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CTCI Corporation The 1 st Investor Conference, 2017 2017.03.29 1

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Page 1: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

CTCI Corporation

The 1st Investor

Conference, 2017

2017.03.29

1

Page 2: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Agenda

• Operation Review – 2016

• Business Outlook and Operation

Strategies

• Financial Highlights – 2016

2

Page 3: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Operation Review – 2016

3

Page 4: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

New Contracts and Breakdown

4

60.2

66.9

77.9

64.5

85.6

0

10

20

30

40

50

60

70

80

90

2012 2013 2014 2015 2016

Unit: NT$, Billion

Taiwan 73%

South East Asia 17%

China 3%

India 2%

Middle East 4%

Others 1%

Hydrocarbon 10%

Environmental 60%

Transportation 2%

Power 22%

Industrial 4%

Other 2%

Page 5: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

Backlog and Breakdown

5

153.2 163.5

187.1 190.5

203.2

0

50

100

150

200

250

2012 2013 2014 2015 2016

Unit: NT$, Billion

Taiwan 55%

South East Asia 21%

China 1%

India 1%

Middle East 21%

Other 1%

Hydrocarbon 39%

Environmental 34%

Transportation 5%

Power 18%

Industrial 4%

Page 6: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

Accomplishments Review

Project Execution Honors

• SAMAC MMA/PMMA Project awarded SABIC Green Flag for Best EHSS Performance

Three Times

• CPC Talin No. 11 DHDS Project and Taichung LNG Terminal Expansion Project honored

with MOEA Public Construction Quality Award

• Thai Oil TOP SPP Project awarded appreciation and recognition for achievements in COD

completion and 10 Million Man-hours without LTI

• Petronas RFCC project awarded Best Performance for continuously leading EPC progress

among all EPC contractors

6

Page 7: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

Accomplishments Review

Company Honors

• Won the highest honor of "The 16th Public Construction Golden Quality Award“ in design

and construction excellence awards under the facilities category

• Honored with Green Sustainability Practice Award by British Standards Institution

• Recognized with five Achievements in 2016 Taiwan Corporate Sustainability Awards

Sustainable Corporate Award

gold medal of service industry for “Taiwan Top 50

Corporate Sustainability Report Award”

Growth through Innovation Award

Transparency and Integrity Award

Group Chairman John T. Yu was honored as the “Outstanding Corporate Sustainability

Professional”

• Listed by Dow Jones Sustainability Indices (DJSI) in its Emerging Markets index

• Evaluated as Top 5% in “Corporate Governance Evaluation System”

• John T. Yu was honored as the “2016 Top 50 CEO” by Harvard Business Review”

7

Page 8: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

Accomplishments Review

The CommonWealth Magazine Top 2,000 Enterprises Survey

ENR Magazine Rankings

Sector 2015 2016

International Contractors 122 100

Global Contractors 148 139

International Design Firms 103 92

Global Design Firms 136 147

8

Sector Company 2015 2016

Contractor CTCI Corp. 1 1

Contractor CTCI SEC 33 30

Contractor CTCI MAC 43 41

Contractor CTCI REI 54 51

Investment Holding

Company KD Holding 5 8

Environmental Services SESC 2 2

IT Equipment Sales and

Services CTCI ASI 35 33

Page 9: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

CSR Fulfillment

9

Records and benefits of indicative green engineering resulted in 2013-2016

• Electricity consumption saved 4,304,030Mwh equivalent to 14.7days of thermal power plant of Taiwan Power Co.

• Cumulative CO2 reduction 58.99 million metric tons equivalent to151,640 times the annual carbon absorption of Daan Forest Park in Taipei City

• Cumulative water saved 135.98 million cubic meters equivalent to 152 days of water use by Taipei City

Records and benefits of O&M for incineration plants in 2016

• The largest O&M institution of incineration plants for city garbage in Taiwan Electricity generated can supply up to 286 thousand households

