FGH — Interim / Quarterly Report 2021

Sep 20, 2021

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CODE：2712

BUSINESS REVIEW

Presenter：Zong-Min, Guo Sales Department Date：Sep. 22, 2021

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Disclaimer

◎ The information provided in this newsletter contains a description of the future outlook. Such statements are expectations of future conditions, but actual results may differ significantly from those expressed subject to known or unknown risks or uncertainties. ◎ For the contents of the newsletter, the company is not responsible for updating or revising any changes or adjustments in the future, except as required by the law.

Agenda

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Company Profile

Farglory Hotel The five major sceneries give you a beautiful visual feast. located at the northern end of the Coastal Mountains at an altitude of 220 meters, covers an area of more than ten hectares and surrounded by mountains and the sea, With the viewing balcony as a companion, there are traces of nature everywhere.

Date of Establishment	Jan.15,1991
TSEC	Dec. 3,2013 (CODE：2712)
President	XIANG-SHENG,WU
General Manager	HUI-MEI,LIU
Capital	NT$1.05 Billion
Employees	288(Jun. 2021)
Main Products	Resort Hotel , Restaurant and Commodity sales.

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Awards

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2021年 榮獲Agoda 2021年度「Agoda`s Customer Review Award」「客戶評價獎」 榮獲易遊網全國「最美飯店」獎 榮獲2021優良觀光產業及其從業人員「觀光旅館及旅館業經理人組獎-郭宗旻」 2020年 ezTravel 易遊網-第三屆台灣最美飯店優勝 獲工商時報2020台灣服務業大評鑑銀牌獎

再度榮獲交通部觀光局星級評鑑五星級旅館認證獎 榮獲Agoda 2020年「旅客優良評鑑獎」

2019年 榮獲交通部觀光局[2019休閒度假之星]

榮獲1111人力銀行餐飲業幸福感調查飯店旅館類企業員工幸福感最高前10名 榮獲TripAdvisor Travellers’ Choice「前25 大家庭式飯店– 亞洲」 二度榮獲TripAdvisor Travellers’ Choice「前25 大飯店– 台灣」 榮獲TripAdvisor Travellers’ Choice「前25 大家庭式飯店– 台灣」第一名 2018年榮獲交通部觀光局【2018星旅100 度假娛樂之星】

二度榮獲World Luxury Hotel Award【Luxury Coastal Hotel】殊榮 榮獲TripAdvisor Travellers’ Choice「前25大家庭式飯店-台灣」 榮獲「2018台灣服務業大評鑑」-休閒度假飯店業銀牌 榮獲「2018台灣服務業大評鑑」服務尖兵個人獎

• 2017年榮獲World Luxury Hotel Award【Luxury Coastal Hotel】殊榮 榮獲2017 Hotels.com Loved by Guests Awards

• 再度榮獲TripAdvisor Travellers’Choice 「前25大家庭式飯店-台灣」 再度榮獲交通部觀光局五星級旅館認證獎

• 2016年二度榮獲Booking.com Guest Review Award 住客評分卓越獎 二度榮獲TripAdvisor Travellers’Choice「前25大家庭式飯店-台灣」 榮獲攜程網最受歡迎獎

• 2015年榮獲Agoda 金環獎Gold Circle Awards

• 榮獲Booking.com Guest Review Award 住客評分卓越獎 榮獲TripAdvisor Travellers’Choice 「前25大家庭式飯店-台灣」

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經營理念

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Customer Company Labor Investor Community
1.Degree of
1.EPS 1.Loyalty 1.P/E 1.Brand value
Satisfaction
2.Brand
2.Repeat 2.Revenue
2.Innovation 2.ROE
awareness
occupancy rate Performance
3.Training 3.P/B 3.Market share
3.Output value
4.Risk
management
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British Guest Room

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General Guest Room

Featuring classical elegance and gorgeous British style, each room has an exquisite oil painting depicting the 19th century in Britain.

