CSC — Interim / Quarterly Report 2021

Nov 17, 2021

==> picture [185 x 68] intentionally omitted <==

November 18-19, 2021

1 Company Profile

2 Operating Performance - - 電動車 再生能源 Agenda國防產業 3 產業升級 Key Strategies 4 Appendix

3

6

15

25

1

==> picture [46 x 540] intentionally omitted <==

Safe Harbor Statement

This presentation may contains forward-looking statements. All statements other than historical and current fact, without limitation, including business outlook, predictions, estimates, are forward-looking statements.

Such statements are based current beliefs and upon management’s expectations and are subject to various risks, uncertainties and other factors that could cause actual outcomes and results to differ materially.

We caution readers not to place undue reliance on forward-looking statements as these statements speak only as of the date they are made, and we disclaim any obligation to, update or alter any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law or regulation.

This cautionary statement is applicable to all forward-looking statements contained in this presentation.

2

==> picture [46 x 540] intentionally omitted <==

==> picture [247 x 116] intentionally omitted <==

==> picture [370 x 62] intentionally omitted <==

3

==> picture [46 x 540] intentionally omitted <==

- Company overview Business snapshot

==> picture [556 x 13] intentionally omitted <==

• CSC is the leading Taiwanese steel manufacturer with integrated production capabilities. Crude steel capacity of CSC Group reached about 16 mmt.

==> picture [361 x 213] intentionally omitted <==

----- Start of picture text -----

CSC Group domestic market share ( 2021.1~3Q )
88%
26%
50%
11% 35%
76% 82%
60%
51%
39%
26% 27%
Hot- Bar/Rod Electro- Plate Cold-rolled Hot-rolled Electrical
中鋼集團 Galvanized Galvanized Steel
Steel
CSC Dragon Steel Chung Hung
----- End of picture text -----

• CSC: 9.9 mmt

• DSC: EAF & No.1&2 BF around 6 mmt

• Dominant position in the domestic market

• Focus on Leading-edge Steel Mill & green energy business.

Improve the percentage of high-end and high-margin products.

Trading and Service and Logistics Investments

Industrial Materials

Steel Engineering

• CSC

• CSSC

• CSCC

   - Gains Investment
  

  • CSE

• China Ecotek

• CHS

• CHC Resources

  • China Steel Security

• CSGT

• DSC

• CSMC

• CSAC

• CSMQ

• CSC Steel Sdn. • Info-Champ Bhd. Systems

• Himag Magnetic

• CSMK

• CPDC

• CSPM

• CMC

• CSVC

• SDMS

• China Steel Resources

• CSC Solar

• CSCI

• China Steel Power

• • KRTC

4

– Company overview Overseas production sites and sales channels

Established southbound overseas production sites and sales channels to breakthrough tariff barriers.

Vietnam CSGT Metals Vietnam J Company Vietnam Hanoi Steel Center Co., Thailand Nippon Steel Thai Sumilox Co., Ltd. China PCMI Metal Products (Chongqing) Co., Ltd Italy Ardemagni SpA Thailand NST Coil Center (Thailand) Ltd. Thailand TSK Steel Co., Ltd. India Mahindra Auto Steel Private Limited China Xiamen Chunyuan Precision Mechatronic Co., Ltd China Maruichi Metal Product (Foshan) Co., Ltd

Malaysia CSCSteel Sdn. Bhd. CSC holds 46% of CSHB Capacity: CR 0.48 mmt (CRC 0.24 mmt including PO, GI 0.17 mmt, PPGI 0.07 mmt) oint Stock Ltd. India China Steel Corporation India Pvt. Ltd. (CSCI) CSC holds 100% of CSCI Capacity: ES 0.2 mmt Vietnam China Steel and Nippon Steel Joint Stock Co. (CSVC) CSC holds 56% of CSVC Capacity: 1.2 mmt (CR 0.5 mmt, GA/GI 0.3 mmt, ES 0.2 mmt, PO 0.2 mmt) China Changzhou China Steel Precision Materials Co., Ltd. CSC holds 70% of the equity interest Capacity: 8,000 metric tones China Qingdao China Steel Precision Metal Co., Ltd China China Steel Precision Metals Kunshan Co., Ltd.

