CST — Interim / Quarterly Report 2019

Aug 13, 2019

August 14, 2019

CHENG SHIN RUBBER IND. CO., LTD.

Investor Conference

==> picture [43 x 34] intentionally omitted <==

==> picture [139 x 23] intentionally omitted <==

We Deliver Performance[TM]

Safe Harbor Notice

==> picture [716 x 6] intentionally omitted <==

This presentation is based on the information obtained from various sources which the Company believes to be reliable. But at some point in the future, there are a variety of factors which could cause actual results to differ materially from those statements. Therefore, please refer to the information on MOPS website as the main basis if any adjustment has been made. (http://mops.twse.com.tw)

==> picture [43 x 34] intentionally omitted <==

==> picture [139 x 23] intentionally omitted <==

1

We Deliver Performance[TM]

Participants

==> picture [716 x 6] intentionally omitted <==

 Mr. Liao, Cheng Yao / Vice President  Mr. Lo, Yung Li / Vice President

==> picture [43 x 34] intentionally omitted <==

==> picture [139 x 23] intentionally omitted <==

2

We Deliver Performance[TM]

==> picture [716 x 6] intentionally omitted <==

==> picture [250 x 187] intentionally omitted <==

Company Introduction

==> picture [43 x 34] intentionally omitted <==

==> picture [139 x 23] intentionally omitted <==

3

We Deliver Performance[TM]

Company Introduction

==> picture [716 x 6] intentionally omitted <==

==> picture [385 x 232] intentionally omitted <==

• Foundation ： Jan., 1967

• IPO ： Dec., 1987

• Headquarter ： Chunghwa, Taiwan

• Capital ： NT$32.414 billion

• Chairman ： Lo, Tsai-Jen

• Global top 9 of tire makers

• Number of employees ： 6,340 (Taiwan) ；

29,572 (Global)

==> picture [233 x 102] intentionally omitted <==

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

Base Date ： 2019-06-30
----- End of picture text -----

==> picture [97 x 92] intentionally omitted <==

==> picture [103 x 97] intentionally omitted <==

==> picture [97 x 92] intentionally omitted <==

==> picture [98 x 92] intentionally omitted <==

==> picture [103 x 90] intentionally omitted <==

==> picture [43 x 34] intentionally omitted <==

==> picture [139 x 23] intentionally omitted <==

4

We Deliver Performance[TM]

Production Plants

==> picture [716 x 6] intentionally omitted <==

==> picture [675 x 333] intentionally omitted <==

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

CSTC
CSTS
MRI
CST (Headquarter)
11
MIT
Production Plants
CSV
XCS
CSTP
PTM CSTZ
CSTE
----- End of picture text -----

==> picture [43 x 34] intentionally omitted <==

==> picture [139 x 23] intentionally omitted <==

5

We Deliver Performance[TM]

Production Configuration

==> picture [716 x 6] intentionally omitted <==

	CST	XCS	CSTC	CSTP	CSTE	CSTS	CSTZ	MIT	CSV	MRI	PTM
PCR	◎	◎	◎			◎		◎
TBR	◎		◎	◎				◎
MC	◎	◎					◎		◎	◎	◎
BC	◎	◎					◎
TUBE	◎				◎				◎	◎	◎
OTHERS	◎	◎					◎		◎

Base Date ： 2019-06-30

==> picture [43 x 34] intentionally omitted <==

==> picture [139 x 23] intentionally omitted <==

6

We Deliver Performance[TM]

Production Capacity

==> picture [716 x 6] intentionally omitted <==

==> picture [488 x 399] intentionally omitted <==

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

OTHERS ： 95
TBR ： 21
TUBE ： 541
PCR ： 182
Total ： 1,339
• TUBE
• BC
BC ： 256
• MC
• PCR
MC ： 244 • TBR
----- End of picture text -----

