YP — Investor Presentation 2020

Aug 27, 2020

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2020 Investor Conference

Security Code ： 2023

DISCLAIMER

This presentation is based on the information obtained from various sources which the company believes to be reliable. But at some points in the future, there are a variety of factors which could cause actual results to differ materially from those statements. Therefore, please refer to the information on MOPS website as the main basis if any adjustment has been made. (http://mops.twse.com.tw/mops/web/index)

2/23

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1
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Introduction

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2
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Operation Outline

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3
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Future Development

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3/23

1.1 Introduction of Yieh Phui Enterprise

Address

NO. 369, Yuliao Road, Qiaotou District, Kaohsiung City 82544, Taiwan, R.O.C.

Founder and Chairman Mr. Lin, I-Shou

 President of Yieh Phui Enterprise  Chairman of Yieh Phui (China) Mr. Wu, Lin-Maw

Number of Date of Founding March 20, 1986 Employees 1,381 （ Jun. 30, 2020 ） Capital Listing Date July 28, 1995 NT$ 19.13 billion （ Jun. 30, 2020 ） 2016 NT$ 23.87 billion 2016 NT$ 52.85 billion 2017 NT$ 29.18 billion Consolidated 2017 NT$ 71.16 billion Revenue 2018 NT$ 30.03 billion revenue 2018 NT$ 73.86 billion 2019 NT$ 24.97 billion 2019 NT$ 59.69 billion

4/23

1.1 Introduction of Yieh Phui Enterprise

Products:

Hot-Dip Zn Coated/5% Al-Zn Coated/55% Al-Zn Coated Steel Coils and Pre-Painted Steel Coils

Production Flow Chart:

Material Procedures Products Hot-Rolled Hot-Rolled Pickled Steel Coils Pickling Steel Coils Packaging Cold-Rolled Full And Cold Rolling Hard Steel Coils Warehouse inbound Cold-Rolled Hot-Dip Hot-Dip Galvanized Steel Coils Galvanizing Steel Coils Pre-painted Coil Coating Steel Coils

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5/23

1.1 Introduction of Yieh Phui Enterprise

Application of galvanized steel coil

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3C & Appliances Farming Usages
9.20% 2.24%
Automobile Parts
Pipes 6.76%
0.38%
Silos Oil Filters for
Automobiles
General Uses Construction/
(substrate, roll forming) Interior Decorating
33.98% 47.44%
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EMT Steel Pipes Solar Panel Bracket
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、
C Z Purlins
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Decking 6/23

1.1 Introduction of Yieh Phui Enterprise

Application of pre-painted steel coil

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Automobile Parts
Appliances 3.30%
0.37%
Interior Decorating
Farming usages
7.47%
0.11%
Hospital and office
appliances
Anti- Microbial Plus
Construction 88.75%
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Roofing & Siding of
Industrial Factory
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Home Appliances
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PVDF Clean ColorCool®

Garage Doors 7/23

Electronic Devices

1.2 Distribution of the revenue in 2019

Others 4.07%

AWID 0.43% EMMT 0.66%

Lianfa (Tianjin) 2.61% Shin Yang 5.14% Yieh Hsing 10.95%

Consolidated Revenue NT$59.688 billion

Yieh Phui Enterprise 40.75%

Yieh Phui (China) 35.39%

8/23

1.3 Consolidated revenue of 2019 by products

Consolidated revenue of Galvanized/coated steel is over 74%

Others 7.04%

Electronics 1.14%

Steel Structure & Cranes 2.51% Steel Pipe 4.7%

Hot-Dip Galvanized Steel Coils 36.6%

Cold-Rolled Full Hard Steel Coils 10.54% Hot-Rolled Pickled Steel Coils 0.06%

Pre-painted Steel Coils 27.08%

Wire Rod 10.33%

9/23

1.4 Consolidated revenue of 2019 by areas

With a global recognition as a premium supplier of coated steel, Yieh Phui has so far reached its sales to 136 countries, a 70% coverage of the all 195 countries in the world.

