YC — Interim / Quarterly Report 2016

Nov 17, 2016

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Quality comes first ‧ integrity first ‧ Quality Sincerity

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LISTED CODE： 2069

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AGENDA
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■ Who We Are? ■ What We Do?

■ How We Did? ■ Can We Do better?

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About Us

Management Company Team History

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About Us
Who We Are
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• Date of Established：

July,1987

• Capital： NT$ 1.2431 billion

• Chairman： Yen, Te-Ho

• General Manager： Yen, Teh-Wei

 Address of Headquarter： 13F, No. 235 Jungjeng 4[th] Rd, Chianjin Chiu, Kaohsiung, Taiwan

• Subsidiary： Ningbo Qiyi Precision Metals Co. Ltd

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 Number of Employees： 520

• Listed Date：

22[nd] , March, 2016

• Main Services：

Stainless Steel Material Processing and Merchandising

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Our History
Who We Are
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Foundation
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• Founded by the chairman, Mr. Yen, Te-Ho in 1987

• Yuen Chang formally entered the field of Stainless Steel

• manufacturing, processing and merchandising.

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Growth
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• 1988-1993

• Plant in Gangshan was completed.

• Plant in Yanchao was completed to cover Gangshan’s over-loading capacity.

• 1993-2011

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Transformation
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• Ningbo Qiyi Precision Metals Co. Ltd was founded and commenced to run the stainless steel market in China

• Headquarter was founded in Kaohsiung, Taiwan

• ‘Awarded for International Trade in 2008’ by MOEA

• Plant in Dafa as a Stainless Steel Service Center was completed to expand other overseas markets.

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Our History
Who We Are
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• 2012 - 2016

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•
•
•
Expansion •
•
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• Completed the second stage of Dafa Plant expansion

• Added new type Fly-Shear Cut-To-Length Line in Dafa Plant

• Certified as ‘Bonded Factory’ by Customs Administration, Ministry of Finance

• Completed the second stage of Ningbo Qiyi Plant expansion, the annual capacity reached to 72,000 Tonnes

• Ningbo Qiyi was awarded as ‘National High & Advanced Technological Enterprise’ in China

• Stock started offering in 2014, Registered to emerging Stock Board in 2015 and Stock listed in 2016

• The Dafa Plant was awarded as ‘Excellent Bonded Factory’ by Customs Administration, Ministry of Finance in 2014

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Our History
Who We Are
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Ninghai New Plant

 Licensed Date：Aug.17, 2016

• Groundbreaking：Nov.08, 2016

• Dimension：55,000 Pings

• Investment：NT$2 Billion Up

• Capacity:10,000 Tonnes / Month

• Entering Production ：Q4,2017

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Title	Name	Academic Background	Professional Experience
Chairman	Yen, Te-Ho	Ming-der Commercial and Vocational High School EMBA, National Sun Yat-sen University
General Manager	Yen, Teh-Wei	BBA, Department of Business National Taiwan University MBA, University of Missouri	Manager of Financial Supervision, American Express Commissioner of Import and Export Department, Citi Bank
Managing Director of Administration Division	Yeh, Mei-Yum	National Hsin Chu Commercial and Vocational High School	Accounting Manager, Kao Group
Vice President of Production Division	Wu, Huang-Yen	BSc, Department of Aeronautics and Astronautics, National Cheng Kung University MSc in Mechanical Engineering, National Chung Hsing University	Managing Director of Production Division, Yieh Mau Corp. Vice General Manager, YowJaan Chern Enterprise Co. Ltd (GuangDong Branch)
Assistant Vice President of Purchase Division	Huang, Ying-Hsueh	BBA, Department of Business Administration, National Sun Yet-sen University	Section Manager of Sales Department, Yieh United Steel Corp. Assistant Vice President, Ningbo Qiyi Precision Metals Co. Ltd
Assistant Vice President of Research and Development Team	Lee, Ming-Nan	BSc, Department of Mechanical Engineering, Feng Chia University	Director, Tung Mung Development Co.Ltd
Manager of Finance and Accounting Division	Chu, Pei-Chen	BBA, Department of Accounting, Tung Hai University MA in Business Management ,National Kaohsiung University of Applied Science	Director of Auditing, Crowe Horwath TW CPAs

Current Industry Situation

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Production Production Introduction Flow

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Current Stainless Steel Industry Situation
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 According to International Stainless Steel Forum, the compound annual growth rate of Global Stainless Steel market has reached 5.99 %, which shows a stable upward trend.

