ACC — Investor Presentation 2020

Sep 21, 2020

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亞洲水泥股份有限公司 Asia Cement Corporation Stock code: 1102 TT

IR presentation

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Aug 2020

Disclaimer

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This presentation contains forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. Actual results may differ materially from those expressed or implied by these forward-looking statements. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this presentation might not occur in the way we expect, or at all. You should not place undue reliance on any forward-looking information.

In preparing the information herein, ACC have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to ACC or which was otherwise reviewed by ACC. Neither ACC nor its advisors have made any representation or warranty as to the accuracy or completeness of such information and nor do they assume any undertaking to supplement such information as further information becomes available or in light of changing circumstances. None of ACC, nor any of their respective affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. Neither this presentation nor any of its contents may be reproduced to a third party without the prior written consent of ACC.

2

Table of Contents

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• Company Snapshot

• Financial Highlights

• Asia Cement (China) Operating Data

• Shanshui Cement Operating Data

• PRC Industry Overview

• Taiwan Industry Overview

• Financials

• CSR Achievements

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Company Snapshot

4

Company Snapshot

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Market Cap: US$ 4.7 bn / NT$ 140 bn (as of 14 Aug 2020)

Consolidated Entities

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Asia Cement
(1102 TT)
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•
Established in 1957
ACC •
2 [nd] largest cement producer
Taiwan
•
Cement capacity: 5.0 mtpa.
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• 10 [th] largest cement producer
AC(China) •
In Central and Southwest China
(743 HK)
•
Cement capacity: 33.0 mtpa.
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• LNG fired IPP (8% of revenue)

• Other • Cold rolled stainless steel

• Business (6% of revenue)

Equity Investments

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FENC U-Ming Shanshui
(1402 TW) Marine Cement
(2606 TW) (691 HK)
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5

ACC(Taiwan) & Other Business

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1. Cement: 2nd Largest Cement Player in Taiwan.

2. IPP: Expanding phase II project with 500MW, COD on 1Q21.

3. Stainless Steel: Producing 300 and 400 series products, export oriented.

Cement market share in TW

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TCC (As of 2019)
Import
30%
20%
ACC
Others
27% 23%
Capacity in TW
Hsinchu
plant
Nanhwa Hualian plant
grinding
station
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IPP Phase II project in TW

Phase I：670MW Phase II：500MW

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Phase I：670MW
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2018 1Q21
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AC(China) Overview

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1. Located in the Yangtze River Economic Belt.

2. Leading player in top-tier cities of each operating province.

Chengdu market share 42% No. 1

Wuhan

Jiujiang and Nanchang

market share 36% and 25% No. 1 and No.2

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2019 Cement Capacity
33mtpa
Sichuan
11 mt Jiangxi
33% 14 mt
43%
Hubei
8 mt
24%
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market share

23% No. 1

7

Shanshui Cement Overview

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1. One of the major cement producers in Northern China.

2. 7[th] largest National wide and 2[nd] largest in Shandong province.

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2019 Cement Capacity
102mtpa
Xinjiang
4 mt
4%
Northeast
China
27 mt
27%
Shandong
55 mt
Shanxi 54%
16 mt
15%
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Note: Northeast China region includes Liaoning province and Inner Mongolia. Source: China Shanshui Cement Group Ltd. 2019 financial report and 2019 annual report.

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Investment in Shanshui

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Timeline

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ACC began
to invest
Shanshui
2010
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Reclassified
ACC
the stake as
entered the
equity
BOD
investment
5/2018 10/2018
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Shanshui Shareholder Structure

Prior EGM 2018/10/30

Current

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China
China Shanshui ACC & Voting
Alliance
Shanshui ACC & Voting Investment
20.74%
Investment Alliance 19.47%
25.09% 26.72%
CNBM
Tianrui
12.94%
Group
CNBM
Tianrui
21.85%
16.67%
Group Others
28.16%
Others 25.00%
3.36%
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Note: Asia Cement holds 17.46%, and 3.28% of the interests are held through agreement to acquire interests in the Company, required to be disclosed under s.317(1)(a) and s.318 of the SFO.

Source: http://www3.hkexnews.hk/listedco/listconews/SEHK/2018/1030/LTN20181030956_C.pdf.

