Tainan Enterprises Co., LTD Date: Feb. 20, 2009
1. Company Profile Date of Establishment: 26 August, 1961 Chairman: Mr. Yang Ching-Hon Headquarters and Plant Location: Tainan Headquarters: No.320, Sec. 3, Jungshan Rd., Gueiren Shiang, Tainan, Taiwan Taipei Office: 15F, No. 15-1, Hangiou S. Rd., Taipei, Taiwan Tainan Plant: No.320, Sec. 3, Jungshan Rd., Gueiren Shiang, Tainan, Taiwan No. of Employee:15,000 Major Product: Garment, Woven & Knitted Garments, Manufacturing for Garments
2. Brief History Aug. 1961 Mr. Yang Kun-Mao founded Tainan Enterprises Mar. 1991 Yixing Yifeng Garments Co., China started production Nov. 1993 Developing its self-owned Tony Wear brand in China Mar. 1994 Tainan Enterprises Indonesia started mass production Jul. 1994 Yixing GaoQing Garments Co., China started production May. 1996 The second Plant of Tainan Enterprises Indonesia started production Jul. 1996 Initial Public Offering Jan. 1998 Indirect investing in Tai Yang Enterprises Co., Cambodia Apr. 1999 Tainan Enterprises listed on the TAISDAQ Market Aug. 1999 Introducing ERP System Oct. 1999 The second plant of Tai Yang Enterprises started production Sep. 2000 Tainan Enterprises transferred to list on the TAIEX market 2002 Launch of Camel Active and Tony Jeans in China 2003 Launch of Undershop in China 2004 Launch of Emely in China Oct. 2004 Investing in Jordan Dragon Garment Industry Co. Ltd. 2005 Launch of New Man in China. Feb. 2005 First Established Knitting factory in Cambodia Apr. 2006 Acquired a washing plant in Cambodia Apr. 2007 Gingdao Tide Garments Co., China started production May. 2008 Close of the Jordan Dragon Garment Industry Co. Ltd.
3. TAINAN GROUP TAIPEI HEADQUARTERS OEM RETAIL * INDONESIA * CMBODIA * TAIWAN * CHINA CHINA TONY WEAR EMELY * TONY WEAR * TONY JEANS * CAMEL ACTIVE * THE UNDER SHOP * NEW MAN EMELY * EMELY SWEETIE
4. Corporate Philosophy Truth Respect for humanity Kindness Comprehensive quality management Elegance Worldwide Brand Name Recognition
Corporate Social Responsibility (CSR) award In March 2007, Tainan Enterprises was recognized by Common Wealth, Taiwan s leading business magazine, for Corporate Social Responsibility (CSR) award. Tainan Enterprises was one of the top fifty companies recognized among 1,100 corporations.
Industrial Leader Expansion from Core Ability In May 2006, according to Taiwan Business Weekly Magazine, Tainan Enterprises was elected as one of the top five companies from 1,000 manufacturers. The criteria are based on the revenue of and profit of CAGR over 25% for the past 10 years and recent 3 years are profitable. The most of elected companies are the leaders in that industries. The strategies of business expansion for those companies are concentration their core business and extension in related business.
Industrial Pioneer Globalization and Surviving in an adverse environment In January 2005, the Commonwealth Magazine published a special report on the progress and success of Tainan Enterprises. In 2006, this article was awarded by SOPA (Society of Publishers in Asia 2006 Awards for Editorial Excellence) as the best commercial article.
Forbes Asia Best Under a Billion In Oct. 2005, Tainan Enterprises was elected by Forbes Asia, for the regional Top 200 smaller companies.
