HONMYUE — Call Transcript 2023

Jun 13, 2023

． Honmyue Enterprise Co.,LTD (1474) 2023 Investor Conference

. Weaving a better world with you. Together

2023/06/13 Mega Securities Co., Ltd.

Disclaimer

• The information published in this conference is for our company use

• only，including Operating Achievements 、Financial Status & Business development.

• Our Company never announce Financial Forecast ，and the opinions of

• Company’s financial、Business 、Q&A and Business development might be slightly different in the future. The causes of the differences could be varied from market、fluctuation of price、competitions、 Global economics、Fluctuation of International Exchange、bargain of suppliers, to Risk factors that could not be controlled .

• This conference represents our company’s view of the future. We will

• not be responsible for updating any changes or adjustments.

Agenda

• Company History

• Financial Statement

• New development & Marketing

• Q&A

3

==> picture [541 x 98] intentionally omitted <==

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

Company Introduction
----- End of picture text -----

4

Company information

==> picture [617 x 378] intentionally omitted <==

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

Milestone Capital EPS
Found in
：
2019 14.45
1970
NTD
：
2020 15.21
Listed in
1.298
1999 2021 ： 15.93
billion
IPO in 2000 2022 : 16.28
----- End of picture text -----

Certification 1998.02：ISO9002 2008.05：ISO14001 2010.11：BLUE SIGN 2015.08：ISO9001 2020.09：GRS 5

Textile Supply Chain

Honmyue

Paper Manufacturing Petrochemical Industry Oil & EG、 PTA、 AM、CPL Synthetic Fiber Manufacturi ng Natural Fiber Manufacturing Synthetic Fiber (Upper stream)	Textured Yarn Industry Yarn Spinning Mills Textiles Mills Industry Knitted Weaving Industry Fabric Mills Industry	Medical Fabric department (Found in 2012) Home Textile Apparel Textile Leather & Appare PU&PVC Synthetic Leather	Medical Fabric department (Found in 2012)

6

Production Site

Taiwan：

==> picture [336 x 205] intentionally omitted <==

• Chenghua (HQ)

  • Shengang/Hemei/Chuansing (Weaving)

• Honmyue Taipei Office

• Nuwa Enterprise Co., LTD.

• Yu Zhan Startup Co.,LTD(Dying)

• China：

• Honmyue Textile(Zhejiang)Co.,LTD.

• Jiujiang DeYu Co., Ltd. (Planning)

• Vietnam：

• Grand and Great Textile.(Joint Venture)

7

Product Application

==> picture [201 x 91] intentionally omitted <==

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

Industrial Fabrics
----- End of picture text -----

==> picture [439 x 284] intentionally omitted <==

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

Apparel Fabrics Furnishing Fabrics
----- End of picture text -----

==> picture [225 x 283] intentionally omitted <==

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

Medical
Textiles
----- End of picture text -----

8

Industrial Fabric

==> picture [138 x 178] intentionally omitted <==

==> picture [189 x 184] intentionally omitted <==

==> picture [180 x 234] intentionally omitted <==

==> picture [174 x 161] intentionally omitted <==

==> picture [157 x 263] intentionally omitted <==

==> picture [342 x 184] intentionally omitted <==

9

Apparel Fabric

==> picture [205 x 213] intentionally omitted <==

==> picture [248 x 247] intentionally omitted <==

==> picture [172 x 329] intentionally omitted <==

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

10
----- End of picture text -----

==> picture [270 x 239] intentionally omitted <==

Furnishing Fabric

==> picture [376 x 228] intentionally omitted <==

==> picture [376 x 228] intentionally omitted <==

==> picture [377 x 226] intentionally omitted <==

11

Medical Textile

==> picture [271 x 379] intentionally omitted <==

==> picture [203 x 185] intentionally omitted <==

==> picture [170 x 128] intentionally omitted <==

==> picture [359 x 215] intentionally omitted <==

12

Green house gas interrogate & external examination progress

==> picture [769 x 305] intentionally omitted <==

(一) The progress of parent company (Honmyue):

