2Q19 Performance Review - ir-cloud.com · Winterthur Taiwan from AXA 2007 Acquired PCA Life 2009 2010 Jointly invested CCB Life with China Construction Bank 2008 Avoid the subprime

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The presentation has not been updated since it was originally presented, and does not constitute a commitment by any CDF entity to underwrite, subscribe for or place any securities or

to extend or arrange credit or to provide any other services.

1

2Q19 Performance Review

August 2019




2

This presentation has been prepared by China Development Financial Holding Corporation and/ or its affiliates (together, “CDF” or the “Group”) for

the exclusive use of the party to whom CDF delivers this presentation to (“Recipient”).

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been, and will not be, updated to reflect material developments which may occur after the date of this presentation. The slides forming part of this

presentation have been prepared solely to support discussion about the Group with the Recipient.

This presentation also contains information and statistics relating to the banking and related industries. The Group has derived such information and

data from unofficial and independent sources, without independent verification. The Group cannot ensure that these sources have compiled such

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undue reliance on statements in this presentation regarding the banking and related industries. No representation or warranty, express or implied, is

made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of any information or opinion contained herein.

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or in part, without the prior written consent of the Group.

Disclaimer




3

Contents

SECTION 1 Business Overview 4

SECTION 2 China Life 8

SECTION 3 KGI Bank 11

SECTION 4 KGI Securities 27

SECTION 5 CDIB Capital Group 33

SECTION 6 Financial Highlights 43




4

Business Overview1.




5

KGI Securities reported profit of NT$1,005mn in 2Q19, thanks to anticipation for a rate cut, a

better performance in bond trading and resumed profitability from brokerage business and

overseas subsidiaries

CDF – 2Q19 Results

China Life was the largest profit contributor

CDIB Capital Group contributed profit of NT$1,275mn in 2Q19

Unrealized gains amounted to NT$614mn as of June 30, 2019

CDIB Capital Group will continue asset monetization and focus on asset management business;

assets under management exceeded NT$43.1bn as of June 30, 2019

CDIB Capital Group

Growing corporate and mortgage loans continued to boost lending balance, whilst reducing

the foreign-currency bond position in the banking book portfolio; KGI Bank registered profit of

NT$919mn in 2Q19

KGI Bank reported an NPL ratio of 0.14%, LLR coverage ratio of 1.27%, and NPL coverage

ratio of 918.7% as of June 30, 2019, compared favorably with the industry average of 0.23%,

1.39%, and 595.9%, respectively

KGI Bank

KGI Securities

Note: 1. CDF, together with KGI Securities, owns 34.28% of China Life

China Life’s 2Q19 net profit was NT$4.6bn; CDF recognized an investment gain of NT$1.3bn

from China Life in 2Q19

Recorded first year premium income (FYP) of NT$80.8bn in 1H19, up 15% YoY

Maintained sufficient capital level above 300%; as of the end of June 2019, net worth

rebounded NT$56.8bn from the end of last year to NT$129.9bn

China Life1




6

Profit contribution by subsidiary under CDF, NT$mn

Profit contribution by subsidiary

China Life Contributed Most Profit in 2Q19 Among Subsidiaries

CDF – 2Q19 Net Profit

Note: 1. CDF’s net income excludes income attributable to non-controlling interests; 2. Investment income from KGI Bank, KGI Securities and China Life has been

adjusted for the purchase price allocation; 3. China Life’s net profit in 2Q19 was NT$4.6bn, whilst CDF recognized an investment income of NT$1.3bn from China Life

in 2Q19, adjusted for the purchase price allocation adjustment and the recognition of investment income on a pro-rata basis




7

Profit contribution by subsidiary

CDF – 1H19 Net Profit

Profit contribution by subsidiary under CDF, NT$mn

Note: 1. CDF’s net income excludes income attributable to non-controlling interests; 2. Investment income from KGI Bank, KGI Securities and China Life has been

adjusted for the purchase price allocation; 3. China Life’s net profit in 1H19 was NT$7.5bn, whilst CDF recognized an investment income of NT$2.0bn from China Life

in 1H19, adjusted for the purchase price allocation adjustment and the recognition of investment income on a pro-rata basis

CDIB Capital Group Contributed Most Profit in 1H19 Among Subsidiaries




8

China Life2.




9

2015 2016 2017 2018 1H19

11.69% 11.57%10.30%

12.09%

14.68%

2015 2016 2017 2018 1H19

82.6 81.1 95.3

73.1

129.9

648.8

1,107.3

1,323.7 1,465.7

1,711.4

1,896.8

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000Total Assets

2015~2019

Ranked among the top 5% of

the Corporate Governance

Evaluation Awards for

5 consecutive years

1963

Established

Listed on the

Taiwan Stock

Exchange

1995

2003Professional

management team

joined

Acquired

Winterthur Taiwan

from AXA

2007

Acquired

PCA Life

2009

2010Jointly invested

CCB Life

with China Construction Bank

2008Avoid the subprime

turmoil during

financial crisis

2016 Included into

TWSE CG 100

Index

Maintaining steady asset growth and sufficient capital level

Shareholders’ Equity Return on Equity NT$bn

Total assets

Surpassed

NT$1 trillion

2014

CDF holds 34.96%

shares of China Life after the

completion

of the tender offer

2017

◆

◆

◆

◆

◆

2018Completed the acquisition of

Allianz Taiwan Life’s

traditional policies and

system integration

Included into

FTSE4Good

TIP Taiwan

ESG Index

1H19

NT$bn

◆

China Life – Performance Highlights




10

2015 2016 2017 2018 1H18 1H19

79.1 100.5

126.2 151.5

66.9 64.7

83.1

90.6

80.2

150.3

70.0 80.8

FYP Renewal premium

2015 2016 2017 2018 1H18 1H19

9.17 9.47

9.08

10.18

6.26

7.45

Total Premium

Delivering solid operational results and premium growth

Net Profits

162.2145.5

191.1206.4

136.9

301.8

6%

China Life – Performance Highlights

NT$bn NT$bn




11

KGI Bank3.