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Investment Portfolio in Far Eastern Group

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NT$ mn
Incor- porated Year	Investees	Stock Code	Holdings	Category	Company Introduction
2004 1997 1992 1975	Asia Cement (China) Holdings Corp. 743 HK 67.7% Consolidation Top 10 cement producer in China Far EasTone Telecommunications Ltd. 4904 TT 1.0% FVTOCI Top 3 telecom company in Taiwan Far Eastern International Bank 2845 TT 2.4% FVTOCI Provide diversified financial services in Greater China Oriental Union Chemical Corp. 1710 TT 7.2% FVTOCI Important supplier of EG and chemical products in Asia-Pacific
1968	U-Ming Marine Transport Corp. 2606 TT 39.3% Equity Method Largest dry bulk carrier in Taiwan
1967	Far Eastern Department Stores Ltd. 2903 TT 5.7% FVTOCI Leading retailer of department store and supermarket in Taiwan
1949	Far Eastern New Century Corp. 1402 TT 23.8% Equity Method Holding Company of Far East Group. Core business integrated from petrochemical to textile.

Note: Asia Cement comprehensively holds 72.0% of Asia Cement(China) Holdings. (100%-owned AC(Singapore) holds a 4.1% stake and Asia Engineering Pte. holds a 0.2% stake of Asia Cement(China))

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Financial Highlights

11

Asia Cement (1102 TW): Robust financial structure and high dividend payout

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NT$ mn NT$ mn
120,000 Net Debt Net Gearing Ratio 60% CAPEX Operating Cash Flow
48% 37,272
90,000 39% 45%
60,763
60,000 54,341 27% 27% 30%
39,538 36,651
10,711
30,000 15% 8,139 7,620
4,275 3,755 3,147
1,157
0 0%
2017 2018 2019 2Q20 2017 2018 2019 1H20
NT$/share, % NT$/share
50 16% 8
Book Value ROE
6
45 12.3% 12%
43.5
9.9%
41.0 4
40.7
8.4%
40 8%
37.9
2
35 4.4% 4%
0
2017 2018 2019 1H20
EPS 1.63 3.31 5.19 1.61
30 0% DPS 1.20 2.80 3.00
2017 2018 2019 2Q20 12
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Note: EPS is calculated using total outstanding shares.

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Asia Cement (China)(743 HK): Excellent rofitabilit and rich cash flow p y

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R$ mn R$ mn CAPEX Operating Cash Flow
Net Debt Net Gearing Ratio
7,500 50%
40.0%
4,883
6,000 40%
4,500 3,963 30%
3,000 13.4% 20% 2,908
1,621
1,500 10%
(1,728) (2,270) 1,520
0 0%
1,169
-1,500 -10%
135 154 228 143
-12.1%
-3,000 -15.8% -20%
2017 2018 2019 2Q20 2017 2018 2019 1H20
R$/share
R$/share, %
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15 Book Value ROE 30%
23.9%
25%
12 22.0%
18.6%
9.1 20%
9 7.7 9.2
6.3 15%
6
10%
3 6.3%
5%
0 0%
2017 2018 2019 2Q20
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3.0
2.5
2.0
1.5
1.0
0.5
0.0
2017 2018 2019 1H20
EPS 0.38 1.55 2.01 0.56
DPS 0.16 0.62 0.50
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Asia Cement (China) Operating Data

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AC(China): Regional P.O42.5 Price & Inventory Level

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Unit: R$/t ; %

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Jiangxi (Nanchang)
%
R$/t
Inventory Level Market Price
600 90
550
80
500
70
450
400 60
350
50
300
40
250
200 30
Jan-19 Apr-19 Jul-19 Sep-19 Dec-19 Apr-20 Jun-20
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Sichuan (Chengdu)

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R$/t Inventory Level Market Price %
600 90
550
80
500
70
450
400 60
350
50
300
40
250
200 30
Jan-19 Apr-19 Jul-19 Sep-19 Dec-19 Apr-20 Jun-20
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Hubei (Wuhan)
R$/t %
Inventory Level Market Price
600 90
550
80
500
70
450
400 60
350
50
300
40
250
200 30
Jan-19 Apr-19 Jul-19 Sep-19 Dec-19 Apr-20 Jun-20
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Jiangsu (Nanjing)
R$/t Inventory Level Market Price %
600 90
550
80
500
70
450
400 60
350
50
300
40
250
200 30
Jan-19 Apr-19 Jul-19 Sep-19 Dec-19 Apr-20 Jun-20
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Source: Digit Cement. Inventory level is based on the average of province.