5

Overseas Investments of CSC group

Co-invest in coil centers with peers and customers through China Steel Global Trading Co.

==> picture [46 x 540] intentionally omitted <==

==> picture [247 x 116] intentionally omitted <==

==> picture [456 x 41] intentionally omitted <==

6

==> picture [46 x 540] intentionally omitted <==

Raw material price trend

==> picture [556 x 13] intentionally omitted <==

Percentage change of incoming raw material price (compared to Dec. 2020)

==> picture [633 x 388] intentionally omitted <==

----- Start of picture text -----

150.59%
160.00%
H1: The iron ore price kept climbing and the
140.00% coking coal price also surged since June.
Q3: The iron ore price started to decline,
120.00%
slightly mitigating the upward trend of costs.
Q4: The coking coal price soared to new
100.00%
highs, which offset the decline of iron ore
80.00% price and pushed up the incoming raw
material price again.
60.00% 50.09%
40.00%
11.69%
20.00%
0.00%
202012 202101 202102 202103 202104 202105 202106 202107 202108 202109 202110
-20.00%
Iron Ore Coking Coal Raw Material Cost Contained in Hot Metal 7
----- End of picture text -----

==> picture [46 x 540] intentionally omitted <==

Consolidated Financial Performance

Consolidated Financial Performance	Consolidated Financial Performance	Consolidated Financial Performance	Consolidated Financial Performance	Consolidated Financial Performance	Consolidated Financial Performance	Consolidated Financial Performance
L i l
Amount: NT$ million atest operatng resuts Item 2021.9 2021.8 MoM 2021.1~9 2020.1~9 YoY Operating Revenue 41,982 41,713 1% 338,848 227,177 49% Operating Income 8,200 8,495 -3% 58,102 (3,571) 1727% Operating Income Margin 19.53% 20.37% 17.15% -1.57% Income Before Income Tax 8,936 8,711 3% 61,933 (3,492) 1874%
Item	2021.9	2021.8	MoM	2021.1~9	2020.1~9	YoY
Operating Revenue	41,982	41,713	1%	338,848	227,177	49%
Operating Income	8,200	8,495	-3%	58,102	(3,571)	1727%
Operating Income Margin	19.53%	20.37%		17.15%	-1.57%
Income Before Income Tax	8,936	8,711	3%	61,933	(3,492)	1874%

*preliminary result

==> picture [642 x 255] intentionally omitted <==

----- Start of picture text -----

Quarterly profits trend
NT$ million  As countries lifted restrictions in
19.79%
30,000 17.98% 20.00% 2020H2, the rapid recovery in demand
27,500 18.00% contributed to the hot market and
25,000
16.00%
22,500
14.00% rising steel price.
20,000
17,500 12.77% 12.00%  Thanks to the increase of both
15,000 12,500 10.00%8.00% monthly and quarterly pricing,
10,000
6.00% especially the significant price
7,500
4.00%
increase in Q2, the ASP increase was
5,000
2,500 2.00%
12,489 13,099 20,758 22,102 24,855 26,732 larger than that of ASC in the same
- 0.00%
2021.1Q 2021.2Q 2021.3Q period. As a result, the profit keeps
Operating Profit Pretax Income Operating Margin growing from 2020Q4 to 2021Q3.8
----- End of picture text -----

==> picture [46 x 540] intentionally omitted <==

Standalone Production / Sales Performance

==> picture [581 x 13] intentionally omitted <==

Sales analysis

• CSC completed the revamping of No.2 blast furnace in advance at the end of 2020 and caught up with a wave of strong demand.

==> picture [227 x 161] intentionally omitted <==

----- Start of picture text -----

thousand tons
2,490 2,432
2,330
67% 66%
64%
Sales Volume
Domestic Sales
2021.1Q 2021.2Q 2021.3Q
----- End of picture text -----

• CSC operated at full capacity because of the strong market demand in Q1 and Q2.

==> picture [20 x 5] intentionally omitted <==

• The sales volume in Q3 declined slightly, partly because of the rainy season and delay of the export shipping schedule.

