TAIWAN’S NO. 1 MEDICAL SKINCARE

Company Introduction Presented by Eric Wu

Chairman and CEO 2017

Ticker：6523

Disclaimer

• The information and forecast contained in this presentation and released at the same time, including the information regarding business outlook, financial status, and business forecast, is produced according to the internal data of this Company and the status of overall macroeconomic development.

• The actual operational outcomes, financial status, and sales results in the future may differ from the forecast for various reasons, including but not limited to market demand; changes in policies, laws and regulations, and macroeconomic condition; and other risk factors beyond the reasonable control of this Company.

• Information contained in this presentation reflects the future outlook of this Company until the present time. This Company makes no guarantee, either expressed or implied, for its accuracy, integrity, or reliability. This Company assumes no responsibility for the update or revision of such information according to its future changes or adjustments.

2

Financial Performance - Brand Positioning and Competitors

- 2016 Revenue and Net Margin Updates

- Income Statement Summary

- Balance Sheet and Key Indices

3

4

• DR. WU Sales of drugstores channel is 17% YOY in 2016, and the growth rate is higher than Derma and Caring.

• DR.WU’s market share is 30%, playing the leading position among Derma Skincare Market.

SOURCE: AC NIELSEN, the data base of Taiwan pharmacy mark include personal care stores, drugstores, hyper market, super market, CVS and traditional stores.

SOURCE: AC NIELSEN, the data base of derma market share include the derma brand sales of personal care stores and drugstores channel .

Financial Performance - 2016 Taiwan Skincare Market Overview

8,799

6,362

2,438 721

9,177

6,423

2,754 843

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Caring Mass Derma DR. WU

TWD Million 2016 Taiwan Pharmacy Market

2015/1-12 2016/1-12

YOY 4%

YOY 1%

YOY 13%

YOY 17% 53% 52% 51%

27% 30% 31%

11% 9% 7%

5% 4% 5% 2% 3% 5%

2014 2015 2016

2016 Derma Market Share

Others(AVENE、Bio、FOB…..) DR. WU Vichy Curel Neogence

5

Financial Performance - 2016 Q4 and Full Year Revenue Updates

• Q4 revenue is 353 million, grows in revenue at 23.6% , mainly driven from EC channels, new channels and China growth.

• Full year consolidated revenue is 1.15 billion, 33% higher, mainly driven by organic growth in Taiwan, and new channels developed in both China and Taiwan, as well as oversea markets in Myanmar.

145,995 184,375 248,980 285,864 234,133 271,854 291,389 353,218

330,370

579,350

865,214

505,987

797,376

1,150,594

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

1,100,000

1,200,000

1,300,000

Q1 Q2 Q3 Q4

Consolidated Revenue (NT$'000)

Sales-2015 Sales-2016 2015 - Accumulated Revenue 2016 - Accumulated Revenue

17.0% 47.5% 60.4% 23.6%

YOY 33%

6

• 2016 net profit is 312 million, EPS 7.06, the profitability is better than 2015, mainly driven by revenue growth and also bolstered by operation leverage given an improving expense ratio.

Financial Performance - 2016 Q4 and Full Year Net Profit Updates

37,635 18,934

80,348 91,473 67,019 73,503 72,609

98,992 56,569

136,917

228,390

140,522

213,131

312,123

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Q1 Q2 Q3 Q4

Consolidated Net Profit (NT$'000)

Net Margin-2015 Net Margin-2016 2015 -Accumulated Net Margin 2016 -Accumulated Net Margin