15

AC(China): Quarterly ASP and GP/t

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R$/t
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ASP by Quarter
344
1Q171Q17 2Q172Q17 3Q173Q17 4Q174Q17 1Q181Q18 2Q182Q18 3Q183Q18 4Q184Q18 1Q191Q19 2Q192Q19 3Q193Q19 4Q194Q19 1Q201Q20 2Q202Q20
221 233 230 285 314 319 339 391 368 380 366 403 385 344
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R$/t
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GP/t by Quarter

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144
1Q171Q17 2Q172Q17 3Q173Q17 4Q174Q17 1Q181Q18 2Q182Q18 3Q183Q18 4Q184Q18 1Q191Q19 2Q192Q19 3Q193Q19 4Q194Q19 1Q201Q20 2Q202Q20
23 55 48 99 104 127 133 167 149 186 151 178 178 144
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Note: According to IFRS, losses on work stoppages, which is the fixed operating cost RMB 115mn in 1Q20, were recognized as operating expense.

16

AC(China): 2Q20 Operating Data

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R$/t
RMC:R$/mm [3]
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ASP
2Q19 2Q20
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485
462
380
344 346
281
68 62
Cement Clinker RMC Aggregate
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mt
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Shipment

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RMC:mm [3]
2Q19 2Q20
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8.1
7.7
1.0 1.1
0.3 0.4 0.5 0.4
Cement Clinker RMC Aggregate
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Note: Net of VAT
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Gross Margin

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2Q19 2Q20
82%
76%
53%
49%
42%
39%
16%
14%
Cement Clinker RMC
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Aggregate

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AC(China): 2Q20 Operating Data

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Cement Product by Regions

ASP

Shipment

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R$/t
2Q19 2Q20
415
388
354 366 357 355
342 336
Jiangxi Hubei Sichuan Jiangsu
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mt
2Q19 2Q20
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2.9 2.9
2.6 2.6
1.8
1.5
0.8 0.8
Jiangxi Hubei Sichuan Jiangsu
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Product Type

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AC(China): 1H20 Operating Data

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R$/t
ASP
RMC:R$/mm [3]
1H19 1H20
489
469
375
355
309
292
63 63
Cement Clinker RMC Aggregate
Note: Net of VAT
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mt
Shipment
RMC:mm [3]
13.6 1H19 1H20
10.3
2.0 1.9
1.1 0.8 0.8 0.5
Cement Clinker RMC Aggregate
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Gross Margin

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1H19 1H20
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80%
74%
46%
43% 43%
37%
16%
14%
Cement Clinker RMC
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Aggregate

19

AC(China): 1H20 Operating Data

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Cement Product by Regions

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R$/t
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ASP

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mt
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Shipment

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1H19 1H20
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1H19 1H20

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408
383
350 353 363 366 348 366
Jiangxi Hubei Sichuan Jiangsu
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4.9
4.5
3.9
3.6
2.9
1.8
1.3
1.1
Jiangxi Hubei Sichuan Jiangsu
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Product Type

20

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Shanshui Cement Operating Data

21

Shanshui: Regional P.O42.5 Price & Inventory Level

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Unit: R$/t ; %
Shandong (Jinan)
Inventory Level Market Price
R$/t %
600 90
550
80
500
70
450
400 60
350
50
300
40
250
200 30
Jan-19 Apr-19 Jul-19 Sep-19 Dec-19 Apr-20 Jun-20
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Inner Mongolia (Hohhot)

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R$/t Inventory Level Market Price %
600 90
550
80
500
70
450
400 60
350
50
300
40
250
200 30
Jan-19 Apr-19 Jul-19 Sep-19 Dec-19 Apr-20 Jun-20
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Shanxi (Taiyuan)
Inventory Level Market Price
R$/t %
600 90
550
80
500
70
450
400 60
350
50
300
40
250
200 30
Jan-19 Apr-19 Jul-19 Sep-19 Dec-19 Apr-20 Jun-20
Liaoning (Shenyang)
R$/t Inventory Level Market Price %
600 90
550
80
500
70
450
400 60
350
50
300
40
250
200 30
Jan-19 Apr-19 Jul-19 Sep-19 Dec-19 Apr-20 Jun-20
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Source: Digit Cement. Inventory level is based on the average of province.

22

Shanshui: 2019 Operating Data

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R$/t ASP mt Shipment
RMC:R$/mm [3] 2018 2019 RMC:mm [3 ] 2018 2019
47.5
493
39.2
456
361
335
269 276
10.0
8.2
Cement Clinker RMC Cement Clinker
Note: Net of sales tax and surcharge.
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Shipment

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10.0
8.2
2.9 3.2
Clinker RMC
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25

Source: China Shanshui Cement Group Ltd. 2019 annual report.