12

KGI Bank – Profitability

Pre-provision operating profits (PPOP), NT$bn

Note: 2015 were pro-forma figures, including corporate banking and global market business

transferred from CDIB Capital Group

Core Income Saw Steady GrowthNet profit, NT$bn



Core income growth remained steady




13

KGI Bank – Profitability (Cont’d)

ROAA, percent

ROAE, percent





Core Income Saw Steady Growth

Core income growth remained steady




14

Steady growth in net revenue generated from consumer and corporate banking

KGI Bank – Net Revenue

(NT$mm) 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Consumer banking1 5,334 4,835 4,992 5,355 1,370 1,354 1,311 1,320 1,349

Corporate banking2 2,646 2,659 2,932 3,320 826 848 847 933 972

Global markets 2,442 2,935 3,087 (180) 4 663 (887) 206 364

Other 536 359 482 574 205 93 139 194 132

Total net revenue 10,958 10,789 11,493 9,069 2,404 2,958 1,409 2,654 2,817

(% of total) 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Consumer banking1 48.7 44.8 43.4 59.0 57.0 45.8 93.0 49.8 47.9

Corporate banking2 24.1 24.6 25.5 36.6 34.3 28.7 60.1 35.2 34.5

Global markets 22.3 27.2 26.9 (2.0) 0.2 22.4 (62.9) 7.8 12.9

Other 4.9 3.3 4.2 6.3 8.5 3.1 9.8 7.2 4.7

Total net revenue 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Note: 1. Including consumer banking and wealth management; 2. Including corporate banking, commercial banking and merchant banking; 3. 2015 were the pro-forma figures post CDIB Capital Group

business transfer




15

Diversified loan portfolio with better loan growth momentum than peers

KGI Bank – Loans

(NT$bn) 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Corporate loans 145.2 175.7 200.8 228.3 229.7 229.5 228.3 233.3 243.8

Large corporations 133.7 161.1 181.8 204.3 209.1 208.9 204.3 204.5 215.5

SMEs 11.6 14.5 19.0 24.0 20.6 20.6 24.0 28.8 28.3

Secured consumer loans 40.7 45.8 60.8 74.7 68.8 72.1 74.7 76.0 78.5

Mortgage 40.6 45.7 60.7 74.7 68.7 72.1 74.7 75.9 78.4

Others 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0

Unsecured consumer loans 35.0 34.5 36.0 37.2 36.7 37.0 37.2 37.2 37.7

Cash card 16.2 15.0 14.5 13.8 14.1 14.0 13.8 13.5 13.3

Personal loans 18.8 19.5 21.5 23.3 22.5 23.0 23.3 23.7 24.3

Total loans 220.9 255.9 297.7 340.2 335.1 338.6 340.2 346.5 360.0

Credit card 2.7 2.7 2.7 2.8 3.3 3.0 2.8 2.7 3.3

AR/ forfaiting/ China advance 32.3 18.6 16.8 17.6 21.1 20.7 17.6 16.1 13.7

Guarantees 12.0 10.7 11.9 14.8 14.8 15.9 14.8 20.7 21.2

Total credit 268.0 287.8 329.1 375.5 374.2 378.1 375.5 385.9 398.2

Total loans YoY/ QoQ (%) (3.6) 15.8 16.3 14.3 5.6 1.0 0.5 1.8 3.9

Total credit YoY/ QoQ (%) (10.6) 7.4 14.3 14.1 6.1 1.0 (0.7) 2.8 3.2

Note: 2015 were the pro-forma figures post CDIB Capital Group business transfer




16

KGI Bank – Loans (Cont’d)

(% of total) 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Corporate loans

Large corporations 60.5 63.0 61.1 60.0 62.4 61.7 60.0 59.0 59.9

SMEs 5.2 5.7 6.4 7.1 6.1 6.1 7.1 8.3 7.9

Secured consumer loans

Mortgage 18.4 17.9 20.4 21.9 20.5 21.3 21.9 21.9 21.8

Others 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Unsecured consumer loans

Cash card 7.3 5.9 4.9 4.1 4.2 4.1 4.1 3.9 3.7

Personal loans 8.5 7.6 7.2 6.9 6.7 6.8 6.9 6.9 6.8

Total loans 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Foreign currency loans 20.5 24.7 28.2 29.2 30.7 29.8 29.2 39.3 40.1


Diversified loan portfolio with better loan growth momentum than peers




17

KGI Bank – Corporate Banking Loan Book

Well-diversified loan portfolio with focus on service and technology industries

Loan Breakdown By Industry

(% of total loan) 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Services 26.0 27.0 32.0 38.2 36.2 36.7 38.2 38.8 39.8

Information, communication, tech 29.5 26.2 24.7 21.6 23.2 22.6 21.6 19.2 20.7

Real estate 9.6 7.6 9.1 9.5 8.2 7.9 9.5 10.8 9.8

Plastics, rubber 9.4 8.4 7.9 6.6 7.2 7.5 6.6 6.8 6.0

Transportation 7.3 7.7 5.0 3.5 4.4 4.5 3.5 4.7 3.8

Energy 2.2 1.8 1.6 2.2 2.3 2.2 2.2 2.1 3.1

Textiles 1.3 2.1 2.0 1.6 2.2 1.9 1.6 1.6 1.8

Others 14.7 19.2 17.6 16.8 16.3 16.6 16.8 16.0 15.0

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Total loans (NT$bn) 145.2 175.7 200.8 228.3 229.7 229.5 228.3 233.3 243.8





