-company report-

Taiwan Hon Chuan Enterprise Co., Ltd.

-Company Report-

March, 2012 Stock Code：9939

Taiwan Hon Chuan Enterprise Co., Ltd. 1

• Company Profile


History of THC

Hon Chuan Enterprise Co. was established in Changhwa,

Taiwan.

1969

THC received approvals for the public listing of its shares on the Taiwan Stock Exchange. 2001

THC established PT. Hon Chuan Indonesia, Hon Chuan (Thailand)Ltd . Hon Chuan FD CO.,Ltd. to facilitate its expansion in SE. Asia.

THC established corporate headquarters in Taiwan, with separate regional headquarters in China and S.E. Asia.

2005

THC established Hon Chuan (China) Holdings Co., Ltd. as the holding company of Hon Chuan (Suzhou) Co., Ltd., Hongxin (Suchou) Co., Ltd., and other 3 plants in Changsha、Taiyuan and Jinan, to facilitate its expansion in China.

2003

THC established Taiwan Hon Chuan(Taichung branch) Co., Ltd

for Aseptic co-packing business. 2006


THC established Coke Taoyuan plant (In-house)、 CKW Pingdong plant (In-house). Changchun (In-house), and Tientsin plants.

2008

THC established Tainan (Taiwan), Guangdong , Xian , Zhengzhou(In-house) in China. 2009

THC established Hon Chuan (Vietnam)Ltd. 2007

THC established Chungli Plant (In-house), Jiayi Plant, Kunming

plant(In-house, Lanzhou (In-house) in China, PT Futami (In-

house) plants, and headquarter in Thailand SE Asia.

THC honored to win the 20th National Quality Award , officially

sponsored by The Executive Yuan of Taiwan Government.

2010

THC established Zhengzhou (In-house) in China, Malaysia Cocoaland Plant (In-house), Vietnam plant, Malaysia plant in SE Asia, and the second aseptic plant in Taiwan.

2011

THC is establishing Zhangzhou aseptic filling plant in China.

We are going to actively expand beverage packaging market

and build production bases to collaborate with leading beverage

companies in Vietnam, Philippines, Malaysia, Thailand,

Pakistan, etc.

2012


About Hon Chuan

Establishment Date: July, 1969

Public Offering: Mar. 2, 2001 on the Taiwan Stock Mainboard

Capital : NTD 2,598,478,790

Market Capitalization(2012/01/18): NTD 16.2bn

Headquarter ：Taichung, Taiwan

International Quality Certificate：

ISO 9001 ISO 22001 HACCP 食品GMP OHSAS 18001 TOSHMS

Taiwan

China

SE. Asia

991

2,500

495

122,900

533,665

38,696

Emplyee number Plant area(m2)

130,265

228,532

28,560

Plant floor area (m2)

3,986 715,261 387,357

Approved Certificate by COCA-COLA, PEPSICO, Uni-President


Closure

Caps

Aluminum cap

Metal lug cap

PET Bottle、 Preform

Bottle

PP Bottle、PE Bottle LDPE shrinkable film for

multipacks

Label

Sales (%)

65%

Beverage

Packaging

PET/OPS／PVC shrinkable label、OPP colorful label


PET HF beverage

filling / OEM

OEM

PET aseptic beverage

filling / OEM

Anti-static films and sheets

Electronic

Battery can and components

Cigarette

類

Cigarette and Beer

packaging material

trade

Sales

30%

Sales

5%

Beverage

OEM

Others

TR aseptic beverage

filling /OEM

The cap and disk for rechargeable battery


Plastic

Cap

PET

Bottle Filling + + +

＝

Label

Overall

Service

＊Currently operating 6 filling OEM plants in China：

Suzhou Hongxin、Jinan、Taiyuan、Changsha、

Guangdong、Xian.

3 in Taiwan : Taichung aseptic filling plant 、

2nd aseptic filling plant

and Tainan plant.

＊

Vertical integration


• Market Outlook


Asian National Economic growth

(GDP) Comparisons in the past 5 years

GDP growth YOY%

Source: IMF

-4

-2

0

2

4

6

8

10

12

14

16

2005 2006 2007 2008 2009 2010 2011(F) 2012(F) 2013(F)

China Taiwan Indonesia Malaysia Myanmar Thailand Vietnam


Beverage packaging trend in Asia Pacific

PET bottle accounts for largest portion and is growing rapidly.

Growth for metal can and glass bottle is slowing down.

PET Metal Glass Paper Others HDPE Pouch PP

in Billion pieces

types of package

Source : Euromonitor

2006 2010


0.0

50.0

100.0

150.0

200.0

250.0

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* 年別

銷

售

額:

新

台

幣

億

元

0.0

100.0

200.0

300.0

400.0

500.0

600.0

整

體

銷

售

額:

新

台

幣

億

元

飲料

茶類飲料

碳酸飲料

果蔬汁

咖啡飲料

運動飲料

機能飲料

包裝水

其他飲料

Beverage

RTD Tea

CSDs

Juice

Coffee

Sport drink

Functional

Bottled Water

Other

Beverage in Taiwan Market NT$ billion NT$ billion

0.0

50.0

100.0

150.0

200.0

250.0

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* 年別

銷

售

額:

新

台

幣

億

元

0.0

100.0

200.0

300.0

400.0

500.0

600.0

整

體

銷

售

額:

新

台

幣

億

元

飲料

茶類飲料

碳酸飲料

果蔬汁

咖啡飲料

運動飲料

機能飲料

包裝水

其他飲料

0.0

50.0

100.0

150.0

200.0

250.0

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* 年別

銷

售

額:

新

台

幣

億

元

0.0

100.0

200.0

300.0

400.0

500.0

600.0

整

體

銷

售

額:

新

台

幣

億

元

飲料

茶類飲料

碳酸飲料

果蔬汁

咖啡飲料

運動飲料

機能飲料

包裝水

其他飲料

0.0

50.0

100.0

150.0

200.0

250.0

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* 年別

銷

售

額:

新

台

幣

億

元

0.0

100.0

200.0

300.0

400.0

500.0

600.0

整

體

銷

售

額:

新

台

幣

億

元

飲料

茶類飲料

碳酸飲料

果蔬汁

咖啡飲料

運動飲料

機能飲料

包裝水

其他飲料

2001-2009 Beverage market size growth 14%

2001-2009 THC sales growth 268%

Source :Taiwan Beverage Industries Association


Beverage in China Market

• Total Beverage Market Size:RMB154 billion in 2009

• CAGR 18% for past 5 years

Source :ACNielsen November 2009

in Liters per head

Per Capita Consumption of Soft

Drinks

Source : Euromonitor

Juice 13.6%

Carbonated Drink 22.3%

Ready-To-

Drink Tea 15.1%

Sport drink 1.6%

Bottled Water 47.3%

YTD Growth:9.7%

YTD Growth:19.8%

YTD

Growth:2.1%

YTD Growth:9.7%

YTD Growth:13.7%


Beverage in SE. Asia Market

• Carbonated drink and bottled water are the mainly drink in SE. Asia beverage market.

• Before the market was price-oriented, the mainstream of the packaging materials were glass bottle and crown cap.

• In these two years, Coca-cola and Pepsi apply PET bottle on packaging in fast pace and lead to the fast growing of the PET usage.

• The growing range for tea, juice and sports drink is more than the one on carbonated drink. THC estimates the revenues will go up continuously.

• There are 11 countries in SE. Asia (Population is about 540m),Coca-cola and Pepsi have the biggest market share in beverage industry. THC group is actively exploring 1881 lighter products and expend the cooperative relationship with Coca-Cola, Pepsi and BIG COLA. The growing of sales performance is promising and predictable.


• Financial Information


Income Statements (consolidated)

(NTD Million) 2008 2009 2010 2010

1-3Q

2011

1-3Q

YOY

%

Revenue 9,211 10,006 12,423 9,908 10,867 +10%

Gross Profit 2,099 2,437 2,786 2,394 2,319 -3%

Gross Margin 23% 24% 22% 24% 21%

Op. Profit 1,334 1,483 1,723 1,608 1,449 -10%

Non-Op. Income -159 -150 -56 -66 48

Pretax Income 1,175 1,333 1,667 1,542 1,497 -3%

Net Income 935 1,079 1,432 1,332 1,242 -7%

Net Income

attributable to

parent company

752 961 1,258 1,116 1,071 -4%

After-Tax EPS 3.1 4.44 5.24 4.65 4.39

Notes: Non-Op. Income= gains( Interest income , Foreign exchange gains , Miscellaneous income..)

–losses (Interest expense, Preferred stock liabilities dividends, Revaluation

loss on financial assets..)


Aluminum cap 8 ﹪

PET bottle 35 ﹪

Label 7 ﹪

Plastic cap 14 ﹪

Others 1 ﹪

Anti-static film 2 ﹪

Cigarette filter 6%

Metal lug cap 4 ﹪

LDPE film 1 ﹪

Sales Construction- 2011FY

Taiwan Region

Filling 23 ﹪


Preform 6 ﹪

Label 4 ﹪

Plastic cap 26 ﹪

Others 3 ﹪

Anti-static film 1 ﹪

Battery can 1 %

Sales Construction- 2011 FY

China Region SE. Asia Region

Filling and PET bottle 59﹪ Label 19﹪

Plastic cap 35 ﹪

Others 2 ﹪

PET bottle 13 ﹪

Preform 31﹪


Group Sales Revenue

0

2

4

6

8

10

12

14

2005 2006 2007 2008 2009 2010

2.8 2.9 3.65.0 5.4

6.41.32.2

2.7

3.53.7

4.6

0.07

0.30.5

0.70.9

1.2

5.4 4.2

Total 6.8

9.2 10

TAIWAN

CHINA

SE. ASIA

12.4

Currency： NTD Billion


Corporate development

Based in Taiwan

Establishing headquarters to integrate corporate resources.

Development and innovation of value-added products.

Transparent and accountable financial and accounting

systems.

Expansion into China

Forming the In-House strategic alliance with the leading

players in the beverage industry. Providing OEM bottle-

filling services. Transferring the successful experiences from

Taiwan to China.

Allocation of Production Bases to Worldwide Market

Taking competitive advantages to spearhead into the

emerging markets, notably in Southeast Asia.


1. Product diversification development:

PET bottle and flexible packages (pouches) for diary products.

Aseptic filling line for coffee, milk tea, and low acid products.

PET bottle & plastic cap for beer application.

2. Global markets expansion:

Extend the reach to ASEAN, such as India、Pakistan、Indonesia、Malaysia、Philippines、Thailand 、 Vietnam and

Burma.

Expand into the global markets with beverage firms owning

well-recognized brands.

Future Roadmap

-company report-

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