MAYER PIPE — Investor Presentation 2020

Sep 2, 2020

Mayer Steel Pipe Corporation?　Investor Conference

Notes:

Outline：

Business Outlook
Operational Overview
Financial Overview

External competitive environment, regulatory environment and overall economic environment:

A. Epidemic spreading impact recovery of the steel industry.
B. Taiwan is excluded from economic integration in the international communities.
C. Steel production and sales are dominated by China.

D. Steel overcapacity around the world.

Production and sales volume in the last two years： ? Unit : Ton / NTD Thousand

Year Department	2018		2019		2020/01/01 To 2020/06/30
	Output	Output value	Output	Output value	Output	Output value
Steel department	110,413	3,864,249	93,762	3,223,006	46,050	1,454,530
Total	110,413	3,864,249	93,762	3,223,006	46,050	1,454,530

Department	2018				2019				2020/01/01 To 2020/06/30
	Domestic Sales		Export Sales		Domestic Sales		Export Sales		Domestic Sales		Export Sales
	Sales volume	Sales value	Sales volume	Sales value	Sales volume	Sales value	Sales volume	Sales value	Sales volume	Sales value	Sales volume	Sales value
Steel	106,799	4,182,092	17,511	544,663	96,227	3,721,303	13,030	399,860	57,722	2,306,334	4,471	124,534
Investment	0	8,921	0	0	0	7,494	0	0	0	536	0	0
Real estate investment	0	0	0	0	0	333,640	0	0	0	0	0	0
Hotel service	0	0	0	0	0	0	0	0	0	16,508	0	0
Other	0	0	0	0	0	21,074	0	0	0	0	0	0
Total	106,799	4,191,013	17,511	544,663	96,227	4,083,511	13,030	399,860	57,722	2,323,378	4,471	124,534

Sales region of major commodities：
| Region | 2018 | | 2019 | | 2020/01/01 To 2020/6/30 | |
| --- | --- | --- | --- | --- | --- | --- |
| | Net sales (NTD Thousand) | Proportion(%) | Net sales (NTD Thousand) | Proportion(%) | Net sales (NTD Thousand) | Proportion(%) |
| Taiwan | 4,191,013 | 88.5 | 4,080,911 | 91.02 | 2,327,288 | 95.06 |
| Vietnam | 317,663 | 6.71 | 190,349 | 4.25 | 73,373 | 3.00 |
| Thailand | 133,276 | 2.81 | 130,964 | 2.92 | 32,929 | 1.35 |
| Other | 93,724 | 1.98 | 81,147 | 1.81 | 14,322 | 0.59 |
| Total | 4,735,676 | 100 | 4,483,371 | 100 | 2,447,912 | 100 |

Percentage of sales revenue：
| Department | 2018 | 2019 | 2020/01/01 To 2020/6/30 |
| --- | --- | --- | --- |
| | Sales value(%) | Sales value(%) | Sales value(%) |
| Steel department | 99.81 | 91.92 | 99.31 |
| Investment department | 0.19 | 0.17 | 0.02 |
| Real estate investment department | 0.00 | 7.44 | 0.00 |
| Hotel service department | 0.00 | 0.00 | 0.67 |
| Other department | 0.00 | 0.47 | 0.00 |
| Total | 100.00 | 100.00 | 100.00 |

Notes:

Future market development：

Carbon steel
A. Raw material price fluctuations
B. Public construction and civil construction

C. Foreign demand for machine structural tubes

Stainless steel
A. Raw material price fluctuation
B. Stainless steel sheet

C. Stainless steel tube

Overseas business development：

	2018		2019		2020/01/01 To 2020/06/30
	Sales volume?(Ton)	Sales value?(Thousand)	Sales volume?(Ton)	Sales value?(Thousand)	Sales volume?(Ton)	Sales value?(Thousand)
Vietnam Mayer	12,304	379,338	8,603	259,967	3,035	82,805
Grand Tech	7,340	426,804	7,324	442,383	2,912	160,791
Diamond Steel Tube	11,654	565,989	10,936	539,126	4,370	204,362

