1q19 performance review - ir-cloud.com cd… · winterthur taiwan from axa 2007 acquired pca life...

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1

1Q19 Performance Review

May 2019




2

This presentation has been prepared by China Development Financial Holding Corporation and/ or its affiliates (together, “CDF” or the “Group”) for

the exclusive use of the party to whom CDF delivers this presentation to (“Recipient”).

The information in this presentation should be considered in the context of the circumstances prevailing at the time of its presentation and has not

been, and will not be, updated to reflect material developments which may occur after the date of this presentation. The slides forming part of this

presentation have been prepared solely to support discussion about the Group with the Recipient.

This presentation also contains information and statistics relating to the banking and related industries. The Group has derived such information and

data from unofficial and independent sources, without independent verification. The Group cannot ensure that these sources have compiled such

data and information on the same basis or with the same degree of accuracy or completeness as are found in other industries. You should not place

undue reliance on statements in this presentation regarding the banking and related industries. No representation or warranty, express or implied, is

made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of any information or opinion contained herein.

None of the Group, or any of their respective directors, officers, employees, agents or advisers shall be in any way responsible for the contents

hereof, or shall be liable for any loss whether directly or indirectly arising from use of the information contained in this presentation or otherwise

arising in connection therewith.

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or in part, without the prior written consent of the Group.

Disclaimer




3

Contents

SECTION 1 Business Overview 4

SECTION 2 China Life 7

SECTION 3 KGI Bank 10

SECTION 4 KGI Securities 26

SECTION 5 CDIB Capital Group 32

SECTION 6 Financial Highlights 42




4

Business Overview1.




5

KGI Securities reported profit of NT$1,120mn in 1Q19, thanks to the capital market recovery

and a declining bond yield, as well as resumed profitability from overseas subsidiaries

CDF – 1Q19 Results

CDIB Capital Group was the largest profit contributor

CDIB Capital Group contributed profit of NT$1,236mn in 1Q19

CDIB Capital Group’s unrealized gains amounted to NT$1.2bn as of March 31, 2019

CDIB Capital Group will accelerate asset monetization and focus on asset management

business; assets under management exceeded NT$43.3bn as of March 31, 2019

CDIB Capital Group

KGI Bank has been capitalizing on group resources to further reduce funding costs and

strengthen cross-selling synergies as well as profitability

Growing corporate and mortgage loans continued to boost lending balance, whilst reducing

the foreign-currency bond position in the banking book portfolio. KGI Bank registered profit of

NT$862mn in 1Q19

KGI Bank reported an NPL ratio of 0.15%, LLR coverage ratio of 1.26%, and NPL coverage

ratio of 837.5% as of March 31, 2019, compared favorably with the industry average of 0.25%,

1.39%, and 549.7%, respectively

KGI Bank

KGI Securities

Note: 1. In addition to KGI Securities’ 9.63% stake in China Life, CDF successfully completed its tender offer to acquire 25.33% (or 880mn common shares) of China Life on September 13, 2017 and now

owns a 34.96% stake, thereby becoming the largest shareholder of China Life.

China Life’s 1Q19 net profit was NT$2.8bn; CDF recognized an investment gain of NT$0.7bn

from China Life in 1Q19

Delivered 55% YoY growth in first year premium income (FYP); total assets amounted to

NT$1.8tn

Shareholders’ equity reached NT$101.6bn as of the end of March 2019, supported by the

rebound of unrealized gains on financial assets

China Life1




6

Profit contribution by subsidiary under CDF, NT$mn

Profit contribution by subsidiary

CDIB Capital Group Contributed Most Profit in 1Q19 Among Subsidiaries

CDF – 1Q19 Net Profit

Note: 1. CDF’s net income excludes income attributable to non-controlling interests; 2. Investment income from KGI Bank, KGI Securities and China Life has been

adjusted for the purchase price allocation; 3. China Life’s net profit in 1Q19 was NT$2.8bn, whilst CDF recognized an investment income of NT$0.7bn from China Life

in 1Q19, adjusted for the purchase price allocation adjustment and the recognition of investment income on a pro-rata basis




7

China Life2.




8

648.8

1,107.3

1,323.7

1,465.7

1,711.4 1,817.4

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800 Total Assets

1963

Established

Listed on the

Taiwan Stock

Exchange

1995

2003Professional

management team

joined

Acquired

Winterthur Taiwan

from AXA

2007

Acquired

PCA Life

2009

2010Jointly invested

CCB Life

with China Construction Bank

2008Avoid the subprime

turmoil during

financial crisis

2016 Included into

TWSE CG 100

Index

2014 2015 2016 2017 2018

Maintains steady asset growth and sufficient capital level

369%

>300%357%

272%

350%

RBC Ratio1

Note: 1. Risk-based capital Ratio

2015 2016 2017 2018 1Q19

82.6 81.1 95.3

73.1

101.6

Shareholders’ equityNT$bn

Total assets

Surpassed

NT$1 trillion

2014

CDF holds 34.96%

shares of China Life after the

completion

of the tender offer

2017

◆

◆

◆

◆

◆

2018Completed the acquisition of

Allianz Taiwan Life’s

traditional policies and

system integration

Included into

FTSE4Good

TIP Taiwan

ESG Index

1Q19

NT$bn

◆

2015~2019

Ranked among the top 5% of

the Corporate Governance

Evaluation Awards for

5 consecutive years

China Life – Performance Highlights




9

2015 2016 2017 2018 1Q18 1Q19

79.1 100.5

126.2 151.5

35.2 28.2

83.1

90.6

80.2

150.3

30.6 47.5

FYP Renewal premium

2015 2016 2017 2018 1Q18 1Q19

9.17

9.47

9.08

10.18

3.68

2.81

Total premium

Delivers solid operation results and premium growth

Net profits

162.2

75.7

191.1206.4

65.8

301.8

15%

China Life – Performance Highlights

NT$bn NT$bn




10

KGI Bank3.




