Nan Liu Enterprise Co., LTD.

1

Friendly

Reminder

Wiping hands frequently, keeps germs away

《 NanLiu 》is your best health guardian!

Nan Liu Enterprise Co., LTD.

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3

•Nonwovens Market

•1. Japan

•2. Asia

•3. China (Baby Wipes)

• Competitive Advantages

•1. R & D

•2. Future Favorable Factors

•3. Future Strategy

•4. Capacity Expansion Plan

•5. Company Introduction

•1. Historical Revenue &

Profit Records

•2. Net Profit Rate

•3. ROE

•4. Cash Flow Analysis

•5、Export Sales

Breakdown by Market

•1. What is nonwovens fabrics?

•2. Production Processes for

Nonwovens Fabrics

•3. Applications for Nonwovens

Fabrics

•4. NanLiu’s Products 1、

Preface 2、Finance

3、Market Analysis

4、Development

Summary

4

What Is Nonwoven Fabric?

Spunlace

Nonwoven Fabrics Traditional

Woven Fabrics

A disposable designed

for a single use

Superior strength

and durability

Definition and Value Chain of Nonwovens Fabrics

Nonwovens are a manufactured sheet, web or bat of directionally or randomly oriented fibers, bonded by friction, and/or cohesion and/or adhesion, excluding paper or products which are woven, knitted, tufted stitch bonded incorporating binding yarns or filaments, or felted by wet milling, whether or not additionally needled. The fibers may be of natural or man-made origin. They may be staple or continuous or be formed. –From EDANA DEFINITION

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Overall nonwoven capacity in

China reached 3.44mn tones in

2012, of which Spunlace

nonwoven accounted for 8% or

275.2k tones. Nanliu is the

largest Spunlace nonwoven

maker in Greater China that has

total capacity of 43.2k tones,

implying 15.7% volume shares.

Source：CNITA 2012

Production Process

Process：

6

Applications For Nonwoven

We focus：

7

Medical gown, wipes,

wet wipes, face masks,

cleansing wipes

A) Spunlace NW B) Wet Wipes

disposable surgical gowns

Face Masks, Cosmetics

C) Air Through NW &

Thermal Bond NW

Source: Nanliu

Nanliu’s Product

211

533

266

358 358

688

805

912

1081

1359 (unit：ton)

Revenue Breakdown

2013

2012

Plup/Spunlace nonwoven fabrics

account for 20% of overall medical

use nonwoven. DuPont is the major

supplier with 75-78% of market

share, followed by Nanliu’s 20%.

SMMS Nonwoven still accounts for

80% of medical use nonwoven

market given lower price

Source：CNITA 2012

Market Analysis - Surgical Gowns

Back-end Surface

Processing

Longer lead-time and more costly

Garment OEMs

Competitive Advantage

Competitive Advantage Nanliu’s one-stop

production：

From manufacture of

spunlace NW to back-end

surface processing

Pros：Shorter lead-time

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Before fine tune

Nanliu has many senior RDs with over 20 years

experience and better quality or shortest lead-

time of the globe

Competitive Advantage

After Nanliu’s fine tune

What is

Nanliu’s

advantage if

competitors

in China

purchase

the same

equipments

?

11 Including China Revenue

Source：Nanliu

Taiwan Revenue Only

Historical Revenue & Profit Trend

China site started

official operation

12

Source: Nanliu

CN

Y

CN

Y

Consolidated Month Revenue

25da

ys

Unit：NT$100million

Acc.Sales Jan

2014 3.96

YOY 11.76%

Unit：NT$100millIon

Con.Sales Q1 Q2 Q3 Q4 All year

2013 9.71 11.88 11.05 13.02 45.68

YOY 16.29% 22.85% 25.43% 28.27% 23.44%

25da

ys

2011.Jan~2014.Jan Revenue(NT$100 million)

25da

ys

25da

ys

25da

ys

CN

Y

13

Spunlace NW line MP by Aug. 2013

(6.2m wide/1,500 tonne/month; dedicated to wet wipes)

Air Through & Thermal Bond machine for baby

daipers’s surface material 2 product line machine in Pinghu; onstream in Sep 2014

Packaging machine for wet wipes a) 1 mini wet wipe machine in Pinghu; onstream in Aug 2013

b) 1 large wet wipe machine in Taiwan; onstream in Oct. 2013

c) 1 large wet wipe machine in Pinghu; onstream in Mar. 2014

High level of Automation equipments:

Capacity Expansion

14

Source: Nanliu

Net Profit Trend

Ramp-up period for China site

Net Profit Unit：NT$ 100million

15 Source: Nanliu

Gross Margin & Net Profit Trend

52.5

(pre-tax)

71.5

16 Source: Nanliu

Ramp-up period for China Site

Net Profit Trend

Net Margin(%；after tax)

6.46%

17 Source: Nanliu

Ramp-up period for China site

ROE Trend

2013Q1：4.99%

2013Q2：5.05%

2013Q3：6.90%

年度 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013(1~9)

當年度稅後淨利 43,828 33,137 69,283 60,709 98,221 118,793 43,738 109,180 100,477 47,445 5,282 139,461 196,996 263,802

A.營業活動淨現金OCF

104,159 46,201 81,214 110,097 157,519 186,770 209,840 219,557 45,771 52,432 182,384 279,499 430,754 449,117

B.投資活動淨現金ICF

(182,695) (33,609) (54,788) (44,177) (277,753) (139,031) (120,588) (419,030) (563,392) (134,708) (173,879) (207,441) (687,326) (275,860)

C.融資活動淨現金FCF

72,942 4,938 (26,363) (67,930) 171,400 77,588 (5,553) 161,432 334,916 106,116 81,582 (20,294) 209,425 (51,587)

營業活動淨現金/稅後淨利

237.65% 139.42% 117.22% 181.35% 160.37% 157.22% 479.77% 201.10% 45.55% 110.51% 3452.93% 200.41% 218.66% 170.25%

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Ramp-up Period for China site

Source: Nanliu

Net Profit

FCF

OCF/PAT

ICF

OCF

Cash Flow

Net Profit

Operating Cash Flow

Investment Cash Flow

Financial Cash Flow

China,

25.14%

Japan,

17.79%

Asia,

16.43%

Other,

1.95%2011

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Revenue Breakdown by Country

Revenue Breakdown by Market

China,

34.19%Japan,

14.25%

Asia,

15.44%

Other,

2.00%2012

total 61.31% total 65.88%

China,

43.71% Japan,

13.72%

Asia,

15.40%

Other,

2.31% 2013.01~09

total 75.14%

20 20

31.7 31.934.2

36 37 38.2

34

37.6 38.640.1

29.6 29.731.7 32.9 34 33.8

28.731.7 31.2 32.2

0

5

10

15

20

25

30

35

40

45

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

國內需求量 生產量

Source：ANFA、Tnet、Nanliu

Unit：10K Tone

In Short Supply

Japan introduced monetary stimulus

measures

Growing

Demand

Supply Demand

Market Analysis - Japan

21 Source：ANFA 2011

Market Analysis - Asia

22

China: Population of 0-3 Year-Olds

26.24mn

31mn

Rural couples in

Shanghai and

Guangzhou have

been entitled to have

a second child

Potential National

Deployment Debate Over One-Child Policy

Source：Frost & Sullivan

Market Analysis - China

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Post-80s parents are willing to pay higher premium for child's health, education,

and welfare; meanwhile, they have strong loyalty to foreign brands

Source：Frost & Sullivan

Average Amount of Spending Per Child

Market Analysis - China

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Company Supplied by

Nanliu

1 Mamy Poko V

2 J&J

3 KC- Kleenex V

4 Good Baby V

5 Pampers

6 Elsker

7 Pigeonbaby

8 YFY (Mayflower) V

9 Enphant V

10 Combi

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Market Analysis - Wet Wipes

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According to China regulations, name and

address of the local manufacturer must be

highlighted on the outer packing, which

helps Nanliu to gain increasing traction

from new customers.

Market Analysis - Wet Wipes

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High Quality production：

100-10,000 class Clean room

One-stop production：

From NW to end product

(mask, wet wipe)

EDI pure water lab

Spunlace NW：

Application includes surgical gown and repetitive use wipes

The widest Spunlace NW production line of 6.2M of the world

Competitive Advantage

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Awarded No.38/Top-10 in Asia in Nonwoven Industry magazine, 2013

