FRG — Investor Presentation 2019

Nov 22, 2019

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Investor Conference Formosan Rubber Group Inc.

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Ticker ： 2107

2019/11/22

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Disclaimer Statement
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• This presentation and the information released at the same time are

based on our internal and external data and reflective of our current expectations about the future. We are not responsible for constantly reminding or updating of any change or modification of our views.

• We do not provide financial guidance. The explanations of our financials, operations or answers in Q&A may be different from actual results, possibly due to demand changes, raw material price fluctuations, industry competition, the global economy, supply chain issues (upstream to downstream) and other risk factors beyond our control.

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Contents
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Company Introduction P1-P2

• 厚生社會 忠誠廉正 禮義謙讓 負責進取 正確求精 勤業樂群 感謝報恩

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Division Introduction P3-P18

Operating Overview P19-P23

Development P24-P26

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Q & A P27

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Company Introduction

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Chairman ： Mr. HSU, CHENG-TSAI

General manager ： Mr. HSU, CHENG-CHI Spokesman ： Mr. CHIANG, JUI-TANG Deputy spokesman ： Mr. Lim, James Capital ： NT$ 3,500,000,000 IPO ： 1992/03/03 Number of employees ： 195

Head Quarter: 8th floor, No.82, Sec.1, Han-Kao St., Taipei City, Taiwan Factory:No.1, Chao-Feng Rd., San-Ho Village, Lung-Tan Dist., Tao-Yuan City, Taiwan Logistics Park ： No,53, HOU-SHEN RD., Luzhu Dist., Tao-Yuan City, Taiwan

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P 1

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Company Introduction

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• Formosan rubber group inc. was founded in 1952.

• For over six decades we strive to achieve outstanding performance in medical, industrial, functional apparel, and silicone materials. We focus in our core competitiveness and become one of the leading rubber material suppliers in Asia.

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• Related to international logistics center and Real Estate development.

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P 2

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Business Lines

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Manufacturing Division
、 、 、
Products : Rubber Plastic PU TPU
Coated Fabrics and Membranes
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Development Division
Real estate development and
Asset management.
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Logistics Division
International Logistics Center business,
、
Warehouse to build Lease business.
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Manufacturing Division - Product Domains
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PLASTIC

RUBBER

Green Materials

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Inflatable Functional
Rainwear Industrial
Rubber Boat Garment
Materials workwear TPU
Material Life Fabric
Tent Luggage Condenser Inflatable
Jacket
Material & Bags Sheet Boat
Material
Material Train Material
Medical TPU
Medical
bellows
Fabric Medical
Materials
OIL relatives
Marine
Luggage Boom Sonic Inflatable Fabric
Rescure
& Bags Material Isolate Tent
Non Dioxin Materials
Truck Material Diving Foam
Inflatable
Dry suit Plastic
Cover TPU boat Rubber
High Material Materials
Tarpaulin Material Pressure Tablemate
&
Air-Jacket
Relatives Flooring
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Manufacturing Division -Products

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Manufacturing Division

• Patent Achievements & Certifications 9 Patents Achievement, 2019 10 Certifications , ( Total : 105 Patents ) 2019

10 Certifications , 2019

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• Patent No. : I 654 091 (Taiwan ) : 。

• Silicon rubber bellows and manufacturing process

• Quality Management System：

  • ISO 9001、ISO 14001 ( 2015 Edition)

• Patent No. : I 654 258 (Taiwan ) :

• Rubber foam construction and manufacturing process

• Rubber Inflatable Boat Material :

  • BV ISO 15372 - Inflatable Boat material

• Patent No. : I 666 113、 I 666 120、I 668 106 (Taiwan ) ： Rubber construction and manufacturing process • Inflatable Life Boat Material :

• • Patent No. : I 669 210 (Taiwan ) ： Marine Life boat / Classification Society (CCS) 、 、

• The translucent soft non-yellowing rubber leather with the five layers construction and manufacturing process • Dry Suit Material ： Pass EN 14225

• • Patent No. : I 675 750 (Taiwan ) ： The continuous process of rubber foam leather • Protect Workwear Fabric：

• • Patent No. : M 574 554 (Taiwan ) ： pass ASTM F 1891 •

• The construction of Double-sided high frequency and Reach (SVHC ) ： processing Pass 201 Substance of High Concern ( SVHC)

• • Patent No. : M 583 376 (Taiwan ) : • High Voltage Condenser Sheet ： • The construction and processing of weather resistant and pass Mechanical & Electrical Product - China

• flame retardant

Patent Applying : 10 items ( Taiwan )

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P 6

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Manufacturing Division

- Modernized Production Equipments

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• Compounding Mixer

• Rubber Calenders

• Steel-Belt Rotocures

• Autoclaves

• Hit-Air Curing System

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• TPU Calender

• PVC Calender

• Knife Coaters

• Transfer Coater

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• Dipping System

• Environmental protect &

energy saving equipment (RTO)

