QVE — Annual Report 2020

Aug 25, 2021

Stock Code: 4438 QVE

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QUANG VIET ENTERPRISE CO., LTD.

4438.TW / 4438.TT

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HQ-TAIPEI
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KHM-TAIPEI ATLANTA-JORDAN
QVA-Jordan, 2017
P&W-CHINA ATLANTA II-JORDAN
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BSP-ROMANIA
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QVL-VIETNAM
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BSP-ROMANIA, 2017
BSP II-ROMANIA
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TOD-CHINA, 2014

Welcome To QVE

1

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Highlights

• COVID-19 in Vietnam: Latest Updates

• Implementation of Three Principles Plan in Vietnam

• Impact of COVID-19 on Apparel Supply Chain and Development

• Factory Expansion in China to Meet Increasing Local Market

• Demand

• Third Plant in Jordan to Satisfy Customers’ Demand for Duty-

• Free Production Base

• Expand Production in Vietnam for Sales Growth in 2022 of

• Outdoor Brands

2

Company Overview

• ⚫ Date of establishment: October 1995

• ⚫ Capital: NT $1.034 billion (US $33 M)

• ⚫ Chairman: Mr. Wen Hsien Yang

• CEO: Mr. Charles Wu

• R&D Vice President: Mr. Spensen Tsai

• ⚫ Number of employees worldwide

Taiwan: 210 employees

Overseas: 20,329 employees

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QVE Group Profile

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QVN (Cu Chi, Vietnam)
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Year Established: 1996 Land Area: 60,000 M² Number of workers : 6,000 Production lines: 115 Lines

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QVT (Tien Giang, Vietnam)
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Year Established : 2010 Land Area : 81,000 M² Number of workers : 6,000 Production line : 155 Lines

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QVL (Long An)
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Year Established : 2017 Land Area : 45,000 M² Number of workers : 1,600 Production Line : 45 Lines

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QVC (Jia Xing, China)
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Year Established : 2003 Land Area : 55,000 M² Number of workers : 2,200 Production line : 92 Lines

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TOD (Shu Yang, China)
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Year Established : 2014 Land Area : 20,118 M² Number of workers : 99

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Group Introduction and Position-BSP

Biancospino S.R.L

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Location: Breaza, Romania Year Established: 1998 Number of workers : 530 Production lines: 16 Lines

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Group Introduction and Position-Atlanta

Atlanta Garment Manufacturing Company

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Location: Amman, Jordan Year Established: 2003 Number of workers : 2,100 Production lines: 20 Lines

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Group Introduction and Position-KHM

King Hamm Industrial Co., Ltd.

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King Hamm HQ (KHM )

Location: Xinzhuang, Taiwan Year Established: 1991 Number of workers : 100

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King Hung (VN-1)

Location: Hồ Chí Minh, Vietnam Year Established: 2003 Number of workers : 1,200 Production lines: 24 Lines

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King Hamm Vietnam (VN-2)

Location: Tiền Giang, Vietnam Year Established: 2013 Number of workers : 1,300 Production lines: 28 Lines

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Group Introduction and Position-P&W

Principle & Will Biotech (PingHu) Co., Ltd.

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Location: Jia Xing, China Year Established: 2003 Number of workers : 1,100 Production lines: 10 workshops

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Major Products

• ⚫ Down Jackets

• ⚫ Primaloft Jackets, Thermoball Jackets, Padding Jackets

• ⚫ Softshell Jackets, Seam Sealed Jackets, Bonding Jackets, Spring Light Jackets, Pants, Shorts

• ⚫ Goose Down, Duck Down

• ⚫ Knitted garments

• ⚫ Surgical Gown, Drape, Protective Equipment, Face Mask and Surgical Pack

Unit ： In Thousands of NTD

Year Products Project	2020	2020	2019	2019
	Net Operating Revenue	%	Net Operating Revenue	%
Down Jackets	5,912,055	48.50%	6,522,710	40.12%
Fiberfill Jackets	2,794,217	22.93%	4,564,607	28.07%
Light Jackets and Coats	1,228,943	10.08%	2,119,493	13.04%
Others (Knitted Garments and Down Material)	2,253,642	18.49%	3,052,507	18.77%
Total	12,188,857	100.00%	16,259,317	100.00%