It is like entering the time tunnel and transforming into a royal aristocrat.

The classical palace-style Victorian architecture is as if you were in 19th-century British country.

Theme Suite

There are 17 different theme suites, with magnificent sea, sunrise, moonlight sea, the best view on the Pacific Ocean, mimicking the most prosperous and magnificent art style of Queen Victoria during the period from 1837 to 1901, feel at home Exotic holiday style.

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Gourmet Cuisine

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British Garden Restaurant

The five-star chefs prepare the most delicious dishes from around the world, insist on using the freshest and local ingredients of the season, presenting the most exquisite exotic cuisine through the chef's creativity, and the space of the English-style farm garden. The sense of design allows you to enjoy a variety of exquisite afternoon tea snacks while immersing yourself in a relaxed atmosphere.

Oriental Garden Restaurant

In this majestic, chic Chinese-themed dining space, local organic vegetables and fresh seafood from Hualien are used to prepare Farglory Hotel’s saporous a la carte meals, suitable for banquets or variety of functions.

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Gourmet Cuisine

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The Piazza KTV Sports Bar

Sporting a wide selection of premier liquors and cocktails from around the world, this is the place to be to get tipsy and enjoy mature conversations.！Set up entertainment experience games to increase parentchild interaction , The light sculpture of the Starry Night Plaza lights up the Fire Dance Corridor and becomes a must-see landmark in Hualien tourism.

Akikusa Japanese Restaurant

Selected local fresh seafood and Hualien's seasonal fruits, vegetables, agricultural and fishery specialties. With the careful cooking of the chef, you can taste the most delicious natural taste.

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9
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Leisure and entertainment

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Leisure and entertainment

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11

Operation Performance

Unit ： Thousands of NTD 、%

Year Item	2021 (Jan-Jun)	2020 (Jan-Jun)	YoY (Jan-Jun)	2020	2019	YoY (2020-2019)
Operating revenues	192,865	196,511	-1.9%	573,115	425,243	34.8%
Operating costs	141,438	145,096	-2.5%	349,497	314,584	11.1%
Gross profit	51,427	51,415	0.02%	223,618	110,659	102.1%
Operating expenses	55,445	53,286	4.1%	123,475	126,693	-2.5%
Net operating income	-4,018	-1,871	-114.8%	100,143	-16,034	724.6%
Non-operating income and expenses	3,705	13,285	-72.1%	14,595	-484	3,115.5%
Profit from continuing operations before tax	-313	11,414	-102.7%	114,738	-16,518	794.6%
Tax expense	-642	34	-1,988.2%	-17,368	544	-3,292.6%
Profit from continuing operations	-955	11,448	-108.3%	97,782	-15,552	728.7%
EPS(NT$1)	-0.01	0.11	-109.1%	0.93	-0.15	720.0%

Source:Market Observation Post System / Farglory Hotel Co.,Ltd. financial statements

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1-1. Operating performance Occupancy Rate (Jan-Jun)

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120%
100%
65.6%
97.1%
80% 64.5%
55.3%
48.6%
60% 73.4% 2020
32.6% 26.7% 2021
40% 54.7%
48.1%
20% 1.3%
28.6%
0%
JAN FEB MAR APR MAY JUN
Unit：%
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Year	JAN	FEB	MAR	Q1 (JAN-MAR)	APR	MAY	JUN	Q2 (APR-JUN)	JAN-JUN
2021	55.3%	65.6%	48.6%	56.2%	64.5%	26.7%	1.3%	30.8%	43.4%
2020	54.7%	48.1%	28.6%	43.7%	32.6%	73.4%	97.1%	67.8%	55.8%
Growth rate	1.1%	36.4%	69.9%	28.6%	-97.9%	-63.6%	-98.7%	-54.6%	-22.2%

Source ：“ Tourism Monthly Statement” of Tourism Bureau, Ministry of Transportation Executive Information System

