CMFC — Interim / Quarterly Report 2019

Jun 4, 2019

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Investor Conference 2019/6/5

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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

Operatio Company Main Annual n overview product capacity overview

Financial Perspective figures

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Company Overview

Date of May 11, 1955 establishment Registered capital TWD $ 15,224M

Chairman Kuei-Shiang , Wang China Man-Made Fiber Corporation manufactures and markets Main products and synthetic filament products such as rayon yarn, rayon fiber, services 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 632 4 Employees

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Main Product

• EG(Ethylene Glycol)

• Application :

EG(Ethylene Glycol) : raw material for polyester, also for antifreeze,re-

frigerant, 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 : 45% domestic market, 55% 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 cost-effective 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 : 10~15% domestic market, 85%~90% export market. Export countries: India, South Korea, Japan, 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 : 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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2018 Petrochemical plant production statistics

2018 PETROCHEMICAL PLANT PRODUCTION STATISTICS QUANTITY(KG) Mono Ethylene Glycol Di Ethylene Glycol Tri Ethylene Glycol Ethylene Oxide Nonyl Phenol

Product Quantity(KG) Mono Ethylene Glycol 193,069,436 Di Ethylene Glycol 17,968,934 Tri Ethylene Glycol 591,300 Ethylene Oxide 19,861,595 Nonyl Phenol 17,637,307

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7%
8%
0%
7%
78%
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2018 Polyester Plant Production Statistics
2018 Polyester Plant Production Statistics
Product Quantity(Ton)
90,000
83,885
80,000
Polyest Semi-Dull Chip 83,885 70,000 68,371
60,000
Polyester Bright Chip 9,851 50,000
40,000
26,553 26,673
POY(Polyester Partially Oriented 30,000
68,371
Yarn) 20,000
9,851
10,000
SDY(Polyester Spin Drawn Yarn) 26,553 -
QUANTITY(TON)
Polyest Semi-Dull Chip Polyester Bright Chip
DTY(Polyester Textured Yarn) 26,673 POY(Polyester Partially Oriented Yarn) SDY(Polyester Spin Drawn Yarn)
DTY(Polyester Tenxtured Yarn)
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2018 Cogeneration Plant Production statistics
300,000,000
Product Unit Quantity 286,175,900
250,000,000
200,000,000
Generated
KWH/Y 286,175,900 150,000,000
electrical
energy
100,000,000
Electricity 50,000,000 6,662,400
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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2018 Cogeneration Plant Production statistics
250,000
Product Unit Quantity
200,000
150,000
32㎏/㎝ [2] Ton/Y 167,592
100,000
50,000
Steam 21㎏/㎝ [2] Ton/Y 248,121
0
TON/Y
TON/Y
32 ㎏ / ㎝ 2 TON/Y
21 ㎏ / ㎝ 2
8㎏/㎝ [2] Ton/Y 180,058 8 ㎏ / ㎝ 2
STEAM
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Financial figures and operation overview
 Revenue Contribution by Segments 2017 and 2018
Chemical Polyester Fiber Others
2017 66% 33% 1%
2018 64% 35% 1%
Others
Polyester Fiber
Chemical
0% 10% 20% 30% 40% 50% 60% 70%
2018 2017
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Chemical Polyester Fiber Others
2017 66% 33% 1%
2018 64% 35% 1%
Others
Polyester Fiber
Chemical
0% 10% 20% 30% 40% 50% 60% 70%
2018 2017
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|---|---|---|---|---|---|---|
|Statements of Comprehensive Income (Financial Statements)|
||(Expressed in thousands of New Taiwan dollars, except for EPS)|
|Selected Items from Statements of|
|2017|%|2018|%|
|Com|rehensive Income|
|p|
|Net Revenue|16,904,870|100|20,064,863|100|
|Gross Profit from operations|686,756|4|812,643|4|
|Operating Expenses|637,890|4|756,252|4|
|Net operating Income(loss)|48,866|0|56,391|0|
|Non-Operating revenue|and|expenses|759,023|5|1,293,085|7|
|Profit (loss) from continuing operations|807,889|5|1,349,476|7|
|before tax|
|Tax (expense) income, continuing|(13,902)|0|22,559|0|
|operations|
|Profit (loss) from continuing operations, net|793,987|5|1,372,035|7|
|of tax|
|Total basic|earnings|per share|0.66|1.1143|

