TFC — Interim / Quarterly Report 2021

Nov 25, 2021

Taiwan Fertilizer Co., Ltd. (1722 TT) Company Introduction

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November 26th, 2021

1

Table of Content

 Company History and Milestones

 Financial Information

• Lines of Business

• Fertilizer and Chemical Business

• Land Development and Investment Business

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History and Milestones

1946

1980

1993

1999

2009

2013

2016

TFC was established by the R.O.C government and initiated to produce fertilizer & chemical products.

Established Jubail JV, a 50/50 joint venture between TFC and SABIC Co. which is located in Saudi Arabia, to produce Urea & Ammonia.

• • Agreed to invest in 2 EH project in Al Bayroni and to extend JV contract with SABIC Co. for 20 years (1993~2013)

TFC was privatized while the R.O.C government still being the largest shareholder with its 24% share.

Agreed to extend JV contract with SABIC Co. for another 20 years (2013~2033)

TFC’s Taichung plant officially began its operation, focusing on the fertilizer chemical production business, and starting its conducting land activation project.

In coordination with the R.O.C government’s “New Southbound policy” , “Construction of Taichung Harbor West Dock 10” project was adopted by the Board of Directors of TFC in order to expand global market.

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History and Milestones

2017

2018

2019

2021

Cooperated with the R.O.C government’s fertilizer policies, TFC had accomplished the goal of comprehensively “Biotec-organic” solution.

Won the “Platinum Award of Top 50 Corporations Sustainability Report” award, and was selected by the “2019 FTSE4Good TIP Taiwan ESG Index”.

Held the Beaming Ceremony of “Nangang C2 Project”.

The Company was once again selected by “2021 FTSE4Good TIP Taiwan ESG Index”.

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’ – TFC s Financial Breakdown(1) Core Business(Operating Profit+ Jubail JV) Others NT$ Million

NT $ Million NT $ Million Year 2017 2018 2019 2020 2021Q1-Q3 Operating Income 1,228 1,286 1,626 1,248 751 Jubail JV 623 1,093 751 594 1,957 Core Business 1,851 2,379 2,377 1,842 2,708 Others (17) 570 87 1,123 200 Income Tax Expenses (215) (668) (400) (512) (614) Net Income 1,619 2,281 2,064 2,453 2,294 Earning per share (dollar) 1.65 2.33 2.11 2.50 2.34 1851 2379 2377 1842 2708 -17 570 87 1123 200 2017 2018 2019 2020 2021Q1-Q3 Core Business(Operating Profit+ Jubail JV) Others
Year		2017	2018	2019	2020	2021Q1-Q3
Operating Income		1,228	1,286	1,626	1,248	751
Jubail JV		623	1,093	751	594	1,957
Core Business		1,851	2,379	2,377	1,842	2,708
Others		(17)	570	87	1,123	200
Income Tax Expenses		(215)	(668)	(400)	(512)	(614)
Net Income		1,619	2,281	2,064	2,453	2,294
Earning per share (dollar)		1.65	2.33	2.11	2.50	2.34

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’ – TFC s Financial Breakdown(2)

Total Revenue

Gross Profit

2021Q1-Q3: 8.63 Billion

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Real Estate
15%
Fertilizer&Chemical
82%
Others
3%
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Fertilizer&Chemical Real Estate Others

2021Q1-Q3: 1.85 Billion

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Real Estate
37%
Fertilizer&C
hemical
Others
60%
3%
Fertilizer&Chemical Real Estate Others
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2020: 2.59 Billion

2020: 10.17 Billion

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Real Estate
Fertilizer&Chemical
16% Fertilizer&C
81%
hemical
Others
64%
3%
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Real Estate
33%
Others
3%
Real Estate Others
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Fertilizer&Chemical
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Fertilizer&Chemical Real Estate Others

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– TFC’s Financial Overseas investment

-  Saudi Arabia Jubail JV

• Four Main Products: Urea, Ammonia, 2 EH, and DOP.

Share of profits of Jubail JV(TFC Account)

NT $ million

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2,500 1,957
2,000
1,500 1,093
594
751
1,000 623
500
0
2017 2018 2019 2020 2021Q1-Q3
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TFC Dividend Polic y

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EPS(NT$) DPS(NT$)
2.50
2.48
2.33 2.30
2.20 2.11 2.20
2.10
2.10 2.10
1.65
2015 2016 2017 2018 2019 2020
(0.07)
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TFC maintained a high payout ratio in the past few years.

