CHC — Interim / Quarterly Report 2021

Aug 9, 2021

Continental Holdings Corporation

3703.TT

2021 Second Quarter Earnings Conference

August 9, 2021

Disclaimer Statement

• This presentation and release contain “forward-looking statements” which may include

projections of future results of operations, financial condition or business prospects based on our own information and other sources.

• Our actual results of operations, financial condition or business prospects may differ from those expressed or implied in these forward-looking statements for a variety of reasons, including but not limited to market demand, price fluctuations, competition, international economic conditions, supply chain issues, exchange rate fluctuations and other risks and factors beyond our control.

• The forward-looking statements in this release reflect the current belief of Continental Holdings Corporation as of the date of this release. Continental Holdings Corporation undertakes no obligation to update these forward-looking statements for events or circumstances that occur subsequent to such date.

2

Year-over-year growth for revenue and net profit

Selected Items from Income Statement (In NT$ millions unless otherwise noted)	1H21	1H20	YoY
Total Revenue	11,945	8,938	+33.6%
Gross Profit	1,750	1,450	+20.7%
Gross Margin	14.6%	16.2%	-1.6 ppt
Operating Expense	689	674	+2.1%
Operating Profit	1,061	775	+36.8%
Operating Profit Margin	8.9%	8.7%	+0.2 ppt
Non-Ops	(98)	(0.4)	+23,651%
Net Profit, attributable to owners of parent	803	742	+8.2%
Net Profit Margin	6.7%	8.3%	-1.6 ppt
EPS (NT$)	0.98	0.90	+8.2%

3

Revenue growth across all segments in 1H

Consolidated Revenues of CHC and each Business Segments (NT$ M)

Environmental Project Real Estate Development Construction Development

YoY

+500 (+36.8%)

• Mainly due to increased construction revenue of Anping Reclaimed Water Plant and Tongluo Science Park Wastewater Treatment Plant Phase II EPC

+1,351 (+81.7%)

• Mainly due to revenue from projects such as 55Timeless and Treasure Garden .

+1,207 (+18.0%)

• Mainly due to increased revenue from Taoyuan MRT Green Line GC01 Section and other private sector construction projects.

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*Consolidated revenue of three business segments do not add up to CHC’s consolidated revenue because of eliminations

Significant profit growth in Real Estate Development and Environmental Pro ect Develo ment se ments in 1H j p g

Net Profit of CHC and each Business Segments (NT$ M)

Environmental Project Real Estate Development Construction Development

YoY

+55

• Mainly due to revenue increase

(+31.6%)

+236

• (+102.4%)

• Mainly due to increase in revenue and decrease in OPEX ratio

-14

(-6.0%)

  - **Mainly due to cash dividend of NT$56m deferred to third quarter**

• Net profit denotes net profit attributable to owners of parent;

• Net profit of three business segments do not add up to CHC’s net profit because of eliminations

5

Strong balance sheet

Selected Items from Balance Sheet (NT$ M)	2021.6.30 Amount %	2020.12.31 Amount %	2020.6.30
			Amount %
Cash and Cash Equivalents	4,846 7.0	4,512 6.7	3,809 5.8
Current Contract Assets	3,832 5.5	3,892 5.8	4,362 6.6
Account Receivable, Net	2,442 3.5	2,036 3.0	1,896 2.9
Inventories	28,474 41.0	28,363 42.2	29,174 44.1
Property, Plant and Equipment	2,416 3.5	2,346 3.5	2,248 3.4
Investment Property, Net	10,431 15.0	10,193 15.2	9,896 15.0
Long-term Accounts Receivables	6,748 9.7	5,808 8.6	5,392 8.2
Total Assets	69,459 100	67,155 100	66,147 100
Short-term Interest-bearing Loans	12,296 17.7	12,811 19.1	10,314 15.6
Current Contract Liabilities	8,225 11.8	8,121 12.1	7,491 11.3
Accounts and Notes Payable	5,521 7.9	5,784 8.6	5,514 8.3
Long-term Interest-bearing Loans	11,380 16.4	9,099 13.5	11,666 17.6
Total Liabilities	42,327 60.9	40,235 59.9	40,155 60.7
Total Equity	27,132 39.1	26,920 40.1	25,992 39.3