Europe 11.1% America Asia 9.7% 45.4% Taiwan 30.6% Others 0.2% Australia 3.0%

10/23

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Introduction

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2
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Operation Outline

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Future Development

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11/23

2.1 Chart for the trend of consolidated revenue

NT$, million

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80,000
70,000 73,856
71,159
60,000
59,688
50,000 52,847
49,785
40,000
30,000
25,364
20,000
10,000
0
2015 2016 2017 2018 2019 2020~Q2
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 The consolidated revenue for the first two quarters of 2020 was NT$ 25,364 million, which was 15.7% lower than the consolidated revenue of the same period of 2019, NT$ 30,087 million.

12/23

2.2 C hart for the trend of consolidated operation

 Gross profit margin

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16.00%
13.64%
12.00%
8.85%
7.44% 8.00%
7.00%
8.00%
5.00%
4.00%
0.00%
2015 2016 2017 2018 2019 2020~Q2
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 Consolidated net profit after tax

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NT$, million
3,000
2,379
2,000
1,345
1,000
265
0
2015 2016 2017 2018 2019 2020~Q2
(1,000)
(985)
(1,615) (1,700)
(2,000)
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 Earnings per Share
(Equity accrued to the parent company)
NT$/Share
1.50
1.37
1.00
0.73
0.50
0.16
0.00
2015 2016 2017 2018 2019 2020~Q2
(0.50)
(0.44)
(0.56)
(0.73)
(1.00)
13/23
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2.3 C onsolidated profitability and financial structure

NT$, Million / Unit	NT$, Million / Unit	NT$, Million / Unit	NT$, Million / Unit	NT$, Million / Unit	NT$, Million / Unit	NT$, Million / Unit
Item/Year	2015	2016	2017	2018	2019	2020~Q2
Sales Revenue	49,785	52,847	71,159	73,856	59,688	25,364
Gross Profit	3,704	7,206	6,299	5,911	2,549	1,699
Sales Gross Profit Margin	7.44%	13.64%	8.85%	8.00%	5.00%	7.00%
Sales Income	862	3,844	2,211	1,459	(895)	76
Net Income before Tax	(1,597)	3,372	1,805	356	(1,985)	(1,125)
Net Income	(1,615)	2,379	1,345	265	(1,700)	(985)
Net Income Attributable to: Owners of the Parent Company	(954)	2,502	1,367	309	(1,401)	(841)
Net Income Attributable to: Non-controlling Interest	(661)	(123)	(22)	(44)	(299)	(144)
Earnings per Share	(0.56)	1.37	0.73	0.16	(0.73)	(0.44)
Debt /Assets (%)	62.02	63.13	66.02	65.95	67.23	68.20
Current Ratio(%)	120.89	102.10	100.90	93.56	75.73	73.81
Quick Ratio(%)	74.11	54.28	48.21	42.74	35.44	61.66
Interest Expense	851	790	1,120	1,264	1,316	601
Shares (thousand	1,718,090	1,718,090	1,821,176	1,875,811	1,913,328	1,913,328
(IFRS)

14/23

2.4 The trend of the sales of coated steel products

10,000 tons Sales of Yieh Phui Sales of Yieh Phui (China) Consolidated Total Sales

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200 193
187
184 185
178
180 172
169
166 166 167 167
162
160
143 144
89
140 130 49 53 84 82 95
125 68 69 67 74 85
11 81
120 0 48
54
100
79
80
60 125 119 117 119 37
95 90 98 100 95 93 100 93 103 104 92
86
40
20 42
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020~Q2 2020~Q2
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Note: the chart above does not include Sales of cold-rolled full hard steel/cold-rolled annealed steel of Yieh Phui (China). Up to the second quarter of 2020, the sales of coldrolled full hard steel/cold-rolled annealed steel of Yieh Phui (China) is 129,121 metric tons.

