ACE — Interim / Quarterly Report 2019

Oct 22, 2019

Jinan Acetate Chemical Co., LTD.

Stock Code：4763

公司簡介

1

==> picture [92 x 56] intentionally omitted <==

==> picture [38 x 6] intentionally omitted <==

==> picture [318 x 20] intentionally omitted <==

二、 MANIN PRODUCT, PRODUCTION PROCESS

AND SALES CONDITION

三、MARKET SITUATION AND INDUSTRIAL STATUS

• 四、COMPETITION ADVANTAGE

五、 ACTUAL PERFORMANCE OF COMPANY

• 六、FUTURE PROSPECTS

2

==> picture [92 x 56] intentionally omitted <==

Basic Information

 LISTED MAIN COMPANY

• Jinan Acetate Chemical Co., LTD.(Cayman)

• Capitalization：TWD 5.1 BILLION

• DIRECTOR：WANG KOCHANG

 OPRATION COMPANY

• JINAN ACETATE CHEMICAL CO., LTD

• ADD.：SHANDONG JINAN

• FOUND TIME：1999.10

• Employees：170

==> picture [266 x 125] intentionally omitted <==

• MANIN BUSINESS：RESEARCH,PRODUCTION AND SALES OF ACETATE TOW

 ACETEK METERIAL CO., LTD

• ADD.：SHANDONG Zaozhuang

• FOUND TIME：2016.6

• Employees：100

• MANIN BUSINESS：PRODUCTION AND

SALES OF ACETATE FLAKE

3

==> picture [92 x 56] intentionally omitted <==

About the Company

==> picture [713 x 445] intentionally omitted <==

----- Start of picture text -----

Jinan Acetate Chemical Taiwan
Co.,LTD. Representative's
(Cayman) Office
Capital：NTD 510,767,000 Establishment day：
Establishment day：SEP. 2014 JAN. 2015
100%
My Parents Living
ACETEK CHEMICAL CO., Technology Limited
80%
LTD(Hong Kong) (Hong Kong)
Capital ：HKD 12,500,000 Capital：USD 14,937,344
Establishment day：OCT.
Establishment day ：FEB.
2012
2019
25% 100% 27.2%
ACETEK MATERIAL CO.,
ELEUNG LIMITED Jinan Acetate Chemical
LTD (China)
(Hong Kong) Co.,LTD. (China)
Capital：RMB
52.8%
Capital ：HKD Capital：US 8,514,400 125,000,000
1,333,333
Establishment day ：
Establishment day：OCT.
Establishment day ：
JUNE. 2016 4
NOV. 1986 1999
----- End of picture text -----

==> picture [92 x 56] intentionally omitted <==

About the Company

==> picture [50 x 51] intentionally omitted <==

In 1999, established JINAN JULONG FIBER CO., LTD., production of nylon aty

==> picture [51 x 51] intentionally omitted <==

In 2006, acetate tow 2,000 tons  In 2008, tow 3,000 tons  In 2010, tow 4,000 tons

In 2012, obtain Certification of the chinese high-tech Enterprises； In 2013, tow 8,000 tons In 2014, obtain the top 100 Taiwan enterprises of SHANDONG；tow 9,000 tons； In 2015 Listed on the Taiwan Stock Exchange (TSE) In 2016, tow 10,000 tons； Established ACETEK MATERIAL CO., LTD. production of acetek flake Capacity 20,000 tons In 2017,issued convertible bonds；tow 11,000 tons；successful mass production of acetate flake in Q3

==> picture [51 x 51] intentionally omitted <==

==> picture [50 x 51] intentionally omitted <==

In 2019, strategic Alliances with the Italian company LA/ES；tow 13,000 tons

5

==> picture [92 x 56] intentionally omitted <==

Shareholders Structure

==> picture [670 x 252] intentionally omitted <==

----- Start of picture text -----

upstream
midstream downstream
raw material
manufacture application
supplier
Jinan Acetate
25.37%
MACRIFER TRADING
strategic
Chemical Co.,
investors DOCIEDAD ANONIMA
LTD.
----- End of picture text -----

==> picture [675 x 142] intentionally omitted <==

----- Start of picture text -----

Yankuang Lunan 8.00% ACETEK
12.00%
Vertical Chemical Co., MATERIAL Thy Glory Limited
Ltd.
integration CO., LTD
Jinan Acetate Chemical
80.00%
、
Co., LTD.(Jinan Acetate
My Parents Living)
----- End of picture text -----

6

Industrial upstream and downstream correlation diagram

==> picture [92 x 56] intentionally omitted <==

==> picture [62 x 74] intentionally omitted <==

Yankuang Lunan Chemical Co., Ltd.

