IR publication – May 2018

Far Eastern New Century (TWSE: 1402)

1

• Company Highlights

• Company Overview

• Strategic Summary

– Production business strategy

– Property development plan

– Dividend policy

– CAPEX

• Financials

• Recent Achievements & CSR

Table of Contents

2

• A constituent of the MSCI ESG Leaders Indexes, FTSE4Good Emerging Index & TWSE CG 100 Index

• Consistent Dividends Payout (refer to page 17)

• Management Efforts on the Production Business (refer to page 6-12)

• With a fully integrated polyester value chain, the combined operating margin of the Production Business turned a loss of

NT$ -2.2 bn in 2012 to a profit of NT$ 0.7 bn in 1Q 2018. The turnaround in operating margin is attributable to:

− Long term client partnerships and a better product mix.

− R&D efforts: The Taiwan in-house R&D center is able to

leverage the vertically integrated production line,

e.g. recycled-PET, and also cooperates with well-known

brand clients to customize specialty products.

− From an Asian to a global producer: FENC grew via organic

growth and acquisitions in order to better service existing clients

locally, such as Coca Cola, Nike, Columbia, and avoid

antidumping duties imposed across borders. (refer to page 7)

• “FENC® DynaFeedTM”, the smart clothes combining fashion design, bio-sensing technology and an IOT platform, won the

Asian Gold Award at the 2016 ISPO Textrends Exhibition in Munich. (refer to page 12)

• Investment Properties (refer to page 13-16)

• Investments & Others (refer to page 5)

Company Highlights

New capacity ramp-up 2017 2018

Vietnam uFabrics vApparel PET

Taiwan PTA

United States PET

3

• Year of establishment: 1954

• Employees: 28,982

• Asset allocation as of March 31, 2018 (Total assets: NT$ 544 billion / Book value per share: NT$ 37.3 /share)

Business Segments Production Sites Current Capacity

Pro

du

cti

on

Petrochemical Taiwan & Shanghai PTA: 1.58 mm tons/yr

Polyester

Taiwan,

Shanghai,

Suzhou,

Wuhan,

Japan,

Malaysia

Polymer: 1.97 mm tons/yr

PET: 1.36 mm tons/yr

PSF: 490K tons/yr

Polyester Filament: 121K tons/yr

Others

Nylon 6,6 filaments: 21K tons/yr

PET Sheets: 131K tons/yr

PET films: 20K tons/yr

Recycled-PET(R-PET): 205K tons/yr

Textiles

Taiwan,

Suzhou,

Wuxi,

Vietnam

Yarn: 513K spindles/yr

Knitted Fabrics: 25K tons/yr

Industrial Fabrics: 21K tons/yr

Industrial Yarn: 102K tons/yr

Apparels: 5.2 mm dozens/yr

Property Various locations in

Northern Taiwan

Total size: 200k pings

(662k sq meters)

Telecom

(Far EasTone)

Integrated service

provider - mobile,

fixed line, ISP, etc.

# of subs: 7.1 mm

Investment &

Others Cement, retail, financial services…etc.

Company Overview

Company Overview

Production

54%

Property

3%

Investment

& Others (Including

Telecom)

43%

• Revenue breakdown in 1Q 2018

Production

32%

Property

28%

Investment

& Others (Including

Telecom)

40%

4

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

In 2017, 26% of the Production

Business revenues is derived

from green products.

Company Overview

5

Value of Major Investments - Listed Companies

(NT$ million)

Note1: Beginning from 18 August 2017, Far Eastern International Bank was re-classified under the equity investment method.

Note 2: 5,353 million shares of FENC common stock were issued and outstanding as of 31 March 2018.

