南六企業股份有限公司 Nan Liu Enterprise CO.,LTD

股票代號：6504 Stock Code：6504.TT

Comfortable

Satisfactory

Joyful

Nan Liu

This report and released message contains information about corporate prospects, financial updates and sales forecasts, established on the basis of internal resources and external reference sharing. The actual performance may be different from expressed or implied predictions due to uncontrollable and/or unpredictable risks. •All prospects reflect Nan Liu’s expectations toward the future, and may be subject to change and Nan Liu reserves the right to alter, update and change relevant information from time to time without prior notice.

Disclaimer

Nan Liu

About Nan Liu

Establishment: Dec, 1, 1978

Chairman: MR. HUANG,CING-SHAN

President： MR. HUANG,HUO-CUN

Paid in Capital: NT$726 million

Total Employee: 783 (as of July, 31, 2014)

TW：283 ；China：500

Production sites：Qiaotou (Kaohsiung), YenChao

(Kaohsiung), Pinghu (Zhejiang, China)

Nan Liu

100%

Location

100%

Qiaotou plant

(Headquarters)

Yenchao plant

Pinghu plant

Shanghai

Pudong

SuZhou

NingBo HangZhou

Nanliu

TaiNan, LiuJia

1.Center of Shanghai and Hangzhou

2.100km away from Pudong airport (1.5 hour drive)

3.10 km away from Jiashan South Railway Station

Nan Liu

Carded Tech

Mechanical Bonding

Hot Air Bonding Thermal Bonding

Spunlance Needlepunch

Chemical Bonding

Spunmelt Tech Airlaid Tech Wetlaid Tech

SpunBond

Production Technology

Meltblown Electrostatic Spinning

Spunlace

Nonwoven Fabrics

Traditiona

Woven Fabrics

A disposable designed

for a single use

Superior strength

and durability

Nan Liu

Revenue Breakdown

2014.Jan~June

Source: Company Filings

items 2012 2013

Spunlance NonWoven 37% 26%

Air Through NW & Thermal Bond NW 17% 19%

Wet Wipes & Cosmetics 43% 42%

disposable surgical gowns 3% 13%

Unit：ton

Disposable surgical gowns Fabrics 14%

Spunlance Nonwoven Fabrics 25.1%

Air Through & Thermal Bond Nonwoven Fabrics 19.2%

Wet wipes & Cosmetics Finished Product

41.7%

211

533

266

358 358

688

805

912

1081

1359 1320 1303

Nan Liu

Industry View 2012 Nonwovens Sales

company sales country Last

Year company sales country

Last

Year

1 Freudenberg $1.50 billion DEU(Germ

any) 1 22 Buckeye Technologies $228 million U.S. 17

2 Dupont $1.35 billion U.S. 2 23 Japan Vilene $209 million JPN 13

3 Ahlstrom $1.30 billion FIN 5 24 Asahi Kasei $201 million JPN 16

4 Kimberly-Clark $1.25 billion U.S. 3 25 Union Industries $189 million ITA 24

5 Polymer Group, Inc. (PGI) $1.15 billion U.S. 4 26 Mitsui Chemicals $183 million JPN 20

6 Fitesa $712 million U.S. 7 27 Jacob Holm Industries $171 million CHE 23

7 Glatfelter $683 million U.S. 8 28 Fibertex Nonwovens $161 million DEN 35

8 Johns Manville $670 million U.S. 6 29 Gulsan $160 million TUR

9 Suominen $602 million FIN 33 30 Georgia-Pacific $155 million U.S. 27

10 Fiberweb $460 million U.K 9 31 Tenowo $152 million DEU

11 TWE Group $400 million DEU 32 Andrew Industries $150 million U.K 28

12 Bonar $379 million NLD 33 Hassan Group $147 million TUR 34

13 Sandler $326 million DEU 11 34 Precision Custom Coatings $145 million U.S. 32

14 Avgol Nonwovens $315 million ISR 10 35 Propex Holdings $140 million U.S. 30

15 Hollingsworth & Vose $305 million U.S. 12 35 Dalian Ruigang Nonwovens Group $140 million CHN

16 Companhia Providencia $273 million BRA 14 37 Toyobo $129 million JPN 25

17 CECEP New Materials Group $256 million HK(China) 38 Nan Liu Enterprise $128 million Taiwan 38

18 Toray Advanced Materials $251 million JPN 19 39 Spuntech Industries $127 million ISR 39

19 First Quality Nonwovens $250 million U.S. 15 40 Jofo Nonwovens $125 million CHN 37

20 Pegas Nonwovens $248 million U.S. 22 41 Lydall $118 million U.S. 31

21 Fibertex Personal Care $235 million DEN 18

Source： http://www.nonwovens-industry.com/issues/2013-09/ ；Nonwoven Industry magazine, 2013

Nan Liu

Competitive Advantage

Plup/Spunlace nonwoven fabrics

account for 20% of overall medical

use nonwoven. DuPont is the major

supplier with 75-78% of market

share, followed by Nanliu’s 20%.