==> picture [688 x 373] intentionally omitted <==

----- Start of picture text -----

acetic
anhydride
ACETEK MATERIAL
CO., LTD
acetate flake-
acetate flake-
fiber grade
plastic grade
Thy Glory Limited Jinan Acetate Chemical
、
Eleung Limitd Co.,LTD.
acetate
tow
MACRIFER
----- End of picture text -----

7

==> picture [92 x 56] intentionally omitted <==

Capacity

Cellulose acetate(flake)		Cellulose acetate tow
Theoretical capacity (tons/year)	20,000	Theoretical capacity (tons/year)	13,000
Actual capacity (tons/year)	17,000	Actual capacity (tons/year)	13,000
self-use fiber grade (tons/year)	12,000
Sold-out plastic grade (tons/year)	5,000	New capacity for next year
Unit Price: fiber grade (RMB/tons)	22,000~25,000	Flake	5,000
Unit Price: plastic grade (RMB/tons)	25,000~40,000	tow	1,000

8

==> picture [92 x 56] intentionally omitted <==

一、 COMPANY INTRODUCTION

==> picture [38 x 20] intentionally omitted <==

==> picture [497 x 23] intentionally omitted <==

==> picture [279 x 20] intentionally omitted <==

三、MARKET SITUATION AND INDUSTRIAL STATUS

• 四、COMPETITION ADVANTAGE

• 五、 ACTUAL PERFORMANCE OF COMPANY

• 六、FUTURE PROSPECTS

9

==> picture [92 x 56] intentionally omitted <==

Production process

10

==> picture [92 x 56] intentionally omitted <==

Product Charactor

==> picture [360 x 214] intentionally omitted <==

ACETATE TOW

With dissolving pulp as raw material, acetate tow is produced from acidified flakes through dissolving, filtering, rolling, crimping and drying.

• Acetate Tow is a regenerated cellulose with advantage of good cleaning and absorption.

• With "Y" type, acetate tow have great filtration ability. 。

Doffing

drying

Rolling

==> picture [102 x 158] intentionally omitted <==

==> picture [114 x 158] intentionally omitted <==

==> picture [118 x 158] intentionally omitted <==

==> picture [310 x 149] intentionally omitted <==

11

==> picture [92 x 56] intentionally omitted <==

Product Applications Acetate Flake Fiber Grade Plastic Grade

==> picture [316 x 137] intentionally omitted <==

==> picture [289 x 120] intentionally omitted <==

==> picture [288 x 124] intentionally omitted <==

==> picture [317 x 113] intentionally omitted <==

==> picture [282 x 128] intentionally omitted <==

==> picture [192 x 103] intentionally omitted <==

==> picture [130 x 100] intentionally omitted <==

12

==> picture [92 x 56] intentionally omitted <==

Product Applications Acetate Tow

==> picture [678 x 421] intentionally omitted <==

13

==> picture [92 x 56] intentionally omitted <==

Cigarette Markets By Volume

==> picture [720 x 324] intentionally omitted <==

14

==> picture [92 x 56] intentionally omitted <==

Sales Network

==> picture [633 x 221] intentionally omitted <==

==> picture [405 x 206] intentionally omitted <==

----- Start of picture text -----

100.00% 0.08% 2.15% 3.09% 0.63%
90.00% 26.50% 19.89% 15.11% 20.24%
80.00%
15.22% 8.02%
70.00% 18.98%
60.00% 29.03% 其他Other
50.00% 美洲America
40.00%
非洲
71.12%
66.58% Africa
30.00% 58.98%
亞洲
44.39%
20.00% Asia
10.00%
0.00%
20152015 2016 2017 2018年度 2016年度 2017年度 2018年度
----- End of picture text -----

With advanced technology and administration system, Jinan acetate tow has been exported to more than 30 countries over Asia, America and Africa.