-9.6% 288.2% 78.1% 8.2%

YOY 37%

Item 2014 2015

YOY% 2016

YOY% Amount % Amount % Amount %

Revenue 662,809 100.0% 865,214 100.0% 30.5% 1,150,595 100.0% 33.0%

Cost of Sales 215,798 32.6% 273,890 31.7% 26.9% 355,088 30.9% 29.6%

Gross Profit 447,011 67.4% 591,324 68.3% 32.3% 795,507 69.1% 34.5%

Operating Expenses 197,852 29.9% 326,283 37.7% 64.9% 412,765 35.9% 26.5%

Operating Profit 249,159 37.6% 265,041 30.6% 6.4% 382,742 33.3% 44.4%

Non-Op Income & Expenses 43,970 6.6% 8,399 1.0% -80.9% -7,873 -0.7% -193.7%

Profit Before Taxes 293,129 44.2% 273,440 31.6% -6.7% 374,869 32.6% 37.1%

Income Tax Expense 53,885 8.1% 45,050 5.2% -16.4% 62,746 5.5% 39.3%

Net Profit 239,244 36.1% 228,390 26.4% -4.5% 312,123 27.1% 36.7%

EPS (NT$) 5.74 - 5.40 - - 7.06 - -

Financial Performance - Income Statement Summary

7

Unit: NT$'000 Consolidated

Financial Performance - Balance sheet & key Indices

8

Item 2014.12.31 2015.12.31 2016.12.31

Cash and Cash Equivalents 294,031 286,476 870,206

Accounts Receivable 150,567 163,350 220,262

Inventories 94,705 113,347 147,588

Other Financial Assets 431,000 430,212 895,179

Total Assets 1,023,521 1,068,585 2,244,170

Total Liabilities 125,928 112,848 194,559

Total Shareholders' Equity 897,593 955,737 2,049,611

Key Indices

A/R Turnover Days 62 79 61

Inventory Turnover Days 132 146 143

A/P Turnover Days 44 45 46

Liability Ratio (%) 12 11 9

ROE(%) 34 25 21

Cash from OP activities 176,220 166,449 281,054

Consolidated Unit: NT$'000

Our Future Prospects - Growth Strategy

- Market Expansions/China Updates

- New Product Development

- Branding Innovation

9

10

• Establishment of Omni-channel to provide full customer services to increase customer satisfaction and loyalty, and focus on market expansion in China and ASEAN countries for the next two years

Omni-Channel

• Continue to develop leading Concept Cosmeceutical products and diversified product portfolio; innovate at 15% New Product Development rate.

Concept Products

• 360° Thematic marketing Theme, engaging multiple celebrities and KOLs to run promotion activities for the extension of brand popularities.

Thematic Marketing

Our Future Prospects - Growth Strategies: 1 Omni-Channel, 2 Concept Products, 3 Thematic Marketing

Market Expansion: Expansion Strategy - Global Skincare Market Potential

NT$157bn ASEAN skincare market 2.9x Taiwan MKT

Thailand Philippines

Vietnam Cambodia Indonesia

NT$ 54bn Taiwan skincare market #1 brand in Taiwan’s cosmeceutical market

11

Taiwan share by Category

Global share by Category

China share by Category

NT$ 3.3tn global skincare market 62x Taiwan MKT

NT$693bn China skincare market

13x Taiwan MKT

2013 2014 2015 15-'13

14% 14% 14% -0.4%

31% 31% 31% 0.4%

6% 6% 6% -0.3%

14% 13% 13% -0.9%

65% 64% 63% -1.3%

15% 15% 15% -0.4%

13% 13% 14% 1.1%

8% 8% 8% 0.6%

35% 36% 37% 1.3%

100% 100% 100% 0.0%

Non-Store

Retailing

Direct Selling

Internet Retailing

Homeshopping

SubTotal

Total

Channel

Store-Based

Retailing

Grocery Retailers

Department Stores

Beauty Specialist

Parapharmacies/Drugstor

SubTotal

12

China Channel

EC Channel

TMALL TAOBAO JUMEI VIP.COM (New) JD.COM Cross Border EC

Department Store Shanghai(2) Beijing(4) (New)

Cosmetic Stores FIONA (40) MYFACE (10) LILYSTAR (10) Watsons (New)

B&M Channel - Taiwan

Drugstore chains channels Watsons (520) Cosmed (400) Your Chance Pharmacies (45)

Department Store Far Eastern Mega City Far Eastern Paoching Far Eastern Kaohsiung (New)

Beauty Specialist SaSa(23) POYA(145) (New)

Others Duty Free Stores(13) W Clinics(4)

EC Channel - Taiwan

DRWU.COM YAHOO MOMOSHOP PCHOME BOOKS PAYEASY, 7net ETMALL

Overseas markets Hong Kong, Macao(367) Singapore(52) Malaysia(66) U.S.A(10) Canada(25) New Zealand Myanmar(7)(New)

Complete Distribution Coverage of Online and Offline Sale Channels

Direct One Level Two Level

Market Expansion: Distribution Channel - Regional Sales Channel Distribution Updates