11

KGI Bank – Profitability

Pre-provision operating profits (PPOP), NT$bn

Note: 2015 were pro-forma figures, including corporate banking and global market business

transferred from CDIB Capital Group

Core Income Saw Steady GrowthNet profit, NT$bn



Core income growth remained steady

1.2

1.1Provision,

etc.

Deferred

Tax

Asset 0.6Deferred

Tax

Asset




12

KGI Bank – Profitability (Cont’d)

ROAA, percent

ROAE, percent





Core Income Saw Steady Growth

Core income growth remained steady




13

Steady growth in net revenue generated from consumer and corporate banking

KGI Bank – Net Revenue

(NT$mm) 2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Consumer banking1 5,334 4,835 4,992 5,355 1,320 1,370 1,354 1,311 1,320

Corporate banking2 2,646 2,659 2,932 3,320 800 826 848 847 933

Global markets 2,442 2,935 3,087 (180) 40 4 663 (887) 206

Other 536 359 482 574 138 205 93 139 194

Total net revenue 10,958 10,789 11,493 9,069 2,298 2,404 2,958 1,409 2,654

(% of total) 2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Consumer banking1 48.7 44.8 43.4 59.0 57.5 57.0 45.8 93.0 49.8

Corporate banking2 24.1 24.6 25.5 36.6 34.8 34.3 28.7 60.1 35.2

Global markets 22.3 27.2 26.9 (2.0) 1.7 0.2 22.4 (62.9) 7.8

Other 4.9 3.3 4.2 6.3 6.0 8.5 3.1 9.8 7.2

Total net revenue 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Note: 1. Including consumer banking and wealth management; 2. Including corporate banking, commercial banking and merchant banking; 3. 2015 were the pro-forma figures post CDIB Capital Group

business transfer




14

Diversified loan portfolio with better loan growth momentum than peers

KGI Bank – Loans

(NT$bn) 2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Corporate loans 145.2 175.7 200.8 228.3 217.0 229.7 229.5 228.3 233.3

Large corporations 133.7 161.1 181.8 204.3 197.2 209.1 208.9 204.3 204.5

SMEs 11.6 14.5 19.0 24.0 19.8 20.6 20.6 24.0 28.8

Secured consumer loans 40.7 45.8 60.8 74.7 64.2 68.8 72.1 74.7 76.0

Mortgage 40.6 45.7 60.7 74.7 64.2 68.7 72.1 74.7 75.9

Others 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0

Unsecured consumer loans 35.0 34.5 36.0 37.2 36.1 36.7 37.0 37.2 37.2

Cash card 16.2 15.0 14.5 13.8 14.2 14.1 14.0 13.8 13.5

Personal loans 18.8 19.5 21.5 23.3 21.9 22.5 23.0 23.3 23.7

Total loans 220.9 255.9 297.7 340.2 317.4 335.1 338.6 340.2 346.5

Credit card 2.7 2.7 2.7 2.8 2.7 3.3 3.0 2.8 2.7

AR/ forfaiting/ China advance 32.3 18.6 16.8 17.6 19.6 21.1 20.7 17.6 16.1

Guarantees 12.0 10.7 11.9 14.8 13.2 14.8 15.9 14.8 20.7

Total credit 268.0 287.8 329.1 375.5 352.9 374.2 378.1 375.5 385.9

Total loans YoY/ QoQ (%) (3.6) 15.8 16.3 14.3 6.6 5.6 1.0 0.5 1.8

Total credit YoY/ QoQ (%) (10.6) 7.4 14.3 14.1 7.2 6.1 1.0 (0.7) 2.8

Note: 2015 were the pro-forma figures post CDIB Capital Group business transfer




15

KGI Bank – Loans (Cont’d)

(% of total) 2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Corporate loans

Large corporations 60.5 63.0 61.1 60.0 62.1 62.4 61.7 60.0 59.0

SMEs 5.2 5.7 6.4 7.1 6.2 6.1 6.1 7.1 8.3

Secured consumer loans

Mortgage 18.4 17.9 20.4 21.9 20.2 20.5 21.3 21.9 21.9

Others 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Unsecured consumer loans

Cash card 7.3 5.9 4.9 4.1 4.5 4.2 4.1 4.1 3.9

Personal loans 8.5 7.6 7.2 6.9 6.9 6.7 6.8 6.9 6.9

Total loans 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Foreign currency loans 20.5 24.7 28.2 29.2 28.6 30.7 29.8 29.2 39.3


Diversified loan portfolio with better loan growth momentum than peers




16

KGI Bank – Corporate Banking Loan Book

Well-diversified loan portfolio with focus on service and technology industries

Loan Breakdown By Industry

Note: 1. 2015 were pro-forma figures post CDIB Capital Group business transfer; 2. Excluding CDC Finance & Leasing Corp. Total consolidated assets of CDC Finance & Leasing Corp.: NT$4,668mn as

of Dec. 31, 2015, NT$4,603mn as of Dec. 31, 2016, NT$3,974mn as of Dec.31, 2017 and NT$4,177mn as of Dec. 31, 2018; NT$3,926mn as of Mar. 31, 2018, NT$4,076mn as of Jun. 30, 2018,

NT$4,110mn as of Sept. 30, 2018, NT$4,177mn as of Dec. 31, 2018 , and NT$4,283mn as of Mar. 31, 2019

(% of total loan) 2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Services 26.0 27.0 32.0 38.2 33.5 36.2 36.7 38.2 38.8

