Grape King Bio Ltd. · TWSE:1707
Grape King Bio — Investor Presentation (April 2023)
54 slides from Grape King Bio's investor presentation, April 2023
Slide 1: Grape King Bio (1707 TT) Investor Presentation
Grape King Bio(1707 TT) Investor Presentation April 2023
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
I@I fal elt FIX Company Profile
Slide 4: Company Milestones
Company Milestones 2019 4 2014 • Grape King Bio- 1991 2009 • Dr. Andrew Tseng 2015 Tech Research succeeded his Institute was Grape King is Bio Engineering Center was 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 2022 Revenue 5% 1. Grape King Taiwan (Parent Co) 11% 11% Taiwan own brand & global OEM & ODM Locus of all key ingredient design, formulation, NT$ and production for the whole Group. 10.39bn 2. Pro-Partner (60%-own) 84% Taiwan Grape King Taiwan direct se
Slide 6: Consistent Organic Revenue Growth
Consistent Organic Revenue Growth 6 Unit: NT$ bn Before IFRS15 After IFRS15 $10.9 $11.7 $10 $10.2 $10.2 $9.2 $9.4 $7.3 $9.8 $10.4 $6.3 $9.18 $9.24 $9.17 +15% +26.8% +15% +7% +0.7% -0.7% 6% YoY YoY YoY YoY YoY YoY YoY $1.4 -2% $1.3 YoY +7.7% Chairman Andrew elected Trade war Covid Pandemic YoY 2014 2
Slide 7: ODM Key Growth Driver
ODM Key Growth Driver 7 Grape King Taiwan ODM Sales Unit: NT$ mn 400 $367 350 300 $255 +51% YoY 250 200 +86% $126 $137 YoY 150 $121 $98 100 +28% +9% $57 -19% YoY YoY 50 YoY +49% YoY 0 2017 2018 2019 2020 2021 2022 2023 1-2
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 117 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 Fo
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
I@] fal selt FIX Financial Performance
Slide 20: Revenue Breakdown (2022 vs. 2021)
Revenue Breakdown (2022 vs. 2021) 20 2022 Revenue +6.1% YoY 2021 Revenue 5% 11% 9% 1. Grape King Taiwan 9% NT$ 1,104mn (+ 21% YoY) NT$ Strong orders from existing and new NT$ 10.39bn ODM business. Own brand products also 9.8bn performed well, particularly the drinks. 84% 2. Pro-Partner 81% NT$ 8,727
Slide 21: Five-Year Income Statement
Five-Year Income Statement 21 YoY (%) (NT$ m) 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 Revenue 9,388 9,183 9,239 9,168 9,798 10,391 2.2 (2.2) 0.6 (0.8) 6.9 6.1 Gross Profit 7,865 7,329 7,566 7,537 7,855 8,481 (0.7) (6.8) 3.2 (0.4) 4.2 8.0 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 2022 2017 2018 2019 2020 2021 2022 Total Assets 9,892 10,648 11,359 13,104 14,061 15,053 3.6 7.6 6.7 15.4 7.3 7.1 Cash 1,920 2,050 2,146 2,927 3,635 4,673 1.1 6.8 4.7 36.4 24.2 28.6 AR & NR 160 171 202 202 301 270 (21.5) 6.8 18.0
Slide 23: Dividend Payout and Capex
Dividend Payout and Capex 23 (NT$ m) 2016 2017 2018 2019 2020 2021 2022 Net Profit 1,297 1,352 1,295 1,309 1,272 1,300 1,457 Cash Dividend 862 903 883 884 948 904 1,022 DPS (NT$) 6.4 6.7 6.5 6.5 6.4 6.1 6.9 Payout Ratio 65.2% 66.6% 67.9% 67.4% 68.5% 69.2% 70.1% EPS 9.82 10.03 9.57 9.63 9.34 8.81 9.8
Slide 24: Revenue Overview (Jan-Feb 2023)
Revenue Overview (Jan-Feb 2022) 24 (NT$mn) (NT$mn) 700 2,000 610 600 484 +19.77% 500 471 1,276 1,184 +3.58% 394 400 991 957 300 200 +60.91% +43.14% +34.95% +10.96% 55 88 100 35 51 135 92 182 102 0 0 2022 2023 Jan-Feb' 22 Jan-Feb' 23 Grape King TW Grape King SH Grape King TW Grape King SH Pro-Partner
Slide 25: Industry Trends
I@I fal elt FIX Industry Trends
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: Global Probiotics Market is Still Growing
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: Consumer Purchasing Power Continues to Grow
Consumer Purchasing Power Continues to Grow 34 Spendings on buying health food for wellness increased YoY. I am worn out: eye care, relieve fatigue, gastrointestinal function, help digestion and absorption, improve immunity Caring for the elderly: nutrition, exercise, joints, calcium NT$6,200/person
Slide 35: Own Brand Revenue from Virtual Channels
Own Brand Revenue from Virtual Channels 35 Total members exceeded 150,000 Virtual channel revenue up 4.3X 160000 150k 140000 120000 100000 80000 60000 40000 20000 0 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021
Slide 36: Own Brand Revenue Contributions – Physical vs. Virtual
Own Brand Revenue Contributions – Physical vs. Virtual 36 (NT$’000) Physical Stores Virtual Channels 400,000 35% 34% 35% 29% 300,000 42% 42% 35% 200,000 36% 43% 29% 100,000 0 2018 2019 2020 2021 2022.1-11 Virtual began to surpass Hot sale of physical under the pandemic Kombucha
Slide 37: 2. Pro-Partner
iT <q 2. Pro-Partner
Slide 38: Pro-Partner Overview
Pro-Partner Overview 38 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 39: 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 40: How is Pro-Partner different from other direct selling companies?
How is Pro-Partner different from other direct selling companies? 40 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 41: 3. Grape King Shanghai
41 3. Grape King Shanghai
Slide 42: Grape King Shanghai Overview
Grape King Shanghai Overview 42 • 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 43: Grape King Shanghai Plant Size
Grape King Shanghai Plant Size Covers area of 170 hectares GMP plant of 12,500 sqm 100K-level GMP qualified manufacturing site manufacturing plant (Liquid filling 10K-level) (Conform to the hygiene standards of productions for the health care products and food.)
Slide 44: One-stop OEM Service Platform
One-stop OEM Service Platform ODM/OEM One-stop service R&D Formulation design Package design Production Regulatory assistance Training assistance Logistics Declaration assistance
Slide 45: Customers of Grape King Shanghai
Customers of Grape King Shanghai 45
Slide 46: OEM Products of Grape King Shanghai
OEM Products of Grape King Shanghai 46 公司簡介
Slide 47: Own Brands of Grape King Shanghai
Own Brands of Grape King Shanghai 47
Slide 48: Our Goals and Strategies
I@) fal celt FIX é Our Goals and Strategies
Slide 49: We have identified our R&D focus fitting in the megatrends
We have identified our R&D focus fitting in the megatrends 49 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 50: 85% of Pro-Partner orders were placed online
85% of Pro-Partner 50 orders were placed online in 2021 vs. 9% in 2018
Slide 51: 50% of Grape King's marketing spend are in Digital
50% of Grape King’s marketing 51 spend are in Digital in 2021
Slide 52: Leading to strong growth from our virtual channels
Leading to strong growth from our virtual channels 52 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 53: Growing on Giant's Shoulder
Growing on Giant’s Shoulder 53 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 54: Thank You
Thank You For more information, please visit our company website at www.grapeking.com.tw 54