2020.1Q sales volume (outsourced slab excluded) is around 2.3 million tons.

==> picture [629 x 200] intentionally omitted <==

----- Start of picture text -----

2021.1~3Q Sales value breakdown Production analysis
thousand tons
2,564
2,521
2,480
Billet/Slab, 2% 2,451
Hot Rolled,
Bar, 9%
26%
Plate, 10% Export 33% 2,314
2,214
Wire Rod,
Domestic 67%
16%
Cold Rolled,
37% 2021.1Q 2021.2Q 2021.3Q
Crude Steel Production Product Production
----- End of picture text -----

9

==> picture [46 x 540] intentionally omitted <==

– Sales Analysis CSC standalone

==> picture [556 x 13] intentionally omitted <==

2021.1~3Q sales volume totaled 7.25 million tons – Sales Breakdown

==> picture [666 x 375] intentionally omitted <==

----- Start of picture text -----

Hot-Rolled,
28.0%
Cold-Rolled,
18.3%
Billet/Slab, 3.4%
China
21.5% Japan 14.6%
Bar/Rod, 22.9% Coated Products,
16.7%
Plate, 10.7% Export
Ship-building 0.3% 34.57%
Wire-rope 0.6% 2.51 million Others 34.9%
Hand tools 1.3% Domestic
tons
Vehicles 4.9%
Others 5.2% 65.43%
Piping 5.7% 4.74 million tons
Trader 6.4% S.E Asia 29.0%
Steel structure 7.3%
Re-rolling 12.8%
Coil center 14.0%
Bolts-nuts 17.0%
Direct users 24.5%
0% 5% 10% 15% 20% 25% 30%
----- End of picture text -----

10

==> picture [46 x 540] intentionally omitted <==

- Sales CSC & Analysis BF products of DSC

==> picture [601 x 13] intentionally omitted <==

2021.1~3Q sales volume totaled 10.07 million tons – Sales Breakdown

==> picture [666 x 375] intentionally omitted <==

----- Start of picture text -----

Hot-Rolled,
42.2%
Cold-Rolled,
13.2%
China
17.8% Japan 14.9%
Billet/Slab, 8.4%
Coated Products,
12.0%
Plate, 7.7%
Bar/Rod, 16.5% Export
Ship-building 0.3% 36.03%
Wire-rope 0.4% 3.63 million Others 32.6%
Hand tools 1.0% Domestic
tons
Vehicles 3.6%
63.97%
Trader 5.1%
Steel structure 5.7% 6.44 million tons
Piping 7.8% S.E Asia 34.7%
Coil center 11.5%
Bolts-nuts 12.5%
Others 13.1%
Direct users 18.2%
Re-rolling 20.8%
0% 5% 10% 15% 20% 25% 30%
----- End of picture text -----

11

==> picture [46 x 540] intentionally omitted <==

Consolidated Income Statement

==> picture [556 x 13] intentionally omitted <==

IFRSs	Units: NT$ millions	Units: NT$ millions	Units: NT$ millions
	2021.1~3Q	2020.1~3Q	YoY
Revenues	338,848	227,177	+49%
Gross profit	69,246	5,860	+1082%
Gross margins	20.44%	2.58%
Profit (loss) before tax	61,933	(3,492)	+1874%
Net profit (loss)	50,125	(3,823)	+1411%
Attributable to
Owners of the corporation	44,498	(4,360)	+1121%
Non-controlling interests	5,627	537	+948%
Earnings Per Share(NTD)	$ 2.88	($ 0.28)	+1129%

12

==> picture [46 x 540] intentionally omitted <==

Consolidated Financial Position

==> picture [556 x 13] intentionally omitted <==

Units: NT$ millions

==> picture [651 x 230] intentionally omitted <==

----- Start of picture text -----

105.15%
101.15% 100.66%
96.77% 96.86%
83.42%
676,122 667,716 674,527 666,632
678,240
636,083
51.25% 50.29% 49.18% 50.17% 49.20%
45.48%
346,542 335,764 331,729 334,417
312,976 308,462
37.62%
35.71% 34.50%
31.57% 31.95%
254,390 238,426 212,949 229,965 203,225 25.52%
173,098
12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 09/30/2021
Asset Debt Net Debt ＊ Debt/Equity Debt/Asset Net Debt/Asset
----- End of picture text -----

• Cash flows from operating activities remains steady; keep paying back debts and reducing debt ratio.

