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S.C.P.C Annual Report 2023

Apr 24, 2024

51900_rns_2024-04-24_d759b2ef-7c5f-4b5b-be46-2953ddace241.pdf

Annual Report

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Standard Chem & Pharm Co., Ltd. Stock Symbol : 1720 2024 Investor Conference 4/25/2024

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免責聲明 Safe Harbor Notice

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本次簡報與討論包含特定預測性的說明,而其內容有關於營運結果、財務狀況,以及對未來事 件的預期。因為此等前瞻性說明是有關於未來事件,而且取決於未來發生時的環境因素,所以必 然含有風險與不確定性。

  • 本公司將不負擔公開更新或修改這些預測性的說明之義務,無論是出現新資訊、未來發生任何

  • 事件,或其他情況。實際結果可能與此等預測性說明推測的內容有重大差異。

In these presentations and discussions, there are certain forward looking statements regarding the results of operation, financial condition and current expectation about future events. As forward-looking statements relate to events and depend on circumstances in the future, they involve risk and uncertainty.

We do not undertake any obligation to publicly revise or update any forward looking statements for availability of new information, future events or otherwise. Real result probably differ substantially from those expected in these forward-looking statements.

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© 2024 SCP, Ltd

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Agenda

Introduction of Standard Group

2023 Operating Results

Future Operation StrategyCorporate Social Responsibility (CSR)

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Agenda

Introduction of Standard Group

2023 Operating ResultsFuture Operation StrategyCorporate Social Responsibility (CSR)

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SCP and Related/Affiliated Com nies
pa
Upstream Manufacture Channels
Syn-Tech (1982; 2005
SCP(1967;
Taiwan Biosim(2017)
Over-The-Counter (OTC))
Western 1995 listed stock)
medicine
Your Chance
Syngen(1999; 2016 OTC) Souriree(1997)
(Invested in 2013;
2024.03 OTC)
Syngen(1999)
Healthcare Multipower
nutrition (Invested in 2012)
Sun-you(1994)
Medical- Syngen (1999)
devices
Q
Ho Yao Biopharm (2021)
Obtained CRO certification In October 2023
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© 2024 SCP, Ltd
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International Accreditation

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1998 2000 2008 2009 2010 2017 2021
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The first TW pharmaceutical company to be ISO9001 certified

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The first TW company to pass US FDA inspection in 2000

Subsequent US FDA GMP inspections : no 483 Last Inspection : 2022/10/31

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SCP received JP PMDA’s “Certificate of Foreign Drug Manufacturer” in 2008

FDF Plant and API Plant passed PMDA GMP Audit in 2018

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2009

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SCP’s API plant passed AU TGA inspection

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2010 SCP passed TW PIC/S GMP inspection 2012 SCP is certified GDP by the T-FDA

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2012 SCP passed K-FDA inspection

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Agenda

Introduction of Standard Group

2023 Operating Results

Future Operation StrategyCorporate Social Responsibility (CSR)

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Consolidated Income Statement

Items 2023 2022 Diff. Annual
changes (%)
Q
(Unless otherwise specified, expressed in
thousands of New Taiwan Dollars)
Operating revenue 6,239,768 5,851,368 388,400 6.6%
Gross profit 2,725,378 2,487,613 237,765 9.6%
Gross profit margin 43.68% 42.51% 1.17%
Operating expenses 1,465,826 1,369,192 96,634 7.1%
Operating profit 1,259,552 1,118,421 141,131 12.6%
Non-operating income and expenses 178,315 281,512 (103,197) -36.7%
Profit before income tax 1,437,867 1,399,933 37,934 2.7%
Profit for the year 1,157,929 1,153,620 4,309 0.4%
Profit attributable to Shareholders
of the parent
834,886 815,408 19,478 2.4%
EPS(NTD) 4.67 4.56 0.11 2.4%
2024 SCP, Ltd

7

© 2024 SCP, Ltd

Comparison of Quarterly Revenue of Past 5 Years (Consolidated)

