PSC — Annual Report 2017

Mar 23, 2017

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March 23, 2017

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P.1

Disclaimer

• This document may contain forward-looking statements, including but not limited to statements that address activities, events or developments that the Company expects or anticipates to occur in the future. All statements are made according to the projection of future operation and various political, economic and market factors beyond the Company’s control. Therefore, the actual results may differ materially from those contained in the forward-looking statements.

• The financial information provided in the document has not fully been reviewed by accountant.

• This document is not and cannot be construed as an offer to purchase or sell securities or other financial products or solicitation of an offer.

• All texts, images, illustrations and other material are subject to copyright held by President Securities Corp. Any reproduction, dissemination, transmission, and forwarding is strictly prohibited without the express written permission of President Securities Corp.

P.2

Agenda

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Business Synopsis Operating Achievements

P.3

Business Synopsis

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Company Profile

D ： ate of Incorporation Dec. 17, 1988 Number of Employees ： 1,520 N ： umber of Affiliated Companies 5 in Taiwan and 2 overseas N ： 37 umber of Branches C ： NTD 13.36 Billion apital Products and Services ： Brokerage, Proprietary Trading, Underwriting, Fixed Income Dealing, Financial Products, Wealth Management& Trust Offshore Securities Units

As of the end of Dec, 2016.

P.5

Service Location

Shanghai office (established in 2002 )

Headquarter (established in 1988)

North District : 25

Preparing to invest in a joint venture securities firm in China

Middle District : 6

Xiamen office

(established in 2008 )

President

Securities (HK) (established in 1994 )

Kinmen : 1

South District : 5

37 Branches

Affiliated Companies : 5 in Taiwan 2 overseas

P.6

Capital Structure

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2017 At the beginning of establishment, the
1.4
1998 capital of our company was 1.4
13.36b
and there was a rapid 10-year growth
Established:
10.18b
1988 up to over 10 billion, reaching a current
1.4b
level of 13.36 billion.
Capital
140
130
13.36
13.23
13.23
13.23 13.23
120
110
100
2012 2013 2014 2015 2016
Unit ： Billion NTD
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At the beginning of establishment, the capital of our company was 1.4 billion, and there was a rapid 10-year growth up to over 10 billion, reaching a current level of 13.36 billion.

P.7

Long-term Business development

Services: Brokerage, Underwriting, Proprietary Trading, Fixed Income Dealing, Financial Products, Shareholder Services, Wealth Management& Trust

Brokerage

• Professional research team and high service quality to gain institutional and foreign investors.

• Diversified products and e-trading platform.

Financial Products

• Providing customize products.

• Deploying risk management system for derivatives.

• Appling for OSU related foreign exchange derivative businesses.

Proprietary Trading

• Fast strategy adjustment through risk management system.

• Developing overseas products and overseas investment businesses.

Futures Proprietary

• Reinforcing capability for in-time strategical quantitative analysis and build up analysis module for overseas return-risk decision.

• Automatizing ordering module.

Fixed Income Dealing

• Building global database and foreign bond trading platform.

• Developing structural products to meet different risk appetite for different clients.

Underwriting

• Gaining private placement businesses and greater China investment bank businesses.

Wealth Management & Trust

 Building a “Domestic wealth management platform for Taiwan” via trust.

 Creating a “cross strait feature” business through OSU.

Shareholder Services

 Providing diversified services for our clients and becoming a shareholder Services division that also functioned as a wealth management advisor.