• Keep reducing financial costs by issuing corporate bonds and paying back US dollardenominated debt in recent years.

• Credit rating: Taiwan Ratings twAA- ; Outlook Stable (2021.04.23) Fitch Ratings AA (twn); Outlook Stable (2021.10.18)

＊ 2014~2017 ：

Net debt = Interest Bearing Debt – cash & cash equivalents – ( financial assets at fair value through profit or loss-current+ available-for-sale financial assetscurrent +held-to-maturity financial assets-current+ derivative financial assets for hedging-current)

＊ 2018~ ：

Net debt = Interest Bearing Debt – cash & cash equivalents – ( financial assets at fair value through profit or loss-current+ financial assets at fair value through other comprehensive income-current)

13

==> picture [46 x 540] intentionally omitted <==

==> picture [67 x 50] intentionally omitted <==

Historical EPS and Dividends Paid

==> picture [556 x 13] intentionally omitted <==

==> picture [667 x 381] intentionally omitted <==

----- Start of picture text -----

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Dividend
85 132 86 70 102 82 81 63 88 600
payout(%)
Cash Dividend
74 105 67 70 102 82 81 63 88 600
payout(%)
in NTD per share
2.00
1.00
-
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Cash Dividend Stock Dividend EPS
0.15
0.20
1.01 1.00 1.00
0.10 0.85 0.88
0.70
0.40 0.5 0.5
1.36 0.38 1.05 1.43 0.49 1.04 1.09 1.58 0.57 0.05 0.3
----- End of picture text -----

14

==> picture [46 x 540] intentionally omitted <==

==> picture [247 x 116] intentionally omitted <==

==> picture [277 x 41] intentionally omitted <==

15

	2 Operating Strategies, 10 Measures
	1. Develop Advanced Premium Steel
	2. Establish Excellent Manufacturing Capability
	3. Improve Marketing Capability
	4. Deepen the Upgrade of Steel-using Industry
	5. Introduce the Application of AIoT
	6. Build up Highly Efficient Business Systems and Processes
	7. Move towards High Productivity
	8. Pass on and Enhance Corporate Culture
	9. Explore and Cultivate in the Green Industry Business
	10. Mitigate Coal Phase-out and Carbon Reduction Pressure
Develop into a high value-added steel millthroughintelligent innovation.
	Expand new business opportunity in promising industry through
	engagement in thegreen energyfield.	16

==> picture [46 x 540] intentionally omitted <==

Develop Advanced Premium Steel

==> picture [556 x 13] intentionally omitted <==

Definition of Advanced Premium Steel (APS)

Products with

”High Technical Content, High Profitability, High Industrial Benefit.”

Focus on 8 items(Meet customers' needs & Follow industry trend)

	Focus on 8 items(Meet customers' needs & Follow industry trend)	Focus on 8 items(Meet customers' needs & Follow industry trend)	Focus on 8 items(Meet customers' needs & Follow industry trend)	Focus on 8 items(Meet customers' needs & Follow industry trend)	Focus on 8 items(Meet customers' needs & Follow industry trend)	Focus on 8 items(Meet customers' needs & Follow industry trend)	Focus on 8 items(Meet customers' needs & Follow industry trend)	Focus on 8 items(Meet customers' needs & Follow industry trend)
	High- Quality Forging Steels	Superior Hand Tool Steels	High Performance Structural Steels	Steel for Green Energy	Ultra-High Strength and Toughness Steels	Advanced Alloy Steels	Cross- Generational Automotive Steels	Ultra- High Efficiency Electrical Steels
	Year			2021	2022	2023	2024	2025
	Advanced Premium Steel proportion target (%) (APS sales volume target divided by total sales volume target, which does not include leeways, secondary and salvage products, and semi-products)			4.2%	5.5%	6.9%	8.4%	10.0%

• Sales volume of the 8 items of APS to achieve 10% in 2025 and 20% in 2030.

