CST — Investor Presentation 2019

Apr 15, 2019

CHENG SHIN RUBBER IND. CO., LTD.

Investor Conference

We Deliver Performance[TM] April 16, 2019

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Safe Harbor Notice

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)

We Deliver Performance[TM]

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Participants

• Mr. Liao, Cheng Yao / Vice President

• Mr. Lo, Yung Li / Vice President

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Company Introduction

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Company Introduction

• �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：6,453 (Taiwan)；

29,240 (Global)

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Base Date：2018-12-31
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Production Plants

CSTC CSTS MRI CST 11 Production Plants MIT CSV 、 XCS CSTP PTM 、 CSTZ CSTE

Note：CST is the Headquarter

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Production Configuration

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

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Base Date：2018-12-31

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Production Capacity

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Unit：thousand pcs / day
OTHERS：105
TBR：19
TUBE：538
PCR：182
Total ： 1,326
BC：238
MC：244
Base Date：2018-12-31
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Revenues of Global Top 10 Tire Makers

Maxxis Revenue in 2017 : US$ 3.955 Billion

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Top 20 Interbrand

Source：Interbrand 2018台灣國際品牌價值調查

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Maxxis VS5 Recommended by Professional Driver Magazine

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Maxxis AT700 Recommended by Professional Magazine

Source：www.4X4australia.com.tw We Deliver Performance[TM]

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Maxxis HP5 Recommended by Professional Magazine

Source：德國汽車雜誌《Auto Bild Allrad》

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KTM Designated Maxxis Tire

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Designated MaxxisTire by CANYON EISBERG

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Official Tire Supplier of MXGP (2019~2021)

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2019 Sponsor Dakar Team

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Sponsor Badminton Competition

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Operating Results

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Operating Results

Unit：NT$ 100 million

Net revenue TWD1,092 (-2.75%) 2017 2017 2017 Net revenue Cost of good sold Operating profit TWD 1,123 TWD 866 TWD 84

Source：CSTG Financial Report We Deliver Performance[TM]

Statements of Comprehensive Income Overview (Consolidated)

Unit：NT$ million	2017 Amount	%	2018 Amount	%
Net revenue	112,309	100	109,221	100
Cost of good sold	(86,631)	(77)	(84,898)	(78)
Gross profit	25,678	23	24,323	22
Operating expenses	(17,280)	(16)	(16,908)	(15)
Operating profit	8,398	7	7,415	7
Non-operating gains & losses	(17)	-	(1,506)	(1)
Income before tax	8,381	7	5,909	6
Net Income	5,602	5	3,575	4
EPS；NT$	1.71		1.09

Source：CSTG Financial Report

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Balance Sheet Overview (Consolidated)

Unit：NT$ million	2017 Amount	%	2018 Amount	%
Cash and cash equivalents	30,918	17	27,809	16
Inventories	19,184	11	19,362	11
Net property, plant and equipment	105,008	59	103,255	59
Total assets	179,084	100	174,763	100
Current liabilities	42,078	24	44,487	25
Long-term debts & corporate bonds	49,459	27	45,966	26
Total shareholder’s equity	82,891	46	79,818	46
Total liabilities and shareholder's equity	179,084	100	174,763	100

Source：CSTG Financial Report

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Statement of Cash Flow Overview (Consolidated)

Unit：NT$ million	2017 Amount	2018 Amount
CASH FLOWS FORM OPERATING ACTIVITIES	8,895	14,855
Net income before tax	8,381	5,909
CASH FLOWS FORM INVESTING ACTIVITIES	(13,909)	(12,377)
Acquisitions of property, plant and equipment	(13,923)	(12,493)
CASH FLOWS FROM FINANCING ACTIVITIES	8,338	(6,333)
Increase (decrease) in loans	17,898	(502)
Increase in cash and cash equivalents	2,025	(3,109)
Cash and cash equivalents at the end of year	30,918	27,809

Source：CSTG Financial Report We Deliver Performance[TM] 22

Revenues (Consolidated)

Unit：NT$ million

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-2.75%
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【Reasons of revenues decrease 2.75%】
YoY：
� Price & exchange rate effect：2.10%
�Quantity effect：-4.09%
�Other effect：-0.76%
2017 2018
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Source：CSTG Financial Report
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YoY Revenues (Consolidated)

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|||||
|---|---|---|---|
|Unit：NT$ 100 million|
|�|2017|�|2018|