18

Deposit breakdown, percent; total deposits, NT$bn

Demand Deposit Ratio Has Been Maintained Within a Stable Range

Continue to optimize deposit mix to reduce funding cost

KGI Bank – Deposits





19

Loan-to-deposit ratio has been maintained within a stable range

KGI Bank – Liquidity

Loan-to-deposit ratio (LDR), percent


Loan-To-Deposit Ratio Has Stabilized




20

KGI Bank – Interest Spread & Net Interest Margin (NIM)

Overall interest spread, percent

Overall Interest Spread Improved due to Lower Cost of Funds for Foreign Currency Deposits

NIM, percent

NIM Improved Slightly due to Lower Cost of Funds for Foreign Currency Deposits



Interest spread and NIM have improved slightly




21

Non-performing loan ratio, non-performing loan coverage, percent

NPL Ratio & NPL Coverage Have Remained Stable

Asset quality remained intact

KGI Bank – Asset Quality

Loan loss reserve, NT$mn; loan loss reserve coverage (LLR), percent

Stable LLR Coverage


Note: 1. 2015 were the pro-forma figures post CDIB Capital Group business transfer Note: Banking peers’ loan loss reserve coverage was 1.39% as of June 30, 2019

Note: Banking peers’ average NPL ratio was 0.23% and peer average NPL coverage ratio was

595.9% as of June 30, 2019




22

Actively boost credit card spending

KGI Bank – Credit Cards & Cash Cards

2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Credit card

Credit cards in circulation ('000) 506 498 452 419 424 425 419 418 424

Active credit cards ('000) 211 198 192 193 193 192 193 195 201

Monthly spending per credit card (NT$) 1,900 2,124 2,314 2,545 2,816 2,417 2,413 2,423 2,732

Spending (NT$mn) 11,538 12,696 12,546 12,793 3,586 3,082 3,032 3,042 3,472

Credit card revolving (NT$mn) 1,153 1,102 1,081 1,087 1,059 1,076 1,087 1,074 1,086

Cash card

Cash cards with credit line ('000) 516 502 494 488 492 490 488 486 484

Cash cards with balances ('000) 355 343 335 328 332 330 328 326 325

Cash card loan outstanding (NT$mn) 16,187 14,986 14,516 13,837 14,118 13,985 13,837 13,490 13,345




23

KGI Bank – Net Fee Income

Continue to enhance fee income

Net Interest Income & Net Fee Income


(NT$mn) 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Net interest income 7,327 5,763 6,385 7,147 1,825 1,812 1,731 1,638 1,668

Net fee income 1,861 1,927 2,017 2,275 588 555 545 605 612

(NT$mn) 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Wealth management 926 953 1,151 1,176 292 277 267 259 284

Loans 399 391 387 474 130 121 116 190 193

TMU 358 421 293 463 124 120 117 111 91

Cards 178 162 185 162 41 37 45 45 44

Net fee income 1,861 1,927 2,017 2,275 588 555 545 605 612

Net Fee Income Mainly Generated From Wealth Management




24

Cost-to-income ratio, percent

Cost-to-Income Ratio Has Been Maintained Within a Reasonable Range During Business Expansion

Steady Cost-to-Income Ratio due to Good Control of Expenses

KGI Bank – Efficiency

Note: 2015 were the pro-forma figures post CDIB Capital Group business transfer Note: A higher cost-to-income ratio in 4Q18 was due to trading and evaluation losses; the ratio returned to a reasonable range as revenue improved




25

Capital adequacy ratio, percent

New Issuance of Subordinated Debt to Strengthen Capital Position

Solid capital position

KGI Bank – Capitalization

Tier-1 capital ratio, percent






26

KGI Bank – Global Markets

(% of total market value) 20154 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

TW GB, municipal 52.8 74.3 55.3 55.8 52.4 53.0 55.8 58.2 55.4

TW negotiable CD +

commercial paper0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Foreign GB 0.0 7.3 0.0 0.8 0.9 0.9 0.8 0.9 1.5

TW corporate/ bond & bank

debenture0.0 0.0 0.0 1.1 1.2 1.1 1.1 1.1 1.2

Foreign corporate/ bond &

bank debenture39.9 14.7 40.0 40.5 43.6 43.1 40.5 37.9 38.7

Equity 7.3 3.7 4.6 1.9 1.9 2.0 1.9 1.9 3.2

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Total market value1 (NT$mn) 74,202 128,669 115,160 141,585 127,608 133,021 141,585 137,452 126,136

Total cost1 (NT$mn) 74,953 131,072 115,927 144,215 129,463 134,980 144,215 137,924 125,892

Unrealized profits2 (NT$mn) (751) (2,403) (767) (2,630) (1,855) (1,959) (2,630) (472) 244

Realized profits3 (NT$mn) 3,612 2,714 2,801 709 373 763 709 781 998

Breakdown of Banking Book Portfolio (Market Value)

Note: 1. Excluding bank deposits, interbank lending, repos, bonds and financial assets recorded at trading book (including bond trading and derivatives); 2. Unrealized loss resulting from higher bond

yields and widening credit spreads in European bonds; 3. Realized profits include dividends and interest received as well as realized gains on disposal; 4. 2015 are pro-forma figures post CDIB Capital

Group business transfer

Portfolio is focused on high-quality government/ corporate bonds & blue-chip stocks




27

KGI Securities4.