1. Our company has set up the "ESG Promotion of Sustainable Development Committee" on 111/5/12. General manager , as the chairman , coordinate the company's sustainable development direction and target plans

1. The parent company starts the greenhouse gas inventory in advance to facilitate the follow-up to the inventory of each subsidiary. Officially launch the Greenhouse Gas interrogate in November this year (2022)

2. A counseling case has been signed with the Textile Industry Research Institute of the Foundation, and also with a government subsidy case. Expected to complete the third-party verification by the end of 2023.

13

Award record

2014 Ministry of Labor「Balance in work and life Award」 「 2018 Labor Award」 Ministry of Labor 「 2019 Changhua County Happy Enterprise 4 stars award 」 「 」 2020 Ministry of Education Sports Enterprise Award 2022 「Labor Ｇolden Award」 Ministry of Labor

==> picture [236 x 130] intentionally omitted <==

==> picture [237 x 142] intentionally omitted <==

==> picture [239 x 173] intentionally omitted <==

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

14
----- End of picture text -----

The 28th 「 session central area Management Excellence Award 」

==> picture [795 x 413] intentionally omitted <==

15

th 「 」 2022(The 40 ) Outstanding manager award

16

2023年(第29屆)「中部地區傑出經理獎」

==> picture [683 x 405] intentionally omitted <==

17

18

consolidated income statement

unit： In thousands of NTD

Item	2023 Jan.~Mar.	2022 Jan.~Mar.	Difference	Difference
			Amount	%
Net Revenue	622,284	888,242	(265,958)	(30%)
Operating Cost	573,059	774,170	(201,111)	(26%)
Grossprofit	49,225	114,072	(64,847)	(57%)
Gross margin	8%	13%	(5%)
Income From Operations(Loss)	(26,354)	20,876	(47,230)	(226%)
Net Income(Loss	) (20,535)	34,427	(54,962)	(160%)
EPS(In NT$ dollars)	(0.15)	0.26	(0.41)

2

Revenue

Consolidated Revenue unit： In thousands of NTD

0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000	0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000	2022 Jan.~May. 1,459,302 2023 Jan.~May. 998,220	2022 Jan.~May. 1,459,302 2023 Jan.~May. 998,220	2022 Jan.~May. 1,459,302 2023 Jan.~May. 998,220	2022 Jan.~May. 1,459,302 2023 Jan.~May. 998,220	2022 Jan.~May. 1,459,302 2023 Jan.~May. 998,220
					1,459,302
			2023 Jan.~May.
			998,220
Year	2023 Jan.~May.			2022 Jan.~May.	Difference
					Amount	In %
Revenue	998,220			1,459,302	(461,082)	(31.60%)

3

2023.01~2023.03

Product ortfolio(Taiwan)

unit： In thousands of NTD

==> picture [420 x 222] intentionally omitted <==

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

Medical2% OEM4%gtoss Yarn1% gross profit 15%
profit 14%
Hone
furniture5%
apparel20% industry Item Revenue
gross profit 68%gross industry 308,938
14% profit 13% apparel 104,075
Furnishing 31,382
Medical 13,693
OEM 26,853
Yarn 227
工業 成衣 傢飾 醫療 代工 紗
Total 485,168
----- End of picture text -----

==> picture [414 x 216] intentionally omitted <==

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

OEM4%gt
oss profit
Finishing 14%
greige
cloth 27%
+yarn
gross
profit 18% 68%gross item Revenue
profit 13% Greige 331,911
+yarn
Finishing
126,177
cloth
胚布+紗 成品布 代工 OEM 26,853
Total 227
----- End of picture text -----

==> picture [418 x 227] intentionally omitted <==

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

export32%
import68%
Item Revenue
Import 330,242
Export 154,926
內銷 外銷
Total 485,168
----- End of picture text -----