13

NTD 000

Market Expansion: Distribution Split - Sales Contribution by Channel

B&M TW 482,689

73%

EC TW 126,436

19%

China 13,636

2%

Overseas 40,048

6% B&M TW 532,959

62%

EC TW 139,439

16%

China 138,671

16%

Overseas 54,145

6% B&M TW 695,338

60%

EC TW 162,325

14%

China 226,427

20%

Overseas 66,504

6%

Channel 2014 2015 2016 YOY

B&M TW 482,689 532,959 695,338 30%

EC TW 126,436 139,439 162,325 16%

China 13,636 138,671 226,427 63%

Overseas 40,048 54,145 66,504 23%

Total 662,809 865,214 1,150,594 33%

2014

2015

2016 Over the past three years, sales from China market continues to

gain contribution from 2% in 2014 to 20% by 2016. Brick and

mortar channel in Taiwan has also demonstrated strong growth

in 2016.

2015 Q3 2015 Q4 2016 Q1 2016 Q2

Market Expansion: Channel Strategy in China - Online First Offline After Expansion

EC

電商

2015 Q1 2015 Q2 2016 Q3 2016 Q4

14

DS

百貨

FIONA Beauty Stores

(41stores)

MYFACE Beauty Stores

(10stores)

LILYSTAR Beauty Stores

(11stores)

CS

美妝

SUPER BRAND Shopping Mall

Counter, Shanghai

BEIJJING - Longfor - Capitaland - GrandPacific SHANGHAI - Longemont

BEIJJING - JoyCity ZY

Market Expansion: Channel Expansion in China - 2017 Entry Plan in WATSONS

15

North: 20 doors

East: 15 doors

West: 5 doors

South: 10 doors

Stage 1: 2017 1H • Total of 50 doors • 45 Wall Units / 5 Counters & Store in Store Stage 2: 2017 2H • Total of 100 doors • 90 Wall Units / 10 Counters & Store in Store Wall Unit

Counter

Store in Store

North: 40 doors

East: 30 doors

West: 10 doors

South: 20 doors

16

Daily Renewal Serum With Mandelic Acid

China Updates: Strategy 1 - Focus on One Star Product - Focus on Pore Control / Acne Prone problems with Mandelic Acid 6%

Focus on one product at a time to quickly catch

customers’ eyeball . Through high effectiveness to fast attract

customers’ interests.

Rapidly Establish Brand recognition and awareness in China.

T-mall NO.2 2015 best skincare brand of first-tier cities university students

China Updates: Strategy 2 - Celebrity Brings Eye Balls - Brand Endorser for 2016: Hannah Quinlivan

Continue Endorser in 2016, DR.WU has Successfully

Enhanced Brand Awareness throughout ASIA:

Hannah's marriage to Jay Chou who is the most popular

singer in Asia and her recent has children announcement

has created tremendous online chatter and followers.

17

Videos of Hannah sharing her beauty tips using DR.WU Serum and Mask during New York Fashion Week, attracting 34,822,000 Unique Visitors.

18

Market Expansion: Growing Brand Awareness in China - Baidu/Weibo/Wechat and UV indices

Brand Awareness, Positive Word of Mouth and Client Loyalty have surged coupled with Increasing attention from media

193

701

0

200

400

600

800

1,000

1,200

Baidu Index

31,907

185,175

0

40000

80000

120000

160000

200000

Wechat/Weibo Fans

Wechat Fans Weibo Fans

75,823

470,357

185,943

0

100,000

200,000

300,000

400,000

500,000

Jun

-14

Au

g-1

4

Oct

-14

De

c-1

4

Feb

-15

Ap

r-1

5

Jun

-15

Au

g-1

5

Oct

-15

De

c-1

5

Feb

-16

Ap

r-1

6

Jun

-16

Au

g-1

6

Oct

-16

De

c-1

6

Jumei/Tmall Unique Vistors

Jumei UV Tmall Flagship UV

19

Market Expansion: Omni-Channel Strategy - From Transactions to Relationships

Transactions

Guessing Preferences

Relationships

Prediction for Customization

Cross-channel Integration

• Engage with customers through QR code across any channel interaction, physical and digital

• Integration of all data flow from multi-channels

CRM

• Analyzation of customer data through systems

• Deliver relevant experience to match behaviors, needs and increasing expectations.

