CPE — Investor Presentation 2021

Nov 30, 2021

Charoen Pokphand Enterprise(Taiwan)CO.LTD

Investor Conference
WELCOME

Profile of CP Group
1. History
Established in Bangkok in 1921

2.Business
1)Agriculture & Foods7)Trading
2)Aquaculture 8)Seeds & Fertilizer
3)Automobile Industry 9)Telecommunications
4)Petrochemicals 10)Financial & Investment
5)Real Estate 11)Medical & Pharmaceutical
6)Wholesale & Retail 12)Entertainment

3.Investment Areas
North America: United States, Canada
South America: Mexico, Brazil
Africa: South Africa
Europe: Belgium, Portugal, Turkey, Russia, England, France, Netherlands, Poland
Asia: Thailand, Taiwan, Singapore, Hong Kong, China, Indonesia, Korea, Japan, Malaysia, Vietnam, Myanmar, India, Pakistan, Cambodia, Laos, Bengal, Philippines, Sri Lanka

CPF

● Annual Feed Yields: 30 million tons, rank first in the world
● Globally 180 feed mills
● Weekly DOC Yields: 43 million，top three in the world
● Swine for Gene Pool: 190,000 heads
● Broiler for Gene Pool: 45% market share in the world, rank first
● Aquatic Shrimp: 400 thousand ton/year, 40% global supply and rank first

I. Profile of CP Taiwan
● Established on Aug. 22, 1977
● Capital：NTD 2.68 billion
● Public Listed on July 27, 1987
● Business
1) Feeds for Poultry and Livestock
2) Fresh Chilled Meat Business
3) Meat Processing
4) Poultry and Livestock Breeding

II. Industrial Overview & Operational Condition (1)
1.Feeds
Our company produced about 840 thousand tons in 2020, mainly for poultry and livestock feeds, with 16% market share. Our customers include self-operated farmers, contracted farmers and private farms, etc., most of them are located in central Taiwan with 60% market share, and 30% for southern & 10% for northern markets. In conformity with environmental & health and in order to provide safe & secure feed products for domestic breeding industry, our company has established a AI-automatic drug-free feed mill in Douliu, Yunlin County in 2018, with 480 thousand tons yearly capacity, which is planned into production in the end of 2021.
2.Fresh Chilled Chicken
In 2020, the 1st year of COVID-19, the overall consumption habit had been drastically changed. The consumer could not eat out in 2021, causing the purchase of fresh meal through our extensive sales channel had been significantly raised so that our company increased the demand of boneless breast & thigh machines in order to promote the added value of our products and the dinning-home convenience of consumers.
In 2020, our yearly capacity of slaughter was 43 million birds, with 18.2% market share, as a leading brand. By responding to the change of our environment and with market-oriented way, we gained better performance.
(2) For logistics distribution system, because of our gradually-complete self-built delivery fleet and of IT-integrated orders, our customers could receive the most fresh products from the stores in the shortest time with the best by date and the sales of our company also had been drastically promoted.

II. Industrial Overview & Operational Condition (2)
3. Processed Chicken Products
(1) Because of unpredictably changing epidemic, the consumer increased substantially dining home, not only causing the sales of fresh meat raise but also the demand for instant foods & ready-to-eat products highly grow. By responding to market demand, our two new-built production lines were also put into running continuously with near fully-loaded capacity, diversifying the consumption and turning the crisis into our opportunity.
(2) In the end of 2020, we had integrated the productivity and the sales of many egg factories. Under the planning & design of Thai expert group this year, we invested various egg processing lines, producing popular egg-processed products such as boiled eggs, tea eggs, omelets, Tamagoyaki, etc., which were distributed in some major channels such as Family-mart, 7-11, Hi-life. It could be seen that the consumer liked such convenient products and then its sales volumes also promoted our advantages in addition to our processed meat.
(3) For online without borders, CP online shopping website had been in the virtual arena. Recently, the epidemic resulted in the consumption habit changed, the proportion of self-cooling at home increasing, so that online shopping had become normal condition. We continuously paid attention to the market demand for various new foods so that we kept on the development of high-quality processed products such as chicken, pork, duck and egg. By integrating CP online shopping website and various famous e-commence platforms, it not only caused good publicity for our brand advertisement but also promoted the cognition of all-age consumers for CP brand, making the news of our products extending to each area and further by way of the first delicious, convenient and safe brand to become a good life companion of each family on their dinning table.

