CHC — Interim / Quarterly Report 2021

May 10, 2021

Continental Holdings Corporation

3703.TT 2021 First Quarter Earnings Conference

May 10, 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.

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Agenda

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Company Overview
Business Outlook
1Q21 Financial Results
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Tracing our roots back to 1945 and gradually diversifying into adjacent sectors

1945

Our flagship construction company Continental Engineering Corporation (CEC) was established

1994

CEC was listed on the Taiwan Stock Exchange

2010

Continental Holdings Corporation (CHC) was established and listed on the Taiwan Stock Exchange with two wholly-owned member companies CEC and CDC

1964

CEC commenced real estate development business, the predecessor of Continental Development Corporation (CDC)

2006

CEC established HDEC Corporation (HDEC) to develop environmental projects

2017

HDEC became the third wholly-owned member company of CHC

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Company overview

Market Cap[(As of 5/6/2021)] NT$23.6B

Ultimate Parent’s Shareholding Montrion Corporation 50.05%

FY2020 FY2020 Net Profit/EPS (NT$/Share) Consolidated Revenues NT$1.54B/$1.87 NT$21.7B (Second highest in history)

BVPS[(As of 3/31/2021)]

$28.5

Revenues/Net Profit Breakdown by Business

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Construction

59%/19%

Real Estate Development 27%/58%

Environmental Project Development 14%/23%

Note: Breakdown in FY2020

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Three member companies focusing on construction, real estate development and environmental project development

Construction

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Real Estate Environmental Project Development Development

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• 75 years of credentials

• Has successfully completed major civil construction works involving viaducts, bridges and tunnels for high-speed rail, highway, metro and railway projects

• Delivered a comprehensive range of building construction projects including hospitals, hotels, multifunctional complexes, high-end residences, as well as township

• A premium property developer specializing in residential, commercial and hotel sectors

• Has partnered with master architects including Richard Meier, Antonio Citterio and Benedetta Tagliabue on many landmark building projects

• Has ongoing projects in Taiwan, USA & Malaysia

• Strong track records in water treatment

• Established Taiwan’s first reclaimed water plant and is set to deliver Taiwan’s first government-owned industrial wastewater treatment plant with zero liquid discharge

• Expertise in processing sewage, industrial wastewater, solid waste, etc.

communities

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58% of revenues linked to the Sustainable Development Goals (SDGs)

2020 By-Segment Consolidated Revenues

Corresponding SDGs

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Construction of
MRT and
Railways
27%
Construction of
Urban Renewal and
Public Housing
Projects
Water
17%
Treatments
14%
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Agenda

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Company Overview
Business Outlook
1Q21 Financial Results
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Business outlook

1 Positive market outlook underpinned by sustainable urbanization

2 Leading market position cemented by our credentials / brands

3 Solid backlog providing revenue visibility

4 Strategically and financially synergistic portfolio poised for growth

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1 Positive market outlook underpinned by sustainable urbanization

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Expanding /renewing Liveable cities
rail network
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• Increasing needs for intra- and inter-city connection

• A growing number of urban renewal projects as >50% of apartments are >30 years old

• Renewal of the existing railway network

• 200,000 units of social housing by 2024

• Potential MRT/railway bids in 2021-25 amounting to NT$350 billion

• Government’s initiatives to upgrade city landscape

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Circular economy
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• At least 7 more reclaimed water projects in the pipeline after the 4 awarded projects

• Upgrade of existing 12 incinerators ($75b)

• • Ramp up of bio-mass energy generation (from kitchen waste)

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2 Leading market position cemented by our credentials / brands

Construction	• •	Civil : • #1 in the railway and MRT sector and top 3 in Taiwan (by revenue) • Beneficiary of government’s increasing adoption of most advantageous bids Building : CEC brand denotes high quality for home buyers in Taiwan
Real Estate Development	• • •	Leading brand in Taiwan’s high-end residential market Track records of mixed-use property development Achieve price premium through brand value, engaging renowned architects, exclusive service offering (residents’ access to facilities of adjacent hotel), etc.

Environmental Project Development	• Has won 3 out of government’s 4 awarded reclaimed water projects • Moving up the value chain from processing of sewage to production of reclaimed water, to processing of industrial wastewater • Beneficiary of manufacturers’ ramp up of production capacity in Taiwan

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3

Solid backlog providing revenue visibility Construction: Balanced civil/building portfolio

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Civil Construction - MRT

Taipei MRT Wanda Line (CQ840) Taipei MRT Wanda Line (CQ850A) Building Construction Taoyuan MRT Green Line (GC01) Bountiful Journey (Residence & Hotel) Taoyuan MRT Green Line (GC03) Nangang Depot (Public Housing) Guangci (Public Housing) CMP Midtown (Residence)

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Civil Construction - Railway

Tainan Railway Underground (C211) Tainan Railway Underground (C214)

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3 Solid backlog providing revenue visibility Real estate develo ment: Growth under inned b health i eline p p y y p p

	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	4.10B					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 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.

