TST Group — Management Reports 2021

Mar 25, 2021

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TST Group Holding Ltd. TST Group -KY(4439) 2021.03.25

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Safe Harbor Notice

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 The content and related information in this briefing report and the synchronous announcement are sourced from TST Group’s inner and outer material, including the operation result, financial situation and the business development, et cetera.

• No financial forecasting is released by TST Group. Discrepancy may be existed between the actual result in the future and the estimated opinion to the company operation and business developing subjects indicated in this briefing report with respect to the financial, business and Q&A part. The causes of the discrepancy may include the variation 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 beyond TST Group’s control.

• The prospects to the future in this briefing report reflect TST Group’s vision of future. TST 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 information

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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 、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 knited 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 long-term partners and Cambodian own factory, providing advantages such as production flexibility, rapid delivery and product Layout in Southeast Asia Close to the supply chain diversification

Outstanding orders and Production management capabilities

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• Cambodia's only largest knitted fabric supplier

• Brand awarded self-test certification

Excellent quality control

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Marketing model of direct brand connection

 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 ,adidas, NIKE , PUMA, GAP , LI NING etc.

• Steady business：For the past years (2017 to 2020), TST Group has a stable profitability, and during this period, the profitability is a share capital

• Stable dividend payout rate: TST Group promises to return profits to shareholders, this year's payout rate is about 50% faster

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Financial Overview-Sales

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NT$ Thousand
2,500,000
2,000,000
1,500,000
1,000,000
500,000
-
2018 2019 2020
Q1 1,131,847 1,710,465 1,424,316
Q2 1,435,432 2,009,559 1,064,440
Q3 1,837,709 2,088,174 1,639,350
Q4 1,364,682 1,550,240 1,261,088
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Financial Overview

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

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Gross margin&Operating Margin

Relationship between regional sales volume and gross margin changes in the quarter of 2020

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120.0% 30.00%
Gross margin Operating Margin
21.70%
100.0% 24.94% 25.00%
23.85%
18.42% 23.1% 21.6%
17.34% 33.7%
36.2%
16.68% 80.0% 20.00%
15.32% 18.83%
18.00%
13.50%
60.0% 15.00%
46.4%
10.30% 31.2%
59.9%
7.95% 7.50% 40.0% 49.4% 10.00%
6.09%
5.81%
4.00%
20.0% 5.00%
35.1%
30.5%
18.5%
14.4%
0.0% 0.00%
1Q20 2Q20 3Q20 4Q20
2015 2016 2017 2018 2019 2020
中國內銷 柬埔寨工廠 外銷中國生產 營業毛利
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Financial Overview

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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 Apr May Jun Jul Aug Sep Oct Nov Dec 2021 Sales revenue 2020 Sales revenue 2019 Sales revenue

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Financial Overview

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2019 2020
Sales (%) Sales (%)
1%
4%
4%
5%
10%
10%
8%
15%
14%
65%
64%
ADIDAS GAP PUMA
ADIDAS GAP PUMA LI NING OTHERS LI NING NIKE OTHERS
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Financial Overview

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NT$ Thousand	NT$ Thousand	2020	2019	YOY	YOY
		AMOUNT	AMOUNT	Difference	%
Sales revenue		5,389,194	7,358,438	(1,969,244)	(26.76)
Operating costs		(4,219,740)	(6,082,217)	1,862,477	(30.62)
Net operating margin		1,169,454	1,276,221	(106,767)	(8.37)
Operating expenses
Selling expenses		(140,437)	(179,155)	38,718	(21.61)
General and administrative expenses		(452,792)	(531,900)	79,108	(14.87)
Research and development expenses		(15,653)	(18,159)	2,506	(13.80)
Impairment loss (impairment gain and reversal of impairment loss) determined in accordance with IFRS 9		(5,535)	4,951	(10,486)	(211.80)
Total operating expenses		(614,417)	(724,263)	109,846	(15.17)
Operating profit		555,037	551,958	3,079	0.56
Non-operating income and expenses
Other income		26,350	13,278	13,072	98.45
Other gains and losses		(36,522)	(18,691)	(17,831)	95.40
Finance costs		(7,332)	(26,109)	18,777	(71.92)
Total non-operating income and expenses		(17,504)	(31,522)	14,018	(44.47)
Profit before income tax		537,533	520,436	17,097	3.29
Income tax (expense) benefit		(121,493)	(132,308)	10,815	(8.17)
Profit for the year		416,040	388,128	27,912	7.19
EPS					15 (4.81)
		~~13.25~~	~~13.92~~	~~(0.67)~~

Your Vision, Our Mission

THANK YOU FOR YOUR ATTENTION

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