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Highwealth Investor Presentation 2018

Jan 24, 2018

52150_rns_2018-01-24_5e3a53d3-86b7-4344-89e1-33ceb13d8083.pdf

Investor Presentation

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HIGHWEALTH CONSTRUCTION
Investor Conference 2018
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興富發集團2018年法人說明會

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2018年1月24日

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Agenda

  • Welcome Remarks

  • Competitive Advantages

  • Sales Performance

  • Future Expectations

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Disclaimer
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  • The prospective information referred to in this briefing and the relevant information released at the same time are based on Company information and the observation of overall economic development conditions.

  • Such prospective information is subject to risks and uncertainties and may be beyond our control. Actual results may differ materially from such prospective information. The reason may come from a variety of factors including, but not limited to, increases in material costs, market demand, various policy and financial economy changes, and other risk factors beyond the control of this Company.

  • The information provided in this briefing does not explicitly or implicitly express or ensure the accuracy, completeness, or reliability of such information and does not represent a complete theoretical discussion of this Company, its industry conditions, or subsequent major development directions. It only represents our outlook for the future and reflects our vision for the future thus far. For any future modifications or adjustments of such views, “The Company” does not guarantee the accuracy of the briefing information and shall not bear responsibility for the updated or revised information content of the briefing.

  • This briefing may not be obtained by any third party without the written consent of this Company.

3

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Welcome Remarks Chairman of Highwealth Construction : Chih-Lung, Cheng

The 40th year in Business for Highwealth, Persistent Investment in Local Taiwan

Total 210 construction sites with a total of 35,000 units, a total floor area of 1.63 million pings Highest total amount of money spent on land purchases among all firms, growing sales every year, growing number of employees

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Competitive Advantage Vice General Manager of Highwealth Construction : Chao-Hsiung, Liao

Concentrate on Marketing Positioning Maintain Strict Construction Quality Control On the Basis of Construction Persistently Maximize the Profit for Shareholders

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HIGHWEALTH CONSTRUCTION
History
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1980 1999 2010 2014 2015 2017

Company Highwealth began Incorporation trading on the TWSE (2542 TT)

Run Long Construction(1808 TT) joined the group and is responsible for the group’s construction business

Revenue reached The total paidHighwealth has NT$37.5 billion, the up capital of been awarded 4[th] consecutive year Highwealth the 10-billion to exceed $20 billion; is NT$11.66 land buyer for hailed as the “treble billion two king” on revenue, consecutive sales and stock price, a brilliant years record.

Revenue exceeded NT$20billion, ranked No. 1 among all firms.

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Development Strategy
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Multiple Real
Estate
Developments
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Creation of
Operational
Advantages
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Operational
Scale
Expansion
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� Have an ample land bank currently, but constant mastery of land source information is essential to determine feasibility of various land development, actively expand prime locations and reserve land resources .

  • Plan various construction projects and aim to satisfy diverse market demands including large-size housing, first-time home purchases, retirement housing, commercial real estate.

  • Accurate planning of real estate development and flexible marketing strategies.

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Real Estate Development
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Northern
Taiwan
Central
Taiwan
Southern
Taiwan
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Build Persistent Construction
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Dedicated to building persistent Intelligent Construction in the aspects of energy-saving, smart networking, environmentally friendly and ecology.

Give consideration to comfortable and safe residences with the concept of low environmental impact.

Energy-saving: High performance building shell system, low-emission glass, energy-saving light system, air conditioning system for energy saving

Smart networking: Remote monitoring facility of control power and water level, develop intelligent housing system Environmentally friendly: Water-energy saving labeled facility, refrigerator appliance for waste and garbage disposal Ecology: Reserve original tree species, emphasize planting, 3-dimensional greening.

Cases awarded the certificate of the Green Building Labeling by Ministry of Interior

Cases are the candidates of the Green Building certificate

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Introduce the techniques of shock insulation and earthquake-proofing: Having the leading technique in the construction industry, the Taiwan number one practitioner of earthquake-proof housing.

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Building Information Modeling (BIM): The 3-dimensional simulation provides information about mechanical electricity and structure for effective collaborative operation by the architects. This is the most consistent information ranging from designs and techniques to management.

