TST Group — Interim / Quarterly Report 2021

Oct 21, 2021

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TST Group Holding Ltd. TST Group -KY(4439) October 2021

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Safe Harbor Notice

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◼ The content of related information in this briefing report and the synchronous announcement is sourced from internal and external data of TST Group, including the operation result, financial situation and the business development, etc.

• No financial forecasting has been released by TST Group. The discrepancy be existed between the actual result in the future and the estimated

• may opinion to TST Group’s operation and business development subjects indicated in this briefing report with respect to the financial, business and Q&A part. The causes of the discrepancy may include the variety of market needs, price fluctuation, competition activities, international economic situation, exchange rate fluctuation, upper and downer stream supply chain, and any other risk factors that are beyond TST Group’s control.

• The prospects for the future in this briefing report reflect TST Group’s vision on the future so far. TST Group is not responsible for any notification or update with regard to any change or adjustment to these prospects in the future.

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TST Group Holding Ltd.

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Contents

1. Company Profile 2. Main Products

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3. Competitive Advantage 4. Financial Overview 5. Q&A

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Company Profile

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• Year of establishment：1995

• Capital：TWD 315 million

• Chairman/CEO/COO ：

• LIN CHIN MAO/LIN CHING WEI/ HUNG KSIANG MING

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• Main products：Sports and leisure cotton blended knitted fabric

• Place of operation ：Hong Kong、China、

• Cambodia and Vietnam

• Group employee ：About 1,100

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Global Strategy

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CHINTEX ENTERPRISES LIMITED

• ➢Main business activities : Sale of textile

GUANGZHOU RUNWELL KNITS TEXTILE

➢Main business activities : Sale of textile

TST Group Taiwn office

TOP STAR TEXTILE LIMITED

• ➢Main business activities : Sale of textile

Top Sports Textile Ltd.

• ➢ Main business activities : Manufacture of textile

Top Star Textile Vietnam Company Limited

• ➢ Main business activities :Manufacture of textile

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Main Products

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◼ High-quality cotton and cotton blend knitted sports and leisure fabrics

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Spacer
Multiple fibers
Special patterns
Breathable knitting
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Fleece
Fluffy hand feel
Pilling resistant
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French Terry
Special grain design
Smoother knitting
techniques
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Dry Nit
Single Jersey
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Business Partner

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Competitive Advantages

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◼ Flexible order distribution capacity: two production bases, mainland certified longterm partners and Cambodian own factory, providing advantages such as production flexibility, rapid delivery and product diversification

Outstanding orders and Production management capabilities

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Layout in Southeast Asia Close to the supply chain

• The only largest knitted fabric supplier in Cambodia

Excellent quality control

Marketing model of direct brand connection

• Brand awarded self-test certification

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Take orders and discuss prices directly with the brand

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Com an Value p y

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• International customers with brand value ：International famous

• brand such as adidas, NIKE , PUMA, GAP and LI NING, etc

• Steady business：For the past years (2017 to 2020), TST Group has a stable profitability. During this period, annual profitability of the Group was one share capital.

• Stable dividend payout rate: TST Group promises to return profits to shareholders. In addition, the dividend payout rate will be about 50% this year.

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Financial Overview-Monthly Revenue

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900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000

• Jan Feb Mar Feb May Jun Jul Aug Sep Oct Nov Dec 2021 Sales reveue 2020 Sales reveue 2019 Sales reveue

Note: All data is self-assessed

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Financial Overview-Quarterly Revenue

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NT$ Thousand

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8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
- 2019 2020 2021
Q1 1,710,465 1,424,316 1,505,177
Q2 2,009,559 1,064,440 1,813,118
Q3 2,088,174 1,639,350 2,268,257
Q4 1,550,240 1,261,088 -
Total 7,358,438 5,389,194 5,586,552
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Note: In Q3 2021 is self-assessed

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Financial Overview-Customer Ratio

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2020 H1
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2020

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2021 H1
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5.7% 3.6% 4.0% 0.5%
0.2% 1.0% [5.0%]
5.1%
6.4%
11.1% 10.0%
13.5%
10.6%
15.0% 53%
68.8% 65%
21.6%
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ADIDAS GAP PUMA NIKE LI NING OTHERS

ADIDAS GAP PUMA NIKE LI NING OTHERS

ADIDAS GAP PUMA NIKE LI NING OTHERS

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Financial Overview

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NT$ Thousand

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1,400,000 16
1,276,221
13.92 1,169,454 14
1,200,000
13.25
11.45
11.27
12
1,000,000
883,908
8.25 811,573 10
800,000
675,114
8
600,000 537,533 556,256
520,436 6.48
6
400,000 343,210 344,413
4
247,167 256,234
200,000
2
0 0
2016 2017 2018 2019 2020 2021H1
Net Operating Margin 675,114 811,573 883,908 1,276,221 1,169,454 556,256
Profit Before Income Tax 247,167 343,210 344,413 520,436 537,533 256,234
EPS 8.25 11.27 11.45 13.92 13.25 6.48
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Financial Overview

