CHC — Investor Presentation 2020

Aug 14, 2020

Investor Conference

August 14, 2020

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

Company Overview

Overview

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

• Market capitalization: NT$11.9 billion as of 8/7/2020

• Shareholder Structure: Board 33%, foreign investors 21%, other domestic investors 46%

Financials

Business Segments

• Capital: NT$8.2 billion

• Revenue for 2019: NT$22.7 billion

• Revenue for Jan-Jul 2020: NT$10.9 billion

• Civil/Building construction

• Real estate development

• Environmental project development

3

Business Scope of Member Companies

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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 commercial complexes

• Construction of residential and commercial buildings

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

4

Revenue Mainly Comes from Construction Business

Revenue by Segment

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5

1H20 Business Highlight of Member Companies

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Construction Real Estate Development End of 1H20 End of 1H20 Contract Value Backlog for Sales/Presales $72 billion $12.4 billion

Environmental Projects During 1H20 New Tenders Awarded $8.1 billion

6

1H20 Results

Consolidated Income Statement

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(Unit: NT$ million except for EPS)
1H20 1H19 YoY
Revenue 8,938 11,977 -25.4%
Gross Profit 1,450 1,560 -7.1%
Gross Margin 16.2% 13.0% +3.2 pp
OPEX (674) (684) -1.4%
Operating Income 775 876 -11.5%
Operating Margin 8.7% 7.3% +1.4 pp
Non Operating Inc/ (Exp) (0) 201 -100.2%
Net Income Before Income Tax 775 1,077 -28.1%
Less: Income Tax (Profit) Expense (16) 273 -105.7%
Net Income Attributable to
742 771 -3.7%
Shareholders of the Parent Company
EPS (NT$) 0.90 0.94 -3.7%
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Gross Margin increased, mainly because of higher product mix margin from the real estate development segment in this period

Operating income decreased, mainly because of higher comparison base from the real estate development segment due to the settlement of 55Timeless in the last period

Net income attributable to

shareholders of the parent company

slightly decreased, mainly because of lower operating income and no gain on disposal of THSRC stocks but significantly lower income tax in this period

7

Business Outlook

Civil/Building Construction

• Indian projects and overseas equity investment will no longer impact financial performance

• Apply core competencies to the new areas of growth

Real Estate Development

• Project portfolio is more diverse in segmentation and geography

• 5 domestic and overseas projects would be completed in 2 years

Environment Project Development

• Continue to cultivate its core business in water treatment

• Carefully assessing biomass power generation and solid waste disposal markets

Recalibrated business focus and confirmed strategic direction

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2019
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8

Continental Engineering Corporation (CEC)

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

• Pioneer in adopting new engineering techniques

• Successfully completed 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)

• GC03 Taoyuan MRT Green Line (2019)

• GC01 Taoyuan MRT Green Line (2018)

• C211 Tainan Railway Underground (2017)

• C214 Tainan Railway Underground (2017)

• Recent Projects - Building Construction

• Taipei Nangang Depot Public Housing Design and Built Project (2019)

• Grand River Xinyi A7 (2018)

• Guanci Po-Ai Park Public Housing Development (2017)

9

On-going Projects: Construction

Civil Construction

• GC01 Taoyuan MRT Green Line (Taiwan)

• GC03 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)

•

Building Construction

• Keishen Shengkai Tate (Taiwan)

• Guanci Po-Ai Park Public Housing Development (Taiwan)

• Sanchih Tucheng Project (Taiwan)

• Nangang Depot Public Housing Design and Built Project (Taiwan)

• CM01 Airport MRT (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)

10

CEC – Revenue and Profit

Unit : NT$ m

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8,346
6,710
The overseas equity
investment no longer
impact financial
Recognized losses in
performance
overseas equity
investment
228
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1H19

(222) 1H20

Revenue Net Income

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CEC – Backlog

Unit : NT$100 m

End of 1H20 Backlog $72 billion

Equivalent to 3.6-year revenue

659

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2019/6/30

720

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2020/6/30

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Continental Development Corporation (CDC)

• Highly recognized in high-end residential market

• A Pioneer in large-sized community development

• Continue developing commercial real estate with market leaders

From 2015 to 2019 Sales CAGR 21%

Unit : NT$ m

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5,901
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4,600
3,734
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2,946
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2,283
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Sales
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2015