Introduce the Triple bottom up method: Adapt innovative techniques, the top down method, bottom up method and up up method to advance construction efficiency.

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Market Share Ratio of Launched Case Volume
in Taiwan 2014~2017
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Year
Item
2014 2015 2016
Until the 3rd
quarter of
2017
Launched case
volume in Taiwan
297.84 200.75 140.48 282.56
Market share
(%)
2.2% 2.29% 2.33% 5.78%
Ratio of prime
launched cases
for each district
Taoyuan and
Hsinchu area 3.9%
Kaohsiung area
4.2%
Taipei area 3.35%
Taichung area 4.73%
Tainan area 7.55%
Keelung area 7.98%
Taichung area 6.26% Taoyuan and Hsinchu
area 15.80%
Taichung area 16.34%
Kaohsiung area
7.69%

*The ratio of the market share (%): The launched case volume of Highwealth Construction/the total launched case volume in Taiwan (Keelung area, Taipei area, New Taipei City area, Taoyuan and Hsinchu area, Tainan area, Kaohsiung area)

*The statistic data of launched case volume is in reference to the Cathay Real Estate Index and My Housing data in the Keelung area until the 3rd quarter of 2017.

The market share of launched cases layout in Taiwan has grown from 3.35% to 16.34%, and is honorably listed as a MSCI constituent.

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The Group’s Amount of Land Purchase
During 2013~2017
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Unit: NT$100 million
Year
2013 2014 2015 2016 2017 Total
Item
HIGHWEALTH 121.78 55 57.72 95.73 103.53 433.76

Run Long 30.87 13.07 37.23 36.97 118.14
Total amount of
152.65 55 70.79 132.96 140.5 551.9
money
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Don’t worry about the signs for future recession, make continuous purchases of land for construction, and prepare for future profit.

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The Number of Employees of the Group Has
Been Increasing Every Year
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The construction industry plays the role of a train locomotive in economic development. As a leader of the construction industry, Highwealth continuously invests in construction in Taiwan and provides local job opportunities. The number of employees of the Group has been increasing every year. The number at present is 6 times greater after being listed on the TWSE.

The Number of Employees of Highwealth Construction Year 2000 2010 2014 2017 Number of 165 412 863 1,009 people - Growth ratio 250% 209% 117%

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Charity Participation, Fulfill Corporate Social
Responsibility
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Increasing the annual investment amount and participating in various charity organizations and promoting activities are things we do to constantly do something good and right in the hope of making a contribution to society and setting an example. While investing in construction in Taiwan, we can make more contributions to Taiwan’s competitiveness.

Provide Emergency Relief Provide care in winter

Drug development in diseases Develop basic ball games Revive the Establish development Highwealth of physical Baseball Team education (PE) Cultivate sports talents

Public

participation and charity

Donate to the gas explosion in Kaohsiung Host dining for charity

Light Up Taiwan Restore the municipal historic Create site Xin Fang community Chun Tea House culture Promote culture activities held by cultural associations

  • Since 2011, we have donated over 80 million to the 4-year restoration of the Taipei City municipal designated historic site, Xin Fang Chun Tea House

Make donations in support of rare diseases research

  • In 2014, we donated to the gas explosion in Kaohsiung

  • • During 2016~2018, we have invested 9 million to establish the “Taipei Highwealth Baseball Team” to support the development of adult baseball game in Taiwan.

Make donations to Tri-Service General Hospital

  • We hosted the Winter Care Charity Fair to support low-income families in 23 schools in Taipei City.

  • We hosted the Light Up Taiwan activity to support the 101 fireworks event.

  • Cultivate sports talents: Provide financial support to teenage tennis players, elementary school teams and the new tennis star, Wu Donglin, who has won ATP ranking.