Dividend policy: Primary focusing on stable growth and cash dividend.

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Production capacity&Location

	Business	Factory	Product Item	Capacity (mt/kl)
	Fertilizer & Chemical	Taichung	nitrate-based compound fertilizer	300,000
			nitrate-based compound fertilizer(PEIFENG)	150,000
			cerium-phosphorus compound fertilizer	140,000
			ammonium sulfate	150,000
			superphosphate	120,000
			nitric acid(65%)	165,000
		Miaoli	organic compound fertilizer	6,000
			instant compound fertilizer	3,500
			biotechnology nutrient solution	600
			phosphoric acid	5,500
			NMP	3,600
			electronic-grade nitric acid	7,200
			electronic-grade ammonia water	7,200
	Real estate & Investment	Hualien	DeepOcean Water	600,000
			Deep Ocean Water Production Park
		(Former Nangang )	Nangang Business-Trade Park
		(Former Hsinchu)	Hsinchu Tech Business Park
		(Former Kaohsiung	) Kaohsiung Multifunctional Commerce & Trade Park

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Fertilizer & Chemical Business

Fertilizer Business in Taiwan

 What we — supply

Compound and single nutrient fertilizer . products

 Whom we — supply Fully supplying to Taiwan domestic farmers.

 Who we are—

As the leading company of Taiwan fertilizer market, holding approximately 70% market share.

Chemical Business in Taiwan

 What we — supply

Ammonia, sulfamic acid, untreated urea, nitric acid, electronic and precision chemicals, oleum, melamine, etc .

 Whom we — supply

Mainly supplying to Taiwan domestic industries while selling some sulfamic acid and nitric acid overseas. products

Seeking logistic & trading Opportunities

Incorporating the existing procurement business in raw materials and taking advantage of the edge of the special piers at Taichung Harbor along with the planning of free trade zone therein, using chemical storage tanks to further expand the business of import procurement, unloading warehousing, transit trade, while actively transforming into the role of a provider for product integration services and a supplier for relevant raw materials.

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Production & Sales

Fertilizer Production and sales trend chart (thousand tons)

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90 Output Sales volume
60
434.9
30
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021Q3
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434.9
432.4
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Chemical Production and sales trend chart (thousand tons)

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Output Sales volume
172.5
20
139.9
15
10
5
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021Q3
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Nangang Business-Trade Park No.C2 and C4 Project

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Kaohsiung Multifunctional Commerce and Trade Park

– Land Development Ma of Si nificant Pro ects p g j

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Nangang Kee-lung
( 南港 ) ‧ ‧ ( 基隆 )
Hsin-Chu
( 新竹 ) ‧
Miao-Li
( 苗栗 ) ‧
Tai-Chung
( 台中 ) ‧
Hua-Lien
‧
( 花蓮 )
Kao-Hsiung
( 高雄 ) ‧
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Development plan of Dongming Rd,Keelung
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Hsinchu Tech Business Park
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Hualien Deep Ocean Water Production Park

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List of Land Assets

		Location Lot of land	size(㎡)
Area ratio	chart	Taipei City 62	109,208.61
		New Taipei City 105	53,860.22
		Keelung City 227	238,763.12
		Ilan County 3	2,761.53
		Hsinchu City 55	218,181.57
		Taipei ~~City~~ 6.86% New ~~Taipei~~ City 3.28% Keelung City 14.35% Ilan ~~County~~ 0.25% Hsinchu City 12.63% Miaoli County 18.30% Taichung City 0.03% Yunlin County 1.05% ~~Kaohsiun~~ g City ~~9.60%~~ Hualien ~~City~~ 33.65% Taipei ~~City~~ 6.86% New Taipei City… Keelung ~~City~~ 14.35% Ilan County ~~0.25%~~ Hsinchu City 12.63% Miaoli ~~County~~ Taichung ~~City~~ Yunlin ~~County~~ Kaohsiun g City Hualien ~~City~~ 33.65% Miaoli County 112 Taichung City 1 Yunlin County 1 Kaohsiung City 5 Hualien County 44	304,530.33 581.62 17,510.00 105,301.77 560,082.00
		18.30% 0.03% 1.05% 9.60% Total 615 1,610,780.77
		Remarks : The data collection date is Nov., 10,	2021.