P.8

Performance on Sustainable Development

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E
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S G

Environmental

Social

Governance

3,302,458 kilograms of carbon emission

Ratio of electronic transaction has reached 49.71%

Turning off all the lights for an hour on the earth day Replacing our low-efficient equipment Waste paper reduction policies

Net income 827 million Certification of Healthy workplace ROE 3.61% Certification of Quality Information Disclosure and Breastfeeding Room Transparency Ranking Industry-Academic cooperation System A++ for 9 consecutive years Corporate Governance Donation to provide scholarships Evaluation System The for accumulated up to 28.3 First Class (TWSE) million Securities Firms Risk Blood donation for 11 years, Evaluation System The accumulated up to 2,817 bags First Class (TPEx)

P.9

Primary Shareholders and Affiliated Companies

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President Futures Corp.
Uni-Present Enterprises Corp.
Uni-President Asset
Management Corp.
Kai Nan Investment Co., Ltd.
President Capital
Management Corp.
President Chain Store Corp.
President President Insurance
Agency Co., Ltd.
Eternal Chemical Co., Ltd. PSC Venture Capital
Securities
Investment Co., Ltd.
President Securities
Corp.
Tainan Spinning Co., Ltd.
(HK) Ltd.
Shanghai office
Kao Chyuan Investment Co., Ltd.
Xiamen office
Others
President Securities
(BVI) Ltd.
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Note: President Personal Insurance Agency Co., Ltd. was merged by President Insurance Agency Co., Ltd. on July 1, 2016. After the merger, President Insurance Agency provides both property and life insurance services.

P.10

Operating Achievements

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P.11

Condensed Income Statements

Unit ： Million NTD

Item	2016	2015
Revenues	3,493	3,511
Operating Expenditures	407	534
Operating Expenses	2,701	2,911
Operating Income	385	66
Other Incomes and Costs	511	1,004
Income Before Tax	896	1,070
Income Tax Expense	69	113
Net Income	827	957
Other Comprehensive Income	-89	78
Total Comprehensive Income	738	1,035
EPS (NTD)	0.62	0.72

P.12

Condensed Balance Sheets

Unit：Million NTD Item 2016 2015 Current Assets 63,516 52,172 Non-Current Assets 8,475 8,579 Total Assets 71,991 60,751 Current Liabilities 48,853 37,964 Non-Current Liabilities 57 69 Total Liabilities 48,910 38,033 Capital Common Stock 13,357 13,231 Other Equity 9,724 9,487 Total Equity 23,081 22,718 Total Liabilities and Equity 71,991 60,751 ROA 1.51% 2.11% ROE 3.61% 4.18%	Unit：Million NTD Item 2016 2015 Current Assets 63,516 52,172 Non-Current Assets 8,475 8,579 Total Assets 71,991 60,751 Current Liabilities 48,853 37,964 Non-Current Liabilities 57 69 Total Liabilities 48,910 38,033 Capital Common Stock 13,357 13,231 Other Equity 9,724 9,487 Total Equity 23,081 22,718 Total Liabilities and Equity 71,991 60,751 ROA 1.51% 2.11% ROE 3.61% 4.18%	Unit：Million NTD Item 2016 2015 Current Assets 63,516 52,172 Non-Current Assets 8,475 8,579 Total Assets 71,991 60,751 Current Liabilities 48,853 37,964 Non-Current Liabilities 57 69 Total Liabilities 48,910 38,033 Capital Common Stock 13,357 13,231 Other Equity 9,724 9,487 Total Equity 23,081 22,718 Total Liabilities and Equity 71,991 60,751 ROA 1.51% 2.11% ROE 3.61% 4.18%
Item	2016	2015
Current Assets	63,516	52,172
Non-Current Assets	8,475	8,579
Total Assets	71,991	60,751
Current Liabilities	48,853	37,964
Non-Current Liabilities	57	69
Total Liabilities	48,910	38,033
Capital Common Stock	13,357	13,231
Other Equity	9,724	9,487
Total Equity	23,081	22,718
Total Liabilities and Equity	71,991	60,751
ROA	1.51%	2.11%
ROE	3.61%	4.18%

P.13

Business performance and market shares

Business Area	Component	2015 Market share	2016 Market share
Brokerage Business	Equity Brokerage Trading Volume	3.26%	2.89%
	Individual Branch	0.08%	0.08%
Financial Products	Warrants Issued(Volume)	5.61%	8.24%
	Structure Commodity Business Volume	2.00%	1.53%
Fixed Income	Repo Transactions	1.37%	0.95%
	Outright Purchases / Sales	0.73%	1.38%
	Interest Rate Swaps	3.48%	1.10%
Underwriting	Lead Underwriting Deals No./ Volume	6/2.13%	3/1.72%
	Co-Lead Underwriting Deals No./ Volume	39/2.45%	34/2.43%

P.14

Revenue for the latest 5 years

Unit ： Billion NTD

Note：The International Financial Reporting Standards (IFRSs) was adopted by the Company starting 2013.