 In 2021Q1~Q3, the sales volume of APS reached 461.1 thousand tons, accounting for 7.31% of total orders (target 4.2%), 9.00% of sales revenues, and 12.83% of gross profits. 17

==> picture [46 x 540] intentionally omitted <==

- Deepen the Upgrade of Steel using Industry

==> picture [571 x 13] intentionally omitted <==

Cultivating core technologies Integrating the resources from government, academia and research institutes to execute the collaborative programs such as power system of EV.

Facilitating industry 4.0

• Constructing industry cloud to enhance cross-factory efficiency.

==> picture [111 x 111] intentionally omitted <==

• Introducing AI-based production and marketing.

Promoting industry service teams

EVI-based Concurrent Engineering

Providing multi-program of process technology, quality control, logistics management, etc. to cultivate medium-sized enterprises.

Establishing JRL to proceed overall researches from materials to end products and enhancing the effect of industry chain.

Promoting Integrated Innovation Facilitating Upgrade and Transformation Generating Demand and Benefits from Advanced Premium Steel

18

==> picture [46 x 540] intentionally omitted <==

– Cultivate in the Green Industry Business Wind Farm & Infrastructure

CSC shareholding : 51% (CIP 49%) Total investment(e): NTD 50~55 billion Power generation(e): 1.1 billion kwh/yr Progress:

• Obtained the establishment permit, signed power purchase agreement (PPA) with Taipower, .

• and being expected to connect to the gird in 2024

• Signed the contract with Sing Da Marine Structure to procure jacket substructures needed in the wind farm.

• A syndicated loan will be signed with banks recently to ensure the funds for wind farm development.

CSC Shareholding: 100% Total investment: NTD 6.842 billion Progress:

was The first 100% domestically made substructure completed in July, 2021. 4 substructures are completed and 2 sets of upper and lower jackets are being welded. Future order: Signed a contract to produce 31

. substructures for Zhongneng Wind Farm Started production of components in Oct.

19

==> picture [46 x 540] intentionally omitted <==

– Cultivate in the Green Industry Business Solar Power

==> picture [165 x 165] intentionally omitted <==

55% 15% • CSC group shareholding: 100% 20% 10%

• Total investment: NTD 4.36 billion (until the end of 2021)

• Capacity Installed: 84.8MW (until the end of 2020)

• Operating performance: (until the end of Sep, 2021)

CO2

Equivalent to the CO2 absorption of 397 Taipei Daan Park

Electricity output Revenues from Carbon reduction 308 electricity sales around 1.418 billion million kwh 155k tons

*Estimated based on the 2020 Taipower electricity carbon emission factor, 0.502 kg CO2e/kwh

Year	2017~2019	2020	2021	Total
Actual Capacity Installed (MW)	83.2	1.6	Under installation	84.8
ElectricityOutput (100m kwh)	1.25	1.04	0.79(until Sep.)	3.08

• Future installation: 3~5MW / yr ; installation target: over 100MW

• Keep developing rooftop PV Systems in CSC group supply chain based on the regulation on users with high power consumption in Renewable Energy Development Act.

• Transform from Type III to Type I renewable energy facility to obtain a license for selling green energy, increasing renewable energy usage of CSC group companies.

20

==> picture [46 x 540] intentionally omitted <==

Decarbonization Pathway

==> picture [650 x 59] intentionally omitted <==

----- Start of picture text -----

2025 2030 2050
Base year: 2018
7% reduction 22% reduction Carbon Neutrality
----- End of picture text -----

==> picture [655 x 299] intentionally omitted <==

• Facing the challenges of technology, resource, and capital, resulted from the lack of mature technology and green hydrogen resources, as well as the required equipment modification.

• Currently evaluating the possibility of investment in the production of hot briquetted iron (HBI) through green hydrogen in Australia in order to cut CO2 21

• emissions.

==> picture [46 x 540] intentionally omitted <==

Environmental Protection Action

Became a TCFD supporter & adopted the TCFD framework.