Area ratio chart

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2021 Land Development Plan

Area	Size(ping)	Size( ㎡ )	Current Status
Nangang Business-Trade Park No.C2 (Taipei)	7,051	23,310	Commercial building and the basement has obtained Usage License in Oct,2021.And the hotels are still under construction.
Nangang Business-Trade Park No.C3 (Taipei)	12,565	41,537	The right of superficies has been given to Taiwan Life Insurance Co., Ltd. for 45 years.
Nangang Business-Trade Park No.C4 (Taipei)	2,091	6,911	Obtained Construction license already. In order to comply with Taipei City government's air bridge policy, the first construction license change design is in progress.
Hsinchu Tech Business Park No.D7 (Hsinchu)	17,790	58,810	1. TFC ONE(D7-A) is all occupied by tenant. 2. D7-B and other land are still under planning and design.
Keelung DongMing Road (Keelung City)	9,448	31,235	The project is under review of urban plan.
Kaohsiung Multifunctional Commerce and Trade Park (Kaohsiung City)	48,779	161,253	1. “7C Urban land Readjustment ” implemented by Kaohsiung City government. 2. The Land No. 7D is in the process of leasing.
Hualien Deep Ocean Water Production Park (Hualien Factory)	138,734	458,627	Focusing on the program of Deep Ocean Water Production, and inviting the investment.

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Note: 1 ping equals to 3.3 ㎡

Location of Nangang

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Taipei Main Station
Zhongxiao E. Rd. Songshan Airport
Xinyi Planned Area Neihu Technology Park
Nangang
Great Taipei Area
R13
R17
R5
C6-9
C4 R4
Nangang C3
Business-Trade C2
Park
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Significant Developments in Nangang - Business Trade Park

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Nangang Software Park I&II Nangang Software Park lll
N
National Freeway
R13-1
China Trust R5
Headquarter C4 R4
Nangang Exhibition
Hall II
C3
Nangang Exhibition
Hall I C2
Railroad Expressway
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Nangang Business Trade Park No.C2 Development — Plan Hotels and Commercial Buildin g

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Land size： 23,310 ㎡ (7,051ping) Plot Ratio：440％

Building Coverage Ratio: 60％

Program：

• GFA：Around 199,172.15㎡ (around 60,000 ping)

• Tower A：Hotel/26F

• Tower B：Business Office/ 28F

• Tower C：Hotel/ 17F

• 4 Floors underground

Strategy：Rental Management/Develop by TFC

Status：

1. Building permit approved in May 2017. In June 2017, the strategy was adjusted. The floor area of the office building was increased, the design of the building license was altered, increasing the benefit of the whole case.

2. In Oct. 2021,partial usage license of commercial building and the basement has obtained and has been letting to tenant

3. successively. Occupancy rate is estimated to reach 50% by the end of 2021.

4. Construction is in progress and is estimated to obtain the whole usage license in 2022,aslo will complete the handover procedure with Grand Hi-Lai Hotel.

5. 4.Currently,TFC continues to find tenants for hotel of building C .

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Nangang Business Trade Park No.C4 — Develo ment Plan Commercial Buildin p g

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Land Size ： 6,911 ㎡ (2,091 ping) Plot Ratio ： 360%

Building Coverage Ratio: 60 ％

Total Floor area : 58,513.64㎡ (about 17,717 ping) ; 23 floors /4 floors underground. Policy ： Rental Management/Develop by TFC Status:

1. Obtained construction license in the middle of 2020.Signed the contract with the main contractor in the 3[rd] quarter.

2. Currently working on the first alteration procedure of design in order to follow Taipei City Government’s policy of pedestrian bridge.

3. The project is expected to be completed in 2025.

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Location of Hsinchu Science Park

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Taipei
Hsinchu
City Center
TFC land
K.D.
Interchange
Hsinchu
Science Park
Taichung
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— Hsinchu Science Park Urban Land Consolidation

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First stage of Readjustment
Second stage of Readjustment
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Land Size ： 190,581 ㎡ (57,651ping) Plot Ratio/Coverage Ratio ： 210 ％、 65 ％

Status ：

1. First stage of Readjustment (D3,D4,D7 included, about 10.4HA)

2. Urban Land Consolidation is completed.

3. Second stage of Readjustment (D5,D6 included, about 8.6HA)

4. The Hsinchu city government included this district into the scope of "X Plan“.In Nov. 2021,the declaration of readjustment construction is done and complete the registration of cadaster.

