SUNKO — Investor Presentation 2023

Sep 15, 2023

SUNKO INK CO., LTD [Index: 1721] Investor Conference

15 Sep. 2023

Disclaimer

The information in this presentation and the contents under discussion are based on existing information, in which we stated with regard to financial and relevant information may include some of Company’s forward-looking statements. Such statements involved may be easily affected by significant risks and uncertainties which lead to different consequences from those statements.

The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise.

The purpose of the contents as presented is for information circulation only, not for investment proposal.

Company Profile

Product: Fine Chemicals, Agrochemicals, Polymer, Synthetic Resin

Start up: Year 1974 Employees: 501 (as at 31 Aug 2023)

Capital: NT $1,849 millions Revenues: NT $3,008 millions for FY2022

Supply Chain Briefing

Upstream

Mid stream

Downstream

Main Products

 Agrochemicals  Fine Chemicals  Polymer  Synthetic Resin

Agrochemicals

 Bendiocarb

 Formetanate  Methomyl  Carbaryl  Carbofuran  Carbosulfan  Oxam l y

Fine Chemicals Antioxidant

Prevents thermal oxidative degradation of plastics and rubbers.

 K-NOX 168

• K-NOX 148

• K-NOX 230

• K-NOX 57

• K-NOX 1520

• K-NOX 1726

Fine Chemicals Curing Agent

A raw material for golf ball core.  K-CURE 339

Fine Chemicals Reducing Agent

In Black Oxide process, DMAB prevents“pink ring”defects in later-stage acid treatment by reducing CuO layer to Cu2O, while enhancing the resin bondin of surface texture. g

 K-MARS 110

Fine Chemicals Non-halogenated Flame Retardant

Reaction with flame retardant, the epoxy resin has relatively high glass transition temperature, good flame retardancy, and thermal stability

• DOPO & derivatives

• Polyphosphazene Flame Retardant

Fine Chemicals Clarifying Agent

An additive to polypropylene (PP), Clarifying Agent can increase transparency and rigidity of polypropylene roducts. p

• K-CLEAR 34

• K-CLEAR 34i

• K-CLEAR 34N1

 K-CLEAR 40

Polymer TPU、TPV

Applications : Footwear, Textile, Adhesive Construction Materials, Car Materials, Plastics Processing

 URELON® TPU

• KUOTANE® TPU

• Elastoplas® TPV

• ETPU (Expanded TPU)

• ETPV (Expanded TPV)

Synthetic Resin

• PU Adhesives

• PU Glazing Agent  PU Matting Agent

Products Mix

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1st Half of 2023 1st Half of 2022
Clarifying
Clarifying Agent
Agent Others 4% Others
4% 9%
6%
Curing Agent
8%
Antioxidant
35%
Reducing
Curing Agent Agent Antioxidant
15% 8% 41%
Agrochemicals
10%
Reducing
Agent
9%
Non- Polymer
Agrochemical halogenated 10% Non-halogenated
s Flame Flame Retardant Polymer
10%
12% Retardant 13%
6%
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In Thousands of TWD
Others, 92,470
Clarifying Agent, 45,550
Curing Agent, 166,020
Reducing Agent, 95,685
1st Half of 2023
Agrochemicals, 123,638
Non-halogenated Flame
Retardant, 69,792
Polymer, 102,557
Antioxidant, 379,457
Others, 94,167
Clarifying Agent, 61,454
Curing Agent, 129,120
Reducing Agent, 137,435
1st Half of 2022
Agrochemicals, 168,152
Non-halogenated Flame
Retardant, 210,639
Polymer, 172,838
Antioxidant, 678,023
0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000
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Statement of Comprehensive Income

In Thousands of TWD or Otherwise stated

		1st Half of 2023	1st Half of 2022	YOY Variance
	Revenues	1,075,170	1,651,828	(34.91)%
	Cost of Goods Sold	(1,133,846)	(1,473,168)
	Gross Margin	(58,676)	178,660	(132.84)%
	Margin %	(5.00%)	10.82%
	Operating Expenses	(95,875)	(119,072)	16.96%
	Operating (Loss)Income	(154,551)	59,588
	Non-operating Profit	(2,197)	31,739
	E(L)BT	(156,748)	91,327
	Income (Loss) After Tax	(135,107)	78,038
	E(L)PS (in Dollar)	(0.73)	0.42

Con Reveneus, Operating Income & Earnings after Tax

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3,500,000
3,243,968
3,008,554
3,000,000 2,850,638
2,752,601
2,500,000
2,000,000
1,500,000
1,075,170
1,000,000
524,306
500,000
17,323 32,562
61,330
0
-6,877
-95,951 -70,016 -154,551 -135,107
(500,000) -243,755
Ist Half of
FY2019 FY2020 FY2021 FY2022
FY2023
Revenues 3,243,968 2,752,601 2,850,638 3,008,554 1,075,170
Operating Income 17,323 -243,755 -95,951 32,562 -154,551
Earnings after Tax -6,877 524,306 -70,016 61,330 -135,107
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Basic EPS & Dividends Policy

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3
2.43
2.5
2
1.5
1
0.5 0.33
0
-0.03
-0.5
-0.38
-1 -0.73
1st Half of
FY2019 FY2020 FY2021 FY2022
FY2023
EPS -0.03 2.43 -0.38 0.33 -0.73
Dividends/share 0 0.5 0 0.1 0
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Overview 1st Half of 2023

 Market:

Operating performance is weak as orders remain stagnated in consequence of continuing inflation, rising interest rates, economic contraction in the Mainland China, and continuing war in Ukraine.

 Selling Price:

Unit prices keep downward as China makers dump significant quantities into global market with extreme unreasonable low prices in view of depressed domestic needs in the Mainland.

 Cost：

Fixed cost is still at a high peak due to some pricy inventory in stock and parts of raw materials being tagged as more pricy as the ones prior because of port congestion and exorbitant shipping cost in 2022.

• 1) Closely monitoring operating cost

Strategy

• 2) Accelerate developing high-profile products

• 3) Upgrading production technology for the global trend of lowcarbon products

Forward Looking

Due to the sustainable trend of the Brand, look for low-carbon and recyclable solutions

： Recycle Eco-friendly TPU Material

 Super Critical Foaming

 3D Print

• Jelly color TPU

• 惰性 TPU

Forward Looking

Forward Looking

• 3D Print isn’t limited by molds, design whatever you want.

• Structural design can adjust 。

• material properties

• Mold design isn’t necessary, it has cost advantage.

Forward Looking

Triazine UV Absorber:

 Triazine UV absorbers enable polymer retain color, gloss, and physical properties under long term UV light exposure, which enhance the performance of polymers in coatings, plastics, cosmetics, and many applications.

• Sunko’s Technique: Significant wastewater from chemical washing is reduced based on Sunko’s research results on altering formulation of materials and adjusting reaction procedures.

Thank You! Q & A Corp. Website： www.sunko.com.tw