南六企業股份有限公司 Enterprise CO.,LTD Comfortable Satisfactory Joyful 股票代號 :6504 Stock Code:6504.TT 1
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Company Profile Establishment: Dec, 1, 1978 Capital: NT$726 MN Market Capital: NT$ 12.34 BN Total employee: 786 (as of Dec 31, 2015) TW:266 ;China:520 Products: Chairman: MR. HUANG,CHIN-SAN CEO: MR. HUANG,HUO-CUN Disposable surgical gowns Fabrics Spunlaced Fabrics Baby Wet Wipes Air Through & Thermalbond Fabrics Cosmetics ( face masks ) For Diapers For Napkins We do Consumer Hygiene Product Foucs on Women, Baby 3
Production Technology Carded Tech Wetlaid Tech Spunmelt Tech Airlaid Tech Hot Air Bonding Thermal Bonding Mechanical Bonding Chemical Bonding SpunBond Meltblown Electrostatic Spinning Needlepunch Spunlance Spunlace Nonwoven Fabrics Traditiona Woven Fabrics A disposable designed for a single use Superior strength and durability 4
Industry Overview (Asia) 2016: Nanliu Thermalbond capacity 18,600 ton / per year (around 9% in Asia) 2015: Nanliu spunlaced capacity 43,200 ton / per year (around 7.65% in Asia) Source:ANFA 2014 file:///d:/downloads/nonwovens_production_in_asia_2014.pdf 5
Vertical Integration PP plant Viscose plant PET plant Air Through & Thermal Bond Fabrics Plant Fabrics Plant New product development is focused on nonwoven fabrics to achieve diversification Spunlace Fabrics Plant 2 layer bonding 3 layer bonding Secondary Processing Plant Used multilayer processing to boost sales/gm Industrial wipes Disposable Fabrics Dust wipes 3D pattern Anti-virus mask Fabrics Finish Product Plant Products must be suitable for highly automated production No development of labor-intensive products Kitchen paper towels Branded distributor Branded distributor 6
Nonwovens Industry International Top 40 Companies 2012 2013 2014 company Sales$ country 2012 2013 2014 company Sales$ country 5 5 1 Avintiv Specialty Materials(PGI) $2.00 bn US 20 19 21 Pegas Nonwovens $252 mn Czech 1 1 2 Freudenberg $1.54 bn Germany 17 24 22 CECEP Costin New Materials Group $199 mn China-HK 4 4 3 Kimberly-Clark $1.30 bn US 25 26 23 Union Industries $176 mn Italy 2 2 4 DuPont $1.25 bn US 29 27 24 Gulsan $175 mn Turkey 3 3 5 Ahlstrom $1.20 bn Finland 38 32 25 Enterprise $174mn Taiwan 6 7 6 Fitesa $755 mn US 31 32 26 Tenowo $173 mn Germany 7 6 7 Glatfelter $731 mn US 28 30 27 Fibertex Nonwovens $171 mn Denmark 8 8 8 Johns Manville $700 mn US 35 28 28 Dalian Ruiguang Nonwoven Group $169 mn China 9 9 9 Suominen $442 mn Finland 24 23 29 Asahi Kasei $167 mn Japan 11 11 10 TWE Group $415 mn Germany 34 35 30 Precision Custom Coatings $163 mn US 12 10 11 Bonar $407 mn Netherlands 33 34 31 Hassan Group $162 mn Turkey 27 29 12 Jacob Holm $400 mn Switzerland 23 22 32 日本 Vilene $159 mn Japan 30 13 13 Georgia-Pacifi c $380 mn US 26 25 33 Mitsui Chemicals $157 mn Japan 41 21 14 Lydall $357 mn US 40 31 34 Jofo Nonwovens $151 mn China 13 14 15 Sandler $346 mn Germany 35 KNH Enterprises $150 mn Taiwan 18 18 16 Toray Advanced Materials $342 mn Korea S 39 38 36 Spuntech Industries $143 mn Israel 15 16 17 Hollingsworth & Vose $335 mn US 35 36 37 Propex Holdings $130 mn US 19 17 18 First Quality Nonwovens $330 mn US 40 38 Mogul $121 mn Turkey 14 15 19 Avgol Nonwovens $319 mn Israel 37 37 39 Toyobo $109 mn Japan 21 20 20 Fibertex Personal Care $293 mn Denmark 40 Advanced Fabrics(SAAF) $83 mn Saudi Arabia Source: http://www.nonwovens-industry.com/issues/2015-09/ ;Nonwoven Industry magazine, 2015 7