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	Balance Sheets (Financial Statements)	Balance Sheets (Financial Statements)	Balance Sheets (Financial Statements)	Balance Sheets (Financial Statements)
		(Expressed in thousands of New Taiwan dollars)
	Selected Items from	2017.12.31	%	2018.12.31	%
	Balance Sheets
	Cash & Marketable	3,502,101	9	3,207,318		9
	Securities
	Accounts receivable and	2,171,485	6	2,720,612		7
	notes receivable
	Inventories	1,676,447	5	2,303,352		6
	Long-Term Investments	14,301,021	40	16,222,153		41
	Property , plant and	11,357,316	31	11,286,138		29
	equipment , net
	Investment property , net	1,688,808	5	990,778		3
	Other assets	1,480,339	4	2,154,259		5
	Total Assets	36,177,517	100	38,884,610	100 15

Balance Sheets ( Financial Statements )

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|---|---|---|---|---|
|Balance Sheets|(|Financial Statements|)|
||(Expressed in thousands of New Taiwan dollars)|
|Selected Items from|2017.12.31|%|2018.12.31|%|
|Balance|Sheets|
|Current Liabilities|7,737,033|21|10,597,605|27|
|Non-current liabilities|7,511,504|21|5,873,497|15|
|Total Liabilities|15,248,537|42|16,471,102|42|
|Total Shareholders’|20,928,980|58|22,413,508|58|
|E|it|
|qu|y|
|Book Value/Share|18.40|18.50|
|16|

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Selected Items from Statements of Comprehensive Income	2017	%	2018	%	2019 Q1	%
revenues	37,038,326	100	41,549,187	100	9,715,734	100
Expenses	32,831,382	89	36,404,425	87	8,999,243	93
Profit (loss) from continuing operations before tax	4,206,944	11	5,144,762	13	716,491	7
Tax (expense) income, continuing operations	(743,253)	(2)	(735,127)	(2)	(50,251)	0
Profit (loss) from continuing operations, net of tax	3,463,691	9	4,409,635	11	666,240	7
Profit (loss), attributable to owners of parent	793,987	2	1,372,035	3	(103,063)	(1)
Profit (loss), attributable to non-controlling interests	2,669,704	7	3,037,600	8	769,303	8
Total basic earnings per share	0.66		1.13		17 (0.09)

Statements of Comprehensive Income ( Consolidated Financial Statements )

Selected Items from Balance Sheets	2017.12.31	%	2018.12.31	%	2019.3.31	%
Cash & Marketable Securities	50,582,706	8	46,255,577	7	44,072,536	6
Accounts receivable and notes receivable	12,658,264	2	12,523,458	2	12,042,590	1
Inventories	2,056,042	-	2,689,034	-	2,175,327	-
Long-Term Investments	120,088,362	18	132,718,662	19	135,630,762	20
Property , plant and equipment, net	22,382,631	3	22,428,871	3	22,368,029	3
Investment property , net	2,070,792	-	1,435,382	-	1,441,367	-
Notes Discounted and loans , net	430,857,960	62	452,594,552	63	445,731,622	62
Other assets	51,032,463	7	50,261,406	6	57,332,485	8
Total Assets	691,729,220	100	720,906,942	100	720,794,718 18	100

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|---|---|---|---|---|---|---|
|Balance Sheets|(|Consolidated Financial Statements|)|
||(Expressed in thousands of New Taiwan dollars)|
|Selected Items from Balance|2017.12.31|%|2018.12.31|%|2019.3.31|%|
|Sheets|
|Current Liabilities|611,282,167|88|635,141,266|88|633,364,898|88|
|Non-current liabilities|27,047,662|4|27,484,888|4|27,940,568|4|
|Total Liabilities|638,329,829|92|662,626,154|92|661,305,466|92|
|Equity attributable to|20,928,980|3|22,413,508|3|22,570,283|3|
|owners|of the|parent|
|Non-controlling interest|32,470,411|5|35,867,280|5|36,918,969|5|
|Total Shareholders’ Equity|53,399,391|8|58,280,788|8|59,489,252|8|
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Perspective

• Cogeneration Plant-2 is officially started, which support CMFC better energy resource configuration. In addition, CMFC has changed manufacturing machinery system on cogeneration plant-1 to increase power supply.

• 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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