28

KGI Securities – Net Revenue

Brokerage commissions were the main revenue driver

Net revenue breakdown, NT$mn

Brokerage Commissions Were KGI Securities’ Main Revenue Driver In 2Q19




29

(NT$mn) 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Net brokerage/ futures/ warrant commissions 8,159 6,208 7,733 8,556 2,256 2,089 1,918 1,663 1,937

Net underwriting fees 667 1,041 920 728 154 225 140 107 173

Net fees & commissions 8,826 7,248 8,652 9,284 2,409 2,314 2,057 1,770 2,110

Net interest income 2,398 1,899 1,869 1,836 524 484 350 294 443

Net investment income 2,246 3,368 6,699 1,733 1,158 602 (163) 1,055 438

Other revenue 577 1,050 1,609 493 (361) 224 251 267 237

Total net revenue 14,047 13,565 18,830 13,347 3,729 3,624 2,495 3,385 3,228

KGI Securities – Net Revenue (Cont’d)

Brokerage business remained the major income source

Note: The figures above included the contribution from overseas subsidiaries

Brokerage Commissions Resumed in 2Q19 on Capital Market Rebound




30

KGI Securities – Profit Breakdown

Resumed profitability from overseas subsidiaries

(NT$mn) 2015 2016 20171 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Taiwan 1,943 3,201 7,227 2,932 872 1,351 15 1,047 1,281

overseas Subsidiaries 610 (718) 850 833 192 215 149 361 297

Hong Kong2 417 (1,044) 571 479 119 123 45 255 229

Thailand 192 327 279 354 74 92 104 106 68

Total 2,552 2,484 8,078 3,765 1,065 1,566 164 1,408 1,578

(% of total profits) 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Taiwan 76.1 128.9 89.5 77.9 81.9 86.3 9.2 74.3 81.2

overseas Subsidiaries

Hong Kong2

16.4 (42.1) 7.1 12.7 11.2 7.8 27.6 18.1 14.5

Thailand 7.5 13.2 3.4 9.4 6.9 5.9 63.2 7.6 4.3

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Profit Breakdown By Geographical Location

Note: 1. Including a one-off valuation gain of NT$3,834mn associated with KGI Securities’ stake in China Life in 3Q17; 2. Including Singapore and Indonesia subsidiaries




31

KGI Securities – Brokerage & Margin Loans

Brokerage business provides a stable recurring income source

(NT$mn) 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Retail 2,722 2,196 3,226 3,501 1,011 876 734 618 727

Institutional 507 459 491 566 132 146 141 137 168

Total 3,229 2,655 3,717 4,067 1,143 1,022 876 754 896

Market share (%) 8.1 8.3 8.3 8.2 8.0 8.1 8.8 8.6 8.7

(NT$mn) 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

KGIS Average Balance 23,675 18,771 21,622 22,737 20,913 19,429 13,004 12,401 12,534

Market share (%) 9.5 8.6 8.4 8.0 8.3 8.0 7.4 7.3 7.2

Breakdown Of Brokerage Commissions By Client Segment (Taiwan Only)

Margin Loans (Taiwan Only)




32

KGI Securities – Investment Portfolio

High-quality investment portfolio

(% of total) 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Fixed-income 68.5 56.3 65.9 75.4 68.7 74.4 75.4 72.6 74.1

Corporate bond & financial debenture 26.5 37.9 40.0 54.6 40.1 48.3 54.6 53.6 61.5

Convertible bond 9.7 7.3 7.4 3.6 5.4 4.7 3.6 3.4 3.0

Exchangeable bond 0.0 0.0 0.2 0.0 0.1 0.0 0.0 0.0 0.0

Government bond 32.2 11.1 18.4 17.1 23.2 21.3 17.1 15.6 9.6

Stocks 27.9 38.5 26.4 15.5 23.7 17.9 15.5 18.5 16.5

Others 3.6 5.2 7.7 9.1 7.6 7.7 9.1 8.9 9.4

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Total market value (NT$mn) 72,177 60,709 56,979 60,432 67,316 65,804 60,432 66,745 67,469

Note: 1. Includes hedged position for warrants; 2. Excludes overseas subsidiaries’ balance




33

CDIB Capital Group5.




34

CDIB Capital Group – Direct Investment Portfolio

(NT$mn) 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Principal investment (Market value) 53,809 48,354 43,070 31,145 37,548 35,307 31,145 33,190 33,953

Greater China 39,855 34,866 30,702 18,962 23,634 21,962 18,962 20,531 19,680

International 13,954 13,489 12,368 12,183 13,914 13,345 12,183 12,659 14,273

Total capital invested 48,221 45,235 41,563 29,819 33,651 32,381 29,819 32,012 33,339

Greater China 37,141 34,180 31,045 19,181 22,382 20,842 19,181 20,133 20,593

International 11080 11,055 10,518 10,637 11,270 11,539 10,637 11,879 12,746

Unrealized profits 5,587 3,119 1,507 1,327 3,897 2,926 1,327 1,178 614

Greater China 2,714 685 (342) (219) 1,252 1,120 (219) 398 (914)

International 2,873 2,434 1,849 1,546 2,645 1,806 1,546 780 1,528

Monetization of direct investment portfolio will continue




35

Region Taiwan Greater China International

Fund nameCreative

Fund

Healthcare

Fund

Growth

Fund

Innovation

Fund2

Ali

Fund

Hua Nan

Fund

Hua Dong

Fund

Yida

Healthcare

Fund

Asia

Partners

Fund

Funds

Partners

Fund

Global

Opportunities

Fund3

Fund sizeNT$1,500

mn

NT$1,750

mn

NT$4,540

mn

NT$1,290

mn

US$100

mn

RMB1,000

mn

RMB1,000

mn

RMB800

mn

US$405

mn

US$169

mn

US$117

mn

Vintage year 2013 2014 2017 2017 2016 2014 2015Under

processing 2014 2015 2018

Shareholding1 39.8% 34.3% 33.3% 23.3% 0.0% 35.0% 30.0%Anticipated

30%24.7% 0% 8.6%

Investment

target

Digital content,

fashion brands,

media and

creative

tourism

Channels and

service

providers of

medical and

healthcare-

related

industries

Technology

and

manufacturing

companies

that intend to

focus on

“smart” and

“green”

technologies

Cloud service,

mobile internet

and

e-commerce

platforms

Supporting

Taiwanese

entrepreneurs

who intend to

distribute

products and

services via

Alibaba’s

ecosystem

Digital content,

consumption

and

healthcare

Consumption,

intelligent

machinery,

environmental

protection,

communications

and internet

Pharmaceuticals,

medical

equipment,

healthcare

consulting/

goods and

services

channels

Taiwanese,

South Korean

and US

companies in

Asia-Pacific

region that

seek long-term

prospects in

China

International

private equity

fund and

portfolio

Market leading

high-growth

companies,

mainly in

North America

and Asia

Pacific

CDIB Capital Group – Focusing On Asset Management

Continue to focus on fundraising

Note: 1. Ownership percentage of CCG and its subsidiaries; 2. Including the parallel fund “CDIB Capital Innovation Accelerator (Cayman) Limited” with fund size of NT$450mn; 3. Global Opportunities

