Grape King Bio Ltd. · TWSE:1707
Grape King Bio — Investor Presentation (November 2022)
46 slides from Grape King Bio's investor presentation, November 2022
Slide 1: Grape King Bio (1707 TT) Investor Presentation
Grape King Bio(1707 TT) Investor Presentation November 2022
Slide 2: Disclaimer
Disclaimer 2 • The information contained in this confidential document ("Presentation") has been prepared by Grape King Bio (the "Company"). It has not been fully verified and is subject to material updating, revision and further amendment. • While the information contained herein has been prepared
Slide 3: Company Profile
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Slide 4: Company Milestones
Company Milestones 2019 4 2014 • Grape King Bio- 1991 2009 • Dr. Andrew Tseng 2015 Tech Research succeeded his Institute was Bio Engineering Center was Grape King is established. Pro-Partner’s 2013 father to become selected as 2017 established. 2021 ranked No.6 among the CEO and Forbes “Asia's • Gra
Slide 5: Company Overview: Three core business units
Company Overview : Three core business units 5 2021 REVENUE 9% 9% 1. Grape King Taiwan (Parent Co) Taiwan own brand & global OEM & ODM Locus of all key ingredient design, formulation, NT$ and production for the whole Group. 9.8bn 2. Pro-Partner (60%-own) 84% Taiwan direct selling distribution A diff
Slide 6: Consistent Organic Revenue Growth
Consistent Organic Revenue Growth 6 Unit: NT$ bn Before IFRS15 After IFRS15 120 $10.9 $10 $10.2 $10.2 100 $9.2 $9.4 $9.1 $7.3 $9.18 $9.24 $9.8 80 $6.3 $9.17 $8.1 60 +15% +26.8% +15% +7% +0.7% -0.7% 6.9% YoY YoY YoY YoY YoY YoY YoY +5% 40 YoY -2% 20 YoY Chairman Andrew elected Trade war Covid Pandemi
Slide 7: ODM Key Growth Driver
ODM Key Growth Driver 7 Grape King Taiwan ODM Sales Unit: NT$ mn 350 $292 300 $255 250 +43% +86% YoY 200 YoY $126 $137 150 $121 $98 100 +9% +28% YoY 50 -19% YoY YoY 0 2017 2018 2019 2020 2021 2022 1-10
Slide 8: Botanical Drug Submitted to USFDA
Botanical Drug Submitted to USFDA 8 • Antrodia is a traditional Chinese mushroom unique to Taiwan, know for its liver protection and cancers fighting benefits. • Grape King Bio has been researching Antrodia for more than 20 years, with various health food supplements already being sold in Taiwan . •
Slide 9: Going Global
Going Global 9 Pro-Partner • Pro-Partner will be heading to Malaysia as part of their expansion to overseas markets • Malaysia has a well regulated and accepting MLM market • 5 products have been submitted for MAL certification • Sales are expected to start at the end of 2023 Taiwan Grape King • Wor
Slide 10: Our Sustainability Progress
Our Sustainability Progress 2021 10 PURPOSE-LED BRAND CLEANER PLANET FAIRER SOCIETY STRONGER STEWARDSHIP 20% 475kg 815hrs 33% of our revenues are aligned with of CO2e of carbon service hours were invested Of Board independence is United Nation’s (UN) Sustainable emission reduced in 2021 in community
Slide 11: Delivering on ESG Scores
Delivering on ESG Scores 11 TWSE CG Score Not covered Not covered Grape King Bio 1707 Started data input on Top 5% 10/2021 Published by IR Platform website - Sept 2022 ESG Risk Rating of Top 35% of all Top 5% among all 19.11, ranked no. 5 global companies, TWSE companies in in Global Personal and th
Slide 12: Our Vision
Our Vision “To become a global leading health and wellness company that promotes a healthier living and a more sustainable future
Slide 13: Our Core Competence
Our Core Competence 13 We are a leading health food manufacturer in Greater China, specializing in probiotics, mushroom and other herbal-based supplements. We command No. 1 position in probiotics and medicinal mushrooms supplements with 31% and 45% market share, respectively in 2020. We are We o
Slide 14: Our Growth Strategies for Three Key Businesses
Our Growth Strategies for Three Key Businesses 14 Key Objectives Levers Grape King Taiwan Market share gain through products upgrade and deeper • Market share gain channels penetration • Expanding through new Business expansion through penetrating new product adjacencies categories • Accelerate
