YGG — Interim / Quarterly Report 2021

May 12, 2021

Safety First  Quality  Speed  Teamwork  Excellence Yeong Guan Group (1589 TT) 2020 Q1 Financial Results

Mr. Richard Lee (CSO) Mr. Ching-Wu Tsai (CFO) Mr. Kevin Tsai (AVP)

May 12, 2021

Disclaimer

The information contained in this document was verified by an independent third party. YG does is not responsible for the accuracy, fairness, and completeness of any information contained in this document. You should not assume any information in this document to be accurate, fair, nor complete. The information or opinions contained in this document is provided on a specified date, which YG reserves all right to update. YG has no obligation to notify you of any updates after a specific date or any development of information in the documents. YG will not accept any liability for any loss resulting from the use of this document or its contents or for other reasons related to this document.

This document does not constitute an offer or solicitation of an offer of purchase or acquisition to sell or issue shares of YG or any of its subsidiaries or related parties in any jurisdictions, does not serve as a part an offer or incentive, nor should be interpreted as such. Any part thereof or distribute the facts does not constitute the basis of any contract or commitment, and should not be relied upon in respect of any contract or commitment.

Your acceptance of this document constitutes your agreement that the information contained in the document is kept strictly confidential, securities researchers should have eligibility of the securities research and follow any relevant securities laws and regulations and restrictions of the appropriate jurisdiction before publishing research results on YG.

This document is provided for the securities researchers for use as their research reference only. Any part of the document cannot be photocopied, copied, forwarded, or in any manner, directly or indirectly transferred to any other person or for public announcement and for any other purpose.

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Outline

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Section One: 公司策略 1. Business Updates & Strategy

Section One: 公司策略 2. 2021 Q1 Financial Highlights Section Two: 3. Market Trends 營運目標 Section Three: ndix 永冠簡介 4. App

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3

Business Updates & Strategy

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4

2021 Q1 Updates

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COVID-19 in India New Customers

World economies are recovering from COVID-19, and thus demand for high quality casting increase as well. New customers are developed in all sectors, including Enercon of Germany

COVID-19 new cases surging in India and Southeast Asian countries Indian market is less than 6% of revenue, shipments to India is normal

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Record Breaking 2021 Q1

Q1 shipment reached 45,622 tons

Q2 shipment targets 47,50050,000 tons

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Raw Material Increase & Price Adjustment

Around 57 customers with annual revenue more than 1 million NTD. 51 customers have agreed to price adjustments, the others are still in discussion.

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Taichung Plant to Start Production in 2022

• Timeline: Construction started in 2020, targeting trial production by Q2 2022.

• Capacity: 80,000-100,000 tons/year.

• 45K by 2023, 60K by 2024, 80K by 2025

• Advantages:

• Customers nearby (Siemens/MVOW)

• Localization requirements

• Proximity to harbor

• Government incentives

• US Supply Chain Focused

• Capex

• Phase 1: NT$ 5.22bn to reach 45k output

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Taiwan
Strait
Siemens Factory
YG Site
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Received Construction License in mid January 2021. Construction underway per original plans.

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Thailand Construction Starts in H2 2021

• Construction starts in 2021. Production to begin in 2023.

• Phase 1: 60,000 tons/year capacity. Onshore Wind, Plastic/Industrial machineries.

• Advantages:

• 968,000 m² site with industrial development potential.

• 8 years tax-free and 5 years halved tax incentives.

• EIA approved, can be developed in stages

• US Supply Chain focused

• Capex: estimated NT$ 2.6 billion for Phase 1

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Total Area
968,000 m²
1 hr drive from 3 nearby sea
距離3個主要港口約1
ports
小時車程
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Thailand’s Board of Investment is reviewing Yeong Guan’s application in due process. Factory design being finalized.

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Outlook for 2021 and Beyond

 Near Term (1-2 years)

• Develop new customers with the global economic recovery

• For 2021, we expect steady demand from Wind and growth from other industries, translating to a 5-10% growth of 185,000194,000 tons output.

• Taichung factory for wind castings: production in 2022

 Mid Term (3-5 years)

• Thailand plant: Construction starts in 2021. Production begins in 2023.

• Capacity reaches 250,000 tons/yr.

 Long Term (5-10 years)

• Sustainable operations & succession planning

• Building upon ESG framework  Corporate social responsibility  Capacity reaches 300,000 tons/yr

出貨噸數預估（千噸） Estimated Shipments (thousand tons)

200 180

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180 176
164
160
152 151
146
140 134
120
100
80
2015 2016 2017 2018 2019 2020 2021E
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2021 Q1 Financial Highlights

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Record Breaking Q1 Performance

 Due to growing demand from plastic injection molding/industrial machinery sectors, 2021 Q1’s revenue and shipment volume reaches new heights since 2012.

