2019 Investor Conference

Dec 17,2019

Ticker Symbol ：2006

律己．愛智．樂觀律己．愛智．樂觀

Disclosure• The information contained in this presentation and its accompanying announcements,

including its business outlook, financial position and business forecasts, is based oninternal information and external economic developments as a whole.

• The Company’s actual results of operations, financial condition and results ofoperations may differ from the forecasted information, which may be due to variousfactors including but not limited to market demand, changes in various policies andregulations and the overall economic situation, and other factors or risks theCompany can not control.

• The information provided in this presentation reflects the Company’s views about thefuture so far as not expressly or implicitly expressed or warranted as to its correctness,completeness, or reliability. The contents of the presentation, if any changes oradjustments occur in the future, the Company is not responsible for updates oramendments.

• For the convenience of readers, this presentation has been translated into Englishfrom the original Chinese version. If there is any conflict between the English versionand the original Chinese version or any difference in the interpretation of the twoversions, the Chinese-language presentation shall prevail.

Agenda

1. Corporate Profile

2. Financial Performance

3. Key Messages

4. Q&A

Corporate Profile

• Date of incorporation ： May 30, 1962

• Date of IPO ：July 13,1988

• Issued common stock ： 1,004,060 thousand shares

• Number of employees： 1,713

• Head Office：6F., No.9, Sec. 1, Chang-an E. Rd., Taipei City, Taiwan

• Corporate culture ：Self-discipline. Love of knowledge. Optimism.

ScrapPig Iron

Billets

Bloom

Beam Blank

Slab

Taoyuan Works

Steel Making

Steel Making

Steel Rolling(1)

Steel Rolling

Steel Rolling

Re-Bar 75萬噸

40萬噸

80萬噸

Annual Capacity/10K metric tons

Steel Rolling(2)

Steel Making Steel RollingSection

Re-Bar60萬噸

75萬噸

140萬噸

125萬噸

100萬噸

Facilities and Products

MiaoliWorks

KaohsiungWorks

Vietnam Works

ScrapPig Iron

ScrapPig Iron Billets

Annual Capacity/10Kk metric tons

Section

Section

Agenda

1. Corporate Profile

2. Financial Performance

3. Key Messages

4. Q&A

2019 2018 %

Operating revenue,net 33,734.73 29,883.58 112.89%

Operating costs (30,826.72) (27,367.49) 112.64%

Gross profit,net 2,908.01 2,516.09 115.58%

Operating expenses,net (1,496.28) (1,478.15) 101.23%

Operating profits 1,411.73 1,037.94 136.01%

Non operating income and expenses 51.68 (22.45) -230.20%

Income tax expense (363.43) (226.99) 160.11%

Net income 1,099.98 788.50 139.50%

attributable to owners of parent 1,100.37 789.51

Non controlling interests (0.39) (1.01)

Earnings per share 1.1 0.79

Gross profit ratio (%) 8.62% 8.42%

Operating profit ratio (%) 4.18% 3.47%

Net profit ratio (%) 3.26% 2.64%

For the nine months ended Sep. 30

(Expressed in Millions of New Taiwan Dollars)

Consolidated Statements of Comprehensive Income

(Expressed in Millions of New Taiwan Dollars) AMT % AMT % AMT %

Current assets 23,996.03 49% 22,968.95 47% 19,235.68 42%

Cash and Current financial assets 1,456.39 3% 1,232.54 2% 1,188.82 3%

Receivable,net 6,510.28 13% 5,042.96 10% 4,801.69 10%

Inventory 14,892.33 31% 15,453.08 32% 12,291.84 27%

other current assets 1,137.03 2% 1,240.37 3% 953.33 2%

Non current assets 24,948.95 51% 25,589.54 53% 26,989.33 58%

Real properties, plants and devices 20,035.03 42% 20,694.94 43% 20,641.87 44%

other non current assets 4,913.92 9% 4,894.60 10% 6,347.46 14%

Total assets 48,944.98 100% 48,558.49 100% 46,225.01 100%

Current liabilities 17,758.92 36% 17,489.73 36% 16,017.81 35%

Short term loans 12,971.82 27% 13,252.10 27% 11,564.81 25%

other current liabilities 4,787.10 9% 4,237.63 9% 4,453.00 10%

Non-current liabilities 7,210.53 15% 7,058.00 15% 6,338.06 13%

Total liabilities 24,969.45 51% 24,547.73 51% 22,355.87 48%

Total equity 23,975.53 49% 24,010.76 49% 23,869.14 52%

Total liabilities & equity 48,944.98 100% 48,558.49 100% 46,225.01 100%

2019.9.30 2018.12.31 2018.9.30

Consolidated Balance Sheets

(Expressed in Millions of New Taiwan Dollars)