Information, communication, tech 29.5 26.2 24.7 21.6 23.4 23.2 22.6 21.6 19.2

Real estate 9.6 7.6 9.1 9.5 8.6 8.2 7.9 9.5 10.8

Plastics, rubber 9.4 8.4 7.9 6.6 8.1 7.2 7.5 6.6 6.8

Transportation 7.3 7.7 5.0 3.5 4.9 4.4 4.5 3.5 4.7

Energy 2.2 1.8 1.6 2.2 2.1 2.3 2.2 2.2 2.1

Textiles 1.3 2.1 2.0 1.6 2.3 2.2 1.9 1.6 1.6

Others 14.7 19.2 17.6 16.8 17.1 16.3 16.6 16.8 16.0

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Total loans (NT$bn) 145.2 175.7 200.8 228.3 217.0 229.7 229.5 228.3 233.3




17

Deposit breakdown, percent; total deposits, NT$bn

Demand Deposit Ratio Has Been Gradually Increasing

Continue to optimize deposit mix to reduce funding cost

KGI Bank – Deposits





18

Loan-to-deposit ratio has been maintained within a stable range

KGI Bank – Liquidity

Loan-to-deposit ratio (LDR), percent


Loan-To-Deposit Ratio Has Stabilized




19

KGI Bank – Interest Spread & Net Interest Margin (NIM)

Overall interest spread, percent

Overall Interest Spread Declined due to Higher Cost of Funds for Foreign Currency Deposits

NIM, percent

NIM Declined Slightly due to a Narrowing Interest Spread & Bond Yield Volatility



Interest spread and NIM have dropped slightly




20

Non-performing loan ratio, non-performing loan coverage, percent

NPL Ratio & NPL Coverage Have Remained Stable

Asset quality remained intact

KGI Bank – Asset Quality

Loan loss reserve, NT$mn; loan loss reserve coverage (LLR), percent

Stable LLR Coverage


Note: 1. 2015 were the pro-forma figures post CDIB Capital Group business transfer Note: Banking peers’ loan loss reserve coverage was 1.39% as of March 31, 2019

Note: Banking peers’ average NPL ratio was 0.25% and peer average NPL coverage ratio was

549.7% as of March 31, 2019




21

Actively boost credit card spending

KGI Bank – Credit Cards & Cash Cards

2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Credit card

Credit cards in circulation ('000) 506 498 452 419 431 424 425 419 418

Active credit cards ('000) 211 198 192 193 192 193 192 193 195

Monthly spending per credit card (NT$) 1,900 2,124 2,314 2,545 2,392 2,816 2,417 2,413 2,423

Spending (NT$mn) 11,538 12,696 12,546 12,793 3,093 3,586 3,082 3,032 3,042

Credit card revolving (NT$mn) 1,153 1,102 1,081 1,087 1,057 1,059 1,076 1,087 1,074

Cash card

Cash cards with credit line ('000) 516 502 494 488 493 492 490 488 486

Cash cards with balances ('000) 355 343 335 328 333 332 330 328 326

Cash card loan outstanding (NT$mn) 16,187 14,986 14,516 13,837 14,184 14,118 13,985 13,837 13,490




22

KGI Bank – Net Fee Income

Continue to enhance fee income

Net Interest Income & Net Fee Income


(NT$mn) 2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Net interest income 7,327 5,763 6,385 7,147 1,778 1,825 1,812 1,731 1,638

Net fee income 1,861 1,927 2,017 2,275 588 588 555 545 605

(NT$mn) 2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Wealth management 926 953 1,151 1,176 340 292 277 267 259

Loans 399 391 387 474 107 130 121 116 190

TMU 358 421 293 463 102 124 120 117 111

Cards 178 162 185 162 39 41 37 45 45

Net fee income 1,861 1,927 2,017 2,275 588 588 555 545 605

Net Fee Income Mainly Generated From Wealth Management




23

Cost-to-income ratio, percent

Good Control of Expenses, While 1Q19 Cost-to-Income Ratio Has Been Restored

Cost-to-income ratio has been maintained within a reasonable range during business

expansion

KGI Bank – Efficiency

Note: 2015 were the pro-forma figures post CDIB Capital Group business transfer Note: A higher cost-to-income ratio in 4Q18 was due to trading and evaluation losses and the ratio should return to the reasonable range once the revenue improves




24

Capital adequacy ratio, percent

Capital Position Remains Solid Despite Robust Loan Growth

Solid capital position

KGI Bank – Capitalization

Tier-1 capital ratio, percent






25

KGI Bank – Global Markets

(% of total market value) 20154 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

TW GB, municipal 52.8 74.3 55.3 55.8 52.6 52.4 53.0 55.8 58.2

TW negotiable CD +

commercial paper0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Foreign GB 0.0 7.3 0.0 0.8 0.9 0.9 0.9 0.8 0.9

TW corporate/ bond & bank

debenture0.0 0.0 0.0 1.1 1.1 1.2 1.1 1.1 1.1

Foreign corporate/ bond &

bank debenture39.9 14.7 40.0 40.5 43.9 43.6 43.1 40.5 37.9

Equity 7.3 3.7 4.6 1.9 1.5 1.9 2.0 1.9 1.9

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Total market value1 (NT$mn) 74,202 128,669 115,160 141,585 133,855 127,608 133,021 141,585 137,452

Total cost1 (NT$mn) 74,953 131,072 115,927 144,215 135,663 129,463 134,980 144,215 137,924

Unrealized profits2 (NT$mn) (751) (2,403) (767) (2,630) (1,808) (1,855) (1,959) (2,630) (472)

Realized profits3 (NT$mn) 3,612 2,714 2,801 709 282 373 763 709 781

Breakdown of Banking Book Portfolio (Market Value)

Note: 1. Excluding bank deposits, interbank lending, repos, bonds and financial assets recorded at trading book (including bond trading and derivatives); 2. Unrealized loss resulting from higher bond

yields and widening credit spreads in European bonds; 3. Realized profits include dividends and interest received as well as realized gains on disposal; 4. 2015 are pro-forma figures post CDIB Capital

Group business transfer

Banking book portfolio is focused on high-quality government/ corporate bonds and

blue-chip stocks




26

KGI Securities4.