15/23

2.5 The price trend of materials

Hot-rolled steel coils

NT$/Ton

Taiwan

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20,000
15,000
10,000
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5,000
-
Source: Yieh Phui
RMB/Ton
5,000
Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20
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China

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4,000
3,000
2,000
，
Source: Custeel.com (Shanghai Market, Benxi Steel SPHC2.75mm)
Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20
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16/23

2.6 The price trend of products

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NT$/metric ton
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40,000
30,000
Domestic sales
(Taiwan) 20,000
10,000
0
FOB US$/metric ton
1500
1000
Exports
(America)
500
0
RMB/metric ton
1500
China
1000
(Sales of Yieh Phui (China))
500
0
Source: Yieh Phui Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20
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China (Sales of Yieh Phui (China))

Pre-painted Steel Coils

Hot-Dip Galvanized Steel Coils

17/21

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Introduction

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Operation Outline

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3
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Future Development

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18/23

3.1 Prospects for major markets

A.International ：

B.Domestic:

• ① Trade War between China and the US

• ① The fact that Taiwanese firms repatriate from China leads to the increasing demand of steel and raw materials. ② New law to push for the use of renewable energy

• ④ New production lines from domestic competition ⑤ Strong NT$ against US$, which is not in favor of exporters who mainly purchase raw materials domestically.

• ② Impact of COVID-19

• ③ Tariffs and Trading barriers

• ③ The Initiation of The Foresight Infrastructure Program has spurred the need in domestic market.

1. European Union:

6.America Union:

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• On July 15[th] , CAFC had vacated CIT’s decision of collapsing three companies into a YP/PT/Synn entity with a single dumping rate and remanded for redetermination.

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• EU automotive industry has suffered a significant decline due to COVID-19. From January to June 2020, the sales for new passenger cars dropped by 38.1% year-on-year to 4,281,529 units. Yet, it is expected for the car sales to be ramped up in the second half of this year to overcome the challenge of COVID-19.

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• EU leaders agreed on a €750 billion recovery fund in a hope to help member states rebuild economies impacted by the COVID-19 pandemic. Consequently, Euro/USD exchange rate reached a 4-month high. This should boost the steel prices.

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• On July 21[st] , US steel and AK steel announced US$ 44/ton increase. This is deemed as an act to stop prices from falling and to stimulate the market.

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2.Middle East:

5.Australia:

• UAE implements a definitive safeguard duty of US$137/ton on imports of pre-painted products from 19th Jul 2020 to 14th May 2021. Materials from Taiwanese origin is excluded. Yieh Phui aims to enlarge the sales of pre-painted products and the substrates.

• Australia GDP is expected to be -3.75% and the unemployment rate to be 9.25% by 2020 due to COVID-19.

• On June 30th ADC has launched GL/GF AD case on Taiwan, Korea and Vietnam. Yieh Phui has responded to the case proactively.

• Due to a weak USD and OPEC’s production cut of crude oil, its price has been strengthened, which will help increasing economy activities and as a result the steel demand.

• Australia dollar has been strong recently which helps import.

3.South East Asia:

4.China:

• As the trade war between the US and China, SEA market has become a diversion of the target market. And especially Vietnam is offering competitive prices to the market and makes sales harder for Taiwan exporters.

• As China still offering QE to the market ， the pressure on capital has decreased a lot and also the flood in central provinces is expected to bring domestic demand for rebuilding the infrastructures. The markets are positive towards the second half of 2020 in China and Asia.

• Due to the fact that part of the solar equipment manufacturers have shifted their production site to SEA, Yieh Phui has seized the opportunity to supply material for solar brackets manufacturing.

• China’s raw carbon steel production has reached 3 million metric ton per day recently. Whether the fact that the prices can be sustained is still not widely accepted.

• Yieh Phui has established our own brand and supplied niche anti-microbial products such as PhuizerGreen ® AMC Plus and ColorGreen AMC Plus® to distinguish YP’s products from low price level markets.

19/23

3.2 Major products: the application of materials

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Renewable energy
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1. Because of the development of Solar Panel Bracket, Yieh Phui has finished the application of the prepainted steel on rooftop, ground and fishing farm photo-electric generation.

2. Manufactured with suitable material/suitable usage

Briefing has made the best team for producer/government/ academic combination on offering the best coated products for renewable energy.

1. Yieh Phui has formed three alliances devoting to the development for future

2. Brackets for solar power plants

3. Power generation via farming (agri-power, fishingpower, optoelectronic greenhouse)

Materials projects

• Solar-panel power system on the roof and school stadium roof

• Wind-power related equipment/maintenance of stadium

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Fire safety and
High-end construction materials
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1. Global warming and ultraviolet rays has severe impact on rooftop and walls. Traditional products will not be sufficient to sustain such damages for long.

