CMFC — Investor Presentation 2017

Jun 12, 2017

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Investor Conference 2017/6/13

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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 $ 14,294 M 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 619 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: 97% to China, others are for Japan, and South-east 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 :

• As the largest NP( Nonylphenol) annual output manufacturer, 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 : 92% domestic market, others for export. Export countries : India, South Korea, Japan, Asia area…etc/

• 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 fulfill customer’s requirement.

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2016 Petrochemical plant production statistics

2016 PETROCHEMICAL PLANT PRODUCTION STATISTICS QUANTITY(KG)

Product Quantity(KG) Mono Ethylene Glycol 112,074,094 Ethylene Oxide, 17,842,433 Di Ethylene Glycol 10,062,339 Tri Ethylene Glycol, 279,177 Tri Ethylene Glycol 279,177 Ethylene Oxide 17,842,433 Di Ethylene Glycol, 10,062,339 Nonyl Phenol 23,252,242

Mono Ethylene Glycol, 112,074,094

Nonyl Phenol, 23,252,242 Ethylene Oxide, 17,842,433 Tri Ethylene Glycol, 279,177

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2016 Polyester Plant Production Statistics
90,000
82,213
80,000
70,000
65,300
60,000
50,000
40,000
27,832 28,884
30,000
10,903
20,000
10,000
-
QUANTITY(TON)
Polyest Semi-Dull Chip Polyester Bright Chip
POY(Polyester Partially Oriented Yarn) SDY(Polyester Spin Drawn Yarn)
DTY(Polyester Tenxtured Yarn)
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2016 Polyester Plant Production Statistics

Product Quantity(Ton) Polyest Semi-Dull Chip 82,213 Polyester Bright Chip 10,903 POY(Polyester Partially Oriented 65,300 Yarn) SDY(Polyester Spin Drawn Yarn) 27,832 DTY(Polyester Textured Yarn) 28,884

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2016 Cogeneration Plant Production statistics
300,000,000
Product Unit Quantity 281,953,100
250,000,000
200,000,000
Generated
KWH/Y 281,953,100 150,000,000
electrical
energy
100,000,000
19,833,600
Electricity 50,000,000
0
KWH/Y KWH/Y
Sale of
KWH/Y 19,833,600
electricity GENERATED ELECTRICAL SALE OF ELECTRICITY
（TPC） ENERGY （ TPC ）
ELECTRICITY
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2016 Cogeneration Plant Production statistics
200,000
186,725
Product Unit Quantity 180,000
160,000
140,000
120,000
115,124
32㎏/㎝ [2] Ton/Y 80,482
100,000 80,482
80,000
60,000
40,000
Steam 21㎏/㎝ [2] Ton/Y 186,725 20,000
0
TON/Y
TON/Y
32 ㎏ / ㎝ 2 TON/Y
21 ㎏ / ㎝ 2
8㎏/㎝ [2] Ton/Y 115,124 8 ㎏ / ㎝ 2
STEAM
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Financial figures and operation overview

 Revenue Contribution by Segments 2015 and 2016

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Chemical Polyester Fiber Others
2015 68% 30% 2%
2016 66% 33% 1%
Others
Polyester Fiber
Chemical
0% 10% 20% 30% 40% 50% 60% 70% 80%
2016 2015
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|---|---|---|---|---|
|Statements of Comprehensive Income (Financial Statements)|
||Unit: NT$ thousand(except for EPS)|
|Selected Items from|2015|%|2016|%|
|Statements of|
|Comprehensive Income|
|Net Revenue|15,426,893|100|13,511,058|100|
|Gross Profit from operations|633,234|4|(692,164)|(5)|
|Operating Expenses|592,887|4|562,709|4|
|-|
|Net operating Income|34,520|(1,242,131)|(9)|
|Non-Operating revenue and|651,884|4|968,377|7|
|expenses|
|Net Income after Tax|540,583|4|(204,094)|(1)|
|14|
|EPS (NT Dollar)|0.45|(0.18)|

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Statements of Comprehensive Income (Financial Statements)

