UPC — Investor Presentation 2023

Aug 18, 2023

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18 August, 2023

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Disclaimer

• This presentation may contain forward-looking statements that reflect the current assumptions, estimates and our own information and other sources information now available planning, based upon

• to us so far. These information including all business prospects or forward-looking statements may be affected by unknown risks, uncertainties and other factors up to change or cause actual results to differ materially.

• Meanwhile, this presentation is not intended to represent complete statement of the Company (UPC), industry or future development.

• Except as required by law, we undertakes no obligation to publicly update or revise the information contained in this presentation, whether as a result of new information, future events or otherwise.

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Copyright © 2023 UPC Technology Corp.

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Agenda

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Reporter
Company Profile and Special Assistant
June Chang
President office
Future Development
VP & CFO
Financial Performance Simon S.C. Wu
Finance & Administration Function
Yi-Shaw Ko Vice Chairman
Ann Bih President
Q & A
Simon S.C. Wu VP & CFO
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Copyright © 2023 UPC Technology Corp.

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Group
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Founded
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•
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of Employees
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1915
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31 July, 2023)
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Revenue
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•
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US$2.4
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2023 H1 : NT$33.5
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Billion)
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•
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•
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Taiwan Stock Exchange listed (Y1989): code 1313

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We are committed to providing the most professional and satisfying products and services to our customers.

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2023 UPC Technology Corp.
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Panjin, Liaoning
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Zhenjiang,
Jiangsu
Taizhou, Jiangsu
Nanchong,
Sichuan
Taipei(HQ)
Zhongshan, Guangdong
Zhuhai, Guangdong
UPCHK
Linyuan,
Bangkok, Kaohsiung
Thailand
Ho Chi Minh,
Vietnam
Kuantan,
Malaysia
Manufacturing & Logistics Center
Marketing center 4
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General & Green Plasticizers
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• Low molecular weight (LMW) phthalates (DEHP、DBP)

• High molecular weight (HMW) phthalates (DINP、DPHP)

• Hydrogenated Plasticizer (DINCH)

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Acid & Anhydride
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• Phthalic Anhydride (PA)

• Maleic Anhydride (MA)

• Fumaric Acid (FA)

• Terephthalates (DOTP、DINTP)

• Adipate Plasticizer (DOA、DINA、DPHA)

• Trimellitate Plasticizer (TOTM、TINTM 、TPHTM)

• Linear Plasticizer (DnDP、911P、810TM、TNOTM)

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PVC Plastic Resin
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• Polymeric Plasticizer (UN600 series)

• Bio-based Plasticizer (ESBO、DOS)

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• suspension PVC

• Unsaturated Polyester Resins

• Polyester Polyol

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Copyright © 2023 UPC Technology Corp.

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Continue to develop green plasticizers
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Y2022 plasticizers Sales Volume : 1.24 million tons (Breakdown by Products)

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-
High temperature resistant plasticizers
for Electric Vehicles
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Bio & CO
2 based plasticizers
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Plasticizers for medical devices
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2023 UPC Technology Corp.
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largest PA
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Plasticizers
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Capacity breakdown by products (unit : KTPA)

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Expansion Projects in 2023
Panjin
PA + 70 KTPA
MA + 50 KTPA
(end 2023)
Taizhou
Plasticizers
+145KTPA ()
(2023/9)
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()
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• converted to DEHP capacity

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2023 UPC Technology Corp.
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• ** others : FA, UPR, POLYOL

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2023/H1
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Sales Volume : 934 KTPA
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Sales Volume Breakdown by Products

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Specialties 2%
Anhydride 9%
PVC 22%
產品與服務 plasticizer
營收占比(%)
67%
Copyright © 2023 UPC Technology Corp.
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Sales Volume Breakdown by Region JP/KR Europe China 1.6 % 0.03 % 87.3 % America 0.7 % M. East SEA & Taiwan 2.4 % & Africa S.Asia 0.8 % 6.9 % Oceania 0.3 %

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KTPA

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Global PVC market
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rise at a
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-
2024
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48,083 (+5.8%)	46,448 (-3.4%)	47,284 (+1.8%)	49,034 (+3.7%)