Enclosed Building in Coking Coal Storage Yard

Investment on environmental protection

• Accumulated investment in environmental protection equipment reached 76.3 billion.

• Investment on air quality improvement projects in the recent 5 years reached 4.756 billion.

• To invest 43.68 billion in air quality improvement projects from 2021~2026.

Reduction of greenhouse gas

• Participate in the GHG voluntary reduction program held by Industrial Development Bureau since 2005. From 2011 to 2020, accumulated carbon reduction reached 1.451 million tons CO2e, equivalent to the CO2 absorption of 3,732 Taipei Daan Park, through 1,182 implemented reduction projects.

• Terminated three boilers earlier before the end of Aug, 2021. CSC group no longer has coal combustion boiler.

Water resources development

• Water recycled rate is 98.4%. (higher than the 65% required by the government)

• Won 16 Water Conservation awards from the Water Resources Administration of Ministry of Economic Affairs .

Introduce the reservoir for reclaimed water

• The first company in Taiwan to use domestic reclaimed water.

• Fengshan Creek reclaimed water was introduced in 2018.

• Linhai reclaimed water will be introduced by the end of 2021.

22

==> picture [46 x 540] intentionally omitted <==

ESG performance

==> picture [471 x 14] intentionally omitted <==

ESG Performance

• 2021.10 CSC won the Gold Class of Sustainable Cities and Communities and the Bronze Class of Decent Work and Economic Growth in the 1st Taiwan Sustainable Action Award by Taiwan Institute for Sustainable Energy (TAISE).

• 2021.09 CSC won the Silver Award of 2020 Greenhouse Gas Reduction Evaluation for

Enterprises in Kaohsiung City.

• 2021.05 CSC was ranked top 5% in TWSE listed companies in the 7th (2020) Corporate Governance Evaluation.

 2020.11 CSC received the highest honor - “Top 10 Domestic Companies Sustainability Model Awards (Manufacturing Industry)” by Taiwan Corporate Sustainability Awards (TCSA).

• 2020.11 CSC won the “Leader in Sustainability Resilience Award” by British Standards Institution (BSI).

• 2020.11 CSC was included in the Emerging Market Index of Dow Jones Sustainability Index (DJSI) for the 9th consecutive year.

• 2020.10 CSC was ranked 50th in the 100 Most Sustainably Managed Companies in the World by Wall Street Journal, and became one of the five Taiwanese companies awarded.

23

Thank you!

24

==> picture [46 x 540] intentionally omitted <==

==> picture [247 x 116] intentionally omitted <==

==> picture [187 x 41] intentionally omitted <==

25

==> picture [46 x 540] intentionally omitted <==

Segment revenues and operating results

==> picture [556 x 13] intentionally omitted <==

Unit : NTD Thousands

2021.1~3Q	Steel	Shipping	Others	Adjustment & Elimination	Total
Revenues from external customers	$ 274,052,117	$ 1,653,719	$ 63,142,085	$ -	$ 338,847,921
Inter-segment revenues	72,501,321	16,109,776	26,792,841	( 115,403,938)	-
Segment revenues	$ 346,553,438	$ 17,763,495	$ 89,934,926	($ 115,403,938)	$ 338,847,921
Segment profit	$ 53,915,888	$ 2,216,234	$ 4,822,502	($ 2,852,270)	$ 58,102,354
Interest income	90,007	8,545	103,878	( 27,647)	174,783
Financial costs	( 1,040,999)	( 85,771)	( 335,167	) 104,749	( 1,357,188)
Share of the profit (loss) of associates	22,669,351	422,327	2,777,059	( 24,750,285)	1,118,452
Other non-operating income and expenses	793,076	84,385	2,556,411	460,700	3,894,572
Profit before income tax	76,427,323	2,645,720	9,924,683	( 27,064,753)	61,932,973
Income tax	10,886,278	110,694	1,161,958	( 351,074)	11,807,856
Net profit for the period	$ 65,541,045	$ 2,535,026	$8,762,725	($ 26,713,679)	$ 50,125,117

26