FRG — Investor Presentation 2021

Dec 3, 2021

2021/12/2

Investor Conference Formosan Rubber Group Inc. Ticker ： 2107

2021/12/3

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Disclaimer Statement

• 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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Table of Contents
Table of Contents P1
厚生社會 Company Introduction P2-P3
忠誠廉正
禮義謙讓
負責進取 Division Introduction P4-P23
正確求精
勤業樂群 Operating Overview P24-P28
感謝報恩
Prospects P29-P33
Q & A
Research makes the difference . . . . .
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Company Introduction

Chairman ： Mr. HSU, CHENG‐TSAI

General manager ： Mr. HSU, CHENG‐CHI Spokesman ： Mr. Lim, James Capital ： NT$ 3,423,260,000 IPO ： 1992/03/03

Number of employees ： 196

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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Company Introduction

• 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.

• Related to international logistics center and Real Estate development.

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Business Lines

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Manufacture Division
R&D and manufacturing of rubber and plastic
fabric and other various materials.
Development Division
Real estate development and
Asset management.
Logistics Division
International Logistics Center business,
Warehouse to build、Lease business.
Research makes the difference
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Manufacturing Division ‐ Product category
Plastic (PVC) Rubber(natural & synthetic) Green Plastic (PU & TPU)
treatment Medical protection Industrial treatment Medical Life vest fabric treatment Medical
Non‐toxic PlasticizerECO RaincoatmaterialFabric Luggage CanopyCarportFabric Medical FabricFlameArc & use For oil spill Oil barrierLuggage materialbag materialBellows Railway Fabric Soundproof raincoatRubber Inflatable Large fabrictent Functional Non‐toxic PlasticizerECO boat FabricInflatable material Industryraincoat
Truck materialbag Inflatable boat Airtight materialsBuilding Inflatable boat garment Marine
coverage canvas material High‐pressureAviation DrysuitFabric AntistaticTable mat material Equipment lifesaving fabric
pneumatic Flooring
Special use jack 3D fabric Railway Rubber
Chemical Flooring
suit
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Manufacturing Division‐eco‐friendly fabric