Records and benefits of O&M by GDDC for photovoltaic power plants in 2016

• Current power generated: 28,960 thousand kWh

Power generated by the end of 2017:41,510 thousand kWh

Water resources management

• Chungli Sewerage System BOT Project: a capacity of 156,800 CMD

• Fengshan Shi Wastewater Reclamation Plant BTO Project:

a capacity of 45,000 CMD

CTCI Education Foundation established in 2016

Page 10: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

Significant Projects Awarded ─ Taiwan

Client Taoyuan City Government

Project Chung Li Sewerage System Project, BOT

Contractor Consortium of CTCI & HEC

Scale 156,800 CMD per day

Scope Investment, Design, Procurement, Construction and O&M (BOT)

Location Taiwan

10

Taoyuan

• CTCI and the partner jointly implement all phases of this project within 35 years of

concession period, serving 200,000 households and improving the life quality in southern

Taoyuan

Page 11: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

Significant Projects Awarded ─ Taiwan

Client Kaohsiung City Government

Project Feng Shan Shi Wastewater Reclamation Project, BTO

Contractor Consortium of HEC & CTCI

Scale 45,000 CMD per day

Scope Investment, Design, Procurement, Construction and O&M (BTO)

Location Taiwan

11

Kaohsiung

• CTCI and the partner jointly implement all phases of project with 17 years concession

period, producing reclaimed water to Linhai industrial park

• This project is the first municipal wastewater reclamation BTO project in Taiwan

Page 12: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

Significant Projects Awarded ─ Taiwan

• To release the risk of power shortage, Ministry of Economic Affairs and Taiwan Power

Company bought two Simple Cycle Generators with capacity of 600MW from GE

company by public bid. CTCI is in charge of the EPC project (except for the generators

and HV equipment)

Client Taiwan Power Company

Project Dah-Tam Gas-Fired Simple Cycle Generators Emergency Project

Contractor GE company

Sub-Contractor CTCI

Capacity 2 x 300MW

Scope Design, Procurement, Construction, and Commissioning

( Except for the generators and HV equipment)

Location Taiwan

12

Taoyuan

Page 13: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

• The first EPC project awarded by FPC USA, utilizing modularization solution to achieve

higher cost effectiveness and efficiency

13

Significant Projects Awarded ─ USA

Client Formosa Plastics Corporation USA

Project Offsite Pipe Rack Modularization & Erection Project, EPC

Contractor CTCI

Module No. 28 modules

Scope Design, Procurement and Construction

Location USA

Taxes

Page 14: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

• Awarded cogeneration power plant project by FPC USA for basic engineering design work,

extending the power business to the USA

Significant Projects Awarded ─ USA

Client Formosa Plastics Corporation USA

Project FPC USA Utility-3 Power Plant Basic Design Project

Contractor CTCI

Capacity 230MW

Scope Basic Engineering Design

Location USA

Taxes

14

Page 15: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

Significant Projects Awarded ─ Middle East

Client Saudi Kayan

Project Ethylene Cracking Furnace and Ethylene Plant Expansion Project,

EPC

Contractor CTCI

Capacity 200 thousand tons per year

Scope Design, Procurement and Construction

Location KSA

15

• Awarded the Ethylene Cracking Furnace Project which comprises the installation of a

new additional furnace, increasing the capacity of ethylene by 200 thousand tons

• Saudi Kayan is a subsidiary of SABIC, which is among the Top 3 petrochemical

companies in the world

Page 16: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

Significant Projects Awarded ─ India

Client Petronet LNG Limited

Project Dahej LNG Terminal the 3rd phases Expansion

Regasification Facilities Project, EPC

Contractor Consortium of CTCI, CINDA

Capacity 2.5 million tons per year

Scope Design, Procurement, Construction, and Commissioning

Location India

16

• Awarded Dahej LNG Terminal Expansion EPC Project by Petronet

Page 17: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

• This is the first project for CTCI to enter the CIS market, successfully developing the new

market given CTCI’s abundant experiences of PTA plants

Significant Projects Awarded ─ CIS

Client SafPet LLC

Project SafPet LLC PTA/ PET Basic Engineering Design

Contractor CTCI

Capacity PTA 210 KTA / PET 250 KTA

Scope Basic Engineering Design

Location Russia

17

Page 18: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Business Outlook and Operation

Strategies

18

Page 19: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

Business Outlook and Operation Strategies─Taiwan

• The new government proposed the “Forward-looking Infrastructure Construction Project” which includes green energy, waterworks, digital development, rail transportation, and urban and rural developments