Briefing

1. Promoting earthquake resistant and fire retardant composite sheet system, satisfying the demand for safe and sound construction materials.

2. Promotion for PVF high-end pre-painted steel sheets

Materials projects

• Metallic composite panels

• Composite fire-proof external wall system

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IT
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1. The trade war between China and the US and the return of Taiwanese merchants from China has been trending. The demand for servers and electric cabinets will increase tremendously.

Briefing

1. Due to the impact of Covid-19, the health related construction materials have been more important than ever.

2. The dramatic increase in demand for clean room has brought opportunities for the products that are antistatic and anti-microbial.

Briefing

  2. The supply chain for cars with new energy course will start immediately. Strategies to deal with the development of electric charging towers, energy storage and charging cabinets will all be needed.

  - Servers

• HVAC made from efficient PhuizerGreen AMC Plus

• Materials Plus

• projects  Partitions made from ColorGreen AMC Plus

Materials projects

• Cable bridging

• Components for new energy cars  Electric car charging stations ~~20/23~~

Product system sales strategy

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Galvanized Steel Pre-painted
steel Proprietor EPC Material Construct Ops steel
Roofing
Paint High corrosion
ITRI System Insurance resistance paint
Adviser
Above Water
Steel
System
Brackets 2 Bake 2 Coat:
5% Al-Zn Coated Steel & Ground High corrosion resistance pre-painted steel
5% Al-Mg-Zn Coated Steel System ( Innovated: ) SolarStar
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Steel corrosion resistance is crucial to acidoid and sulfide in Taiwan’s environment. Other than 5%Al-Zn and 5%Al-Mg-Zn coated steel, we've successfully developed SolarStar pre-painted steel to deal with harsh environment and more product options for the customers.

	ISO 9223/12944-2 Corrosion level	C1	C2	C3	C4	C5	CX
		Very low	Low	Medium	High	Very high	Extreme
	Steel Class	5% Al-Zn (PhuizerFan) or Al-Mg-Zn (PhuizerMax) coated steel
	Galvanize coating	Y27	Y27	Y27	Y35	Y35	Y35~Y45
	Edging, punching area full post-painted	—	—	—	Edging, punching area full post-painted	Further anticorrosive treatment, i.e., full post-painted	Further anticorrosive treatment, i.e., full post-painted
	Durability (years)	25	25	25	20	20	20
	Optimal corresponding material	(ColorFan) pre-painted steel SolarStar
	Galvanize coating	Y27	Y27	Y27	Y27~Y35	Y27~Y35	Y27~Y35
	Durability (years): pH<3	25	25	25	≧20	≧20	≧20
		Island: M I T Brackets 21/23

Efficient PhuizerGreen[®] AMC Plus & ColorGreen AMC Plus[® ]

Healthy environment

Second-generation Efficient PhuizerGreen[®] AMC Plus & ColorGreen AMC Plus[® ]

1. Staphylococcus aureus 2. Klebsiella pneumoniae 3. Pseudomonas aeruginosa 4. Corynebacterium diphtheriae 5. Escherichia coli 6. Legionella pneumophilia FIRDI test report SGS test report 7. MRSA (methicillin-resistant Staphylococcus aureus) Approved by FIRDI, SGS antibacterial certification PhuizerGreen[®] AMC Plus

Obtained Nanomark certification

ColorGreen AMC Plus®

1 Inhibiting the growth of 7 pathogens

1 Inhibiting the growth of 7 pathogens

2 Disinfectant & alcohol wipe resistance

Antibacterial 3 High corrosion & weather resistance Efficacy 99%

2 Inhibiting the growth of fungi

3 Nanoscale antimicrobial additives

4 Custom color & gloss 4 5 RoHS & REACH directives complied 5 Application Medical, Food, Electronic use Ducts

4 High corrosion resistance (SST 240hrs) 5 RoHS & REACH directives complied

22/23

3.3 Outline for Most Recent Investment

Area Projects Briefing Stockholding The E Sky Land site A contains 31 stories aboveground, 6 stories underground, total of Kaohsiung space of 77,000 ping of high-end shopping E Sky Land 100% Taiwan mall with a hotel franchised with Marriott International to form Marriott Kaohsiung. Expected to operate in Q4 2020.

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23/23