CMFC — Investor Presentation 2018

Jun 11, 2018

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Investor Conference 2018/6/12

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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 627 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 :

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 : 94% domestic market, others for export. Export countries : Iran, 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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2017 Petrochemical plant production statistics

2017 PETROCHEMICAL PLANT PRODUCTION Product Quantity(KG) Tri Ethylene STATISTICS QUANTITY(KG) Glycol, 133,162 Mono Ethylene Glycol 125,122,056 Ethylene Oxide, Nonyl Phenol, 15,769,931 21,308,066 Di Ethylene Di Ethylene Glycol 11,894,842 Glycol, 11,894,842 Mono Ethylene Glycol, 125,122,056 Tri Ethylene Glycol 133,162 Ethylene Oxide 15,769,931 Nonyl Phenol 21,308,066

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2017 Polyester Plant Production Statistics
90,000
84,787
80,000
70,000 65,348
60,000
50,000
40,000
28,143 26,329
30,000
9,691
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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2017 Polyester Plant Production Statistics

Product	Quantity(Ton)
Polyest Semi-Dull Chip	84,787
Polyester Bright Chip	9,691
POY(Polyester Partially Oriented Yarn)	65,348
SDY(Polyester Spin Drawn Yarn)	28,143
DTY(Polyester Textured Yarn)	26,329

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2017 Cogeneration Plant Production statistics
300,000,000
Product Unit Quantity
269,123,700
250,000,000
200,000,000
Generated
KWH/Y 269,123,700 150,000,000
electrical
energy
100,000,000
Electricity 50,000,000 14,702,400
0
KWH/Y KWH/Y
Sale of
KWH/Y 14,702,400
electricity GENERATED ELECTRICAL SALE OF ELECTRICITY
（TPC） ENERGY （ TPC ）
ELECTRICITY
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2017 Cogeneration Plant Production statistics
200,000
Product Unit Quantity 180,000
160,000
140,000
120,000
32㎏/㎝ [2] Ton/Y 92,775
100,000
80,000
60,000
40,000
Steam 21㎏/㎝ [2] Ton/Y 195,453 20,000
0
TON/Y
TON/Y
32 ㎏ / ㎝ 2 TON/Y
21 ㎏ / ㎝ 2
8㎏/㎝ [2] Ton/Y 137,747 8 ㎏ / ㎝ 2
STEAM
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Financial figures and operation overview

 Revenue Contribution by Segments 2016 and 2017

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Chemical Polyester Fiber Others
2016 66% 33% 1%
2017 66% 33% 1%
Others
Polyester Fiber
Chemical
0% 10% 20% 30% 40% 50% 60% 70%
2017 2016
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	Statements of Comprehensive Income (Financial Statements)	Statements of Comprehensive Income (Financial Statements)	Statements of Comprehensive Income (Financial Statements)	Statements of Comprehensive Income (Financial Statements)
		Unit: NT$ thousand(except for			EPS)
	Selected Items from Statements of	2016	% 2017		%
	Comprehensive Income
	Net Revenue	13,511,058	100 16,904,870		100
	Gross Profit from operations	(692,164)	(5) 695,946			4
	Operating Expenses	562,709	4 637,890			4
	Net operating Income(loss)	(1,242,131)	(9) 48,866			0
	Non-Operating revenue and expenses	968,377	7 759,023			5
	Profit (loss) from continuing operations	(273,754)	(2) 807,889			5
	before tax
	Tax (expense) income, continuing	69,660	1 (13,902)			5
	operations
	Profit (loss) from continuing operations, net	(204,094)	(1) 793,987			5
	of tax
	Total basic earnings per share	(0.18)	14 0.7

	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	2016	%		2017	%
	Balance Sheets
	Cash & Marketable	3,469,934	10		3,502,101		9
	Securities
	Accounts receivable and	1,865,113	5		2,171,485		6
	notes receivable
	Inventories	1,171,753	3		1,676,447		5
	Long-Term Investments	13,590,806	39		14,301,021		40
	Property , plant and	11,490,124	33		11,357,316		31
	equipment , net
	Investment property , net	1,341,881	4		1,688,808		5
	Other assets	2,160,283	6		1,480,339		4
	Total Assets	35,089,894	100		36,177,517	100 15

Balance Sheets ( Financial Statements )

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|---|---|---|---|---|
|Balance Sheets|(|Financial Statements|)|
||Unit: NT$ thousand|
|Selected Items from|2016|%|2017|%|
|Balance|Sheets|
|Current Liabilities|7,231,337|21|7,737,033|21|
|Non-current liabilities|7,843,536|22|7,511,504|21|
|Total Liabilities|15,074,873|43|15,248,537|42|
|Total Shareholders’|20,015,021|57|20,928,980|58|
|E|it|
|qu|y|
|Book Value/Share|17.68|18.40|
|16|

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Selected Items from Statements of Comprehensive Income	2016	%	2017	%	2018.03.31	%
revenues	33,221,334	100	37,038,326	100	9,972,297	100
Expenses	30,205,523	91	32,831,382	89-	8,692,681	87
Profit (loss) from continuing operations before tax	3,015,811	9	4,206,944	11	1,279,616	13
Tax (expense) income, continuing operations	(564,057)	(2)	(743,253)	(2)	(63,643)	(1)
Profit (loss) from continuing operations, net of tax	2,451,754	7	3,463,691	9	1,215,973	12
Profit (loss), attributable to owners of parent	(204,094)	(1)	793,987	2	536,414	5
Profit (loss), attributable to non-controlling interests	2,655,848	8	2,669,704	7	679,559	7
Total basic earnings per share	(0.18)		0.7		17 0.47

Statements of Comprehensive Income ( Consolidated Financial Statements )

Selected Items from Balance Sheets	2016	%	2017	%	2018.03.31	%
Cash & Marketable Securities	40,893,203	7	50,582,706	8	52,559,386	7
Accounts receivable and notes receivable	9,343,085	1	12,658,264	2	11,810,361	2
Inventories	1,526,729	-	2,056,042	-	1,711,895	-
Long-Term Investments	54,252,308	8	120,088,362	18	125,992,387	18
Property , plant and equipment, net	22,666,278	4	22,382,631	3	22,495,346	3
Investment property , net	1,758,073	-	2,070,792	-	2,071,449	-
Notes Discounted and loans , net	426,166,259	65	430,857,960	62	426,493,810	62
Other assets	98,496,881	15	51,032,463	7	49,653,136	8
Total Assets	655,102,816	100	691,729,220	100	692,787,770 18	100

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|Balance Sheets|(|Consolidated Financial Statements|)|
||Unit: NT$ thousand|
|Selected Items from Balance|2016|%|2017|%|2018.03.31|%|
|Sheets|
|Current Liabilities|582,502,077|89|611,282,167|88|610,969,254|88|
|Non-current liabilities|21,680,026|3|27,047,662|4|26,569,911|4|
|Total Liabilities|604,182,103|92|638,329,829|92|637,539,165|92|
|Total Shareholders’ Equity|50,920,713|8|53,399,391|8|55,248,605|8|
|19|

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Perspective

• Cogeneration Plant-2 is test-operating now, which support CMFC better energy resource configuration. In addition, CMFC plan to change manufacturing machinery system on cogeneration plant-1 to increase power supply in the beginning of next year.

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

• 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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