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Manufacturing Division‐
R&D patents and certifications
2021 Obtained 1 patents A total of 10 product
A total of 108 patents have been certifications have been
obtained obtained
• 2021 • Quality management system (2 items ):
• ROC patent (licensing): manufacturing method of ISO 9001, ISO 14001 (2015 new version) certification
cushion and cushion (New) • Inflatable boat product materials (1 item):
• 2020 Obtained EU BV (ISO 15372) certification for the main rubber material of
•• ROC patent number I 699 283: Flame-resistant fabric ROC Patent Certificate No. I 692 405: Flame-retardant and waterproof fabric and its manufacturing method • marine inflatable boatsLife-saving inflatable product materials (1 item );inflatable lifeboats of China Classification Society.Continuation of the certification of the main rubber material for marine
• and its manufacturing methodROC patent number I 698331: Rubber tape and its • Dry diving suit (3 items): Obtained European EN 14225 standard diving material certification .
• preparation method2019 • Protective clothing material (1 item):(ASTM F1891). American arc flame protection test
• ROC patent number I654091; I654258; I666120; I66113; • Chemical protective clothing materials (2 items);
I668106 rubber composite structure and its Chemical resistance test certification (ASTM F903).
manufacturing method • Reach EU environmental protection (SVHC) materials (3 items):
• ROC Patent No. M 574 554: Double-sided high- Obtained the SVHC high concern forbidden and restricted 201 chemical
frequency processing composite structure testing standards.
• ROC Patent No. M 583 376: Weather-resistant and fire- • Capacitor rubber insulating material (1 item):
resistant composite structure Obtained the high-voltage insulation test standard for electromechanical
• ...Another 11 patents are under review. products in mainland China.
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Manufacturing Division‐Production and R&D
• Rubber and plastic mixing system
• Rubber Calendaring machine
• Steel belt Rotocre vulcanizer
• Autoclave vulcanizer
• Hot air vulcanizer
• TPU Calendering machine
• PVC Calendering machine
• Direct coating machine
• Multifunctional transfer coating
machine
• Padding machine
• Environmental air pollution
prevention and energy saving
equipment. (Exhaust gas combustion
RTO and waste heat recovery energy-
saving equipment)
• Central laboratory
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Development Division
‐
Bridge Upto Zenith
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
‐
Modesty Mountain
New Taipei
Location City Banqiao Usage Residence
District
Site Area 3,903 m [2] Structure SS
Floor Area 26363.09 m [2] Floors B3F/26F
Householders/ Revenue TWD $ 2.55
45/135
parking spae (FRG) billion
Complete
Start Date 2011/03/25 2013/12/27
Date
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Development Division
‐
Legend River
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
‐
55 Timeless
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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Development Division
‐
La bella vita
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)
Start Date 2016/03/04 Complete 2019/12 月
Date
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Development Division
‐
SERIF
Market Street, Residence/Hot
Location Usage
San Francisco el/Retail
Site Area 3,183 m [2] Structure RC
Floor Area 37,923 m [2] Floors B2F/12F
Net income
Condo/Hotel USD $ 16 ‐18
242/238/10 before tax
rooms/Shops Million
(FRG)
Complete
Start Date 2018/10/25 2021/Nov.
Date
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SERIF
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Development Division
‐
Ambassador Hotel Kaohsiung
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Development Division
‐
Ambassador Hotel Kaohsiung
Location The original location of Ambassador Hotel Kaohsiung
(The first row of the Love River)
Land lots number Land number 533 、 535
Houjin Section, Qianjin District, Kaohsiung City
Land lots Area 6,698m [2]
Districts 5 [th] Business district
(Building coverage ratio 70% 、 Floor Area Ratio 840%)
Site Facing three roads:
民生二路 60M( 園道 ) 、河東路 30M( 園道 ) 、國民街 10M
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Distribution of benefits
Distribution of benefitsDevelopment Division
‐
Ambassador Hotel Kaohsiung
• Land owner : FRG 30% 、 The Ambassador Hotel Co. 50% 、 CDC 20%
Join venture • Developer : CDC
• FRG’s Distribution of benefits : 11.1%
•Considering the preparation period for the demolition of the original
Development building and the business vacancy, the construction permit is expected to get in 2‐3 years, but it depends on the progress of the
reconstruction of urban unsafe and old buildings plan.
Advantages •Great location•Kaohsiung people‘s memory ： Love River and Kaohsiung Port Interchange ： Ambassador Hotel Kaohsiung
and Prospects •Become a landmark of Kaohsiung
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Logistics Division
Nankan Logistics Park
Logistics center operation, warehouse construction,
lease management, etc.
Bridge Upto Zenith business center
Commercial retail for rent and leasing business
Longtan intelligent park
Logistics operations, construction of industrial plants and
warehouses,lease management, etc.
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Logistics Division Nankan Logistics Park
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.
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 ILC Center
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FRG International Logistics obtained a logistics center license from the Taipei Customs of the Ministry of Finance in 2003 and has since accumulated more than 18 years of experience in warehousing services for the electronics industry, covering services from B2B to B2C for e-commerce. In addition, FRG’s WMS system integrates the end-to-end import and export and customs clearance processes, accelerating the import and export services and providing a safe and secure storage environment to enhance the overall performance of logistics operations for the customer. 。 Therefore customs could improve overall logisyics operational performance and a safe storage environment . Arrow 、 Macnica 、 ATM 、 NEC 、 CIRTEK are our major customes. Research makes the difference[. . . . .] P 21

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Logistics Division
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Bridge Upto Zenith business Center
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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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Logistics Division
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Longtan intelligent Park
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This year, FRG Longtan is focused on the revitalization of existing assets, including the 6,600sqm R&D Building and set up a logistics team to take charge of business development. At present, the first floor is occupied by UniMax Electronics and the second floor is a third-party logistics warehouse leased to a Japanese company, with FRG responsible for the import and export of goods.

