麗豐股份有限公司 (4137.TT) Chlitina Holding Limited

麗豐股份有限公司 (4137.TT) Chlitina Holding Limited

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Agenda Company Introduction Brand Multiple Channels High Quality Products Large-scale Training Outstanding Financial Performance

About CHLITINA Leader in Greater China Skincare Salon Chain Market Capitalization: US$ 611 mn (as of April 19, 2016) NT$ 4.4 bn in sales (2015) NT$ 3.5 bn net cash (as of Dec. 31, 2015) 76% Gross Margin (2015) 26.6% Net Margin (2015) 68% Cash Payout ratio (2015) Over 3600 franchises (2015) Revenue by Geography 3.4% Mainland China HK,TW,others 96.6% 4

About CHLITINA Company Milestones 2013 - Listed on the TWSE on Nov. 27 (Ticker: 4137) - Number of franchise stores in operation surpassed 3,000 - Named "Most Valuable Beauty Chain" at China Beauty Expo 3,000 Number of CHLITINA stores 1989 Launched the CHLITINA brand in Taiwan 1997 Chlitina Group set up its China HQ in Shanghai 2012 - Honored at the 17th China Beauty Expo as a "Leading Brand" and as "The Most Influential Beauty Chain Salon - Named one of "Top 10 Highest Investment Value Brands in Asia" at Asia Brand Annual Meeting 2012 2008 - Formed R&D alliance with its French partner - The 15,000 th skincare consultant completed Chlitina s elite training program 2011 Listed among China s Famous Trademarks 2,000 1999 Flagship store opened in Shanghai 1989 1997 1999 2005 2008 2011 2012 2013 Year 5

After years of development, Chinese economy now ranks among the top in the world. With the new national leadership, Chinese economy changed from explosive development in the past to rational, stable growth. Starting from 2010, the growth of GDP consciously slowed down. The absolute value of disposable income increased year after year, but the growth rate significantly slowed down. In 2015, the growth of disposable income was only 7.4%, even smaller than that of 2009 (the year of the financial crisis). Historical growth of GDP and living standards 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 11.4% 12.1% 17.2% 14.5% 11.3% 11.3% 12.7% 14.2% 8.8% 10.4% 9.6% 9.2% 9.3% 14.1% 12.6% 9.7% GDP Disposable Income per Capita 8.0% 7.4% 7.7% 7.7% 7.3% 6.9% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 6

Significant growth of tertiary Industry In 2015, the tertiary industry accounted for 50.5% of GDP, over half of GDP for the first time. The tertiary industry, especially the service sector grew significantly, driven by industrialization, upgrades in information technology and consumer spending. The contribution of consumption to growth was 66.4%, becoming more significant. The Tertiary Industry as a percentage of GDP 120.0 100.0 80.0 60.0 40.0 20.0-44.3 45.5 46.9 48.1 50.5 46.1 45.0 43.7 42.7 40.5 9.5 9.5 9.4 9.2 9.0 2011 2012 2013 2014 2015 Tertiary Industry Secondary Industry Primary industry 7

Beauty and Personal Care Industry at a Restructuring Stage Despite the slow down of the overall Chinese economy, the growth rate of beauty and personal care has been higher than the growth rate of GDP, indicating optimistic prospects of beauty and personal care industry. The next two years will be an important restructuring period for this industry. If properly restructured, the companies in this sector will have better future development. 2010-2018 China GDP and Personal Care Growth 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 12.7% 11.3% 9.7% 8.8% 10.4% 7.4% 9.3% 6.9% 7.7% 7.7% 7.3% 6.9% GDP Growth 7.7% 8.3% 8.8% According to government reports, the growth of GDP in China will be below 7%. 2010 2011 2012 2013 2014 2015 2016e 2017e 2018e Source: Chinese national statistics website 8

