CATHAY RED — Interim / Quarterly Report 2020

Sep 24, 2020

Cathay Real Estate Development Co., Ltd.

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Disclaimer Statement

• This presentation contains forward looking statements which are estimated based on the current status of Cathay Real Estate Development Co., Ltd. and general economic conditions. The forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward looking statements. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, rising costs of raw materials, competitive products and pricing pressures and regulatory developments.

• Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved.

• Cathay Real Estate Development Co., Ltd. expressly disclaims any obligation to review, update or correct these materials after the date thereof. Cathay Real Estate Development Co., Ltd. may update, amend, supplement or otherwise alter the information contained in any such materials by subsequent presentations, reports, filings, or other means without notice. This presentation may not be stored, copied, distributed, transmitted.

Content

• Company Brief

• Financial Data

• Consolidated Income Statement

• Consolidated Balance Sheet

• Business Strategy & Operating Results

• Ordinary Business：Current progress of the project execution

• Re-investment：Current status and future plan

• Real-estate Market Prospects

• Presale Market Overview

• The Factors Affect Housing Market

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Company Brief
Reputable Publicly-traded Developer
Domestic
Re-investment
Domestic
Ordinary Business  Set up Cathay Real Estate
Management in 2005.
 Leading brand in  Set up Cathay Healthcare
Established in 1964
Management in 2011.
housing development.
 Number of households with 115.96  Set up Cathay Hospitality
billion in capital. Management in 2012;
built: 54,071. Listed on TWSE combined with Consulting
 Building area built: in 2019.
in 1967, stock code
.
approx. 8,319,405m [2] Commercial
2501.
Future Development
 Joint Venture  Courtyard hotel cooperated
with Marriot in 2018.
 Liberty Stationery Corp. office
building rebuilt in 2023.
 Hotel built cooperated
with Mitsui Fudosan in 2025.
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Strategy as Real Estate Developer_

Total Quality Management, Business Expansion, Sustainable Brand

1

Consolidated Income Statement

		2017 2018 2019 2020Q2 EPS、Cash Dividend：NTD/Per Share	2017 2018 2019 2020Q2 EPS、Cash Dividend：NTD/Per Share	2017 2018 2019 2020Q2 EPS、Cash Dividend：NTD/Per Share	2017 2018 2019 2020Q2 EPS、Cash Dividend：NTD/Per Share	2017 2018 2019 2020Q2 EPS、Cash Dividend：NTD/Per Share	2017 2018 2019 2020Q2 EPS、Cash Dividend：NTD/Per Share	2017 2018 2019 2020Q2 EPS、Cash Dividend：NTD/Per Share	2017 2018 2019 2020Q2 EPS、Cash Dividend：NTD/Per Share	2017 2018 2019 2020Q2 EPS、Cash Dividend：NTD/Per Share
		2017		2018		2019		2020Q2
	Item
		NT$bn	% of Rev.	NT$bn	% of Rev.	NT$bn	% of Rev.	NT$bn	% of Rev.
	Revenue	122.7	100%	142.9	100%	116.2	100%	29.1	100%
	Gross Profit	25.9	21%	37.2	26%	31.6	27%	6.4	22%
	Operating Profit	13.4	11%	22.3	16%	15.0	13%	(0.5)	(2%)
	Non-operating revenue and expenses	(1.5)	(1%)	22.8	16%	0.7	1%	1.1	4%
	Net Profit	12.4	10%	42.4	30%	14.0	12%	0.7	3%
	Parent Net Profit	14.4	12%	36.1	25%	13.7	12%	0.7	3%
	EPS	1.25		3.11		1.18		0.06
	Cash Dividend	1.2		2.1		1.0		-

2

Consolidated Balance Sheet(1/2)

	Item	2017	2017	2018	2018	2019	2019	2020Q2	2020Q2
		NT$bn	%	NT$bn	%	NT$bn	%	NT$bn	%
	Ld f
	an or Construction	89.0	16%	81.5	17%	71.5	13%	99.8	17%
	Construction in Progress	160.3	30%	150.6	31%	160.1	30%	162.2	28%
	Buildings and Land Held for Sale	35.7	7%	20.5	4%	28.5	5%	41.1	7%
	Others	3.5	1%	7.4	1%	5.4	1%	2.0	-
	Total Inventories	288.5	54%	260.0	53%	265.5	49%	305.1	53%
	Cash and Cash Equivalents	12.3	2%	16.2	3%	21.2	4%	20.7	4%
	Investment Property	129.8	24%	111.3	23%	86.4	16%	85.4	14%
	Long-term investment – Equity	0.1	-	-	-	-	-	-	-
	Total Assets	537.6	100%	487.7	100%	537.4	100%	579.1	100%

3

Consolidated Balance Sheet(2/2)

