Corporate Profile of President Securities Corp. Lynn Huang Vice President May 2008 1
Outline Uni-President Corp. Introduction 3 Food Business of Uni-President Corp. in Taiwan 5 Food Business Uni-President Corp. in China 6 Food Business Uni-President Corp. in Southeast Asia 8 Leading Retail Business of Uni-President Corp. in Taiwan 9 President Securities Corp. Introduction 12 Strength 14 Financial Data 15 Revenues Breakdown of the Latest 3 years 18 2007 Market Share of Various Business Areas 19 Performance 20 2006 Honor Roll 21 Credit Rating & Risk Management 22 Strategic Development 23 PSC Long-Term Business Strategy, China 24 Goals of President Securities Corp. 26 2
Introduction of Uni-President Corp. (1) Food Uni-President Enterprises Corp. TTET Union Corp. (38%)-Taiwan s largest soybean crushing manufacturer Kuang Chuan Corp. Ltd. (31%)-Dairy products & beverages Wei Li Food(32%)-Taiwan s 2 nd largest instant noodles company with around 20% market share Retail Trading Investment Financials PCSC (45.4%) Presicarre Corp. (29.35%) Nan Lien International Corp. (100%) President International Develop. Corp. (66%) President Securities Corp. (29.24%) PCSC operates Taiwan s largest distribution channels with over 4,705 7-11 chain stores Presicarre Corp. is Taiwan s largest hypermarket chain stores with 47 stores Importer, distributor and agent of consumer products including Anheuser-Busch beer, Maxwell House Coffee and Chupa Chups Lollipops Investment arm of the Group with investments in LTPS TFT LCD, shopping mall and biotechnology Brokerage, underwriting, proprietary trading, fixed income dealing, financial products, shareholder services coordinator, wealth management 3
Introduction of Uni-President Corp. (2) Date of Establishment Market Capitalization Number of Affiliates Aug. 25, 1967 US$ 5.3 billion* 200 Taiwan s largest food company, with leading retail and distribution business in Taiwan. Strong presence in beverage and instant noodles in China. * Market Capitalization based on closing price as of April 17, 2008. USD 1=NTD30.275 4
Food Business of Uni-President Corp. in Taiwan Market Share in 2006 Category Position Market Share(%) Yogurt Drink 44.8 Dairy Products Fresh Milk No.1 29.6 Flavored Milk 49.5 Non-Carbonated RTD Tea 47 No.1 Juice 17.8 Instant Noodles No.1 50.2 The depth and breadth of our food and beverage products cover all range of consumers via a successful multi-brand strategy. Strong R&D and marketing capability enhance competitive market position in many categories. 5
Food Business of Uni-President Corp. in China (1) Uni-President China Holdings Ltd. (UPC owned 73.5% ) One of the leading beverage and instant noodles manufacturers in China, commenced operations in 1992, listed on Dec 17th, 2007 in Hong Kong with market capitalization US$1.9bn* Strong brand recognition and position in China: Category Position Market Share(%) Juice Drinks More series No. 2 29.1 RTD Unif Green Tea No. 2 22.8 Instant Noodles Haojindao No. 2 11.2 Source: AC Nielsen 1~9, 2007 Sole official noodles sponsor of Beijing 2008 Olympics * Market capitalization based on closing price as of Jan 24, 2008, US$1=HK$7.75 6
Food Business of Uni-President Corp. in China (2) Beverages Market in China With 13 production plants, 53 production lines in beverage and 50 production lines in instant noodles. 530 sales offices and over 1,000,000 distribution points distributing over 300 different products. 7
Food Business of Uni-President Corp. in Southeast Asia Uni-President Thailand (owned 100% ) Beverages Uni-President Indonesia (owned 49% ) Beverages Instant noodles Uni-President Vietnam (owned 100% ) Aquatic feeds Instant noodles Uni-President Philippines (owned 100% ) Instant noodles NT$ mn * By internal report 8
Leading Retail Business of Uni-President Corp. in Taiwan (1) President Chain Store Corp. (UPC owned 45.4% ) Operates 7-ELEVEN chain stores, the number one convenience chain store in Taiwan, with various retail and distribution businesses in Asia Listed on Taiwan Stock Exchange with market capitalization US$2.7bn*, cash dividend yield 4~5% US$ mn Taiwan Sales 51.5% Source:Taiwan Ministry of Economic * Market capitalization based on closing price as of Jan 24, 2008, US$1=NT$32.35 9