Company Overview

Stock code Investees Holdings Book value

(2018.3.31)

Market value

(2018.5.15)

1102 TT Asia Cement 26% 20,400 29,150

1460 TT Everest Textile 26% 1,164 1,563

1710 TT Oriental Union Chemical 31% 6,196 9,193

2606 TT U Ming Marine 0% - -

2845 TT Far Eastern International Bank 16% 5,730 5,178

2903 TT Far Eastern Department Stores 24% 7,269 6,461

4904 TT Far EasTone 38% 31,237 93,442

Total 71,994 144,986

6

A Leading Integrated Polyester Producer

WORLDWIDE TOP 1

Recycled-PET

ASIA PACIFIC TOP 1

Nylon 6,6 Filament

WORLDWIDE TOP 3

PET Resin

ASIA TOP 1

PET Sheet

WORLDWIDE TOP 2

Nonwoven Polyester Staple Fiber

Production business strategy

7

From An Asian to A Global Producer

New Capacity Ramp-up Location Unit Nameplate Capacity

2017 2018(E)

Petrochemical PTA Taiwan K Tons/year 1,000*

Polyester PET Vietnam

K Tons/year 400

United States 360

Textiles Fabrics Vietnam K Tons/year 10.8

Apparel Vietnam MM Dozens/year 4

Note : * One old PTA line will be phased out while the new PTA line in commercial operations, thus the net increase in capacity is 1 million tons/year.

** New capacity excludes the Corpus Christi JV project with Alpek & Indorama which are subject to the related government approvals.

• FENC’s production sites: Taiwan, China, Vietnam, United States, Japan and Malaysia.

• New expansion plans via organic growth or acquisitions:

Production business strategy

8

Total Solution (I) : Close Customer Partnerships

Production business strategy

9

Fabric clients Apparel clients

Brands

Filaments

provider

fabric apparel

Pull

Currently: Two way communication partnership with brand clients

Total Solution (II) : From Reaction to Creation

• What’s changed?

– Marketing to brands directly:

1) Pull-through strategy: to

anticipate future trends by creating

innovative filaments

2) “FEX”: FENC’s B2B total solution

brand Award winning innovations

raised its profile amongst brands.

– Scale-up of the downstream

capacity: Vietnam expansion project

is to fill the gap in limited fabric &

apparel capacity

Filaments

provider

Many

fabric clients

fabric

Many

apparel clients

apparel

Brands

Before: One way communication clients decided materials

Push

Production business strategy

(Capacity)

Fabric

Apparel

New

capacity

New

capacity

10

What Differentiates FENC from Peers?

• Vertical integration: the only producer manufacturing from raw material PTA to providing total solution

services to brand clients

• 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 strategy

Production Business (Smart from the Start : R&D Efforts) Outsourced Feedstock

Green products please refer to page 11

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®

11

Go Green: Worldwide Largest Recycled PET Producer

Recycled

bricks

R-PET chips

Closed loop

Shredded &

Cleaned flakes

Post-consumer

• R-PET market: Strong demand from the brands green missions

• Key milestones for brand supply:

u Green products certification v Secure global feedstock supply

– Capacity expansion starting in Taiwan then Japan.

– Cooperation with Brands & NGOs to collect waste plastic

bottles, e.g. Adidas’s “For the Oceans” program.

– China’s plastic waste import ban began in Jan 2018.

Production business strategy

12

Invest in the Future: Smart Textiles

Production business strategy

• DynaFeedTM : Smart Clothes

(world’s first and only integrated smart garment solution)

─ FENC core technology lies in a conductive coating layer which

registers the minute voltage potential of muscle contractions, and is

conductive enough to safely deliver active energy to muscles to cause

contractions.

─ FENC’s garment solution contains:

─ DynaFeedTM target markets: Sport / Therapy / Health

MOUs signed with L.L.Bean and Valmed in 2017.

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”.

Ultra low-profile,

high pliability

Non-metallic polyester

based matrix

High durability >

100x wash cycles

Unrestricted

placement

Highly designable

in shapes & sizes

Water & oxidation

proof

13

New Book Value (Market value using

“fair value model” under

TW IFRS on Mar 31, 2018)

• Total land holdings: approximately 570k pings (1,887k sq meters)

• Investment properties as at Mar 31, 2018: approximately 200k pings (662k sq meters)

Land Holdings Owned by FENC

NT$ 35.3 BN

NT$ 124 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

14

Banqiao Size: 84,421 pings (279,434 sq meters)

Book value: ~65% 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: 1,651 pings (5,465 sq meters)

Yilan (SPA resort) Size: 32,035 pings (106,036 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)

15

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)

Property development plan

Car Park

South

park

TPKC.D

North

Park

New Taipei City

Library

Residential

III

TPKA

Residential

II

Taiwan

Power

16

• No. 1 commercial office building (TPK-A)

– 11-floor building, with 2 floor underground parking lot

– Land area: 4k pings (13k sqm)

– GFA: 18.7k pings (62k sqm)

– Current tenants: Amazon Web Service (AWS),

Ericsson, Telecom Technology Center, etc.