27

KGI Securities – Net Revenue

Brokerage commissions were the main revenue driver

Net revenue breakdown, NT$mn

Brokerage Commissions Were KGI Securities’ Main Revenue Driver In 1Q19




28

(NT$mn) 2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Net brokerage/ futures/ warrant commissions 8,159 6,208 7,733 8,556 2,294 2,256 2,089 1,918 1,663

Net underwriting fees 667 1,041 920 728 209 154 225 140 107

Net fees & commissions 8,826 7,248 8,652 9,284 2,503 2,409 2,314 2,057 1,770

Net interest income 2,398 1,899 1,869 1,836 479 524 484 350 294

Net investment income 2,246 3,368 6,699 1,733 137 1,158 602 (163) 1,055

Other revenue 577 1,050 1,609 493 380 (361) 224 251 267

Total net revenue 14,047 13,565 18,830 13,347 3,498 3,729 3,624 2,495 3,385

KGI Securities – Net Revenue (Cont’d)

Brokerage business remained the major income source

Note: The figures above included the contribution from overseas subsidiaries

Brokerage Business Remained the Major Income Source in 1Q19, While Investment Income Has Been

Restored Thanks to a Capital Market Rebound




29

KGI Securities – Profit Breakdown

Resumed profitability from overseas subsidiaries

(NT$mn) 2015 2016 20171 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Taiwan 1,943 3,201 7,227 2,932 694 872 1,351 15 1,047

overseas Subsidiaries 610 (718) 850 833 277 192 215 149 361

Hong Kong2 417 (1,044) 571 479 192 119 123 45 255

Thailand 192 327 279 354 84 74 92 104 106

Total 2,552 2,484 8,078 3,765 970 1,065 1,566 164 1,408

(% of total profits) 2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Taiwan 76.1 128.9 89.5 77.9 71.5 81.9 86.3 9.2 74.3

overseas Subsidiaries

Hong Kong2

16.4 (42.1) 7.1 12.7 19.8 11.2 7.8 27.6 18.1

Thailand 7.5 13.2 3.4 9.4 8.7 6.9 5.9 63.2 7.6

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Profit Breakdown By Geographical Location

Note: 1. Including a one-off valuation gain of NT$3,834mn associated with KGI Securities’ stake in China Life in 3Q17; 2. Including Singapore and Indonesia subsidiaries




30

KGI Securities – Brokerage & Margin Loans

Brokerage business provides a stable recurring income source

(NT$mn) 2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Retail 2,722 2,196 3,226 3,501 880 1,011 876 734 618

Institutional 507 459 491 566 146 132 146 141 137

Total 3,229 2,655 3,717 4,067 1,026 1,143 1,022 876 754

Market share (%) 8.1 8.3 8.3 8.2 8.0 8.0 8.1 8.8 8.6

(NT$mn) 2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

KGIS Average Balance 23,675 18,771 21,622 22,737 20,245 20,913 19,429 13,004 12,401

Market share (%) 9.5 8.6 8.4 8.0 8.4 8.3 8.0 7.4 7.3

Breakdown Of Brokerage Commissions By Client Segment (Taiwan Only)

Margin Loans (Taiwan Only)




31

KGI Securities – Investment Portfolio

High-quality investment portfolio

(% of total) 2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Fixed-income 68.5 56.3 65.9 75.4 68.7 68.7 74.4 75.4 72.6

Corporate bond & financial debenture 26.5 37.9 40.0 54.6 38.1 40.1 48.3 54.6 53.6

Convertible bond 9.7 7.3 7.4 3.6 5.6 5.4 4.7 3.6 3.4

Exchangeable bond 0.0 0.0 0.2 0.0 0.2 0.1 0.0 0.0 0.0

Government bond 32.2 11.1 18.4 17.1 24.8 23.2 21.3 17.1 15.6

Stocks 27.9 38.5 26.4 15.5 23.5 23.7 17.9 15.5 18.5

Others 3.6 5.2 7.7 9.1 7.8 7.6 7.7 9.1 8.9

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Total market value (NT$mn) 72,177 60,709 56,979 60,432 62,766 67,316 65,804 60,432 66,745

Note: 1. Includes hedged position for warrants; 2. Excludes overseas subsidiaries’ balance




32

CDIB Capital Group5.




33

CDIB Capital Group – Direct Investment Portfolio

(NT$mn) 2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Principal investment (Market value) 53,809 48,354 43,070 31,145 41,326 37,548 35,307 31,145 33,190

Greater China 39,855 34,866 30,702 18,962 29,108 23,634 21,962 18,962 20,531

International 13,954 13,489 12,368 12,183 12,219 13,914 13,345 12,183 12,659

Total capital invested 48,221 45,235 41,563 29,819 38,833 33,651 32,381 29,819 32,012

Greater China 37,141 34,180 31,045 19,181 28,293 22,382 20,842 19,181 20,133

International 11080 11,055 10,518 10,637 10,540 11,270 11,539 10,637 11,879

Unrealized profits 5,587 3,119 1,507 1,327 2,493 3,897 2,926 1,327 1,178

Greater China 2,714 685 (342) (219) 814 1,252 1,120 (219) 398

International 2,873 2,434 1,849 1,546 1,679 2,645 1,806 1,546 780

Monetization of direct investment portfolio will continue




34

Region Taiwan Greater China International

Fund nameCreative

Fund

Healthcare

Fund

Growth

Fund

Innovation

Fund2

Ali

Fund

Hua Nan

Fund

Hua Dong

Fund

Yida

Healthcare

Fund

Asia

Partners

Fund

Funds

Partners

Fund

Global

Opportunities

Fund

Fund sizeNT$1,500

mn

NT$1,750

mn

NT$4,540

mn

NT$1,290

mn

US$100

mn

RMB1,000

mn

RMB1,000

mn

RMB800

mn

US$405

mn

US$169

mn

US$116

mn

Vintage year 2013 2014 2017 2017 2016 2014 2015Under

processing 2014 2015 2018

Shareholding1 39.8% 34.3% 33.3% 23.3% 0.0% 35.0% 30.0%Anticipated

30%24.7% 0% 8.6%

Investment

target

Digital content,

fashion brands,

media and

creative

tourism

Channels and

service

providers of

medical and

healthcare-

related

industries

Technology

and

manufacturing

companies

that intend to

focus on

“smart” and

“green”