Leading Retail Business of Uni-President Corp. in Taiwan (2) Presicarre Corp. (effective interests 29.35%) Joint venture with Carrefour, the number one Hypermarket with 47 Stores in Taiwan Acquired Tesco in 2006, strengthened market position Various store types to target different markets US$ mn Taiwan Retail Sales 37% 41% Source:Taiwan Ministry of Economic 10
Leading Retail Business of Uni-President Corp. in Taiwan (3) President Starbucks Coffee (effective interests 33.62% ) 50% joint venture with US Starbucks Operates in Taiwan and China:Shanghai, Jiangsu, Zhejiang areas US$ mn Sales Taiwan/China Number of Stores Taiwan/China 11
Introduction of President Securities Corp. (1) Shareholders & Subsidiaries Uni-President Corp. President Chain Store Corp. Tainan Spinning Co., Ltd. Eternal Chemical Co., Ltd. Canking Investment Corp. Tainan Spinning Investment Corp. Others 29.24% 2.58% 2.00% 2.31% 1.14% 1.94% 60.79% President Securities Corp. President Futures Corp. President Capital Management Corp. Uni-President Investment Corp. President Personal Insurance Agency Co.,Ltd. President Securities (Hong Kong) Ltd. President Securities (BVI) Ltd. Xiamen Representative Office * In Process * Shanghai Representative Office 12
Introduction of President Securities Corp. (2) Date of Establishment Dec. 17, 1988 Capital USD$387.48 million* Number of Branch Offices 35 Number of Employees 1494 * Market capitalization based on closing price as of Mar 31, 2008, US$1=NT$30.35 13
Strength of President Securities Corp. Focus & Professionalism Focus on the needs of Taiwan s individual investors and institutional investors. Professionalism in customer services, products design, and proprietary trading. A financially solid conglomerate which is able to offer strong intergroup support. Numerous sister companies represent large potential client avenues to be developed. Our parent company has already developed significantly in Mainland China and will, no doubt, provide a gateway to bountiful opportunities for all the Group s constituents in that market, going forward. We are the only financial institution with access to the type of opportunities that this substantial PRC presence will create. 14
Financial Data (1) YTD Earnings in 2008 As of 30 April, 2008 Pre-Tax Earnings (NTD Thousand) 850,750 After-Tax Earnings (NTD Thousand) 800,209 Pre-Tax EPS(NTD/SHARE) 0.723 After-Tax EPS(NTD/SHARE) 0.680 Book Value per Share 17.201 15
Financial Data (2) Financial Results in 2007 Pre-Tax Earnings (NTD Thousand) After-Tax Earnings (NTD Thousand) Pre-Tax EPS(NTD) After-Tax EPS(NTD) ROE ROA 2,900,704 2,406,346 2.465 2.045 12.73% 5.74% BV/Share (NTD) 16.636 16
Financial Data (3) Item Capital Structure Analysis(%) Debt Ratio Long-term Fund to Fixed Assets Ratio Year 2003 63.57 1,052.64 2004 50.73 1,056.02 2005 67.03 763.25 2006 61.28 891.91 2007 63.72 1059.27 Liquidity Analysis(%) Current Ratio Quick Ratio 139.37 132.52 169.88 156.92 128.75 122.44 139.67 139.55 145.55 145.44 Turn on Total Assets(%) 4.71 3.91 2.86 4.74 5.69 Profitability Analysis Turn on Equity (%) Income to Capital(%) Operating Income Income Before Tax 11.81 16.12 18.94 8.14 14.69 15.59 6.08 11.54 11.89 12.31 12.32 13.19 12.73 25.31 24.65 Net Income to Sales (%) 40.69 28.96 25.18 39.03 30.52 Basic Earning Per Share (NT$) 1.68 1.21 0.90 1.91 2.05 Cash Flow Cash Flow Ratio (%) Cash Flow Adequacy Ratio(%) - 205.58 35.01 184.65 - (122.66) 6.98 (53.75) - (55.5) Cash Flow Reinvestment Ratio(%) (20.64) 25.38 (35.85) 5.41 (4.51) Debt to Equity Ratio 174.48 102.95 203.32 158.23 175.63 Other Ratio(%) Fixed Assets to Total Assets Ratio Total Underwriting to Quick Assets Ratio 5.30 3.81 7.08 12.51 6.08 4.06 6.19 2.34 5.39 - Total Margin Loan Balance to Equity Ratio Total short Sales Amount to Equity 79.29 6.90 79.10 11.17 77.36 11.66 87.11 11.08 98.10 7.79 17
Breakdown of Revenues for the Latest 3 years Revenues of President Securities Corp Unit:NT$1,000 Business 2005 2006 2007 Area Revenue Proportion (%) Revenue proportion (%) Revenue proportion (%) Brokerage 2,339,673 57.41 2,888,184 52.16 4,115,261 52.19 Proprietary Trading 1,610,121 39.51 2,410,275 43.52 3,556,720 45.11 Underwriting 125,832 3.08 239,136 4.32 213,071 2.7 Total 4,075,626 100 5,537,595 100 7,885,052 100 Unit:NT$1,000 18
