T3EX — Investor Presentation 2021

Mar 19, 2021

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Stock Number:2636TT
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T3EX Group’s Investor Conference

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Legal Disclaimer
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• The information contained in this presentation, including all forwardlooking information, is subject to change without notice, whether as a result of new information, further events or otherwise, and T3EX Holdings. (the “Company”) undertakes no obligation to publicly update or revise the information contained in this presentation.

• The financial, business, and Q&A statements of the company made by this presentation may differ from actual future results.

• Investor should not regard the above forward-looking information as legally binding but as information subject to change. No guarantees regarding the completeness, accuracy, and reliability of information contained are made explicitly or implicitly. They are not intended to represent complete statement of the company, industry or future development.

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Outline
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01 Company Overview

02 2020 Operating Performance

03 2021 Operating Outlook 04 T3EX Group’s Future Prospectus

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Company Overview

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Core Products
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Core
Products
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Group Members
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Supply Chain
International Logistics China Domestic Logistics
Finance
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Services	Multi-modal transportation including ocean freight, air freight and railway	Supply chain management – ocean freight, air freight, warehousing, delivery	Import Custom Brokerage & Warehousing	B2B2C Warehousing & Distribution	Supply Chain Finance
Markets	Long Distance Routes within N. America, Europe, New Zealand, Australia, Africa, India and Intra-Asia Routes	Intra-Asia	China	China	China
Branches	Taiwan: 4 China: 31 Hongkong:1 Northeast Asia: 3 Southeast Asia: 13 Total: 52	Taiwan: 8 China: 5 Hong Kong:1 Singapore: 1 Total:15	China: 6	China: 4	China: 3

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*7 Brands / 29 Subsidiaries / 81 Branches

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Business Scale (2020FY)
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200,000
67,000 Tons
Shipments
Customs Clearance Air Freight Volume
82 Trucks 340,000 TEU
Truck Fleet Ocean Freight Volume
18 Warehouses
1,897 Staff
120,000 m [2]
Warehouses & Size Headcount
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340,000 TEU

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Synergy Created via Holding Structure (2012 ➔ 2020)
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Operating Scale

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• 29 subsidiaries

• Revenue grew by 83% (8.3 billion15.2 billion)

• Operating Expense Ratio decreased by 2% (14%12%)

Front End

• Diversified products, comprehensive market coverage

• Diluted the risk of having only single product

• Increased service scope for customers

Middle Platform

• Increased economies of scale, as well as bargaining power

• Product mix synergy

• Integrated backend support that results in cost saving of customs, warehousing, transportation personnel

Back End

• Enhanced financial structure

• Decreased financing costs

• Minimized operating risk

• Employee career development & reward system

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Historical Dividend Policy
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Yield Ratio of Cash Dividend

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7.7%
6.4% 5.8%
6.7%
5.6%
3.6%
2015 2016 2017 2018 2019 2020
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(Calculated by the closing stock price on March 9)

Dividend Paid Out Ratio

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67% 72% 72%
68%
63%
60%
2015 2016 2017 2018 2019 2020
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2020 Operating Performance

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Q4

From Deep Downturn to Big Rebound, T3EX’s Performance Breakthroughs a Record High.

Q2

The surging needs of PPE delivery caused high demand of air cargo spaces, and freight prices increased over 400%

Q1

Global Covid cases continued to peak, and purchasing power in USA and Europe remained strong, causing severe ocean container shortage, further encumbered by insufficient port labor resulted in explosive growth in ocean freight prices

Q3

Work from home & inventory restock created strong import demand from USA and Europe, which in turn fueled the growth of ocean, air, rail freight market

The global pandemic outbreak caused citywide lock-downs and supply chain cutoffs. The logistics market slumped heavily as a result

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2020 Operating Performance
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T3EX’s operating income grew 135% YoY, while EPS grew 120% YoY.