Fund will complete its second closing in September 2019 with anticipated fund size reaching US$120mn




36

CDIB Capital Group – Focusing On Asset Management (Cont’d)

Private-equity funds continue to bear fruit on steadily increasing portfolio valuation

Note: 1. Managed by CDIB Capital Group for global institutional investors; 2. Figures have been converted into New Taiwan dollars using the exchange rate on the last day of each quarter; assets under

management = undrawn capital + unrealized value; realized gains have been excluded from unrealized value; 3. Estimated figure

3

2014 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Undrawn capital 1,097 802 560 324 218 312 296 218 198 158

Unrealized value 486 816 1,053 1,133 1,231 1,191 1,180 1,231 1,253 1,325

Assets under management 1,582 1,617 1,613 1,457 1,449 1,503 1,476 1,449 1,451 1,483

Undrawn capital 650 1,269 697 678 267 484 386 267 267 216

Unrealized value 225 705 1,625 1,133 1,554 1,266 1,520 1,554 1,754 1,684

Assets under management 875 1,974 2,322 1,811 1,821 1,750 1,906 1,821 2,021 1,900

Undrawn capital 0 0 0 1,065 797 1,043 1,004 797 743 690

Unrealized value 0 0 0 192 462 242 310 462 543 660

Assets under management 0 0 0 1,257 1,259 1,285 1,314 1,259 1,286 1,350

Undrawn capital 0 0 0 2,653 3,031 3,569 3,390 3,031 2,740 2,544

Unrealized value 0 0 0 942 1,649 1,157 1,343 1,649 1,987 2,258


Undrawn capital 363 258 190 485 367 416 416 367 367 320



Undrawn capital 0 299 355 382 327 332 327 327 327 327



Undrawn capital 61 254 134 67 54 63 54 54 55 4


Assets under management 207 423 403 449 421 457 424 421 448 429

Undrawn capital 0 0 96 75 51 71 67 51 51 41



Undrawn capital 0 29 29 29 29 29 29 29 29 29



Undrawn capital 0 0 0 0 99 0 117 99 99 83



Undrawn capital 5,549 14,237 12,129 13,783 14,569 13,809 16,503 14,569 14,325 11,407

Unrealized value 5,518 13,407 20,070 24,327 27,492 25,844 25,599 27,493 29,247 31,688

Assets under management 11,067 27,644 32,199 38,110 42,062 39,653 42,102 42,062 43,573 43,095

US$mn Funds Partners Fund1

NT$mn Total AUM2

US$mnGlobal Opportunities

Fund

Asia Partners Fund

US$mn Ali Fund

US$mn

Hua Nan Fund

RMBmn Hua Dong Fund

RMBmn

Innovation Fund

NT$mn Growth Fund

NT$mn

Creative Fund

NT$mn Healthcare Fund

NT$mn

3




37

Portfolio Breakdown - Greater China Portfolio

Note: 1. Banking-related strategic investments, which include stakes in Taiwan Stock Exchange Corporation, were fully disposed in 2Q19; 2. Venture capital-related business excluding cash held by

venture capital-related strategic investment, i.e., CDIB Private Equity (Hong Kong) Corp. Ltd., CDIB Private Equity (China) Corporation, CDIB Capital Creative Industries Limited, CDIB Capital Healthcare

Ventures Limited, CDIB Capital Innovation Accelerator CO., Limited, CDIB Capital Growth Partners L.P., CDIB Private Equity (Fujian) Enterprise (L.P.), CDIB Yida Private Equity (Kunshan) Enterprise

(L.P.), CDIB & Partners Investment Holding Corp., and CDIB Capital International Corp.

(NT$mn) 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Strategic investment 16,484 15,121 13,872 12,003 14,164 14,384 12,003 13,093 12,436

Banking-related1 8,843 6,278 2,953 1,386 3,294 3,290 1,386 1,386 0

Venture capital-related2 7,641 8,843 10,919 10,617 10,870 11,093 10,617 11,706 12,436

Direct investment 23,371 19,744 16,831 6,959 9,470 7,578 6,959 7,438 7,243

Total 39,855 34,866 30,702 18,962 23,634 21,962 18,962 20,531 19,680

(% of total, percent) 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Strategic investment 41.4 43.4 45.2 63.3 59.9 65.5 63.3 63.8 63.2

Banking-related1 22.2 18.0 9.6 7.3 13.9 15.0 7.3 6.8 0

Venture capital-related2 19.2 25.4 35.6 56.0 46.0 50.5 56.0 57.0 63.2

Direct investment 58.6 56.6 54.8 36.7 40.1 34.5 36.7 36.2 36.8

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Monetization of direct investment portfolio will continue

CDIB Capital Group – Greater China Portfolio




38


High-quality portfolio with focus on growth sectors

Note: Excluding strategic investment

(% of direct investment, percent) 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Consumer & services 43.5 35.4 26.6 53.3 46.4 48.0 53.3 52.4 54.2