2007 Market Share of Various Business Areas Business Area Component Market Share Ranking Equity Brokerage Equity Brokerage Trading Volume Market Share Per Branch 3.56% 10 0.10% 3 Warrant Warrants Issued (No.) 6.18% 7 Business Warrants Issued (Value) 4.35% 10 Fixed Income Dealing Repo Transactions Outright Purchases/ Sales 1.95% 9.25% (9st vs. securities firms) (2st vs. securities firms) IRS 14.29% 2 Underwriting Underwriting Deals (No.) 5.13% 8 Underwriting Deals (Value) 3.32% 12 19
Performance Average Market Share Per Branch Ranked 1st within Domestic Securities Firms over the Past 5 Years (2003~2007) Average ROE Ranked 1st within Domestic Securities Firms for the Most Recent Four Years (2004~2007) Average After-Tax EPS Ranked 2nd vs. Securities Firms for the Most Recent Four Years (2004~2007) 20
Present Securities Corp. A.D.2006 Honor Roll Awards and Achievements ROE 12.31%, ranked 3rd vs. securities firms (Announced by Securities Firms, 2006) EPS 1.91, ranked 2nd vs. securities firms (Announced by Securities Firms, 2006) ROS 35.86 %, ranked 2nd vs. Taiwan financial Institutions, and 1st vs. local financial institutions (2007.05.09 CommonWealth Magazine issue No.371) Ranked 2nd of Central Government Bonds Dealer Performance evaluation (Data from The Central Bank of China) Revenues of 6.043 billion, ranked 80th vs. Taiwan's financial institutions, and 7th vs. the securities industry (2007.05.09 CommonWealth Magazine issue No.371) Market value of 20 billion, ranked 927th vs. top 1,000 enterprises of Hong- Kong, China, and Taiwan (2006.05.13 Business Today issue No. 541) Information transparency & disclosure was ranked A+ vs. stock-listing companies (Securities and Futures Institute, from 2005.01.01 to 2006.12.31) 21
Credit Ratings and Risk Management Long-Term Debt Rating twa Short-Term Credit Rating twa-1 Precise on Market Risk, Credit and Operational Risk, Capital Allocation and Liquidity Risks President Securities could flexibly modify its ability of risk management, which depends on the requirements to adjust its risk operation by market variation. President Securities adequately controls its risk position, and by this effort decrease the dependence of the fluctuating market in Taiwan. The capital structure of President Securities is relatively proper for the case of its risk structure. 22
Strategic Development Move forward with consolidation within the President Group, thereby enhancing our securities business and financial services. Offer professional asset management and provide personalized financial planning services. Improve IT and enhance e-business infrastructure. Implement risk management practices and technologies, thereby improving profitability and stabilizing overall business operations. Focus on business development in China. 23
PSC Long-Term Business Strategy, China (1) Expand the Business Cross the Strait Develop Brokerage Channel in China Strategic Alliances Evaluate Wealth Management Business International Business Cooperation 24
PSC Long-Term Business Strategy, China (2) Establish Securities, Asset Management and Futures Corporations in China Build a Platform in China: Xiamen representative office Establish Asset Management Company: Acquire a Securities Firm: Acquire a Futures Corporation: 25
Goals of President Securities Corp. Integrate the resources of President Enterprise Corporation Uni-President Group PSC Subsidiaries Fully display integrated Corporate effects Deeply rooted in Taiwan President Securities Corp. President Capital Management Corp. President Futures Corp. President Investment Trust Corp. President Personal Insurance Agency Co., Ltd. Comprehensive Financial management Step towards for Great China region President Securities (Hong Kong) Limited Shanghai Representative Office, President Securities (Hong Kong) Limited Leverage corporate strength Integrate securities conglomerate Establish mutually beneficial strategic alliances Become a first-class securities company in Great China Region 26