THSRC — Interim / Quarterly Report 2019

Mar 2, 2020

Ticker Symbol: 2633

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Taiwan High Speed Rail Corporation 4Q, 2019 Operation Report

03/03/2020

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Copyright © Taiwan High Speed Rail Corporation. All Contents Confidential.
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Disclosures

• The information contained in this presentation and its accompanying announcements, including content relating to business outlooks, financial operations, and business forecasts, is based on information derived from internal corporate data and external economic developments as a whole.

• The Company's actual operations, financial conditions, and operational performance may differ from forecasted information; this may be due to various factors including but not limited to market demand, changes in policies and regulations and overall economic conditions, and other factors or risks beyond the Company’s control.

• The information provided in this presentation reflects the Company's current views about the future; correctness, completeness, or reliability of said views are not explicitly or implicitly expressed or warranted. The Company is not responsible for updating or amending changes or adjustments made to the contents of this presentation, if such changes or adjustments should occur in the future.

• For the convenience of readers, this presentation has been translated into English from an original Chinese version. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, information in the Chinese-language presentation shall prevail.

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AGENDA I. BUSINESS OVERVIEW II. FINANCIAL OVERVIEW III. MARKET OVERVIEW IV. OUTLOOK

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I. Business Overview

1. High-Speed Rail Network 2. Operational Performance

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2019 Taiwan High Speed Rail Corporation. All Contents Confidential.
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1. High-Speed Rail Network

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Stations
Bases
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Population 90 %

Route Length (km) 350

Stations 12

Maintenance Bases 5

Train Model 700T

Total Train Sets 34

Maximum Speed 300 km/h

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2. Operational Performance

1. Train Frequency

(daily frequency )

Daily Two-Way Services (WEEKEND) Daily Two-Way Services (WEEKDAY)

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 19 weekly train services added since July 2019
 1,016 total weekly scheduled train services
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2. Ridership & Loading Factor

(thousand persons/day)

Load Factor, (%)

• 2019 Daily Avg. Ridership: 5.4 % YoY Growth

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3. Growth of Transportation Capacity & Volume(2019 vs 2018)

Seat-Km

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Train Services
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(mn-km)
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(frequency) Transportation Capacity

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2.2 %
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2.5 %
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Ridership
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Passenger-Km
(mn-km)
3.8 %
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(thousand persons)
5.4 %
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Transportation Volume

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4. Operational Performance

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2019 2007.01.05 ~ 2019.12.31
Train Services 53,727 618,660
Cumulative Passengers (million passengers) 67.4 596.2
Passenger Kilometers (million-km) 11,994 114,383
Loading Factor 68.0% 56.8%
Reliability 100% 99.66%
Punctuality (delay<5min) 99.88% 99.49%
Avg. Delay Time (min) 0.07 0.20
Accidents resulting in Liabilities 0 0

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II. FINANCIAL OVERVIEW

1. Financial Performance

2. Financial Risk Management

3. Corporate Credit Rating & Market Cap 4. Recent Major Events and Activities

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1. Financial Performance

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1. Income Statement (2019 vs. 2018)

(NT$mn)	2019	2019	2018	2018	Variance Amount	Var. %
Operatingrevenue	47,507	100%	45,415	100%	2,092	4.6%
Operatingcosts	(25,763)	-54%	(25,081)	-55%	(682)	2.7%
Gross Profit	21,745	46%	20,334	45%	1,411	6.9%
Operatingexpenses	(1,233)	-3%	(1,189)	-3%	(44)	3.7%
Net OperatingIncome	20,512	43%	19,145	42%	1,367	7.1%
Non-operating income and expenses
Interest expenses	(6,455)	-13%	(6,618)	-14%	163	-2.5%
Stabilization reserve	(6,524)	-14%	(5,415)	-12%	(1,109)	20.5%
Others	242	-	200	-	42	21.0%
Net Income before tax	7,775	16%	7,312	16%	463	6.3%
Income tax	232	1%	3,385	7%	(3,153)	-93.1%
Net Income	8,007	17%	10,696	23%	(2,689)	-25.1%
EPS	1.42		1.90

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2. Balance Sheets

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(NT$mn)	2019.12.31	2018.12.31
Current assets	42,710	22,797
Operatingconcession asset	390,113	401,169
Other non-current assets	10,236	9,092
Total assets	443,060	433,057
Current liabilities	13,279	13,814
Non-current liabilities	358,703	349,830
Total liabilities	371,982	363,644
Common stock	56,283	56,283
Capital surplus	173	173
Legal reserve & unappropriated earnings	14,621	12,957
Total equity	71,077	69,413
Total liabilities & equity	433,059	433,057

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3. Statement of Cash Flows

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(NT$mn)

2019.12.31

2018.12.31

Cash & cash equivalents at the beginning 6,948 7,188 of the eriod p Cash flows from operating activities 28,546 26,217 Cash flows from investing activities (12,761) (4,356) Cash flows from financing activities (6,462) (22,101) Net increase in cash & cash equivalents 9,324 (240) Cash & cash equivalents at the end of the period 16,272 6,948

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4. Net Profits & Operating Revenues

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1) Revenue Structures

(NT$bn)	2019 2018 YoY
Railway Revenue	46.11 44.10 4.6%
Non-railway Revenue	1.40 1.32 6.3%
Total	47.51 45.42 4.6%

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Note: Non-railway revenues mainly include rental incomes, advertising revenues, and onboard sales.