Unit ： thousand pcs / day

• TUBE ：內胎 • BC ：自行車外胎 • MC ：機車外胎

• PCR ：輻射層汽車外胎

• TBR ：輻射層卡車外胎 • OTHERS ：其他

Base Date ： 2019-06-30

==> picture [190 x 35] intentionally omitted <==

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

We Deliver Performance [TM]
----- End of picture text -----

==> picture [139 x 23] intentionally omitted <==

7

Maxxis Awards

==> picture [716 x 6] intentionally omitted <==

==> picture [49 x 65] intentionally omitted <==

==> picture [282 x 248] intentionally omitted <==

台灣 20 大國際品牌 - 福建奔馳賓士優秀供應商 中國年度操控輪胎大獎 中國汽車雜誌輪胎王中王大賞 汽車族雜誌中國年度車輪獎 澳洲 4X4 雜誌評測第一名

澳洲 BAUER MOTORING Wheels 雜誌輪胎測試第一名 澳洲 Driving Solutions 雜誌性能測試第一名 歐洲 Professional Driver 雜誌評價第三名 德國 AUTO ZEITUNG 雜誌評測第三名

==> picture [43 x 34] intentionally omitted <==

==> picture [139 x 23] intentionally omitted <==

8

We Deliver Performance[TM]

Maxxis Activities

==> picture [716 x 6] intentionally omitted <==

==> picture [718 x 349] intentionally omitted <==

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

MXGP
----- End of picture text -----

==> picture [43 x 34] intentionally omitted <==

==> picture [139 x 23] intentionally omitted <==

9

We Deliver Performance[TM]

==> picture [716 x 6] intentionally omitted <==

==> picture [210 x 186] intentionally omitted <==

Operating Results

==> picture [43 x 34] intentionally omitted <==

==> picture [139 x 23] intentionally omitted <==

10

We Deliver Performance[TM]

Operating Results

==> picture [716 x 6] intentionally omitted <==

Unit ： NT$ 100 million

Net revenue TWD553 億 (-1.07%) 2018H1 2018H1 2018H1 Net revenue Operating profit Cost of good sold TWD 559 TWD 47 TWD 428

Source ： CSTG Financial Report We Deliver Performance[TM]

==> picture [139 x 23] intentionally omitted <==

Statements of Comprehensive Income Overview (Consolidated)

==> picture [716 x 6] intentionally omitted <==

Unit：NT$ million	2018H1 Amount	%	2019H1 Amount	%
Net revenue	55,896	100	55,256	100
Cost of good sold	(42,772)	(77)	(42,803)	(77)
Gross profit	13,124	23	12,453	23
Operating expenses	(8,456)	(15)	(8,289)	(15)
Operating profit	4,668	8	4,164	8
Non-operating gains & losses	(678)	(1)	(8)	(-)
Income before tax	3,990	7	4,156	8
Net Income	2,611	4	2,768	5
EPS；NT$	0.80		0.85

==> picture [43 x 34] intentionally omitted <==

==> picture [139 x 23] intentionally omitted <==

Source ： CSTG Financial Report

12

We Deliver Performance[TM]

Balance Sheet Overview (Consolidated)

==> picture [716 x 6] intentionally omitted <==

Unit：NT$ million	2018H1 Amount	%	2019H1 Amount	%
Cash and cash equivalents	33,770	18	26,503	15
Inventories	19,445	11	18,407	11
Net property, plant and equipment	105,221	57	102,663	59
Total assets	184,318	100	172,468	100
Current liabilities	50,722	28	48,820	29
Long-term debts & corporate bonds	49,395	26	38,496	22
Total shareholder’s equity	82,891	46	79,818	46
Total liabilities and shareholder's equity	184,318	100	172,468	100

==> picture [43 x 34] intentionally omitted <==

==> picture [139 x 23] intentionally omitted <==

Source ： CSTG Financial Report

13

We Deliver Performance[TM]

Statement of Cash Flow Overview (Consolidated)

==> picture [716 x 6] intentionally omitted <==

Unit：NT$ million	2018H1 Amount	2019H1 Amount
CASH FLOWS FORM OPERATING ACTIVITIES	4,685	10,195
Net income before tax	3,989	4,156
CASH FLOWS FORM INVESTING ACTIVITIES	(6,933)	(4,414)
Acquisitions of property, plant and equipment	(7,114)	(4,529)
CASH FLOWS FROM FINANCING ACTIVITIES	4,128	(7,107)
Increase (decrease) in loans	4,134	(7,048)
Increase in cash and cash equivalents	2,852	(1,307)
Cash and cash equivalents at the end of year	33,770	26,503

==> picture [43 x 34] intentionally omitted <==

==> picture [139 x 23] intentionally omitted <==

Source ： CSTG Financial Report

14

We Deliver Performance[TM]