Gross Margin Return on Equity

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26%
24% 25% 4% 6%
21% 22% 2% 1% 1%
-1%
11% 2,431 2,488
2,229 1.94 2.11
2,136 2,146 1.82
1.61
1.13
1,130
-1.06
4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21
Revenue NT$ millions EPS NT$ dollar
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2021 Q1 Net Earnings Analysis

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Unit NT$ Thousand
Operating Interests Other Incomes Exchange Interest Income Tax Net Earnings
Margin Income Rate Losses Fees
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Plastics/Industrial Machinery Industries Rebound

• 2021 Q1 Revenue composition: Renewables 60.3%, Plastic Injection 18.4%, Industrial Machinery 21.3%

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 Plastic Injection Molding/Industrial Machineries demand grows, while Renewables demand remains steady.
3,000,000 80.00%
70.00%
2,500,000
60.00%
2,000,000
50.00%
1,500,000 40.00%
30.00%
1,000,000
20.00%
500,000
10.00%
0 0.00%
2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21
Renewables 再生能源類 Plastic 注塑機 Industrial 產業機械 營收 Revenue in NT$ 百萬
Injection Machinery NT$ Million
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2021 Q1 Revenue Analysis

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Revenue by Application (%) Revenue by Currency (%)
NTD
Industrial EUR
4%
Machinery 5%
21%
USD RMB
14% 77%
Injection
Molding
Machines
19%
Renewables
60%
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2021 Q1 Income Statement

Unit: Thousand NTD	1Q 2021	4Q2020	QoQ	1Q2020	YoY
Revenue	2,145,708	2,487,809	-14%	1,130,199	90%
GrossProfit	550,607	616,074	-11%	126,516	335%
Gross Margin	26%	25%	↑1PP	11%	↑15PP
OperatingExpense	351,088	404,143	-13%	237,874	48%
OperatingIncome	199,519	211,931	-6%	(111,358)	279%
Operating Profit Ratio	9%	9%	0PP	(10)	19PP
NonOperatingItems	(42,526)	49,871	-185%	(16,668)	-155%
Profit beforeTax	156,993	261,802	-40%	(128,026)	-223%
Profit after Tax	125,705	229,678	-45%	(112,830)	211%
EPS (Basic $NTD)	1.13	2.11		(1.06)

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2021 Q1 Balance Sheet

Unit: Thousand NTD	1Q2021	4Q2020	QoQ	1Q2020	YoY
Total Assets	16,599,842	16,394,386	1.3%	13,269,779	25.1%
Cash	1,935,231	2,682,852	-27.9%	1,384,711	39.8%
NR & AR	3,540,410	3,516,934	0.7%	2,171,125	63.1%
Inventory	1,430,904	1,324,434	8.0%	1,340,458	6.7%
Total Non-Current Assets	7,673,787	6,980,605	9.9%	6,603,537	16.2%
Total Liabilities	7,677,845	7,630,444	0.6%	5,667,224	35.5%
Bank Loans	3,680,693	3,498,085	5.2%	4,183,919	-12%
NP & AP	1,708,879	1,646,381	3.8%	814,689	109.8%
Total Equity	8,921,997	8,763,942	1.8%	7,602,555	17.4%
Common Stock	1,106,175	1,106,175		1,056,175

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Market Trends

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American Jobs Plan

• Biden announces USD 2.28 trillion spending plan focused on job creation

• Jobs plan includes investments in infrastructure and manufacturing, which will drive demand for machinery

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US Wind Market Developments

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 In 2020, US installed 17 GW of new wind energy, expects to add 21 GW more in 2021

Various States declares 2030 wind energy installation targets: New York 30 GW, California 30 GW, Virginia 12 GW, New Jersey 12 GW, Maryland 12 GW

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 Biden Administration: Achieve net zero greenhouse gas emissions by 2050. By 2030, reduce greenhouse gas emissions by at least 50% compared to 2005 levels

• Build 30 GW of Offshore Wind by 2030

• US Department of Energy to spend USD 3 billion on offshore wind development

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Plastic Machinery Industry Optimistic on 2021

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• Plastic Injection Molding industry serves: automotive, consumer electronics, appliances, food packaging etc.

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• VDMA data shows 7% growth in revenue for plastic/rubber machinery

• Growth in passenger/commercial vehicles, food packaging, appliances sales

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Asia Pacific Region Leads The Economic Recovery

• Some Asian countries are expected in 2021 to achieve GDP growth from 2019 levels

• During 2020, 75% of Yeong Guan’ sales came from the Asia-Pacific region

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Appendix

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Yeong Guan Overview

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 Nearly half a century in the foundry industry
 Founded in Taiwan in 1971, investing in China since 1992. Now with 6 Design Casting
factories.
 Around 2,500 employees Total
Assembly Machining
Solution
 2020 Revenue reached NT$ 8.18 billion, with 176,000 tons of castings
shipped
 Annual capacity of 200,000 tons Welding Painting
 Lead the Industry in Environment, Health and Safety (EHS) Best Practices
 Several of our plants have earned recognition from local regulatory
authorities. Renewables
 EHS qualification is required to gain long-term order flows from Tier 1
MNCs.
 The installation of high standard, environmental friendly equipment
enhances our cost-competitiveness
 Optimizing Lean Production: Improve efficiency
Plastic Industrial
Injection Machinery
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Historical Income Statement