Shanshui: 2019 Operating Data

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Cement Product by Regions

Shipment

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R$/t ASP mt Shipment
2018 2019 2018 2019
28.3
466
418 410 24.8
372
253 285 272 262
12.2
9.1
5.7
4.2
1.1 1.4
Shandong Shanxi Northeast Xinjinag Shandong Shanxi Northeast Xinjinag
Note: Net of sales tax and surcharge.
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Product Type

Source: China Shanshui Cement Group Ltd. 2019 annual report

26

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PRC Industry Overview

27

China Cement Demand Outlook

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Infrastructure :

• RMB$3.75 tn local government special bond for 2020 (RMB$2.15 tn for 2019) and RMB$1 tn special central government bond all indicate sufficient funding for infrastructure investment growth in 2H20 and 2021.

: Property

• Housing demand is benefiting from policy easing.

• Construction activities are expected to continue to accelerate in 2H20.

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mt 2021-2023: Plateau Period with Well-controlled Supply and Stable Demand
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3,000
2,476
2,414 2,403
2,500 2,348 2,316 2,330
2,184 2,177
2,063
1,868
2,000
1,629
2016-2020:
1,388
1,500 2012-2015: YoY-4.8%
“New Normal Economy”
2009-2011: Demand slowed urges Supply-Side 998
1,000
Demand boosted by down and oversupply Reform and industry
R$4 trillion stimulus weakened ASP evolution.
500
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 6M20
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Source: ccement, National Bureau of Statistics

28

China Cement Industry Policy Trend

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Control capacity expansion

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1. Prohibit using outdated pipelines for capacity swap.

2. Tightening regulation for crossprovincial capacity swap.

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Phase out capacities by lifting industry standards

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1. Raise UT rate from 70% to 80%.

2. Eliminate PC 32.5R grade of cement.

3. Promote intelligent manufacturing.

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Blue sky protection campaign carries on

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1. Production halt has continued to contribute to supply discipline since 2016.

2. Stricter regulations developing into ultra low emission and differentiation.

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Encourage consolidation

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1. M&A, cross holding, JVs, sales platform

2. Subsidizing the exiting capacity with decapacity funds.

Source: China Cement Association “De-capacity action plan”, ”Cement industry 13[th] five year plan”, PRC State Council “Guiding policies to facilitate structural upgrade of building materials industry”

29

Jiangxi: Guaranteed Mid-long Term Demand

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Beijing
Nanchang-Jiujiang to be 1. 2020 annual investment plan reached
an important section of
RMB$239 bn, YoY+16.5%.
the national project
Jiujiang
Beijing-HK HSR 2. Major projects:
construction started in 2020
Estimated
Nanchang
Projects Construction
Period
Jian Nanchang-Jiujiang High-speed
2020~2023
Ganzhou Railway
Anqing-Jiujiang High-speed Railway 2018~2022
Nanchang-Huangshan High-speed
2019~2023
Railway
Shenzhen Expansion of Nanchang City Ring
2020~TBD
Expressway
Hong Kong
Nanchang-Huangshan
High-speed Railway
Huangshan
Jingdezhen
Jiujiang
Nanchang
Nanchang
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30
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Source: Jiangxi Provincial Development and Reform Commission, Sina news, people.cn

Sichuan: Gateway to the West

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Sichuan-Tibet Railway

1. Hub of coordinated development between eastern and western regions.

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1. Primary beneficiary of Western Development.

2. Major projects:

Projects	Estimated Construction Period
Sichuan-Tibet Railway	2013~2026
High-speed railways alongthe Yangtze River	2020~2025
Xian-ChengduHigh-SpeedRailway	2019~2025
Transportation Integration of Chengdu- ChongqingTwin Cities Economic Circle	2020~2022

High-speed Railways along the Yangtze River

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Nanjing
Hefei
Chengdu
Jingzhou
Shanghai
Wuhan
Chongqing
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Chengdu
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Source: National Development and Reform Commission, Xinhua news agency, ccement, itw01.com

31

Hubei: Post-pandemic Surge of Infrastructure Projects

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Two Great Bridges to Be Constructed in Wuhan

infrastructure after Covid-19

1. 14[th] Five-Year Comprehensive Transportation Plan of Wuhan 3. Major projects:

Shuangliu Bridge

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Wuhan
City
Guanggu Bridge
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Estimated Projects Construction Period Wuhan west railway station 2021~TBD Wuhan-Dawu Highway 2018~2021 Wuhan-Yangxin Expressway 2018~2020 Shuangliu Yangtze Great Bridge 2020~TBD Guanggu Yangtze Great Bridge 2020~TBD Expansion of Tianhe International Airport 2020~TBD

Wuhan West Railway Station

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Wuhan
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Source: Hubei Provincial Development and Reform Commission, ccement, Fang.com, Tencent news

32

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Taiwan Industry Overview

33

Taiwan Cement Market

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Demand getting warm since 2018

ASP remain steady

mt

NT$/t

91.58% Anti-dumping tariff

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20 Cement Consumption 5% 8% 2,600
imposed on cement products from China
YoY(%)
2011/5/30~2022/2/19
4%
2,500
15
2,400
12.5
11.7 11.4 0% 2,400
10.7
10.3 10.2
2,279
10 -4% 2,300
6.0
-8% 2,200
5
-12% 2,100
2,100
0 -16% 2,000
2014 2015 2016 2017 2018 2019 1H20 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2Q20
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1. Central government proposed the Forward-looking Infrastructure Development Program (2018-2021) with a budget of NT$420 bn.