Notes:

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Notes:

Condensed Balance Sheet (Consolidated)

Year?Item	Financial Information for the Past Two Years (Unit: NTD thousand)		2020/6/30
	2018	2019
Current Assets	3,351,074	3,118,544	3,370,519
Property, Plant and Equipment	914,795	1,074,738	1,055,592
Intangible Assets	2,210	2,210	3,470
Other Assets	1,457,784	2,107,362	2,029,802
Total Assets	5,725,863	6,302,854	6,459,383
Current Liabilities	2,415,454	2,154,279	2,609,847
Non-Current Liabilities	296,509	1,017,469	1,016,580
Total Liabilities	2,711,963	3,171,748	3,626,427
Capital Stock	2,245,261	2,225,261	2,225,261
Additional Paid-In Capital	283,711	281,622	281,622
Retained Earnings	727,657	833,959	548,685
Other Equity	(242,551)	(208,224)	(220,628)
Treasury Stock	-	-	-
Equity attributable to Owners of the Company	3,014,078	3,132,618	2,834,940
Non-Controlling Interests	(178)	(1,512)	(1,984)
Total Equity	3,013,900	3,131,106	2,832,956

Notes:

Statement of Comprehensive Income (Consolidated)

Year??Item	Financial Information for the Past Two Years (Unit: NTD thousand)		2020/1/1 To 2020/6/30
	2018	2019
Operating Revenue	4,735,676	4,483,371	2,447,912
Gross Profit (Loss) from Operations	424,303	481,809	172,908
Net Operating Income (Loss)	186,175	253,882	80,064
Non-Operating Income and Expenses	170,285	241,288	72,392
Profit (Loss) from Continuing Operations before Tax	356,460	495,170	152,456
Profit (Loss) from Continuing Operations	311,786	435,331	125,899
Other Comprehensive Income, Net	(83,167)	27,752	(12,375)
Total Comprehensive Income	228,619	463,083	113,524
Profit (Loss), attributable to Owners of Parent	300,590	436,706	126,400
Profit(Loss), attributable to Non-Controlling Interests	11,196	(1,375)	(501)
Total Comprehensive Income, attributable to Owners of parent	215,606	464,417	113,996
Total Comprehensive Income, attributable to Non-Controlling Interests	13,013	(1,334)	(472)
Basic Earnings Per Share	1.34	1.96	0.57

Financial Analysis (Consolidated)

Year   Item		Financial Analysis for the Past Two Years		2020/1/1 To 2020/6/30
		2018	2019
Capital Structure Analysis(%)	Debt Ratio	47.36	50.32	56.14
	Long-Term Funds to Property, Plant and Equipment	361.87	386.01	364.68
Liquidity Analysis (%)	Current Ratio	138.73	144.76	129.15
	Quick Ratio	70.38	77.22	65.21
	Times Interest Earned (times)	12.02	14.67	7.59
Operating Performance Analysis (%)	Accounts Receivable Turnover (times)	8.61	9.71	10.46
	Days to collect Accounts Receivable	42.39	37.59	34.89
	Inventory Turnover (times)	2.84	2.78	3.15
	Accounts Payable Turnover (times)	8.64	9.04	12.37
	Average Days to Sell Inventory	128.52	131.29	115.87
	Property, Plant and Equipment Turnover (times)	5.10	4.51	4.60
	Total Asset Turnover (times)	0.81	0.75	0.77
Return on Investment Analysis (%)	Return on Total Assets	5.76	7.72	1.95
	Rate of Return on Stock Equity	9.81	14.17	4.27
	Income before Tax to Capital	15.88	22.25	13.70
	Net Income to Sales	6.58	9.71	5.14
	Earnings Per Share (NTD)	1.34	1.96	0.57

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