NT$ Million	2016	2017	2018	2019		2020	2021 Q1	2020 Q1	YoY(%) 2017 2018 2019 2020 2021 Q1 vs 2020 Q1 -13.2 -3.2 27.5 3.6 89.9 -40.8 -42 65 30.6 333.9 -74.2 -183.1 186.5 157.1 -280.2 -74.2 -167.8 195.3 182.4 -222.7 -74.1 -206.2 159.9 215.2 211.5 -73.2 -208.8 162.1 212.3 206.6
Sales Revenue	7,374	6,404	6,196	7,900		8,184	2,146	1,130
Gross Profit	2,419	1,432	831	1,371		1,790	551	127
Operating Profit	1,144	295	-245	212		545	200	-111
Income before Tax	1,325	342	-232	221		624	157	-128
Net Income	997	258	-274	164		517	126	-113
EPS (NT$)	8.5	2.28	-2.48	1.54		4.81	1.13	-1.06
Key financial ratio (%	)
Gross Margin	33	22	13	18		22	26	11
Operating Margin	16	4	-4	3		6	9	-10
Net Margin	13	4	-4	2		6	6	-10
OPEX ratio	17	18	17	15		16	17	21

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Historical Balance Sheet

NT$ Million	2016	2017	2018	2019	2020	2021 Q1	2020 Q1		YoY(%)	YoY(%)	YoY(%)	YoY(%)	YoY(%)
									2017	2018	2019	2020	2021 Q1 vs 2020 Q1
TOTAL ASSETS	15,052	14,483	14,531	13,521	16,394	16,600	13,270		-3.8	0.3	-7	21.2	25.1
Cash	4,241	3,316	3,153	1,451	2,682	1,935	1,042		-21.8	-4.9	-54	84.8	85.7
NR & AR	2,186	2,026	2,103	2,947	3,517	3,540	2,171		-7.3	3.8	40.1	19.3	63.1
Inventory	1,261	1,256	1,368	1,226	1,324	1,431	1,340		-0.4	8.9	-10.4	8	6.8
Fixed Asset	5,701	6,279	5,920	5,735	5,756	6,461	5,623		10.1	-5.7	-3.1	0.4	14.9
TOTAL LIABILITIES	4,974	4,768	6,250	5,699	7,630	7,678	5,667		-4.1	31.1	-8.8	33.9	35.5
Bank Loans	619	612	4,584	3,858	3,498	3,681	4,184		-1.1	649	-15.8	-9.3	-12
NP & AP	1,098	1,136	1,050	990	1,646	1,709	815		3.5	-7.6	-5.7	66.3	109.7
TOTAL EQUITY	10,078	9,715	8,281	7,822	8,764	8,922	7,603		-3.6	-14.8	-5.5	12	17.3
Common Stock	1,188	1,188	1,116	1,056	1,106	1,106	1,056		0	-6.1	-5.4	4.7	4.7
Book value per share	82.3	79.3	72.9	72.5	79.2	80.7	72.0
A/R turnover days	116	121	123	117	145	151	208
Inventory turnover days	98	99	97	78	76	80	125
A/P turnover days	82	82	74	57	75	96	82
ROE (%)*	9.8	2.8	-3.2	2.1	6.3	1.4	-1.5

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• ROE: Parent company Net income / average common equity

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Quarterly Income Statement

NT$ Million	4Q18	1Q19	2Q19	3Q19	4Q19	1Q20	2Q20	3Q20	4Q20	1Q21
Sales Revenue	1,703	1,552	1,951	2,168	2,229	1,130	2,136	2,431	2,488	2,146
Gross Profit	266	218	304	390	459	127	465	582	616	551
Operating Profit	(29)	(38)	47	105	99	(111)	154	290	212	200
Income before Tax	(51)	(102)	35	101	186	(128)	223	267	262	157
Net Income	(60)	(106)	19	80	172	(113)	193	207	230	126
EPS (NT$)	(0.55)	(1.00)	0.18	0.75	1.62	(1.06)	1.82	1.94	2.12	1.13
Revenue by Application (%)	4Q18	1Q19	2Q19	3Q19	4Q19	1Q20	2Q20	3Q20	4Q20	1Q21
Renewable Energy	38.8	43.3	47.9	59.4	66.6	60.7	67.0	72.8	67.4	60.3
Injection Molding Machine	29.2	26.9	24.3	16.7	14.6	17.7	14.1	11.7	14.4	18.4
Industrial Machinery	32.0	29.8	27.8	23.9	18.8	21.6	18.9	15.5	18.2	21.3

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Thank you for your consideration!

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Investor Relations Kevin Tsai Office : +886 02 27917198 ext: 17 E-mail : ir@ygget.com

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www.ygget.com

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