Unit: NTD thousands	2020	2019	YoY
Revenue	15,160,243	11,258,071	34.66%
Gross Profit	2,467,887	2,014,229	22.52%
Operating Expense	1,771,981	1,717,569	3.17%
Operating Income	695,906	296,660	134.58%
Net Income	570,727	241,363	136.46%
EPS(dollars)	4.72	2.15	119.53%
Gross Margin	16.28%	17.89%	-1.61%
Operating Expense Ratio	11.69%	15.26%	-3.57%
Net Income Margin (Note)	3.58%	2.21%	1.37%

Note: Calculated by the parent company’s net income.

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Revenue Breakdown by Business
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	Ocean Freight	Air Freight		Domestic Logistics
			China-Europe/ China-Russia Rail Transport
2020 Revenue Breakdown	52%	33%	5%	10%
2019 Revenue Breakdown	53%	30%	4%	13%

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Volume Breakdown by Business
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Ocean Freight

Rail

8,538

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+11.3% 332,086

Air Freight

+409%

298,330

1,677

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69,550

-3.7%

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Rail(CY/TEU)
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Ocean(CY/TEU)
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66,949
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+0.7% 488,615

492,105

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Air(Tons)
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+703%
3,615
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29,033

2019 2020

Ocean(CFS/CBM)

Rail(CFS/CBM)

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Revenue Breakdown by Geography
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2019

2020

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+39% 10,875
7,807
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+23%
+36%
2,678 -7%
2,169
1,317
971
311 290
Taiwan Southeast Asia Northeast Asia
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China & Hong Kong

Unit: Millions NTD

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Revenue Breakdown by Geography
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From Jan. to Feb. of the year 2020 From Jan. to Feb. of the year 2021

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+209%
2,977
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2021
+88%
963 +178%
56%
621
392
331
141
36 56
China & Hong Kong Taiwan Southeast Asia Northeast Asia
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Unit: Millions NTD

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2021 Operating Outlook

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2021 Operating Outlook

Riding the Winds and Waves to Embrace a Bright Future.

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Ocean Business Outlook: Growing Demand;
High Freight Rates Become the Long-term Trend.
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SCFI (SHANGHAI CONTAINERIZED FREIGHT INDEX)

• 3,500 3,000

Demand Side:

1. Inventory repurchasing caused a strong need for space booking.

2. The US’s stimulus check has

2,500 triggered expenditure growth .

• 2,000 Supply Side:

• The Covid-19 pandemic caused labor shortages and port congestions in the US and Europe, resulting in

1,500 global container and space shortages.

1. As it was increasingly difficult to book space, the advantage of large-scale forwarders became clear.

1,000

Demand Side:

1. The growing vaccination rate will speed up global economic recovery.

2. Going into the traditional ocean peak season.

Supply Side:

1. As container and space shortages are alleviated, freight rates decline slightly.

2. The business structure of the ocean industry has been transformed as a result of the pandemic, high freight rates will become the long-term trend.

500

• First Half of the Year ~~Second Half of the Year~~ 1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec 2019 2020 2021

• The freight rate of 12 March, 2021 was 2,638, having grown 189% compared to 2020, and 256% compared to 2019.

• According to predictions by Clarksons, the world's leading provider of integrated shipping services, the 2021 supply capacity will grow 3.4%, and cargo demand will grow 5%.

• For the future, we should observe these three indexes: Container turnover rate , GCSP (Global Carrier Schedule Performance) , and Global Covid-19 vaccination Rate .

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Air Business Outlook: Tight Capacity and Strong
Demand → High Freight Rates Will Be Sustained.
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Supply Side:

1. Almost 50% of belly cargo was grounded and the capacity of dedicated freighters was 20%, so there was an overdemand gap of 20%~30%. 2. Before the cancellation of international travel restrictions, a shortage of air space will remain and freight rates will remain at a high level.

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Demand Side:

1. Remote communication and new electrical products such as electric vehicles, 5G, and AI will continue to be launched, fueling a tremendous growth in the demands of the .

semi-conductor industry and related electronic components

1. The US’s stimulus check has triggered expenditure growth. 3. The Covid-19 pandemic caused a cut-off of the global supply chain, manufacturers “ ” " ” - -

have adjusted their inventory policy from Just in Time to Safe Inventory .

1. Covid-19 vaccines are transported globally via chartered flights and dedicated freighters that meet the requirements for temperature control, which will occupy a lot of air freight capacity.

