Fu Hua — Call Transcript 2021

Aug 17, 2021

Zongtai Real Estate Development Co., LTD.

Stock Code:3056.TT

2021 Investor Conference August 17,2021

Disclaimers

• This presentation is based on the information obtained from various sources.

• This presentation may contain forward-looking information provided in this presentation may be proactive and may differ materially from the actual results. Information provided is neither explicitly nor implicitly warranted on its accuracy and completeness and does not represent Zongtai 's perspective on the industry circumstances or future development. Zongtai undertakes no obligation to continuously update any changes or modification on its own perspective.

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AGENDA

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1 • Company Introduction
• Financial Results
2
3 • Operational overview
4 • Future Expectations
5 • Q&A
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1-1. Company Introduction

• Foundation ： 1997.11

• Stock Listing ： 2003.3 (Stock Code:3056.TT)

• Established Taichung Branch ： 2007/8

• Renamed Zongtai Real Estate Development Co., LTD. ： 2011/7

• Capital ： NTD2,107.91 million

• Chairman ： WENG, YU-LING

• Main Business ： Real Estate Development

• Number of employees :125

• Headquarter ： Taichung, Taiwan

• Company Phone No. ： +886-4-23026018

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1-2. Summary of Affiliated Companies

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Zongtai Real Estate
Development
Co.,Ltd.
100% 100% 100% 100%
Ritai Asset
Zongtai Construction Play Fun Industrial Dashun Advertising
Management
Co., Ltd Co., Ltd. Co., Ltd..
Corporation, Ltd.
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2-1. Financial Results - Consolidated Statement of Comprehensive Income

Unit : NT$ thousands

Year	2016	2017	2018	2019	2020	2021Q2
Item
Operatingrevenue	4,579,375	3,145,082	2,661,309	3,742,423	4,684,643	3,593,209
Operatingcosts	3,218,702	2,108,058	2,006,309	3,004,836	3,157,914	2,543,248
Grossprofit	1,360,673	1,037,024	655,000	737,587	1,526,729	1,049,961
Gross margin	30%	33%	25%	20%	32%	29%
Operatingexpenses	360,308	185,661	277,377	249,344	249,981	144,008
Net operatingincome	1,000,365	851,363	377,623	488,243	1,276,748	905,953
Operatingmargin	22%	27%	14%	13%	27%	25%
Profit before income tax	1,009,001	846,715	406,227	507,992	1,272,433	906,291
Profit	998,275	748,011	333,505	471,367	1,024,587	721,955
EPS	4.34	3.24	1.46	2.25	4.9	3.43
ROE	21.71	15.23	6.91	9.97	20.45	12.93

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5,000,000
4,000,000
Operating revenue
3,000,000
Gross profit
2,000,000
Net operating
1,000,000
income
0
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Operating Revenue
(consolidated
4,579,375 3,145,082 4,684,643
2,661,309 [3,742,423]
2016 2017 2018 2019 2020
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2016 2017 2018 2019 2020

2-2. Financial Results – Consolidated Condensed Balance Sheet

Unit : NT$ thousands

Year	2016	2017	2018	2019	2020	2021Q2
Item
Cash and cash equivalents	670,821	1,470,920	1,451,408	629,509	1,843,954	1,219,827
Inventories	5,823,137	7,308,057	7,201,287	12,384,380	13,818,591	12,358,982
Inventories %	69%	70%	75%	87%	78%	68%
Total current assets	7,753,789	10,019,399	9,289,990	13,816,531	17,110,844	17,549,017
Total Assets	8,408,732	10,479,683	9,663,862	14,205,153	17,727,722	18,152,964
Current borrowings	1,934,480	4,053,860	3,270,450	7,264,270	7,611,740	7,611,740
Current Borrowings %	23%	39%	34%	51%	43%	42%
Total current liabilities	3,586,809	5,477,486	5,012,523	9,349,521	10,326,143	10,021,081
Total current liabilities %	43%	52%	52%	66%	58%	55%
Total non-current Liabilities	1,885	1,824	8,775	50,373	2,186,560	2,184,647
Total liabilities	3,588,694	5,479,310	5,021,298	9,399,894	12,512,703	12,205,728
Ordinary share	2,304,847	2,313,387	2,085,205	2,092,877	2,103,341	2,107,907
Total equity	4,820,038	5,000,373	4,642,564	4,805,259	5,215,019	5,947,236