==> picture [457 x 229] intentionally omitted <==

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

USA4% [Asia(others)1]
Others7%
%
Canada6%
ARF42%
China40%
Item Revenue
China 85,922
ARF 36,938
Canada 6,300
USA 13,272
中國 東協六國 加拿大 Asia(other)
美國 亞洲(其他) 其他 other 21 12,494 21
total 608,673
----- End of picture text -----

Product portfolio and gorss profit (Consolidated Financial )

2022.01-2022.09

unit：Thousand NT dollars

==> picture [442 x 222] intentionally omitted <==

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

Medical 2% OEM
yarn1% gross
Furnishing
gross profit 4%gtoss
profit 17%
4%gross 20% profit -13%
profit 21%
Industry 73%
Appreal
Item Revenue
gross
16%gross
industry 1,827,644
profit 12%
profit 14%
appreal 391,024
Furnishing 92,393
Medical 59,645
OEM 113,962
工業 成衣 傢飾 醫療 代工 紗
Yarn 15,916
Total 2,500,584
----- End of picture text -----

==> picture [255 x 186] intentionally omitted <==

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

OEM4%gro
Finishing ss profit -
cloth 13% Greige+
32%gross yarn
63% gross
profit 18%
profit 11%
胚布+紗 成品布 代工
----- End of picture text -----

item	Revenue
Greige+yarn	1,583,078
Finishing cloth	803,544
OEM	113,962
Total	2,500,584

==> picture [450 x 226] intentionally omitted <==

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

Sales area
Taiwan
57%
Other 43%
Item Revenue
Taiwan 1,416,036
other 1,084,548
台灣 其他
Total 2,500,584
----- End of picture text -----

china57% ARF31% Canada 3% USA3% Asia(other) 2% other4% 大陸 東協六國 加拿大 美國 亞洲(其他) 其他
	Item	Revenue
	China	619,023
	ARF	338,225
	Canada	33,325
	USA	26,683
	Asia(other)	19,369
	22 other	~~22~~ 47,923
	Total	1,084,548

Market Trend RD Manager Mr.Guo

New development

Main Fabric Development

==> picture [85 x 462] intentionally omitted <==

Light Weight High New recycle material tenacity Solution Dye fabric Tear and abrasion resistance Recycle waste Water proof Decompose material Anti fungus Bio –based material Water repellent Anti-static Low temperature dyeing process Anti-flame Digital printing reflection Reduce Carbon emission

==> picture [86 x 462] intentionally omitted <==

Elastic and comfort

Light Weight & Keep warm Water proof and breathable

Cotton-like

Linen-like

Furry hand feel

==> picture [87 x 434] intentionally omitted <==

Crinkle -2 tone

3D-geometry 2 tone

Digital Printing

Our fabrics focus on sustainability

• Reach sustainability via raw material

 Zero carbon emission ， develop in low carbon products and recyclable products

• Energy saving and reduce resource depletion

Energy saving and reduce Carbon emission

Recycle Waste

• Recycle PET

• Recycle textile

• Recycle fish net

• Recycle material replacement (ie. rPVB)

Circular Economy

  - **Mono material, easy to**

  - **recycle , to decompose , and to reuse.**

• Simplify or zero water dyeing

• process

• Equipment allows for low carbon emission

• Low carbon material involved

Recent new development of key products

Backpacks

• We are Trash Environmentally friendly fabric recycled yarn series

• Honmyue x Subeco Fishing net recycling high strength series

• Mono Material Mono material seires

Home textile

• Envive rPVBEnvironmental protection recycling covered yarn outdoor mesh series

Apparel

• Easy Move Ultra lightweight Lightweight and environmentally friendly mechanical stretch fabric

Weaving Waste We are Trash recycle

Product

We're Trash is the extended version of second-generation series of I m Trash. It is an all-polyester environmentally friendly recycled fabric .It uses textile Second Life fabric recycled yarn to meet the needs of circular economy and create the best backpack equipment in a sustainable way.