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Sales Performance Vice General Manager of Highwealth Construction : Chao-Hsiung, Liao

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HIGHWEALTH CONSTRUCTION
Introduction
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Company HIGHWEALTH CONSTRUCTION Corp. Incorporation In 1980 Started trading on the TWSE in 1999 (2542 TT) Capital NT$11,666,266,430 Chairman Mr. Chih-Lung, Cheng General Manager Mr. Hua-Chun, Fan Spokesperson Mr. Chao-Hsiung, Liao (VP of Development Dept.) Company Address 10F., No.267, Lequn 2nd Rd., Zhongshan Dist., Taipei City 104, Taiwan (R.O.C.) Company Phone No. +886-2-2755-5899

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Sales Performance of
Construction Cases
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Area Name of
Case
Location Area of
Site (ping)
Total
Building
Area Sold
(ping)
Total Sales
Amount (by
NT$ 100
million)
Sales
Ratio
Greater
Taipei
Area
Hongshulin
(Art Deco in
Taipei)
Tamsui Dist.,
New Taipei
City
1573.41 8,984.12
33.59
61.87%
Taichung Orion Legend Xitun Dist.,
Taichung City
804.87 9,661.10
36.58
86.60%
Subtotal 70.17

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Sales Performance of
Construction Cases
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Sales Performance of Existin Housin in 2017 g g

Area Name of Case Location Total Sales
Amount
(NT$ 100 million)
Greater Taipei Area National No.1 Linkou Dist., New
Taipei City
0.61
Song Jiang No.1 Zhongshan Dist.,
Taipei City
2.09
Taipei No.1 Zhongshan Dist.,
Taipei City
1.26
Taipei Times Square Zhongshan Dist.,
Taipei City
2.08
Yuanshan No.1 Shilin Dist., Taipei
City
14.32
Xin Fang Chun Datong Dist., Taipei
City
3.02
Taipei Surprise Wanhua Dist., Taipei
City

15.15
Zhongshan Kai Yen
(Po Yuan)

Zhongshan Dist.,
TaipeiCity

6.05
Hsinchu The Giant Zhubei City, Hsinchu
County

5.13

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Sales Performance of
Construction Cases
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Sales Performance of Existin Housin in 2017 g g

Area Name of Case Location Total Sales
Amount
(NT$ 100 million)
Taichung Goddess Aroma West Dist., Taichung City 1.35
Taichung National No. 1 Xitun Dist., Taichung City 3.47
APEC Clouds North Dist., Taichung City 0.32
Orion Castle Xitun Dist., Taichung City 3.31
Times Square CBD
(Po Yuan)
Xitun Dist., Taichung City 5.35
Tainan Chengda City
(Chi Yu)
North Dist., Tainan City 0.79
Kaohsiung King's Castle Gushan Dist., Kaohsiung City 1.12
Art Castle Gushan Dist., Kaohsiung City 1.09
Emperor No. 1 Lingya Dist., Kaohsiung City 5.32
Oriental Place Gushan Dist., Kaohsiung City 3.25
Subtotal 75.08

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Sales Performance of
Construction Cases
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Sales Performance of Sales Online in 2017

Area Name of Case Location Total Building Area Sold
(ping)
Total
Sales
Amount
(NT$ 100
million)
Sales
Ratio
Greater Taipei
Area
*Twin Lakes Estates Neihu Dist., Taipei City 15,251.43
169.27
47.13%
*Heart of the Ocean Tamsui Dist., New Taipei City 15,430.88
39.72
91.08%
*Metro Twin Tower Nangang Dist., Taipei City 2,765.36
25.16
58.19%
Hongshulin (Art Deco in Taipei) Tamsui Dist., New Taipei City 8984.12 33.59 61.87%
*More Worth Xizhi Dist., New Taipei City 5,839.00
25.79

3.89%
*Erudition Manor
(Po Yuan)
Anle Dist., Keelung City 6,018.03
14.35
61.36%
Hsinchu *The Top Green Life Zhubei City, Hsinchu County 5,788.11
17.65
84.76%
Park River Life Zhubei City, Hsinchu County 7,856.63
23.72
32.14%
Welcome to My World Hsinchu City 32,429.30
(with Highwealth 14,636.1)