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1-2. Operating performance Average Room Prices (Jan-Jun)

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7000
6000
4,452
6,133
5000
3,366 2020
3,041
4000 2,985 3,213 2021
2,368
3000
2000 3,656
3,023 2,715
2,702
1000 2,012
0
JAN FEB MAR APR MAY JUN
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Unit ： NTD

Year	JAN	FEB	MAR	Q1 (JAN-MAR)	APR	MAY	JUN	Q2 (APR-JUN)	JAN-JUN
2021	3,366	4,452	2,985	3,646	3,041	3,213	6,133	3,134	3,464
2020	3,656	3,023	2,702	3,221	2,715	2,012	2,368	2,292	2,656
Growth rate	-7.9%	47.3%	10.5%	13.2%	12.0%	59.7%	159.0%	36.7%	30.4%

Source : ”Tourism Monthly Statement” of Tourism Bureau, Ministry of Transportation Executive Information System

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2-1. Operating Results-Operating Revenue (Jan-Jun)

Unit ： Thousands of NTD 、 %

Year Item	2021 As of Q2	2021 As of Q2	2020 As of Q2	2020 As of Q2	Growth Rate	2020	2020	2019	2019	Growth Rate
	$	%	$	%	%	$	%	$	%	%
Rent	121,903	63.2%	122,118	62.1%	-0.2%	362,003	63.2%	260,284	61.2%	39.1%
Food& Beverage	62,952	32.6%	65,007	33.1%	-3.2%	183,515	32.0%	149,009	35.0%	23.2%
Others	8,010	4.2%	9,386	4.8%	-14.7%	27,597	4.8%	15,950	3.8%	73.0%
Total Revenue	192,865	100.0%	196,511	100.0%	-1.9%	573,115	100.0%	425,243	100.0%	34.8%

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2021 As of Q2
4.2%
Rent
32.6%
Food &Beverage
63.2%
Others
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2020 As of Q2
4.8%
Rent
33.1%
Food &Beverage
62.1%
Others
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Source:Farglory Hotel Co.,Ltd. financial statements

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2-2. Operating Results (Dividends Pay Out)

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Unit ： NTD 、 %
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1.00
0.80
0.60
0.40
0.20
0.00
-0.20
-0.40
EPS Cash Dividends Cash Pay Out Ratio
2016 0.59 0.50 84.8%
2017 0.16 0.112 70.0%
-
2018 -0.30 0.0%
-
2019 -0.15 0.0%
2020 0.93 0.6386 68.7%
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Source:Farglory Hotel Co.,Ltd. financial statements

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3-1. Resort Hotels In Hualien Operating Ranking by Total Revenue (Jan-Jun,2021)

Unit ： Thousands of NTD

NO.	Names of Hotels	Occupancy Rate	Average Room Price	Rent	Food & Beverage	Others	Total Revenue
1	Grand Cosmos Resort Ruisui Hualien	55.9%	12,546	251,216	31,442	10,581	293,239
2	Silks Place Hotel, Taroko	61.6%	9,436	168,226	51,601	27,364	247,191
3	Farglory Hotel, Hualien	43.4%	3,464	103,699	62,271	26,736	192,706
4	Hualien Chateau de Chine Hotel	48.6%	2,654	41,258	39,502	3,225	83,985
5	Parkview Hotel	14.9%	3,267	21,521	10,258	3,896	35,675
6	Astar Hotel	17.1%	1,522	7,876	3,420	176	11,472

Source: “Tourism Monthly Statement” of Tourism Bureau, Ministry of Transportation Executive Information System

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3-2. Resort Hotels In Hualien Operating Ranking by Number of Tourists (Jan-Jun,2021)