5. D6 is developed to become an urban science park. Currently discuss with Hsinchu Science Park Bureau about the deals of Superficies contract conditions.

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Hsinchu Science Park D7 Block

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D7
-
D7 B
-
D7 A
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Hsinchu Tech Business Park(D3 D7)

Land Size ： 7HA Plot Ratio ： 210 ％

Building Coverage Ratio : 65 ％

Hsinchu Tech Business Park(D7 A)

Land Size ： 1.1 HA

Total floor area ： 21 thousand Ping

Policy ： Rental Management/Develop by TFC

Status ： The office construction is done in Aug. 2017 and the lease is completed.

D7B

Land Size ： 2.4 HA

Total floor area ： 23 thousand Ping, with two commercial buildings

Policy ： Rental Management by TFC Develop by TFC or with others

Status ： Proposing development plan and urban design review to Shinchu City Government.

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Note: 1 ping equals to 3.3 ㎡

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Hsinchu Science Park
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D3 Mobile City (short term use) Land Size ： 22,715.29 ㎡ (6,871 ping) Plot Ratio ： 210 ％ Building Coverage Ratio: 65 ％ Program ： Mobile showroom & basic maintenance station

Status ：

1. All leased, to Audi, Toyota, Volkswagen, etc.

2. Current annual rental income is

about NTD $ 37 million.

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Keelun Medical Park g

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Land Size ： 31,235 ㎡ (9,448 ping) (Type Yi Industrial land)

Plot Ratio ： 150 ％

Building Coverage Ratio : 60 ％

Program ： Planning residential and commercial areas Status ：

1. Working on urban planning review procedure, city government is now deliberating.

2. Planning to divide the industrial land into commercial area and residential area in order to comply with the policy of city government.

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Kaohsiung Multifunctional Commerce &
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Land Area

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Land Size ： 161,253 ㎡ (48,779 ping)

1. Trade 7C (16.91 HA) Land size of TFC:158,008 ㎡ (account for 93.58% of the whole area)

2. Trade 7D (7.09 HA) Land size of TFC:3,245 ㎡ (account for 4.57% of whole area)

Plot Ratio ： 490 ％ Building Coverage Ratio: 60 ％

• Program: Mall, Office, Hotel and Cultural Facilities Status ：

• Trade Park 7C & 7D area have been torn down and cleared. Trade Park 7C is now developing “Urban Land Readjustment” ” implemented by Kaohsiung City government and working on the procedure of Replotting Specification and dispute resolution, expected to complete in the beginning of 2023.

• Land registration of Trade Park 7D is done, already gained the lot of the land number 9, the land size is 1,605.58 ㎡ . Currently, it’s for renting.

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Hualien Dee Ocean Water Production Park p

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Land Size： About 46 hectare in Hualien Factory Summary： Using the features of ocean deep water to develop diversified products and related value-added industry, and also to activate the land in Hualien factory.

Program： Manufacturing and sale of bottled drink water、salt 、 、 manufacturing processed food additives cosmetics and functional food ; aquaculture and its processing.

Status ：

1. First Stage(2005~2011)：

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• TFC invested 0.482 billion to draw deep ocean water by setting up drawing pipe and related facilities and established “Taiwan Yes Deep Ocean Water Co., Ltd. "in September,2006. TFC is running the business of bottled drink water, DOM salt, Nigari Concentrate and Cosmetics.

• 1. Second Stage(2011~2018)：

• Starting the program of Deep Ocean Water Production Park from April,2011, developing stage by stage.

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• To draw the attention of investors, it’s mainly divided into aquaculture area, manufacturing and processing area, experience area. At the same time, we are working on multiple-stage aquaculture and deep ocean water production through industry-university cooperative research project. We are dedicating to achieving three one-hundred-percent goals.

• On December 2, 2016 and October 3, 2017, the Premier Lai and President Tsai inspected the park respectively, expected to combine and upgrade the development of Hualien’s tourism industry and marine resources industry.

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25

Thank You !

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