FROCH — Investor Presentation 2017

Jun 26, 2017

==> picture [720 x 419] intentionally omitted <==

----- Start of picture text -----

彰源企業股份有限公司
FROCH ENTERPRISE CO., LTD.
Froch
Taiwan
----- End of picture text -----

Institutional Investors Conference Stan Shih – Spokesperson

06/27/2017

1

Table of Contents

1. Company Profile 2. Operational Briefing 3. Competitive Advantage 4. Looking Forward

2

1. Company Profile

• Share Capital ： NT$2.86 billion

• Land Area ： Taiwan 210,213m[2] , China 250,583m[2]

• ： Taiwan 637 China 270

• Number of Employees ,

• Main Products ： Stainless Steel Tubes, Pipes, Sheets,

and Coils

==> picture [540 x 88] intentionally omitted <==

----- Start of picture text -----

3
----- End of picture text -----

Industry Properties

Steel Making

Slab

Hot Rolled / Cold Rolled

==> picture [552 x 105] intentionally omitted <==

----- Start of picture text -----

Froch Enterprise Co., Ltd. Froch Enterprise Co., Ltd.
----- End of picture text -----

Froch Enterprise Co., Ltd.

4

Main Products

Industrial Pipes ：

High quality Stainless Steel pipes for Heat Endurance, Corrosion Resistant, Pressure Endurance, etc. Applications: Chemical, Pulp and Paper, Foods and Beverage, Sewage and Water Treatment industries, etc.

Structural Tubes ：

High quality Stainless Steel Round tubes, Square and Rectangular Tubes, shiny polished.

Applications: Furniture, Decorative Materials, Construction Materials, Transportations, etc.

Sheets and Coils ：

High quality stainless steel sheets, shiny polished. Applications: Kitchenware, Furniture, Construction Materials, etc.

5

Stainless Steel Material

6

Industrial Pipes

7

Industrial Pipes

==> picture [6 x 9] intentionally omitted <==

----- Start of picture text -----

8
----- End of picture text -----

Structural Tubes

9

Structural Tubes

10

Sheets

11

Sheets and Plates

12

Industrial Pipes - Applications

==> picture [12 x 9] intentionally omitted <==

----- Start of picture text -----

13
----- End of picture text -----

Industrial Pipes - Applications

Foods and Beverage

Petrochemical

14

Structural Tubes - Applications

==> picture [305 x 378] intentionally omitted <==

----- Start of picture text -----

Stair Handrail
Doors / Windows
----- End of picture text -----

==> picture [277 x 219] intentionally omitted <==

----- Start of picture text -----

Boiler
----- End of picture text -----

15

Stainless Steel Sheets and Coils - Applications

==> picture [471 x 319] intentionally omitted <==

----- Start of picture text -----

Escalators / Elevators
----- End of picture text -----

16

Stainless Steel Sheets and Coils - Applications

==> picture [318 x 375] intentionally omitted <==

----- Start of picture text -----

Skylight House
----- End of picture text -----

17

2. Operational Briefing

 Industry Benchmark

 Widely Approved by both domestic and global customers

 Top tier player

• Market diversification

• Market leader

 More than 2,000 customers domestically

• Sales to more than 100 countries globally

18

2. Operational Briefing - Year 2016

Stainless steel tube and pipe:

==> picture [552 x 257] intentionally omitted <==

----- Start of picture text -----

Domestic Sales - Export Sales –
Taiwan Consumption Taiwan Export Quantity
Others
Froch
Froch
Others
25.4%
30.8%
29%
48%
Y.C.
Y. C.
43.8%
23%
----- End of picture text -----

19

2. Operational Briefing - Cost

==> picture [223 x 177] intentionally omitted <==

----- Start of picture text -----

Inside Stainless Steel ：
8%
Cost percentage ： 50-60%
----- End of picture text -----

20

2. Operational Briefing – Last 2 Year Prices

Nickel Prices

==> picture [664 x 385] intentionally omitted <==

----- Start of picture text -----

Decreased
44%
Increased
32%
----- End of picture text -----

21

2. Operational Briefing – Last 2 Year Prices

Product Prices

==> picture [661 x 378] intentionally omitted <==

----- Start of picture text -----

Decreased Increased
35% 35%
----- End of picture text -----

22

2. Combined Sales and Profit

Unit:

==> picture [153 x 326] intentionally omitted <==

----- Start of picture text -----

10.96 Billion
S
A
L 1.08
E
S
E
P
S
----- End of picture text -----

Sales in NT$ Billion’s, EPS in NT$ Dollar’s

==> picture [141 x 150] intentionally omitted <==

----- Start of picture text -----

3.17 Billion
S
0.74
A
E
L
P
E
S
S
----- End of picture text -----

2016 2017 Q1

23

3. Competitive Advantages

• Comprehensive Product Range - Customers satisfied with One-Stop shopping.

24

3. Competitive Advantages

B. Leading Production Capabilities among the Industry -

First to be accredited with ISO-9001.

Accredited with ISO-14001 by Lloyd’s Register Quality Assurance in 1999.

Quality Assurance Laboratory was approved by Taiwan Accreditation Foundation (TAF) in 2001.

Accredited with JIS mark by Japan Quality Assurance Organization (JQA) in 2009.

25

3. Competitive Advantages

C. Complementary Domestic Sales of 40% with Export Sales of 60%.

• Worldwide clientele

More than 2,000 customers domestically. Sales to more than 100 countries globally.

26

4. Looking Forward

• Expand High Value-added Products

• Expand Sales Channels and Sales

Locations

 Maintain Market Leader Position by Increasing Market Share

==> picture [12 x 9] intentionally omitted <==

----- Start of picture text -----

27
----- End of picture text -----

28