EITC — Interim / Quarterly Report 2017

Aug 18, 2017

Stock code：2607

Evergreen International Storage and Transport Corp.(EITC) 2017 Investor Conference

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Aug 18 , 2017

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Legal Disclaimer

• The information contained in this presentation, including all forward-looking information, is subject to change without notice, whether as a result of new information, further events or otherwise, and Evergreen International Storage and Transport Corp. (the “Company”) undertakes no obligation to publicly update or revise the information contained in this presentation.

• Investors should not regard the above forward-looking information as legally binding but as information subject to change. No guarantees regarding the completeness, accuracy, and reliability of information contained are made explicitly or implicitly. They are not intended to represent complete statement of the Company, industry or future development.

• The presentation herein is for reference only and may not be reprinted or reproduced for any purposes without consent from EITC.

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Summary

• Company Profile

• 2017 First Half Operating Results

• Company's Dividend Policy

• Major Products and Services Overview

• Corporate Operational Strategy

• Operational Outlook

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Company Profile

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Company History

	Time	Company History
	Oct 5, 1973	Incorporated. The Company was initially operated under the name of “Everglory Transport Corporation”
	Nov 6, 1986	The Company was renamed as “Evergreen Transport Corporation”
	Dec 14, 1990	Shares of the Company have been traded on the Taiwan Stock Exchange
	Sep 28, 2001	The Company was renamed as “Evergreen International Storage and Transport Corporation”
	Mar 31, 2002	The Company merged with “Evergreen Container Terminal Corporation”
	Nov 1, 2002	The Company merged with “Uniglory Marine Corporation”
	May 1, 2003	The Company merge with “Evervoyage Transportation Corporation”, a wholly- owned subsidiary of the Company

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Company Basic Information

• Paid-in Capital：TWD 10,671,410,940

• No. of Employee：1,052 (As of June 30, 2017)

• Shareholder structure：

As of April 30, 2017

Item	Government Agencies	Financial Institutions	Other Juridical Persons	Domestic Natural Persons	Foreign Institutions & Natural Persons	Total
Percentage	0.08%	1.25%	50.15%	43.61%	4.91%	100.00%

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2017 First Half Operating Results

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Operating Performance – 1

Group Financial Statistics unit：NT$ Million

Items	2017 First Half	2016 First Half	%
Operating revenue	3,751	3,663	2.4 %
Gross profit	584	667	-12.4 %
Operating profit	466	550	-15.3 %
Profit for the period	353	434	-18.7 %
Profit attributable to Owners of the parent	352	435	-19.1 %
Earnings per share(NT$)	0.33	0.41	-19.5 %

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Operating Performance – 2

Group Financial Position unit：NT$ Million

Items	June 30, 2017	June 30, 2016	%
Total assets	32,607	34,117	-4.4 %
Total liabilities	11,329	12,838	-11.8 %
Total equity	21,278	21,279	0.0 %
Equity per share(NT$)	19.81	19.81	0.0 %

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Operating Revenue Analysis – 1

Group Segment Information：

a. Inland transportation is the business of carrying cargo and passengers.

b. Container terminals are the business of container and cargo loading.

c. International marine transportation is the business of container terminals and leased ships and containers.

• d. Gasoline station is the business of different kinds of petroleum products

sold.

• e. Other businesses are those not classified from (a) to (d).

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Operating Revenue Analysis – 2

Group Financial Statistics unit：NT$ Million

0 500 1000 1500 2000 2500 3000
	948 292 2219 265 908 286 2221 219	27 29
	Inland Container International Gasoline 2017 First Half 2016 First Half Terminals Marine Transportation Station Transportation	Others

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Cash Flow Analysis

Group Financial Statistics unit：NT$ Million

Items	2017 First Half	2016 First Half	%
Cash and cash equivalents at beginning of period	2,886	2,893	-0.2 %
Net cash flows from operating activities	1,244	1,087	14.4 %
Net cash flows used in investing activities	(790)	(563)	40.3 %
Net cash flows used in financing activities	(616)	(45)	1268.9 %
Effect of exchange rate changes	(130)	(42)	209.5 %
Net (decrease) increase in cash and cash equivalents	(292)	437	-166.8 %
Cash and cash equivalents at end of period	2,594	3,330	-22.1 %