Revenues (Consolidated)

==> picture [716 x 6] intentionally omitted <==

Unit ： NT$ million

-1.14%

• 【 Reasons of revenues decrease 1.14% 】

YoY ：

• Price & exchange rate effect ： -0.80%

• Quantity effect ： 0.47%

• Other effect ： -0.81%

2018H1 2019H1

==> picture [43 x 34] intentionally omitted <==

Source ： CSTG Financial Report

==> picture [139 x 23] intentionally omitted <==

15

We Deliver Performance[TM]

YoY Revenues (Consolidated)

==> picture [716 x 6] intentionally omitted <==

Unit：NT$	100	million
			2018H1	2019H1

==> picture [710 x 271] intentionally omitted <==

==> picture [139 x 23] intentionally omitted <==

Source ： CSTG Financial Report We Deliver Performance[TM]

16

Revenues by Subsidiary

==> picture [716 x 6] intentionally omitted <==

Unit ： % of sales

 2018H1  2019H1

==> picture [710 x 248] intentionally omitted <==

YoY ▼ 1.8% ▲ 0.1% ▼ 0.1% ▼ 0.3% ▲ 0.4% ▲ 0.6% ▼ 1.3% ▲ 0.4% ▲ 2.0%

==> picture [43 x 34] intentionally omitted <==

Source ： CSTG Financial Report

==> picture [139 x 23] intentionally omitted <==

17

We Deliver Performance[TM]

Revenues by Region

==> picture [716 x 6] intentionally omitted <==

==> picture [732 x 395] intentionally omitted <==

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

Unit ： % of sales
China
55.0% ( ▼ 1.5%)
Europe
6.6% ( ▼ 0.6%)
-2.7%
-7.4%
Taiwan America
6.0% ( ▲ 0.1%) 12.7% ( ▲ 1.3%)
+1.3% +11.3%
M. East & Asia Pacific
Africa 15.1% ( ▲ 0.1%)
4.6% ( ▲ 0.6%)
+0.2%
+15.7%
----- End of picture text -----

==> picture [378 x 35] intentionally omitted <==

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

Source ： CSTG Non-audited Financial Report (2019H1)
We Deliver Performance [TM] 18
----- End of picture text -----

==> picture [139 x 23] intentionally omitted <==

Revenues by Products (Consolidated)

==> picture [716 x 6] intentionally omitted <==

Unit ： % of sales

==> picture [771 x 138] intentionally omitted <==

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

PCR TBR MC BC OTHER TUBE
39.8% ( ▼ 1.3%) 22.1% ( ▲ 0.6%) 11.7% ( ▲ 0.3%) 8.4% ( ▲ 0.3%) 11.4% ( ▼ 0.3%) 6.6% ( ▲ 0.4%)
----- End of picture text -----

==> picture [738 x 121] intentionally omitted <==

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

-3.1% +2.7% +2.4% +3.3% -2.8% +6.9%
----- End of picture text -----

Source ： CSTG Non-audited Financial Report (2019H1) We Deliver Performance[TM]

==> picture [139 x 23] intentionally omitted <==

19

YoY Quantities by Products (Consolidated)

==> picture [716 x 6] intentionally omitted <==

Unit ： million pcs

==> picture [771 x 138] intentionally omitted <==

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

PCR TBR MC BC OTHER TUBE
19.0 2.5 19.7 41.1 10.2 91.7
----- End of picture text -----

==> picture [754 x 151] intentionally omitted <==

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

PCR,
40.9%
-6.4% +2.6% +7.6% +4.9%
+4.2% +8.5%
----- End of picture text -----

==> picture [43 x 34] intentionally omitted <==

Source ： CSTG Non-audited Financial Report (2019H1)

We Deliver Performance[TM]

==> picture [139 x 23] intentionally omitted <==

20

YoY ≧ 17” PCR Sales (Consolidated)

==> picture [716 x 6] intentionally omitted <==

==> picture [141 x 69] intentionally omitted <==

Unit ： ≧ 17” % of PCR sales amount 2018H1 2019H1 28.8% 31.3% 2.5% ≧ 17” Unit ： ≧ 17” % of PCR sales volume 2018H1 2019H1 21.4% 22.9% 1.5%

