生泰合成工業股份有限公司 - syn-tech.t”Ÿ泰法說會2017-英文.pdfSale proportion basis on the Area (Jan~ Sep, 2017) 2. Business and Financial Performance (3) 10 Asia

Andrew Wang, General Manager

Nov. 23, 2017

Stock Code：1777

SYN-TECH CHEM.& PHARM.CO.,LTD 生泰合成工業股份有限公司

SYN-TECH CHEM.& PHARM.CO.,LTD

生泰合成工業股份有限公司

Safe Harbor Notice

In these presentations and discussions, there are certain forward-looking

statements regarding the results of operation, financial condition and current

expectation about future events. As forward-looking statements relate to

events and depend on circumstances in the future, they involve risk and

uncertainty.

We do not undertake any obligation to publicly revise or update any forward-

looking statements for availability of new information, future events or

otherwise. Real result probably differ substantially from those expected in

these forward-looking statements.

2



Outline

1. Company Brief Introduction

2. General Situation in Business and Financial

Performance

3. Strategy in Future Development & Company

Outlook

4. Opportunity and Challenge

3



1. Company Brief Introduction (1)

Date of Establishment：1982, Nov. 9

Capital：NT $300,595,500

Chairman：J. M. Hsiao

Current Number of Employees：167

Main Business：Active Pharmaceutical

Ingredient

4




Category of Main Products

1.Muscle Relaxant

2.Proton-pump Inhibitor

3.Topical Anesthetic Agent

4.Respiratory System Medicine

5. Non- Steroidal Anti- Inflammatory Drugs

6. Cardiovascular Medicine

7. Intermediates

5




DMF Registration Status in Various Countries

41 items have passed the TFDA PIC/S GMP Inspection

COUNTRY DMF/MF

U.S.A 24

Japan 17

Canada 4

Korea 5

Others 15

6




Official Audit Records

Name of the

Regulatory Authority Time Period Frequency

US FDA 1995~2015 5

Korea FDA 2007~2012 2

Hungary FDA 2008 1

Japan PMDA 2014 1

Mexico 2015 1

EDQM 2016 1

Taiwan FDA 2002~2016 14

7



2. Business and Financial Performance (1)

Revenue of Recent 5 Years

431

502

609

684

767

548

0

100

200

300

400

500

600

700

800

900

2012 2013 2014 2015 2016 2017(Q1~Q3)

Unit: NT in million

8



Revenue in Recent 3 Years Basis on Area

Unit: NT in million


61 73

255

288

7

73 85

328

279

1

48 30

244 226

0.2

0

50

100

150

200

250

300

350

Europe America Asia Taiwan Other

2015

2016

2017 (Q1~Q3)

9



Sale proportion basis on the Area (Jan~ Sep, 2017)


10

Asia 44%

(including

Japan 27%)

America

5%

Europe

9%

Africa

1%

Taiwan 41%

(including

indirect export

31%)

Asia America Europe Africa Taiwan



Revenue Proportion Basis on Product Category


283 282

206

80

129

86

101 111

89 99

86

68

25 24 12 18 20 17

6 4 3

0

50

100

150

200

250

300

2015 2016 2017 (Q1~Q3)

Muscle relaxant

Proton-pump inhibitor

Topical Anesthetic agent

Respiratory system medicine

Non- Steroidal Anti- Inflammatory Drugs

Non- Steroidal Anti- Inflammatory Drugs

Intermediates

Unit: NT in million

11



Revenue Proportion Basis on Product Category (Jan.~

Sep, 2017)


Item Ratio

Muscle Relaxant 38%

Topical Anesthetic Agent 16%

Proton-pump Inhibitor 16%

Respiratory System Medicine 12%

Cardiovascular Medicine 3%

Non- Steroidal Anti- Inflammatory Drugs 2%

Intermediates 1%

Others 12%

12



Revenue Comparison Between 2017 and 2016


Item 2017年

Jan.~ Sept.

2016年

Jan.~ Sept. Differences

Operating revenue 548 578 (30)

Gross profit 157 235 (78)

Gross profit ratio 28% 41% (13%)

Profit before tax 79 156 (77)

Net income 46 119 (73)

EPS (in dollar) 1.52 3.97 (2.45)

Unit: NT in million

13



Net Profit and Dividend of Recent 5 Years

Unit: NT in dollar


3.10

4.93 5.20 5.27

1.52 2.0

3.0 3.5

3.5

0.00

1.00

2.00

3.00

4.00

5.00

6.00

2013 2014 2015 2016 2017 (Q1~Q3)

EPS

Cash Dividend

14



Analysis and Discussion on Major Operating Differences between 2017

and 2016 --- a. Revenue

Revenue of 2017 for two major items is lower. This is because our

customers' product sales and their estimated market growth were less

than their expected.

1. Muscle relaxant

2. Cardiovascular medicine

One of contract project from a customer was completed the first phase

of development and production last year, while there was about 30

million revenue contributions. Although the second phase of this project

was continued this year, it will not be completed until the first half of

next year, so this year there is no revenue contribution from this project.


15



Analysis and Discussion on Major Operating Differences between

2017 and 2016 --- b. Net Profit

Revenue differences between certain high-margin products

Competition from India and mainland China led to

customer’s requesting price cuts

Exchange losses


16



3. Strategy in Future Development & Company

Outlook (1)

Scale up Production & Commercialize

the Developing New Products

17



Improve the process of existing products to enhance product

competitiveness and increase profit

Shorten & Improve the Manufacturing Processes

Switch the resolution approach to asymmetric synthetic approach

for the synthesis of optically active API.

3. Strategy in Future Development & Company Outlook (2)

Precursor R-Enantiomer

Desired R-Product asymmetric

synthesis

Racemic Mixture

R-Enantiomer

S-Enantiomer

resolution

Desired R-Product

R-Enantiomer

S-Derivative R-Derivative stereo

inversion

18



Carefully select and evaluate suitable future new

niche APIs for company’s future development

Should be technology and equipment advantages

High-tech threshold

High added value

3. Strategy in the Future Development & Company Outlook (3)

19



Expanding New Business Areas：

APIs key intermediates

Formulated API

Macromolecular APIs

Cooperate with other company in the research

and development of new drugs

3. Strategy in the Future Development

& Company Outlook(4)

20



4. Opportunities and Challenge (1)

Opportunity

In order to control the expansion of medical costs,

governments encourage the use of generic drugs.

Southeast Asia, Latin America, and Africa dominate

using the generic drugs.

It is estimated that the global generic drug market

will reach about 400 billion U.S. dollars in 2020 and

500 billion U.S. dollars in 2025.

21



4. Opportunities and Challenge (2)

Challenge

India and mainland China API manufacturers have the advantage of

the domestic big market, also both countries have a wealth of basic

chemical raw materials with low cost. In contrast, we almost all have

to rely on imports for all raw materials and reagents, so the cost is

higher. This is the challenge that we are facing.

Overcome

Providing high quality of products and developing high technology.

22



Documents

生泰合成工業股份有限公司 - syn-tech.t”Ÿ泰法說會2017-英文.pdfSale proportion basis on the Area (Jan~ Sep, 2017) 2. Business and Financial Performance (3) 10 Asia