technologies

Cloud service,

mobile internet

and

e-commerce

platforms

Supporting

Taiwanese

entrepreneurs

who intend to

distribute

products and

services via

Alibaba’s

ecosystem

Digital content,

consumption

and

healthcare

Consumption,

intelligent

machinery,

environmental

protection,

communications

and internet

Pharmaceuticals,

medical

equipment,

healthcare

consulting/

goods and

services

channels

Taiwanese,

South Korean

and US

companies in

Asia-Pacific

region that

seek long-term

prospects in

China

International

private equity

fund and

portfolio

Market leading

high-growth

companies,

mainly in

North America

and Asia

Pacific

CDIB Capital Group – Focusing On Asset Management

Continue to focus on fundraising

Note: 1. Ownership percentage of CCG and its subsidiaries; 2. Including the parallel fund “CDIB Capital Innovation Accelerator (Cayman) Limited” with fund size of NT$450mn




35

2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Undrawn capital 802 560 324 218 312 312 296 218 198

Unrealized value 816 1,053 1,133 1,231 1,170 1,191 1,180 1,231 1,253

Assets under management 1,617 1,613 1,457 1,449 1,482 1,503 1,476 1,449 1,451

Undrawn capital 1,269 697 678 267 542 484 386 267 267

Unrealized value 705 1,625 1,133 1,554 1,289 1,266 1,520 1,554 1,754


Undrawn capital 0 0 1,065 797 1,057 1,043 1,004 797 743

Unrealized value 0 0 192 462 187 242 310 462 543

Assets under management 0 0 1,257 1,259 1,244 1,285 1,314 1,259 1,286

Undrawn capital 0 0 2,653 3,031 3,569 3,569 3,390 3,031 2,740

Unrealized value 0 0 942 1,649 1,046 1,157 1,343 1,649 1,987


Undrawn capital 258 190 485 367 434 416 416 367 367



Undrawn capital 299 355 382 327 332 332 327 327 327



Undrawn capital 254 134 67 54 67 63 54 54 55


Assets under management 423 403 449 421 460 457 424 421 448

Undrawn capital 0 96 75 51 75 71 67 51 51



Undrawn capital 29 29 29 29 29 29 29 29 29



Undrawn capital 0 0 0 99 0 0 117 99 99



Undrawn capital 14,237 12,129 13,783 14,569 14,011 13,809 16,503 14,569 14,325

Unrealized value 13,407 20,070 24,327 27,268 25,173 25,844 25,599 27,268 28,939


US$mn Funds Partners Fund1

NT$mn Total AUM2

US$mnGlobal Opportunities

Fund

Asia Partners Fund

US$mn Ali Fund

US$mn

Hua Nan Fund

RMBmn Hua Dong Fund

RMBmn

Innovation Fund

NT$mn Growth Fund

NT$mn

Creative Fund

NT$mn Healthcare Fund

NT$mn

CDIB Capital Group – Focusing On Asset Management (Cont’d)

Private-equity funds continue to bear fruit on steadily increasing portfolio valuation

Note: 1. Managed by CDIB Capital Group for global institutional investors; 2. Figures have been converted into New Taiwan dollars using the exchange rate on the last day of each quarter; assets under

management = undrawn capital + unrealized value; realized gains have been excluded from unrealized value; 3. Estimated figure

3




36

Portfolio Breakdown - Greater China Portfolio

Note: 1. Banking-related strategic investment includes Taiwan Stock Exchange Corporation; 2. Venture capital-related business excluding cash held by venture capital-related strategic investment, i.e.,

CDIB Private Equity (Hong Kong) Corp. Ltd., CDIB Private Equity (China) Corporation, CDIB Capital Creative Industries Limited, CDIB Capital Healthcare Ventures Limited, CDIB Capital Innovation

Accelerator CO., Limited, CDIB Capital Growth Partners L.P., CDIB Private Equity (Fujian) Enterprise (L.P.), CDIB Yida Private Equity (Kunshan) Enterprise (L.P.), CDIB & Partners Investment Holding

Corp., and CDIB Capital International Corp.

(NT$mn) 2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Strategic investment 16,484 15,121 13,872 12,003 14,340 14,164 14,384 12,003 13,093

Banking-related1 8,843 6,278 2,953 1,386 3,145 3,294 3,290 1,386 1,386

Venture capital-related2 7,641 8,843 10,919 10,617 11,195 10,870 11,093 10,617 11,706

Direct investment 23,371 19,744 16,831 6,959 14,767 9,470 7,578 6,959 7,438

Total 39,855 34,866 30,702 18,962 29,108 23,634 21,962 18,962 20,531

(% of total, percent) 2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Strategic investment 41.4 43.4 45.2 63.3 49.3 59.9 65.5 63.3 63.8

Banking-related1 22.2 18.0 9.6 7.3 10.8 13.9 15.0 7.3 6.8

Venture capital-related2 19.2 25.4 35.6 56.0 38.5 46.0 50.5 56.0 57.0

Direct investment 58.6 56.6 54.8 36.7 50.7 40.1 34.5 36.7 36.2

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Monetization of direct investment portfolio will continue

CDIB Capital Group – Greater China Portfolio




37


High-quality portfolio with focus on growth sectors

Note: Excluding strategic investment

(% of direct investment, percent) 2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Consumer & services 43.5 35.4 26.6 53.3 29.6 46.4 48.0 53.3 52.4