Slide 15: Grape King Biotech Research Institute
Grape King Biotech Research Institute Product Innovation backed by Science
Slide 16: Competitive Strengths - Strong Products Capabilities
Competitive Strengths - Strong Products Capabilities 16 We acquired more than 186 patents and published over 84 research papers. Also, we acquired more than 10 TFDA Health Food certifications on our products. Brain Eye protection With TFDA Lion’s Mane Mushroom Powder Yo-Shi Premium Lutein Health Foo
Slide 17: 2015~2022: 21 countries, 198 awards
2015~2022：21 countries, 198 awards
Slide 18: Our Sustainability Progress
Our Sustainability Progress 2021 18 PURPOSE-LED BRAND CLEANER PLANET FAIRER SOCIETY STRONGER STEWARDSHIP 72% 475kg 815hrs 33% of our revenues are aligned with of CO2e of carbon service hours were invested Of Board independence is United Nation’s (UN) Sustainable emission reduced in 2021 in community
Slide 19: Financial Performance
falaclt FIX Financial Performance
Slide 20: Revenue Breakdown (1H22 vs. 1H21)
Revenue Breakdown ( 1H22 vs. 1H21) 20 1H21 REVENUE 1H22 REVENUE 1.Grape King Taiwan +6.7% YoY NT$ 482mn (+ 7% YoY) 10% 10% 4% 10% Thanks to strong sales of our own brand products as well as higher ODM revenues. However, higher opex was incurred due to beverage products (Kombucha NT$ NT$ and POWERBom
Slide 21: Five-Year Income Statement
Five-Year Income Statement 21 YoY (%) (NT$ m) 2017 2018 2019 2020 2021 3Q22 2017 2018 2019 2020 2021 1H22 Revenue 9,388 9,183 9,239 9,168 9,798 7,267 2.2 (2.2) 0.6 (0.8) 6.9 6.7 Gross Profit 7,865 7,329 7,566 7,537 7,855 5,910 (0.7) (6.8) 3.2 (0.4) 4.2 10.4 Operating Expenses (5,610) (4,979) (5,231)
Slide 22: Five-Year Balance Sheet
Five-Year Income Statement 22 YoY (%) (NT$ m) 2017 2018 2019 2020 2021 3Q22 2017 2018 2019 2020 2021 1H22 Total Assets 9,892 10,648 11,359 13,104 14,061 13,695 3.6 7.6 6.7 15.4 7.3 3.4 Cash 1,920 2,050 2,146 2,927 3,635 3,249 1.1 6.8 4.7 36.4 24.2 (9.6) AR & NR 160 171 202 202 301 339 (21.5) 6.8 18.
Slide 23: Dividend Payout and Capex
Dividend Payout and Capex 23 (NT$ m) 2015 2016 2017 2018 2019 2020 2021 Net Profit 1,052 1,297 1,352 1,295 1,309 1,272 1,300 Cash Dividend 730 862 903 883 884 948 904 DPS (NT$) 5.6 6.4 6.7 6.5 6.5 6.4 6.1 Payout Ratio 69.4% 65.2% 66.6% 67.9% 67.4% 68.5% 69.2% Cash Yield 2.6% 3.2% 2.9% 3.0% 3.3% 3.8%
Slide 24: Our Capacity and Expansion Plan
Our Capacity and Expansion Plan 24 Grape King Specialist Fermentation Grape King Shanghai Grape King Bio-Tech Grape King Bio-Tech & Manufacturing Site* Headquarters Headquarter Research Institute Production Monthly Capacity Production Monthly Capacity Production Monthly Capacity Production Capacity
Slide 25: Industry Trends
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Slide 26: Taiwan Health Food Industry
Taiwan Health Food Industry 26 Taiwanese Takes Nutraceuticals Post-Pandemic are 4 Times Greater than Americans • The annual consumptions of health food in Taipei Metropolis is TWD 21,000 (USD 700)/people in average, which is 3.7X comparing to the spending of TWD 4,400 (USD 147) in the US. • Statisti
Slide 27: China Health Food Industry
China Health Food Industry 27 China’s Health Food Industry Grew 6.4% CAGR Between 2016-2026 China Direct Selling Continues to Play an Important Role Overall, there is no brand that can monopolize the market in China's health Direct selling remains as an important distribution channel in supplement m
Slide 28: China Health Food Industry
China Health Food Industry 28 China’s Aging Society Reached 7.18 Trillions Population 2021 China Health Supplement Consumer Age Distributions According to iiMedia Research, the market size of China's health China elderly group remain the largest consumption group for health supplements for seniors a
Slide 29: China Health Food Industry