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Product Category-Sports Wear Brand

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Adidas
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Adidas Adidas

Adidas

Adidas

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Puma
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Puma

NIKE NIKE NIKE Reebok

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Reebok

Converse

New balance

New balance

Under Armour

Under Armour 10

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Product Category-Outerwear Brand

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Merrell

The North Face

The North Face

The North Face

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Mont-Bell

Patagonia Patagonia

Patagonia

Arc’teryx

Mont-Bell

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Spyder

Ralph Lauren

Helly Hansen

Black Diamond

Mammut

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Lacoste
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Milestone

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1997

2005 2006 2007 2008 2009

2011 2013 2014

NIKE PUMA REEBOK ADIDAS THE NORTH PATAGONIA MONTBELL Merrell ARC’TERYX FACE Ralph Lauren

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2016
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2018 2020

2021 2022

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HURLEY
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Helly Hansen Mammut Marmot New Balance Under Armour Aritzia

Black Spyder Diamond

Lacoste

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2020 Major Customers

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SPORTS WEAR 50% ， OUTDOOR WEAR 50%

• (Note: TNF for The North Face brand)

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Major Customers

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Operation Overview

QVE Consolidated Revenue

QVE Consolidated Revenue
3.74 6.66 6.38 6.60 8.49 9.37 9.04 10.20 13.28 16.26 12.19 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 NTD (Billion) Year
	Year	Consolidated revenue (Thousands)	Remark
	2010	3,741,311	Provided by company
	2011	6,657,044
	2012	6,378,609
	2013	6,597,920	Per Audit
	2014	8,488,545	Per Audit
	2015	9,368,010	Per Audit
	2016	9,038,818	Per Audit
	2017	10,203,655	Per Audit
	2018	13,280,440	Per Audit
	2019	16,259,317	Per Audit
	2020	12,188,857	Per Audit

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Operation Overview

Unit: In Thousands of NTD

Year	Income before income tax	Capital	Remark
2010	201,007	290,799	Provided by company
2011	603,957	363,498
2012	689,964	454,373
2013	860,710	645,247	Per Audit
2014	1,128,222	802,034	Per Audit
2015	1,221,518	922,339	Per Audit
2016	888,707	1037,639	Per Audit
2017	682,996	1,037,639	Per Audit
2018	1,115,716	1,033,753	Per Audit
2019	1,385,291	1,033,753	Per Audit
2020	686,398	1,033,753	Per Audit
Year	Net income	Capital	Remark
2010	165,915	290,799	Provided by company
2011	543,643	363,498
2012	613,693	454,373
2013	643,356	645,247	Per Audit
2014	902,865	802,034	Per Audit
2015	940,594	922,339	Per Audit
2016	698,307	1,037,639	Per Audit
2017	546,996	1,037,639	Per Audit
2018	857,041	1,033,753	Per Audit
2019	1,097,607	1,033,753	Per Audit
2020	557,830	1,033,753	Per Audit 16

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QVE Consolidated Profit
NTD (Billion)
1.60
1.39
1.40
1.22
1.20 1.13 1.12
1.00
0.89
0.86 1.10
0.94
0.80 0.69 0.90 0.68 0.69
0.86
0.60
0.60 0.70
0.61 [0.64 ]
0.54 0.55 0.56
0.40
0.20
0.20
0.17
0.00
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Year
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Operation Overview

NTD (dollar)

QVE EPS

0.00 2.00 4.00 6.00 8.00 10.00 12.00	2.21 7.27 8.20 8.56 10.4710.21 7.41 5.07 7.43 9.73 5.20 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
		Year	EPS(dollar)	Capital (Thousands)
		2010	2.21	290,799
		2011	7.27	363,498
		2012	8.20	454,373
		2013	8.56	645,247
		2014	10.47	802,034
		2015	10.21	922,339
		2016	7.41	1,037,639
		2017	5.07	1,037,639
		2018	7.43	1,033,753
		2019	9.73	1,033,753
		2020	5.20	1,033,753

