SPC — Annual Report 2020

Dec 23, 2020

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Success Prime Corporation Stock Code：2496

2020.12.23

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CONTENT

01 Overview of Success Prime Corporation and Subsidiaries 02 Operating Performance 03 Chen-Li Education 【 】Operating Mode and Future Outlook 04 Chen-Li Elm 【 】Operating Mode and Future Outlook

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Company Profile

Founding Time Success Prime Corporation (2496) founded in 1991 Chairman Min-Chun Chen CEO Shu-Ling Tseng Employees 235 Capital NT$ 191,854 thousands Major Service Education Business Unit：85% (2020/1-11M) Item Optical Fiber Business Unit：15% (2020/1-11M)

Note：The Board of Directors Approved the disposition of Prime Optical Fiber Corporation in July

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Organizational Structure

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100%
100%
Chen-Li
Chen-Li Education
(Xiamen)
% of Rev.：76%
100%
100%
Here
Chen Li Elm
% of Rev.：7%
% of Rev.：1%
60% 60%
Li-Ren Chen-Li Zhi-Yi
Education Education
% of Rev.： 1% % of Rev.：0.3%
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Business Strategy of Education Group

Professional Steady Teaching Team Resource Integration

Complete K-12 vertical integration. Cooperate with the pioneer of area. Expand the market share of education industry.

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Shareholding of Directors-2020
Unit：thousand shares
4,400
4,276
4,239
4,183
4,163
4,200
4,000
3,860
3,800
3,600
3,460 3,460 [ 3,460 ]
3,433 3,433 3,438
3,400
3,200
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
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Operating Performance

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Condensed Income Statement

Unit: NT$ thousands

						Unit: NT$ tho
	3Q20		3Q19	YOY	2020/1-3Q	2019/1-3Q
Operating Revenue	189,907		227,478	-16.52%	600,711	655,857
Operating Costs	91,509			-23.91%	317,698	362,273
		91,509	120,262
Gross profit	98,398		107,216	-8.22%	283,013	293,584
Gross Profit Margin		51.81%	47.13%	－	47.11%	44.76%
Operating Expenses	71,647		78,277	-8.47%	230,552	230,279
Operating Profit	26,751		28,939	-7.56%	52,461	63,305
Operating Profit Margin	14.09%			－	8.73%	9.65%
		14.09%	12.72%
Non-operating Income and Expenses	9,165		441	10.77%	11,721	3,958
Net Income after Tax	31,830		27,076	17.56%	54,374	59,928
EPS(NTD)		1.65	1.40	17.86%	2.84	3.14

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Profitability

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60%
52%
47%
50%
45% 45%
44% 44%
43%
40%
30%
20%
17%
13%
11%
10% 8% 14%
10%
5% 12% 4%
10%
5% 8%
7%
4%
0%
2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1 2020 Q2 2020 Q3
毛利率 營業淨利率 稅後淨利率
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Education Revenue

200,000 180,000 160,000 140,000 120,000 100,000 181,516 80,000 166,656[ 169,242 ] 164,508 154,135 157,812 146,138 60,000 40,000 20,000 - 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1 2020 Q2 2020 Q3

Unit: NT$ thousands

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Dividend Policy Unit：NTD；%

	2017	2018	2019
EPS	9.37	7.18	4.41
Non-reimbursable rights issue retroactively adjusted EPS Stock Dividend	8.92 0.5	7.18 -	4.01 1.0
Cash Dividend	6.5	4.0	1.5
Distribution Yield (NTD)	7.0	4.0	2.5
Dividend Payout Ratio (%)	75%	56%	57%
ROE	21.65%	16.12%	9.75%
ROA	15.30%	9.92%	5.86%

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Chen Li Education Co., Ltd.

Presenter：Chen Li Education Group CEO Xiao-Cheng Qiu

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CEO：Xiao-Cheng Qiu Experience：

2002─2005 Director of Tainan Branch

2005─2006 Director of Zhongli Branch

2007─2010 Director of Taipei Headquarters 2010─NOW CEO of Chen Li Education Group

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Business Locations

North Students：8,163 % of Rev.： 75%

Centre Students：2,261 % of Rev.： 16%

Southern Students：1,415 % of Rev.： 9%

11 Locations in Taiwan K12 Exam – oriented Administration office Taipei Shilin Neihu Banqiao Xindian Xinzhuang Headquarters Branch Branch Branch Branch Branch Hsinchu Fengyuan Taichung Branch Branch Branch Chiayi Tainan Branch Branch

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Business Locations

Complete K12 system

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Elementary 4Branchs School Taipei, Banqiao, Taichung, Tainan

Middle High School 9Branchs School 11Branchs Taipei, Shilin, Neihu, Banqiao, Taipei, Shilin, Neihu, Banqiao, Xindian, Xinzhuang, Hsinchu, Xindian, Hsinchu, Xinzhuang, Fengyuan, Taichung, Taichung, Tainan Chiayi, Tainan

