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IR publication – June 2017
Far Eastern New Century 1402 (TWSE)
1
• Year of establishment: 1954
• Asset allocation as of Mar 31, 2017 (Total assets: NT$ 501 billion / Book value per share: NT$ 35.6 /share)
Business Segments Production Sites Current Capacity
Pro
du
cti
on
Petrochemical Taiwan & Shanghai PTA: 1.61 mm tons/yr
Polyester
Taiwan,
Shanghai,
Suzhou,
Wuhan,
Japan,
Malaysia
Polymer: 1.98mm tons/yr
PET: 1.46 mm tons/yr
PSF: 490K tons/yr
Polyester Filament: 136K tons/yr
Others
Nylon 6,6 filaments: 21K tons/yr
PET Sheets: 114K tons/yr
PET films: 20K tons/yr
Textiles
Taiwan,
Suzhou,
Wuxi,
Vietnam
Yarn: 513K spindles/yr
Knitted Fabrics: 23K tons/yr
Industrial Fabrics: 20K tons/yr
Industrial Yarn: 112K tons/yr
Apparels: 4.9 mm dozens/yr
Property Various locations in
Northern Taiwan
Total size: 210k pings
(695k sq meters)
Telecom
(Far EasTone)
Integrated service
provider - mobile,
fixed line, ISP, etc.
# of subs: 7.3 mm
Investment &
Others Cement, retail, financial services…etc.
Company Overview
Company Overview
Production
53%
Property
3%
Investment
& Others (Including
Telecom)
44%
• Revenue breakdown in 1Q 2017
Production
30%
Property
30%
Investment
& Others (Including
Telecom)
40%
2
Strategy Go
Green
Value
Added
Products
Total Solution (Products + Services)
Invest in the
Future
Strategic Summary
Stable
Investment
Income
Transformation
of
Production
Business
Monetization
of
Property
Business
Sound Financials & Stable Dividend Policy
We are growing and transforming in a systematic way
In 2015, 25% of the Production Business
revenues is derived from
recycled/bio/energy-saving products.
Company Overview
3
Stock code Investees Holdings Book value
(2017.3.31)
Market value
(2017.5.23)
1102 TT Asia Cement 26% 18,929 23,949
1460 TT Everest Textile 26% 1,141 1,941
1710 TT Oriental Union Chemical 31% 5,736 6,528
2606 TT U Ming Marine 0% - -
2845 TT Far Eastern International Bank 14% 4,111 4,097
2903 TT Far Eastern Department Stores 23% 7,259 5,153
4904 TT Far EasTone 38% 29,439 94,565
Total 66,616 136,234
Value of Major Investments - Listed Companies
(NT$ million)
Note1: Beginning from 1 July 2009, Far Eastern International Bank was re-classified as an available-for-sale financial asset.
Note 2: 5,353 million shares of FENC common stock were issued and outstanding as of 31 Mar 2017.
Company Overview
4
A Leading Integrated Polyester Producer
ASIA TOP 1
PET Sheet
WORLDWIDE TOP 6
PET Resin
WORLDWIDE TOP 3
Nonwoven
Polyester Staple Fiber
ASIA PACIFIC TOP 1
Nylon 6,6 Filament
ASIA TOP 1
Recycled-PET
Production business strategy
5
What Differentiates Us from Our Peers?
• Vertical integration: the only producer manufacturing from raw material PTA to providing total solution
services to brand clients. Also speeding up the Vietnam expansion project to meet client demand for
future growth.
• Award winning innovations: modifying polymer “gene” (technology built in) by R&D team and thus
producing textiles difficult for peers to clone. Smart, functional & sustainable textiles.
• Close customer partnerships: chosen as their strategic partners by well-known brands.
Note: • 1 Polyester = 0.83 PTA + 0.33 MEG
• 1 PTA = 0.67 PX + 0.03 acetic acid
• 1 MEG = 0.6 Ethylene + oxygen + water
Production Business (Smart from the Start : R&D Efforts) Outsourced Feedstock
Production business strategy
Green products please refer to page 7
Natural Gas
Food Packaging
Non-food Packaging
Apparel
PTA
MEG
PX
Ethylene
Naphtha
Nylon 6,6 Filament
Nylon 6,6 Flake
Polyester Staple Fiber Non-
Apparel Polyester Filament
• Germanium (鍺觸媒) &
titanium catalyst (鈦觸媒)
PET to replace antimony
catalyst (銻觸媒) PET
• PET heat shrinkable films
• A-PET (Amorphous) sheets
• Nonwoven
−Low melt fibers
−Hygiene
• Industrial use
−Airbag / safety belt
−Tire cord / conveyor belt
PET Resin
Polyester Polymer
TopDry®
6 Production business strategy 6
7
Key barriers : 1)securing feedstock supply & 2)acquiring quality approvals (i.e. FDA and clients’ approval)
• Shirts : FENC announced the 1st
100% bio-polyester shirt made
entirely from plants in April 2016
• Match with “Local-to-Local” distribution system of
international beverage producers
• Production sites:
Taiwan Japan China/ASEAN Europe/US
• JV with Ishizuka Glass Co., Ltd. in Japan: − Annual capacity: 35k tons
− Commercial run in 2015
• FENC’s recycled-PET capacity expansion plan: − 20K tons in 2014 90K tons in 2015 140K tons in 2019
Go Green: Recycled-PET & Bio-based PET
Phase I: Worldwide Production Base Phase II: 100% Bio-PET Products
Production business strategy
0.33 Bio-PET 1st generation: food crops (ex: corn, sugar cane, etc.)
2nd generation: agriculture waste (ex: corn stalk, wheat straw, rice straw, etc.)