• No. 1 residential product: California Dream

phase I

– Land area: 3.2k pings (11k sqm)

– GFA: 19.3k pings (64k sqm), and around 396 units

– 3 – 4 bedrooms designed for typical Taiwan families

– ASP at NT$ 420k/ping (US$ 4k/sqm, due to its

proximity to the MRT station)

• New A-Mart had its opening in April 2015

Development Plan

2008 - 2015 2016 and After (Planned)

• California Dream phase II: – GFA: around 5.5k pings (18k sqm), or 154 units

– 2Q16: Available for sale to the public at NT$ 550k/ping

(US$ 5k/sqm)

• Commercial office buildings

– TPK-B

Land area: 3.8k pings (12.6k sqm)

– TPK-C (FETone IDC center)

11-floor building; GFA of 10.2k pings (33.8k sqm)

– TPK-D (No.2 commercial office building)

16-floor building; GFA of 17.7k pings (58.5k sqm)

The combined land area of TPK C&D: 4.7K pings (15k sqm)

• No. 2 residential product (Residential IV) – 27-floor building; land area of 1.5k pings (5k sqm)

– GFA (for sale): 7k pings (23k sqm)

Property development plan

17

Dividends Payout History

Dividend policy

2017 Cash Dividend of NT$ 1.2 /share

is proposed by the Board of Directors,

and the final resolution will be

subjected to AGM in June 2018.

18

• Historically, the maintenance CAPEX

was covered by the depreciation

expense

• Re-expansion period starting from 2010

to grow and transform

• Major new CAPEX items:

From 2010 to 2015

– Production Business: PTA expansion and

energy cost saving projects in Taiwan,

recycled-PET expansion plans in Taiwan and

Japan, nonwoven hygiene products in China,

Nylon 6,6 filament in Taiwan and China.

– Property Business: the office building TPK-A

and the entire infrastructure of the Tpark

From 2016 onwards

– Vietnam expansion plan: to build the 3rd

production site targeting textile products and

PET resins for food packaging.

– U.S. M&A projects: to acquire M&G PTA &

PET assets.

– Tpark: the construction of new office buildings

and residential products.

CAPEX – Excluding Telecom Business Segment

CAPEX

5-year

Average

Depreciation:

NT$ 6.5 bn

CAPEX

19

Key Financial Highlights (IFRS-consolidated Base)

(1) EPS is calculated using adjusted outstanding shares (deducting treasury stock). Note:

(NT$ million) YoY

Revenues 51,458 100% 50,383 100% 2% 217,847 100% 215,856 100%

Profit from Operations 3,492 7% 3,753 7% -7% 15,434 7% 14,537 7%

1,393 3% 701 1% 99% 4,114 2% 1,874 1%

Interest Expenses-Net (545) -1% (496) -1% n.a. (2,119) -1% (2,046) -1%

Gain on revaluation of investment property 169 0% 215 0% -21% 1,040 0% 3,269 2%

Gain (Loss) on disposal of investment property - - - - n.a. 3 0% 313 0%

Others 119 0% (618) -1% n.a. (1,580) -1% (1,987) -1%

Consolidated Income before Tax 4,628 9% 3,555 7% 30% 16,892 8% 15,960 7%

Tax Expenses 526 1% 683 1% -23% 2,691 1% 3,257 1%

Consolidated Net Income 4,102 8% 2,872 6% 43% 14,201 7% 12,703 6%

Attributable to:

Shareholders of the Company 2,469 5% 1,286 3% 92% 8,066 4% 6,308 3%

Non-Controlling Interests 1,633 3% 1,586 3% 3% 6,135 3% 6,395 3%

EPS (NT$)(1) 0.49 0.26 1.61 1.26

Depreciation & Amortization 5,141 10% 5,002 10% 3% 20,513 9% 19,338 9%

Total Assets 543,601 100% 516,766 100% 513,460 100%

Total Debt 277,177 51% 261,227 51% 261,268 51%

Net Interest-bearing Debt 173,832 32% 168,066 33% 160,148 31%

Total Equity 266,423 49% 255,539 49% 252,193 49%

199,790 37% 194,360 37% 190,886 37%

Non-Controlling Interests 66,633 12% 61,179 12% 61,306 12%

Book Value Per Share 37.3 36.3 35.7

2017 2016

Investment Income(Equity method)-Net

Total Shareholders' Equity of

Parent Company

1Q18 1Q17

20

Performance by Business Segments

Note: (1) Investment & Others segment includes investment income (loss) from equity-method investees, i.e. ACC, OUCC, and share disposal gain (loss), etc.