Characteristic

• 100% Recycled Yarn" made from recycled PET bottles and fabric scraps gives new life to pre-consumer textile scraps and realizes the goal of low carbon emissions and zero waste.

• The fabric retains the Recycle color effect and the variegated effect of recycled fibers, no dyeing is required to save water resources

==> picture [82 x 44] intentionally omitted <==

==> picture [40 x 39] intentionally omitted <==

==> picture [40 x 39] intentionally omitted <==

==> picture [36 x 35] intentionally omitted <==

Circular Resource Recycled Economy saving materials

Recycle fish net

==> picture [64 x 57] intentionally omitted <==

==> picture [30 x 48] intentionally omitted <==

Honmyue x Subeco

==> picture [336 x 384] intentionally omitted <==

Product

• Recycled fabrics made from decommissioned fishing nets recovered from the ocean, preventing them from becoming pollutants in the ocean

• High-strength nylon recycled yarn made by chemical recycling method, its physical properties are comparable to virgin nylon

• Inspired by fishing nets, the textured design is a bold, strong fabric style that uses tissue to enhance tear strength

==> picture [168 x 151] intentionally omitted <==

==> picture [164 x 151] intentionally omitted <==

Design No: N1148 Content: 100% HT RE-NYLON Description: N200D*N200D Finishing: C0 WR+PU900MM

Design No: N1154 Content: 100% HT RE-NYLON Description: N400D*N400D Finishing: C0 WR+PU1000MM

==> picture [64 x 57] intentionally omitted <==

Circular MONO MATERIAL series Economy From the fabric to the processing procedure, it is composed of a single material. Compared with composite materials, a single material is easier to be disassembled and recycled, which improves the recycling capacity and promotes a sustainable economy.

1) NüCycle Nylon HT with Nylon Film

2) RPES fabric with PET coating

Single-component material, composed of recycled nylon, solvent-free adhesive and environmentally friendly nylon film to enhance product recyclability

Using recycled fabric with PET coating , makes the single material composition more sustainable

==> picture [145 x 214] intentionally omitted <==

==> picture [208 x 214] intentionally omitted <==

==> picture [172 x 174] intentionally omitted <==

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

Without
bleaching
and re-
dyeing, the
effort is
more
energy-
efficient to
further
reduce Textile
carbon
footprint. to
Textile
----- End of picture text -----

==> picture [179 x 215] intentionally omitted <==

==> picture [64 x 57] intentionally omitted <==

Comfortable and functional

EASY MOVE Ultra Lightweight

Easy Move-Ultra Lightweight I (Recycled)

Easy Move (Recycled), with circular design as the original intention, it is made of 100% PET bottle recycled mechanical elastic yarn, and 20D and 30D ultra-lightweight fine deniers are launched, and through the composition of polyester single material, the subsequent recycling operation of the product becomes particularly easy , Practice the concept of circular economy.

==> picture [431 x 130] intentionally omitted <==

==> picture [444 x 296] intentionally omitted <==

==> picture [64 x 57] intentionally omitted <==

Envive r PVB Outdoor mesh series

Product

==> picture [245 x 72] intentionally omitted <==

introduction

The newly developed recycled PVB material is used, and then blended and modified composite environmental protection plastics are used to replace the existing core-spun yarn with PVC as the yarn batch coating. Recycled r-PVB Teslin outdoor mesh is made by special weaving technology.