Market Review

• Energy Policy • The nuclear free policy and the decrease of Percent Operating Reserve may

bring more opportunities for power plant expansion projects in the next few years

• CPC investment plan amounted NT$ 200 billion includes the Taoyuan Refinery Revamping Project, The Third LNG Terminal Project, CPC Talin Tank Farm Project and related projects for high-value petrochemical product

• Wastewater Reclamation Policy:

• The six Wastewater Reclamation projects in Taiwan have been planned by CPAMI since last year, and will be continuously open for bidding in the future

• Transportation Policy:

• MRT Projects such as Keelung Light Rail Transit, Taoyuan Green Line, Wanda Line and Xinyi Eastern Extension and Xinzhuang Depot E&M System Project

• Railway Projects such as railway double-track electrification, underground and elevated railway, etc.

• Continuously look for the domestic investments plan for high-value petrochemical product

Business Outlook

• Continuously maintain close cooperation with major equipment suppliers such as GE, Mitsubishi Heavy Industries, and Siemens, etc. to stabilize the domestic power plant market

Operation Strategies

19

Page 20: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

• The cheap shale gas significantly reduces the downstream petrochemical material cost, and creates more opportunities for the new investment on petrochemical

• More incentive for international petroleum companies to invest in petrochemical industry in US

Market Review

• Awarded some Engineering and EPC projects, and is bidding for several mega projects such as:

• Formosa Texas LDPE and EG plants

• Formosa Group Louisiana petrochemical complex (US$ 10 billion dollars)

• ExxonMobil and SABIC petrochemical investment (US$ 10 billion dollars)

• The energy policy under Trump’s government will benefit CTCI to enter downstream petrochemical market in US

Business Outlook

• Hire local management team and build-up the comprehensive EPC capability

• Seek for the best strategic alliance to enter to the LNG terminal fields

• Considering the high labor cost in USA, CTCI will leverage the modularization to minimize the site manpower

Operation Strategies

Business Outlook and Operation Strategies─USA

20

Page 21: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

Business Outlook and Operation Strategies─ Middle East

and Africa

• The members of Gulf Cooperation Council prefer to invest in downstream industry and high-value products following the drop of oil price in 2014

Market Review

• Major potential opportunities are downstream petrochemical plants based on strategic plan for country economy development and private investment, such as :

• Duqm refinery project in Oman

• Aramco oil and gas Industry project in KSA

• Qatar Petroleum Corporation petrochemical expansion project in Qatar

• Borouge ethylene expansion project in Abu Dhabi

• Sonatrach new refinery projects in Algeria, Africa

Business Outlook

• To cultivate the relationship with clients such as SABIC, and Qatar Petroleum, etc.

• Develop the new market such as Kuwait, UAE, Iran and Africa

Operation Strategies

21

Page 22: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

Business Outlook and Operation Strategies─Southeast

Asia and India

• The Southeast Asia and India have better fundamentals due to the less effect by Europe and America, the government policy impulse and the increasing investments by KSA, which are beneficial for infrastructures and petrochemical investments

• The RAPID petrochemical EPC projects in Malaysia, the refinery project in Indonesia, and the hydrocarbon and LNG projects in India

• The increasing demand for power brings in various business opportunities for IPP power plant projects; there are also infrastructures like transportation and waste to energy plants

Market Review

• Continuously strive for Petronas RAPID projects • Several projects over US$10 billion dollars such as Thai Oil CFP, and

Pertamina Balikpapan Refinery, etc.

• Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants in Philippines and MRT projects in Singapore, which are all potential opportunities in the future

Business Outlook

• Actively enter the petrochemical maintenance fields and chemical markets in Malaysia • Prudently choose partners to jointly develop the petrochemical market in Indonesia

Operation Strategies

22

Page 23: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

Business Outlook and Operation Strategies ─CIS

• The abundant petroleum and LNG resources in Russia and Kazakhstan provide many opportunities in petrochemical industry. Nevertheless, the project financing is required given the tight budget for the owners

Market Review

• Awarded the first PTA/PET basic design project in Russia in 2016 and now aggressively seek for the following detail design work • Kazakhstan is planning to build PTA/PET plant, and CTCI/CTCI Beijing will cooperate to strive for the FEED project and provide the project financing for the owner