45.86
32.66%
Taichung Orion Legend Xitun Dist., Taichung City 9661.10 36.58 86.60%
Taichung *Wenhua hui Xitun Dist., Taichung City 6,271.11
32.11
58.48%
The Knowledge Xitun Dist., Taichung City 7,852.08
36.76
36.71%
*Zhenai (Beloved and Precious) Xitun Dist., Taichung City 11,642.01
41.83
86.06%
Kaohsiung The New Wave Zuoying Dist., Kaohsiung City 8,475.91
29.76
80.30%
*Avenue des Champs Qianjin Dist., Kaohsiung City 6,717.43
19.17
98.34%
*The House In The Midtown Lingya Dist., Kaohsiung City 6,888.32
18.38
99.48%
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Planned Cases for 2018
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Area Name of Case
(temporary)
Location Total Building Area
(ping)
Total Sales
Amount
(NT$ 100 million)










Greater Taipei Area Jiangcui Section Banqiao Dist., New Taipei City 4237.00
(with Highwealth 1950)

9.69
Yong Cui I Banqiao Dist., New Taipei City 6,704.00
32.74
Beixindu Banqiao Dist., New Taipei City 7682.00
(with Highwealth 2438)

11.42
Yong Cui II Banqiao Dist., New Taipei City 6,550.00
32.18
Longfeng Section Xinzhuang Dist., New Taipei City 12675.00
(with Highwealth 5288.85)

20.89
Taoyuan Qingbu Project Zhongli Dist., Taoyuan City 6596.00
(with Highwealth 2968)

9.63
Taichung Shuhe Garden Nantun Dist., Taichung City 8,746.00
34.15
Tainan Jinhua Section Anping Dist., Tainan City 9,054.00
28.88
Shangding City Rende Dist., Tainan City 33,147.00
72.01
Yuguang III Anping Dist., Tainan City 26645.00 62.76
Kaohsiung Liuhe Project Lingya Dist., Kaohsiung City 8,830.00
25.27
Dagang Section Sanmin Dist., Kaohsiung City 8338.00 29.71
Meishu Garden Sanmin Dist., Kaohsiung City 18,354.00
44.50
Zhongdou III Sanmin Dist., Kaohsiung City 6317.00 20.21
The Joyful Life Zuoying Dist., Kaohsiung City 21378.00
(with Highwealth 8551)

19.54
Boxiao Bijiang Qianjin Dist., Kaohsiung City 15,209.00
54.32
Subtotal 169,089.85 507.90

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Unit Price of New Housing
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Year
Item
2018 2019 2020 2021 2022 Total
Unit Price of New
Housing
(NT$ 10million)
476.09 81.37 195.92 846.3 55.63 1655.31

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Plan for Future 5 Years
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Area Name of Case Total Sales
Amount
(100 million)
2018 2019 2020 2021 2022
Greater Taipei
Area

Twin Lakes Estates
169.27
Heart of the Ocean 39.72
Metro Twin Tower 25.16
Nangang Renovation 42.00
Beitou Daye Section 13.63
More Worth 25.79
Danhai V 94.14
Longfeng Section 20.89
Jiangcui Section 9.69
Nangant V 78.70
Yong Cui I 32.74
Bexindu Section 11.42
Yong Cui II 32.18
Erudition Manor (Po Yuan) 14.35
Taoyuan Qingbu Project 9.63
Hsinchu The Top Green Life 17.65
Park River Life 23.72
Welcome to My World 45.86

22

Area Name of Case Total Sales Amount
(100 million)
2018 2019 2020 2021 2022
Taichung Wenhuahui 32.11
The Knowledge 36.76
Shuhe Garden 34.15
Zhenai (Beloved and
Precious)
41.83
Heuili Section 47.27
Tainan Jinhua Section 28.88
Shangdong City 72.01
Yuguang III 62.76
Kaohsiung The New Wave 29.76
Loiuhe Project 25.27
Avenue des Champs 19.17
The House In The Midtown 18.38
Dagang Section 29.71
Zhongdou Section 31.01
Meishu Dayue 44.50
The Joyful Life 19.54
Zhongdou Section 20.21
Fushan Section 49.84
Boxiao Yiji 90.63
Boxiao Bijiang 54.32
Oriental Laurel(Chi Yu) 160.66 ~~23~~
Subtotal 1655.31