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Source：CSTG Financial Report

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Revenues by Subsidiary

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Unit：NT$ 100 million
� 2017 � 2018
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-
YoY ▲1.3% ▼0.9% ▲0.3% ▲0.4% ▼0.9% ▼0.4% ▼0.2% ▲0.4%
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Source：CSTG Financial Report
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Revenues by Region

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Unit：NT$ million
China
56.1% ( ▼ 0.2%)
Europe
6.8% ( ▲ 1.0%)
-2.4%
+16.0%
Taiwan America
5.9% ( ▼ 0.3%) 12.2% ( ▲ 0.1%)
-6.5%
-0.8%
M. East & Asia Pacific
Africa 15.2% ( ▲ 0.5%)
3.8% ( ▼ 1.2%)
+1.3%
-25.3%
Source：CSTG Non-audited Financial Report (2018)
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Revenues by Currency

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VND
OTHERS
THB
3.9%
5.4%
4.2%
NTD
5.9%
RMB
USD
54.7%
25.9%
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Source：CSTG Non-audited Financial Report (2018)

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YoY Revenues by Products (Consolidated)

Unit：% of sales

PCR

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TBR
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MC

BC

OTHER

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TUBE
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41.6% (▲0.7%) 21.3% (▲0.6%) 11.1% (▼0.6%) 7.8% (▼0.5%) 11.9% (▼0.1%) 6.3% (▼0.2%)

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-0.4%
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+0.7% -6.7% -6.9% -2.8% -4.7%
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Note：17”↑tires is 25.3% of PCR sales in 2017；17”↑tires is 28.9% of PCR sales in 2018

Source：CSTG Non-audited Financial Report (2018) We Deliver Performance[TM]

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YoY Quantities by Products (Consolidated)

Unit：million pcs

PCR

TBR

MC

BC

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OTHER TUBE
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40.5

4.7

37.0 73.5

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-17.4%
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-3.3% -15.7% -2.1%

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22.0 176.2
PCR,
40.9% -11.2%
15.2%
198.4
176.2
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Note：17” ↑tires is 18.1% of PCR quantities in 2017；17”↑tires is 21.3% of PCR quantities in 2018.

Source：CSTG Non-audited Financial Report (2018) We Deliver Performance[TM]

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Gross Profit Rate (Consolidated)

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【Reasons of gross profit rate decrease 0.59%】
YoY：
�Material cost effect：-1.46%
2017 2018
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Source：CSTG Financial Report
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Material Cost

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Unit：% of total material cost
Natural Synthetic Nylon Cord Steel & Steel
Chemicals Carbon Fabric Cord Fabric
Rubber Rubber
23% (▼6%) 22% (▼1%) 18% (▲3%) 15% (▲3%) 11% ( - ) 11% ( ▲1% )
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Source：CSTG Non-audited Financial Report (2018)
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Market Material Price Trend – 2017~2018

Unit： 布蘭特(Brant) ：USD/桶 BR0150：NTD/公斤泰國RSS3號膠：NTD/公斤 SBR1502：NTD/公斤 碳煙CBN330：NTD/公斤

Source：http://cip.chinatimes.com/

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Operating Income Rate (Consolidated)

【Reasons of operating income rate decrease 0.69%】 YoY： �Operating expense rate effect：-0.10% �Gross profit rate effect：-0.59% 2017 2018

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Source：CSTG Financial Report
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Net Income Rate – Attributable to shareholders of the parent (Consolidated)

• 【Reasons of net income rate decrease 1.71%】 YoY：

• �Income tax rate effect：+0.33% �Non-operating rate effect：-1.35% �Operating expense rate effect：-0.10% �Gross profit rate effect：-0.59%

• 2017 2018

Source：CSTG Financial Report

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EPS (Consolidated)

Unit：NT$

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2017 2018
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Source：CSTG Financial Report

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Revenues by Domestic & Foreign Sales

Source：CSTG Non-audited Financial Report (2018)

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Revenues by OE & RE Customer

� OE

� RE

Source：CSTG Non-audited Financial Report (2018)

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2018 Operating Overview

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Unit：NT$100 million
Income
56 (41)
Others
Cost
(10)
25 Tax
36
4
2017 (20) 2018
Net Profit Net Profit
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Thanks for coming and kindly appreciate your support.

CST websie：http://www.cst.com.tw/

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