Sinkang — Investor Presentation 2019

Jul 5, 2019

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Stock Code: 2032

SINKANG INDUSTRIES CO., LTD

Investor Conference

2019.07.08

1

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Disclaimer

The forward-looking statements contained in this presentation are subject to risks and uncertainties and actual results may differ materially from those expressed or implied in these forward-looking statements. Sinkang Industries Co., Ltd. makes no representation or warranty as to the accuracy or completeness of these forward-looking statements and nor does Sinkang Industries Co. Ltd. undertake any obligation to update any forward-looking statements, whether as a result of new information or future events.

2

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Content

1. Company Profile

2. Industry Overview

1. Financial Results

2. Q&A

3

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Company Profile

4

Company Profile

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Date of establishment 1971.07.10 Date of listing 2000.09.11 Capital NTD1.3 Billion (130,521,545 shares) (Number of shares received) Number of employees About 200 Chairman Hsi Chi Tsai General manager Ching Long Hung Main business Processing and sales of stainless steel materials NO.8 DAH AN ROAD,XINZHUANG DISTRICT, NEW TAIPEI CITY, Location TAIWAN, R.O.C.

5

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Operation Locations Xinzhuang Plant

==> picture [850 x 425] intentionally omitted <==

6

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Operation Locations Tayuan Plant

==> picture [841 x 411] intentionally omitted <==

7

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Operating Offices

Taipei Operations Headquarters (Xinzhuang Factory ) Business line : (02)22020172

Taichung Office Business line :(04)23357606

==> picture [101 x 52] intentionally omitted <==

Tainan Office Business line:(06)2542452-3

Kaohsiung Office Business line :(07)3724707-8

8

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Industry Overview

9

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

==> picture [705 x 206] intentionally omitted <==

----- Start of picture text -----

TE、YUSCO、
Hot Rolled
Line of Business TM、WALSIN...
Cold Rolled
SINKANG INDUSTRIES CO., LTD SINKANG INDUSTRIES CO., LTD
Next Process Cutting Process
Surface treatment Shearing、Slitting、re-coiling
----- End of picture text -----

==> picture [211 x 31] intentionally omitted <==

----- Start of picture text -----

Medical industry
----- End of picture text -----

==> picture [178 x 31] intentionally omitted <==

----- Start of picture text -----

Food industry
----- End of picture text -----

==> picture [201 x 31] intentionally omitted <==

----- Start of picture text -----

Chemical industry
----- End of picture text -----

==> picture [159 x 30] intentionally omitted <==

----- Start of picture text -----

Machine industry
----- End of picture text -----

==> picture [280 x 30] intentionally omitted <==

----- Start of picture text -----

Electronic devices industry
----- End of picture text -----

==> picture [172 x 31] intentionally omitted <==

----- Start of picture text -----

Office equipment
----- End of picture text -----

==> picture [240 x 31] intentionally omitted <==

----- Start of picture text -----

Transportation equipment
----- End of picture text -----

==> picture [115 x 52] intentionally omitted <==

----- Start of picture text -----

Electrical
appliance
----- End of picture text -----

==> picture [131 x 53] intentionally omitted <==

----- Start of picture text -----

Kitchenware
industry
----- End of picture text -----

==> picture [141 x 30] intentionally omitted <==

----- Start of picture text -----

Mobile device
----- End of picture text -----

==> picture [165 x 75] intentionally omitted <==

----- Start of picture text -----

Building
materials &
Decoration
----- End of picture text -----

10

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Machinery Equipment

Name of Name of EquipmentEquipment	Thickness (mm)	Width (mm)	Length (mm)	Quantity
Leveling & Shearing Line machines	0.3~3.0	50~1560	100~6100	6
Slitting Line Machines	0.3~6.0	10~1570		4
Re-coiling Line Machine	0.3~0.8	550~1250		1
Coil Polishing Line Machine	0.4~3.0	500~1570		2
Sheet Polishing Line Machine	0.6~3.0	700~1570	1220~5000	2
Shearing Machines	0.3~6.0	Max.4050		7
PVC Coating Machine	0.3~3.0	1570以下	4000以下	2

