USI — Investor Presentation 2021

May 24, 2021

USI CORPORATION

(Stock Code ： 1304)

Investor Conference

2021.05.24

1/26

Disclaimer

This presentation includes the Company’s current information. Any development or adjustments thereof will be published according to laws, regulations or rulings. The Company is not obligated to update or revise this presentation.

The information in this presentation is not for investment advices.

2/26

Presentation Outline

==> picture [67 x 308] intentionally omitted <==

General Information of USI Business Review and Outlook Finance Information Q&A

3/26

General Information of USI

Reported By: Mark Wu (Vice President of Sales & Marketing Dept.)

4/26

Established Date

Capital

No. of Employees

Revenue (2020)

May 26, 1965

NT$11,888M (up to Mar. 31, 2021)

470 (up to Mar. 31, 2021)

Individual ： NT$10,200M Consolidated ： NT$50,200M

5/26

High Pressure LDPE/EVA Plant

Main Products

• 4 sets of High-Pressure LDPE/EVA Total at Autoclave Production 150KMT Lines

• 4 sets of High-Pressure

• Low Density Polyethylene Resins (Injection/Film Grades)

• Ethylene Vinyl Acetate Copolymer Resins (Foaming/HMA/PV Grades)

6/26

Low Pressure HDPE/LLDPE Plant

Production Annual Main Facility Capacity Products

1 set of Gas Phase • HDPE/LLDPE Total at Production Line 130KMT

• 1 set of Gas Phase

• High Density Polyethylene Resins (Injection/Yarn/ Rotation Grades)

• Linear Low Density Polyethylene Resins (Blown Film/Casting Grades)

7/26

Business Review and Outlook

Reported By: Mark Wu (Vice President of Sales & Marketing Dept.)

8/26

Crude/Ethylene Prices Review

• Ethylene ： Due to COVID-19 epidemic disease spread and oil prices fluctuation the price in H1 of 2020 varied a lot. In H2 2020 it was driving sharply up by strong demand of downstream derivatives.

==> picture [721 x 347] intentionally omitted <==

----- Start of picture text -----

（ $/b ） （ $/MT ）
Brent C2 NEA
70 1200
60
1000
50
800
40
600
30
2020
2021 400
20
200
10
0 0
Source from: Platts
9/26
----- End of picture text -----

EVA Prices Review

EVA Price Trend

==> picture [640 x 311] intentionally omitted <==

----- Start of picture text -----

EVA 14%~20% CFR CMP EVA 22%~30% CFR NEA Ethylene CFR NEA
2800
2300
1800
2020 2021
1300
800
300
Source from: ICIS
USD/MT
----- End of picture text -----

10/26

PE Prices Review

PE Price Trend

==> picture [95 x 9] intentionally omitted <==

----- Start of picture text -----

HD YARN CFR FEA
----- End of picture text -----

HD INJ CFR FEA

Ethylene NEA

==> picture [613 x 196] intentionally omitted <==

----- Start of picture text -----

1300
1200
2020 2021
1100
1000
900
800
700
600
500
400
300
USD/MT
----- End of picture text -----

Source from: Platts

11/26

Business Review of 2018 to Q1, 2021

Comparison of Sales Volume

==> picture [600 x 288] intentionally omitted <==

----- Start of picture text -----

300
271
253 256
250
200
150
100
68
50
0
2018 2019 2020 2021 Q1 Unit: KMT
----- End of picture text -----

12/26

Q1 of 2019 & 2021 Sales Volume Comparison

	Jan.~Mar., 2020	Jan.~Mar., 2021	Variance
Total	57,439	68,188	+10,749

Unit: MT

13/26

• EVA sales in Q1 2021 were with full swing momentum as that in Q4 2020. It weakened shortly before Chinese New Year festival but rose again quickly due to the impact of big earthquake hit Japan and severe ice storm hit Texas USA in Feb. 2021.

• PV demand was softer after CNY festival due to continuous surging of raw materials costs such as polysilicon, glass, EVA, and etc.. Downstream module factories suffered from profit loss and were reluctant to place new orders thus caused PV film demand shrinkage.

• Affected by severe ice storm hit Texas, the EVA raw materials for shoes foaming application faced short supply. Brand shoes OEM factories encountered a shut-down risk due to this belated delivery. They had to seek help from USI for immediate which resulted in the sales volume of our

• shipment support foaming grades increased significantly compared with the same period of last year.

• EVA sales volume in Q1 2021 increased by 16% compared with Q1 2020.

14/26

• Uncertainty of deep sea cargo. Tight supply from North America caused by Texas ice storm. Subdued Asia supply due to Middle East cargo flowing into EU in the first priority, thus the PE market prices increased sharply after Spring Festival.

• • HDPE：Both domestic and export sales volume were increased. Compared with Q1 2020, the sales volume in Q1 2021 increased by 25%.

• LLDPE：Sales focused on regular customers’ needs with price-based quantity. The sales volume in Q1 2021 was increased by 24% compared with Q1 in 2020

• • LDPE：Limited allocation for regular users only. Using APC’s production line to make LDPE. The sales volume in Q1 2021 was decreased by 19 % compared with Q1 in 2020.