Gross margin & Operating Margin

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Gross margin Operating Margin
21.70%
18.42%
17.34%
16.68% 16.76%
15.32%
10.30%
7.95%
7.50% 7.26%
6.09%
5.81%
2016 2017 2018 2019 2020 2Q21
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Relationship between regional sales volume and gross margin changes in each quarter

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100%
90%
80% 40% 41%
51% 53% 52%
70% 59%
69%
60%
50%
48% 57%
40% 58%
46%
30% 47%
40%
30%
20% 25% 24%
19% 21%
18%
10% 13%
0%
1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21
Cambodia China Gross margin
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Financial Overview

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Cotton Trend

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120
100
80
60
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40
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0

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International Cotton Indices U.S. Cotton

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Financial Overview- 2021 Q2 VS 2020 Q2

NT$ Thousand	NT$ Thousand	2021Q2	%	2020Q2	%	YOY	YOY
Sales revenue		1,813,118	100.00	1,064,440	100.00	748,678	70.34%
Operating costs		1,568,452	86.51	872,856	82.00	695,596	79.69%
Net operating margin		244,666	13.49	191,584	18.00	53,082	27.71%
Operating expenses
Selling expenses		43,490	2.40	37,171	3.49	6,319	17.00%
General and administrative expenses		119,153	6.57	84,957	7.98	34,196	40.25%
Research and development expenses		2,381	0.13	4,970	0.47	(2,589)	-52.09%
Impairment loss (impairment gain and reversal of impairment loss) determined in accordance with IFRS 9		(1,169)	(0.06)	(1,477)	(0.14)	308	-20.85%
Total operating expenses		166,193	9.16	128,575	12.08	37,618	29.26%
Operating profit		78,473	4.33	63,009	5.92	15,464	24.54%
Non-operating income and expenses
Interest income		2,124	0.12	2,797	0.26	(673)	-24.06%
Other income		17,129	0.94	4,075	0.38	13,054	320.34%
Other gains and losses		(575)	(0.03)	(1,726)	(0.16)	1,151	-66.69%
Finance costs		(1,390)	(0.08)	(1,951)	(0.18)	561	-28.75%
Total non-operating income and expenses		17,288	0.95	3,195	0.30	14,093	441.10%
Profit before income tax		95,761	5.28	66,204	6.22	29,557	44.65%
Income tax expense		18,932	1.04	16,401	1.54	2,531	15.43%
Profit for theyear		76,829	4.24	49,803	4.68	27,026	54.27%
EPS							16 ~~55.~~06%
		~~2.45~~		~~1.58~~		~~0.87~~

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Financial Overview- 2021 H1 VS 2020 H1

NT$ Thousand	NT$ Thousand	2021H1	%	2020H1	%	YOY	YOY
Sales revenue		3,318,295	100.00	2,488,756	100.00	829,539	33.33%
Operating costs		2,762,039	83.24	2,029,026	81.53	733,013	36.13%
Net operating margin		556,256	16.76	459,730	18.47	96,526	21.00%
Operating expenses
Selling expenses		73,540	2.22	71,048	2.85	2,492	3.51%
General and administrative expenses		241,208	7.27	198,949	7.99	42,259	21.24%
Research and development expenses		4,478	0.13	8,198	0.33	(3,720)	-45.38%
Impairment loss (impairment gain and reversal of impairment loss) determined in accordance with IFRS 9		3,875	0.12	(1,377)	(0.06)	5,252	-381.41%
Total operating expenses		315,351	9.50	279,572	11.23	35,779	12.80%
Operating profit		240,905	7.26	180,158	7.24	60,747	33.72%
Non-operating income and expenses
Interest income		5,135	0.15	3,941	0.16	1,194	30.30%
Other income		17,509	0.53	15,321	0.62	2,188	14.28%
Other gains and losses		(4,389)	(0.13)	(583)	(0.02)	(3,806)	652.83%
Finance costs		(2,926)	(0.09)	(4,686)	(0.19)	1,760	-37.56%
Total non-operating income and expenses		15,329	0.46	13,993	0.57	1,336	9.55%
Profit before income tax		256,234	7.72	194,151	7.81	62,083	31.98%
Income tax expense		52,982	1.60	47,979	1.93	5,003	10.43%
Profit for theyear		203,252	6.12	146,172	5.88	57,080	39.05%
EPS							17 ~~39.~~35%
		~~6.48~~		~~4.65~~		~~1.83~~

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Q&A
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THANK YOU FOR YOUR ATTENTION

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