• Central laboratory

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Development Division -Completed Project(1) Bridge Upto Zenith

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New Taipei
Residence/
Location City Banqiao Usage
Commercial
District
Site Area 12,105.72 m [2] Structure SRC+SS
Floor Area 170,872.1 m [2] Floors B6F/37F
Householders/ Revenue TWD $ 17.8
446/1084
parking space (FRG) billion
Complete
Start Date 2006/12/07 2010/12/20
Date
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Development Division -Completed Project(2) Modesty Mountain

Location	New Taipei City Banqiao District	Usage	Residence
Site Area	3,903 m2	Structure	SS
Floor Area	26363.09m2	Floors	B3F/26F
Householders/ parking spae	45/135	Revenue (FRG)	TWD $ 2.55 billion
Start Date	2011/03/25	Complete Date	2013/12/27

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Development Division -Completed Project(3)

Legend River

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New Taipei
Location City Hsin-tien Usage Residence
District
Site Area 1,708.3 m [2] Structure RC
Floor Area 170,872.1 m [2] Floors B4F/23F
Householders/ Revenue TWD $ 1
38/88
parking spae (FRG) billion
Complete
Start Date 2012/11/19 2016/08/26
Date
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Development Division -Completed Project(4)

55 Timeless

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Taipei City
Location Usage Residence
Xinyi District
Site Area 3,500 m [2] Structure SS
Floor Area 25,931.47 m [2] Floors B4F/31F
Householders/ Revenue TWD $ 4
42/125
parking spae (FRG) billion
Complete
Start Date 2014/08/15 2018/11/05
Date
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P 11

Development Division -Under construction Project(1)

La bella vita

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Taichung City
Location Usage Residence
Xitun District
Site Area 3,621.49 m [2] Structure SS
Floor Area 55,809.29 m [2] Floors B6F/33F
Householders/ Revenue
166/332 TWD $ 3 billion
parking spae (FRG)
Complete
Start Date 2016/03/04 2019/12 月
Date
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P 12

Development Division -Under construction Project(2)

950 Market Street

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950 Market Residence/Hotel
Location Usage
Street /Retail
Site Area 3,183 m [2] Structure RC
Floor Area 37,923 m [2] Floors B2F/12F
Net income
Condo/Hotel TWD $ 16 -18
242/236/10 before tax
rooms/Shops Million
(FRG)
Complete
Start Date 2018/10/25 2020/Q4
Date
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P 13

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Logistics Division- Lease business

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FRG Logistics Park has advantage in developed large and park-style scales to lower the hardware build costs, also use the concept of park-style reconciliation to attract enterprise stationed in storage centre. There are six commercial buildings in Nankan Park, total 。 rented area is about 100,000 square meter.

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風和大樓-E
誠品大樓-AB C棟大樓
風和大樓-F
厚生大樓-D1/D2:
南崁園區配置圖
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Logistics Division - Lease business

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Bld.- D
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Bld.-AB
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• Area：3,662 pins

• Floor：8-10F

• Stationed in the industry： Assembly processing and

• logistics

• Area：14,772pins

• Floor：D1: 4-7F

D2: 1-7F

• ：

• Stationed in the industry

• ILC and logistics

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Logistics Division - Lease business

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Bld.- F
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Bld.- C Bld.- E
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• Area：1,880 pins

• • Floor：1-3F ：1-3F 1-3F

• Floor：1-3F ：1-3F 1-3F • Area：1,880 pins • Area：7,745 pins • • • Floor：1-3F Floor：1-7F Stationed in the • • Stationed in the Stationed in the ： industry ： ： industry industry Assembly processing ILC and logistics Assembly processing and logistics and logistics

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Logistics Division - ILC

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FRG entered the logistics arena as a third party logistics service provider, and obtained the license of ILC in June,2003, Whose serial number are CL060 and CL061. We provide a really complete logistic service including international transportation integration, customs clearance, warehousing management, PO handling, value-added service, delivery . Therefore customs could improve overall logisyics operational performance and a 、 、 、 、 safe storage environment . Arrow Macnica ATM NEC CIRTEK are our major customes.

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Logistics Division – Commercial property

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。

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Bridge Upto Zenith business center , covering an area of 6224.8m[2] , all occupant with tenants now. Tenants Included ESun Bank, Nan Shan Life Insuance Co.,Ltd , Sinopac Financial Holding and ALPHABELLE. annual rental income over 38 millions NTD, Bridge Upto Zenith business center has become the leading commercial center in Banqiao District

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0 500 1000 1500 2000 2500 3000 3500 4000 4500	Consolidated Revenue 2014-2018	Consolidated Revenue 2014-2018	Consolidated Revenue 2014-2018	Consolidated Revenue 2014-2018	Consolidated Revenue 2014-2018
	1321 1235 1244 1185 1115 206 216 223 228 226 4,017 840 241 314 33 Manufacturing Rental and Logistics Real Estate Units: TWD$ Million
Year	2014 2014	2015 2015	2016 2016	2017 2017	2018 2018
Manufacturing Sales	1,321	1,235	1,244	1,185	1,115
Rental and Logistics	206	216	223	228	226
Real Estate	4,017	840	241	314	33
Total	5,544	2,291	1,708	1,727	1,374