Production Business

Production Business

(NT$ million) 1Q18 1Q17 YoY 2017 2016

Reclassified for Presentation Purposes

Gross Revenue

Petrochemical 7,918 7,244 9% 30,426 31,401

Polyester 15,446 14,420 7% 61,970 59,463

Textiles 7,715 7,593 2% 34,054 33,946

Telecom 21,667 22,480 -4% 92,070 94,344

Property 1,501 1,558 -4% 7,943 8,896

Investment & Others (1) 2,782 2,159 29% 11,039 6,935

Subtotal 57,028 55,455 3% 237,502 234,986

Inter-company Sales 4,174 4,369 -4% 15,281 17,053

Revenue-net 52,854 51,087 3% 222,220 217,932

Profit from Operations

Petrochemical 9 (257) n.a. (1,262) (1,275)

Polyester 511 (7) n.a. 1,007 693

Textiles 161 208 -22% 1,091 1,178

Telecom 3,251 3,781 -14% 14,216 15,024

Property 227 233 -3% 760 1,009

Investment & Others (1) 619 441 40% 3,809 158

Subtotal 4,778 4,400 9% 19,620 16,787

Other Adjustments 110 56 98% 187 (174)

Reclassified Profit from Operations 4,888 4,456 10% 19,808 16,613

For Reconciliation Purposes

-1,393 701 99% 4,114 1,874

- Dividend Income 3 3 35% 259 203

Profit from Operations 3,492 3,753 -7% 15,434 14,537

Investment Income from

Equity-method Investees, net

21

Recent Achievements & CSR

• Issued NT$ 3 billion green bond in 2018 for investing in green projects

• TW (S&P) long-term credit rating: TW A+

• Board independence: Three independent directors

• Remuneration & audit committees: Established separately in 2011 and 2015

• A constituent of the MSCI ESG Leaders Indexes (MSCI ESG Rating – Industrial

Conglomerates: A), FTSE4Good Emerging Index & TWSE CG 100 Index

• FENC has reached Management Level in the Carbon Disclosure Program (CDP).

• CSR report: awarded “Best Report of the Year” by Taiwan Corporate Sustainability Award (TCSA) in 2017

• CSR achievements:

- Awarded “TOP50 Sustainable Corporates”, “Sustainable Water Management Awards”, “Social Inclusion Award”, “Growth

through Innovation Awards” & “Circular Economy Leadership Awards” by TCSA in 2017

- Ranked “One of the Top 50 Large Enterprises of Excellence in Corporate Social Responsibility” by CommonWealth

Magazine in 2017

- Awarded “Excellence Award in CSR Annual Survey Award - Traditional Industries Group by Global Views Monthly in 2017

Environmental,

Social

&

Governance

• Selected “the 2018/19 TOP10” by ISPO (TopDry® , TopDry® Non-woven & Wind Guard 3D)

• Awarded “the 2016/17 Gold Award” by ISPO in Munich (Dynafeed® )

• Developed 1st 100% bio-polyester shirt made entirely from plants in April 2016

• Awarded “the 2016 Sustainability Winner” by Adidas (ocean plastic recycled project)

• Co-Developed 1st bio-PET bottle with Coca-Cola in 2014

• 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

Leadership

22

For further information, please contact

IR Team, Finance Department

IR email box: IR@fenc.com

Company website: www.fenc.com

Can also be reached as follows,

Carol Wang (886) 2 2733-8000 ext.8537; wang2002@fenc.com

Chialing Chao (886) 2 2733-8000 ext.8470; chialing@fenc.com

Jarvis Liu (886) 2 2733-8000 ext.8492; jarvisliu@fenc.com

Q&A

23

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