0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
Q1
Q2
Q3
Q4
2019
2020
2021
2022
2023
2024
Expressed in thousands of NTD
19 20 21 22 23
19 20 21 22 23
19 20 2122
19 20 21 22 23
23
24
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
Q1
Q2
Q3
Q4
2019
2020
2021
2022
2023
2024
Expressed in thousands of NTD
19 20 21 22 23
19 20 21 22 23
19 20 2122
19 20 21 22 23
23
24
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
Q1
Q2
Q3
Q4
2019
2020
2021
2022
2023
2024
Expressed in thousands of NTD
19 20 21 22 23
19 20 21 22 23
19 20 2122
19 20 21 22 23
23
24
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
Q1
Q2
Q3
Q4
2019
2020
2021
2022
2023
2024
Expressed in thousands of NTD
19 20 21 22 23
19 20 21 22 23
19 20 2122
19 20 21 22 23
23
24
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
Q1
Q2
Q3
Q4
2019
2020
2021
2022
2023
2024
Expressed in thousands of NTD
19 20 21 22 23
19 20 21 22 23
19 20 2122
19 20 21 22 23
23
24
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
Q1
Q2
Q3
Q4
2019
2020
2021
2022
2023
2024
Expressed in thousands of NTD
19 20 21 22 23
19 20 21 22 23
19 20 2122
19 20 21 22 23
23
24
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
Q1
Q2
Q3
Q4
2019
2020
2021
2022
2023
2024
Expressed in thousands of NTD
19 20 21 22 23
19 20 21 22 23
19 20 2122
19 20 21 22 23
23
24
Q1 Q2 Q3 Q4 Total Growth(%)
2019 846,177 1,010,837 1,048,886 1,031,229 3,937,129 +10.2%
2020 1,034,417 1,108,059 1,045,351 1,117,573 4,305,400 +9.4%
2021 1,101,113 1,149,060 1,120,840 1,233,069 4,604,082 +6.9%
2022 1,237,170 1,481,061 1,549,872 1,583,265 5,851,368 +27.1%
2023 1,493,025 1,509,004 1,645,531 1,592,208 6,239,768 +6.6%
2024(Per book) 1,613,344 1,613,344 +8.06%

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Q

© 2024 SCP, Ltd Note: SYN-TECH CHEM. & PHARM. Co., Ltd. is consolidated into the financial report since 2021.12.08

8

Consolidated Balance Sheet

Items 2023 2023 2022 2022 Diff. Annual
changes(%)
(Expressed in thousands of NTD) Amount % Amount %
Cash and cash equivalents 2,036,743 18.2% 2,259,381 20.6% (222,638) (9.9%)
Accounts receivable 1,418,423 12.7% 1,479,581 13.5% (61,158) (4.1%)
Inventories 1,614,976 14.4% 1,386,483 12.6% 228,493
16.5%
Investments 1,206,522 10.8% 1,184,109 10.8% 22,413
1.9%
Property, plant and equipment 4,021,526 35.9% 3,658,581 33.4% 362,945
9.9%
Others 890,534 8.0% 1,000,124 9.1% (109,590) (11.0%)
Total Assets 11,188,724 100.0% 10,968,259 100.0% 220,465
2.0%
Current Liabilities 2,370,880 21.2% 2,879,832 26.3% (508,952) (17.7%)
Non-current Liabilities 680,507 6.1% 652,826 6.0% 27,681
4.2%
Total liabilities 3,051,387 27.3% 3,532,658 32.2% (481,271) (13.6%)
Total shareholder’s equity 8,137,337 72.7% 7,435,601 67.8% 701,736
9.4%
Debt Ratio(Liabilities/Assets) 27.3% 32.2%
© 2024 SCP, Ltd

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© 2024 SCP, Ltd

9

Consolidated Cash Flows

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Items 2023 2022
(Expressed in thousands of NTD)
Cash at beginning ofyear 2,259,381
2,564,395
Cash flows from operatingactivities 1,336,523
1,227,834
Acquisition ofproperty,plant and equipment (625,696) (1,196,056)
Cash dividends (446,740) (446,740)
Short & long-term borrowings (450,003) 124,014
Investment and others (36,722) (14,066)
Cash at end ofyear 2,036,743
2,259,381
Free cash flow
(Cash flows from operating activities-Acquisition of property, plant and
equipment)
710,827
31,778

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© 2024 SCP, Ltd

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SCP (Code:1720) achieved a record high net profit after tax EPS and cash dividend in 2023 ,

NTD Thousand

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900,000 4.56 [4.67] 5.00
4.50
800,000
3.95
4.00
700,000
3.50
600,000
2.93
3.00
500,000
2.50
400,000 2.09 [2.15 ] 2.09 1.95 1.90 2.03 2.09 2.11
1.77 [1.81 1.88 ]
2.00
300,000 1.35 [1.47 1.61 1.73 ]
1.50
2.50 2.70
2.50
200,000
1.20 [1.50] [1.25] 1.20 [1.60] 0.50 1.00 1.20 1.00 1.50 1.50 1.60 1.50 1.50 1.80 1.00 Q
100,000 2.50 0.50
0.70
0.30 0.30
0 0.00
11
© 2024 SCP, Ltd
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SYN-TECH’s (Code:1777) net profit after tax and EPS in 2023