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Financial Analysis

Group Financial Statistics

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36.87
40 34.04 35.42 34.74
30
17.64
20 16.99
11.48
10.83 9.41
9.73 9.51 10.03
10
0
2012 2013 2014 2015 2016 2017
First Half
Debt Ratio Profit ratio
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Company's Dividend Policy

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Dividend Policy

According to the Company’s Articles of Incorporation, any profit made by the Company for each fiscal year shall, after deduction of tax, be applied first towards making up any losses incurred by the Company in previous years, then 10% of the balance thereof shall be retained as the legal reserve, and set aside the special reserve in compliance with regulations, together with the accumulated unallocated profit of the previous period, shall be allocated pursuant to the proposal made by the Board of Directors and adopted by the shareholders at their meeting.

Stockholders’ dividends shall be distributed in cash dividends and stock dividends, with the cash dividend comprising at least 10% of the total amount of distribution.

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EPS & Dividend distribution

EITC UNIT：NT$

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EPS Cash Dividends
0.79
0.76
0.63
0.55 0.54
0.35 0.35 0.35
0.3 0.3
2012 2013 2014 2015 2016
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Major Products and Services Overview

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Major Products and Services

• Container Transportation Business

• Inland Container Terminal Business

• Taichung Port Container Terminal Business

• Ship Chartering and Container Leasing

• Businesses

• Passenger Bus Business

• Gas Station Business

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Container Transportation

Business

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Taichung Port Container Terminal Business

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Passenger Bus Business

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Inland Container Terminal Business

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Ship Chartering and Container Leasing Businesses

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Gas Station Business

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Container Transportation Business - 1

Provide quality, reliable and convenient container transportation services for the shipping industry as well as industry and commerce. The company allocates tractors and chassis in northern Taiwan, Taichung and Kaohsiung areas; capable of working with shipping companies in the northern, central and southern Taiwan areas at any time to provide mobile, convenient transportation service.

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Container Transportation Business - 2

With a total of 174 tractors, 747 chassis, the allocation is as follows:

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Container Transporting Vehicle / Chassis Allocation
450
409
400
350
300
250 226
Chassis
200
Tractor
150
112
87
100
45 42
50
0
Trucking Department Taichung Office Kaohsiung Office
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Container Transportation Business – 3

Industry Overview

• Due to the trend of environmental protection, carriers adopt “blue way” business; the south-north transit businesses are reduced and the focus of haulage service has turned to shipside transport with shorter distance.

• Due to the shipping market downturn in recent years, the downstream container transportation industry operators are facing price reduction pressure from the carriers.

• After enforcement of the new Labor Standards Act, the demand for truck drivers is high, but the recruitment of drivers is more difficult.

• In recent years, the oil price has been relatively low compared to the 2014 high. This

• benefits business operations.

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Container Transportation Business – 4

Coping Strategies

• Adjust business commitment, strive for quality haulage business from CY customers.

• Outsource part of the business depending on the business and manpower situations.

• Adjust the freight charge reasonably to reflect the operating costs.

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Inland Container Terminal Business - 1

The Company's Shichih and Taoyuan Container Terminals are located near industrial parks and highway interchanges to provide convenient import and export container services for shipping companies and customers. They provide warehouse space leasing services. They also provide CFS warehouse stevedoring services in the fourth and fifth container terminals at Kaohsiung Harbor.

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Inland Container Terminal Business - 2

Industry Overview

• The inland container terminal business has been impacted by growing container wharf businesses, and promotion of on-dock business by the carriers.

• Export volume has decreased over previous years due to domestic industries moving out of Taiwan. Increasing import volume has bolstered the demand for warehousing.

• Some of the domestic container terminals have transformed or exited the business in recent years. Market competition is reduced and operational rates are relatively stable.

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Inland Container Terminal Business - 3

Coping Strategies

• Strengthen the solicitation of shipping companies’ import and export business; canvass empty and laden container business, import bonded warehouse and high value-added business; machinery equipment update and renovation of Shichih Container Terminal Warehouse.