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Source： ISSF May, 2015

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Current Stainless Steel Industry Situation
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Upstream Midstream Downstream End User
Electronic Products
Integrated Mobile Phone,
Retailer or
Stainless Steel Mill Stainless Steel Tablet, Hard Disk,
TISCO,BAOSTEEL,POS Distributor LED Monitor
Service Center
CO, WALSIN LIHWA,
YUEN CHANG
TANG ENG, FUXIN
Home Appliances
●GRINDING &
Fridge, Washing
POLISHING
Machine, Dish Dryer,
●SLITTING Coffee Machine,
Microwave Oven
●SHEARING
Stainless Steel
Stamping and
QIYI
Cold Rolled Mill
Construction
Moulding
●SLITTING
QIYI
Manufacturer Engineering
●SHEARING
●Cold Rolling Petrochemical Tank
●Bright Annealing Mechanical Equipment
Building Fa ç ade
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Mobile Phone, Tablet, Hard Disk, LED Monitor

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Stainless Steel
Cold Rolled Mill
QIYI
●Cold Rolling
●Bright Annealing
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Fridge, Washing Machine, Dish Dryer, Coffee Machine, Microwave Oven

Petrochemical Tank Mechanical Equipment Building Fa ç ade Elevator

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Cold Rolled Stainless Steel Production Flow
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HR or CR Coil
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20 High Sendzimir Mill Horizontal BA Line Vertical BA Line 3

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BA Coil
Slitting Tension Levelling Skin Pass Mill
Cold Rolled
Shearing
Product
Flat Product
Slitted Coil
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Product Introduction-Type What We Do

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Ni-Cr Series 90%

Ni-Cr Series 20%

Cr Series 80%

Cr Series 10%

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Product Introduction-Type What We Do

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Stainless
Steel Coil
Stainless
Steel Strip
Stainless
Steel Sheet
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What We Do
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Eco-Friendly
3C Product Automobile
Energy
Construction
Appliance Battery
Engineering
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Product Introduction-Customers What We Do

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 Consolidated Sales Ratio

Vehicles, Batteries, Ecoenergies…etc. Others 9% Processing & Logistics 12% 32% 20% Home Appliance 27% 2015

Vehicles, Batteries, Ecoenergies…etc.

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Others
10%
11%
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Processing
& Logistics
28%
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2016
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Performance Competitiveness

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Thousand NT$/Tonne	2013 2014	2013 2014	2015 2016Q3	2015 2016Q3	2015 2016Q3
Item	Revenue Volume Revenue	Volume	Revenue	Volume Revenue	Volume
Yuen Chang	4,164,028 55,598 4,977,462	63,445	4,525,296	67,256 3,062,167	52,585
Qiyi	3,294,743 67,424 3,324,665	63,352	3,123,832	61,889 2,202,539	49,467
Consolidation	7,458,771 123,022 8,302,127	126,797	7,649,128	129,145 5,264,706	102,052

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Thousand $ Revenue
9,000,000 2014
8,000,000 2013 2015
7,000,000
6,000,000 2016Q3
2014
2015
5,000,000 2013 2014
4,000,000 2016Q3 2013 2015
3,000,000 2016Q3
2,000,000
1,000,000
0
YUEN CHANG QIYI CONSOLIDATION
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Volume

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Tonne
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2015
140,000 2014
120,000 2013
2016Q3
100,000 2014
015 年
80,000 2013
2014 2015
60,000 2013 2016Q3 2016Q3
40,000
20,000
0
YUEN CHANG QIYI CONSOLIDATION
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％	2013	2014	2015	2016 Q3
Yuen Chang	3.02	6.37	1.55	6.78
Qiyi	5.57	9.35	14.06	13.96
Consolidation	4.14	7.56	6.66	9.8