Unit ： Rooms 、 People

NO.	Names of Hotels	Available Rooms	Rooms Occupied	FIT	GROUP	Toatal
1	Farglory Hotel, Hualien	381	29,937	45,868	28,455	74,323
2	Grand Cosmos Resort Ruisui Hualien	198	20,023	32,248	21,674	53,922
3	Silks Place Hotel, Taroko	160	17,829	36,345	12,952	49,297
4	Hualien Chateau de Chine Hotel	197	15,546	30,491	10,780	41,271
5	Silks Place Hotel, Taroko	245	6,588	12,968	3,398	16,366
6	Astar Hote	167	5,176	6,859	3,942	10,801

Source: Refer to “Tourism Monthly Statement” of Tourism Bureau, Ministry of Transportation Executive Information System. The company's own statistics

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Market Trend

1. Tourism Income Statistics In Taiwan

	Project	Project	2021	2019	2018
Tourism Income		Total Amount	US$13.59Billion (NT$401.7Billion)	US$27.19Billion (NT$838.3Billion)	US$26.19Billion (NT$790.2Billion)
		% of GDP	2.05%	4.44%	4.31%
	Visitors from abroad	Foreign Exchange Income of tourism	US$1.8Billion (NT$53.9 Billion)	US$14.41Billion (NT$445.6 Billion)	US$13.71Billion (NT$413.3 Billion)
		Visitors from abroad	1,377,861persons	11,864,105persons	11,066,707persons
		Per Capita Daily Spending	US$71.16	US$195.91	US$191.70
		Per Capita Average Number of Nights	8.29nights	6.2nights	6.46nights
	Domestic Tourism	Total Expenditure	US$11.76Billion (NT$347.8 Billion)	US$12.69Billion (NT$397.2 Billion)	US$12.49Billion (NT$376.9 Billion)
		Domestic Tourism	142,970,000 trips	169,280,000 trips	171,090,000 trips
		Per Capita Spending	NT$2,433	NT$2,320	NT$2,203

Source: “Tourism Yearly Statement” of Tourism Bureau, Ministry of Transportation Executive Information System

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2-1. Number of Foreign Visitors and Tourists abroad in the Past Decade

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Unit：persons
18,000,000 17,101,335
16,644,684
15,654,579
16,000,000
14,588,923
14,000,000 13,182,976
11,844,635
12,000,000 11,052,908
10,239,760
11,864,105
9,583,873
10,000,000
10,439,785 10,739,601 11,066,707
9,910,204 10,690,279
8,000,000
8,016,280
7,311,470
6,000,000
6,087,484
4,000,000
2,335,564
2,000,000
1,377,871
-
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Inbound Outbound
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Source: “Tourism Yearly Statement” of Tourism Bureau, Ministry of Transportation Executive Information System

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2-2. Number and Percentage of Foreign Visitors Who Visited Taiwan by Purpose of Visit in the Past

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Source: “Tourism Yearly Statement” of Tourism Bureau, Ministry of Transportation Executive Information System

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2-3.Trends of Foreign Visitors by Country in the Past Decade

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Source: “Tourism Yearly Statement” of Tourism Bureau, Ministry of Transportation Executive Information System

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2-4.Numbers Changes of Domestic Tourism in the Past Decade

Unit：Thousands of persons

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210,000
190,000
190,376
183,449
170,000
178,524
171,090
169,279
150,000 156,260
152,268
142,069 142,615 142,970
130,000
110,000
97,990
90,000
70,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
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Source: “Tourism Yearly Statement” of Tourism Bureau, Ministry of Transportation Executive Information System

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3-1. Tourist in Hualien in the past seven years

Unit：Thousands of persons、%

Year	Year	2014	2015	2016	2017	2018	2019		2020
Persons		15,377	13,034	10,748	10,003	8,981	9,814		9,615
Growth Rate		27.1%	-15.2%	-17.5%	-6.9%	-10.2%	9.3%		-2.1%
0 5000 10000 15000 20000	15377 13034 10748 10003 8981 9814 9615 2014 2015 2016 2017 2018 2019 2020							仟人次