2. ASP remains steady since antidumping tariff blocked import from China.

3. Trade frictions prompt Taiwanese corporate to return to invest in Taiwan.

Note: consumption ＝ local ＋ imports

Source: National Development Council, Taiwan Cement Manufacturers’ Association

34

ACC(Taiwan) Outlook: Improving sales and margins

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Domestic market shares

1. Local sales improved in 2020.

2. Gross margin continued to pick up on lower coal cost.

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40%
30% 27% 27%
26% 24% 24%
23%
22%
20%
10%
0%
2014 2015 2016 2017 2018 2019 1H20
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Cement and Clinker Sales

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mt
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Local sales
YoY +0.9% Export sales
2.6 2.6
YoY +9.5%
1.3 1.4
1.3 1.3
0.7
0.5
2018 2019 1H19 1H20
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ACC(Taiwan) Gross Margin

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14%
12%
10%
8%
6%
4%
2%
0%
2014 2015 2016 2017 2018 2019 1H20
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Financials

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Steady Payout with Enjoyable Yields

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Note1: Payable EPS= Net income – Investment property adjustment Note2: Dividend yield= Cash dividend / Last 12-month average share price

37

Summary of P&L

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NT$ mn

	2Q20	2Q19	YoY	1H20 1H19 YoY
Operating Revenue Operating Cost Net Gross Profit SG&A expenses Operating profit	20,689 14,012 6,677 1,266 5,411	24,420 16,344 8,076 985 7,091	-15% 33,828 43,806 -23% -14% 24,453 31,071 -21% -17% 9,375 12,735 -26% 29% 1,943 1,866 4% -24% 7,432 10,869 -32% 1,852 3,798 -10% 1,991 2,380 -16% 575 849 (112) 50 854 950 675 531 (86) (459) 301 421 (108) 93 (422) 1,164 130 81 47 118 9,285 14,667 -25% 6,834 11,435 -40% -25% 5,411 9,119 -41% -25% 1.61 2.71 -41% 27.7% 29.1% 22.0% 24.8% 16.0% 20.8%
Non-operating income(net) Equity Income	2,305 1,833	2,833 2,046
Far Eastern New Century Corp. U-Ming Marine Transport Corp. Shanshui Cement Co. Ltd. Others	241 40 1,196 355	518 13 1,119 395
Net Interest Expense Dividend Income Gain (loss) on exchange Gain (loss) on FVTPL Financial Assets and Liabilities Gain (loss) on Investment Property Others Pre tax Income Net income	(5)	(198)
	298	418
	(185) 219	71 405
	96	46
	51	45
	7,716	9,923
	5,703	7,625
Profit Attributable to Owners of Parent EPS (NT$/share)	4,667 1.39	6,190 1.84
Gross margin	32.3%	33.1%
Operating margin	26.2%	29.0%
Net margin	22.6%	25.3%

Note: EPS is calculated using total outstanding shares.

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Performance by Segments

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Note: Cement revenue= Taiwan cement operation(cement, RMC and other downstream value chain) + China cement operation NT$ mn	Note: Cement revenue= Taiwan cement operation(cement, RMC and other downstream value chain) + China cement operation NT$ mn	Note: Cement revenue= Taiwan cement operation(cement, RMC and other downstream value chain) + China cement operation NT$ mn	Note: Cement revenue= Taiwan cement operation(cement, RMC and other downstream value chain) + China cement operation NT$ mn	Note: Cement revenue= Taiwan cement operation(cement, RMC and other downstream value chain) + China cement operation NT$ mn	Note: Cement revenue= Taiwan cement operation(cement, RMC and other downstream value chain) + China cement operation NT$ mn	Note: Cement revenue= Taiwan cement operation(cement, RMC and other downstream value chain) + China cement operation NT$ mn
	2Q20	2Q19		YoY	1H20 1H19	YoY
Operating Revenue	20,689	24,420	-15% 33,828 43,806 -23% -15% 27,421 35,918 -24% -21% 2,885 3,479 -17% -25% 2,018 2,998 -33% -2% 1,505 1,411 7% -14% 24,453 31,071 -21% -17% 9,375 12,735 -26% 29% 1,943 1,866 4% -24% 7,432 10,869 -32% -28% 6,231 9,932 -37% 18% 723 612 18% NA (28) 47 NA 28% 506 278 82%
Cement business Power business Stainless Steel business Others	17,304 1,495 1,011 879	20,277 1,902 1,349 892
Operating Cost Net Gross Profit SG&A expenses Operating profit	14,012 6,677 1,266 5,411	16,344 8,076 985 7,091
Cement business Power business Stainless Steel business Others	4,568 432 (4) 416	6,382 366 17 326