Operating Mode

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Operating System

Operating Center

Chen-Li Brand & Business Development Strategy

HR & Organizational Effectiveness Management Teachers Development

Development Integration Planning Course Development and Market Development

Profit

Planning, Course, Teacher Admission Developing, Marketing Charges

Sign up, Choose Course

Coaching and relationship Start maintenance, the Brand build Class

Operating Activity

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2020 High School Promotional Mode

Third Grade Math, English, Mandarin, Science, Physical, Full Chemistry , Society Subjects Professional Certification, Interview % of Rev.：32.09% Second Grade Math, English, Mandarin, Physical, Chemistry Plural Professional Certification Subjects % of Rev.：28.32% First Grade Math, English, All-round Mandarin, Science Diversification Development Single % of Rev. : 23.85% Increase Revenue！ Subject

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2020 Elementary & Middle School Promotional Mode

Third Grade 國九 Exam - oriented 應試 % of Rev.：5.99% Second Grade Exam - oriented 國八 、Professional 應試、認證、素養Certification % of Rev.： 3.91% Elementary & First Grade 小學& 國七 Exam – oriented, Professional 應試、認證、素養、競賽 Comprehensive and diversified Certification, competition The higher grade students development are, the more requirements % of Rev.： 4.52% Market scale is wide of Exam - oriented need.

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Strengths We Get!

01

Exam – oriented → Focus on students’ feedback a、Care about the learning result b、Outstanding exam grades c、Great brand image

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Addition to the Grades List， What Strengths We Have?

Complete, Full Subjects, K12

01

a、High school -- The first and second year of university- Middle school -- Elementary school b、Math -- English -- Full subjects -- Special lesson c、Exam – oriented -- Professional ability-

• -Professional certification -- Learning resumes

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Addition to the Grades List， What Strengths We Have? Direct manage 11 branch in Taiwan

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a、Teaching team, Textbook : Coaching/Planning/3 Books and 5 Types 02 b、Administration office management： System unification/Service/Learning curve c、Employee of marketing and class service : Young team/Shareholder/ Full-time

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Under Outline 108 Course, The advantages We own

• Minimize class size

(Version/Process/Level)  Experience of 30 years (Strong team of professional teachers)

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Under Outline 108 Course, The Advantages We Own

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Lesson design/ Teaching material & test 02 paper /Equipment/ Professional certification /1.0→3.0 Classroom

Classroom 3.0 (multipurpose)

Classroom 2.0 (Middle)

Classroom 1.0 (Big)

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Under Outline 108 Course, The Advantages We Own

 Integrated online and offline services  Professional teaching team  Special class with three teachers system

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Forecast 3-5 Years Goal of Chen Li Education Group

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01
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Build up a department for online shop User guideline/Teaching material/ Integration of online and offline service

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Forecast 3-5 Years Goal of Chen Li Education Group

Special class with three teachers system 02 Integration and allocation of teaching resource

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Forecast 3-5 Years Goal of Chen Li Education Group

The growth curve of elementary and middle school 03 should increase

a. Diversified course planning and design

b. Professional teaching team, Improved the teaching material c. Comprehensive resource and system

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Chen Li Elm

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Teaching Material

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Business Model

Ａ：Introduction of formal courses in private schools（Math , Science）

• Cooperate with the pioneers , to achieve Profits maximization.

• Ｂ：Cooperated with famous School（Teachers＋Teaching material）

• Cooperate with the pioneer of area , to increase brand awareness, retention rate and price.

• Ｃ：Provided supplementary education Know how to cooperator（Teachers training + Course）

• •Based on benchmark school ,our teaching will be satisfied with parents.

• •Authorization method : cooperate first , and then pay. More friendly to cooperators.

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2020 Cooperative partner

Elite private schools !!

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WAGOR
Hua Wen Micro
INTERNATIONAL
School
SCHOOL
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Einstein Academy
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Pu Tai
Elementary
School
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2020合作對象

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Renren Giraffe

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Chen Li Elm Revenue

Unit: NT$ thousands Private Schools Authorization Schools Other

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154
1,196
107
353
315
1,024 1,882
790
976
330 426
177
2019 Q4 2020 Q1 2020 Q2 2020 Q3
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Future Market

Taipei Hsinchu Taichung 2021 Changhua Cooperate with Private School＆ Nantou Authorization School Chiayi Tainan Kaohsiung

All over Taiwan

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2021 Main Strategy

In-depth development of indicative private schools all over Taiwan

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Increase benchmark
Expand Authorized
school’s student
school actively
retention rate
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Three year Authorized School Promoting Plan

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Chen-Li is everywhere 100 Authorized Schools

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THANK YOU FOR LISTENING