NTD Thousand

© 2024 SCP, Ltd
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
0.50
1.70
2.00 2.40
1.52 1.00 2.30
1.00
1.30
2.00
3.00
3.50 3.50
1.75
3.30 3.50 4.00
1.93
3.00 3.50
2.93
3.33
1.74
2.37 2.15
3.38
2.19
1.89
3.10
4.935.20 5.27
1.99
5.125.31
6.21
5.03
6.62
5.63
0
1
2
3
4
5
6
7
8
9

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Q

12

Syngen’s(Code:8279) net profit after tax and EPS in 2023

NTD Thousand

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400,000 14.00
11.85
350,000
12.00
10.14
300,000
10.00
8.77
250,000 7.86 7.95
8.00
6.43
200,000
5.8
6.00
4.69
150,000
3.76
4.00
5.00
100,000
3.50
2.04 4.00
2.00
50,000
1.00 1.00 2.50
3.00
0.50
0.00 1.00 5.00
0 0.00
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Agenda

Introduction of Standard Group2023 Operating Results

Future Operation StrategyCorporate Social Responsibility (CSR)

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Future Milestone

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From Taiwan to International From Generics to Better than Generics (BTG)

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© 2024 SCP, Ltd

Significant Business Activities in Recent Years Significant Business Activities in Recent Years Significant Business Activities in Recent Years Significant Business Activities in Recent Years Significant Business Activities in Recent Years
Taiwan China Japan
• Double-digit growth in • Antibiotic injections • Continues to be sold of
clinic and hospital.
• Southeast Asia
region’s sales growth.
• Establishment of
marketing team for
Philippines subsidiary.
• Record-high revenue
and profits in 2023.
continue to be sold
• Technology transfer
certificate:2 cases.
• Consistency
Evaluation(GQCE)
reviews in progress :3
cases.
• Under R&D:4cases.
2 medications:
bronchiolitis and oral
anti-inflammatory and
pain relief medications.
• The new contracted
CDMO: 1 case.
• Acting as importer for
gout new medicines,
nasal spray generic
medicines, with a
submission scheduled
Q
for 2023 and expected
© 2024 SCP, Ltd to get the license in
2025.
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Revenue Growth Strate -Taiwan gy

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SCP (1720) 4.67 S n-Tech 1777 5.63 y ( ) S n en 8279 10.14 y g ( )

We Can (6929) 0.37

  • Outstanding performance

  • Specializing in four key areas:

    • Western medicines, APIs, health supplements, and pharmaceutical chain stores.
  • SCP, Syn-Tech, Syngen, and Your Chance boast exceptional management teams.

  • We Can has been listed on the OTC since March 28, 2024.

© 2024 SCP, Ltd

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China Market Trends: Current

  • Continuously improve the national centralized drug procurement system.

  • Medical reform Strengthen regular supervision of the use of medical insurance funds.

  • in 2024 • Increase the per capita fiscal subsidy standard for resident medical insurance.

  • Deepen reforms in public hospitals.

  • Profit Margin Compression: The expansion and acceleration of centralized

  • Challenges in procurement, along with negotiations on medical insurance and rising raw the material prices, are squeezing profit margins. •

  • pharmaceutical Expansion of the CDMO (Contract Development and Manufacturing Organization) Market: The global market share of the CDMO market The global market share of the CDMO market

  • field

  • Expansion of the CDMO (Contract Development and Manufacturing Organization) Market: The global market share of the CDMO market The global market share of the CDMO market increased from 5% in 2017 to 13% in 2021, with an estimated increase to 20% by 2025.