SMMS Nonwoven still accounts for

80% of medical use nonwoven

market given lower price

Source：CNITA 2012

outsourcing Finishing Processing

Longer lead-time and more costly

Garment OEMs

Nanliu’s one-stop production：

From manufacture of spunlace NW

to finishing processing

Pros：Shorter lead-time

Nan Liu

Core Competance (on Spunlace Fabric)

Before fine tune

Nanliu's experienced senior engineers and RDs with over

20+ years in operations enjoying a very good reputation

on quality and quick delivery around the world.

After Nanliu’s fine tune

What is

Nanliu’s

advantage if

competitors

in China

purchase the

same

equipments?

High Quality production：

100-10,000 class Clean room

One-stop production：

From NW to end product (mask, wet wipe)

(we say “one dragon style”)

EDI pure water lab (for wet wipe)

Spunlace NW：

Application includes surgical gown and repetitive use wipes

The widest Spunlace production line of 6.2M of the world

Automated production machines

(for face mask and baby wipes)

Nan Liu

Core Competance (on Spunlace Fabric、Wet wipes)

Nan Liu

Industry Overview

Source：ANFA 2011

Nan Liu

Industry Overview

Source：ANFA 2011

Chemicalbonded

5% Thermalbonded

6%

Needlepunched

25%

Spunlaced

13%

Spunbonded/MB

45%

Other/Dry-

laid

4%

Wet-laid

2%

Nan Liu

Industry Overview

Rural couples in

Shanghai and

Guangzhou have

been entitled to have

a second child

Potential National

Deployment Debate Over One-Child Policy

Source：Frost & Sullivan

China's urban population 0-3 years old, 2006~2015

Unit：people

Nan Liu

Industry Overview

14

According to China regulations, name and

address of the local manufacturer must be

highlighted on the outer packing, which

helps Nanliu to gain increasing traction

from new customers.

Nan Liu

Industry Overview

Diaper sales Diaper Consumer structure

2011 China’s Diaper Consumer Ratio

Baby Diaper

Adult Diaper

Baby Diaper Adult Diaper

Unit：hundred million piece

source：China paper Association、GF securities

Nan Liu

Industry Overview

source：China paper Association、GF securities

source：China paper Association、GF securities

Baby Diaper Market penetration

Adult Diaper Market penetration

China

Japan

North America

2011 TOP 10 Baby Diaper brand name in China 2011 Diaper Market penetration

2.17

3.16 3.01 3.17 3.06

3.42

2.78 3.00 3.03 3.15

3.18

3.82 3.54

2.62

3.54 3.81

3.99 4.08

3.57 3.80 3.68

4.00 4.30

4.71

3.96 3.80

4.83

4.07

4.50 4.75

3.88

CN

Y

CN

Y

25

da

ys

25

da

ys

25

da

ys

25

da

ys

CN

Y

25

da

ys

25

da

ys

25

da

ys

IPO

Nan Liu

Financial Highlights (by month)

2012.Jan ~ 2014.May Consolidated revenue

Unit：NT$ hundred million

25

da

ys

unit：NT$ hundred million

Consolidated revenue

Jan Feb Mar Apr May June July Jan~July

2014 3.96 3.8 4.83 4.07 4.5 4.75 3.88 29.81

YOY 11.86% 45.04% 36.44% 6.96% 12.74% 16.30% 8.91% 18.45%

Nan Liu

Source: Company Filings

Financial Highlights (by year)

0.69 0.6

0.98 1.19

0.43

1.09 1

0.47

0.052

1.39

1.96

3.7679

1.4016

2.0548

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2013H1 2014H1

YOY 46.6% Net profit(unit：NT$ hundred million)

Ramp-up period for China site

1.Material price Soaring 2. Flooding hurt us

Nan Liu

Source: Company Filings

Financial Highlights (by year)

2.33

1.86

2.81 3.09

1.03

2.58 2.38

1.45

0.10

2.32

3.19

5.39

2.01

2.83

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2013H1 2014H1

Earning Per Share (EPS)

YOY 40.8%

Nan Liu

Source: Company Filings

Financial Highlights

Consolidated Revenue ( unit：NT$ hundred million)