Industrial & manufacturing 14.8 15.5 12.7 17.3 13.6 17.9 18.3 17.3 17.2

PC & components 16.5 21.6 29.2 10.6 30.9 13.1 13.3 10.6 11.2

Solar 4.7 3.9 6.8 5.8 9.0 8.9 6.9 5.8 6.2

Semiconductor 7.8 9.8 13.4 5.3 8.7 6.3 5.7 5.3 5.3

Financial 2.5 2.9 1.5 3.1 1.8 2.8 2.9 3.1 2.7

Optical 3.1 2.7 3.9 0.5 1.4 0.4 0.6 0.5 0.4

Telecom 1.8 2.2 2.1 0.2 1.3 0.2 0.2 0.2 0.3

Others 5.3 6.0 3.7 3.9 3.7 4.0 4.1 3.9 4.3

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Portfolio Breakdown - Greater China Portfolio




38


Listed companies accounted for approximately 10% of the portfolio

(% of total, percent) 2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Listed 22.4 25.5 34.1 9.7 27.9 11.5 10.7 9.7 9.0

Emerging 13.5 8.9 7.3 5.1 5.9 6.5 5.5 5.1 5.5

Unlisted 64.1 65.6 58.6 85.2 66.2 82.0 83.8 85.2 85.5

Total market value 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0


Total capital invested (NT$mn) 37,141 34,180 31,045 19,181 28,293 22,382 20,842 19,181 20,133

Unrealized profits (NT$mn) 2,714 685 (342) (219) 814 1,252 1,120 (219) 398

Market Value & Capital Invested - Greater China Portfolio

Note: Including strategic investment (excluding cash held by venture capital-related strategic investment) and direct investment




39

CDIB Capital Group – Greater China Portfolio (Cont’d)

Portfolio valuation has been affected by market movement

(NT$mn) 2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Divestment 1,801 1,324 1,693 1,557 (248) 187 263 1,356 91

Dividends 1,007 585 686 305 2 29 270 5 0

Equity pickup 441 443 175 49 154 (138) 96 (63) 57

Remuneration 30 51 50 18 2 2 11 2 1

Impairment (920) (915) (902) 0 0 0 0 0 0

Valuation gain/loss - - - (46) 965 467 (113) (1,366) 602

Realized profits 2,359 1,488 1,701 1,883 875 548 527 (66) 751

Unrealized profits 2,714 685 (342) (219) 814 1,252 1,120 (219) 398

Realized & Unrealized Gains/ Losses - Greater China Portfolio

Note: Including strategic investment and direct investment




40

CDIB Capital Group – International Portfolio

Portfolio value above par and further appreciation expected

(% of international portfolio, percent) 2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Third-party funds 33.7 42.1 50.4 52.2 50.9 48.7 49.8 52.2 58.9

Direct investment and co-investment 66.3 57.9 49.6 47.8 49.1 51.3 50.2 47.8 41.1

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0


Total capital invested (NT$mn) 11,080 11,055 10,518 10,637 10,540 11,270 11,539 10,637 11,879

Unrealized profits (NT$mn) 2,873 2,434 1,849 1,546 1,679 2,645 1,806 1,546 780

Market Value & Capital Invested - International Portfolio




41

CDIB Capital Group – International Portfolio (Cont’d)

Portfolio valuation has been affected by market movement

(NT$mn) 2015 2016 2017 2018 1Q18 2Q18 3Q18 4Q18 1Q19

Third-party funds 400 284 616 (3) 243 70 (265) (51) 134

Direct investment and co-investment 883 672 1,916 1,251 450 707 (496) 590 85

Realized profits 1,283 957 2,532 1,247 693 776 (761) 539 219

Unrealized profits 2,873 2,434 1,849 1,546 1,679 2,645 1,806 1,546 780

Realized & Unrealized Gains/ Losses - International Portfolio




42

Financial Highlights6.




43

Financial Snapshots – CDF

Four core business engines provide diversified earning sources

CDF (consolidated) 2015 2016 2017 2018

Total assets (NT$bn) 866.7 892.2 2,392.5 2,717.8

Total net worth (NT$bn) 168.8 167.1 249.2 223.6

Total assets/ net worth (X) 5.1 5.3 9.6 12.2

Net profits (NT$bn)1 8.5 5.9 11.7 7.9

EPS (NT$/ share) 0.58 0.40 0.80 0.54

Book value per share (NT$/ share) 11.18 11.17 11.60 10.97

Cash dividend per share (NT$/ share) 0.50 0.50 0.60 0.30

Adjusted ROAE (%)2 5.1 3.6 7.1 4.7

ROAA (%) 1.0 0.7 0.8 0.5

Note: 1. Excluding profits attributable to non-controlling interests; 2. Adjusted ROAE excludes non-controlling interests




44

Financial Snapshots – China Life

China Life (consolidated) 2015 2016 2017 2018

First-year premium (NT$bn) 83.1 90.6 80.2 150.3

Total premium (NT$bn) 162.2 191.1 206.4 301.8

Investment income (NT$bn) 47.2 47.1 47.4 51.8

Net profits (NT$bn) 9.2 9.5 9.1 10.2

EPS (NT$/ share) 2.29 2.36 2.26 2.54

Total assets (NT$bn) 1,202.6 1,323.7 1,465.7 1,711.4


ROAE (%) 11.7 11.6 10.3 12.1

ROAA (%) 0.8 0.8 0.7 0.6

Sustained profitability supported by steady growth of premium income and investment income




45

Financial Snapshots – KGI Bank

Improving profit source

KGI Bank (consolidated) 2015 2016 2017 2018

Total assets (NT$bn) 546.2 572.1 590.1 683.3



Net profits (NT$bn)1 5.2 3.8 3.2 2.2

EPS (NT$/ share) 1.13 0.83 0.69 0.47


CAR ratio (%) 15.0 13.2 14.2 13.4

ROAE (%) 9.2 6.6 5.32 3.63

ROAA (%) 0.9 0.7 0.5 0.3

Note: 1. Excluding profits attributable to non-controlling interests; 2. The adjusted ROAE, which excluded the impact derived from the reduction of deferred tax asset (NT1.2bn), rose to 7.3% in 2017; 3.