15

Shanghai Zihui Shanghai Zihui 2017/2018 Revenue by customers

2017 Main Customers

==> picture [582 x 222] intentionally omitted <==

----- Start of picture text -----

2018 Main Customers
Global
Filters
14%
EASTERN KOREA
14% SHINHUNG
other
7%
OOO
34%
SERTOW Dong Guan
11% other Smart
6%
Global Filters 50%
TOPTAC
10%
5%
LLC T.H
3% 4%
WF SINCO EASTERN
YAOHOU
EDZEN KOREA 7% 3%
3% TOPTAC Dong Guan Shanhai IDEAL
3% T.H 6% SHINHUNG Jiuxin Zihui LLC 3%
4% 5% 2% 3% 3%
----- End of picture text -----

Customers

Suppliers

16

==> picture [92 x 56] intentionally omitted <==

一、 COMPANY INTRODUCTION

二、 MANIN PRODUCT, PRODUCTION PROCESS

AND SALES CONDITION

==> picture [39 x 20] intentionally omitted <==

==> picture [540 x 20] intentionally omitted <==

四、COMPETITION ADVANTAGE

五、 ACTUAL PERFORMANCE OF COMPANY

• 六、FUTURE PROSPECTS

17

==> picture [92 x 56] intentionally omitted <==

Industry Supply Chain Acetate Flake

• Upstream Material：dissolving pulp、acetic anhydride

raw material supplier

• Process： Pretreatment, vinegar, hydrolysis, deposition, molding, washing, extrusion, midstream

manufacture

• Product：acetate flake

• Fiber grade： Filter wire bundles, high-grade fabrics, non-woven mFilter wire bundles, high-grade fabrics, non-woven masks, etc.asks, etc.

downstream • Plastic Grade： Spectacle frame, hand tool machine handle, screwdriver handle, shoe lead, etc.

application

18

==> picture [92 x 56] intentionally omitted <==

Industry Supply Chain Acetate Tow

Upstream raw material supplier

• Material：acetate flake、acetone、TiO2

• Process：dissolving, filtration, rolling, crimping, drying, doffing, packaging

• midstream

• manufacture • Product：acetate tow and derivative fiber

• Cigarette filter rod, refill downstream application

19

==> picture [92 x 56] intentionally omitted <==

Cellulose Acetate Tow Global Market

The cellulose acetate tow is a oligopoly market, international companies market share of more than 85%.

==> picture [525 x 297] intentionally omitted <==

----- Start of picture text -----

Jinan Acetate
2%
Daicel
Celanese (CE US)
14%
Eastman (EMN US)
Celanese
Solvay Solvay (SOLB BR)
39%
(Rhodia)
Daicel
(4202 JP)
15%
others
Eastman
30%
----- End of picture text -----

Data sources：Company Data, SRI, Morgan Stanley Research

20

==> picture [92 x 56] intentionally omitted <==

一、 COMPANY INTRODUCTION

二、 MANIN PRODUCT, PRODUCTION PROCESS

AND SALES CONDITION

三、MARKET SITUATION AND INDUSTRIAL STATUS

==> picture [38 x 21] intentionally omitted <==

==> picture [323 x 20] intentionally omitted <==

五、 ACTUAL PERFORMANCE OF COMPANY

• 六、FUTURE PROSPECTS

21

==> picture [92 x 56] intentionally omitted <==

COMPETATION ADVANTAGE

Competitor：Fiber Grade：Celanese、Eastman 、Solvay及Daicel；Plastic Grade： Eastman 、Daicel and Sichuan Push

==> picture [316 x 214] intentionally omitted <==

==> picture [316 x 220] intentionally omitted <==

Customization capabilities

• Supply completed technical service ,small order quantity and various specifics according to customer's requirement

• Advanced after-sale service, trace the product quality and provide complete technical service and guidence

Professional reasearch team and expericed production

• With self research, self design abality and some technical patents, JINAN is the only manufacture with proprietary intellectual property rights in China

• In the production and research, JINAN has more than 10 years production experiance