II. Industrial Overview & Operational Condition (3)
4.Pig Husbandry
African Swine Fever (ASF), outbroken in Mainland China in 2018, is still spreading in 2021, except for Taiwan & Japan, reaching 10 East Asia countries including North Korea, South Korea, Vietnam, Cambodia, Timor-Leste, Myanmar, Philippines, Mongolia, Laos and Indonesia. Under our strong epidemic prevention in Taiwan farming & animal husbandry, although it has not affected Taiwan, it has caused extreme panic for our husbandry. For the future coping measures, our company has taken following:
To fully support the governmental propaganda and measures for border quarantine & inspection, strictly banning on importing or online shopping from foreign areas with aggravated penalty to completely eradicate viral entry.
To strengthen food safety works. ASF, a non-zoonoses, will be no-problem for food safety so consumers shall be more confident in our local pork products.
To strictly control the drug use for hogs, to obey the governmental laws & regulations, and to guarantee the pork products without drug residues. To raise health pigs, to make our consumers feel unworried and relieved, and to create our company’s brand.
To enhance the entry quarantine & inspection for pig farms and to strictly prohibit from eating pork products in the farm.
To stably develop our existed pig farms and no hurry for subsequent scale expansion.
Not only to introduce worldwide excellent breeds and promote our production efficiency and quality, but also to continuously encourage the contracted farms to invest the hermetic drencher farm facility in order to reduce their vulnerability.
To gradually promote total automation & computerization of our production process.

Consolidated IS
（Three months ended Sep.30 2021 & 2020）
Amount：Million TWD

Notes:

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Consolidated IS
（Nine months ended Sep.30 2021 & 2020）

Amount：Million TWD

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Consolidated BS
（As for Sep. 30 2021 & 2020）

Amount：Million TWD

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Quarterly Operating Performance
（Yr.2019- Yr.2021）
Amount：Million TWD

Sales Revenue

Operating Margin

% Sales Growth
% Margin

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Key data -Operating Performance
（Yr.2009 –Yr.2021）
Amount：Million TWD

VI. Future Prospects (1)
“ Kitchen of the World” is always our business objective. Although Thai experts could not visit Taiwan because of COVID-19, we still had online video meeting by the help of our IT department. And under the assistance of Thai experts long-term resided in Taiwan, we still stayed in the introduction of new products developed by CP Group worldwide into domestic consumers. This year, we communicated with CP Group R&D center worldwide through globally video conference in order to get more Chinese-favorite product information to apply in our product development, bringing unlimited business opportunities.

VI. Future Prospects (2)
2. Vegetarian meal is future trend. We also had met with some major vegetarian producers in domestic to discuss our cooperation opportunity in future. At present, we had introduced such vegetarian producers to our Thai parent group in the hope of future Taiwan-Thai cooperation so as to export our vegetarian products all over the world, making CP products more diversified as another advantage of our products.
3. By the investment of NTD 1.3 billion, our company has built a AI-automatic drug-free feed mill in Yunlin Technology-based Industrial Park of Douliu City, Yunlin County in February 2018, introducing the most advanced AI-automatic stereoscopic warehouse facility and AI-automatic systems for all production, acceptance & shipment processes including raw material inbound & preparation, producing, and packing, which will save 50% manpower in comparison with existed feed mills. With yearly capacity of 480 thousand tons, including early year capacity of 240 thousand tons, this feed mill will put into full production in the end of 2021, driving the growth of our operating performance , elevating our market share to 20% up

VI. Future Prospects (3)
4.
Ruimu Foods Co., Ltd, one of our joint ventures, will increase its the capacity of 80 thousand birds in the first quarter of 2022 with focus on animal welfare, reaching total capacity of 400 thousand birds. In cooperating with the policy of Council of Agriculture in promotion of washed eggs, our newly-built egg washing plant would be completed in the end of 2021 and put into production in the first quarter of 2022 so as to add the capacity of 80 thousand eggs/HR. And we will add the production of such processed egg products as liquid egg and boiled egg.
Ruifu Foods Co., Ltd, one of our joint ventures, will increase its the capacity of 50 thousand birds in the first quarter of 2022 with focus on animal welfare, reaching total capacity of 600 thousand birds. In cooperating with the policy of Council of Agriculture in promotion of washed eggs, our newly-built egg washing plant had begun small production in the end of 2021 and would reach the highest capacity of 126 thousand eggs/HR. And we will add the production of such processed egg products as liquid egg and boiled egg from 2022.
Sheng Da Food Co., Ltd, one of our joint ventures, will put into full production in the end of 2021 with three new-built production lines of egg washing & sorting machine (120 thousand eggs/HR), boiled egg line (200 thousand eggs/HR) and sterilized liquid egg line (800 kg/HR). Such three lines will put into production in the forth quarter this year, which will raise next-year capacity.

VII. Corporate Social Responsibility
By following the business philosophy of our Chairman Dhanin of CP Group, 『Benefit Country, Benefit People, Benefit Company』, we always require all of our employees not only to take account of our economics, corporate social responsibility, environmental protection while executing our policies, but also to do their full efforts to ensure consumer food safety and health.

【Contact Information】? Spokesperson: Mr. Ming Che Liu Tel：+886- 2-2507-7071 Ext.207