The adjusted ROAE, which excluded the impact derived from the reduction of deferred tax asset (NT0.6bn), rose to 4.6% in 2018; 4. 2015 was the pro-forma figures post CDIB Capital Group business

transfer




46

Financial Snapshots – KGI Securities

Leading securities firm in Taiwan with extensive network presence

KGI Securities (consolidated) 2015 2016 2017 2018




Net profits1 (NT$bn) 2.6 2.5 8.2 3.8

EPS (NT$/ share) 0.67 0.68 2.48 1.16


CAR ratio (%) 339.0 329.0 296.0 327.0

ROAE (%) 4.2 3.9 13.3 6.1

ROAA (%) 0.9 0.9 2.9 1.4

Note: 1. Excluding profits attributable to non-controlling interests




47

Financial Snapshots – CDIB Capital Group

Leading merchant bank in Taiwan with focus on private equity

CDIB Capital Group (consolidated) 2015 2016 2017 2018




Net profits1 (NT$bn) 4.9 1.5 3.4 2.3

EPS (NT$/ share) 1.49 0.71 1.63 1.13


ROAE (%) 5.3 2.1 5.5 4.5

ROAA (%) 1.8 2.1 5.3 4.3





48

Quarterly Financial Snapshots – CDF

Four core business engines provide diversified earning sources

CDF (consolidated) 1Q18 2Q18 3Q18 4Q18 1Q19

Total assets (NT$bn) 2,533.8 2,700.4 2,769.0 2,717.8 2,867.2

CDIB Capital Group (NT$bn) 58.7 55.5 50.2 50.4 52.0

KGI Securities (NT$bn) 297.6 313.1 321.5 277.5 312.8

KGI Bank (NT$bn) 666.7 709.5 723.0 683.3 697.3

China Life (NT$bn) 1,509.9 1,621.0 1,674.9 1,711.4 1,817.4

AMC2(NT$bn) 3.4 3.3 3.3 3.3 3.3

Total net worth (NT$bn) 246.1 230.1 240.9 223.6 257.5

Total assets/ net worth (X) 10.3 11.7 11.5 12.2 11.1

Net profits (NT$bn)1 3.3 2.8 2.4 (0.6) 3.6

CDIB Capital Group (NT$bn) 1.3 1.2 (0.3) 0.1 1.2

KGI Securities (NT$bn) 1.0 1.1 1.6 0.2 1.4

KGI Bank (NT$bn) 0.7 0.9 0.9 (0.3) 0.9

China Life (NT$bn) 3.7 2.6 4.2 (0.3) 2.8

AMC (NT$mn) 31.7 11.9 11.7 (20.0) 15.4

EPS (NT$/ share) 0.23 0.19 0.17 (0.05) 0.25

Book value per share (NT$/ share) 11.70 11.10 11.42 10.97 12.03

Adjusted Annualized ROAE (%)2 7.7 6.7 6.0 (1.6) 8.6

Annualized ROAA (%) 0.9 0.6 0.8 (0.1) 0.7

Note:1. Net profits excluded non-controlling interests; 2. Adjusted annualized ROAE excludes non-controlling interests




49

Quarterly Financial Snapshots – China Life

Asset size amounted to NT$1.8 trillion driven by robust business growth

China Life (consolidated) 1Q18 2Q18 3Q18 4Q18 1Q19

First-year premium (NT$bn) 30.6 39.4 41.2 39.1 47.5

Total premium (NT$bn) 65.8 71.1 81.8 83.2 75.7

Investment income (NT$bn) 12.1 13.2 15.6 10.9 14.1

Net profits (NT$bn) 3.7 2.6 4.2 (0.3) 2.8

EPS (NT$/ share) 0.92 0.68 1.06 (0.08) 0.70

Total assets (NT$bn) 1,509.8 1,621.0 1,674.9 1,711.4 1,817.4





50

KGI Bank (consolidated) 1Q18 2Q18 3Q18 4Q18 1Q19

Total assets (NT$bn) 666.7 709.5 723.0 683.3 697.3



Net profits (NT$bn)1 0.7 0.9 0.9 (0.3) 0.9

EPS (NT$/ share) 0.15 0.19 0.20 (0.07) 0.20


CAR ratio (%) 12.7 11.6 11.6 13.4 13.1

Annualized ROAE (%) 4.6 5.7 6.2 (2.3) 6.0

Annualized ROAA (%) 0.5 0.5 0.6 (0.2) 0.5


Quarterly Financial Snapshots – KGI Bank

Solid capitalization laying foundation for potential profit growth




51

Quarterly Financial Snapshots – KGI Securities

Profitability has been affected by market volatility

KGI Securities (consolidated) 1Q18 2Q18 3Q18 4Q18 1Q19




Net profits (NT$bn) 1 1.0 1.1 1.6 0.2 1.4

EPS (NT$/ share) 0.32 0.33 0.48 0.06 0.43


Annualized ROAE (%) 6.4 7.0 10.0 1.2 8.8

Annualized ROAA (%) 1.4 1.4 2.0 0.3 1.9

Note: 1. Net profits excluded non-controlling interest




52

Quarterly Financial Snapshots – CDIB Capital Group

Asset monetization will continue with focus on asset management

CDIB Capital Group (consolidated) 1Q18 2Q18 3Q18 4Q18 1Q19




Net profits (NT$bn)1 1.3 1.2 (0.3) 0.1 1.2

EPS (NT$/ share) 0.65 0.58 (0.14) 0.04 0.61


Annualized ROAE (%) 9.7 8.7 (2.3) 0.8 10.2

Annualized ROAA (%) 9.4 8.4 (2.2) 0.7 9.7

Note: 1. Net profits excluded non-controlling interests




53

CDF Shareholding Structure

FINI holdings exceed 29.2%

Steadily Increasing FINI Holdings

Source: Taiwan Stock Exchange

FINI shareholdings, percent

Note: Shareholding percentage will be updated before the date of the Regular Shareholders’

Meeting each year

As of March 31, 2019

Top 10 Shareholders Of CDF

1. Shin Wen Investment Co., Ltd. 4.34%

2. China Life Insurance Co., Ltd. 3.76%

3. Jing Kwan Investment Co., Ltd. 2.79%

4. Bank of Taiwan Co., Ltd. 1.92%

5. Cathay Life Insurance Co., Ltd. 1.79%

6. Government of Singapore 1.64%

7.