Revenue Breakdown Unit:NT$ million 4,568 5,343 727 13.6% 5,922 895 15.1% Disposable Surgical gowns Fabrics 3,700 111 3% 506 1,293 11% 28.3% 1,325 24.8% 1,504 25.4% Spunlance Nonwoven Fabrics 1,369 37% 1,591 43% 1,914 42% 2,249 42.1% 2,337 39.5% Wet wipes & Cosmetics 18.7% 19.5% 629 856 1,042 1,186 17% 2012 2013 2014 2015 20.0% Air Through & Thermal Bond Nonwoven Fabrics Source: Company Filings 8
Shipments of disposable surgical gowns fabrics Unit:tons 1853 1627 1081 1359 13851389 1320 1303 1208 1271 688 805 912 533 211 266 358 358 Source: Company Filings 9
Revenue Breakdown (by country) Unit:NT$ million 5,922 5,343 253 4.3% 3,700 3,534 71 580 629 2% 16.4% 17.8% 74 570 529 887 25.1% 1,265 2% 15.4% 14.3% 34.2% 4,568 109 720 628 2,006 2.4% 15.8% 13.7% 43.9% 172 686 3.2% 12.8% 1,053 598 11.2% 837 2,546 47.6% 2,184 17.8% 14.1% 36.9% Revenue 100% others Asia Japan China 25.1% 1,368 1,262 1,105 1,342 1,595 38.7% 34.1% 24.2% 26.9% Taiwan 2011 2012 2013 2014 2015 Source: Company Filings 10
Company Location Baby Wipes, Facial Mask, ThermalBond line*1 Spunlace line*2 Qiaotou plant (Headquarters) Yenchao plant Surgical gowns Spunlace line*1 6.2m Spunlace line *1 Thermalbond line*2 Baby Wipes, Facial Mask SuZhou Shanghai Pudong New Thermalbond line*2 Pinghu plant HangZhou NingBo 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 11
PingHu factory (China) 4.8m Spunlace Line a.surgical gowns Fabrics b.industry wipes c.3d Dust removal dry wipes d.spunlace fabrics 6.2m Spunlace Line ThermalBonded Line ThermalBonded Line Wet wipes & Cosmetics Employee dormitory Office New Thermal Bonded Full run time 2015.Q4 One stop shopping Cost Adventage Economies Scale 12
Competitive Advantage Spunlace Fabrics Before fine tune After Nanliu s fine tune Nanliu's experienced senior engineers and RDs with over 20+ years in operations enjoying a very good reputation on quality and quick delivery around the world. Baby wipes & Facical mask 1.High Quality production: 100-10,000 class Clean room 2.One-stop production: From NW to end product (mask, wet wipe) (we say one dragon style ) 3.EDI pure water lab (for wet wipe) 4.Automated production machines (for face mask and baby wipes) Disposable Surgical gown Fabrics Nanliu s one-stop production: From manufacture of spunlace NW to finishing processing Pros:Shorter lead-time Garment OEMs TOP1~5 in Asia Longer lead-time and more costly 13
Financial Highlights (by month) 2014.Jan ~ 2016.Feb Consolidated revenue Unit:NT$ million 483 450 475 501 533 528 484 452 396 407 380 388 393 397 564 495 500 517 444 448 543 454 522 508 479 382 unit:nt$ million Unit: NT$ million Con.revenue Jan Feb Acc.Sales Jan~Feb 2016 479 382 YOY -9.31% -3.82% 2016 861 YOY (%) -6.95% Source: Company Filings 14