2016

2017

2018

2019

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CDC – Revenue and Profit

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Higher comparison base due to the
settlement of 55Timeless in the last
period；Deferred settlements due
to COVID-19 pandemic in the
beginning of this year
3,308
Unit : NT$ m
1,654
988
230
1H19 1H20
Revenue Net Income
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14

CDC – Recent Projects

Greater Taipei Area

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Bountiful Journey Tianjin Street

Timeless and Modern Expression Fullerton Hotel Joint-Development Project

55Timeless

Drawing the Dream Life

Taichung 7[th] Redevelopment Zone La Bella Vita

Kaohsiung

Residential & Commercial Complex

Overseas

USA：Residential & commercial complex in San Francisco Malaysia：Hotel in Kuala Lumpur

Source of Qianzhen District map：Wikipedia (Author:Xy19043112) 15

CDC – Sales and Project Overview

End of 1H20 Contract Value for Sales and Presales NT$12.4 billion

Project Name Location Product Type Date of Completion Salable Value (NT$100 m) Remark	Project Name Location Product Type Date of Completion Salable Value (NT$100 m) Remark	Project Name Location Product Type Date of Completion Salable Value (NT$100 m) Remark	Project Name Location Product Type Date of Completion Salable Value (NT$100 m) Remark	Project Name Location Product Type Date of Completion Salable Value (NT$100 m) Remark	Project Name Location Product Type Date of Completion Salable Value (NT$100 m) Remark
Completion
Treasure Garden	Xitun District, Taichung	Residence	2017/9	90
55Timeless	Xinyi District, Taipei	Residence/ Commercial	2019/1	120
La Bella Vita	Xitun District, Taichung	Residence/ Commercial	2020/3	87
Under Presale
Bountiful Journey	Zhongshan District, Taipei	Residence/ Commercial	2H21	90
Drawing the Dream Life	Xindian District, New Taipei	Residence/ Commercial	1H22	35
Timeless and Modern Expression	Shilin District, Taipei	Residence/ Commercial	2H22	35
Expected Presale This Year
Kaohsiung Asia New Bay Area Project	Qianzhen District, Kaohsiung	Residence/ Hotel	2H23	40 (Residence)	CDC with 35% shareholding
Tianjin Street Project	Zhongshan District, Taipei	Residence/ Commercial	2H23	35
Fullerton Hotel Project	Songshan District, Taipei	Residence/ Hotel	2H24	43 (Residence)
Overseas Projects
The LINE SF	San Francisco, USA	Residence/ Hotel	1H21	75 (Residence)	CDC with 54% shareholding
Malaysia Mega Project	Kuala Lumpur, Malaysia	Hotel	1H21	30	CDC with 55% shareholding
Malaysia Bangsar Project	Bangsar area of Kuala Lumpur, Malaysia	Serviced Apartment	1H24	10	CDC with 60% shareholding
Under Development
Huiguo 101	Taichung 7th Redevelopment Zone	Residence/ Office	N/A		Expected presale next year
TaichungDakengProject	Dakeng,Taichung	Villa	N/A		Expectedpresale nextyear
Republic BuildingProject	Daan District,Taipei	Residence	N/A

16

HDEC Corporation

• Inherit environmental engineering competencies from CEC

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

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

• Continue exploring new environmental projects

Unit : NT$ m

From 2015 to 2019 Revenue CAGR 17%

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1,710
1,497
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1,785
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800 Consolidated Revenue
677
303
220 259 267
169
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Net Income
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2015

2016

2017

2018

2019

17

HDEC Corporation – Revenue and Profit

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Linhai project enters its
construction peak
Unit : NT$ m
47%
1,359
926
151 173
1H19 1H20
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Revenue Net Income

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HDEC Corporation – Current Projects

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Project Under Operation
New Taipei City Danshui Area Sewerage System BOT Project (2005-2040)
Taoyuan
New Taipei
Chungli Area Sewerage System BOT Project (2016-2056)
Puding Area Sewerage System BOT Project (2016-2055) Miaoli
New Tenders Awarded
Tongluo Science Park Wastewater Treatment Plant
Phase II project (2020-2023)
Tainan Anping Reclaimed Water Plant New
Construction Turnkey Project (2020-2037)
Tainan
Project Under Operation Kaohsiung
Fengshan River Wastewater Reclamation & Reuse BTO Project
(2016-2033)
Linhai Wastewater Treatment Plant and Reclaimed Water
BTO Project (2018-2036)
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19

Thank you