YL — Investor Presentation 2019

Mar 11, 2019

TW ： 2201

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YULON MOTOR CO., LTD. Investor Conference

2018/4/24

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人
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Copyright © Yulon Motor, All rights reserved.

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Disclaimer Statement

1. This document is provided by Yulon Motor Co., Ltd. (the “Company"). Except for the numbers and information included in the Company's financial statements, the information contained in this document has not been audited or reviewed by any accountant or independent expert. The Company makes no express or implied representations or warranties as to the fairness, accuracy, completeness, or correctness of such information or opinions. This document is provided as of the date herein and will not be updated to reflect any changes hereafter. The Company, its affiliates and their representatives do not accept any responsibility or liability for any damage caused by their negligence or any other reasons, nor do they accept responsibility or liability for any loss or damages arising from the use of this document or the information contained herein or anything related to this document.

2. This document may contain forward-looking statements, including but not limited to all statements that address activities, events or developments that the Company expects or anticipates to take place in the future based on the projections of the Company toward the future, and various factors and uncertainness beyond the Company's control. Therefore, the actual results may differ materially from those contained in the forward-looking statements.

3. This document is not and cannot be construed as an offer to purchase or sell securities or other financial products or solicitation of an offer. ‡

4. The copyright of this document is owned by the Company and / or our affiliates and may not be directly or indirectly reproduced, redistributed or forwarded to any other person and may not be published in whole or in part for any purpose.

Copyright © Yulon Motor, All rights reserved.

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Agenda

Agenda Time Speaker Opening 5 min Lo Wen Yi –General Management Financial Results & Future Prospects 10 min Lo Wen Yi –General Management Q&A 15 min Lo Wen Yi –General Management

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Financial Results & Future Prospects

人 ‧ 車 ‧ 生活

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2018/1~3 Sales Volume in Taiwan

Brand		Sales volume	Sales volume	Sales volume	Sales volume	Growth rate	Growth rate	Market share %	Market share %	Market share %
	Domestic /Imported	2016/1~10		2017/1~10		2017/1~10	Total	**2017/1~10 **	2016/1~10	%
		Units	Total	Units	Total
YULON Nissan Co.	Domestic	10,424	11,352	8,777	9,492	-15.8%	-16.4%	7.8%	9.9%	-2.0%
	Imported	928		715		-23.0%		0.6%	0.9%	-0.2%
LUXGEN	Domestic	3,853	3,853	4,556	4,556	18.2%	18.2%	4.1%	3.6%	0.4%
	Imported	0		0		0.0%		0.0%	0.0%	0.0%
MITSUBISHI	Domestic	12,227	12,254	12,748	13,467	4.3%	9.9%	11.4%	11.6%	-0.2%
	Imported	27		719		2563.0%		0.6%	0.0%	0.6%
YULON GROUP subtotal	Domestic	26,504	27,459	26,081	27,515	-1.6%	0.2%	23.3%	25.1%	-1.8%
	Imported	955		1,434		50.2%		1.3%	0.9%	0.4%
TOYOTA	Domestic	21,429	32,062	19,400	32,107	-9.5%	0.1%	17.3%	20.3%	-3.0%
	Imported	10,633		12,707		19.5%		11.3%	10.1%	1.3%
FORD	Domestic	4,519	5,068	4,461	5,203	-1.3%	2.7%	4.0%	4.3%	-0.3%
	Imported	549		742		35.2%		0.7%	0.5%	0.1%
MAZDA	Domestic	0	4,601	0	5,295	-	15.1%	0.0%	0.0%	0.0%
	Imported	4,601		5,295		15.1%		4.7%	4.4%	0.4%
HONDA	Domestic	7,637	8,220	9,440	10,222	23.6%	24.4%	8.4%	7.2%	1.2%
	Imported	583		782		34.1%		0.7%	0.6%	0.1%
HYUNDAI	Domestic	2,874	3,092	2,602	2,783	-9.5%	-10.0%	2.3%	2.7%	-0.4%
	Imported	218		181		-17.0%		0.2%	0.2%	0.0%
BENZ&BMW	Domestic	0	12,154	0	12,426	0.0%	2.2%	0.0%	0.0%	0.0%
	Imported	12,154		12,426		2.2%		11.1%	11.5%	-0.4%
OTHERS	Domestic	506	13,002	1,359	16,625	168.6%	27.9%	1.2%	0.5%	0.7%
	Imported	12,496		15,266		22.2%		13.6%	11.8%	1.8%
Total market	Domestic	63,469	105,658	63,343	112,176	-0.2%	6.2%	56.5%	60.1%	-3.6%
	Imported	42,189		48,833		15.7%		43.5%	39.9%	3.6%

The sales volume in 2018/1~3 maintain the performance year on year, including 0.2% decrease of domestic cars and 15.7% increase of imported cars, accounting for domestic cars and imported cars of 57%:43%. The reasons of growing sales volume of imported cars: (1) the price reduction caused by fluctuation of exchange rate, (2) there are more marketing resources on imported cars which promote consumers to buy imported cars.

Copyright © Yulon Motor, All rights reserved.

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Auto Sales in Taiwan Through the Years

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43.0 (F)
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1. The sales volume in 2017/1~12 of Taiwan is 435K units, and 1% growth rate year on year.

2. “Chung-Hua Institution for Economic Research“ and “Taiwan institute of Economic Research” predicted economic growth rate of Taiwan are 2.27% and 2.34% in 2018 respectively. The “Directorate General of Budget” forecast the economic growth rate of Taiwan is 2.42% in the third quarter of 2018 showing the economic grow steadily in 2018.