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* Source:
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Market Analytics by
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IMF (2023.07)
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2023 UPC Technology Corp.
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Comprehensive and JIT
Liaoning
Sichuan Jiangsu
Guangdong
Taiwan
Thailand
Vietnam
Malaysia
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Our Logistics & Service Business

		Chemical Storage	Chemical Storage	Transportation	Transportation
	Region	Warehouse (M 2 )	Tank (M 3 )	Tractor head	Tail trailer
Own	Liaoning	9,289	103,000	8	11
	Jiangsu	38,355	270,850	42	53
	Guangdong	12,771	140,620	43	49
	Sichuan	3,868	25,400	2	2
	Taiwan	4,526	46,337	-	16
	Malaysia	384	36680	6	6
TOTAL		69,193	622,887	101	137
3rd party	Liaoning	-	-	65
	Jiangsu	-	-	43
	Guangdong	-	-	53
	Sichuan	-	-	3
	Taiwan	-	15,600	-
	Thailand	-	3,042	-
	Vietnam	-	1,761	-
TOTAL			20,403	164

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Copyright © 2023 UPC Technology Corp.

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Our Logistics & Service Business

Terminal operations and pipeline transfer for bulk chemicals

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Panjin, Liaoning
 Own Jetty
•
50,000 DWT
•
10,000 DWT
Taizhou, Jiangsu
Zhongshan, Guangdong
 Own Jetty
 Own Jetty •
50,000 DWT
•
5,000 DWT
Zhuhai, Guangdong
 3 [rd] party Jetty
• Zhenjiang, Jiangsu
80,000 DWT
•  3 [rd] party Jetty
50,000 DWT
•
20,000 DWT
•
5,000 DWT
Malaysia
3 [rd] party Jetty
•
23,000 DWT
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Copyright © 2023 UPC Technology Corp.
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UPC Carbon Reduction Performance
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2021 2022 2023/H1 845 788 366 530 491 224 315 297 142 -80 -37 -21 -600 -660 -337 -680 -697 -358

Unit : 1,000 MT-CO2e 2021 Carbon emission 845 of Scope 1+ 2 530 Scope 1 315 Scope 2 Carbon reduction -80 of Scope 1+ 2 • PA/MA Steam to TG (power) • Improve Process Efficiency • Recovery PA H/L as fuel • Recovery waste alcohol as fuel • Recovery PA waste water to make FA

Carbon reduction -600 other than Scope 1+ 2 • PA/MA Steam for process & heating • PA/MA Steam sold to customers • Pallet & FIBC recycle . reuse

Total carbon reduction

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2023 UPC Technology Corp.
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Carbon reduction projects - Solar Energy

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site	Expected solar	Expected carbon
	power generation	reduction per year
	per year(MWh)	(MT-CO2e)
Taiwan	211	104
Malaysia	500	248
Zhongshan, Guangdong	770	381
Zhuhai, Guangdong	1,621	802
Zhenjiang, Jiangsu	270	134
Taizhou, Jiangsu	5,840	2,396
Panjin, Liaoning	1,350	668
Nanchong, Sichuan	970	480
TOTAL	10,532	5,213

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2023 UPC Technology Corp.
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Carbon reduction
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Carbon reduction projects - R eplace with high energy efficiency equipment	Carbon reduction projects - R eplace with high energy efficiency equipment	Carbon reduction projects - R eplace with high energy efficiency equipment
- Raise energy integration efficiency
	Projects	Expected carbon reduction per year (MT － CO 2 e)
Air compressor	replace with two-stage & inverter compressors	1,795
Cooling water pump	replace with high-efficiency & energy- saving water pumps	6,770
PA/ MA blower	frequency conversion to replace IGV	2,450
Raise steam utilization efficiency	low pressure steam to replace high pressure steam. There will be more high pressure steam togeneratepower (TG)	6,675
	Invest new TG in Taiwan site (on-stream in Oct. 2023)	6,760

