CMFC — Annual Report 2020

Jun 1, 2020

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INVESTOR CONFERENCE 2020/6/2

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DISCLAIMER

• ALL STATEMENT AND REPORT FROM THE SEMINAR ARE BASED ON INTERNAL, EXTERNAL SOURCE OF INFORMATION CONCERNING FINANCIAL REPORT, SALES PERFORMANCE…ETC.

• WE HAVEN’T RELEASE FINANCIAL PREDICTION YET. DURING THE SEMINAR, OUR FORWARD-LOOKING STATEMENT MAY DIFFER MATERIALLY FROM ACTUAL RESULTS INVOLVED WITH FINANCIAL PERFORMANCE, RESULTS OF BUSINESS OPERATIONS, AND Q&A. THOSE DIFFERENCES CAUSE FROM RISK FACTORS AND UNCERTAINTIES, INCLUDING CHANGES IN MARKET DEMAND, PRICE VOLATILITY, INTERNATIONAL ECONOMIC ENVIRONMENT, CURRENCY FLUCTUATIONS, UP AND DOWN STREAM SUPPLY CHAIN…ETC.

• THE FUTURE PROSPECT FROM THE SEMINAR REFLECTS OUR FORWARD-LOOKING EXPECTATION. READERS SHOULD ALSO REFER OUR COMPANY DOCUMENT WHICH HAS BEEN APPLIED TO AUTHORITIES. AFTER THE SEMINAR, WE DON’T UNDERTAKE ANY OBLIGATIONS TO UPDATE OR REVISE FORWARD-LOOKING STATEMENT AS A RESULT OF NEW INFORMATION UPDATED, OR EVENTS OCCURRED.

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CATALOG

Company Main Annual Operation Financial Perspective overview product capacity overview figures

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COMPANY OVERVIEW

Date of establishment	May 11, 1955
Registered capital	TWD $ 16,214M
Chairman	Kuei-Shiang , Wang
Main products and services	China Man-Made Fiber Corporation manufactures and markets synthetic filament products such as rayon yarn, rayon fiber, polyester. About petrochemical product, we also supply ethylene glycol, ethylene oxide, nitrogen...etc.
Date of Listing	Listed on TWSE on December 2, 1963 (1718-TW)
Number of Employees	628

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MAIN PRODUCT

• EG(ETHYLENE GLYCOL)

• APPLICATION:

  - EG(ETHYLENE GLYCOL): RAW MATERIAL FOR POLYESTER, ALSO FOR ANTIFREEZE,

     - REFRIGERANT, DEICING /ANTI-ICING SOLVENT…ETC

  - DEG(DI-ETHYLENE GLYCOL): RAW MATERIAL FOR PLASTIC PROCESSING, ALSO FOR INK SOLVENT, BRAKE FLUID, SOLVENT OIL, DEHYDRATOR, SOFTENING AGENT…ETC.

• MARKET SHARE: 35% DOMESTIC MARKET, 65% EXPORT MARKET. EXPORT COUNTRIES:

• 98% TO CHINA, OTHERS MAINLY TO THE REST OF ASIA COUNTRIES.

• COMPETITIVE ADVANTAGE ： CMFC CAN SUPPLY CUSTOMER COMPETITIVE FREIGHT COST AND SHORT LEAD TIME DUE TO THE ADJACENT TO THE LARGEST DEMAND MARKET, CHINA.

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MAIN PRODUCT

• EO(ETHYLENE OXIDE)

• APPLICATION : RAW MATERIAL FOR NON-IONIC SURFACTANTS, GLYCOL ETHERS.

• MARKET SHARE : 100% DOMESTIC MARKET.

• COMPETITIVE ADVANTAGE ：

CMFC SUPPLY CUSTOMERS 90% OF GAS VIA PIPELINE SYSTEM. CMFC IS PROUD TO BE LEADING POSITION TO OFFER CUSTOMERS WITH PROMPT AND COMPETITIVE COSTEFFECTIVE TRANSPORTATION.

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MAIN PRODUCT

• NP( NONYLPHENOL)

• APPLICATION : NON-IONIC SURFACTANTS, ANTIOXIDANTS, STABILIZER FOR POLYMER AND 。

• RUBBER, PHENOLIC RESINS, ADDITIVE FOR LUBRICANT, INK RESIN

• MARKET SHARE : 15~20% DOMESTIC MARKET, 80%~95% EXPORT MARKET. EXPORT COUNTRIES: INDIA, SOUTH KOREA, JAPAN, CHINA AND ASIA AREA…ETC.