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3 Solid backlog providing revenue visibility

Environmental project development: Full spectrum of water treatment solutions

Project	Location	Type	Duration	Current Status	Current Status	Category	Category	Category
				Under Construction	Operating	Municipal Wastewater	Reclaimed Water	Industrial Water
Danshui Area Sewerage System	Taipei	BOT	2005 – 40
Fengshan River Wastewater Reclamation and Reuse	Kaohsiung	BTO	2016 – 33
Puding Area Sewerage System	Taoyuan	BOT	2016 – 55
Chungli Area Sewerage System	Taoyuan	BOT	2016 – 56
Linhai Wastewater Treatment Plant and Reclaimed Water	Kaohsiung	BTO	2018 – 36		(Operating from November)
Tongluo Science Park Wastewater Treatment Plant Phase II	Miaoli	EPC	2020 – 23
Anping Reclaimed Water Plant	Tainan	DBO	2020 – 37

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4 Strategically and financially synergistic portfolio poised for growth

	Construction	Real Estate	Environmental
Business Cycle
Employed Capital
Profitability
Required capabilities	• Technical (design- build, BIM, etc.) • Management of contractual relations	• Project management • Financing • Asset management	• Project development • Management of contractual relations • Capital management

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4 Strategically and financially synergistic portfolio poised for growth

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•
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
•
Participate in incinerator business with partners
Project
•
Leverage existing anaerobic digestion
Development
capabilities to enter bio-mass energy business
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Agenda

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Company Overview
Business Outlook
1Q21 Financial Results
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Significant year-over-year growth for revenue and net profit

Selected Items from Income Statement (In NT$ millions unless otherwise noted)	1Q21	1Q20	YoY
Total Revenue	6,353	4,339	+46.4%
Gross Profit	993	731	+35.8%
Gross Margin	15.6%	16.9%	-1.3 ppt
Operating Expense	351	283	+23.9%
Operating Profit	642	448	+43.4%
Operating Profit Margin	10.1%	10.3%	-0.2 ppt
Non-Ops	(80)	(39)	+103.9%
Net Profit, attributable to owners of parent	481	354	+35.8%
Net Profit Margin	7.6%	8.2%	-0.6 ppt
EPS (NT$)	0.58	0.43	+35.8%

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Revenue growth across all segments

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

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Environmental Project
Real Estate Development Construction
Development
6,353 YoY
+511
46.4% 1,098
(+87.1%)
4,339
2,105 +1,285
587 (+156.7%)
820
+76
3,528 3,604
(+2.2%)
1Q20 1Q21
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• Mainly due to increased construction revenue of Linhai Wastewater Treatment and Reclaimed Water Plant BTO, and Tongluo Science Park Wastewater Treatment Plant Phase II EPC

• Mainly due to revenue from projects such as 55Timeless, Treasure Garden, and La Bella Vita.

• Mainly due to increased revenue from civil and building construction projects in Taiwan

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

Profit growth across all segments

Net Profit of CHC and each Business Segments (NT$

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Environmental Project M)
Real Estate Development Construction
Development
481 YoY
35.8%
+39 • Mainly due to revenue increase
125
(+45.3%)
354
86
+184 • Mainly due to revenue increase
366
(+101.1%)
182
+26 •
41
15 (+173.3%) civil construction projects in Taiwan
1Q20 1Q21
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• Mainly due to gross profit expansion from civil construction projects in Taiwan

• 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

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Solid backlog of three business segments

Construction

Environmental Real Estate Project Development Development

Backlog Signed contracts to close Contracts on hand NT$ 66.7B NT$ 16.3B NT$ 40.5B 4.7x of 2020 Revenues 2.8x of 2020 Revenues 13.0x of 2020 Revenues • +NT$0.2B QoQ, mainly due • -NT$0.4B QoQ, mainly due to • -NT$2.0B QoQ, mainly due to to the newly awarded civil higher hand-overs this quarter lack of new contract bids and and building construction adjustment on revenue projects in Taiwan this forecast for some projects quarter

Note:

1. Backlog and contract numbers are as of end of first 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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Strong balance sheet

Selected Items from Balance Sheet (NT$ M)	2021.3.31 Amount %	2020.12.31 Amount %	2020.3.31
			Amount %
Cash and Cash Equivalents	5,412 7.8	4,512 6.7	3,755 5.8
Current Contract Assets	3,766 5.4	3,892 5.8	4,993 7.7
Account Receivable, Net	2,565 3.7	2,036 3.0	1,898 2.9
Inventories	28,104 40.4	28,363 42.2	28,968 44.5
Property, Plant and Equipment	2,335 3.4	2,346 3.5	2,261 3.5
Investment Property, Net	10,320 14.8	10,193 15.2	9,849 15.1
Long-term Accounts Receivables	6,367 9.1	5,808 8.6	4,927 7.6
Total Assets	69,601 100	67,155 100	65,148 100
Short-term Interest-bearing Loans	12,889 18.5	12,811 19.1	11,595 17.8
Current Contract Liabilities	8,287 11.9	8,121 12.1	6,634 10.2
Accounts and Notes Payable	5,504 7.9	5,784 8.6	5,846 9.0
Long-term Interest-bearing Loans	10,634 15.3	9,099 13.5	9,965 15.3
Total Liabilities	42,951 61.7	40,235 59.9	39,219 60.2
Total Equity	26,650 38.3*	26,920 40.1	25,929 39.8

*The Board has declared FY20 Cash Dividend amount of NT$1.15B in March, resulting a decrease in total equity this quarter compared to the end of FY20

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Recap of recent major events

• Completed issuance of domestic secured corporate bond, with total amount of NT$2.0B (2021/01/11)

• The Board approved FY2020 cash dividend of NT$1.4 per share (2021/03/16)

• The Board approved the convening of the 2021 AGM, with meeting date set for June 1[st] . Resolutions and elections to be resolved include (2021/03/16):

• To amend Article of Incorporation to include the floor of the payout ratio

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

• To approve 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