Business niche market

• The company regard the new contries as niche markets, make stable development

Low production cost

• factory and equipment cost is lower than the international competitors

• labor cost in manland is lower than international competitors

22

==> picture [92 x 56] intentionally omitted <==

一、 COMPANY INTRODUCTION

二、 MANIN PRODUCT, PRODUCTION PROCESS

AND SALES CONDITION

三、MARKET SITUATION AND INDUSTRIAL STATUS

四、COMPETITION ADVANTAGE

==> picture [39 x 20] intentionally omitted <==

==> picture [284 x 20] intentionally omitted <==

==> picture [31 x 20] intentionally omitted <==

==> picture [123 x 20] intentionally omitted <==

六、FUTURE PROSPECTS

23

、 Revenues Operating Profit Gross profit margin and operating profit margin

==> picture [92 x 56] intentionally omitted <==

==> picture [659 x 406] intentionally omitted <==

----- Start of picture text -----

In Thousands of NTD；%
Sales Gross Margin Operation Margin
1,800,000 1,747,987 1,739,194
1,586,120
1,600,000
1,438,715
1,376,124
1,400,000
1,200,000
1,007,070
1,000,000
800,000
600,000
28.70
400,000 26.83 27.53 27.57
24.37 24.23
19.17
200,000 16.84 16.47 15.92
11.87
9.32
0
2014 2015 2016 2017 2018 2019Q2
----- End of picture text -----

24

==> picture [92 x 56] intentionally omitted <==

EPS

EPS

EPS	EPS	EPS	EPS	EPS	EPS
0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 2014 2015 2016 2017 2018 2019Q2 5.60 6.33 6.17 3.70 4.85 2.74
		2015	2016	2017	2018
EPS (NTD)		6.33	6.17	3.70	4.85
Dividend	CASH	5.0	5.0	5.0	4.0
	STOCK	0	0	0	1.0

25

==> picture [92 x 56] intentionally omitted <==

Financial Ratios

	ITEM	2015	2016	2017	2018	2019Q2	26
Capital structure	Debt Ratio(%)	25.67	14.67	43.58	44.25	48.96
Liquidity	Current Ratio(%)	318.86	398.04	268.48	233.11	109.98
	Quick Ratio(%)	267.59	226.98	170.44	156.32	78.07
Profitability	Gross margin(%)	27.53	27.57	24.37	24.23	28.70
	Net Margin(%)	18.40	18.07	9.51	12.88	12.32
	EPS(NT$)	6.33	6.17	3.70	4.85	2.74
	ROA(%)	18.57	16.55	8.62	10.45	11.29
	ROE(%)	25.13	21.19	12.11	17.48	19.58
Operating performance	AR turnover (Times)	6.15	7.60	6.92	5.04	5.21
	Accounts receivable days	59	48	53	72	70
	Inventory turnover(Times)	5.83	3.84	3.34	3.57	4.70
	Inventory turnover days	63	95	109	102	78

==> picture [92 x 56] intentionally omitted <==

一、 COMPANY INTRODUCTION

二、 MANIN PRODUCT, PRODUCTION PROCESS

AND SALES CONDITION

三、MARKET SITUATION AND INDUSTRIAL STATUS

• 四、COMPETITION ADVANTAGE

• 五、 ACTUAL PERFORMANCE OF COMPANY

==> picture [39 x 22] intentionally omitted <==

==> picture [233 x 20] intentionally omitted <==

27

==> picture [92 x 56] intentionally omitted <==

Future Prospects

Increase strategic Partners

• Extend closer partnership with cigarette factory to expand capacity of acetate

Production capacity of acetate flake expanded with acetate tow

• Expand the other capacity of acetate flake, 10,000 tons

Research and development of biodegradable cellulose acetate

• In addition to the existing fiber grade and plastic grade of the cellulose acetate

application areas, in order to be in response to the trend of global plastic limiting, and expand the market application of cellulose acetate, we plans to development CA (cellulose acetate membrane), mainly used in food packaging and lithium diaphragm, in preparation for the next phase of EU degradable consumer packaging requirements

28

==> picture [462 x 59] intentionally omitted <==

==> picture [676 x 211] intentionally omitted <==

THANK YOU !

29