• COMPETITIVE ADVANTAGE :

CMFC HAS COST ADVANTAGE FOR OUR SCALE ECONOMIES EFFECT. FURTHERMORE, CMFC HAS DEDICATED TO DEVELOPING RELIABLE CUSTOMERS TO MAINTAIN MARKET SHARE OVER THE PAST FEW YEARS.

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MAIN PRODUCT

• POLYESTER

• APPLICATION : TO MAKE PROFESSIONAL FALSE TWIST TEXTURED YARNS, POLYESTER TEXTURED YARN, KNITTED FABRICS.

• MARKET SHARE : 90% DOMESTIC MARKET, OTHERS FOR EXPORT. EXPORT COUNTRIES : EUROPE, CHINA, U.S.A, AND THE REST OF ASIA COUNTRIES.

• COMPETITIVE ADVANTAGE :

CMFC BENEFITS FROM HER VERTICAL INTEGRATION MANAGEMENT TO SUSTAIN STABLE RAW MATERIAL SOURCE. WE ALSO KEEP UPGRADING CUTTING-EDGE FACILITATES TO ENSURE PRODUCTION EFFICIENCY AND STABLE QUALITY TO FULFILL CUSTOMER’S REQUIREMENT.

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2019 PETROCHEMICAL PLANT PRODUCTION STATISTICS

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2019 Petrochemical plant production statistics
Product Quantity(KG)
Quantity(KG)
Ethylene Oxide Nonyl Phenol
Mono Ethylene Glycol 133,291,124 12% 10%
Tri Ethylene
Glycol
Di Ethylene Glycol 12,259,758
0%
Mono Ethylene Glycol
Di Ethylene Glycol
Di Ethylene Glycol Mono Ethylene
Tri Ethylene Glycol 355,933 Tri Ethylene Glycol
7% Glycol
71% Ethylene Oxide
Nonyl Phenol
Ethylene Oxide 22,246,134
Nonyl Phenol 18,651,325
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2019 POLYESTER PLANT PRODUCTION STATISTICS

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2019 Polyester Plant Production Statistics
Product Quantity(Ton)
80,000
70,000 70,159
Polyest Semi-Dull Chip 70,159
60,000 56,678
50,000
Polyester Bright Chip 7,952 40,000
29,550
25,535
30,000
POY(Polyester Partially
56,678 20,000
Oriented Yarn) 7,952
10,000
SDY(Polyester Spin Drawn Yarn) 29,550 - QUANTITY(TON)
Polyest Semi-Dull Chip Polyester Bright Chip
POY(Polyester Partially Oriented Yarn) SDY(Polyester Spin Drawn Yarn)
DTY(Polyester Textured Yarn) 25,535
DTY(Polyester Tenxtured Yarn)
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2019 COGENERATION PLANT PRODUCTION STATISTICS

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286,175,900
Product Unit Quantity 300,000,000
250,000,000
200,000,000
Generated
KWH/Y 286,175,900 150,000,000
electrical
100,000,000
energy
50,000,000 6,662,400
Electricity
0
KWH/Y KWH/Y
Sale of
KWH/Y 6,662,400
electricity Generated electrical Sale of electricity
（TPC） energy （ TPC ）
Electricity
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2019 COGENERATION PLANT PRODUCTION STATISTICS

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250,000
Product Unit Quantity
200,000
32㎏/㎝ [2] Ton/Y 117,138 150,000
100,000
50,000
Steam 21㎏/㎝ [2] Ton/Y 187,796
0
Ton/Y Ton/Y Ton/Y
8㎏/㎝ [2] Ton/Y 163,119 32 ㎏ / ㎝ 2 21 ㎏ / ㎝ 2 8 ㎏ / ㎝ 2
Steam
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FINANCIAL FIGURES AND OPERATION OVERVIEW

• REVENUE CONTRIBUTION BY SEGMENTS 2018 AND 2019

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Chemical Polyester Fiber Others
2018 64% 35% 1%
64% 35% 1%
2019
Others
Polyester Fiber
Chemical
0% 10% 20% 30% 40% 50% 60% 70%
2019 2018
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STATEMENTS OF COMPREHENSIVE INCOME (FINANCIAL STATEMENTS)

• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT FOR EPS )

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Selected Items from Statements of
2018 % 2019 %
Com rehensive Income
p
Net Revenue 20,064,863 100 13,591,338 100
Gross Profit from operations 812,643 4 (1,670,102) (12)
Operating Expenses (756,252) (4) 710,085 (5)
Net operating Income(loss) 56,391 0 (2,380,187) (17)
Non-Operating revenue and expenses 1,293,085 7 1,276,084 9
Profit (loss) from continuing operations 1,349,476 (1,104,103)
7 (8)
before tax
Tax (expense) income, continuing 22,559 374,339
0 3
o erations
p
Profit (loss) from continuing operations, net 1,372,035 (729,764)
7 (5)
of tax
1 4
Total basic earnings per share 1.06 (0.57)
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BALANCE SHEETS ( FINANCIAL STATEMENTS )

• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Selected Items from Balance Sheets	2018.12.31	%	2019.12.31	%	15
Cash & Marketable Securities	3,207,318	9	2,503,722	7
Accounts receivable and notes receivable	2,720,612	7	1,810,889	5
Inventories	2,303,352	6	1,169,176	3
Long-Term Investments	16,222,153	41	17,770,939	47
Property , plant and equipment , net	11,286,138	29	10,917,846	29
Investment property , net	990,778	3	1,112,465	3
Other assets	2,154,259	5	2,297,804	6
Total Assets	38,884,610	100	37,582,841	100

BALANCE SHEETS ( FINANCIAL STATEMENTS )

• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)	• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)	• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)	• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)	• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
Selected Items from Balance Sheets	2018.12.31	%	2019.12.31	%
Current Liabilities	10,597,605	27	10,592,837	28
Non-current liabilities	5,873,497	15	4,986,241	13
Total Liabilities	16,471,102	42	15,579,078	41
Total Shareholders’ Equity	22,413,508	58	22,003,763	59
Book Value/Share	18.50		17.05

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STATEMENTS OF COMPREHENSIVE INCOME ( CONSOLIDATED FINANCIAL STATEMENTS )

• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT FOR EPS)

Selected Items from Statements of Comprehensive Income	2018	%	2019	%	2020/Q1	%
Revenues	41,549,187	100	35,732,022	100	7,596,582	100
Expenses	36,404,425	87	32,615,940	91	7,147,067	94
Profit (loss) from continuing operations before tax	5,144,762	13	3,116,082	9	449,515	6
Tax (expense) income, continuing operations	(735,127)	(2)	(535,258)	(2)	(235,106)	(3)
Profit (loss) from continuing operations, net of tax	4,409,635	11	2,580,824	7	214,409	3
Profit (loss), attributable to owners of parent	1,372,035	3	(729,764)	(2)	(467,849)	(6)
Profit (loss), attributable to non-controlling interests	3,037,600	8	3,310,588	9	682,258	9
Total basic earnings per share	1.06		(0.57)		(0.36)	17

BALANCE SHEETS ( CONSOLIDATED FINANCIAL STATEMENTS )

• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)	• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)	• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)	• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)	• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)	• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)	• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
Selected Items from Balance Sheets	2018.12.31	%	2019.12.31	%	2020.3.31	%
Cash & Marketable Securities	46,255,577	7	39,649,435	6	34,766,368	5
Accounts receivable and notes receivable	12,523,458	2	12,848,933	2	11,717,153	2
Inventories	2,689,034	-	1,541,484	-	1,371,506	-
Long-Term Investments	132,718,662	19	144,001,844	20	146,241,662	20
Property , plant and equipment, net	22,428,871	3	23,585,296	4	23,483,986	4
Investment property , net	1,435,382	-	1,464,708	-	1,495,781	-
Notes Discounted and loans , net	452,594,552	63	435,398,334	61	437,724,569	61
Other assets	50,261,406	6	53,414,202	7	58,590,708	8
Total Assets	720,906,942	100	720,906,942	100	720,794,718	18 100

BALANCE SHEETS ( CONSOLIDATED FINANCIAL STATEMENTS )

• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)	• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)	• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)	• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)	• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)	• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)	• (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
Selected Items from Balance Sheets	2018.12.31	%	2019.12.31	%	2020.3.31	%
Current Liabilities	635,141,266	88	631,868,016	89	634,616,416	89
Non-current liabilities	27,484,888	4	19,433,814	2	20,526,462	3
Total Liabilities	662,626,154	92	651,301,830	91	661,305,466	92
Equity attributable to owners of the parent	22,413,508	3	22,003,763	3	21,073,649	3
Non-controlling interest	35,867,280	5	38,598,643	6	39,175,206	5
Total Shareholders’ Equity	58,280,788	8	60,602,406	9	60,248,855	8
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PERSPECTIVE

• CMFC EG-3 PLANT UPGRADE NEW SELECTIVITY OF CATALYST, WHICH CONTRIBUTE LOW CONSUMPTION OF ETHYLENE.

• CMFC SUCCESSFULLY REDUCING COST BY VERTICAL INTEGRATION INTO POLYESTER AND FALSE TWIST TEXTURED YARNS PLANTS. IN THE FUTURE, CMFC WOULD LIKE TO IMPROVE QUALITY AND SALES PRICE OF THESE PRODUCTIONS.

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