Eternal Materials Co., Ltd. · TWSE:1717
Eternal Materials — Investor conference hosted by President Securities Corp. 2018
28 slides from Eternal Materials's conference presentation, Dec 13, 2018
Slide 1: The Impacts and Opportunities Facing the US-China Trade War
The Impacts and Opportunities Facing the US-China Trade War Linus Lin Director, Synthetic Resins 13 Dec 2018 Eternal Materials 1 Eternal Materials
Slide 2: Contents
Contents 1. Eternal Materials Profile profile, development milestones, core technologies, main products, production sites, global service network, sales, performance, honors 2. Synthetic Resins Division 3. The Impacts and Opportunities of Synthetic Resins Facing the US-China Trade War Eternal Materi
Slide 3: Profile
Profile Core Business Manufacturing, processing and sales Year of Establishment 1964 No of Production Sites 24 Consolidated No. of Headcounts of R&D Revenue Employees Researchers Expenditures NTD 41,551million 4,672 555 3% of revenue (2017) Eternal is: • One of the leading suppliers of dry film phot
Slide 4: Development Milestones
Development Milestones 1964 1985 1989 2000 2004 2008 2018+ Eternal Materials 4
Slide 5: Core Technologies
Core Technologies Resins Functional Resin Synthesis Printed New Circuit Materials Boards Core Technology Quality Chemical Precision LCD Formulation Processing UV IC Eternal Materials 5
Slide 6: Main Products
Main Products Resins Alkyd Resin, Solvent-Based Acrylic Coating Resin, Water-Based Acrylic Coating Resin, Materials 54% Dry Film Photoresist, Dry Film Solder Mask, UV INK, Dry Film Photosensitive Polyimide, Acrylic Resin For Adhesives and Overprinting, Liquid Polyimide Material, Prism Film, Polyeste
Slide 7: Global Production Sites
Global Production Sites Global Production Sites: 24 Northeast Japan(3) Taiwan ：3 China (1) China ：14 North • Yingkou • Ogaki Thailand ：1 China (1) • Kodama • Aichi USA ：1 • Tianjin Japan ：3 Malaysia ：1 Italy ：1 Southwest Italy(1) China (2) • Chengdu • Milan USA (1) • Chongqing East • Virginia China
Slide 8: Global Service Network
Global Service Network Global sales country：65 Northeast Japan(3) Global Service Network : 35 China(1) • Tokyo (2) Taiwan 4 China 19 • Yingkou • Aichi USA 1 Japan 3 Thailand 2 Korea 1 North Indonesia 1 India 1 China(2) Korea(1) Vietnam 1 Malaysia 1 • Tianijn(2) • Suwon Italy 1 Central China(2) South
Slide 9: 2013-2018 Annual Sales
2013-2018 Annual Sales 45,000 Sales during Jan to Sep , 2018 41,551 40,343 40,000 38,487 38,680 38,189 11,255 ROW, 29% 35,000 10,421 10,173 32,854 9,248 10,885 30,000 Area 4,576 9,551 CN, 61% 5,408 TW, 10% 5,658 4,708 25,000 4,710 ROW 3,424 20,000 Taiwan China 15,000 By Product High 24,514 25,720 Pe
Slide 10: Operating Performance
Operating Performance Unit: NTD Million Account 2018 2013 2014 2015 2016 2017 Names/Year Ending Sep 30th Revenue 38,189 40,343 38,487 38,680 41,551 32,854 Gross profit 6,845 7,780 8,747 8,582 7,438 5,617 Operating 4,508 4,954 5,349 5,453 5,576 4,095 expenses Operating income 2,337 2,825 3,397 3,129
Slide 11: Honors
Honors 2001 Distinguished Award for Industry Technology Advancement, the highest honor granted 2003 Set up Industrial Technology Innovation Center approved by Ministry of Economic Affairs 2005 Honored NBIA International Incubation Award from Open Laboratory /Incubation Center of ITRI 2007 Awarded In
Slide 12: Synthetic Resins Division
SYNTHETIC RESINS DIVISION Eternal Materials 12
Slide 13: The Supply Chain of Synthetic Resins
The Supply Chain of Synthetic Resins FPG, CPC, NANYA, Petrochemical Dow, BASF Industry Ashland, Qualipoly, CCP, Daily- Quick Stick, Adhesive Resins Coating Resins Polymer, Allnex, Dow, Synthomer BASF, DSM 3M, Symbio, Inc, Rainbowpaint, AKZO, Jotun, Avery Dennison Adhesives Industry Coating Industry
Slide 14: Products & Applications – General Industrial
Products & Applications – General Industrial Adhesive Resins Applications • Acrylic resins for PSA • Tapes • Water Borne • Graphic Arts • Solvent Borne • Labels • Polyester polyol • Protective Films • Peelable Mask • PU for Adhesives Eternal Materials 14
Slide 15: Products & Applications - Coatings