Year

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Operation Overview

Account/Year	2020		2019
	Amount (Thousands)	%	Amount (Thousands)	%
Operating revenue	12,188,857	100.00%	16,259,317	100.00%
Operating costs	10,903,247	89.45%	13,714,136	84.35%
Gross profit	1,285,610	10.55%	2,545,181	15.65%
Operating expenses	1,005,212	8.25%	1,162,827	7.15%
Operating income	280,398	2.30%	1,382,354	8.50%
Non-operating income and expenses	406,000	3.33%	2,937	0.02%
Income before tax	686,398	5.63%	1,385,291	8.52%
Income tax expense	128,568	1.05%	287,684	1.77%
Net income	557,830	4.58%	1,097,607	6.75%
Net income attributable to shareholders of theparent	537,296	4.41%	1,006,033	6.19%
EPS (dollars)	5.20		9.73

Calculation of EPS is based on weighted average number of shares: 103,375 thousand shares Source: Audited consolidated financial statements

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Operation Overview

In Thousands of NTD, except EPS

Source: Audited consolidated financial statements Calculation of EPS is based on weighted average number of shares: 103,375 thousand shares

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Operation Overview

In Thousands of NTD, except EPS

Source: Audited consolidated financial statements Calculation of EPS is based on weighted average number of shares: 103,375 thousand shares

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Operation Overview

Future Business Plan

Factory	2020 Current Production Lines	Increase in 2021	Increase in 2022	Increase in 2022	2022 Total
QVN (Vietnam)	115	+0	+0		115
QVT (Vietnam)	155	+0	+5		160
QVC (China)	92	+0	+8		100
QVL (Vietnam)	45	+2	+10		57
BSP (Romania)	12	+2	+2		16
Atlanta(Jordan)	12	+8	+10		30
KHM (Vietnam-1)	24	+0	+0		24
KHM (Vietnam-1)	32	+0	+0		32
Total	487	+12	+35		534
		( +2.46% )		( +7.01% )

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QVT
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QVL
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Opportunities and Challenges

• Global economic recovery, stability and growth in Taiwan economy and the pandemic slowing down promotes diversification

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Challenges and
Market Prospect
and Opportunities Uncertainty
Target
Strategies
Customers
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• Business opportunities in medical and protective equipment industry

• Strengthen product developments for different target customers

• Each customer can develop exclusive face mask, protective equipment or protective blankets

• Global currency market

• Global apparel market

• Xinjiang Cotton Controversy

• Impact of Covid-19 on customer brands

• Strategical alliance opportunities to expand business and diversification

• Concentrate on North America and China market, while developing Europe, Japan and other regions

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Business Development

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• Environment friendly down products of Patagonia

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• TNF’s high-end and fashionable series Black Label

• Under Armour expanding its functional jacket market

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• Developed with Adidas its fifth generation down jacket

• New PPE products, such as surgical gowns, surgical drapes and special face masks

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Corporate Social Responsibility

Solar Energy Output of QVT Factory is the largest in Vietnam

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Corporate Social Responsibility

Vietnam’s Largest Solar Energy Generator in Garment Factories 6M / W Total electricity consumption 67%

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Duty Free Production Base

1. Increase Automated Manufacturing Ratio

2. Duty Free Advantages:

3. A. EVFTA applies to Vietnam’s exports to Europe

4. B. Exemption on tariffs for Jordan’s exports to the US and Europe

5. C. Europe withdrew part of the tariff preferences on Cambodia resulting in orders transferred to Vietnam and Jordan

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ISPO Urban Outdoor Award

Co-developed with Adidas Outdoor Performance Apparel that is both environment sustainable and functional, and won the ISPO Award

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ISPO Outdoor Down Layer Award

Co-developed with Mammut Laser Fused jacket and won the ISPO Award

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