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2-3. Dividend Policy

Cash Dividend Stock Dividend

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0
0
0 0
4.4
2 0
0
0 3
0.5 1.5 2.5 2.5
2
1.8
1.5
1 1
0.5
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
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2-4. Payout Ratio

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140.00%
133.33%
120.00%
102.74%
100.00%
89.80%
82.30%
80.00%
Payout Ratio
68.87%
Cash Dividend Yield
61.73%
60.00%
57.60%
48.86%
40.00% 41.10%
20.00% 19.42%
15.84% 14.63%
12.41% 12.97%
10.21%
7.20%
5.75%
3.99% 3.67%
1.93%
0.00%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
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3-1. Operational overview – Ongoing Pre-sale Projects

Project Name	Location	Product	Area of Land (㎡)	Salable Value (NT$ bn)	Sales Rate %	Year of Completion
Zongtai 2020	Beitun Dist., Taichung City	Residential	20,180.88	6.1	99%	2020
Good together Melody	Beitun Dist., Taichung City	Residential	4,793.74	2.2	95%	2022
Get together	Beitun Dist., Taichung City	Residential	19,808.76	6.7	98%	2022
Live as the queen	South Dist., Taichung City	Residential	2,289.00	1.0	94%	2023
The way home	Beitun Dist., Taichung City	Residential	37,457.00	15.5	52%	2025
		Total	84,529.38	31.50

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3-2. Corporate Social Responsibility

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“2021 caring for poor family” activity in Beitun Dist., Taichung City . The Company keep practice the brand target “Beautiful city, Blissful community”. Charity action had made many families feel warmth from society.

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3-2. Corporate Social Responsibility

National Taiwan Museum of Fine Arts held donation thanksgiving. Appreciating company sponsor the fund to making uniform for volunteers.

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3-2. Corporate Social Responsibility

Zongtai donate the relief supplies for epidemic prevention.

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3-2. Corporate Social Responsibility

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Due to COVID-19 pandemic in May, distance learning becomes the only way for the students. However, some disadvantaged children face dilemma about the digital device shortage. The company participate the plan of the digital learning. The World Vision accompany the disadvantaged children, helping their future study.

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3-2. Corporate Social Responsibility

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On-line workshop is in full swing ！

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4 Future Expectations

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4-1. Operational overview - Land Stock

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Area of Land Cost
Location Product
(㎡) (NT$ mi)
Wenbei section of Beitun
Residential 157.10 15
District, Taichung City
Goubei section of Beitun
Residential 1,090.20 194
District, Taichung City
Xin Xinping section of Beitun
Residential 9,174.64 2,050
District, Taichung City
Wenshang section of Shituen
Residential 2,145.48 1,535
District, Taichung City
Total 12,567.42 3,794
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4-2. Market Overview

CNN ：「 Taichung is the most livable city in Taiwan. 」

The city development Construction The area includes land of Taichung Shuinan Trade and readjustment Economic Park, implementation by Taichung Arena the public and private Station, Taiyuan Sectors and lands Medical Area, expropriated are Taichung MRT, 5346 HA. The expressway etc. land of planning subarea is close to 1000 HA.

Industry

Many industries are located near the DaDu Mountain,

People

Taichung City is the second large city in Taiwan. The population in Taichung is about 2.8 million.

including precision machinery,

technology, medical biotechnology, bicycle, exhibition, logistic. real estate development.

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4-3.Market Development

Land in Taichung The latest transaction prices/ prediction property price

2021.08.14

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4-3. Market Development

Land of latest transaction price in Taichung/ prediction property price

4-3. Market Development

Land of latest transaction price in Taichung/ prediction property price

4-3. Market Development

Real value registry of around Taichung area’s property prices(avg. & the highest) within a year.

Already net parking price

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4-3. Market Development

Real value registry of around Taichung Tun District property prices(avg. & the highest) within a year. Already net parking price

4-3. Market Development

Real value registry of around Taichung City property prices(avg. & the highest) within a year. Already net parking price

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4-3. Market Development Real value registry of around Taichung area ‘s property prices(avg. & the highest) within a year. Already net parking price

Q&A

Thank you

Company Website http://zte.zongtai.com.tw/ Facebook www.facebook.com/zongtai Line ID @zongtai

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