	Balance Sheets (Financial Statements)	Balance Sheets (Financial Statements)	Balance Sheets (Financial Statements)	Balance Sheets (Financial Statements)	Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand
	Selected Items from	2015	%		2016	%
	Balance Sheets
	Cash & Marketable	3,232,390	9		3,469,934		10
	Securities
	Accounts receivable and	1,911,976	6		1,865,113		5
	notes receivable
	Inventories	1,153,553	3		1,171,753		3
	Long-Term Investments	13,934,496	41		13,590,086		39
	Property , plant and	11,804,592	34		11,490,124		33
	equipment , net
	Investment property , net	1,726,987	5		1,341,881		4
	Other assets	841,652	2		2,160,283		6
	Total Assets	34,605,646	100		35,089,894	100 15

Balance Sheets ( Financial Statements )

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|---|---|---|---|---|
|Balance Sheets|(|Financial Statements|)|
||Unit: NT$ thousand|
|Selected Items from|2015|%|2016|%|
|Balance|Sheets|
|Current Liabilities|6,648,210|19|7,231,337|21|
|Non-current liabilities|7,433,120|22|7,843,536|22|
|Total Liabilities|14,081,330|41|15,074,873|43|
|Total Shareholders’|20,524,316|59|20,015,021|57|
|E|it|
|qu|y|
|Book Value/Share|18.17|17.68|
|16|

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Selected Items from Statements of Comprehensive Income	2015	%	2016	%	2017.03.31	%
Sales revenue	18,933,934	100	17,421,962	100	4,651,299	100
Gross Profit from sales	1,256,410	7	69,219	-	213,049	5
Operating Expenses	6,402,953	34	7,189,273	41	1,714,439	37
Net operating loss	(5,146,543)	(27)	(7,120,054)	(41)	(1,501,390)	(32)
Other-Operating revenue and expenses	9,156,021	48	10,135,865	58	2,333,977	50
Net Income after Tax	3,195,085	17	2,451,754	14	636,992 17	14

Selected Items from Balance Sheets	2015	%	2016	%	2017.03.31	%
Cash & Marketable Securities	45,848,968	8	40,893,203	7	47,332,503	7
Accounts receivable and notes receivable	7,311,972	1	9,343,085	1	9,276,128	2
Inventories	1,479,291	-	1,526,729	-	1,383,037	-
Long-Term Investments	32,652,799	5	54,252,308	8	112,299,033	17
Property , plant and equipment , net	22,800,320	4	22,666,278	4	22,536,783	3
Investment property , net	1,937,761	-	1,758,073	-	1,757,867	-
Notes Discounted and loans , net	391,083,582	65	426,166,259	65	427,799,008	64
Other assets	99,791,302	17	98,496,881	15	44,986,254 18	7
Total Assets	602,905,995	100	655,102,816	100	667,370,613	100

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|---|---|---|---|---|---|---|
|Balance Sheets|(|Consolidated Financial Statements|)|
||Unit: NT$ thousand|
|Selected Items from Balance|2015|%|2016|%|2017.03.31|%|
|Sheets|
|Current Liabilities|531,473,038|88|582,502,077|89|594,159,270|89|
|Non-current liabilities|22,130,120|4|21,680,026|3|21,775,646|3|
|Total Liabilities|552,603,158|92|604,182,103|92|615,934,916|92|
|Total Shareholders’ Equity|50,302,837|8|50,920,713|8|51,435,697|8|
|19|

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Perspective

1. Cogeneration Plant-2 is expected to restart on the second half of 2017, which support CMFC better energy resource configuration. In addition, CMFC plan to change manufacturing machinery system on cogeneration plant-1 to increase power supply.

2. CMFC EG-3 plant upgrade new selectivity of catalyst, which contribute low consumption of ethylene. Furthermore, CMFC plan to apply high effective catalyst by saving cost and reducing energy consumption on EG-1 and EG-2 plants.

3. CMFC successfully reducing cost by vertical integration into polyester and false twist textured yarns plants. In the future, CMFC will develop .

specialty filament

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