• Adjust the warehousing business, and increase the logistics warehouse leasing

• business.

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Taichung Port Container Terminal (Wharf) Business - 1

The company built a container terminal wharf No. 32 and 33 in Taichung Port, to provide shipping companies and customers a convenient wharf stevedoring and container import/export and cargo storage/transit services.

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Taichung Port Container Terminal (Wharf) Business - 2

Industry Overview

• The Company's Taichung Port Container Terminal mainly serves near-ocean lines and cross-strait lines. At present, there are 10 direct call carriers and 20 carriers with exchange slot or purchase slot agreements for a total of 30 carriers.

• As the economy gradually improves in 2017, cargo volume is trending higher.

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Taichung Port Container Terminal (Wharf) Business - 3

Coping Strategies

• Actively strive for berthing operations business from existing and new carriers.

• Actively attract the Free Trade Zone related storage and transit businesses.

• Facing competition from within the industry, container terminal machinery is updated in phases to enhance the overall quality of service. This helps secure existing customers and benefits the search for new business.

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Ship Chartering and Container Leasing Businesses

The company and its subsidiaries have a total of 17 full-container ships, all currently chartered to shipping companies. The company started its container leasing business in 2014 and profit is stable.

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Passenger Bus Business - 1

The company has tour bus, passenger, and passenger car businesses that operate Taiwan tour and scheduled freeway services. The scheduled services operate between Taoyuan International Airport, Nankan, and Taipei City.

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Passenger Bus Business - 2

With a total of 82 vehicles, the business allocation is follows:

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Passenger Bus Business Vehicle Allocation
60
53
50
40
30
24
Tour Bus
20
Passenger Bus
10 5 Business Passenger Car
0
Number of Vehicles
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Passenger Bus Business - 3

Industry Overview

• The company's bus business is mainly for tour bus services, followed by passenger

• transport services. In recent years, the shrinking market for Mainland Chinese tourists has had no impact on the company.

• The company's tour bus service won an Excellence Award in the Tour Bus Passenger Industry Safety and Service Quality Evaluation conducted by the Directorate General of Highways.

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Passenger Bus Business - 4

Coping Strategies

• The fleet is regularly replaced with new vehicles to strengthen safety, maintain high quality services, and expand the scale of operations according to market demand.

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Gas Station Business - 1

The Company opened the Evergreen Gas Station near Taoyuan Nankan Interchange in 1994 as a franchise of CPC to provide gasoline and diesel refueling services.

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Gas Station Business - 2

Industry Overview

• Since the government lifted the ban on gas stations within 500 meters of each other and deregulated sale of petroleum products, privately owned gas stations have sprung up and are highly competitive.

• Due to a favorable location with high traffic flow, the business performance of the

company's gas station is excellent.

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Gas Station Business - 3

Coping Strategies

• Strive for contract clients (the client base includes corporations and other business

customers, cross-industry collaboration).

• The gas station began self-service operations in March of this year.

• More benefits for Evergreen Gas Card members; efforts to increase membership.

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Corporate Operational Strategy

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Corporate Operational Strategy

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Diversified Operations

• Integration and activation of the company's assets, planning of Dayuan Logistics Industry Park Development Project.

• Container terminal and container transportation all-in-one service to improve service quality.

Optimize Costs, Improve Efficiency

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• Replace old machinery with new to improve operational safety and efficiency.

• Introduce new TOSPro System in Shichih and Taoyuan Container Terminals; Upgrade TOSPro System in Taichung Container Terminal to improve management efficiency.

• Strengthen the Container Transport Optimized Dispatching System to improve vehicle dispatching efficiency.

• Strengthen vehicle safety equipment and measures to increase driving safety.

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Alliances with Peers and Different Industries

Collaborate with container transportation companies for container exchange services.

Provide interoperability for products provided by different industries.

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Operational Outlook

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Operational Outlook

Affected by the consolidation of the shipping industry and the recovery of the global economy, the shipping market has gradually improved. In the first half of the year, revenue of the company's container transportation, inland container terminals and Taichung Port container terminal have increased compared to the same period last year, and we remain cautiously optimistic for business performance in the second half of the year.

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Q & A

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Thank You

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