Industrial & manufacturing 14.8 15.5 12.7 17.3 17.9 18.3 17.3 17.2 15.5

PC & components 16.5 21.6 29.2 10.6 13.1 13.3 10.6 11.2 10.9

Solar 4.7 3.9 6.8 5.8 8.9 6.9 5.8 6.2 7.3

Semiconductor 7.8 9.8 13.4 5.3 6.3 5.7 5.3 5.3 5.2

Financial 2.5 2.9 1.5 3.1 2.8 2.9 3.1 2.7 2.8

Optical 3.1 2.7 3.9 0.5 0.4 0.6 0.5 0.4 0.4

Telecom 1.8 2.2 2.1 0.2 0.2 0.2 0.2 0.3 0.3

Others 5.3 6.0 3.7 3.9 4.0 4.1 3.9 4.3 3.4

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Portfolio Breakdown - Greater China Portfolio




39


Listed companies accounted for approximately 10% of the portfolio

(% of total, percent) 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Listed 22.4 25.5 34.1 9.7 11.5 10.7 9.7 9.0 8.6

Emerging 13.5 8.9 7.3 5.1 6.5 5.5 5.1 5.5 5.8

Unlisted 64.1 65.6 58.6 85.2 82.0 83.8 85.2 85.5 85.6

Total market value 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0


Total capital invested (NT$mn) 37,141 34,180 31,045 19,181 22,382 20,842 19,181 20,133 20,593

Unrealized profits (NT$mn) 2,714 685 (342) (219) 1,252 1,120 (219) 398 (914)

Market Value & Capital Invested - Greater China Portfolio

Note: Including strategic investment (excluding cash held by venture capital-related strategic investment) and direct investment




40

CDIB Capital Group – Greater China Portfolio (Cont’d)

Portfolio valuation has been affected by market movement

(NT$mn) 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Divestment 1,801 1,324 1,693 1,557 187 263 1,356 91 1,775

Dividends 1,007 585 686 305 29 270 5 0 70

Equity pickup 441 443 175 49 (138) 96 (63) 57 (52)

Remuneration 30 51 50 18 2 11 2 1 4

Impairment (920) (915) (902) 0 0 0 0 0 0

Valuation gain/loss - - - (46) 467 (113) (1,366) 602 (1,313)

Realized profits 2,359 1,488 1,701 1,883 548 527 (66) 751 484

Unrealized profits 2,714 685 (342) (219) 1,252 1,120 (219) 398 (914)

Realized & Unrealized Gains/ Losses - Greater China Portfolio

Note: Including strategic investment and direct investment




41

CDIB Capital Group – International Portfolio

Portfolio value above par and further appreciation expected

(% of international portfolio, percent) 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Third-party funds 33.7 42.1 50.4 52.2 48.7 49.8 52.2 58.9 58.7

Direct investment and co-investment 66.3 57.9 49.6 47.8 51.3 50.2 47.8 41.1 41.3

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0


Total capital invested (NT$mn) 11,080 11,055 10,518 10,637 11,270 11,539 10,637 11,879 12,746

Unrealized profits (NT$mn) 2,873 2,434 1,849 1,546 2,645 1,806 1,546 780 1,528

Market Value & Capital Invested - International Portfolio




42

CDIB Capital Group – International Portfolio (Cont’d)

Portfolio valuation has been affected by market movement

(NT$mn) 2015 2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Third-party funds 400 284 616 (3) 70 (265) (51) 134 117

Direct investment and co-investment 883 672 1,916 1,251 707 (496) 590 85 780

Realized profits 1,283 957 2,532 1,247 776 (761) 539 219 896

Unrealized profits 2,873 2,434 1,849 1,546 2,645 1,806 1,546 780 1,528

Realized & Unrealized Gains/ Losses - International Portfolio




43

Financial Highlights6.




44

Financial Snapshots – CDF

Four core business engines provide diversified earning sources

CDF (consolidated) 2015 2016 2017 2018

Total assets (NT$bn) 866.7 892.2 2,392.5 2,717.8

Total net worth (NT$bn) 168.8 167.1 249.2 223.6

Total assets/ net worth (X) 5.1 5.3 9.6 12.2

Net profits (NT$bn)1 8.5 5.9 11.7 7.9

EPS (NT$/ share) 0.58 0.40 0.80 0.54

Book value per share (NT$/ share) 11.18 11.17 11.60 10.97

Cash dividend per share (NT$/ share) 0.50 0.50 0.60 0.30

Adjusted ROAE (%)2 5.1 3.6 7.1 4.7

ROAA (%) 1.0 0.7 0.8 0.5

Note: 1. Excluding profits attributable to non-controlling interests; 2. Adjusted ROAE excludes non-controlling interests




45

Financial Snapshots – China Life

China Life (consolidated) 2015 2016 2017 2018

First-year premium (NT$bn) 83.1 90.6 80.2 150.3

Total premium (NT$bn) 162.2 191.1 206.4 301.8

Investment income (NT$bn) 47.2 47.1 47.4 51.8

Net profits (NT$bn) 9.2 9.5 9.1 10.2

EPS (NT$/ share) 2.29 2.36 2.26 2.54

Total assets (NT$bn) 1,202.6 1,323.7 1,465.7 1,711.4


ROAE (%) 11.7 11.6 10.3 12.1

ROAA (%) 0.8 0.8 0.7 0.6

Sustained profitability supported by steady growth of premium income and investment income




46

Financial Snapshots – KGI Bank

Improving profit source

KGI Bank (consolidated) 2015 2016 2017 2018

Total assets (NT$bn) 546.2 572.1 590.1 683.3



Net profits (NT$bn)1 5.2 3.8 3.2 2.2

EPS (NT$/ share) 1.13 0.83 0.69 0.47


CAR ratio (%) 15.0 13.2 14.2 13.4

ROAE (%) 9.2 6.6 5.32 3.63

ROAA (%) 0.9 0.7 0.5 0.3

Note: 1. Excluding profits attributable to non-controlling interests; 2. The adjusted ROAE, which excluded the impact derived from the reduction of deferred tax asset (NT1.2bn), rose to 7.3% in 2017; 3.