Training Brand Products Channels 9

Training Brand Products Channels 10

Brand Precise Positioning Benefiting from Brand Positioning & Investment The Chlitina brand is positioned at the affordable luxury level, targeting rising middle-class consumers in China. Chlitina focuses on fast-growing market segments: high-end skincare & high-end beauty products. 1,200 1,000 800 Million 1,042 Surging Middle-Incomers in China -4% 725 +28% 2007-2017 CAGR 2007 2017E 600 433 400 +16% 200 36-2 9 < $7,500 $7,501-80,000 > $80,000 Source: Euromonitor (May 2012). Annual Income (US$) 11

2015 Branding and Marketing Zhejiang Satellite TV- Love Village Hubei Satellite TV- If you love CTS Nirvana in Fire Taipei Taoyuan International Airport Lightboxes 12

2016 Branding and Marketing Brand Awareness Brand ambassador Outdoor Baidu Magazines Brand Reputation Shanghai Movie Festival CSR Programs KOL APP contents Transformation into sales Product promotions Ads in buildings Brand ambassador Alin Shanghai Movie Festival 13 13

Training Brand Products Channels 14

Diverse Sales Channels Beauty Franchise E-Commerce Brand Licensing 15

2016 China Strategy by Region Developed Areas Well-off regions Developing areas Representative Areas Shanghai, Jiangsu etc. Fujian, Guangxi etc. Heilongjiang, Jilin etc. Development Strategy Enhance branding, improve single store profitability Enhance branding, improve market share Enhance brand awareness, open more stores 16

CHLITINA The Most Scalable Skincare Franchise in China with over 3,600 Exclusive Stores, and Still Growing. Over 3400 stores in China, and over 200 stores in Taiwan 2015 Beauty Franchise Channel Review Xinjiang Uyghur Autonomous Region 10 locations Tibet Autonomous Region 4 locations Northeast China North China East China Southeast China Northwest China Southwest China Taiwan Qinghai Province 1 location Chengdu Flagship store Inner Mongolia Autonomous Region 106 locations Ningxia Hui Autonomous Region 8 locations Gansu Province 4 locations Shaanxi Province 47 locations Sichuan Province 105 locations Yunnan Province 14 locations Chongqing City 53 locations Hebei Province Shanxi Province 132 locations 79 locations Liaoning Province 78locations Beijing City 236 locations Henan Province 56 locations Hubei Province 187 locations Hunan Province 195 locations Guizhou Province 39 locations Guangxi Zhuang Autonomous Region 23 locations Hainan Province 6 locations Anhui Province 118 locations Tianjin City 150 locations Shandong Province 120 locations Jiangxi Province 104 locations Guangdong Province 335 locations Jiangsu Province 348 locations Heilongjiang Province 33 locations Zhejiang Province 419 locations Fujian Province 57 locations Jilin Province 27 locations Shanghai City 334 locations Shanghai Flagship store Taiwan 227 locations Taipei Flagship store 17

There is Still Substantial Untapped Potential in Lower Tier Cities in Mainland China 4000 3500 3000 2500 3004 3086 3413 3443 2000 2012 2013 2014 2015 No of Cities Penetrated 2012 2013 2014 2015 Total 329 334 346 347 2015 # of Stores % Sales (MN NTD ) % Tier 1 Cities 948 27.5% 804 29.2% Tier 2 Cities 698 20.3% 548 19.9% Tier 3 Cities 510 14.8% 416 15.1% Tier 4 & 5 Cities 1287 37.4% 988 35.8% Franchisee sales 3443 100.0% 2,756 100.0% Others* 1,638 Total 4,394 *Others include HK/Taiwan sales, sales from related party, and franchise fees 18

A Clear Strategy to Realize Franchise Value Asset-light, franchise-based model to capture growth opportunity in the China beauty industry 25 well-established branch offices to ensure business strategy is effectively carried out to each region and store cover up to 70% of China s population Pleasing our customers is our top priority, but we place equal emphasis on our franchisees. We strive to develop a franchise model that inspires entrepreneurship among franchisees increases franchisee and customer stickiness Resilient Store Portfolio 50% 30% Source: company data > 3 yrs > 5 yrs Store Age 19