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％ Gross Margin
16
2015
14 2016Q3
12 2016Q3
2014
10
2014
8 2014 2016 Q3 2015
2013
6
2013
4 2013
2 2015
0
YUEN CHANG QIYI CONSOLIDATION
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Thousand NT$	2013	2014	2015	2016 Q3
Yuen Chang	(25,280)	65,320	(112,588)	46,113
Qiyi	49,326	67,149	173,610	113,820
Consolidation	24,046	132,469	61,022	159,631

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Thousand NT$ Net Profit
200,000 2015
2016Q3
150,000 2014
2016Q3
100,000
2014 2014 2015
2013
2016Q3
50,000 2013
0
YUEN CHANG QIYI CONSOLIDATION
-50,000 2013
-100,000
2015
-150,000
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	Counterparts	Counterparts	Counterparts	Counterparts	in Taiwan	in Taiwan	in Taiwan
			How We		Did
Companies	Yuen Chang	Yeou Yih	YC Inox	FROCH	Sin Kang	Ta Chen	Chain Chon	Chien Shing
2016 Q3 EPS(NT$)	1.35	0.41	1.32	0.49	0.40	0.13	(0.24)	0.10

NT$ 2016年Q3 EPS(NT$) Yuen Chang YC Inox 1.6 1.35 1.32 1.4 1.2 1 0.8 FROCH Yeou Yih 0.6 0.41 0.49 Sin Kang 0.4 0.40 Chien Shing Ta Chen 0.13 0.10 0.2 0 -0.2 Chain Chon (0.24) -0.4

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Competitive AdvantagesYuen Chang Taiwan How We Did

DUTY

CONCESSION

The Dafa Plant As A Bonded Factory by free duty, taking great advantages of purchase cost of material.

FULL-EQUIPPED PRODUCT

Full-Equipped Products Satisfy Customers’ Demand In One Stop Shop.

CONVENIENT TRANSPORTATION

The Dafa Plant Is Near By Kaohsiung Harbour. Its Location Facilitates Transportation To Global Stainless Steel Market.

Fully Associated with Major Global Stainless Steel Systems And Thus Easy To Obtain Timely Market Information. This Enables The Whole Group to Adjust Strategy With The MARKET Market . INFORMATION

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Competitive AdvantagesNingbo Qiyi How We Did

CAPACITY OF R&D

Great Capacity For Customised Products, Co-development With Suppliers And Customers From R&D To Production. Enhance Added Value Of Product .

CRAFTSMANSHIP & TECHNIQUES

Excellent Craftsmanship and Techniques in Producing Ultrathin Stainless Steel Foster Qiyi’s Competitiveness

GEOGRAPHIC ADVANTAGE

Located in China, The Largest Country of Stainless Steel Material Supply, Stable Material And Localised Services Have Won Qiyi An

Essential Position In Chinese Supply Chain .

Significant Market Share In China’s

Precision Stainless Steel Market Has Stablised Its Dominant Position. DOMINANT POSITION

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Development of Techniques & Products

Strategies & Prospects

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Development of Techniques & Products Can We Do Better

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Automotive Trim USB TYPE-C Eco-Energy

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Automotive
Trim
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• Corrosion Resistance

• Material • Excellent Brightness

• Requirement • Excellent Fineness

• • Excellent Formibility

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Application
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• Japanese Cars

• • European Cars

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USB
汽車
TYPE-C
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• Excellent Deep Drawing

• Material • Durability

• Requirement • Easy Plug-in

• • Notebook

• •

• Application Desktop • Mobile Phone

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Development of Techniques & Products
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Eco-Energy
電子汽車
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• Uniformity of Thickness

• Flatness of Surfaces

• • Mechanical Properties

Requirement

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Application
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• New Eco-Battery

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• Combined Advantages from Both Sides of Taiwan Strait

• Utilisation of Information Technologies

• Non stop R&D in Ultrathin Stainless Steel Flat Products

• Optimised Product Combination to Enhance Added Value

• Strengthen R&D in High Value Added Products

• Proper Utilisation of Geographic Advantages As A Bonded Advantages

• Constant Excellent Services

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Q ＆ A

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