11

Tayuan Plant

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

==> picture [521 x 425] intentionally omitted <==

Next Process

• 5'Oil Method Coil Polishing Line Machine

• T: 0.4mm - 3mm

• W: 500mm - 1570mm

No.4 Finish

Hair Line Finish

12

Tayuan Plant

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

==> picture [556 x 417] intentionally omitted <==

Cutting Process

5'Slitting Line Machine T: 0.3mm - 3mm W:400mm-1570mm

13

Tayuan Plant

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

==> picture [555 x 407] intentionally omitted <==

Cutting Process

• 5'Leveling and Shearing Line Machine

• T: 0.3mm - 3mm

• W: 500mm - 1600mm L: 400mm - 6100mm

14

Xinzhuang Plant

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

==> picture [574 x 400] intentionally omitted <==

Cutting Process

==> picture [259 x 126] intentionally omitted <==

----- Start of picture text -----

5'Leveling and
Shearing Line Machine
T: 0.3mm - 3mm
W: 400mm - 1590mm
L: 400mm - 6250mm
----- End of picture text -----

==> picture [288 x 193] intentionally omitted <==

15

Xinzhuang Plant

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

==> picture [554 x 414] intentionally omitted <==

==> picture [293 x 258] intentionally omitted <==

----- Start of picture text -----

4'Leveling and
Shearing Line Machine
T: 0.3mm - 2mm
W: 400mm - 1300mm
L: 400mm - 4250mm
----- End of picture text -----

==> picture [289 x 162] intentionally omitted <==

----- Start of picture text -----

It is expected to
be put into
production in
August of 2019.
----- End of picture text -----

Xinzhuang Plant

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

==> picture [567 x 426] intentionally omitted <==

Cutting Process

==> picture [252 x 115] intentionally omitted <==

----- Start of picture text -----

10‘Hydrulic Shear
Machine
T: 0.3mm -3mm
L: < 3050mm
W:85mm-1250mm
----- End of picture text -----

17

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Major Product

==> picture [210 x 224] intentionally omitted <==

----- Start of picture text -----

6%
8%
2%
----- End of picture text -----

==> picture [46 x 24] intentionally omitted <==

----- Start of picture text -----

84%
----- End of picture text -----

Steel material

304 316 400 Other

18

==> picture [832 x 515] intentionally omitted <==

----- Start of picture text -----

The Rate of Customer Business
transportation Other
1% 2%
Elactronic Devices Midstream Process
6%
Fire Building Materials
Machine Manufacture
6%
Process Manufacture
Midstream Process
26%
Kinchenware
Kinchenware
8%
Machine Manufacture
Elactronic Devices
transportation
Other
Process Manufacture Fire Building Materials
29% 23%
----- End of picture text -----

19

Fireproof Building Materials

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Elevator door

==> picture [277 x 273] intentionally omitted <==

==> picture [139 x 21] intentionally omitted <==

----- Start of picture text -----

door & lock
----- End of picture text -----

==> picture [268 x 355] intentionally omitted <==

==> picture [149 x 111] intentionally omitted <==

==> picture [118 x 146] intentionally omitted <==

==> picture [92 x 14] intentionally omitted <==

----- Start of picture text -----

Wave board
----- End of picture text -----

20

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Process Manufacture

BBQ grill

Washing machine inner tank

==> picture [370 x 383] intentionally omitted <==

==> picture [322 x 273] intentionally omitted <==

==> picture [264 x 335] intentionally omitted <==

21

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Kitchenware

sink

refrigerator

kitchen counter

22

Machine Manufacture

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

ultrasonic cleaner

==> picture [315 x 357] intentionally omitted <==

refrigeratory

freezer

==> picture [219 x 350] intentionally omitted <==

23

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Electronic Devices

dry cabinet

electrical box

==> picture [376 x 387] intentionally omitted <==

24

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Other

waste bin

traffic mirror

==> picture [295 x 301] intentionally omitted <==

Food storage bucket

==> picture [206 x 319] intentionally omitted <==

25

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Human Resources

Average age of employees :42.29 The rate of employees age:

==> picture [426 x 258] intentionally omitted <==

20↓ 1.64% 21-39 45.36% 40-59 48.09% 60↑ 4.91%

26

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Financial Results

27

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Statement of Comprehensive Income

In NT Thousand Dollars

	Jan.-Mar., 2019	Jan.-Mar., 2019	Jan.-Mar.,	2018
	Amount	%	Amount)	%)
Net Revenues	687,049	100.00	811,531)	100.00
Gross Profit	47,408	6.90	43,517)	5.36
Operating Income (Loss)	22,604	3.29	17,737	2.19
Profit (Loss) Before Income Tax	23,320	3.39	15,652	1.93
Profit (Loss) for the Period	18,541	2.70	15,467	1.91
Total Comprehensive Income (Loss) for the Period	18,580	2.70	15,467	1.91

28

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Operation Performance Analysis

	Jan.-Mar.,2019	Jan.-Mar.,2018
Average collection turnover (times)	4.67	5.67
Average collection days(days)	78.10	64.41
Average inventory turnover (times)	7.64	7.81
Average inventory days(days)	47.78	46.76
Average payable turnover (times)	35.73	36.98
Property, plant and equipment turnover (times)	4.76	5.46
Total assets turnover (times)	1.39	1.63

29

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Profitability Analysis

	Jan.-Mar., 2019	Jan.-Mar., 2018
Return on total assets (%)	3.76	3.12
Return on equity (%)	4.50	3.77
Pre-tax profit to paid-in capital ratio (%)	7.15	5.03
Net profit ratio (%)	2.70	1.91
Earning per share (NT$)	0.14	0.12

30

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Net Revenues Trend

==> picture [785 x 359] intentionally omitted <==

----- Start of picture text -----

In NT Thousand Dollars
3,500,000
3,056,085 3,067,403
3,000,000 2,836,616
2,789,687
2,500,000
2,000,000
1,500,000 As of
Mar 31th
1,000,000
687,049
500,000
-
2015 2016 2017 2018 2019
----- End of picture text -----

31

From ： MOPS

Employee Welfare

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

==> picture [381 x 251] intentionally omitted <==

Domestic Travel(Xiluo Bridge)

==> picture [345 x 223] intentionally omitted <==

Dodgeball Game

==> picture [303 x 227] intentionally omitted <==

Lunch Supply

32

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Green energy

Under the promotion of governmental low carbon and renewable energy policy, we developed solar power system. We have been in contract with Star Energy Corporation since May, 2018. And we leased the roof of Tayuan factory out to build the solar power system. The solar panel work started in July, 2018. After grid-connected generation of electricity, the electric power was sold to Taiwan Power Company. We have officially started to generate electricity since April, 2019. Besides, the installed capacity is 806KW (kilowatt).

33

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

Green energy

Solar panels

==> picture [322 x 197] intentionally omitted <==

Taipower electrical distribution box

==> picture [321 x 198] intentionally omitted <==

==> picture [114 x 55] intentionally omitted <==

----- Start of picture text -----

(D.C.)
----- End of picture text -----

==> picture [114 x 59] intentionally omitted <==

----- Start of picture text -----

Output
----- End of picture text -----

Inverter(D.C.→A.C.)

==> picture [351 x 195] intentionally omitted <==

==> picture [350 x 228] intentionally omitted <==

----- Start of picture text -----

High-voltage plate ( A.C. )
34
----- End of picture text -----

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

==> picture [699 x 374] intentionally omitted <==

35

==> picture [40 x 24] intentionally omitted <==

==> picture [45 x 28] intentionally omitted <==

==> picture [428 x 322] intentionally omitted <==

36