EITC — Investor Presentation 2018

Apr 27, 2018

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Evergreen International Storage and Transport Corp. (EITC) 2018 Investor Conference

Apr 27, 2018

Stock code ：2607

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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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Legal Disclaimer

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Summary

▪ 2017 Operating Results

▪ Overview of Main Products, Services and Operations

▪ Operational Strategies

▪ Operational Visions

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Summary

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2017 Operating Results

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2017 Operating Results

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The Proportion of Consolidated Operating Income

Inland Rental Transportation 19.14% Containers 18.79% Ship Chartering 23.62% Container Yard Service 18.03% Others Passenger Gas Station 7.85% Transportation Sale 5.26% 7.31%

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The Proportion of Consolidated Operating Income

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Consolidated Income Statement

Items	2017	2016	%
Operating revenue	7,554	7,472	1.1%
Gross profit	1,115	1,271	-12.3%
Operating profit	860	1,016	-15.4%
Profit for the period	884	809	9.3%
Profit attributable to Owners of the parent	883	811	8.9%
Earnings per share(NT$)	0.83	0.76	9.2%

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Consolidated Income Statement

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Consolidated Cash Flow Analysis

unit：NT$ Million	unit：NT$ Million	unit：NT$ Million	unit：NT$ Million
Items	2017	2016	%
Cash and cash equivalents at beginning of period	2,886	2,893	-0.24%
Net cash flows from operating activities	2,515	2,305	9.11%
Net cash flows used in investing activities	(1,689)	(1,208)	39.82%
Net cash flows used in financing activities	(337)	(1,059)	-68.18%
Effect of exchange rate changes	(179)	(45)	297.78%
Net increase (decrease) in cash and cash equivalents	310	(7)	4528.57%
Cash and cash equivalents at end of period	3,196	2,886	10.74%

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Consolidated Cash Flow Analysis

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Consolidated gross profit margin and net income margin

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25
20
16.92
17.01
14.37 14.76
15 12.91
11.71
11.48 10.83
10.03
9.51
10
5
0
2013 2014 2015 2016 2017
gross profit margin(%) net income margin(%)
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Consolidated gross profit margin and net income margin

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EPS & Dividend distribution

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NT$
1
0.83
0.79
0.76
0.8
0.63
0.54
0.6
0.35 0.35
0.35 0.35
0.4 0.3
0.2
0
2013 2014 2015 2016 2017
EPS Cash Dividends
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EPS & Dividend distribution

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Overview of Main Products, Services and Operations

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Overview of Main Products, Services and Operations

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Main Products and Services

▪ Container Transportation Business

▪ Inland Container Terminal Business

▪ TCG Port Container Terminal

Business

• Ship Chartering and Container

Leasing Business

• Coach Business

• Fuel Supply Business

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Container
Inland Container TCG Port Container
Transportation
Terminal Business Terminal Business
Business
Ship Chartering and
Fuel Supply
Container Leasing Coach Business
Business
Business
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Major Products and Services

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Container Transportation Business - I

To provide excellent and efficient container transportation for shipping companies and other businesses, we deploy trailers and chassis in northern Taiwan, Taichung, and Kaohsiung. We are able to offer flexible and convenient transportation services for shipping companies and shippers in northern, central, and southern Taiwan.

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Container Transportation Business - I

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Container Transportation Business - II

Vehicle distribution: the distribution of 174 trailers and 747 chassis are as follows:

Distribution of Trailers and Chassis

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394
400
350
300
250 228 Chassis
200 Trailers
150 125
87
100
45 42
50
0
Trucking Department Taichung Office Kaohsiung Office
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Container Transportation Business - II

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Container Transportation Business - III

Overview of the Industry

▪ To protect the environment, shipping companies develop “blue way” business, which reduces north-south transshipment operations. The focus of haulage shifts to short-distance operations.

▪ Fierce competition in the market and difficulty in adjusting charges.

▪ High demand for drivers in the transportation industry and difficulty in hiring staff.

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Container Transportation Business - III

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Container Transportation Business - IV

Operational Focuses

▪ Adjustment of business model in order to pursue high-quality CY import and export and large-scale retail logistics center haulage services.

▪ Outsourcing of some operations according to the business and manpower situation.

▪ Timely adjustment of transportation fees in accordance with costs.

▪ Continual rejuvenation of fleet to lower fuel and maintenance costs and improve service quality.

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Container Transportation Business - IV

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Inland Container Terminal Business - I

Our Shichih Container Terminal and Taoyuan Container Terminal are located near industrial parks and freeway interchanges, which provides shipping companies and shippers convenience in inbound and outbound container and freight transportation. We also offer warehouse leasing services. Our Kaohsiung Container Terminal 4 and Terminal 5 offer CFS handling services.

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Inland Container Terminal Business - I

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Inland Container Terminal Business - II

Overview of the Industry

▪ Container port operators try actively to acquire customers while shipping lines implement on-dock clearance. Both developments affect inland container terminal business.

▪ As domestic businesses relocate overseas, export volumes decrease. However, import volumes and warehousing demands are increasing.

▪ In recent years, some domestic container terminals have undergone transformation or stopped operations, which lessens competition and stabilizes operational costs.

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Inland Container Terminal Business - II

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Inland Container Terminal Business - III

Operational Focuses

• Equipment Rejuvenation ：

• Shichih Container Terminal and Taoyuan Container Terminal introduced two and three rubber-tired gantry cranes (RTG) respectively in 2017 to improve operational safety and service efficiency.