Business Outlook

• CTCI and CTCI Beijing will acquire the ECA for the owner to easily receive the project financing support by cooperating with China Export & Credit Insurance Corporation (Sinosure), which is beneficial for CTCI to win the project

Operation Strategies

23

Page 24: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

Taiwan

Hydrocarbon:23bn

Infrastructure, Environment, and Power:29.9bn

South East Asia

Hydrocarbon:90bn

Infrastructure, Environment, and Power:67.5bn

India

Hydrocarbon:44.0bn

Total Amount

Hydrocarbon:563.7bn

Infrastructure, Environment and Power:101.1bn

China

Hydrocarbon:10bn

Infrastructure, Environment, and Power:2.6bn

CIS and Others:

Hydrocarbon:1.5bn

Infrastructure, Environment and Power:0.6bn

2017~2018Q2 Potential Opportunities

24

Unit:NT$

USA

Hydrocarbon:92.9bn

Middle East

Hydrocarbon:302.3bn

Infrastructure, Environment, and Power:0.5bn

Page 25: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Financial Highlights – 2016

25

Page 26: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

Consolidated Sales Revenues and Breakdown

26

52.2

57.7

67.1 70.5

0

10

20

30

40

50

60

70

80

2013 2014 2015 2016

Unit: NT$/Billion

Taiwan 50%

South East Asia 18%

China 3%

Middle East 26%

Other 3%

Hydrocarbon 50%

Environmental 7%

Transportation 2% Power 27%

Industrial 11%

Other 3%

Page 27: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

2016 Consolidated Income Statement

Unit: NT$, Thousand

2016/12/31 2015/12/31 YOY

Sales Revenues 70,509,675 100% 67,057,640 100% 5.1%

Operating costs (64,323,846) -91.2% (61,621,562) -91.9% 4.4%

Gross Profit 6,185,829 8.8% 5,436,078 8.1% 13.8%

Operating expenses 2,023,306 2.9% 2,434,166 3.6% -16.9%

Operating income 4,162,523 5.9% 3,001,912 4.5% 38.7%

Total non-operating income

and expenses (184,055) -0.3% 318,740 0.5% -157.7%

Profit before income tax 3,978,468 5.6% 3,320,652 5.0% 19.8%

Income tax expense (964,753) -1.4% (750,509) -1.1% 28.5%

Profit for the period 3,013,715 4.3% 2,570,143 3.8% 17.3%

Profit attributable to

Owners of the parent 2,222,888 2.6% 2,040,610 2.5% 8.9%

Total basic earnings per

share 2.92 2.69

27

Page 28: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

2016 Consolidated Balance Sheet Unit: NT$, Thousand

2016/12/31 2015/12/31 2016/12/31 2015/12/31

Current assets* 51,394,621 45,298,807 Current liabilities 40,297,705 34,389,605

Financial assets 1,479,172 1,479,308 Non-current liabilities 5,737,135 6,112,898

Non-current assets 14,830,268 14,931,779 Long-term borrowings 2,265,150 2,611,950

Property, plant and

equipment 6,876,224 7,001,676

Other non-current

liabilities 3,471,985 3,500,948

Intangible assets 127,686 121,469 Total Liabilities 46,034,840 40,502,503

Other non-current

assets 7,826,358 7,808,634 Total equity 20,190,049 19,728,083

Total assets 66,224,889 60,230,586 Total liabilities and

equity 66,224,889 60,230,586

*Cash and cash equivalents:NT$13.8bn

28

Page 29: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved.

Dividend Payout

29

Unit: NT$

2.13

2.41 2.65

2.91

3.22 3.32

2.22

2.51 2.69

2.91

1.74 1.92

2.37 2.42

2.76 2.84

1.99 2.23

2.40 2.60

87%

80%

89%

83% 86% 85%

90% 89% 89% 89%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

EPS Cash DPS Cash Dividend Payout Ratio(%)

Page 30: CTCI Corporation The 1st Investor · Pertamina Balikpapan Refinery, etc. • Coal-fired power plants in Vietnam, gas-fired power plants in Malaysia and Thailand, waste to energy plants

Copyright © 2016 CTCI All Rights Reserved. 30