Diverse Sales Channels Beauty Franchise E-Commerce Brand Licensing 20

E-commerce Positioning 020 Platform for health and beauty products Platform Perfecting PC mall, Wechat mall, App, cross-border e-commerce Development Strategy Products Enriching product lines, including beauty products, slimming products, baby products, healthy products Promotion Brand building based on product reputation Integration of online and offline resources, enhance user participation and contribution 21

Diverse Sales Channels Beauty Franchise E-Commerce Brand Licensing 22

The Growth of Kelti China Regulations Having obtained the direct sales license in 2009 from the government, Kelti China has since received permits from 27 provinces and cities. Macroeconomic trends Direct sales industry has become more popular due to its low barrier of entry, high rate of success for individual entrepreneurs in current economic environment in China. The new social media became successful tools for direct sales. Accumulation of Experience After obtaining the direct sales license in 2009, Kelti China accumulated years of experience in sales, product development, channel management, which contributed to its growth. 23

Selling 3DR and Peekaboo through Kelti China s Direct Sales Channel Manufacturing of Licensed Semi-Finished Products R&D+ Raw Materials+ Formula+ Labor Manufacturing of Finished Products Filling and Packaging Selling of Products Direct Sales Channel Licensing of Products Trademark License agreement with Kelti China in 2012: if Kelti s monthly sales from licensed products exceed RMB10mn, Chlitina recognizes 6% of sales as trademark licensing income. GPM: 17-20% Net M: 13-15% GPM: 100% Net M: 83-84% 24

Training Brand Products Channels 25

Products by Channel Beauty Franchise Professional line High personalization Products+ Service+ Equipment+ Extensions Appx. 150 SKU E-commerce At home skincare Mid-high end e- commerce brand: to enhance the stickiness of the existing franchise salon channel Health-related products Appx. 30 SKU Brand Licensing 3DR : facial skincare products Peekaboo : color cosmetics, at-home skincare, body products Appx. 40 SKU 26

Products Well-Received Products More than 145 SKU to provide a full-range of products. 27

Diverse Product Lines Signed an exclusive distribution agreement on the brands Spirularin and Skinicer with Ocean Pharma in the Greater China region and Southeast Asia territories. The patented Spiralin ingredient received the 2015 Best Ingredient Award from the German Magazine Aesthetic Dermatology ) The new series Professional Beauty Salon Series will be released in March. Combining natural essences from plants and newest technology, the 5 new serums target different skin types and provide a deep conditioning for an intensive repair and nourishment. 28

Training Brand Products Channels 29

Training Building a Stable Foundation of Franchise Stores Chlitina training scheme/facility: Accommodates up to 2,000 trainees and is supported by a highlyqualified teaching staff Has provided training to 90%+ of incumbent beauticians We will shift our centralized training to distributed model leveraging 25 branch office to increase training capacity. 30

Our 25 Regional Branch Offices Ensure a Uniform Level of Service Across Our Franchisee Network Inner Mongolia Beijing Dalian Hebei Tianjin Shandong Our Branch Offices Provide Franchisees with: Timely advice and supervision for existing franchise stores Strategies for business development and expansion Basic storefront management courses for new franchisees Training in basic & advanced skincare Basic & advanced knowledge on new and existing products Chengdu Shaanxi Chongqing Hubei Hunan Anhui Guangzhou Hangzhou Jiangxi Shenzhen Nanjing Fujian Suzhou Shanghai Ningbo Wenzhou Taipei Taichung Kaohsiung 31

Corporate Culture 產銷協調及物流管理 32

Corporate Culture Our Mission: Love and Sharing makes a better world Our vision: Happiness, Health and Wealth for all 33

Financial Performance 34

2015 Performance The consolidated revenue in 2015 was NTD 4,394,264K, a 43.1% increase from NTD 3,071,369K in 2014. The consolidated operating profit in 2015 was NTD 1,371,183K, a 56.2% increase from NTD 877,892K in 2014. The consolidated net income in 2015 was NTD1,167,087K, the net margin was 26.6%. The consolidated net income in 2014 was NTD755,837K, the net margin was 24.6%. The basic EPS in 2015 was NTD14.68. 35