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2023 UPC Technology Corp.
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	Carbon reduction projects - Circular Economy Implementation	Carbon reduction projects - Circular Economy Implementation	Carbon reduction projects - Circular Economy Implementation	Carbon reduction projects - Circular Economy Implementation	Carbon reduction projects - Circular Economy Implementation
			2021	2022	2023/H1
	 Convert process heat to steam	MT	3,938,545	2,813,310	1,517,379
	 Recycle and reuse of waste water (bio - treatment)	M 3	992,310	1,167,909	598,571
		recovery rate	71%	76.8%	76.6%80% (Panjin plant waste water treatment improvement project done in Sep. 2023)
	 Rainwater harvesting & utilization	M 3	26,820	89,006	32,781
	 Recycle the waste filter cake of plasticizer process to make PVC compound	MT	3,826	3,529	1,918
	 Pallet r ecycl e & reuse	PC	20,868	6,997	1,603
	 FIBC (Flexible Intermediate Bulk Containers) r ecycl e & reuse	PC	5,874	8,075	3,803
	 Recovery PA d istillation residue as fuel	MT	1,354 / 923	1,059 / 621	467 / 217
	 Recovery alcohols as fuel	MT	950	1,926	581

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2023 UPC Technology Corp.
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F
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Development
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• the business to maintain our

• Continuously expand scope and scale leading position in the PA and plasticizer market.

• -

• Continuously R & D green, eco friendly and high value added products.

• Further deployment in Southeast Asia to strengthen the supply chain resilience.

• Establish knowledge management systems.

• Accelerate digital transformation.

• -

• Implement ESG and move towards the 2050 Net Zero goal.

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2023 UPC Technology Corp.
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2. Financial Performance

Copyright © 2023 UPC Technology Corp.

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2018~2023/H1 Consolidated Revenue

(Billion NTD)

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Copyright © 2023 UPC Technology Corp.

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2023/H1 Sales Revenue : 33.5 Billion NTD (YoY growth rate of -16%)

Sales Revenue Breakdown by Products Main Products Revenue & YOY Growth rate

(2023/H1)

(2023/H1 vs 2022/H1)

(Billion NTD)

2023/H1 Total Revenue 33.5 Billion NTD

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2023/H1 Sales Volume : 0.93 million tons (YoY growth rate of +2.6%)

Sales Volume Breakdown by Products Main Products Sales Volume & YOY Growth rate (2023/H1 ) (2023/H1 vs 2022/H1)

2023/H1 Sales Volume 0.93 million tons

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+4.3%
+35.6%
-25.3%
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2018~2023/H1 Net Income after Tax & EPS

Net Income after Tax (Billion NTD)

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EPS (NTD)
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(%)
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2018~2023/H1 Financial ratio：Financial structure (%)

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(%)

2018~2023/H1 Financial ratio：Solvency (%)

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2018~2023/H1 Capital Expenditures

(Billion NTD)

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2023/H2
2023/ H1
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Copyright © 2023 UPC Technology Corp.

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File download

Copyright © 2023 UPC Technology Corp

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The operating rate of PA in China hit a six-year low in July 2023

E. China PA price in RMB/MT

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OX based PA
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Naphthalene based PA

• High oil prices + new PTA capacity  high OX cost

• Sluggish downstream demand

• Competition pressure from naphthalene based PA

• Reduce PA OR and captive use to make plasticizer to reduce losses

• Copyright © 2023 UPC Technology Corp.

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In 2023, 2EH in China will maintain a tight balance

E. China C3/2EH/DOP price in RMB/MT

• 2EH will keep tight before new capacity installation

• After 2024, new 2EH projects startup, most in East China

• • China 2EH capacity double in 2027

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VCM maintenance in June. PVC price raised in July

E. China C2/VCM/PVC price in RMB/MT

• Contract VCM stable supply : 35KTPA/month

• VCM plants maintenance in June, tight supply

• Low PVC inventory in US. Push PVC price $150/MT higher in July

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Copyright © 2023 UPC Technology Corp.

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Thank You!
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2023 UPC Technology Corp
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www.upc.com.tw