Competitive Advantage

2012 Nonwovens Sales

company sales country Last

Year company sales country

Last

Year

1 Freudenberg $1.50 billion DEU(Germ

any) 1 22 Buckeye Technologies $228 million U.S. 17

2 Dupont $1.35 billion U.S. 2 23 Japan Vilene $209 million JPN 13

3 Ahlstrom $1.30 billion FIN 5 24 Asahi Kasei $201 million JPN 16

4 Kimberly-Clark $1.25 billion U.S. 3 25 Union Industries $189 million ITA 24

5 Polymer Group, Inc. (PGI) $1.15 billion U.S. 4 26 Mitsui Chemicals $183 million JPN 20

6 Fitesa $712 million U.S. 7 27 Jacob Holm Industries $171 million CHE 23

7 Glatfelter $683 million U.S. 8 28 Fibertex Nonwovens $161 million DEN 35

8 Johns Manville $670 million U.S. 6 29 Gulsan $160 million TUR

9 Suominen $602 million FIN 33 30 Georgia-Pacific $155 million U.S. 27

10 Fiberweb $460 million U.K 9 31 Tenowo $152 million DEU

11 TWE Group $400 million DEU 32 Andrew Industries $150 million U.K 28

12 Bonar $379 million NLD 33 Hassan Group $147 million TUR 34

13 Sandler $326 million DEU 11 34 Precision Custom Coatings $145 million U.S. 32

14 Avgol Nonwovens $315 million ISR 10 35 Propex Holdings $140 million U.S. 30

15 Hollingsworth & Vose $305 million U.S. 12 35 Dalian Ruigang Nonwovens Group $140 million CHN

16 Companhia Providencia $273 million BRA 14 37 Toyobo $129 million JPN 25

17 CECEP New Materials Group $256 million HK(China) 38 Nan Liu Enterprise $128 million Taiwan 38

18 Toray Advanced Materials $251 million JPN 19 39 Spuntech Industries $127 million ISR 39

19 First Quality Nonwovens $250 million U.S. 15 40 Jofo Nonwovens $125 million CHN 37

20 Pegas Nonwovens $248 million U.S. 22 41 Lydall $118 million U.S. 31

21 Fibertex Personal Care $235 million DEN 18

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Certification:

ISO13485 ISO9001 ISO14001 F S C

GMPC ISO22716 OHSAS18000

Competitive Advantage

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In progress

3D wipes

Medical use wood pulp spunlace NW fabrics

Flexible Medical

use Fabrics

Invisible mask fabrics

Developed

Future target

Biodegradable (corn fabrics) NW

Ventilate film

Anti-Virus NW products

Flexible NW fabrics for diaper waistband

3D Thermal bond fabrics

for diaper surface

Loofah solution products

Men’s wet wipes RS Fullerene products

Recent Developments

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Nanliu’s company strategy Maintain product variety and high market share

Expand overseas market along with customers

Increase product quality and value content

Company Strategy

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Establishment: Dec, 1, 1978

Chairman: MR. HUANG,CING-SHAN

CEO： MR. HUANG,HUO-CUN

Paid in Capital: NT$726 mn

Total Employee: 712 (as of Jan, 31, 2014)

Production sites：Qiaotou (Kaohsiung), YenChao

(Kaohsiung), Pinghu (Zhejiang, China)

Company Background

32

Nanliu

TaiNan, LiuJia

Convenient Transportation – Easy access via MRT, HSR and near Kaohsiung Airport

Qiaotou plant

(Headquarters)： No.88, BiXiu Rd., Qiaotou District,

Kaohsiung City

Yenchao plant： No. 108-8, SiLin Rd, Yenchao District,

Kaohsiung city

Company Background

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Pinghu plant：No. 2188, XinKai Rd, Economic Development Zone, Pinghu city, Zhejiang province

1.Center of Shanghai and Hangzhou

2.100km away from Pudong airport (1.5 hour drive)

3.10 km away from Jiashan South Railway Station

Product：

Spunlace NW, Medical use fabrics, fabrics for wipes, wet wipes, mask, cleansing cotton, PP NW fabrics…etc.

Operation：since Feb. 2008

Location：ZheJiang Pinghu Economic Development Zone

Capital input: USD 45 mn

Registered capital input: USD 12 mn

Area：82,000m2

Shanghai

Pudong

Company Background

SuZhou

NingBo HangZhou

34 34

Startup phase：Nanliu was founded and started with dish washing sponge

Developing phase：Installed 3 Thermal bond, 1 air-through equipment for diaper and sanitary pad surface use NW fabrics

Growing phase：Installed Spunlace NW production lines and wet wipes packaging equipments for new NW fabrics applications

Leaping phase：Ramp up of Pinghu plant and started production of medical use fabrics

Thriving phase：To become top-20

NW manufacturer of the world

2016年以後

卓越期

1978~1987

Startup phase

1988~1998

Developing

1999~2007

Growing

2008~2018

Leaping

2018 -

Thriving

Company History

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Company motto – The Perfect Cycle

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