0.83
Phase I:
Phase II:
Recycled
bricks R-PET
Bio-PTA
Bio-MEG
• Bottles: FENC co-developed with
Coca-Cola the 1st bio-PET bottle
and announced in 2014
8
Invest in the Future: Smart Textiles
• A revolutionary smart garment system that seamlessly connects the
textile and digital worlds.
- Efficient turn-key solution in terms of both cost efficiency and
manufacturing process
- Highly durable materials that can be used in diverse sports, fitness and
wellness scenarios
- Advanced conductive coating film that allows highly accurate bio-sensing
analytics
- Simple and commercial-ready system that integrates textile
manufacturing, electronic devices and application/software development
- Non-allergenic
Production business strategy
• DynaFeedTM : Smart Clothes (the Internet of Textile)
The ISPO AWARD jury’s description:
“A great new component that does not inhibit the
functionality of the fabric while collecting and
transporting vital information”.
FENC® DynaFeedTM user-friendly interface provides body vital information for
user, enhancing training quality and efficacy.
9
New Book Value (Market value using
“fair value model” under
TW IFRS on Mar 31, 2017)
• Total land holdings: approximately 574k pings (1,900k sq meters)
• Investment properties as at Mar 31, 2017: approximately 210k pings (695k sq meters)
Land Holdings Owned by FENC
NT$ 35.3 BN
NT$ 125 BN
Old Book Value Market Value (After future
land development)
Property development plan
After disposing
investment properties
Gain on disposal of
investment properties
(P&L)
Special reserve
Unappropriated earnings
(Balance sheet)
Total distributable
income
10
Banqiao Size: 89,822 pings (297,311 sq meters)
Book value: ~70% of investment properties
Investment Properties – Major Pieces of Land
a) Land holdings in Taipei City include self-use and investment properties
b) 1 ping = 3.31 sq m = 35.58 sq ft
Taipei City (Note a)
Size: 1,650 pings (5,462 sq meters)
Yilan (SPA resort) Size: 32,201 pings (106,585 sq meters)
Phase I plan: villa concept, around 200 rooms
Hualien Size: 9,446 pings (31,266 sq meters)
New Taipei City & Keelung City Size: 9,091 pings (30,091 sq meters)
Property development plan
Taishan Size: 16,829 pings (55,704 sq meters)
Tau Yuan County Size: 38,804 pings (128,441 sq meters)
11
Developed area
(2008-2016)
Developing area
(2017-2020)
Developing area
(after 2020)
• Target tenants for commercial office buildings
A smart green campus, with sole property ownership, integrated with residential zones (for sale),
commercial offices (for lease), a medical center, a college, and a hypermarket in the neighborhood
Taipei Far Eastern Telecom Park (Banqiao)
Retail
Medical Center
Oriental Institute
of Technology
Residential III
Residential II
TPK-B
TPK-C
TPK-D
Residential IV
Property development plan
Car Park
South
park
TPKC.D
North
Park
New Taipei City
Library
Residential
III
TPKA
Residential
II
Taiwan
Power
12
0.2 0.2 0.3
0.5
1.0 1.0
1.3
1.8
0.8
1.3
2.0
1.7
1.3 1.3 1.2
1.0
0.8 0.4 0.5
0.7
0.7
0.8
0.6
0.3
0.2
0.2
0.2
0.3
0.3
0.2 0.2
0.2
-
-
0.5
1.0
1.5
2.0
2.5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E
NT$/share
Cash dividend
Share dividend
Dividends Payout History
Dividend policy
2016 Cash Dividend of NT$ 0.8 /share
is proposed by the Board of Directors,
and the final resolution will be
subjected to AGM in June 2017.