Revenue,GM, OPEXP, OPM Ratio yearly Trends Consolidated Revenue 100% ( unit:nt$ million) 5,343 5,922 YOY 10.82% 4,568 3,519 3,700 1,068 1,161 1,300 1,418 2,315 1,534 1,677 1,904 2,858 17.07% 14.34% 21.09% 18.71% 18.16% 18.34% 19.77% 19.45% 20.21% 17.03%16.42% 19.38% 13.45% 14.19% 10.40% 12.12% 13.30% 11.98% 11.08% 11.09% 11.20%12.68% 10.17% 10.17% 9.18% 7.39% 8.76% 9.21% 8.58% 8.68% 8.25% 6.90% 6.95% 7.64% 6.63% 9.16% 7.53% 4.52% 6.18% 5.34% 4.54% 3.54% Gross Margin OP Margin OPEX ratio 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Ramp-up period for China site Source: Company Filings Economic scale 15
Net Profit, Net Margin Ratio yearly trends Net Profit (NT$ million) Net Margin % 581 YOY 38% 377 420 6.53% 5.23% 7.54% 8.37% 2.85% 6.51% 5.29% 2.05% 0.17% 3.96% 5.32% 196 8.25% 7.86% 9.82% 69 60 98 119 43 109 100 47 5.2 139 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Company Filings Ramp-up period for China site 1.Material price Soaring 2. Flooding hurt us Economic scale 16
Dividend Policy,EPS,ROE, Cash flow 19.32% 17.38% 15.22% 12.28% 15.64% 13.72% 18.26% 16.72% 5.39 23.45% 19.35% 5.79 1.62 (4Q) 23.20% 8.01 1.92 (4Q) 1.82 (3Q) 2.33 1.Dividend Policy:around 45~55% 2.We don t like to take money from shareholders. ( ex. Cash capital increase, CB ) Dividend 1.86 2.81 3.09 1.03 7.06% 2.58 2012 2013 2014 2015 EPS 3.19 5.39 5.79 8.01 CASH 1.33 2.2 2.8 3.9 STOCK 0 0 0 0 Payout Ratio 41.8% 40.8% 48.4% 48.7 2.38 6.12% 1.45 2.32 0.10 0.69% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 3.19 1.34 (3Q) 1.49 (2Q) 1.34 (1Q) 2.19 (2Q) 2.08 (1Q) Source: Company Filings Selected Cash Flow Statement Items NT$ mm 2009 2010 2011 2012 2013 2014 2015 Cash from Operating Activities 52 182 279 471 692 524 628 Cash from Investing Activities (134) (173) (207) (687) (387) (370) (363) Cash from Financing Acvitities 106 81 (20) 168 (137) (252) (68) Effect of Exchange Rate changes on cash and cash 19 39 (7) equivalents NET INCREASE IN CASH AND CASH EQUIVALENTS 188 (59) 190 Note : 2012 and 2013 be used IFRS;* is Net profit before tax Capex (115) (150) (169) (592) (474) (343) (358) Depreciation & Amortization 150 145 157 193 216 262 268 17
Company History Startup: household products (e.g., dish scrubber) Development: daily supplies (e.g., surface material for sanitary pad, diaper) Growth: spunlace nonwoven fabrics for sanitary supplies, diversification into biotech segment (facial masks, skincare products) Acceleration: pulp/spunlace nonwoven fabrics, built and expanded Pinghu plant at Zhejiang Breakout: research and innovation leader shaping client demand Flushable Fabrics Pure cotton Fabrics 1978~1987 年 Startup 創業期 1988~1998 Development 1999~2007 Growth 2008~2018 Acceleraton 2018 and beyond Breakout 18
Potential drivers (I) New Product Taiwan new factory will be in 2Q~3Q 2017 2015.01.22 An estimated NT$1.5bn will be invested over time, Creating 100 employment opportunities 19
Potential drivers (I) New Product New Plant is bigger than Pinghu Plant (China) 20
The End Thank you Thanks for your attention. Have a great day. 21