Loyalty Program

• Through loyalty program design to retain customers and boost their engagement

• Seamless, orchestrated, and personalized

CRM

SOCIAL MEDIA

BIG DATA

LOYALTY PROGRAM

PRM

12 SERIES- 68 SKU

Average

Retail Price USD 40

HYALUCOMPLEX

HYDRATING SYSTEM

x11 BASIC CARE SYSTEM

x3

UV PROTECT

SUNCARE SYSTEM

x6

MINERAL MAKE UP

x3

PREMIUM SKINCARE

x6

SKINCARE FOR MEN

x5

20

CAPSULE MASK

x8 FIRST AID SERIES

x2

VITAMIN C +

WHITENING SYSTEM

x6

AGEVERSAL

REPAIRING SYSTEM

x6

ACNECUR

ANTI-ACNE SYSTEM

x5

MANDALIC

RENEWAL SYSTEM

x7

35%

25%

12%

7%

New Product Development: Complete Product Lines - Complete Product Lines: 12 Key Lines x 68 sku

New Product Development: 2016 - Launch 19 Products and Received 16 Beauty Awards

21

X Y Z CAPSULE MASK

Complete 15 new & 5 limited products in 2016, more than 15% targeted NPD rate.

Mask is a big successful New Product Lines, with significant growth of 75% in 2016.

New Comers: Received 16 Beauty Awards

Recognized by the Most Prestige Beauty Awards and Honors ,including BAZAR, FG , UrCosme, BEAUTY, Yahoo, 儂儂, InStyle Best Beauty Buys, SIMPLY HER GREAT SKIN AWARD

NO.3 NO.1 NO.2 HYDRATING

GLACIER WATER DAILY RENEWAL SERUM WITH MANDELIC ACID

CLEANSING MOUSSE for Men

VITAMIN C+ WHITENING SYSTEM UPGRADE

ANTI-AGING NEW Products

Sales NO.1 of Yahoo Single day

22

•Products renewal rate remain at 15% per year. •Continue to develop high efficacy, non additive, medical skin care products. •Diversified product portfolio, extent product form type and reach new demographic.

Mineral Make-up:

1st Derma brands DD cushion. By using

the microcrystalline powder "Accurate Match Powder“ and multiple caring essence to have natural light-permeable make-up

Ultra Potency Concentrate :

This program can achieve micro surgery result through DR.WU’s high potency、 gentle、insensitive formula, suitable for in-house

treatment

Earth Resource Mask: Concept origins from using natural herbal and extracts ingredients for Mask. New hit products after hero items capsule mask.

New Product Development: 2017 - 2017 New Products and Continue to Elevate Existing Series

• Continuous formula upgrades for current products

Branding Innovation: 360° Marketing Theme -2017 Big Idea “DR.WU Derma Academy “

Derma Academy

Brand Endorsers

Different endorsers

with quarterly theme

Internet celebrity

With Live video

delivery

We Media

KOL Management

and Word-of-mouth

Media Platform

Collaboration with top

content providers

Social Media

Extension of fans club

Wechat/Weibo

Channel Linkage

Creates direct sales links to channel

23

Our Future Prospects: Strategy Building Blocks -Product Innovation, Profit growth, and Market leading

Becoming

Asia’s Leading

Cosmeceutical Brand

Product Power “Deliver core values”

• R&D masstige products to drive micro surgery market

• Extension to cosmetics and natural extracts masks

• Product revamp by continuous upgrades

Brand Power “Taiwan Leading No. 1”

• Thematic marketing campaigns promotions

• Engage multiple celebrities to extend brand popularities

• Increase customer loyalty through CRM program

Sales Power “Channel Coverage”

• Establishment of Omni-channel to provide full customer services

• Organic growth in existing markets

• Continuous online and offline channel development

Infrastructure build out

• Organization enhancement • People development and retention • Process improvement plan

25

Thank You “Your Personal Doctor For Your Perfect Skin”

-DR.WU

Contact Information

Jennifer Tu, CFO ext. 83

Fiona Chiu, Financial Manager ext. 36

TEL：+886-2-2369-9888

Mobile：+886-905-685-503

E-mail：ir@drwu.com