• The renovated Shichih Container Terminal Warehouse Seven helps increase revenues from inbound bonded cargo operations.

• Adjustment of warehousing operations to include logistics warehouse leasing services.

• In compliance with the precision requirements for outbound containers by the International Maritime Organization’s International Convention for the Safety of Life at Sea (IMO-SOLAS), we offer outbound clients reasonable weighing rates in accordance with Container Weight Verification Requirement (VGM).

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Inland Container Terminal Business - III

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TCG Port Container Terminal Business - I

The container yard at wharf #32 and wharf #33 offers cargo handling, inbound and outbound container and cargo warehousing, and transshipping services for shipping companies and shippers.

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TCG Port Container Terminal Business - I

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TCG Port Container Terminal Business - II

Overview of the Industry

▪ TCG Port Container Terminal caters mainly to near-sea shipping lines and cross-strait routes. It is currently the direct port of call for 10 shipping lines. Along with slot exchange and slot purchase clients, there are a total of 30 shipping lines.

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TCG Port Container Terminal Business - II

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TCG Port Container Terminal Business - III

Operational Focuses

• Upgrade of the TOSPro system at TCG Port Container Terminal helps to

improve operational efficiency and controls costs.

▪ In response to competition, the terminal rejuvenates its equipment and machinery in stages to improve overall service quality, strengthen the existing client base, and win new clients.

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TCG Port Container Terminal Business - III

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Ship Chartering and Container Leasing Business

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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Ship Chartering and Container Leasing Business

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Coach Business- I

We have tour buses, passenger buses and business passenger cars that can serve as company shuttle buses and tour coaches. We also offer National Highways bus services between Taoyuan International Airport/Nankan and Taipei.

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Coach Business - I

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Coach Business- II

The distribution of the 83 vehicles is shown in the following graph:

Distribution of Coaches

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53
60
50 Tour bus
40 25 Passenger bus
30 Business passenger car
20
5
10
0
Number of Vehicles
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Coach Business - II

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Coach Business- III

Overview of the Industry

▪ Our coach business focuses on shuttle tour bus services, with passenger

coach services as an additional revenue stream. The downturn in Mainland Chinese visitor numbers in recent years has had only a minor impact on the company.

• The inauguration of Taoyuan Airport MRT has affected some National Highways bus services.

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Coach Business - III

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Coach Business- IV

Operational Focuses

▪ Regular rejuvenation of the fleet, increase of wheelchair-accessible vehicles, improvement of traffic safety, and maintenance of excellent service quality.

▪ In response to the launch of Taoyuan Airport MRT, we modified our National Highways bus schedules to reduce costs.

▪ Diversified marketing, strengthening of Evergreen Bus’s brand image, and active expansion of National Highways bus, tour bus, and shuttle bus

services.

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Coach Business - IV

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Fuel Supply Business- I

The company set up Evergreen Gas Station as a CPC franchisee near Nankan Interchange, Taoyuan, in 1994, offering gasoline and diesel fuel.

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Fuel Supply Business - I

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Fuel Supply Business- II

Overview of the Industry

▪ Since the government abolished a prohibition against the establishment of gas stations within 500m of one another, privately run gas stations are booming. There is fierce competition in the gas-station industry.

▪ The company’s gas station has an excellent location with busy traffic, which . has helped us achieve great performance

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Fuel Supply Business - II

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Fuel Supply Business- III

Operational Focuses

▪ Pursuit of contractual clients for our gas station (including clients of the company’s other business divisions and cross-industry allies).

▪ The competitively priced self-service gas pumps, launched in March 2017, attract customers and reduce labor demand.

▪ By increasing special offers for Evergreen Gas Station membership card holders, we can encourage more people to become members.

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Fuel Supply Business- III

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Operational Strategies

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Operational Strategies

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Business Diversification

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▪
▪
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▪ Through the development of Dayuan Logistics Park, we improve the use value of land. ▪ Revitalization of company assets, energy conservation and carbon reduction, and the evaluation of the viability of solar power on the company premises.

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Business Diversification

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Cost Optimization and Efficiency Improvement

▪ The rejuvenation of equipment and machinery improves operational safety and efficiency. ▪ The introduction of the new TOSPro system at Shichih Container Terminal and Taoyuan Container Terminal improves management efficiency. ▪ The strengthening of container transportation and the optimization of vehicle dispatch system improve dispatch efficiency.

▪ The strengthening of vehicle safety and monitoring devices improves traffic safety.

Cost Optimization and Efficiency Improvement

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Improvement of Service Quality and the Pursuit of Excellent Clients

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▪
▪
▪
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▪ Active development of container terminal services for shipping lines.

▪ Efforts to become the shuttle bus service provider for new airline routes.

▪ Development of new business through intraindustry and cross-industry alliances.

Intra-industry ： exchange of containers in container transportation.

Cross-industry ： choosing each other’s services and products.

Improvement of Service Quality and the Pursuit of Excellent Clients

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Operational Visions

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Operational Visions

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Operational Visions

Because of the consolidation of shipping lines and global economic recovery, the shipping market is changing for the better. The company’s 2017 revenues grew by 1.1% from 2016. The prospects are looking good in 2018. However, the US-China trade war and the rise of protectionism worldwide may negatively affect global trade and economic development. The company will improve its competitiveness, diversify its business, and implement flexible management strategies, so as to balance business performance and corporate social responsibility, while ensuring sustainable development.

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Operational Visions

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Thank You

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