		2017 2018 2019 2020Q2 Equity Per Share：NTD/Per Share	2017 2018 2019 2020Q2 Equity Per Share：NTD/Per Share	2017 2018 2019 2020Q2 Equity Per Share：NTD/Per Share	2017 2018 2019 2020Q2 Equity Per Share：NTD/Per Share	2017 2018 2019 2020Q2 Equity Per Share：NTD/Per Share	2017 2018 2019 2020Q2 Equity Per Share：NTD/Per Share	2017 2018 2019 2020Q2 Equity Per Share：NTD/Per Share	2017 2018 2019 2020Q2 Equity Per Share：NTD/Per Share	2017 2018 2019 2020Q2 Equity Per Share：NTD/Per Share
		2017		2018		2019		2020Q2
	Item
		NT$bn	%	NT$bn	%	NT$bn	%	NT$bn	%
	Total Borrowing	241.9	45%	175.8	36%	194.0	36%	226.7	39%
	Advances from Customers	45.0	8%	36.5	8%	35.8	7%	44.5	8%
	Total Liabilities	305.4	57%	234.3	48%	292.5	54%	345.2	60%
	Capital (per share NT$10)	116.0	22%	116.0	24%	116.0	22%	116.0	20%
	Parent Equity	227.7	42%	250.7	51%	243.8	45%	232.6	40%
	Total Equity	232.2	43%	253.4	52%	244.8	46%	233.9	40%
	Equity Per Share	19.63		21.62		21.02		20.05

★Based on Parent Equity.

4

Business Strategy

• Business Model

• Utilize premium brand image to create products’ added value.

• Market driven sales strategy.

• Delivery perpetual services

• Land Bank

• Mainly the lands in downtown area, adjoining lands in suburbs with complete residential functions.

• Diversified land development models (including joint venture, commercial urban renewal, … etc.)

5

Operating Results

• Positive Profitability Expected

• 4 new projects completed this year are continually handed over to buyers.

• Outstanding sales of listed projects which will be completed during 2021 to 2022.

• Sufficient Planned Development in Reserve  Approximately 336 billion dollars reserved for planned residential development.

• Approximately 63% of the planned development located in the northern area (north of Hsinchu).

6

Home-Sales Performance(1/2)

			Total	Sales	Year of completion	Year of completion	Year of completion	Year of completion
	Project	Area	Amount (NT$bn)	rate(%)
					2020	2021	2022	2023
	國泰水秀	Taoyuan	12	100%	
	國泰禾	Hsinchu	38	100%	
	國泰PLUS	Taichung	27	100%	
	O2馥建築	Kaohsiung	38	75%	
	國泰豐格	Taipei	18	100%		
	國泰上城	Taipei	17	100%		
	文府硯	Tainan	38	90%		

7

Home-Sales Performance(2/2)

			Total	Sales	Year of completion	Year of completion	Year of completion	Year of completion
	Project	Area	Amount (NT$bn)	rate(%)
					2021	2022	2023	2024
	國泰朋	Taipei	25	100%		
	國泰田	Taipei	31	100%		
	國泰悅	Taipei	18	100%		
	國泰Mega+	Taichung	28	100%		
	國泰豐和	Taipei	20	100%			
	國泰豐碩	Taipei	36	75%			
	國泰川青	Taoyuan	24	60%			
	國泰華威豐年	Taipei	23	95%				

8

Re-investment-Current status and future plan

Cathay Real Estate Development

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Cathay Real Cathay Hospitality Cathay Medical
Estate Healthcare
Management Network
Management Management
R1 R2
Medical
Network:
Madison Taipei Renai Taipei Postpartum
Taipei
Future: Care:
Dunnan Taipei Future:
Zhonghua Tainan
World Building, Hsinchu
Building, Taipei Health Check:
Dunnan Future:
Neihu Hsinchu
Courtyard® by Hsinchu Taichung
Tainan
Current: Marriott® Taipei
Minsheng Taipei
Zhongxiao Taipei
Ximen Building, Anhe Commercial Ximen Tainan Physical
fitness:
Taipei Building Zhongshan Kaohsiung
Tainan
Cozzi Blu
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Sheraton Grande Minsheng Commercial Taipei Hotel Building

9

Presale Market Overview

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Trading Volume Index
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Cathay Real Estate Index

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Housing Price Index
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全國(TAIWAN)

Housing market presents rising price and stable volume in the past year. Covid-19 has made a critical impact on global economic. The trading volume slightly decreased in the first half of the year, yet still higher compared to 2016. As for housing price, it Price corrected at peak in 2013 and has adjusted gradually by quarter since 2016. Even if & housing market got interfered by pandemic, the housing price remain rising. And Volume consumer confidence increases with pandemic easing gradually during the 2[nd] quarter. The key for the recovery of housing market is whether trading volume can keep growing.

10

The Factors Affect Housing Market

The government proceeds land auction and strives for investment promotion. Executive Yuan also launched a plan bring back overseas Taiwanses business and Government steps up the policy of Statute for Expediting Reconstruction of Urban Unsafe and Policy Old Building. Overall, there are no harmful policies to housing market currently so housing demand has increased continuously.

US Fed announced that the interest rate would not increase by 2022. US and other major economies will continue to have easing monetary policies to stimulate the countries reboot economic activities after economy. Although Economic pandemic happening, international trading policies still remains uncertain. With Factors US-China trade battle continues and the economic recession of major countries, the international institutions forecast it’s slowing the growth of global economy. The of vaccine around the world would be the for process development key economic recovery.

11