4. Net Profits & Operating Revenues

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2) Operating Revenue and Net Income

(NT$bn)

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5. Operational Efficiency ： EBITDA & EBITDA Margin

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(%) (NT$bn)

 EBITDA

 EBITDA Margin

• 2019: YoY +4.8%

• ’17~’19: 72%~73%

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2. Financial Risk Management

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(%)
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3. Corporate Credit Ratings & Market Cap

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(US$bn)

Jan, 2020 Market Cap$214.6bn(≒US$7bn)

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[note]
Market Cap
[Note]: Market cap is calculated using monthly average prices,
outstanding common shares (including private placement shares) at
month end, and an exchange rate of US$/NT$=30.5.
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4. Recent Major Events and Activities

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Date	Events
2019.7  Procurement announcement for three diesel shunters from TRS.
2019.9  A total of 874 train services were provided during the 5-day Mid-autumn festival holiday. On September 15, single-day passenger numbers reached to 318,249 passengers, the highest number on record since THSRC commenced commercial operations.
2019.11  Issued unsecured corporate bonds for the first time, with a 30-year period of issuance, at fixed annual interest rate of 1.60%, and total amount of NT$8 billion.
2020.01  Since the start of commercial operation on January 5, 2007, the cumulative THSR ridership has exceeded 600 million passengers.

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III. MARKET OVERVIEW

1. Inter-City Transportation 2. Inter-City Public Transport Market

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1. Inter-City Transportation

Market size of intercity transportation for different travel lengths

Weekday

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Weekend

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Source：IOT, MOTC「Western Taiwan Intercity Land Transport Statistics 2017」，Page 21 Apr. 2019

2. Inter-City Public Transport Market

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Passenger
(thousand persons)
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Passenger Proportions
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TRA
THSR
Freeway
Bus
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Passenger-km
(thousand persons-km) Passenger-km Proportions
TRA
THSR
Freeway
Bus
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(thousand persons)

2019 Trend of Passenger Growth

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2.1%
3.0%
5.4%
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(thousand
persons-km) 2019 Trend of Passenger-km Growth
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3.8%
1.7%
3.6%
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km km

Avg. Copyright © Passenger Distance

km

資料來源：交通部Page 22

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IV. OUTLOOK

1. Sustain Revenue Growth Drivers 2. CSR Performance

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1、Sustain Revenue Growth Drivers

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1. Strategies

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Yield
management
Price & quantity management
Precision Cross-industry
marketing collaboration
Off-peak promotions Development of travel
markets
Precision marketing to B2B & B2C membership
Supply/demand adjustments: scheduling reviews
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Transfer transportation Enhance attractiveness Ticketing channels Increase sales Services Enhance loyalty
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2. Integrate travel services to drive revenue growth

Ticket Types

• Discount

• Periodic

• Multi-Ride

• Early Bird

• THSR Pass

TRA Airline Bus MRT Sightseeing Dining Shopping

Customize

T Holiday Packages

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• Individual Traveler

• Free Travel Discounts

• Hotel Coupons

Adaptability

Diversify

Create a mass transit tourism network with high-speed rail as the backbone

Ticket Channels

• T-EX Mobile APP

Digitize

• Messenger Booking

• Convenience Store

• Easycard Co-brand

Promote

Convenience

• Ticket Window Equipment

Transfer

• Ticket Vending Machine

Non-ticket Revenues

Member Benefits

• Store Leasing

• MRT/TRA

• Individual TGo Membership Services

• THSR Shuttle Bus

  • Parking Lot Rental

  • Advertising

• Bus/Passenger Transport

• Transport  Station/In-train Shops  Corporate

• Taxi  Co-branded Sales Membership

• Copyright © 2019 Taiwan High Speed Rail Corporation. All Contents Confidential.  Accessible Shuttle  Multi-purpose Services

• Conference Room

Combo Tickets

• THSR+Bus/MRT Combo Ticket

• THSR+Hotel Combo Ticket

• THSR+Airline Combo Ticket

• THSR+Event Combo Ticket

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2. CSR Performance

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Performance Highlights

 2019.10 Received the honor of “Excellent Green Procurement Enterprise” by the Environmental Protection Administration for 11 consecutive times since 2008.  2019.05 Taiwan Stock Exchange presented THSRC with a “Top 5% of Corporate Governance Evaluations Award” for the second consecutive year.  2019.04 THSRC was selected by and listed in the FTSE4Good TIP Taiwan ESG Index for the second time.

 2018.11 Was given outstanding award in “2018 Low-Carbon Product Awards” by the Environmental Protection Administration, as the first award-winning transport operator.

 2018.11 Won the 11th Taiwan Corporate Sustainability Award (TCSA) in 2018.  2018.08 Listed on FTSE4Good Emerging Index.  2018.07 Listed on TWSE Corporate Governance 100 Index.

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Conclusion

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Vision: To be the platform for advancement and enjoyment.

Integrate technology into services for new 4T smart and convenient life. THSRC strives to be one of the top ten brands in Taiwan.

運輸 To build professional transportation systems that provide high quality . T services and products ransportation

科技 To implement intelligent transportation that improves operational efficiency T and quality, and enhances services, safety, and emergency responses. echnology

在地 To combine unique local cultures and landscapes to create a multicultural T aiwan platform. 關懷 To establish brand culture, enhance talent skills and corporate efficiency, T ouch and participate in social caring and environmental protection.

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To learn more about THSRC, please visit http://www.thsrc.com.tw

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