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© 2024 SCP, Ltd

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China Market Trends: Current

In mid-December 2022, China ended its "zero-COVID" policy, causing a rebound
in pharmaceutical sales. In the first half of 2023, pharmaceutical sales gradually
stabilized.
(Unit: Hundred million/RMB)
16000 Hospital Drugstore Overall sales
14084
13824 13816
14000 13329
12961
12000
10984
10387 10465 10210
9717
10000
8000 7384
6000 5564
Q
4000 2942 3100 3244 3359 3606
1820
2000 Source:
www.menet.com.cn
19
China (public hospital and
0 b rick-and-mortar
© 2024 SCP, Ltd 2018 2019 2020 2021 2022 2023 H1 pharmacy)
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Revenue Growth Strate - China gy

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Strategy

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Achievements in getting licenses

  • Own brand and tech transfer simultaneously

  • 2 cases for tech transfer

  • CDMO

  • Expand the number of collaborative projects and pharmaceutical companies

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NMPA Consistency Evaluation

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  • 3 cases submitted for evaluation

Medium-term targets

  • Self-developed products submission

  • Tech transfer profit sharing revenue

Project initiation/Research in progress

Cooperation

  • Tech-transfer

  • 4 cases in progress

  • Joint ownership of License

  • Cooperative production and marketing

  • Profit-sharing Partnerships

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© 2024 SCP, Ltd

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Ja an Market Trend-Generic Dru s Market in 2023 p g

There are only 176 generic drugs applying for drug prices in 2023, which is 18% of that in 2020 and a record low. It is speculated that generic pharmaceutical companies will gradually reduce the launch of . new products to ensure stable supply Only 16 ingredients are the first generic drug . The launch of the first generic drug is the main source of revenue for pharmaceutical companies, and the decline in the number of applications is not conducive to future operations.

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(Number Changes in price application items for generic drugs of items) The first generic drug application Others (Year, Month)

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Japan Market Trend-Drug price system reform in 2024

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The PMDA is undergoing institutional reforms to address two major issues: drug shortages and supply instability.

Encouraging new drugs and similar pharmaceuticals to enter the market more readily.

  • Adjust the method of drug price weighting.

  • Increase weighted assessment criteria.

  • Expand assessment for pediatric medication.

  • Recalculate drug prices to attract similar products into the market.

Ensure stable supply of generic drugs.

  • Ensuring stable supply system for enterprises is one of the factors considered in drug price adjustments.

  • When there are 10 or more generic drug pricing applications, the price of generic drugs is .

  • set at 0.4 of the original drug price, reduced to 7 or more applications

  • Essential drugs with a market presence of 25 years and high medical necessity may not undergo price reduction adjustments. This period is shortened to 15 years.

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© 2024 SCP, Ltd

Revenue Growth Strate - Ja an gy p

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Strategy

Collaboration Model

  • Agent for brand new drugs.

  • CDMO

  • Collaborating with Japan pharmaceutical company to enter other markets.

  • Japan marketing partner

  • Self-owned license

  • Strategic alliance with API manufacturer.

  • API Vertical Integration with Syn-Tech.

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Current State

On Going

  • 2 items continue sales

  • 1 new signed CDMO collaboration

  • CDMO/CMO

  • Common items for China/ Southeast Asia/ Japan are under discussion

  • Acting as an agent for a new gout medication and nasal spray generic drug, registration is in progress.

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23

© 2024 SCP, Ltd

US Market Trend-The shortage of medicines is becoming increasingly serious

  • The US market is facing a severe shortage of approximately 132 small molecule drugs, including those for pain/anesthesia, oncology, central nervous system, and infectious diseases. Generic drugs (84%) and injectable medications (67%) are among those affected.

  • Factors contributing to the shortages include natural disasters and interruptions in the supply of raw materials.

  • Shortages of GLP-1 medications for diabetes and weight loss are on the rise, primarily due to increased demand. Since the launch of Wegovy (Semaglutide) in 2021, new prescriptions for diabetes GLP-1 have increased by 181%, and new prescriptions for obesity GLP-1 have increased by 257%. New data shows that GLP-1 therapy can prevent cardiovascular events, which may further increase demand.

  • According to the ASHP Drug Shortage Database, shortages have been reported for Semaglutide, Tirzepatide, Liraglutide, and Dulaglutide.

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© 2024 SCP, Ltd

US Market Trend-Develo ment in Future p

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The greatest contributors to growth in the next five years will be oncology, immunology, diabetes, and obesity drugs. This growth is a result of continuous influx of innovative medications.

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© 2024 SCP, Ltd

Revenue Growth Strate – U.S.A. gy

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U.S.A. Market

  • Application process for drug licenses is costly, time-consuming, and requires longterm planning

  • Target products with patents expiring in 5 years or more.

  • Increase the number of sales items and cooperating manufacturers.

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Strategy

  • Co-develop new products with pharmaceutical companies and dealers.