Source: “Tourism Monthly Statement” of Tourism Bureau, Ministry of Transportation Executive Information System

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3-2. Tourist In Hualien

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Unit：Thousands of persons、%
Year 2019(Jan-Jun) 2020(Jan-Jun) 2021(Jan-Jun)
Persons 4,740 4,011 3,208
Growth Rate 23.4% -15.4% -20.0%
5000
4000
4,740
3000 4,011 2019(Jan-Jun)
2000 2020(Jan-Jun)
3,208
1000 2021(Jan-Jun)
0
2019(Jan-Jun) 2020(Jan-Jun) 2021(Jan-Jun)
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Source: “Tourism Monthly Statement” of Tourism Bureau, Ministry of Transportation Executive Information System

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3-3. Occupancy rate in Hualien in the past five years

Unit：%	Unit：%	Unit：%	Unit：%	Unit：%	Unit：%
Year	2016	2017	2018	2019	2020
International Tourism hotel	56.4%	49.5%	50.7%	53.5%	57.5%
General hotel	39.2%	39.1%	40.6%	43.9%	45.7%
Homestay	20.0%	18.8%	21.7%	26.8%	27.8%

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70.0%
56.4% 57.5%
60.0% 53.5%
50.7%
49.5%
50.0%
40.0% 45.7% International Tourism hotel
43.9%
30.0% 39.2% 39.1% 40.4% General hotel
20.0% 26.8% 27.8% Homestay
10.0% 20.0% 18.8% 21.7%
0.0%
2016 2017 2018 2019 2020
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Source: “Tourism Monthly Statement” of Tourism Bureau, Ministry of Transportation Executive Information System

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3-4. Tourism hotel In Hualien in the past five years – in operation

Unit：Number of Rooms

Year	2016	2017	2018	2019	2020
International Tourism hotel	1,519	1,519	1,447	1,447	1,447
General hotel	7,611	8,096	8,212	7,902	7,929
Homestay	6,415	6,976	7,216	7,393	7,180

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10000
8096 8212
7902 7929
7611
8000
7216 7393
6000 6976 7180 International Tourism hotel
6415
General hotelGeneral hotel
4000
Homestay
2000
1519 1519 1447 1447 1447
0
2016 2017 2018 2019 2020
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Source: “Tourism Monthly Statement” of Tourism Bureau, Ministry of Transportation Executive Information System

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Prospect and Outlook

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1. Develop and upgrade products

• Special tourism journey in Hualien -Whale watching, river tracing, wild river hot spring

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• Featured dishes - Hualien local ingredients

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1. Develop and upgrade products

◆ Wedding products with great value

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◆ Cooking product packaging

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2. Expand target market

Market operation:

• Provide promotion to different customers.

MICE

• Provide facilities for academic research conference, business meeting, and product announcement.

Inbound tourism

• Maintain and operate Inbound travel agency. Maintain good interaction and wait for the opening of tourism.

Strategy Alliance

• Joint different transportation to provide multiple choice to customers.

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31

3.Enhance corporate governance – Corporate Social Responsibility Fulfillment Recycle system of rainwater. Provide staff shuttle to reduce the CO2 emission. Include public welfare activities into annual operation. Build stakeholders area in website.

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32

4.Prospect- reorganization plan Purpose and vision

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The future we see

Home market (Reunion)

• Family travel

• High proportion of family travel

• Multi-generational travel trends

• • Friendship between grandparents and grandchildren travel to create beautiful memories

Personal market (Second Life)		Post-epidemic market (In-depth experience)
• The end of work is the beginning of travel • Choose a more adventurous tour after retirement • Taiwan ranks second in the world for single travel		• A surge in tourists exploring the secrets of the second city • Domestic travelers hope to focus on family travel • Be happy with important people

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Target audience

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New brand positioning

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THANK YOU

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