The adjusted ROAE, which excluded the impact derived from the reduction of deferred tax asset (NT0.6bn), rose to 4.6% in 2018; 4. 2015 was the pro-forma figures post CDIB Capital Group business

transfer




47

Financial Snapshots – KGI Securities

Leading securities firm in Taiwan with extensive network presence

KGI Securities (consolidated) 2015 2016 2017 2018




Net profits1 (NT$bn) 2.6 2.5 8.2 3.8

EPS (NT$/ share) 0.67 0.68 2.48 1.16


CAR ratio (%) 339.0 329.0 296.0 327.0

ROAE (%) 4.2 3.9 13.3 6.1

ROAA (%) 0.9 0.9 2.9 1.4

Note: 1. Excluding profits attributable to non-controlling interests




48

Financial Snapshots – CDIB Capital Group

Leading merchant bank in Taiwan with focus on private equity

CDIB Capital Group (consolidated) 2015 2016 2017 2018




Net profits1 (NT$bn) 4.9 1.5 3.4 2.3

EPS (NT$/ share) 1.49 0.71 1.63 1.13


ROAE (%) 5.3 2.1 5.5 4.5

ROAA (%) 1.8 2.1 5.3 4.3





49

Quarterly Financial Snapshots – CDF

Four core business engines provide diversified earning sources

CDF (consolidated) 2Q18 3Q18 4Q18 1Q19 2Q19

Total assets (NT$bn) 2,700.4 2,769.0 2,717.8 2,867.2 2,983.3

CDIB Capital Group (NT$bn) 55.5 50.2 50.4 52.0 46.5

KGI Securities (NT$bn) 313.1 321.5 277.5 312.8 322.6

KGI Bank (NT$bn) 709.5 723.0 683.3 697.3 713.5

China Life (NT$bn) 1,621.0 1,674.9 1,711.4 1,817.4 1,896.8

AMC2(NT$bn) 3.3 3.3 3.3 3.3 3.3

Total net worth (NT$bn) 230.1 240.9 223.6 257.5 282.6

Total assets/ net worth (X) 11.7 11.5 12.2 11.1 10.6

Net profits (NT$bn)1 2.8 2.4 (0.6) 3.6 4.2

CDIB Capital Group (NT$bn) 1.2 (0.3) 0.1 1.2 1.3

KGI Securities (NT$bn) 1.1 1.6 0.2 1.4 1.6

KGI Bank (NT$bn) 0.9 0.9 (0.3) 0.9 1.0

China Life (NT$bn) 2.6 4.2 (0.3) 2.8 4.6

AMC (NT$mn) 11.9 11.7 (20.0) 15.4 19.8

EPS (NT$/ share) 0.19 0.17 (0.05) 0.25 0.29

Book value per share (NT$/ share) 11.10 11.42 10.97 12.03 12.46

Adjusted Annualized ROAE (%)2 6.7 6.0 (1.6) 8.6 9.4

Annualized ROAA (%) 0.6 0.8 (0.1) 0.7 0.9

Note:1. Net profits excluded non-controlling interests; 2. Adjusted annualized ROAE excludes non-controlling interests




50

Quarterly Financial Snapshots – China Life

Asset size amounted to NT$1.9tn driven by robust business growth

China Life (consolidated) 2Q18 3Q18 4Q18 1Q19 2Q19

First-year premium (NT$bn) 39.4 41.2 39.1 47.5 33.3

Total premium (NT$bn) 71.1 81.8 83.2 75.7 69.8

Investment income (NT$bn) 13.2 15.6 10.9 14.1 18.5

Net profits (NT$bn) 2.6 4.2 (0.3) 2.8 4.6

EPS (NT$/ share) 0.64 1.06 (0.08) 0.70 1.15

Total assets (NT$bn) 1,621.0 1,674.9 1,711.4 1,817.4 1,896.8





51

KGI Bank (consolidated) 2Q18 3Q18 4Q18 1Q19 2Q19

Total assets (NT$bn) 709.5 723.0 683.3 697.3 713.5



Net profits (NT$bn)1 0.9 0.9 (0.3) 0.9 1.0

EPS (NT$/ share) 0.19 0.20 (0.07) 0.20 0.21


CAR ratio (%) 11.6 11.6 13.4 13.1 14.2

Annualized ROAE (%) 5.7 6.2 (2.3) 6.0 6.3

Annualized ROAA (%) 0.5 0.6 (0.2) 0.5 0.6


Quarterly Financial Snapshots – KGI Bank

Solid capitalization laying foundation for potential profit growth




52

Quarterly Financial Snapshots – KGI Securities

Profitability has been affected by market volatility

KGI Securities (consolidated) 2Q18 3Q18 4Q18 1Q19 2Q19




Net profits (NT$bn) 1 1.1 1.6 0.2 1.4 1.6

EPS (NT$/ share) 0.33 0.48 0.06 0.43 0.49


Annualized ROAE (%) 7.0 10.0 1.2 8.8 9.4

Annualized ROAA (%) 1.4 2.0 0.3 1.9 2.0

Note: 1. Net profits excluded non-controlling interest




53

Quarterly Financial Snapshots – CDIB Capital Group

Asset monetization will continue with focus on asset management

CDIB Capital Group (consolidated) 2Q18 3Q18 4Q18 1Q19 2Q19




Net profits (NT$bn)1 1.2 (0.3) 0.1 1.2 1.3

EPS (NT$/ share) 0.58 (0.14) 0.04 0.61 0.62


Annualized ROAE (%) 8.7 (2.3) 0.8 10.2 11.0

Annualized ROAA (%) 8.4 (2.2) 0.7 9.7 10.4

Note: 1. Net profits excluded non-controlling interests




54

CDF Shareholding Structure

FINI holdings exceed 27.4%

Steadily Increasing FINI Holdings

Source: Taiwan Stock Exchange

FINI shareholdings, percent

Note: Shareholding percentage will be updated before the date of the Regular Shareholders’

Meeting each year

As of June 30, 2019

Top 10 Shareholders Of CDF

1. China Life Insurance Co., Ltd. 3.76%

2. Shin Wen Investment Co., Ltd. 3.21%

3. Jing Kwan Investment Co., Ltd. 2.79%

4. Bank of Taiwan Co., Ltd. 1.92%

5. Cathay Life Insurance Co., Ltd. 1.79%

6. Government of Singapore 1.70%

7.