Current Status

  • Passed the fifth FDA inspection in 2022.

  • Strategic alliances with raw material suppliers

  • Shipped three drugs: for diabetes, spinal muscular atrophy, and lipidlowering.

  • API Vertical Integration with Syn-Tech.

  • Actively participated in exhibitions to expand business.

  • Seeking Early Market Entry for First to File.

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Q

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Future Operation Strategy

2024 2025 、 Southeast Asia 、 、 USA Japan China Japan

Future From Taiwan to International From Generics to BTG

Core techniques and Increasing oversea professional Oversea marketing Resource proportion 增加海 核心技術 skills to expend & 專業 海外市場操作 practices oversea sales 借力使力外比例 • • Increase resources for Use mature Taiwanese Establish a solid foundation. overseas business.

  • Use mature Taiwanese technology to create R&D wealth.

  • Quickly generate revenue.

  • Recruit and train international talents.

  • Learn the rules of the game. in various markets.

  • Jointly plan and operate in various markets. markets with foreign • Seek for long-term partners.

  • companies.

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Agenda

Introduction of Standard Group2023 Operating ResultsFuture Operation Strategy

Corporate Social Responsibility (CSR)

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Net Zero Emissions and Sustainable Develo ment p

Energy Management

Waste Management

  • Engage qualified environmental service providers and recycling businesses certified by the Environmental Protection Agency to carry out cleaning and treatment or resource reuse.

  • • Submit a waste cleanup plan in accordance with the law, implement it after review and approval. Select waste transporters and treatment facilities with legal registration and Class A licenses.

  • Replacing T5 fluorescent lights with LED lights, resulting in an annual electricity savings of approximately 24,960 kWh.

  • • Upgraded our ventilation system, replacing with variable frequency blowers, saving 295,650 kWh of electricity per year.

  • Inventory classification management reduces waste, saving 91,980 kWh per year.

  • Implementing maintenance, recycling hot water, adjusting system parameters, optimizing water production conditions, etc., effectively reduce carbon emissions, improve costeffectiveness, and save energy.

  • Conducting periodic maintenance of pipelines to reduce unnecessary water loss due to leaks.

  • • Regularly disclosing Company's water usage to remind employees to conserve water resources.

  • • Optimizing the production process and product design to reduce unnecessary water usage while improving production efficiency.

Water Resource Management

  • Prioritizing the use of water-saving equipment

  • © 2024 SCP, Ltd to reduce water wastage.

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Social Care and EngagementFan Dao Nan Foundation

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Introduction to the foundation

  • Established in 1987

  • Endowment Fund: NT$196 Million

  • Annual Budget: NT$12 Million

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Principal Activities

  • Cultural and educational development activities

  • Public education affairs

  • Children’s education and happiness

  • Scholarships and Talent Cultivation

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Rewards and Honors Received

  • 2011: Special Recognition Award – Ministry of Education

  • 2012: Tainan City Govt. Grant for Scholarship Program

  • 2013: National Special Selection Award for

  • After-School Program – Dept. of Education

  • 2022: Group Award on Social Education Contribution by Ministry Of Education

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Social Care and Engagement-2023 Corporate
Social Responsibility
Scholarships
Hope After-school Class Sunflower Wednesdays
 Pharmaceutical or related major: 3
universities/ 7 students
High school :8 schools, totaled 133 •Weekday afternoons •Every Wednesday afternoons
students
Middle school:56 schools, totaled •16 schools,1,050 students •4 Schools,230 students
719 students
 Elementary school: 239 schools,
totaled 2,800 students
NTD 1.16 million NTD 0.15 million
NTD 6.61 million
Other Sponsorships Meal-Assistance Charity
 organizations.Sponsor 12 public welfare  Provided 8,280 meals  SCP Children’s Drawing Competition
NTD0.39 million
 SCP National Table Tennis Q
Competition NTD1.88 million
NTD 0.68 million NTD 0.74 million NTD 2.27 million
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Social Care and Engagement-The 38[th] SCP National Table Tennis Com etition p

  • From December 1st, 2023, the tournament was held for three consecutive days at the Tainan Municipal Xinying Stadium.

  • A record high of 344 teams and 2,172 participants competed.

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- - Social Care and Engagement Senior Gym Athletic Training and Health Center

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2023

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  • Accumulated a total of 127,098 user times.

  • Held 19 health and wellness seminars and fitness courses, providing knowledge on nutritional care, muscle strengthening exercises, and senior fitness courses.

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Q & A

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