QVE — Annual Report 2020

Apr 7, 2021

Stock Code: 4438 QVE

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QUANG VIET ENTERPRISE CO., LTD. 4438.TW / 4438.TT

越南古芝廠

中國嘉興廠

越南前江廠

台北總部

KHM-TAIPEI 中國宏昌廠

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中東約旦廠
ATLANTA-JORDAN
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羅馬尼亞廠
BSP-ROMANIA
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羅馬尼亞 2 廠
BSP-ROMANIA, 2017
BSP-ROMANIA
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中東約旦 2 廠

越南隆安廠

沭陽羽絨廠

TOD-CHINA, 2014

Welcome To QVE

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Xinjiang Cotton Controversy

• This page is a statement of the impact of the Xinjiang Cotton Controversy on the business operations of QVE. It does not represent any political position.

• Cotton is classified as staple fiber; whilst fiberfill products of QVE are synthetic fiber, which is classified as continuous fiber. Goose down or duck down filled in down jackets are natural fur. Therefore, the XinJiang Cotton boycott does not affect QVE.

• Regarding the speculations of some analysists that down and fiberfill jackets of QVE will benefit from the controversy, QVE hereby states that the company does not make any assumptions regarding customers’ opinion.

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 : 1,600 Production lines: 16 Lines

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Group Introduction and Position-KHM

King Hamm Industrial Co., Ltd.

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新莊金漢總部( KHM )

Location: Xinzhuang, Taiwan Year Established: 1991 Number of workers : 80

越南金鴻廠( VN-1 ) Location: Hồ Chí Minh, Vietnam Year Established: 2003 Number of workers : 1,200 Production lines: 24 Lines

越南金漢廠( 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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Patagonia

Patagonia

Mont-Bell

Patagonia

Patagonia

Mont-Bell

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Ralph Lauren

Ralph Lauren

Helly Hansen

Arc’teryx

Mammut

Arc’teryx

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Milestone

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1997

2005 2006 2007 2008

2009 2011 2013

NIKE PUMA REEBOK ADIDAS THE NORTH PATAGONIA MONTBELL Merrell FACE

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2014 2016

2018

2020

2021

ARC’TERYX HURLEY Helly Hansen Mammut Marmot Ralph Lauren New Balance Under Armour Aritzia

Black Spyder Diamond

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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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14

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 0.90
0.69 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 10.47 10.21 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

Quarterly Profit and Loss Statement	Quarterly Profit and Loss Statement	Quarterly Profit and Loss Statement	Quarterly Profit and Loss Statement	Quarterly Profit and Loss Statement	Quarterly Profit and Loss Statement	Quarterly Profit and Loss Statement	Quarterly Profit and Loss Statement
Account/Year	1Q20	2Q20	3Q20	4Q20	2020	2019	YoY
Operating revenue	1,846	3,174	5,422	1,747	12,189	16,259	-25.03%
Operating costs	1,721	2,629	4,860	1,693	10,903	13,714	-20.50%
Gross profit	125	545	562	54	1,286	2,545	-49.47%
Operating expenses	269	234	270	232	1,005	1,163	-13.59%
Operating income	(144)	311	292	(178)	280	1,382	-79.74%
Non-operating income and expenses	57	13	67	269	406	3	13433.33%
Income before tax	(87)	324	359	91	686	1,385	-50.47%
Income tax expense	(25)	66	67	21	129	288	-55.21%
Net income	(62)	258	292	70	558	1,098	-49.18%
Net income attributable to shareholders of the parent	(54)	242	280	69	537	1,006	-46.62%
EPS (dollars)	(0.53)	2.35	2.71	0.67	5.20	9.73	-46.56%

19

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	+0		92
QVL (Vietnam)	45	+2	+5		52
BSP (Romania)	12	+2	+2		16
Atlanta(Jordan)	12	+8	+8		28
KHM (Vietnam-1)	24	+0	+0		24
KHM (Vietnam-1)	32	+0	+0		32
Total	487	+12	+20		519
		( +2.46% )		( +4.01% )

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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

• Global currency market

• Global apparel market

• • Xinjiang Cotton Controversy

• Impact of Covid-19 on customer brands

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Market Prospect Challenges and
customer brands
and Opportunities Uncertainty
•
Strategical alliance
Target opportunities to expand
Strategies
Customers
business and
diversification
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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

• Concentrate on North America and China

market, while developing Europe, Japan and other regions

21

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Business Development

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• Exclusively developed new synthetic jackets with Patagonia for camping and home quarantine use

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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 fourth generation down jacket

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

22

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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Smart Clothing Research and Development

Cooperated with Taiwan Textile Research Institute to develop Smart Clothing and won the 2020 TOG Award

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Smart Clothing Research and Development

Cooperated with Taiwan Textile Research Institute to develop Smart Clothing and won the 2020 TOG Award

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