JPMorgan Chase Bank N.A., Taipei Branch in

custody for Vanguard Total International Stock Index

Fund, a series of Vanguard Star Funds

1.50%

8. CTBC Bank Trust Account for KGI Securities 1.50%

9.Vanguard Emerging Markets Stock Index Fund, A

series of Vanguard International Equity Index Funds1.50%

10. Norges Bank 1.40%

Total 22.14%

Note: Shareholding percentage will be updated after the registration date of the Regular

Shareholders’ Meeting and ex-dividend each year




54

1st

2nd

3rd Coco Coco

DCF DCF DCF

Coco Coco

IPO PriceIndependent

Appraisal

DCF NAV NAV

IPO Candidate

Market priceIs the issuer

listed?

Early StageExpansion SurveillanceStable

Closing price on

the valuation date

* liquidity discount

factor1

Market price

Emerging Stocks

Valuation by stage of development2

Yes

Private Placement

Listed / OTC

Average monthly turnover in

the latest quarter > average median turnover of l isted

companies during the past one year?

Valuation on the

valuation date *

liquidity discount

factor1

Is a bench marking

price

available?

Is a binding price available in the next 3

months?

Fund-raising price or put option

Is a market price available in the past 3

months?

No

Yes

Yes

Yes Yes

Yes

YesYes

No

No No

No

No

No

No

Valuation Method

Valuation system co-developed with KPMG has improved transparency

Note 2: Stages of development

IPO

Candidate

The company has a qualified IPO

plan or has signed contracts with

recommended securities firms

Stable The company has main

operations >2 years with (1)

positive retained earnings for the

recent financial years, or (2) net

profits for the past 2 years

Expansion Main operations >2 years with net

loss for the recent financial years

Early Main operations <2 years

(excluding biotech companies still

in the R&D-phase)

Surveillance The company is in trouble (e.g.,

termination of operations or

liquidation)

Valuation

Method(s) Acronyms

DCF Discounted cash flow

Coco Competitor comparison

NAV Net asset value

Note 1: Based on

Black Scholes Model Daily

Average

Price

Range




55

CDF & Principal Subsidiaries

Organization structure

CDF and principal subsidiaries

China Development Asset Management Corp.

中華開發資產管理

China Development Financial Holdings

中華開發金控

CDIB Capital Group

中華開發資本

China Life

中國人壽

KGI Securities

凱基證券

KGI Bank

凱基銀行

Chung Hwa

Growth 4 Asset

Mgmt. Corp.

中華成長四

資產管理

(100%)

CDIB Capital Innovation

Advisors Corp.

開發創新管理顧問

(60%)

CDIB Private Equity

(Hong Kong) Co. Ltd.

(100%)

CDIB Venture Capital

(HK) Corp. Ltd.

(100%)

**CDIB Private

Equity (China)

Corp. provides

advisory service

to general

partners of CDIB

Yida Private

Equity (Kunshan)

Co. Ltd./ CDIB

Private Equity

(Fujian) Co. Ltd.

CDIB

Private Equity (China) Corp.

中華開發股權投資管理

(100%)

CDIB Capital

International

Corp. (CCIC)

(100%)

CDIB Global

Markets Limited

(100%)

CDIB Capital

Investment

I, II Limited

(100%)

CDIB

International

Leasing Corp.

中華開發

國際租賃

(100%)

* CDIB Capital

Management

Corporation is

engaged to

manage CDIB

Venture Capital

Corporation

CDIB Capital

Management

Corporation

中華開發

資本管理顧問

(100%)

CDIB Venture Capital

Corporation

中華開發

創業投資

(100%)

CDIB

Management

Consulting

Corp.

中華開發

管理顧問

(100%)

Development

Industrial Bank

Asset Mgmt. Corp.

開發工銀

資產管理

(100%)

Chung Hwa

Growth 3 Asset

Mgmt. Corp.

中華成長三

資產管理

(100%)

CDC Finance

& Leasing

Corp.

華開租賃

(76.04%)

CDIB

Private Equity

(Fujian) Co. Ltd.

華開(福建)股權

投資管理

(70%)

CDIB Yida

Private Equity (Kunshan)

Co. Ltd.

華創毅達 (昆山)

股權投資管理

(65%)

*** CCIC is engaged to manage CDIB

Global Markets Limited, CDIB Capital

Investment I, II Limited and CDIB Asia

Partners Limited

CDIB Private Equity Mgmt.

(Fujian) Enterprise (Limited

Partnership)

華創(福建)股權投資管理

企業(有限合夥)

(70%)

CDIB Yida Private Equity Mgmt.

(Kunshan) Enterprise (Limited

Partnership)

昆山華創毅達股權投

資管理企業

(有限合夥企業) (65%)

CDIB Capital

International

(Hong Kong)

Corp. Ltd.

(100%)

CDIB Capital

International

(USA) Corp.

(100%)

CDIB Capital

International

(Korea) Corp.

(100%)

CDIB Capital

Asia Partners

Limited

(100%)

56% 20% 58.34% 27.08%

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