Products & Applications - Coatings Coating Resins Applications • Alkyd resins • Architectural paints • Oil-free polyester resins • Decorative paints • Acrylic resins • Wood coatings • High molecular weight • Industrial coatings polyester • Can coatings • Fluoro resins • Coil coatings • Amino resins
Slide 16: Production Sites of SR Division
Production Sites of SR Division Chengdu Tianjin Kunshan, Changzhou Guangdong Pingnan Malaysia Remark “Changzhou plant” in preparation Eternal Materials 16
Slide 17: Certificates of SR Division
Certificates of SR Division • ISO 9001 • ISO 14001 • OHSAS18001 / TOSHMS • ISO 50001 • Verification Statement Carbon Footprint • Green Factory Stamp Certificate • National Workplace Safety And Health Week Series Activities Implementation Plan Participation Certificate • The Third Place In The Enterp
Slide 18: The Outlook of Synthetic Resins
The Outlook of Synthetic Resins New products and applications • High Performance Electronics Products • Solar & Wind Power Resins • Environmental Friendly Resins Expand overseas markets • Particularly Southeast Asia, USA, the Middle East Develop value-added products for: • Heavy-duty • Weather
Slide 19: The Impacts and Opportunities Facing the US-China Trade War - Synthetic Resins
THE IMPACTS AND OPPORTUNITIES FACING THE US-CHINA TRADE WAR - SYNTHETIC RESINS Eternal Materials 19
Slide 20: The Impacts on China's Economy
The Impacts on China’s Economy • Since the second half of 2018, China faces the threat of economic downturn. • China's stock market falls rapidly due to the depreciation of RMB which combats investors' confidence and affects consumer behaviors. • China’s GDP growth of 6.5% in the 3rd quarter of 2018
Slide 21: The Affected Industries in China
The Affected Industries in China The business sectors under threat include tools and machinery, motors, electrical and electronic instruments, furniture and lighting equipment, automotive components, rubber products, leather products, and steel (aluminum). US tariffs on products from China Section S
Slide 22: The Impacts on Eternal Materials
The Impacts on Eternal Materials Impact 1 Impact 2 Impact 3 U.S to impose 25% tariff on Downstream industries of Imported raw materials of coatings from China coatings and adhesives coatings and adhesives Limited influence Significant influence To be observed • EM’s market is domestic • The downstre
Slide 23: The Impacts on Eternal Materials
The Impacts on Eternal Materials The affected sectors - export demand will be weaker; re-allocation of production sites. Affected Industry Descriptions Impact on products Electrical Electronics, China exports household appliances to the US of $ 14.4 billion, Coil coating, Heavy- Equipment Electrical
Slide 24: The Impacts on Eternal Materials
The Impacts on Eternal Materials The Influence of Imported Raw Materials Phase I: Soybeans, Ethanol • Of all the imported soybeans, US imported soybeans account for 36% in 2017. If China is to impose the tariff on soybean imports, it will push the cost of solvent born alkyd resins in the short-ter
Slide 25: The Opportunities for Eternal Materials
The Opportunities for Eternal Materials The short-term demand is weaker in China; however, the long-term demand remains positive. (Short-term bearish; long-term bullish) • Short-term outlook: The demand of certain segments has diminished in Q3 2018. Whether the trend will remain weak is to be obse
Slide 26: The Opportunities for Eternal Materials
The Opportunities for Eternal Materials Alleviate the impact on export • RMB depreciation will alleviate the impact of the tariffs. • China adopts new macro economic policies, such as increasing export sales tax rebates on 397 items to mitigate private sectors’ pressure. • Transit trade through pr
Slide 27: Proactive Approach
Proactive Approach Opportunities and threats in the trade war • Eternal Materials to grasp the opportunities rising from the shift of the value chain from China to Taiwan, whose position lies between China and the US. • Eternal Materials Taiwan with close proximity to China and economical and poli
Slide 28: Q&A Thank you
Q&A Thank you Eternal Materials 28
Eternal Materials — Investor conference hosted by President Securities Corp. 2018 on 6ix