6

Solid backlog of three business segments

Construction

Real Estate Development

Environmental Project Development

Backlog NT$ 67.0B

4.8x of 2020 Revenues • +NT$0.3B QoQ, mainly due to the newly awarded civil and building construction projects in Taiwan this quarter

Contracts on hand NT$ 39.8B 12.8x of 2020 Revenues

Signed contracts to close Contracts on hand NT$ 16.7B NT$ 39.8B 2.9x of 2020 Revenues 12.8x of 2020 Revenues • • +NT$0.4B QoQ, mainly due to -NT$0.7B QoQ, mainly due to new signed contracts from lack of new contract bids this domestic completed projects quarter and domestic/overseas pre-sell projects

Note:

1. Backlog and contract numbers are as of end of second quarter, 2021; Revenues numbers are 2020 consolidated revenues

2. Contracts on hand for Environmental Project Development business are calculated based on contract terms and project status. Actual recognized revenue amount may vary based on final execution for each project.

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Pipeline of Real Estate Development Business

	Project Name	Location	Type	Value1 (NT$)	Completion Date2	Completion Date2	Completion Date2	Completion Date2	Completion Date2
					2021	2022	2023	2024	2025
	Bountiful Journey/ Hotel by_My Humble House Group_	Taipei	Residence/ Hotel	8.20B (Residence/Retail only)	v
	Drawing the Dream Life	New Taipei	Residence	2.84B		v
	Timeless and Modern Expression	Taipei	Residence	2.52B		v
	Tianjin Street Project	Taipei	Residence	2.23B			v
	Arranging New Asia Bay/ The Hotel Nikko3	Kaohsiung	Residence/ Hotel	3.50B (Residence only)			v
	Huiguo 101	Taichung	Residence/ Office	4.12B (Residence only)				v
	Dakeng Project	Taichung	Township Community	3.54B				v
	Sensuous Garden	Taipei	Residence	4.50B					v
	Republic Building Project	Taipei	Residence	4.31B					v
	SERIF/ THE LINE Hotel4	San Francisco, CA, USA	Residence/ Hotel	US$240M (Residence only)	v
	Capri by Fraser4	Kuala Lumpur, Malaysia	Serviced Apartment	-	v
	Bangsar Project4	Kuala Lumpur, Malaysia	Residence	MY$170M				v

1. (1) Total project value amounts for JV and overseas projects; otherwise project value amounts attributable to CDC. (2) Actual project value amounts for sold-out projects; otherwise estimated project value amounts.

2. Scheduled completion date is the estimated earliest year to recognize part or all of the project revenues.

3. Owned by JV between Daiwa House Group (65%) and CDC (35%)

4. Owned by CDC subsidiaries; 54.08%, 55%, and 60% stake in the project companies for SERIF/The LINE Hotel, Capri by Fraser, and Bangsar Project, respectively.

8

Strategically and financially synergistic portfolio poised for growth

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

•
Profitability over revenue
•
Participate in the civil portion of the
Construction emerging energy related projects
•
Use technology to enhance safety and to
improve productivity
•
Diversify into other cities beyond
Real Estate Taipei/Taichung
•
Cultivate more project in the
Development
commercial sector (office, etc.)
•
Well poised to gain more reclaimed water
Environmental projects
•
Ally with partners to enter incinerator business
Project
•
Leverage existing anaerobic digestion
Development
capabilities to enter bio-mass energy business
----- End of picture text -----

9

Recap of recent major events

• FY2020 cash dividend of NT$1.4 per share paid (2021/07/30)

• Resolutions and elections resolved in the 2021 AGM included (2021/07/30):

• Amending Article of Incorporation to include the floor of the payout ratio

• Electing the 5[th] board of directors, of which female directors account for 43% of total directors

• Approving lifting non-competition restriction for the 5[th] board of directors

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3703.TW 欣陸投控 Continental Holdings Corporation https://www.continental-holdings.com ir@continental-holdings.com +886-2-2700-4509