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Consolidated Financial Status
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Year
Item
2014 2015 2016 2017
(Financial data until
September 30th, 2017)
Operating income 37,515,171 34,638,039 35,057,830 13,855,192
Operating costs 23,312,300 21,833,114 23,768,287 10,114,442
Operating margin 14,202,871 12,804,925 11,289,543 3,740,750
Operation gross
margin (%)
38 37 32 27
Business expenses 2,927,776 2,989,867 3,556,513 1,630,833
Operating income 11,275,095 9,815,058 7,733,030 2,109,917
Pre-tax income 11,172,002 9,873,872 7,856,704 2,197,307
Net income 10,746,861 8,954,895 7,268,083 2,016,641
Current net operating
profit (%)
29 26 21 14
Composite income 10,757,880 8,931,878 7,266,952 2,019,120
Earnings per share 8.80 7.06 5.57 1.62
Total indebtedness 73,912,357 74,873,735 72,425,781 88,743,935
Stockholder’s equity 34,280,534 39,322,208 38,730,346 33,890,754
Paid-up capital 8,974,051 11,666,266 11,666,266 11,666,266

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Dividend Policy
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Dividend
Year
Cash Dividend Cash Dividend Stock
Dividends
Stock Price
Before Ex-
dividend Date
Dividend
Yield
(%)
Dividend
Payout Ratio
(%)
Apportionment of
profit
(NT$/dividend)
Additional paid-in
capital
(NT$/dividend)
Stock dividend from
retained earnings
(NT$/dividend)
2016 4.87300000 0.12700000 0.00000000 48.05 10.41 89.77
2015 6.00000000 0.00000000 0.00000000 53.30 11.26 84.99
2014 4.00000000 0.00000000 3.00000000 60.90 6.57 45.45

Until the end of 2017, the paid cash dividend has reached over NT$ 33.3 billion.

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Sales Performance Vice General Manager of Run Long Construction : Ping-Tse, Chiu

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Run Long-Taichung

Run Long Construction Co., Ltd 2018

Presentation for Investor’s Conference

Jan 24, 2018

27

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Run Long Construction
Introduction
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Company Name Incorporation

Capital Chairman General Manager Spokesperson Company Address Company Phone No. Factory Address Factory Telephone

Run Long Construction Co., Ltd. In 1977 Began trading on the TWSE in 1994 (1808 TT) NT$ 2,434,044,460 Mr. Tsung-Pin, Tsai Mr. Tsung-Pin, Tsai Mr. Ping-Tse, Chiu (Vice General Manager) 8F., No.267, Lequn 2nd Rd., Zhongshan Dist., Taipei City 104, Taiwan (R.O.C.) +886-2-8501-5696

No.220, Dechang St., Yingge Dist., New Taipei City 239, Taiwan (R.O.C.) +886-2-2678-0666

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Sales Performance of
Construction Cases
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Cases Completed in 2017

Name of
Case
Location Product Total
Building
Area Sold
(ping)
Total Sales
Amount
(NT$ 100
million)
Sales
Ratio
Xinyi City Xinyi Dist.,
Keelung City
Residential
housing
10,204.64 20.54 100%
True Love
Is ONLY
LOVE
Yongkang
Dist., Tainan
City
Residential
housing
23,252.99 45.61 98%
Total 33,457.63 66.15

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Sales Performance of
Construction Cases
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Sales Performance on Existing Housing in 2017

Name of Case Location Product Total Sales Amount
(NT$ 100 million)
Leader Empire Xindian Dist., New Taipei City Residential housing
Jingxin Wenhui Wenshan Dist., Taipei City Residential housing 3.41
Forest Palace Neihu Dist., Taipei City Residential housing 7.33
Eton Manon Wenshan Dist., Taipei City Residential housing
Dream House Zhubei City, Hsinchu County Residential housing 18.71
The Palace Xitun Dist., Taichung City Residential housing
Total 29.45

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Sales Performance of
Construction Cases
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Sales Performance of Sales Online in 2017