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Gross Profit Rate and Net Income Rate
2014-2018
80%
70% 67% Gross Profit Rate
59%
Net Income Rate
60%
46%
50%
40% 34%
31% 31%
30% 24%
19%
20% 16%
11%
10%
0%
2014 2015 2016 2017 2018
Year 2014 2015 2016 2017 2018
Gross Profit Rate 67% 46% 31% 31% 24%
Net Income Rate 59% 34% 19% 11% 16%
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EPS and Dividends 2014-2018

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0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00	6.57 1.60 0.71 0.47 0.59 2.80 0.85 0.55 0.65 0.68 43% 53% 77% 138% 115% EPS Cash Dividends Payout Ratio Units: TWD$ Dollar	6.57 1.60 0.71 0.47 0.59 2.80 0.85 0.55 0.65 0.68 43% 53% 77% 138% 115% EPS Cash Dividends Payout Ratio Units: TWD$ Dollar	6.57 1.60 0.71 0.47 0.59 2.80 0.85 0.55 0.65 0.68 43% 53% 77% 138% 115% EPS Cash Dividends Payout Ratio Units: TWD$ Dollar	6.57 1.60 0.71 0.47 0.59 2.80 0.85 0.55 0.65 0.68 43% 53% 77% 138% 115% EPS Cash Dividends Payout Ratio Units: TWD$ Dollar	6.57 1.60 0.71 0.47 0.59 2.80 0.85 0.55 0.65 0.68 43% 53% 77% 138% 115% EPS Cash Dividends Payout Ratio Units: TWD$ Dollar	6.57 1.60 0.71 0.47 0.59 2.80 0.85 0.55 0.65 0.68 43% 53% 77% 138% 115% EPS Cash Dividends Payout Ratio Units: TWD$ Dollar
Year		2014年 2014	2015年 2015	2016年 2016	2017年 2017	2018年 2018
EPS		6.57	1.60	0.71	0.47	0.59
Cash Dividends		2.80	0.85	0.55	0.65	0.68
Payout Ratio		43%	53%	77%	138%	115%

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Consolidated Revenue
2018 & 2019 1Q-3Q
2,500,000
2018,1-3Q 2019,1-3Q 2,044,752
2,000,000
Units: TWD$ Thousands
1,500,000 1,175,446
(58%)
825,920 1,022,042
1,000,000 (81%) 704,311
(34%)
500,000
168,790 164,995
27,332
(16%) (8%)
(3%)
0
Manufacturing Rental and Real Estate Total
Sales Lo istics
g
期間 2018,1-3Q % 2019,1-3Q %
Manufacturing Sales 825,920 81 704,311 34
Rental and Logistics 168,790 16 164,995 8
Real Estate 27,332 3 1,175,446 58
Total 1,022,042 100 2,044,752 100
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Profit and Loss Account 2018 & 2019 1Q-3Q

Account 2018 1-3Q 2019 1-3Q

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Net Revenue 2,044,752 1,022,042 Operating Cost (777,709) (1,529,371) Gross Profit 515,381 244,333 Operating Expenses (158,953) (166,618) Operating income 85,380 348,763 Non-operating gains or losses 143,214 140,417 Income before income tax 489,180 228,594 Income tax (36,530) (40,307) Net Income 448,873 192,064 1.28 EPS (TWD) 0.52

Units: TWD$ Thousands

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Niche Vision

- Manufacturing Division

Continually Upgrade the Multifunctional Coated fabrics for heavy-duty protective wear :

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1. Anti-strong acid, Anti-alkali, Anti-chemicals 2. Anti-High Voltage Arc、 Flame retardant, Safety & Oil resistant and Abrasion resistant. Security

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Continually Upgrade the coated fabrics for marine automatic inflatable life-saving field : Match the IMO (International Maritime Organization) grade apply for automatic inflatable Liferaft, escape chute system and life jacket related materials.

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Marine Rescure

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Focus on Railway train- gangway & interior decoration market :

FRG had developed multi- properties & construction bellows relative materials and Rubber Flooring some as environmentally-friendly grade 。

Train

Bellows

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Niche Vision

-Logistics Division

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• Developing new logistic warehouses and increase storage space for different industries

For extending the long-term stable rental profit , will Build up professional warehouse and create storage space to catch different industrial requirements of Local and international manufacturers or retailers.

• The Project of oversea’s enterprise backflow Connecting

Affected by USA--China Tariff and trade issue , focus business on oversea’s manufacture or enterprise back flow to Taiwan and will expanding VMI warehouse to Lung-Tan area.

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Niche Vision -Development Division

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 Developing assets aggressively.

Increase the constant revenue.

• Raise brand value.

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FRG 形象影片

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