JPMorgan Chase Bank N.A., Taipei Branch in

custody for Vanguard Total International Stock Index

Fund, a series of Vanguard Star Funds

1.50%

8.Vanguard Emerging Markets Stock Index Fund, A

series of Vanguard International Equity Index Funds1.46%

9. CTBC Bank Trust Account for KGI Securities 1.45%

10. Norges Bank 1.42%

Total 21.00%

Note: Shareholding percentage will be updated after the registration date of the Regular

Shareholders’ Meeting and ex-dividend each year




55

1st

2nd

3rd Coco Coco

DCF DCF DCF

Coco Coco

IPO PriceIndependent

Appraisal

DCF NAV NAV

IPO Candidate

Market priceIs the issuer

listed?

Early StageExpansion SurveillanceStable

Closing price on

the valuation date

* liquidity discount

factor1

Market price

Emerging Stocks

Valuation by stage of development2

Yes

Private Placement

Listed / OTC

Average monthly turnover in

the latest quarter > average median turnover of l isted

companies during the past one year?

Valuation on the

valuation date *

liquidity discount

factor1

Is a bench marking

price

available?

Is a binding price available in the next 3

months?

Fund-raising price or put option

Is a market price available in the past 3

months?

No

Yes

Yes

Yes Yes

Yes

YesYes

No

No No

No

No

No

No

Valuation Method

Valuation system co-developed with KPMG has improved transparency

Note 2: Stages of development

IPO

Candidate

The company has a qualified IPO

plan or has signed contracts with

recommended securities firms

Stable The company has main

operations >2 years with (1)

positive retained earnings for the

recent financial years, or (2) net

profits for the past 2 years

Expansion Main operations >2 years with net

loss for the recent financial years

Early Main operations <2 years

(excluding biotech companies still

in the R&D-phase)

Surveillance The company is in trouble (e.g.,

termination of operations or

liquidation)

Valuation

Method(s) Acronyms

DCF Discounted cash flow

Coco Competitor comparison

NAV Net asset value

Note 1: Based on

Black Scholes Model Daily

Average

Price

Range




56

CDF & Principal Subsidiaries

Organization structure

CDF and principal subsidiaries

China Development Asset Management Corp.

中華開發資產管理

China Development Financial Holdings

中華開發金控

CDIB Capital Group

中華開發資本

China Life

中國人壽

KGI Securities

凱基證券

KGI Bank

凱基銀行

Chung Hwa

Growth 4 Asset

Mgmt. Corp.

中華成長四

資產管理

(100%)

CDIB Capital Innovation

Advisors Corp.

開發創新管理顧問

(60%)

CDIB Private Equity

(Hong Kong) Co. Ltd.

(100%)

CDIB Venture Capital

(HK) Corp. Ltd.

(100%)

**CDIB Private

Equity (China)

Corp. provides

advisory service

to general

partners of CDIB

Yida Private

Equity (Kunshan)

Co. Ltd./ CDIB

Private Equity

(Fujian) Co. Ltd.

CDIB

Private Equity (China) Corp.

中華開發股權投資管理

(100%)

CDIB Capital

International

Corp. (CCIC)

(100%)

CDIB Global

Markets Limited

(100%)

CDIB Capital

Investment

I, II Limited

(100%)

CDIB

International

Leasing Corp.

中華開發

國際租賃

(100%)

* CDIB Capital

Management

Corporation is

engaged to

manage CDIB

Venture Capital

Corporation

CDIB Capital

Management

Corporation

中華開發

資本管理顧問

(100%)

CDIB Venture Capital

Corporation

中華開發

創業投資

(100%)

CDIB

Management

Consulting

Corp.

中華開發

管理顧問

(100%)

Development

Industrial Bank

Asset Mgmt. Corp.

開發工銀

資產管理

(100%)

Chung Hwa

Growth 3 Asset

Mgmt. Corp.

中華成長三

資產管理

(100%)

CDC Finance

& Leasing

Corp.

華開租賃

(76.04%)

CDIB

Private Equity

(Fujian) Co. Ltd.

華開(福建)股權

投資管理

(70%)

CDIB Yida

Private Equity (Kunshan)

Co. Ltd.

華創毅達 (昆山)

股權投資管理

(65%)

*** CCIC is engaged to manage CDIB

Global Markets Limited, CDIB Capital

Investment I, II Limited and CDIB Asia

Partners Limited

CDIB Private Equity Mgmt.

(Fujian) Enterprise (Limited

Partnership)

華創(福建)股權投資管理

企業(有限合夥)

(70%)

CDIB Yida Private Equity Mgmt.

(Kunshan) Enterprise (Limited

Partnership)

昆山華創毅達股權投

資管理企業

(有限合夥企業) (65%)

CDIB Capital

International

(Hong Kong)

Corp. Ltd.

(100%)

CDIB Capital

International

(USA) Corp.

(100%)

CDIB Capital

International

(Korea) Corp.

(100%)

CDIB Capital

Asia Partners

Limited

(100%)

56% 20% 58.34% 27.08%

Documents

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