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Rail Business Outlook: Space Capacity Tight,
Demand Grows Steadily.
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Rail Demand Side:

1. China was the EU’s largest bilateral trade partner in 2020, the bilateral trade amount reaching EUR 586 billion and surpassing the US-EU bilateral trade amount of EUR 555 billion.

2. The freight cost of China-Europe/China-Russia rail transport is much lower than the air freight cost, and the transportation time is one third of ocean freight, so rail transport has already become the main tool for many customers since the pandemic.

Rail Supply Side:

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50%
China-Europe/China Russia Trains
12,400
8,225
6,300
3,673
2,191
80 308 815
2013 2014 2015 2016 2017 2018 2019 2020
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Data resource: China State Railway Group Co., Ltd.

The strong demand for railway space booking resulted in tight train and container capacity, while the freight rate of 2020 increased 80% to 100%, the freight rate being close to ocean freight, which will bring strong and stable space booking needs. T3EX will continue to develop the business of China-Europe/China-Russia/China-Central Asia 21 railways and China-Central Asia transportation.

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China Domestic Logistics/Southeast Asia
Business Outlook: Business Continues Growing
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Domestic Logistics/Southeast Asia Demand Side:

1. Chinese spending expenditure has been growing since 2020Q3, which fueled an explosive growth in import, customs clearance, warehousing, and transportation.

2. The China-US trade war as well as the Covid-19 pandemic resulted in a restructuring of the global supply chain, shaping China’s “dual circulation economy” with domestic manufacturing for domestic consumption, while Taiwan and .

Southeast Asia produce for the US consumer economy

1. The Chinese government regarded the dual circulation economy as the main plan of the 14th Five-Year Plan and the 2035 Future Prospectus.

T3EX’s Operating Strategy for Domestic Logistics/Southeast Asia:

1. Embracing the opportunity of China’s domestic expenditure to develop a China import one-stop shopping service (import + customs clearance + warehousing + transportation + supply chain finance).

2. Forming strategic partnerships with Northeast Asian partners through M&A or JV to develop wider warehousing and transportation networks in Asia.

3. Due to the continuing China-US trade war, Southeast Asia will grow explosively. Below are the numbers of T3EX’s Southeast Asia revenue growth YOY:

Thailand

Vietnam

Year 2020: +59% Year 2020: +29% From Jan. to Feb From Jan. to Feb of year 2021: of year 2021: +435% +222%

Malaysia

Year 2020: +86% From Jan. to Feb of year 2021: +108%

Singapore

Year 2020: +23% From Jan. to Feb of year 2021: +19%

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T3EX Group’s Future Prospectus

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Raising Sufficient Capital to Expand Market
Share in the Post-Covid-19 Era.
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 In the post-Covid era, many forwarders and logistics companies that lacked cash or human resources will be bankrupt or close down.

 NTD$615 million capital which raised from capital market, with much health and completed financial structure and sufficient cash flow to ally with strategic partners to merge or joint-venture strategy for integrating vertical industry as well as expanding market share in order to achieve the purpose of keeping the T3EX’s profit growing.

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The Operating Strategy of Duo Headquarters
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Shanghai Headquarter Taipei Headquarter (China Market) (Non-China Market)

1. Enhance one-stop logistics service in China 1. Capture the opportunity of returning

(Import + Custom Clearance+ Warehousing + Transportation + Supply Chain Finance), Taiwanese manufacturers from China, and increase investment in import logistics business increase investment in Taiwan

1. Develop Africa and Latin America market via JV 2. Increase investment in Southeast Asia market and closer partnerships with overseas agents 3. Strengthen long haul route business from Asia

2. Develop comprehensive China-Russia / Chinato USA and Europe Europe railway business 4. Expand network locations within Asia

3. Expand supply chain finance business 5. Deepen collaborations with WPG Holdings 5. Build digital B2B2C warehouses 目標

Target

1. Average gross margin reaches 20% in the next five years

2. Ocean freight, air freight and domestic logistics will each account for 30% of total gross profit 3. China and Non-China revenue will each account for 50% of total revenue

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Thank You