==> picture [401 x 321] intentionally omitted <==

==> picture [168 x 99] intentionally omitted <==

Characteristic

• Made of eco-friendly recycled material PVC-Free

==> picture [209 x 157] intentionally omitted <==

• High light fastness (Grade>7, ISO 105 B02)

• Excellent weather resistance and dimensional stability

• Unique imitation natural texture appearance

• Comply with Reach related environmental protection certification

ISPO fabric awards

• ISPO Textrends Award - FW 2024/25

==> picture [298 x 200] intentionally omitted <==

==> picture [298 x 200] intentionally omitted <==

==> picture [89 x 31] intentionally omitted <==

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

N1084-BR
NüPalette HT
----- End of picture text -----

 Blue X Red create color flashing effect  High tenacity high color fastness polyester dope dye P1678 I’m Trash

 100% recycle material (waste fabric +R-PET yarn)  No dye process with unique

==> picture [298 x 200] intentionally omitted <==

==> picture [298 x 200] intentionally omitted <==

SFPX0-0690-XDF

 corduroy 2 layer 3D structure

• Recycle elastic polyester

SJPX0-1694-XLH

• BlackXwhite fine 2 side waving pattenr

• Recycle dope dye elastic fabric

Innovative products winningAward

Performance Forum March 23’

Election of the image area of ​the German Functional Textile Exhibition

==> picture [327 x 218] intentionally omitted <==

SFPX0-0690-XDF

• Eco-friendly recycled polyester elastic fabric

• Corduroy double-layer double-sided threedimensional weave

==> picture [93 x 44] intentionally omitted <==

SLNK0-2776-XWE-CTW

 100% high-strength solution-dyed nylon, yellow x blue x red yarns are interwoven through the warp and weft to form a houndstooth pattern fabric with a galaxy luster, providing environmentally friendly products with differences in function and appearance.

SFPX3-0626-XDF

 100% plastic bottle recycled mechanical elastic fabric, ultra-lightweight 30D fine denier, and through the composition of polyester single material, it makes the subsequent recycling operation of the product particularly easy, and implements the idea of circular economy.

SLPY0-2469-XWE-CTW

• The non-dyed floral gray x black dope-dyed yarn, through warp and weft yarn design and texture changes, has become an environmentally friendly and characteristic fabric that is resistant to sunlight, not easy fade away , and is not easy to be copied.

==> picture [284 x 188] intentionally omitted <==

R&D Innovation Program Proposal Grant

In 2012, it was approved by the Ministry of Economic Affairs to subsidize research and development related plan funds, and invested in product technology development in the fields of environmental protection and sustainability, low-carbon transformation and forward-looking research and innovation.

Project category	Project type	Project Name	Project Year	Project Cost
Industry Upgrading Innovation Platform Mentoring Program	Thematic R&D Program	Suppliers, traders, manufacturers integrated carbon reduction strategy demonstration plan	112/4~114/3	40,500,000 NT dollars
A+ Enterprise innovation R & D quenching chain plan	Encourage domestic enterprises to set up R&D centers in Taiwan	Honmyue Sustainable Innovation R&D Center Project	112/7~114/6	40,318,000 NT dollars

Marketing

Digital Marketing

Virtual Mock-Up end use product 3D simulation and Higg MSI展示 Online the 3D simulation of our environmentally friendly fabrics applied to bags, and present the comparison of the material sustainability data of general and environmentally friendly fabrics, and the carbon emission and other data that the brand values

==> picture [327 x 296] intentionally omitted <==

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

the brand values
----- End of picture text -----

==> picture [412 x 283] intentionally omitted <==

Marketing Promotion

• List of exhibition activities in 2023

	Exhibition Name	Date	Place
Visit	Performance Days German Functional Textile Exhibition	3/15 – 3/16	Munich Germany
Join	Techtextil North American North American Technical Textiles Exhibition	5/10 - 5/12	Atlanta, USA
Visit	Spoga+gafa German Outdoor Leisure and Gardening Exhibition	6/18 - 6/20	Cologne, Germany
	Performance Days German Functional Textile Exhibition	10/4 - 10/5	Munich Germany
	TITAS Taipei Textile Exhibition	10/17 – 10/19	Nangang Exhibition Hall
	Advanced Textiles Expo Techtextil	11/1 – 11/3	Orlando, USA
Join
	ISPO Munich German sporting goods exhibition	11/28 – 11/30	Munich Germany