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Consolidated Revenue
2016-2020
2,500 Manufacturing Sales Real Estate Rental and Logistics
2,207
2,000
1,519
1,500
1,244 1,185 1,115
961
1,000 845
500 241 223 314 228 226 222 230
‐ 33 TWD$ Million
Year 1 2 3 4 5
2016 2017 2018 2019 2020
Division
Manufacturing 1,244 1,185 1,115 961 845 26%
Real Estate 241 314 33 1,519 2,207 67%
Rental and
223 228 226 222 230 7%
Logistics
Total 1,708 1,727 1,374 2,702 3,282 100%
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Gross Profit Rate and Net Income Rate
2016-2020
35%
Gross Profit Rate Net Income Rate 32%
31% 31%
30%
27%
25% 24% 24%
20%
20% 19%
16%
15%
11%
10%
5%
0%
Year 20161 20172 20183 20194 20205
Gross Profit Rate 31% 31% 24% 24% 32%
Net Income Rate 19% 11% 16% 20% 27%
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EPS and Dividends
2016‐2020
3
EPS Cash Dividends Payout Ratio 2.62
2.5
2
1.54 1.50
1.5 138%
115%
1 0.71 0.55 77% 0.47 0.65 0.59 0.68 0.80 52% 57%
0.5
0
1 2 3 4 5
Year 2016 2017 2018 2019 2020
EPS 0.71 0.47 0.59 1.54 2.62
Cash Dividends 0.55 0.65 0.68 0.80 1.50
Payout Ratio 77% 138% 115% 52% 57%
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Units: TWD$ Dollar
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Consolidated Revenue
2020 & 2021 1Q‐3Q
1,800,000
1,622,951 2020,1‐3Q 2021,1‐3Q
1,600,000
1,400,000
1,228,834
1,200,000
1,000,000
800,000 638,169 673,514
600,000
400,000
200,000 169,984 181,223
‐
Manufacturing Sales Real Estate Rental and Logistics
Duration
Division 2020,1-3Q % 2021,1-3Q %
Manufacturing Sales 638,169 26% 673,514 32%
Real Estate 1,622,951 67% 1,228,834 59%
Rental and Logistics 169,984 7% 181,223 9%
Total 2,431,104 100 % 2,083,571 100 %
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Units: TWD$ Thousands
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Research makes the difference . . . . . Account 2020 1-3Q 2021 1-3Q Net Revenue 2,431,104 2,083,571 Operating Cost (1,577,138) (1,428,978) Gross Profit 853,966 654,593 Operating Expenses (169,053) (178,340) Operating income 684,913 476,253 Non‐operating gains or losses 124,414 173,600 Income before income tax 809,327 649,853 Income tax (8,715) (76,120) Net Income 800,612 573,733 EPS (TWD) 2.32 1.67 28 Profit and Loss Account 2020 & 2021 1Q‐3Q Units: TWD$ Thousands

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Prospects-Manufacturing

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Energy saving Safety
and ECO Protection
protection
Sound
insulation
and noise Maritime
reduction escape
Electronics
Independent
industry Research and
Production development
supplies
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Prospects-Logistics Division

• We are dedicated to reaching industrial clustering to create exclusive logistics for different industries. FRG Longtan Intelligent Park: We will utilize the experience we learned from our Nankan Center to acquire 10,000 square meters of land on which the Longtan Smart Park will be established.

• FRG Logistics Center will obtain PIC/S GDP

• certificate in the mid-and long-term

  • In the future, we will build a GDP warehouse at our FRG International Logistics in Nankan, which would meet international standards and establish medical warehousing services that allow us to develop our business in the new fields of medical logistics.

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Prospects-Development Division

• Developing assets aggressively.

• Increase the constant revenue.

• Raise brand value.

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Research makes the difference .....

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