2015 Financial Performance GP margin % Net profit margin % 78.4% 80.7% 76.0% 25.7% 24.6% 26.6% 1,441 428 880 918 1,137 622 720 604 712 992 595 721 824 2013 2014 2015 Q1 Q2 Q3 Q4 Revenue m NTD 185 222 327 199 176 160 176 237 149 183 175 2013 2014 2015 Q1 Q2 Q3 Q4 PAT m NTD 36

2015 Revenue Analysis Revenue Analysis NTD mn Others Manufacturing Trademark licensing 4,500 7.1% Body products Salon series 4,000 13.9% At-home Skincare 3,500 3,000 2,500 9.1% 4.7% 14.2% 1.0% 14.9% 1.4% 1.9% 3.8% 2,000 1,500 47.0% 38.2% 33.1% 1,000 500 39.2% 41.4% 29.1% 0 2013 2014 2015 37

2015 GPM Analysis 2013-2015 GPM by Channels Units: mn NTD Channel Beauty Franchise 2013 2014 2015 Revenue GPM Revenue GPM Revenue GPM 2,693 78.6% 2,991 81.6% 3,130 81.9% Semi-FG Sales 8 13.7% 48 14.9% 610 19.9% Trademark Licensing 32 100.0% 655 100.0% Total 2,701 78.4% 3,071 80.7% 4,394 76.0% 38

2015 Financial Review 20.00 15.00 10.00 5.00 0.00 EPS(NTD) EPS Trend 7.43 8.72 9.51 14.68 Y2012 Y2013 Y2014 Y2015 Note: EPS based on shares issued on Dec. 31, 2015 (79,492K) Item Y2012 Y2013 Y2014 Y2015 Net profit (K NTD) 2015 shares balance Basic EPS (NTD) EPS of shares issued(ntd) 590,385 693,228 755,837 1,167,087 79,492 79,492 79,492 79,492 8.84 9.70 9.51 14.68 7.43 8.72 9.51 14.68 39

Financial Performance High Payout Ratio ( NTD Million ) 2015 Net income 1,167 Cash dividend 795 Dividend p/s (NTD) 10 Cash yield (%) 4 *1 Payout ratio (%) 68 Notes: 2015 yield is based on CHLITINA s latest closing share price on April 19, 2016. 40

Financial Analysis Income Statement Summary YOY (%) NTD million 2014 2015 2015 Sales Revenue 3,071 4,394 Gross Profit 2,480 3,339 OP Expense 1,602 1,967 OP Profit 878 1,371 Net Income 756 1,167 Basic EPS (NTD) 9.51 14.68 43.1% 34.6% 22.8% 56.2% 54.4% 54.4% Gross Margin 80.7% 76.0% OP Margin 28.6% 31.2% Net Margin 24.6% 26.6% 41

Financial Analysis Balance Sheet Summary YOY (%) NTD million 2013 2014 2015 2014 2015 Total Assets 4,338 4,399 5,975 1.4 35.8 Cash 2,646 2,410 3,396 AR & Other Receivables 35 82 703 Inventory 235 239 437 Fixed Asset 1,109 1,149 1,067 Total Liabilities 1,372 1,070 2,028 AP & Other Payables 618 782 904 Bond Payables - - 849 Total Equity 2,966 3,330 3,947 ROA 22.0% 17.6% 22.50% ROE 35.0% 24.0% 32.10% Net cash* 2,397 2,627 3,510 (8.9) 40.9 132.9 757.3 2.0 82.8 3.5 (7.1) (22.0) 89.5 26.6 15.6-100.0 12.3 18.5 *Net cash = cash & cash equivalents + other current financial assets (time deposits, money market fund and government bond related) bank loans Note: The increase of AR and OR mainly due from the increase of trademark licensing revenue and semi-fg sales to Kelti China. 42

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