CHC — Investor Presentation 2021

Apr 7, 2021

Continental Holdings Corporation

3703.TT

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
Investment Highlights
Financial Snapshot
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Tracing our roots back to 1945; Diversifying into adjacent sectors over the past 75 years

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 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 member company of CHC

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Company Overview

MktCap[(As of 4/6/2021)] NT$20.3B

Shareholder Structure

Board 33% + FINI 21% + Others 46%

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

BVPS[(As of 12/31/2020)]

28.8 $

3 Major Business Segments Breakdown in Sales/Net Profit

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Civil & Building Real Estate Construction Development 59%/19% 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

Civil & Building 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 sustainable development goals

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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Selected 2020 ESG efforts

BS 8001:2017 Reduction in Reduction in Circular Economy CO2 emissions waste sludge Certificate

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First public
468 1,024 housing
project
tons tons
in Taiwan
Customer Female
Satisfaction Board Directors
(CDC)
28%
98%
(Taiwan Avg:
14%)
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Agenda

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Company Overview
Investment Highlights
Financial Snapshot
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Investment Highlights

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

• Renew the existing rail network

• 200,000 units of social housing by 2024

• Potential MRT/rail 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 recycled 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 rail and MRT sector and top 3 in Taiwan (by revenue) • Beneficiary of government’s increasing adoption of most advantageous bids Building : Able to get price premium from developers as CEC brand denotes high quality for home buyers in Taiwan

• Leading brand in Taiwan’s high-end residential market • Track records of mixed-use property development Real Estate • Achieve price premium through brand value, engaging renowned Development architects, exclusive service offering (residents’ access to 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 water • Beneficiary of manufacturers’ ramp up of production capacity in Taiwan

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3 Solid backlog providing revenue visibility

Civil & Building Real Estate Environmental Construction Development Project Development

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Backlog Signed contracts to close
NT$ 66.5B NT$ 16.7B
-4% YoY +90% YoY
4.7x of 2020 Revenues 2.8x of 2020 Revenues
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Contracts on hand
NT$ 42.5B
+16% YoY
13.7x of 2020 Revenues
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Note: Backlog and contract numbers are as of end of 2020; Revenues numbers are 2020 consolidated revenues

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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)

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

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Available for Settlement Revenues in 2021~
Taipei, Taiwan Taichung, Taiwan Taichung, Taiwan Kuala Lumpur, Malaysia San Francisco, CA, USA Taipei, Taiwan
55 Timeless 琢白 Treasure Garden 宝格 La Bella Vita 丽格 Capri by Fraser SERIF/ The LINE Hotel Bountiful Journey琢豐
(Residence) (Residence) (Residence) (Serviced Apartment) (Mixed-use Complex) (Hotel & Residence)
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Revenues in 2022~ Revenues in 2023~
Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Kaohsiung, Taiwan • Taipei, Taiwan:
Drawing the Dream Life Timeless and Modern Tianjin Street Project Arranging New Asia Bay •
鐫画 (Residence) Expression 鐫月 鐫豊 和陸寓邸 & The Hotel Nikko (Residence)
(Residence) (Residence) (Residence & •
Hotel)
(Residence)
• Taichung, Taiwan:
•
•
• KL, Malaysia:
•
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Revenues in 2024 ~

• Sensuous Garden 鐫萃 (Residence)

• Republic Building Project (Residence)

• Dakeng Project (Township community)

• Huiguo 101 Project (Residence)

• • KL, Malaysia:

• Bangsar Project (Residence)

*JV between Daiwa House Group and CDC, CDC owns 35% of the company

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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 Plan and Reclaimed Water	Kaohsiung	BTO	2018 – 36
Tongluo Science Park Wastewater Treatment Plan 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
Investment Highlights
Financial Snapshot
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Enhancing gross margin and cleaning up non-op items

(NT$M)	2016 2017 2018 2019 2020
	Amount % Amount % Amount % Amount % Amount %
Revenue	24,537 100 28,385 100 25,154 100 22,665 100 21,689 100
Gross Profit	1,594 6.5 2,349 8.3 3,72414.8 2,733 12.1 3,292 15.2
Operating Profit	320 1.3 1,167 4.1 2,350 9.3 1,325 5.8 1,762 8.1
Non-Ops	219 0.9 (276) (1.0) (198) (0.7) (702) (3.1) (41) (0.2)
Profit before Tax	539 2.2 892 3.1 2,162 8.6 623 2.8 1,721 7.9
Tax Expense	42 0.2 84 0.3 144 0.6 470 2.1 88 0.4
Profit,attributable to owners of parent	529 2.2 788 2.8 1,942 7.7 97 0.4 1,539 7.1
EPS, $	0.64 0.96 2.36 0.12 1.87

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GM expansion mainly because of favorable change in revenue mix

Consolidated Gross Margin and Revenue Composition

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14.8% 15.2%
12.1%
8.3%
6.5%
3%
6% 7% 8%
14%
14%
17%
25% 22%
27%
83%
77%
68% 70% 59%
2016 2017 2018 2019 2020
Construction Real Estate Development Environmental Project Development
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Strong balance sheet