2019 2018

Cash at beginning of period 1,097.98 1,020.46

Cash flows from operating activities 1,939.28 (2,416.78)

Cash flows from investing activities (374.73) (1,202.25)

Cash flows from financing activities (1,445.47) 3,735.45

Effect of exchange rate changes 73.88 (117.16)

Cash at beginning of period 1,290.94 1,019.72

Free Cash flows 1,564.55 (3,619.03)

Cash dividends 1,204.87 1,405.69

For the nine months ended Sep. 30

Consolidated Statements of Cash Flows

35,892

31,053

25,209

31,749

39,769

33,735

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2014 2015 2016 2017 2018 2019/1~9

Operating revenue

2,888 3,034 2,970

3,802

3,325

2,908

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2014 2015 2016 2017 2018 2019/1~9

Gross profit

1,355

1,511 1,491

1,842

1,275 1,412

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2014 2015 2016 2017 2018 2019/1~9

Operating income

1,057

1,269

1,485

1,715

888

1,100

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2014 2015 2016 2017 2018 2019/1~9

Net income attributable to owners of parent

Historical Operating Results(NT$Millions)

■Earnings per share ■ Dividend per share

1.06

1.27

1.49 1.72

0.88

1.3

1.1

1.3 1.4

1.2

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

2014 2015 2016 2017 2018

每股盈餘 每股股利

(NT$)

Historical Dividend

12

Agenda

1. Corporate Profile

2. Financial Performance

3. Key Messages

4. Q&A

13

Key Messages

1. Improvement of Taoyuan Works’ capabilities

and efficiency

2. THSVC new rolling mill put into production

3. Taiwan H-Beam Demand and Production

4. Corporate Governance Performance

Steel Making

Rolling LINE 1

Rolling LINE 2

Improvement of Taoyuan Works’ capabilities and efficiency

130-140萬噸

75-80萬噸

75-80萬噸

Annual Capacity/10K metric tons

63.04

72.93 80.35

89.33 85.00

91.57 88.33

66.85 70.85

92.66

105.00

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019*(估)

10K metric tons

Tung Ho Steel’ annual rebar production

Improvement of Taoyuan Works’ capabilities and efficiency

Floor area of building permit(Million m2)

＊Est fromJan-Oct

19.9

31.2

34.132.8

39.838.6

32.6

26.2

29.9

34.0 34.1

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019*

3.90 4.99 5.66 5.73 5.79 6.06 5.65 4.77 4.71 5.23 5.27*RebarAnnualDemand(Mil tons)

Improvement of Taoyuan Works’ capabilities and efficiency

Billet

Steel Making Rebar

Section steel

100萬噸 60萬噸

Wire rod coil

Products

40萬噸

THSVC new rolling mill put into production

Annual Capacity/10K metric tons

Annual Demand of long steel products in Vietnam domestic market

THSVC new rolling mill put into production

422 428

489

614

751

810

863 910

2012 2013 2014 2015 2016 2017 2018 2019(估)

10K metric tons

19

827 874 872 879 922

844 908 804 782

925

1,014 1,014 969

936 1,036

905

984

876 906

946

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019*

Demand Production*Est fromJan-Oct

Taiwan H-Beam Deamand and Production

1K metric tons

20

• Tung Ho Steel Enterprise Corporation was endowed with the honor

to win the “Traditional Manufacturing – Gold Award” of “TCSA

Taiwan Enterprise Sustainability Award ”, in year 2018。

• It’s the fourth year that Tung Ho Steel Enterprise Corporation has

been evaluated for 6% to 20% in corporate governance evaluation

system from TWSE。

• Tung Ho Steel Enterprise Corporation was included in the “ Taiwan

Stock Exchange Corporate Governance Index 100 ” for two

consecutive years.

Corporate Governance Performance

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