Gross Margin %

Net Margin % (after tax)

10.68 11.66

13.07 14.25

15.39 16.95

19.04

23.06

28.67

35.33 37

45.68

12.6 13.43

17.07% 14.33%

19.38% 21.05%

18.71% 18.11% 17.51% 19.80%

13.72% 12.11%

14.35%

19.77% 20.34% 20.10%

6.46% 5.15%

7.50% 8.35%

2.79%

6.43% 5.25%

2.04% 0.18%

3.93% 5.30%

8.25% 7.71% 8.14%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

0

4

8

12

16

20

24

28

32

36

40

44

48

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014.Q1 2014.Q2

Nan Liu

Source: Company Filings

Financial Highlights

Finance / Year 2012.3Q 2012.4Q 2013.1Q 2013.2Q 2013.3Q 2013.4Q 2014.1Q 2014.2Q

Gross Margin(%) 20.1 18.26 19.39 21.34 19.6 18.79 20.34 20.1

Operating Expenses Ratio(%)

9.6 9.73 9.15 10.31 8.5 7.03 7.79 8.15

Income from Operating Ratio(%)

10.5 8.53 10.24 11.03 11.1 11.76 12.55 11.95

Net Profit (before Tax)(%)

6.27 8 9.89 10.39 9.9 11.77 12.38 11.99

Net Profit (After Tax)(%)

4.65 5.95 6.49 6.48 11.18 8.68 7.7 8.14

it should be 6.47% Because we have some tax return from government

Nan Liu

12.04%

8.45%

15.22%

12.28%

17.38%

19.32%

7.06%

15.64%

13.72%

6.12%

0.69%

16.72% 18.26%

23.45%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Return on Equity (ROE)

1.Material price Soaring 2. Flooding hurt us

Ramp-up period for China site

Source: Company Filings

Financial Highlights (by year)

2014H1 10.28%

9.43

5.51

3.35 2.84

0.48

12.15

5.85

3.65 3.34

0.93

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

China Taiwa Asia Japan Others

2013.H1 2014.H1

Nan Liu

Financial Highlights

Unit：NT$ thousand million

China, 43.6%

Taiwa, 25.5%

Asia, 15.5%

Japan, 13.1%

Others, 2.2%

China, 46.9%

Taiwa, 22.6%

Asia, 14.1%

Japan, 12.9%

Others, 3.6%

Source: Company Filings

2013.H1 2014.H1

China,

25.14%

Japan,

17.79%

Asia,

16.43%

Other,

1.95%2011

Nan Liu

24

China,

34.19%Japan,

14.25%

Asia,

15.44%

Other,

2.00%2012

total 61.31% total 65.88%

China,

43.29% Japan,

13.75%

Asia,

15.75%

Other,

2.39% 2013

total 75.81%

Financial Highlights (by year)

9.30

6.58 6.08

0.72

14.32 12.65

5.27 5.71

0.74

12.62

20.06

6.28 7.19

1.09

11.05

China Japan Asia Other Taiwan

Revenue by country

2011 2012 2013 Unit：NT$ thousand million

Source: Company Filings

Selected Balance Sheet Items

NT$ mm 2009 2010 2011 2012 2013 2014.H1

Cash and Cash Equivalents 136 201 260 210 398 356

Short-Term Borrowings 744 743 780 452 688 319

Long-Term Debt 656 722 713 1121 467 692

(Short+Long) term Debt 1400 1465 1493 1573 1155 1011

Net Debt (1264) (1264) (1233) (1363) (757) (655)

Total Equity 784 738 929 1217 1996 2001

Net Debt / Total Equity 161.22% 171.27% 132.72% 112.00% 37.93% 32.73%

Note : 2012 and 2013 be used IFRS；

Nan Liu

Financial Highlights (by year) Source: Company Filings

Selected Cash Flow Statement Items

NT$ mm 2009 2010 2011 2012 2013 2014.H1

Net profit 47 53 139 272* 482* 315*

Cash from Operations 52 182 279 471 692 418

Cash from Investing (134) (173) (207) (687) (387) (198)

Cash from Financing 106 81 (20) 168 (137) (157)

Effect of Exchange Rate changes on cash and cash

equivalents 19 (6)

Cash and Cash Equivalents,end of period 398 381

Note : 2012 and 2013 be used IFRS；* is Net profit before tax

Capex 115 150 169 592 474 84

Depreciation & Amortization 150 145 157 193 216 126

Source: Company Filings

Nan Liu

Thank you for your attention.

Have a great day.

The End

Thank you