Revenue (1H20)

39

Summary of Balance Sheets

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NT$ mn
	2Q20	1Q20 2019
Current Assets Cash&Cash equivalents Short-term Investments Others Non-Current Assets Long-term Investment Fixed Assets Intangible Assets Other Assets Total Assets Current Liabilities Short-term debt Others Non-Current Liabilities Bonds Payable Bank Loans Others Total Liabilities Total Shareholders’ Equity Book Value(NT$/Share)	92,590 20,375 43,251 28,964 203,678 92,136 87,130 6,713 17,699 296,268 75,561 52,365 23,196 61,188 32,525 15,387 13,276 136,749 159,519 40.7	98,317 89,242 29,628 24,735 39,551 31,724 29,138 32,783 205,122 208,036 92,957 96,140 87,357 86,858 6,897 7,000 17,912 18,038 303,439 297,279 71,389 74,336 56,236 55,895 15,153 18,440 66,218 53,494 19,303 19,281 33,606 20,821 13,309 13,392 137,607 127,829 165,832 169,449 42.3 43.5
ROE	9.9%	10.7% 12.3%
Net Gearing Ratio	26.8%	28.1% 27.1%
Net Debt	36,651	39,966 39,538
Net Debt/EBITDA	1.5	1.5 1.4

Note: Net gearing = Nebt debt / (total shareholders' equity - minority interest)

40

Summary of Cash Flow Statement

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NT$ mn
	2Q20	2Q19	YoY	1H20 1H19 YoY
Net Income Depr&Amort Changes of non-cash WC Disposal/(Acquisition) of FVTPL FA(1) Other Ope. CF Items Operating Cash Flow CAPEX Disposal/(Acquisition) of AC FA(2) Disposal/(Acquisition) of FVTOCI FA Other Inv. CF Items Investing Cash Flow Changes in Debt/Borrowings Dividends Paid Other Fin. CF Items Financing Cash Flow Effect of FX Net Changes in Cash Free Cash Flow	4,667 1,200 1,065 (1) (1,407) 5,525 (1,462) (3,544) 28 65 (4,914) (8,455) 0 (1,049) (9,503) (361) (9,253) 4,063	6,190 1,233 1,310 1,752 (1,940) 8,545 (1,449) (6,998) 0 36 (8,411) 1,682 0 (1,367) 315 (68) 382 7,097	-35% NA NA NA -43%	5,411 9,119 2,428 2,473 3,184 5,165 (834) 1,316 (2,569) (3,242) 7,620 14,830 -49% (3,147) (2,128) (10,704) (9,446) (1,118) (57) (17) (2,260) (14,984) (13,890) NA 4,563 1,627 0 0 (1,105) (1,251) 3,458 375 821% (454) 135 (4,360) 1,451 NA 4,473 12,703 -65%

Note1: Under the IFRS 9 applied since 2018, mutual fund investment has been classified as operating activities. Note2: Mainly over 3 months time deposit.

41

AC(China): Summary of P&L

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RMB$ mn
	2Q20	2Q19	YoY 1H20 1H19 YoY
Operating revenue Operating cost Gross Profit Other net income/(loss) Selling&marketing costs Administative expenses Operating income Finance costs Shares of results of jointly controlled entities Pre tax Income Tax Net Income	3,027 1,799 1,228 17 115 66 1,063 42 3 1,024 335 690	3,531 1,873 1,658 48 122 130 1,453 75 2 1,380 414 966	-14% 4,314 6,043 -29% -4% 2,528 3,400 -26% -26% 1,786 2,643 -32% 74 93 179 221 251 242 -27% 1,431 2,274 -37% 95 143 1 2 1,337 2,134 427 585 -29% 910 1,549 -41% -29% 878 1,510 -42% 31 38 -29% 0.56 0.96 -42% 41.4% 43.7% 33.2% 37.6% 20.4% 25.6% 43.8% 44.5% -22% 1,888 2,690 -30%
Profit Attributable to Owners of Parent Minority interests EPS (RMB$/share)	668 21 0.43	942 24 0.60
Gross margin	40.6%	47.0%
Operating margin	35.1%	41.2%
Net margin	22.1%	27.4%
EBITDA margin	43.0%	47.2%
EBITDA	1,302	1,667

Note: According to IFRS, losses on work stoppages, which is the fixed operating cost RMB 115mn in 1Q20, were recognized as operating expense.