13
Key Financial Highlights (IFRS-consolidated Base)
(1) EPS is calculated using adjusted outstanding shares (deducting treasury stock). Note:
(NT$ million)
YoY
Revenues 50,383 100% 51,596 100% -2% 215,856 100% 217,948 100%
Profit from Operations 3,753 7% 3,823 7% -2% 14,537 7% 14,514 7%
701 1% 113 0% 517% 1,874 1% 2,722 1%
Interest Expenses-Net (496) -1% (533) -1% n.a. (2,046) -1% (1,966) -1%
Gain on revaluation of investment property 215 0% 1,028 2% -79% 3,269 2% 4,659 2%
Gain (Loss) on disposal of investment property - - (25) 0% n.a. 313 0% 942 0%
Others (618) -1% (842) -2% n.a. (1,987) -1% (1,168) -1%
Consolidated Income before Tax 3,555 7% 3,565 7% 0% 15,960 7% 19,701 9%
Tax Expenses 683 1% 998 2% -32% 3,257 1% 5,014 2%
Consolidated Net Income 2,872 6% 2,567 5% 12% 12,703 6% 14,686 7%
Attributable to:
Shareholders of the Company 1,286 3% 835 2% 54% 6,308 3% 8,035 4%
Non-Controlling Interests 1,586 3% 1,732 3% -8% 6,395 3% 6,652 3%
EPS (NT$)(1) 0.26 0.17 1.26 1.61
Depreciation & Amortization 5,002 10% 4,697 9% 6% 19,338 9% 18,265 8%
Total Assets 501,147 100% 513,460 100% 518,765 100%
Total Debt 248,115 50% 261,268 51% 258,368 50%
Net Interest-bearing Debt 158,815 32% 160,148 31% 152,787 29%
Total Equity 253,032 50% 252,193 49% 260,397 50%
190,308 38%190,886 37% 197,252 38%
Non-Controlling Interests 62,723 12% 61,306 12% 63,145 12%
Book Value Per Share 35.6 35.7 36.8
Investment Income(Equity method)-Net
Total Shareholders' Equity of
Parent Company
1Q17 1Q16 2016 2015
14
Performance by Business Segments
Production Business
Production Business
Note: (1) Investment & Others segment includes investment income (loss) from equity-method investees, i.e. ACC, FEDS, and share disposal gain (loss), etc.
(NT$ million)1Q17 1Q16 YoY 2016 2015
Reclassified for Presentation Purposes
Gross Revenue
Petrochemical 7,244 7,684 -6% 31,401 29,976
Polyester 14,420 14,254 1% 59,463 60,476
Textile 7,593 7,445 2% 33,946 32,260
Telecom 22,480 23,819 -6% 94,344 97,293
Property 1,558 933 67% 8,896 6,644
Investment & Others (1) 2,159 1,484 46% 6,935 8,783
Subtotal 55,455 55,619 0% 234,986 235,432
Inter-company Sales 4,369 3,907 12% 17,053 14,532
Revenue-net 51,087 51,712 -1% 217,932 220,900
Profit from Operations
Petrochemical (257) (302) n.a. (1,275) (1,647)
Polyester (7) 224 n.a. 693 897
Textile 208 158 32% 1,178 673
Telecom 3,781 3,844 -2% 15,024 15,393
Property 233 98 138% 1,009 692
Investment & Others (1) 441 (116) n.a. 158 1,100
Subtotal 4,400 3,906 13% 16,787 17,108
Other Adjustments 56 33 67% (174) 358
Reclassified Profit from Operations 4,456 3,939 13% 16,613 17,465
For Reconciliation Purposes
-701 113 517% 1,874 2,722
- Dividend Income 3 3 -9% 203 230
Profit from Operations 3,753 3,823 -2% 14,537 14,514
Investment Income from
Equity-method Investees, net
15
• The Chairman won the “Top 50 Taiwan CEOs 2016” hosted by Harvard Business Review (哈佛商業評論-2016年度台灣執行長50強)
• Ranked “One of the Most Admired Companies in Taiwan” 2003 - 2012 by CommonWealth Magazine (天下雜誌最佳聲望標竿企業)
Management
&
Leadership
Recent Achievements & CSR
• Awarded “ the Gold Award of 2016/2017 “ by ISPO Textrends Exhibition in Munich
• Awarded “the 2016 Sustainability Winner” by Adidas (ocean plastic recycled project)
• Awarded “the 2014 Consumer Decides Award” by Nike
• Awarded “the 2013 Apparel Fabric Supplier of the Year” by Puma
• Awarded “2013 Supplier of the Year” by Coca-Cola
• Awarded “2013 Supplier Innovation Award” by Nike
Client
Relationship
&
Green
• TW (S&P) long-term credit rating: TW A+
• Board independence: Three independent directors appointed in 2012
• Remuneration & audit committee: Established in 2011 and 2015, separately
• A constituent of the MSCI Global Sustainability Index Series, FTSE4Good Emerging Index & TWSE CG 100 Index
• FENC has participated in the Carbon Disclosure Program (CDP).
• CSR report: prepared according to GRI G4 Comprehensive option and the AA 1000 standards. - Awarded “the CSR report of the year”, “Corporate Sustainability Award” and “Growth through Innovation Award” by
Taiwan Corporate Sustainability Award in 2016.
Corporate
Governance
16
This presentation is prepared by Far Eastern New Century Corporation (the “Company”)
and is solely for the purpose of corporate communication and general reference only. The
presentation is not intended as an offer to sell, or to solicit an offer to buy or form any
basis of investment decision for any class of securities of the Company in any
jurisdiction. All such information should not be used or relied on without professional
advice. The presentation is a brief summary in nature and does not purport to be a
complete description of the Company, its business, its current or historical operating
results or its future prospects.
This presentation is provided without any warranty or representation of any kind, either
expressed or implied. The Company specifically disclaims all responsibilities in respect of
any use or reliance of any information, whether financial or otherwise, contained in this
presentation. Neither this presentation nor any of its contents may be reproduced to a
third party without the prior written consent of the Company.
Disclaimer