15/26

Global PV Demand

2010~2021 Global PV Installations

==> picture [523 x 249] intentionally omitted <==

----- Start of picture text -----

180 (Est.)
158
150 139
115
120
98 97
90
75
56
60
45
41
28 30
30
18
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
(GW)
----- End of picture text -----

Source from :

1. IHS

2. IEA (International Energy Association)

3. Energy trend

4. CPIA

16/26

China EVA Demand

Year	Production	Import	Export	Demand	Self-sufficiency rate
2017	555	1,035	64	1,526	36%
2018	631	976	49	1,558	40%
2019	736	1096	60	1,771	42%
2020	741	1177	54	1,864	40%
2021 Q1	201	321	12	509	39%

Unit: KMT

==> picture [535 x 224] intentionally omitted <==

----- Start of picture text -----

2000
1800
1600
1400
1200
1000
800
600
400
200
0
2017 2018 2019 2020 2021
(Q1)
Reference: Chem99,
Production Import Export Demand China Customs Data
----- End of picture text -----

17/26

Business Outlook of 2021

Crude Oil ：

Markets hold conservative point of view in 2021 due to many variables like resurgence of COVID-19 and uncertainty of OPEC+ oil-producing movement, and etc.. Yet it is forecasted to be more stable than last year. Ethylene ： Global supply of ethylene in H1 2021 was seriously affected by severe cold damage in Texas and the overhaul of crackers in spring. It is expected to stabilize gradually especially in H2 while new capacity mainly from China will be released into the market.

18/26

Business Outlook of 2021

PE & EVA ：

 It is optimistic for long term PV industry development but for short term closely watch is still necessary. In Q1 the progress is lagging behind target. Some clients who fear the same scenario in 2020 will happen again in China have begun to deploy ahead of schedule.

 Following new EVA capacity released in China this year requires close monitoring which affects the supply and demand status in H2.

 COVID-19 influence on global economy is continuous. Thus the demand for facial masks and other hygiene materials are sustained. Pay close attention to the needs of customers.

 Continuously promote high-performance EVA products. Also improve the quality of HD products further to develop niche market.

19/26

Gulei Petrochemical Project

• Taiwan and China each holds 50%

• Total investment (Taiwan & China) ： 30.39 Billion RMB

• . Sales and production of Ethylene, Propylene, Butadiene, Ethylene Vinyl Acetate copolymers (EVA), Ethylene Oxide (EO), Ethylene Glycol (EG), and etc..

• 2016/11 Fujian Gulei Petrochemical Co. Ltd. was established.

• 2017/12 Opening ceremony of Fujian Gulei Petrochemical Co. Ltd. was launched.

• 2018/08 Overall design of Gulei Petrochemical Project was approval.

• 2019/05 The Land Usage Proposal and Infrastructure Plan were reviewed.

• 2019/06 Project construction was started

• 2021/03 Test-run of PP item was successfully performed

• 2021/06 SM item will be mechanical completion and test-run

• 。

• 2021/Q3 Steam Cracker will be mechanically complete

20/26

USI Corporation and Subsidiaries

Consolidated Financial Information

Reporter :Amy Kuo, Manager of Accounting Dept. Date : 2021,May.24

21/26

USI Corporation Consolidated Statements of Income

==> picture [642 x 369] intentionally omitted <==

----- Start of picture text -----

(In millions of NTD, except per share data)
2021 2020 2020 2019 2018
YoY%
1/1-3/31 1/1-3/31 FY FY FY
Sales 16,194 11,356 42.6% 50,201 55,657 60,893
Cost of goods sold 11,738 9,517 23.3% 39,721 48,924 55,098
Gross profit 4,456 1,839 142.3% 10,480 6,732 5,795
gross profit ratio 28% 16% 21% 12% 10%
Selling and administrative expenses 1,148 765 50.1% 3,221 3,385 3,440
R&D expenses 105 85 23.1% 363 416 422
Operating income 3,204 989 223.8% 6,896 2,932 1,933
operating income ratio 20% 9% 14% 5% 3%
Non-operating income(loss) 61 (100) -160.4% 227 434 597
Income before income taxes 3,265 889 267.1% 7,123 3,366 2,530
Income taxes 690 244 183.4% 1,440 820 654
Net income 2,574 646 298.7% 5,683 2,545 1,876
net income ratio 16% 6% 11% 5% 3%
Net income attributable to
- USI Corporation 1,249 217 475.5% 2,410 1,281 540
- non-controlling interests 1,326 429 209.2% 3,273 1,264 1,336
Earnings per share 1.16 0.20 2.25 1.19 0.50
----- End of picture text -----

22/26

USI Corporation

Financial ratio analysis-Consolidated

	2021 1/1-3/31	2020 1/1-3/31	2020 FY	2019 FY	2018 FY
Operating income margin(%)	19.8	8.7	13.7	5.3	3.2
Net income margin(%)	15.9	5.7	11.3	4.6	3.1
Debt ratio(%)	36	43	37	45	47
Current ratio(%)	219	267	225	222	205
Quick ratio(%)	176	212	185	177	155
Accounts receivable turnover days	45	54	54	52	50
Inventory turnover days	36	49	42	43	45

23/26

EPS vs DPS

==> picture [665 x 386] intentionally omitted <==

24/26

==> picture [721 x 271] intentionally omitted <==

25/26

Thanks for attending the conference and your kind support.

Company Website ： https://www.usife.com.tw

26/26