42

AC(China): Summary of Balance Sheets

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RMB$ mn
	2Q20	1Q20 2019
Current Assets Inventories Trade and other receivables Bank balances and cash Non-Current Assets Property,Plant&Equipment Total Assets Current Liabilities Borrowings- due within one year Trade and other payables Non-Current Liabilities Borrowings- due after one year Total Liabilities Total Equity Equity Attributable to Parent Book Value(RMB/Share)	12,274 726 2,367 9,157 11,112 7,803 23,387 6,199 4,592 1,246 2,497 2,295 8,696 14,690 14,359 9.2	14,490 12,620 803 674 3,079 3,963 10,583 7,943 11,239 11,366 7,918 8,077 25,729 23,986 6,539 7,695 4,387 4,770 1,807 2,174 4,327 1,647 4,105 1,444 10,866 9,343 14,863 14,643 14,474 14,264 9.2 9.1
ROE	18.6%	20.6% 23.9%
ROA	11.1%	12.0% 14.1%
Net Gearing Ratio	-15.8%	-14.4% -12.1%
Net Debt	(2,270)	(2,091) (1,728)

Note: Net gearing = Net debt / (total shareholders’ equity – minority interests)

43

AC(China): Summary of Cash Flow Statement

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RMB$ mn		2Q19 YoY 1,394 -23% (617) NA 574 NA 1,351 NA	1H20 1H19 YoY 1,520 2,307 -34% (143) (54) NA (21) (207) NA (285) (231) NA 1,214 1,869 -35%
	2Q20	2Q19
Net Income Depr&Amort Changes of non-cash WC Other Ope. CF Items Operating Cash Flow CAPEX Other Inv. CF Items Investing Cash Flow Changes in Debt/Borrowings Dividends Paid Other Fin. CF Items Financing Cash Flow Net Changes in Cash Free Cash Flow	1,073 (1) (2,498) (1,426)	1,394 (617) 574 1,351

44

Shanshui: Summary of P&L

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RMB$ mn				YoY 1H20 1H19 1% 8,747 9,441 2% 5,725 6,159 -1% 3,022 3,282 295 115 251 274 1,107 1,184 17% 1,959 1,939 185 244 9 19 1,783 1,714 459 508 20% 1,324 1,206 19% 1,297 1,196 27 9 0.30 0.27 34.5% 34.8% 22.4% 20.5% 14.8% 12.8%	YoY
	2Q20	2Q19
					-7% -7% -8% 1% 10% 8%
Operating revenue Operating cost Gross Profit Other net income/(loss) Selling&marketing costs Administative expenses Operating income Finance costs Shares of results of jointly controlled entities Pre tax Income Tax Net Income	6,914 4,331 2,583 247 170 374 2,286 101 7 2,191 414 1,778	6,865 4,265 2,600 103 175 570 1,958 62 16 1,912 434 1,478
Profit Attributable to Owners of Parent Minority interests EPS (RMB/share)	1,679 98 0.39	1,407 71 0.40
Gross margin	37.4%	37.9%
Operating margin	33.1%	28.5%
Net margin	24.3%	21.5%

45

Shanshui: Summary of Balance Sheets

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RMB$ mn
	2Q20	2019 2018
Current Assets Inventories Trade and other receivables Bank balances and cash Non-Current Assets Property,Plant&Equipment Total Assets Current Liabilities Borrowings- due within one year Trade and other payables Non-Current Liabilities Borrowings- due after one year Total Liabilities Total Equity Equity Attributable to Parent Book Value(RMB/Share)	7,421 2,226 2,427 1,754 20,364 17,982 27,784 11,105 3,372 4,011 2,770 2,021 13,876 13,909 13,778 3.2	6,217 5,858 1,995 1,459 1,937 2,127 1,364 1,304 20,611 20,215 18,331 18,131 26,828 26,073 11,182 13,228 3,911 5,919 3,742 3,240 3,046 3,258 2,249 2,501 14,227 16,486 12,600 9,586 12,497 9,522 2.9 2.2
ROE	25.1%	27.0% 32.7%
ROA	11.3%	11.2% 8.6%
Net Gearing Ratio	24.2%	36.5% 71.8%
Net Debt	3,329	4,567 6,839

Note: Net gearing = Net debt / (total shareholders’ equity – minority interests)