Selected Items from Balance Sheet (Unit: NT$ M)	2020 Amount %	2019
		Amount %
Cash and Cash Equivalents	4,512 6.7	4,423 7.0
Current Contract Assets	3,892 5.8	4,963 7.8
Account Receivable, Net	2,036 3.0	2,140 3.4
Inventories	28,363 42.2	26,369 41.5
Property, Plant and Equipment	2,346 3.5	2,287 3.6
Investment Property, Net	10,193 15.2	9,835 15.5
Long-term Accounts Receivables	5,808 8.6	4,548 7.2
Total Assets	67,155 100	63,548 100
Short-term Interest-bearing Loans	12,811 19.1	9,972 15.7
Current Contract Liabilities	8,121 12.1	6,555 10.3
Accounts and Notes Payable	5,784 8.6	5,908 9.3
Long-term Interest-bearing Loans	9,099 13.5	10,353 16.3
Total Liabilities	40,235 59.9	37,851 59.6
Total Equity	26,920 40.1	25,697 40.4

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Year 2020: 6.0% Dividend yield and 75% payout ratio

CHC Cash Dividend (NT$/Share) Since Inception

	2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 931 984 1,147 920 (980) 573 529 788 1,942 97 1,539 54% 43% 37% 91% - 72% 78% 63% 38% 424% 75% 4.7% 4.6% 4.5% 4.2% - 4.6% 4.3% 4.5% 5.2% 3.7% 6.0% 0.60 0.50 0.50 0.50 0 0.50 0.50 0.60 0.90 0.50 1.40 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020	2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 931 984 1,147 920 (980) 573 529 788 1,942 97 1,539 54% 43% 37% 91% - 72% 78% 63% 38% 424% 75% 4.7% 4.6% 4.5% 4.2% - 4.6% 4.3% 4.5% 5.2% 3.7% 6.0% 0.60 0.50 0.50 0.50 0 0.50 0.50 0.60 0.90 0.50 1.40 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020	2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 931 984 1,147 920 (980) 573 529 788 1,942 97 1,539 54% 43% 37% 91% - 72% 78% 63% 38% 424% 75% 4.7% 4.6% 4.5% 4.2% - 4.6% 4.3% 4.5% 5.2% 3.7% 6.0% 0.60 0.50 0.50 0.50 0 0.50 0.50 0.60 0.90 0.50 1.40 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020	2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 931 984 1,147 920 (980) 573 529 788 1,942 97 1,539 54% 43% 37% 91% - 72% 78% 63% 38% 424% 75% 4.7% 4.6% 4.5% 4.2% - 4.6% 4.3% 4.5% 5.2% 3.7% 6.0% 0.60 0.50 0.50 0.50 0 0.50 0.50 0.60 0.90 0.50 1.40 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020	2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 931 984 1,147 920 (980) 573 529 788 1,942 97 1,539 54% 43% 37% 91% - 72% 78% 63% 38% 424% 75% 4.7% 4.6% 4.5% 4.2% - 4.6% 4.3% 4.5% 5.2% 3.7% 6.0% 0.60 0.50 0.50 0.50 0 0.50 0.50 0.60 0.90 0.50 1.40 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020	2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 931 984 1,147 920 (980) 573 529 788 1,942 97 1,539 54% 43% 37% 91% - 72% 78% 63% 38% 424% 75% 4.7% 4.6% 4.5% 4.2% - 4.6% 4.3% 4.5% 5.2% 3.7% 6.0% 0.60 0.50 0.50 0.50 0 0.50 0.50 0.60 0.90 0.50 1.40 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020	2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 931 984 1,147 920 (980) 573 529 788 1,942 97 1,539 54% 43% 37% 91% - 72% 78% 63% 38% 424% 75% 4.7% 4.6% 4.5% 4.2% - 4.6% 4.3% 4.5% 5.2% 3.7% 6.0% 0.60 0.50 0.50 0.50 0 0.50 0.50 0.60 0.90 0.50 1.40 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020	2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 931 984 1,147 920 (980) 573 529 788 1,942 97 1,539 54% 43% 37% 91% - 72% 78% 63% 38% 424% 75% 4.7% 4.6% 4.5% 4.2% - 4.6% 4.3% 4.5% 5.2% 3.7% 6.0% 0.60 0.50 0.50 0.50 0 0.50 0.50 0.60 0.90 0.50 1.40 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020	2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 931 984 1,147 920 (980) 573 529 788 1,942 97 1,539 54% 43% 37% 91% - 72% 78% 63% 38% 424% 75% 4.7% 4.6% 4.5% 4.2% - 4.6% 4.3% 4.5% 5.2% 3.7% 6.0% 0.60 0.50 0.50 0.50 0 0.50 0.50 0.60 0.90 0.50 1.40 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020	2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 931 984 1,147 920 (980) 573 529 788 1,942 97 1,539 54% 43% 37% 91% - 72% 78% 63% 38% 424% 75% 4.7% 4.6% 4.5% 4.2% - 4.6% 4.3% 4.5% 5.2% 3.7% 6.0% 0.60 0.50 0.50 0.50 0 0.50 0.50 0.60 0.90 0.50 1.40 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020	2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 931 984 1,147 920 (980) 573 529 788 1,942 97 1,539 54% 43% 37% 91% - 72% 78% 63% 38% 424% 75% 4.7% 4.6% 4.5% 4.2% - 4.6% 4.3% 4.5% 5.2% 3.7% 6.0% 0.60 0.50 0.50 0.50 0 0.50 0.50 0.60 0.90 0.50 1.40 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
	2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020
Net Profit (NT$ M)	931 984 1,147 920 (980) 573 529 788 1,942 97
Payout Ratio1	54% 43% 37% 91% - 72% 78% 63% 38% 424%
Dividend Yield2	4.7% 4.6% 4.5% 4.2% - 4.6% 4.3% 4.5% 5.2% 3.7%

1. CHC also distributes stock dividend in 2013.

2. Dividend yields for 2010-19 were based on the closing prices of ex-div days. 2020 figure is based on the closing price NT$23.40 on March 16[th] , 2021.

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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

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