Name of Case Location Product Total
Building
Area Sold
(ping)
Total Sales
Amount
(NT$ 100 million)
Sales Ratio
More Worth Xizhi Dist., New
Taipei City
Residential
housing
1,333.58 5.78 5%
National Trade
Center
Xitun Dist.,
Taichung City
Commercial
building
13,595.67 61.61 70%
Run Long Nantun Dist.,
Taichung City
Residential
housing
9,661.22 32.58 32%
The Joyful Life Zuoying Dist.,
Kaohsiung City
Residential
housing
13,224.83 29.29 9%
Total 37,815.30 129.26

31

Name of Case
(temporary)
Location Product Area of Site
(ping)
Total Building Area
Sold (ping)
Total Sales Amount
(NT$ 100 million)
BanqiaoYong
Cui
Banqiao Dist.,
New Taipei
City
Residential
housing
629.60 3,672.00 17.93
Zhonghe
Yuantong
Zhonghe Dist.,
New Taipei
City
Residential
housing
1,164.46 3,396.00 16.75
Shangorilla Zhongshan
Dist., Keelung
City
Residential
housing
23,006.50 71,444.41 178.11
Taoyuan
Zhonglu
Taoyuan Dist.,
Taoyuan City
Residential
housing
1,266.01 6,482.00 20.58
Hsinchu
Guangwu
East Dist.,
Hsinchu City
Residential and
commercial
building
2,707.44 32,382.00 59.38
Taichung
Zhongzheng
Xitun Dist.,
Taichung City
Residential and
commercial
building
1,478.92 15,000.00 62.28
Kaohsiung
Fudong
Lingya Dist.,
Kaohsiung
City
Residential and
commercial
building
1,455.33 10,079.00 28.27
Total 31,708.26 142,455.41 383.3

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Unit Price of New Housing
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Year 2017 2018 2019 2020 2021 Total Item Unit Price of New Housing 66.15 99.97 78.14 215.19 119.26 578.71 (NT$ 100 million)

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Future 5 Years Plan
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Name of Case Total Sales
Amount
(NT$ 100 million)
2018 2019 2020 2021 2022
More Worth 5.78
BanqiaoYong Cui 17.93
Zhonghe Yuantong 16.75
Xinyi City 20.54
Shangorilla 178.11
Taoyuan Zhonglu 20.58
Hsinchu Guangwu 59.38
National Trade
Center
61.61
Run Long 32.58
Taichung
Zhongzheng
62.28
True Love Is ONLY
LOVE
45.61
Kaohsiung Fudong 28.27
The Joyful Life 29.29
Total 578.71

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Financial Status
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Year
Item
2014 2015 2016 2017
(Financial Data until
September 30th, 2017)
Operating income 4,596,676 4,951,316 5,729,654 2,114,263
Operating margin 3,525,834 3,503,090 4,147,121 1,707,759
Operation gross profit 1,070,842 1,448,226 1,582,533 406,504
Operating gross margin
(%)
23.30 29.25 27.62 19.23
Business expenses 356,583 473,161 487,244 261,518
Operating income 714,259 975,065 1,095,289 144,986
Pre-tax income 676,809 955,667 1,164,927 199,357
Net income 668,548 910,219 1,035,778 183,810
Current net operating
profit (%)
14.54 18.38 18.08 8.69
Composite income 668,548 910,893 1,125,403 132,425
Earnings per share 3.73 4.30 4.41 0.76
Total indebtedness 11,053,038 11,485,947 13,462,660 19,312,614
Stockholder’s equity 3,978,298 5,160,794 5,218,013 4,245,372
Paid-up capital 1,850,089 2,330,323 2,376,663 2,434,044

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Dividend Policy
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Dividend
Year
Cash Dividend Cash Dividend Stock Price
Before Ex-
dividend
Date
Dividend Yield
(%)
Dividend Payout
Rateio
(%)
Apportionment of
profit
(NT$/dividend)
Additional paid-in
Capital
(NT$/dividend)
2016 3.84210937 1.23276237 47.35 10.72 115.08
2015 3.60851052 1.40095114 38.30 13.08 116.50
2014 3.50887481 0.50226438 27.30 14.69 107.54

Until 2017, the paid cash dividend has reached over NT$ 4.8 billion.

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Future Expectations Chairman of Highwealth Construction : Chih-Lung, Cheng

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Q & A THANK YOU!

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