5. Competitive Advantage Experienced management team Strong financial foundation to support long term development Platform for sharing resources and knowledge management Market-Oriented product development strategies International production network
6. Int l Production Network (WITHOUT OUTSOURING) Cambodia 9,000 employees 67,000 (Woven 52,000 and Knitted 15,000) dozens/month 86 production lines(72.14) Washing Plant TY1 TY TY2 Taiwan 235employees 5,000 dozens/month 5 production lines Camwell Cambodia strength Special washing/large order production/knitting order Tony Wear Emely Own brand TW TN Tainan Headquarter TN HQ Taipei office Taiwan strength Quick response order CN GQ TI1 ID TI2 China 1,560 employees 11,700 dozens/month 28 production lines China strength Sourcing & marketing information Indonesia 4,802 employees 40,000 dozens/month 47 production lines Indonesia strength High quality/value/fashion production
7. Main Customers 2007 2008 GAP (28.75%) GAP (36.26%) MAST (12.95%) MACY (10.47%) MAST (13.91%) MACY (10.22%) LIFUNG(8.22%) ANNTAYLOR(7.60%) LIZ (7.49%) ESPRIT (6.40%)
8. Consolidated Financial Results (I) Year 2004 2005 2006 2007 2008 Amount (NT$mn) 7,151 7,799 8,985 9,561 Revenue YoY (%) 0.45 9.06 15.21 6.41 Gross Margin % 23.7 21.0 23.0 20.0 Operating income (NT$mn) Pre-tax income (NT$mn) Net Income (NT$mn) 543 619 552 512 640 560 768 874 699 544 704 569 EPS (NT$) (NT$) 4.48 4.47 5.50 4.21
9. Consolidated Financial Results (II) Year 2004 2005 2006 2008 Gross margin (%) 23.7 20.85 23.14 Operating margin (%) 7.8 6.56 8.54 Profitability Net margin (%) ROAE (%) ROAA (%) 7.73 19.0 11.85 7.18 18.36 10.48 7.78 20.83 11.65 2007 20.00 5.00 6.00 13.89 8.86 Net debt/equity (%) Net cash Net cash Net cash Net cash Net cash Financial leverage Current asset/ current liab (%) 3.2 3.8 3.17 3.03
10. Dividend Policy According to the corporate law & the company s regulation Depends on the company s short & long term operation plan and profitability Depends on the company s cash position Year 2004 2005 2006 2007 EPS (NT$) 4.48 4.47 5.50 4.21 Cash dividend (NT$/share) 3.0 3.0 3.7 2.5 Stock dividend (NT$/share) 0.1 0.1 0.1 0.0 Payout ratio (%) 69.2 69.4 69.1 59.4 2008 0.0
11. Current Operation (I) Current operations of each business division are as follows: 1. Taiwan This Plant s accumulated sales in 2008 reached US$17.30m and its current gross margin stands at around 8%~12%. 2. Indonesia The Indonesian plant was built up in 1993. The accumulated sales for 2008 reached US$78.70m, and the current gross margin is around 13%~18%. 3. Cambodia The accumulated sales in 2008 reached US$90.50m and the current gross margin stands at around 11%~17%. 4. China Founded 16 years ago, the Yixing GaoQing plant focused on the Japan market before. From 2003, the China factory began to place order for non-quota items from America. The accumulated sales in 2008 reached US$36.65m, and its gross margin of around 10~16%.
Retail brands
12. Own brand business 1. TONY WEAR Established 15 years ago, Tony Wear has become a well-known brand for men s wear in China. We also developed a sub-brand Tony Jeans and licensed brand Camel Active from 2002 Undershop from 2003 and New Man from 2005. As a result of the achievement in its marketing channel, the brand has started turning in handsome revenue. Total number of stores reached 650 by the end of 2008. The accumulated sales in 2008 reached US$60m and the gross margin is around 53%. 3. Emely Established in 2004, Emely is focus on office ladies clothing. The sales territory is only in China right now. We also developed a sub-brand Emely Sweetie from 2008. As a result of management experience and successful marketing plan, the accumulated sales in 2008 reached US$6.27m and gross margin is around 50%. Total number of stores reached 116 by the end of 2008. All of Emely s stores are franchise.
THANKS