Marketing Promotion

• List of exhibition activities in 2023

==> picture [866 x 321] intentionally omitted <==

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

Exhibition Name Date Place
「Trade Association-Small Motorized Sales Sign up in mid-
New York District
Expansion Group」 February
「Trade Association-Small Motorized Sales Munich District
Sign up in mid-April
商 Expansion Group」
洽
會
TITAS Spring Sourcing Fair 5/15 – 5/16 Taipei Garden Hotel
拓
銷
團 US Canada sales group August(tentative) online/physical
FFF Portland
11/2 – 11/3 Portland, USA
Functional Textile Exhibitors Fair
/
----- End of picture text -----

Marketing Promotion

• Physical Exhibition - 3/15~16 Functional Textiles Exhibition in Munich, Germany (Performance Days) After years of development, Performance Days has become an international landmark professional exhibition of functional textiles. It is held twice a year during the procurement period of international brand buyers. This exhibition does not divide into national exhibition areas, and all exhibitors are in the form of standard booths, with a different image District and seminar activities, and the conference strictly selects excellent suppliers with strong development capabilities in the textile industry chain, and also serves as a stage for Taiwan's sustainable and environmentally friendly functional textile industry to shine. The two-day exhibition has 32 A total of 283 companies from different countries and regions participated in the exhibition, attracting nearly 2,700 professional buyers to visit.

==> picture [398 x 249] intentionally omitted <==

==> picture [300 x 249] intentionally omitted <==

==> picture [234 x 249] intentionally omitted <==

Marketing Promotion

• Physical Exhibition - 5/10~12 Technical Textiles Exhibition in Atlanta, USA (Techtextil North America)

The consumption of industrial textiles in the United States is the highest in the world. Techtextil North America exhibits themes including new textile materials, advanced process technology and innovative applications. It is the most direct and effective platform for the industry to develop cross-field business opportunities; This year, a total of 282 manufacturers from 21 countries participated in the exhibition, exhibiting industrial textiles including industrial, automotive, construction, protective and functional clothing, attracting a total of about 7,000 visitors.

==> picture [302 x 227] intentionally omitted <==

==> picture [301 x 227] intentionally omitted <==

==> picture [229 x 227] intentionally omitted <==

Marketing Promotion

• Sourcing Fair - 5/15~16 Taipei Garden Hotel TITAS Spring Sourcing Fair

Supported by the International Trade Bureau of the Ministry of Economic Affairs, the Taipei Textile Exhibition (TITAS) Spring Purchasing Fair organized by the Textile Development Association invited 13 international brands from 5 countries to conduct about 200 one-on-one negotiations with 50 TITAS exhibitors.

The world's top brands invited to Taiwan to purchase items for this season: composite functional fabrics that combine sports, outdoor, leisure and fashion, recycled fibers using ocean recycling, recycled fibers from garments, biomaterials, and other textiles that can promote recycling and waste reduction, And environmentally friendly textiles that have passed international certifications such as Bluesign, GOTS, GRS, and Oekotex. Taiwan's textile industry takes "innovation and sustainability" as the core of development, which is in line with the current procurement priorities of global brand owners. The autumn procurement fair will be expanded during the TITAS exhibition (10/17~19)

==> picture [55 x 54] intentionally omitted <==

WE Fashion ＜Netherlands ＞

Brands

==> picture [113 x 39] intentionally omitted <==

==> picture [210 x 40] intentionally omitted <==

Dunning Golf

＜USA＞

==> picture [100 x 60] intentionally omitted <==

Perry Ellis

＜USA＞

Cape Union Mart

＜South America＞

==> picture [86 x 86] intentionally omitted <==

The North Face ＜USA＞

HONMYUE(1474)

Weaving a better world with you. Together

==> picture [514 x 233] intentionally omitted <==

43