P.15

Dividend policy – stable payout ratio

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Dividend
Unit ： NTD Unit ： NTD
EPS
0.81
Total
0.51
0.41 Payout ratio
(Proposed)
year year
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P.16

Capital Adequacy Ratio-solid risk management

According to Article 64 of the Regulations Governing Securities Firms, a 150% securities firm has to satisfy a minimum capital adequacy rate of ( 200% in order to be permitted to operate in derivatives products). The company’s capital adequacy rates are well above the minimum requirement.

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P.17

Credit Ratings and the Information Disclosure & Corporate Governance Evaluation System

 Well and Stable Ratings

YEAR	2012	2013	2014	2015	2016
Taiwan Ratings **Long-term Ratings **	TWA	TWA	TWA	TWA	TWA
Taiwan Ratings **Short-term Ratings **	TWA-1	TWA-1	TWA-1	TWA-1	TWA-1
Taiwan Ratings Rating Outlook	Stable	Stable	Stable	Stable	Stable

	 Were awarded the highest ranking in Corporate Governance Evaluation	 Were awarded the highest ranking in Corporate Governance Evaluation	 Were awarded the highest ranking in Corporate Governance Evaluation	 Were awarded the highest ranking in Corporate Governance Evaluation	 Were awarded the highest ranking in Corporate Governance Evaluation	 Were awarded the highest ranking in Corporate Governance Evaluation
	System for 2 consecutive years!!
	YEAR	2014		2015
	Corporate Governance	Top 5%		Top 5%
	Evaluation System	(The Highest Grade)		(The Highest Grade)
	 Were awarded the highest ranking in Information Disclosure
	and Transparency Ranking			System for 7 consecutive years!!
	YEAR			2008-2010		2011-2014
	Information Disclosure and			A+		A++
	Transparency Ranking System		(The Highest Grade)		(The Highest Grade)

P.18

Roll of Honor

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2016.09 PSC was ranked No. 14 in Corporate Social Responsibility Award held by the Commonwealth magazine.

2016.10 PSC was received the Second TAIFEX Diamond Award in Trading Volume of Security. 2016.10 PSC was received the Second TAIFEX Diamond Award in Trading Volume Growth of Security.

2016.10 PSC was received the Second TAIFEX Diamond Award in Trading Volume Growth of Futures Brokers.

2016.10 PSC was received “Sports Enterprise Certification Badge” from Sports Administration of Ministry of Education.

2016.11 PSC was ranked No.2 in the 6[th] National Wealth Mangement Competition.

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P.19

Future Perspectives of Uni-President Securities Group

All of President Deep Roots Significant Enterprises' Vast in Taiwan Inroads Resources into China President Securities Uni-President Corp. President Securities Group President Capital (Hong Kong) Ltd. Capitalize on Management Corp. Comprehensive PSC Subsidiaries Group-wide President Securities President Futures Financial Opportunities (Hong Kong)Ltd., Corp. Services and Efficiencies Uni-President Office Asset Management Corp. President Insurance Agency Co., Ltd. Office PSC Venture Capital Investment Co., Ltd. Boost Group's Securities Group Mutually-beneficial Aggressiveness Integration Strategic Alliances

President Securities (Hong Kong) Ltd. Comprehensive President Securities Financial (Hong Kong)Ltd., Services Shanghai Representative Office

President Securities Ltd., Xlamen Representative Office Mutually-beneficial Strategic Alliances

First Class Securities Firm in Pacific-Asia Region

P.20

Q&A

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