==> picture [43 x 34] intentionally omitted <==

==> picture [139 x 23] intentionally omitted <==

21

We Deliver Performance[TM]

Gross Profit Rate (Consolidated)

==> picture [716 x 6] intentionally omitted <==

【 Reasons of gross profit rate decrease 0.94% 】 YoY ：  Material cost effect ： 1.12%  Manufacturing expense effect ： -1.85%

2018H1 2019H1

資料來源：正新橡膠合併財報

==> picture [43 x 34] intentionally omitted <==

Source ： CSTG Financial Report

==> picture [139 x 23] intentionally omitted <==

22

We Deliver Performance[TM]

Material Cost in 2019H1

==> picture [716 x 6] intentionally omitted <==

==> picture [740 x 376] intentionally omitted <==

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

Brent ,
in USD
11%
Steel & Steel Cord
Fabric
12% 23% BR0150 , RSS3 ,
Nylon Cord in NTD/kg
Synthetic Rubber in NTD/kg
Fabric
15%
Carbon 22%
Natural Rubber
SBR1502 ,
in NTD/kg
17%
Chemicals
----- End of picture text -----

Source ： http://cip.chinatimes.com/

==> picture [43 x 34] intentionally omitted <==

==> picture [139 x 23] intentionally omitted <==

23

We Deliver Performance[TM]

Operating Income Rate (Consolidated)

==> picture [716 x 6] intentionally omitted <==

【 Reasons of operating income rate decrease 0.82% 】

YoY ：

 Operating expense rate effect ： 0.12%

 Gross profit rate effect ： -0.94%

2018H1 2019H1

==> picture [43 x 34] intentionally omitted <==

Source ： CSTG Financial Report

==> picture [139 x 23] intentionally omitted <==

24

We Deliver Performance[TM]

Net Income Rate – Attributable to shareholders of the parent (Consolidated)

==> picture [716 x 6] intentionally omitted <==

【 Reasons of net income rate decrease 0.34% 】 YoY ： Income tax rate effect ： -0.04% Non-operating rate effect ： 1.20% Operating expense rate effect ： 0.12% 2018H1 2019H1 Gross profit rate effect ： -0.94%

==> picture [43 x 34] intentionally omitted <==

Source ： CSTG Financial Report

==> picture [139 x 23] intentionally omitted <==

25

We Deliver Performance[TM]

EPS (Consolidated)

==> picture [716 x 6] intentionally omitted <==

==> picture [102 x 41] intentionally omitted <==

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

Unit ： NT$
----- End of picture text -----

==> picture [547 x 267] intentionally omitted <==

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

NT$
6.25%
2018H1 2019H1
----- End of picture text -----

==> picture [43 x 34] intentionally omitted <==

Source ： CSTG Financial Report

==> picture [139 x 23] intentionally omitted <==

26

We Deliver Performance[TM]

Revenues by Domestic & Foreign Sales

==> picture [716 x 6] intentionally omitted <==

==> picture [675 x 344] intentionally omitted <==

==> picture [43 x 34] intentionally omitted <==

Source ： CSTG Non-audited Financial Report (2019H1)

==> picture [139 x 23] intentionally omitted <==

27

We Deliver Performance[TM]

Revenues by OE & RE Customer

==> picture [716 x 6] intentionally omitted <==

OE

 RE

==> picture [43 x 34] intentionally omitted <==

Source ： CSTG Non-audited Financial Report (2019H1)

==> picture [139 x 23] intentionally omitted <==

28

We Deliver Performance[TM]

2019 H1 Operating Overview

==> picture [716 x 6] intentionally omitted <==

Unit ： NT$100 million

==> picture [43 x 34] intentionally omitted <==

==> picture [653 x 353] intentionally omitted <==

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

Income Others Tax
(0.01) 27.7
26.1
(5.8)
Cost
(0.3) 1.7
2018H1 2019H1
(1.6)
Net Profit Net Profit
----- End of picture text -----

==> picture [139 x 23] intentionally omitted <==

29

We Deliver Performance[TM]

==> picture [377 x 417] intentionally omitted <==

Thanks for coming and kindly appreciate your support.

CST website ： http://www.cst.com.tw/

==> picture [164 x 179] intentionally omitted <==

==> picture [139 x 23] intentionally omitted <==

30

We Deliver Performance[TM]