46

Shanshui: Summary of Cash Flow Statement

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RMB$ mn	2019 2018 YoY 2,973 2,197 1,533 1,395 (181) (1,645) (158) 234 4,167 2,180 91% (1,105) (713) (461) (136) (1,567) (849) NA (2,563) (1,639) 0 339 0 0 9 952 (2,554) (349) NA 14 13 46 983 -95% 3,061 1,467
1H20 1H19 YoY
Net Income 1,196 Depr&Amort 721 Changes of non-cash WC (401) Other Ope. CF Items 126 Operating Cash Flow 1,602 1,642 -2% CAPEX (682) Other Inv. CF Items (76) Investing Cash Flow (456) (758) NA Changes in Debt/Borrowings (819) Issuance of Common Stock 0 Dividends Paid 0 Other Fin. CF Items(1) (11) Financing Cash Flow (742) (830) NA Effect of FX (14) (2) Net Changes in Cash 404 54 647% Free Cash Flow 960

47

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CSR Achievements

48

ACC: Sustainable Mining Mountain

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Mining Monitoring

• 24/7 vibration monitoring to make explosion feelingless.

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Green Manufacturing

• Realizing waste reduction and energy reuse in production.

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Safe Mining Technique

• Inward stepping down method to lower the impact to the landscape.

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Flood Detention

• No landslide caused by the mining for 40 years.

49

Source: ACC CSR report

ACC: Local Care and Interactions

Providing job opportunities to local aboriginal people

Type	Total	Local Employees	Local Employees	Aboriginal People	Aboriginal People
		Number	%	Number	%
Employee	306	293	96%	86	28%
Subcontractor	898	268	30%	446	50%
Total	1,204	561	47%	532	44%

Satisfying the needs of the community by applying the engineering expertise

Offering house repairing service, installing water tank and mountain spring water pipes, and electricity bill subsidy free of charge Source: ACC CSR report

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Communicating with outside and eliminating the doubts A global model mining mountain

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Periodically inviting local people to visit the limestone quarry and reporting water/soil preservation work, greening with vegetation, mining site safety Highly recognized by scholars from Japan, Australia, etc Supporting the education for aboriginal youth

Aboriginal students’ after-school learning

50

ACC: ESG Awards

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Taiwan & Global Corporate Sustainability Award: 2019 TCSA Top 50 2019 GCSA Great Practice

6 years listed in

“Taiwan Corporate Governance 100 Index” and “Taiwan High Salary 100 Index” by TWSE

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2019 Included as a member of the FTSE4Good TIP Taiwan Index by FTSE Russel

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TWSE Corporate Governance Evaluation: Top 6%~20%

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Asia Responsible Entrepreneurship Awards: 2019 Winner of Green Leadership

Carbon Disclosure Project:

2019 B List Ministry of Economics Affairs:

6 times award winner of Excellent Company in GHG Voluntary Reduction

Source: ACC CSR report

51

AC(China): Sustainable Green Cycling

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Strive to improve energy
•
4 mines listed as 2019 National
efficiency
Green Mine mcal / t 水泥耗能Energy consumption of cement
661.5
• Jiangxi Yadong awarded the 2 [nd] 662 658.8
658 654.3
prize of Green Mine Techniques
654
by Zhongguancun Green Mine 650
2017 2018 2019
Industry Alliance
Low-carbon
Sustainable
Mines Green Intelligent
Manufacturing
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Circular Social Economy Care

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Performance of Waste Disposal
廢棄物處置量
Amount of waste disposed
t
19,616
20,000
10,000 5,268
1,200
0
2017 2018 2019
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Assisting in community
infrastructure
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Source: AC(China) CSR report

52

AC(China): Lower Emissions and Energy Consumption

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Emissions
mg/m [3]
ACC Jiangxi ACC Hubei ACC Sichuan superior to ultra-low standard
267
198
85
63
25
6 9 8 5
SOSO22 NOXNOx Dust ParticlesDust Particles
Note: Averaged by capacity
Energy Consumption
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National standard

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120
110
110.3
100
103.3
90 93.7
80
78.6
70
60
50 57.1
40
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Coal consumption of Power consumption of Energy consumption of Power consumption of Energy consumption of clinker (kgce/t) clinker (kWh/t) clinker (kgce/t) cement (kWh/t) cement (kgce/t) Source: AC(China) CSR report

53

Capacity in Jiangxi, China

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54

Capacity in Hualien, Taiwan Capacity in Jiangxi, China

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55

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Thank you

ir@acc.com.tw http:// www.acc.com.tw

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Q&A: Mining Concerns

ACC Eco-friendly Achievements

Download: ACC Financials

56