China Health Food Industry 29 China Herbal/Traditional Products Market Continue to Grow Most Favored Health Supplement Among Elderly Chinese According to iResearch's survey, the core functional requirement of the The increasing demand of the China herbal and traditional products may elderly people i
Slide 30: China Health Food Industry
China Health Food Industry 30 Global Probiotics Market is Still Growing Grape King is the 7th Largest Distributor globally According to Research and Market, global probiotics market is We are ranked as the 7th largest probiotics supplement company expecting to reach US$62 bn with Asia Pacific region
Slide 31: China Probiotic Market
China Probiotic Market 31 Probiotics Demand Remains Popular within Young and Middle-Aged Women
Slide 32: 1. Grape King Taiwan
32 1. Grape King Taiwan
Slide 33: Taiwan - Grape King Brand Sales Channels
Taiwan - Grape King Brand Sales Channels 33 Business Line Own Brand Products Raw materials & global ODM Health / Functional Mushroom mycelium/ ODM Products Beverages Bio Products Probiotics/Enzymes Products Physical Virtual Customers Channels/ Customers Traditional Pharmacy、 TV Shopping Channel、 Dir
Slide 34: 2. Pro-Partner
34 2. Pro-Partner
Slide 35: Pro-Partner Overview
Pro-Partner Overview 35 4 key numbers of Pro-Partner Growing sales and members# 220,000 • Largest local direct selling company in Taiwan 1 (+2% YoY) based on revenue. • One of the fastest growing direct selling companies in Taiwan (15% sales CAGR from 2008 to 2020) 210,900 157,262 3 • Second largest
Slide 36: Bai Yi Jie (toothpaste) Hi Spray (oral spray)
Bai Yi Jie (toothpaste) Hi Spray (oral spray) • Grape King’s • Grape King’s • Sorbitol Lactobacillus Lactobacillus → Anti-plaque pentosus GK4 pentosus GK4 • Thyme → Inhibit 13 kinds of → Inhibit 13 kinds of → Freshen breath oral bacteria & oral bacteria & Prevent cavities Prevent cavities • Mint • X
Slide 37: How is Pro-Partner different from other direct selling companies?
How is Pro-Partner different from other direct selling companies? 37 Products purchase Products’ uniqueness Support Training Compensation No minimum Higher entry barrier Managed by Grape All the trainings and Transparent purchase for Products (bio- King, a well-respected venues are held by
Slide 38: 3. Grape King Shanghai
38 3. Grape King Shanghai
Slide 39: Grape King Shanghai Overview
Grape King Shanghai Overview 39 • Established in 1994, Grape King Shanghai was initially targeted as the production base for Grape King’s own brand products in China. • A change in strategy steered by the new management to an OEM/ODM model has reversed several years of losses and turned the operatio
Slide 40: Our Goals and Strategies
Our Goals and Strategies
Slide 41: We have identified our R&D focus fitting in the megatrends
We have identified our R&D focus fitting in the megatrends 41 Probiotics Medicinal Mushrooms Personal Hygiene Respiratory Health/Anti-Bacterial Lower risks factor (Antrodia) Memory Improvement (Lionsmane) Mood Improvement Weight Management Eye Health (Cordyceps Sobolifera) Sleeping Quality (Armillar
Slide 42: 85% of Pro-Partner orders were placed online
85% of Pro-Partner 42 orders were placed online in 2021 vs. 9% in 2018
Slide 43: 50% of Grape King's marketing spend are in Digital
50% of Grape King’s marketing 43 spend are in Digital in 2021
Slide 44: Leading to strong growth from our virtual channels
Leading to strong growth from our virtual channels 44 Grape King Taiwan’s revenue from virtual channels grew by 21% in 1-3Q21 and accounted ~50%* of total revenue. *Not including ODM revenue
Slide 45: Growing on Giant's Shoulder
Growing on Giant’s Shoulder 45 Channels & Distribution Collaboration • Physical Channels：Taiwan~6,000 stores/ China~ 400 stores / Southeast Asia ~ 3,000 stores (including convenience stores, pharmacies, department stores) • Virtual Channels R&D Collaboration Production Resource • New adjacencies (su
Slide 46: Thank You
Thank You For more information, please visit our company website at www.grapeking.com.tw 46
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