Chien Shing Stainless Steel Co., Ltd. — Investor Presentation 2022

Nov 29, 2022

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Chien Shing Stainless Steel Co., Ltd.

2022 Investor Conference

November 30, 2022

Stock Code : 2025.TW

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Disclaimer

 This briefing is based on the information obtained by the company from various sources. Some information may be affected by uncertain factors in the future, making it completely different from the company's original description of the future prospects.

• Changes or adjustments in the future will be released

• on Market Observation Post System (MOPS).

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Outline

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Company Profile Operation Overview

Waste Case Description Market prospect Q & A

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Company Profile

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• Founded : MAY 8[th] , 1972

• Capital : NT $ 2,812 million

• Chairman : Mr. Ye Shuo Tong

• : 54

• Employee (Octorber,2022)

• IPO Time ： February,1996

• Main business ： Manufacture, trade, import and .

• export cold rolled stainless steel

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Company History

Time Company History

1972 Founded in May 8[th] .

1989 SEO and IPO.

1990 SEO based on factory construction. Paid-in capital reached NTD 1.1 billion. 1996 The company's stock was listed and passed ISO9002 certification. 2000 Paid-in capital amounted to NTD 3.228 billion.

2009

Typhoon Morakot caused part of the equipment damaged, and repairs were completed within one year.

2012

Developed the first electric locomotive, obtained the official light-duty machine pedal type safety inspection certificate approved by the Ministry of Transport, legally listed on the road.

2017

Conducted a simple merger with three 100% subsidiaries on November 27[th] in accordance with the resolution of the board of directors and the corporate mergers and acquisitions law, approved by the Ministry of Economic Affairs to merge and change registration on January 4[th] , 2017. Paid-in capital reached NTD 2.812 billion.

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Production Technology & Process

Raw Material: Stainless steel 300 series hot rolled coil. Width: 1300mm Thickness: 2.0 to 6.0mm

Maximum Capacity: 12,000 (MT/month)

Cold Rolled Products: Cold rolled 2B steel plate. Width: 1300mm Thickness: 0.3 to 3.5 mm

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Operation Overview
Unit: NTD $1,000 2020 2021 2022 Q1-Q3
Operating Revenue 803,775 2,470,941 1,027,001
Net Profit Before Tax (209,678) 276,324 674,426
3,000
2471
2,000
1027
804
1,000 674
276
0
-210
2020 2021 2022 until Q3
-1,000
Operating Revenue Net Profit Before Tax
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Unit: NTD $1 million

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Operation Overview- Operating Revenue per Month

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Month January February March April May June July August September October
Y to Y (%) 28.89 21.82 6.33 103.57 37.10 94.25 (77.13) (97.91) (96.9) (75.35)
20212 2022
390
355
Unit: NTD $1 million
287 288
247
232
223
180
168 169
158 171
134
110
84 62 85 87 71
51
6 11
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
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Operation Overview- Operation of 4 years

Operating Revenue

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3000 2471
2000
1155
1027
804
1000
0
2019 2020 2021 2022
Q1-Q3
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Gross Profit (Loss)

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400 304
200
0
-30
-200
-160
-189
-400
2019 2020 2021 2022
Q1-Q3
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Operating Profit (Loss)

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400
265
200
0
-56
-200
-197 -222
-400
2019 2020 2121 2022
Q1-Q3
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Net Profit (Loss)

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1000
674
500 276
0
-178 -210
-500
2019 2020 2021 2022
Q1-Q3
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Financial Performance –Balance Sheet

Unit: NTD $1,000	2022/09/30 Amount	%	2021/09/30 Amount	%	2020/09/30 Amount	%
Current Assets	1,080,572	62	1,007,585	55	726,213	43
Non-Current Assets	654,008	38	831,563	45	956,518	57
Total Assets	1,734,580	100	1,839,148	100	1,682,731	100
Current Liabilities	364,893	21	1,226,512	66	237,442	14
Non-Current Liabilities	7,477	0	13,526	1	992,790	59
Total Liabilities	1,362,210	79	599,110	33	452,499	27
Total Assets &Liabilities	1,734,580	100	1,839,148	100	1,682,731	100

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Financial Performance – Income Statement

Unit: NTD $1,000	2022 Till Q3	2022 Till Q3	2022 Till Q3	%	2021 Till Q3	2021 Till Q3	%	%	2021 %
Operating Revenue		1,027,001		100	1,545,907		100		2,470,941 100
Gross Profit (Loss)		(29,824)		(3)		189,171	12		304,399 12
Operating Profit (Loss)		(56,163)		(6)		161,634	10		265,521 11
Net Profit (Loss)		674,426		66		177,661	11		276,462 11
EPS (in dollars)			2.4			0.63			0.98
-100000 -500000 50000 100000 150000 200000 250000 300000 350000 400000 450000 2021 Q4		2022 Q1		2022	Q2	2022 Q3			Operating Profit Net Profit Before Tax Unit: NTD $1 thousand

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Waste Case Description

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1. Receive a letter of approval in principle from the competent authority on the company’s waste disposal . completion report on 2021 July 6[th]

2. The competent authority sent person to the company to handle soil and groundwater inspections and other related matters on 2021 July 7[th] . The inspection and review was carried out by the Environmental Protection Administration, Executive Yuan on October 1[st] , 2021, and the inspection and review was still in progress on the day of the Investor Conference.

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Waste Case Description

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1. On September 5, 2022, the Taiwan High Court Tainan Branch received a criminal appeal judgment against the Waste Disposal Law. The company was sentenced to a fine of 12 million yuan for violating the Waste Disposal Law. The appeal was rejected, and the chairman of the company was sentenced to five years in prison. The chairman refused to accept the verdict and has filed an appeal according to law, which is still under trial in the Supreme Court.

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1.
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Market Prospect

1. In 2021, the world will be affected by COVID-19, which will lead to an imbalance between the supply and demand of raw materials. Manufacturers will increase their purchases significantly, resulting in the prosperity of all industries. This year, as the epidemic situation in various countries gradually slows down, steel prices have fallen back this year after a sharp rise in nickel prices last year. After the third quarter of this year, the price of nickel has stabilized, which has kept steel prices stable. With the rigid demand driven by the infrastructure construction plans in Europe and the United States, it is expected that steel prices will be supported to a certain extent.

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Market Prospect

1. The U.S. Fed is facing the strongest inflation crisis in decades. It will raise interest rates aggressively in 2022. As of November, a total of 6 interest rate hikes have been announced, with a cumulative rate hike of 15 yards (375 bp). The Fed’s strong interest rate hikes should be a drag on the economy The effect will put pressure on global economic growth in 2023.

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Market Prospect

1. Due to the global pursuit of low-carbon transformation and the increasing domestic awareness of environmental protection, high-pollution industries are bound to become the target of public criticism. The operation of the iron and steel industry is in a dilemma. Due to the characteristics of the industry, the total energy consumption and greenhouse gas emissions are large, and the journey of energy conservation and carbon emission is slow. The pressure is very difficult, the company will uphold steady operation and seek growth and profit in stability.

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Chien Shing Stainless Steel Co., Ltd.

Q & A

Thanks for listening

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