CHC — Investor Presentation 2019

Jul 5, 2019

Investor Conference

July 5, 2019

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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Company Overview

Overview

• Listed on the Taiwan Stock Exchange (Ticker: 3703 TW)

• Market capitalization: NT$14.1billion as of 6/27/2019

• Shareholders: Board 27%, foreign investors 22%, other domestic investors 51%

Financials

Business Lines

• Capital: NT$8.2 billion

• Revenue for 2018: NT$25.2 billion

• Revenue for Jan-May 2019: NT$10.0 billion

• Civil/Building construction

• Real estate development

• Environmental project development

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Business Scope

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Civil/Building Real Estate Development Construction

Environmental Project Development

• Construction of public • Development of transportation and residential buildings infrastructure • Development of

• • Construction of commercial complexes

• Construction of residential and

• Construction, operation, and maintenance of wastewater reclamation and sewerage systems

commercial buildings

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Construction Revenues Remained Relatively Stable

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Unit: NT$ m
6,611 6,388 6,450
84 5,705
91 89
470
306 4,968
87 562
372
1,432 81
1,910
1,591
1,145 467
957
4,622
4,146 4,101 4,143
3,462
1Q18 2Q18 3Q18 4Q18 1Q19
Construction Real estate development Environmental projects Others
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1Q19 Consolidated Income Statement

Consolidated Income Statement (Unit: NT$ million except for EPS) 2019 1Q	Consolidated Income Statement (Unit: NT$ million except for EPS) 2019 1Q	• • 6,611 -24.9% 922 -26.0% 13.9% -0.2pp (299) 1.8% 623 -39.3% 9.4% -1.8pp (156) NMF 427 49.2% 0.52 49.2% 2018 1Q YoY
Revenue	4,968	6,611 -24.9%
Gross Profit Gross Margin OPEX Operating Income Operating Margin Non Operating Inc/ (Exp)	682 13.7% (304) 378 7.6% 312
Net Income Attributable to Shareholders of the Parent Company	637	427 49.2%
EPS (NT$)	0.77

Revenue fell, mainly because the new projects from the construction business had not contributed to the revenue yet and lower settlement of fully-built units from the real estate business had been seen

Net income attributable to shareholders of the parent company increased mainly because of higher valuation gain on THSRC shares

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Continental Engineering Corporation

• A leading engineering and construction contractor tracing its root back to 1945

• A pioneer in adopting new engineering techniques

• Successfully complete a wide range of public and private-sector construction projects

Recent Projects - Civil Construction

• Hong Kong G506 – Construction of Station Square at Kai Tak Phase 1 (2019)

• GC01 Taoyuan MRT Green Line (2018)

• C211 Tainan Railway Underground (2017)

• C214 Tainan Railway Underground (2017)

• Recent Projects - Building Construction

• Nangang Depot Public Housing Development (2019)

• Grand River Xinyi A7 (2018)

• Guanci Poai Park Public Housing Development (2017)

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On-going Projects: Construction

Civil Construction

• GC01 Taoyuan MRT Green Line (Taiwan)

• C211 Tainan Railway Underground (Taiwan)

• C214 Tainan Railway Underground (Taiwan)

• CJ910 Taichung MRT Depot (Taiwan)

• CJ930 Taichung MRT Green Line (Taiwan)

• CM01 Airport MRT (Taiwan)

Building Construction

• Keishen Shengkai Tate (Taiwan)

• Guanci Poai Park Public Housing Development (Taiwan)

• Sanchih Tucheng (Taiwan)

• Nangang Depot Public Housing Development (Taiwan)

• Reishui Tunnel (Taiwan)

• CQ840 Taipei MRT Wanda Line (Taiwan)

• CQ850A Taipei MRT Wanda Line (Taiwan)

• CQ842 Taipei MRT Wanda Line (Taiwan)

• Mui Wo (HK)

• LT-6 (HK)

• Kai Tak Development – Stage 2 Infrastructure Works for Development at the Southern Part of the Former Runway (HK)

• G506 Construction of Station Square at Kai Tak Phase 1 (HK)

• JMRC UG1B (India)

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Construction: Leveraging Core Competencies to Drive Growth

• Taiwan government’s “Forward Looking Plan” has released civil construction projects with a total value of NT$366 billion during 2017-30 in the railway/metro sector

• Taiwan’s national energy policy will have a focus on natural gas and renewable energy development

• Taiwan’s civil and building segments we target at include: - Civil segment: Railway, stations, and conventional/renewable energy projects - Building segment: High-end residential buildings, mixed-use transit hubs, super high-rise commercial complexes, selective hotels, and turnkey public housing projects

• Hong Kong government’s civil infrastructure expenditures average at HK$56 billion per annum

• Pursue the most advantageous tenders in the civil projects

• Explore new segments in the civil construction

• Utilize technology to elevate efficiency

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Continental Development Corporation

• Highly recognized in developing high-end residential buildings

• A Pioneer in large-sized community development

• Continue developing commercial real estate and building partnership

• Recent Projects

• 琢豐 (2018)

• 琢白 (2016)

• 丽格 (2016)

• Recent Land Acquisitions and Development Projects

• Bangsar District, Kuala Lumpur, Malaysia (2019)

• Intersection of Zhongshan and Linsan Roads, Kaohsiung City (2019)

• Sixin Section, Xindian District, New Taipei City (2018)

• Zhishan Section, Shilin District, Taipei City (2018)

• Dakeng Scenic Area, Taichung City (2018)

• Yongsheng Park, Zhongshan District, Taipei City (2018)

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On-going Projects: Real Estate Development

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Taipei Taichung
琢豐 丽格
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San Francisco
USA
Residential & Commercial
Complex
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Kuala Lumpur
Malaysia
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Service Apartment

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Real Estate Development: Diversifying the Portfolio and Creating Values

Market Overview	• Taiwan’s real estate market has gradually gained its momentum and restored • Only those developers with reputation and financial capabilitiescan sustain well		Strategy	• Geographical expansion from northern tocentral and southern Taiwan • Continue developing commercial real estate projectswithpartners • Continue observing and exploring new segmentsin response to demographic changes

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HDEC Corporation

• Inherits environmental engineering competencies from CEC

• Participates in local government tenders for sewerage system BOT and wastewater reclamation and reuse BTO projects

• Exhibits project management capabilities in planning, designing, building and operation & maintenance

• Continue exploring new environmental projects

• Recent Projects

• Linhai Wastewater Reclamation & Reuse BTO project (2018)

• Puding Area Sewerage System BOT Project (2016)

• Chungli Area Sewerage System BOT Project (2016)

• Fengshan River Wastewater Reclamation & Reuse BTO Project (2016)

• New Taipei City Danshui Area Sewerage System BOT Project (2005)

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Water Resources Plants in Operation

Tamsui, New Taipei City Fengshan, Kaohsiung City

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Environmental Projects: Growing Water Business and Exploring Other Environment Project Areas

Market Overview		• Taiwan government’s expenditures insewerage system projectsamount to NT$58 billion during 2018-22 • Taiwan government’s expenditures inwastewater reclamation and reuse projectsamount to NT$20 billion during 2018-22		Strategy	• Continue developing new business opportunities in sewerage system projects andwastewater reclamation and reuse projects • Carefully consider tapping intoothernew segments • Continue enhancing Engineering Procurement Construction (“EPC”)project management capabilities and operational execution

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Thank you