3. Following the advantage of commodity tax subsidy policy since 2016 and the sales promotion from vehicle vendors, Taiwan‘s overall auto market sales volume in 2018 are expected to reach 430K units (The heavy trucks are excluded).

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Auto Sales in China Through the Years

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1. The sales volume in 2017/1~12 of China is 28.88 million units, and 3% growth rate year on year.

2. Although the economic growth rate in 2018 in China is 6.7% ~6.8%, The economic could continue to grow steadily in 2018.

3. The Continental overall auto market forecast is expected to reach 29.98 million units in 2018, increased by 1.10 million compared to 2017, the growth rate is about 3.8%.

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Consolidated &Alone Comprehensive Income Statements

(NT $ Million)

	17Q4 16Q4 Difference
	Alone Consolidated Alone Consolidated Alone Consolidated
	Amount % Amount % Amount % Amount % Amount % Amount %
Operating revenue Gross profit	94,111 100% 36,093 100% 112,167 100% 39,998 100% (18,056) -16% (3,905) -10% 20,001 21% 2,941 8% 19,199 17% 2,999 7% 802 4% (57) -2%
Operating income	1,897 2% 1,847 5% 2,224 2% 1,803 5% (327) -15% 44 2%
Nonoperating income and expense 2,241 2% 473 1% 840 1% 7 0% 1,401 167% 466 6654% Consolidated income before income ta 4,138 4% 2,320 6% 3,064 3% 1,810 5% 1,074 35% 510 28%
Consolidated net income 3,078 3% 2,288 6% 1,779 2% 1,335 3% 1,299 73% 953 71%
Other comprehensive income, net (870) -1% (780) -2% (1,928) -2% (1,610) -4% 1,058 55% 830 52% Total comprehensive income 2,208 2% 1,508 4% 148 - 0% 275 - -1% 2,356 1592% 1,783 648%
―Owner of the Company 1,508 2% 275 - 1,783 648% ―Non-controlling interests 700 1% 127 573 451%
EPS 1.56 0.91 0.65

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Consolidated & Alone Balance Sheets

(NT $ Million)

	Amount % Amount % 17 4Q Consolidated Alone	16 4Q	Difference
		Consolidated Alone	Consolidated Alone
		Amount % Amount %	Amount % Amount %
Current assets Noncurrent assets	169,428 66% 28,408 31% 88,988 34% 64,609 69%	131,585 59% 16,409 21% 89,687 41% 62,837 79%	37,843 29% 11,999 73% (699) -1% 1,772 3%
Total Assets 258,416 100% 93,017 100% ―From TAC 136,314 53% - 0% ―Excluding TAC 122,102 47% - 0%		221,272 100% 79,246 100% 111,395 50% - 0% 109,877 50% - 0%	37,144 17% 13,771 17% 24,919 22% 0 0% 12,225 11% 0 0%
Current liabilities 158,833 61% 7,288 8% Noncurrent liabilities 20,462 8% 15,296 16%		132,381 60% 5,275 7% 9,827 4% 4,256 5%	26,452 20% 2,013 38% 10,635 108% 11,040 259%
Total Liabilities 179,295 69% 22,584 24% ―From TAC 122,307 47% - 0% ―Excluding TAC 56,988 22% - 0%		142,208 64% 9,531 12% 99,501 45% - 0% 42,707 19% - 0%	37,087 26% 13,053 137% 22,806 23% 0 0% 14,281 33% 0 0%
Share capital 15,729 6% 15,729 17% Capital surplus 6,666 3% 6,666 7% Retained earnings 47,916 19% 47,916 52% Other equity 8,810 3% 122 0%		15,729 7% 15,729 20% 6,665 3% 6,665 8% 46,465 21% 46,465 59% 10,205 5% 856 1%	0 0% 0 0% 1 0% 1 0% 1,451 3% 1,451 3% (1,395) -14% (734) -86%
Total Equity 79,121 31% 70,433 76%		79,064 36% 69,715 88%	57 0% 718 1%

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Luxgen Sales Volume in China and Taiwan

	16Y Actaual	17Y Actaual	17Y Growth Rate	17Y Jan.~Mar. Actaual	18Y Jan.~Mar. Actaual	18Y Jan.~Mar. Growth Rate
Luxgen	16,440	15,372	-6.5%	5,027	5,743	14.2%
DongfengYulon Motor	40,500	19,058	-52.9%	5,554	3,124	-43.8%
Total	56,940	34,430	-39.5%	10,581	8,867	-16.2%

1. Luxgen

• A. In 2017, Luxgen continued improving fuel consumption and quality, the main sale models are U5&U6, the total sales volume reached annual sales of 15,372 units in 2017.

• B. The first quarter of 2018, Luxgen continued to improve customer satisfaction and conduct activities related to the improvement of existing product quality, it will redesign the models in the third quarter of 2018 and launch two new EV cars at the end of year.

• Dongfeng Yulon Motor (DFYL)

• A. Spreading the dealers, progressing brand marketing, and enhancing after-sales service and warranty through 100% owned subsidiary Luxgen (hangzhou) Motor Sales Co., Ltd in this year end, it is expected to reach a higher sales volume goal in 2018 and increasing its sale energy by Large-scale sales of new-type e-commerce.

• B. In the second half of 2018, annual changes will be made to U6, S3 and U5. It is expected that by the end of 2018, a new seven-seater SUV will be officially produced.

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Q & A

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人 ‧ 車 ‧ 生活
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