Shane Global Holding Inc.

8482 TT

Investor Presentation1

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Executive Summary

✓ We are the largest custom-made furniture outsourcing service provider in the world

We are the largest custom-made furniture outsourcing service provider in the world. We provide services

ranging from designing, sourcing, inventory, manufacturing, all the way to last mile logistics. Our unique

business structure of high vertical integration and our know-how of J-I-T factory management allow us to

deliver an industry leading turnaround time (7 weeks, door-to-door service) to our clients. We owns five

factories in Hangzhou, China, and one in Thailand. We are also looking to further expand our manufacturing

footprint.

✓ Our clients are high-end furniture retailers

We work mostly with the high-end retailers such as RH (Restoration Hardware) and William Sonoma, whose

target clienteles (for high-end custom-made furniture) are with annual household income larger than

USD300,000.

✓ Our goals: Double our market share in five yearsWe aim to double our market share in high-end custom-made furniture in five years (from 4% to 8%), by

penetrating more US clients as well as growing our Australia, Europe and Japan customers. Our new mattress

business, which we will set up in Cambodia in 1H2020, is expected to bring in another USD100m in revenues in

five-years.

✓ Dividend policyWe are committed to return our earnings back to our shareholders. We’ve paid out on average +80% of our

earnings over the past five years, we expect to continue to do so.

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A Leader In High-end Custom-made Furniture

Shane Global Holding Inc. (Ticker: 8482TT)

• Founded in 1999 in Hangzhou, China

• Set up as a Cayman Company in 2014 and was listed in the TWSE on Aug 15, 2018

• Market cap: USD512m

• Shares Outstanding: 111.1m shares

• Revenue: NTD4.4bn in 2018

• Employees: 2,000 people

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Who we are

the largest custom-made furniture

outsourcing service provider in the world

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We

are

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Deliver High-end Custom-made Furniture Directly To Your Door

With just one click of the mouse…

Door-to-door service directly to end consumers homes

ALL UNDER 7 WEEKS!

Design Manufacture Inventory Logistics

Order Sent

Door-to-Door

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What Is Dash Order?

More than 10 years in the making

Started in 2008, from 1 shipping container per week, to now

+40 containers per week.

Customizable Options

End consumers have many options for their furniture, such as

upholstery (+800 types of fabric, +100 types of leather),

dimensions (W x H x D), types of sponge (firm or soft), etc.

For example: RH offers +300,000 SKUs to its clients.

Door-to-door service

Last mile logistics already sorted out in our factory in

Hangzhou, China. When the furniture arrives US, it goes

straight to end consumers’ home without going into

warehouse.

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Dash order is our custom-made order program

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3

4

End consumer to receives our custom-made furniture no later

than 7 weeks. Even faster than our US competitors

Quick turnaround time of 7 weeks

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Dash Order Process

Consolidate all

Dash Orders at

retailers site

Order

Placement

Production

Inspection

Packaging

Week 1-2

Freight by sea

Week 3-4

Clear customs;

West coast US

consumers

receive orders

Week 5-6

East coast US

consumers

receive orders

Week 6-7

SGH receives

orders; Start

JIT production

Day 1

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ServicesHow we are able

to provide these it is because of…

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Competitive Offerings

Highly Vertically

Integrated

Just-In-Time Factory

Management

Logistics Competitive Pricing

✓ Highly Vertically Integrated ✓ JIT Factory Management

• “Mass produce” custom-made

pieces in two weeks

✓ Logistics

• Industry leading turnaround

time (5-7 weeks)

• Door-to-door service

✓ Competitive Pricing

• Our US competitors are 20%

more expensive than us

• +90% in-house sourcing

• One-stop-shop offerings

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Our Products – Upholstery

OTTOMANBED DINING CHAIRSOFA

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Our Products – Wood Furniture

TROLLEYCABINET & SHELF TABLE

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Our Customers

Annual Household Income

larger than USD300,000;

Which is 2-3% of the US

population

Customer Portfolio Target Consumers

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RHTake as an example

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Warren Buffet Just Recently Purchased Restoration Hardware

• RH is one of our largest clients that subscribes to our

custom-made furniture outsourcing services

• Berkshire Hathaway disclosed in a regulatory filing on Nov

15, 2019 that it took a $212 million stake in RH

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Our Value Proposition To Furniture Retail Clients

High-end custom-made service

Dash orders are all presold items

Raw materials are on SGH books

Door-to-door logistics service

• Higher ASP and margin

• 50% down payment at retail level

• More working capital on hand

• No finished goods inventory at

retailers (and at SGH)

• Minimize labor and warehouse cost

• Decrease client’s inventory burden

Offerings Benefits

Increased dependency on SGH’s outsourcing services

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ResultAs a …

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Dash Order Mix On The Rise

• We saw dash orders grew about 5% YoY in

9M2019.

• New clients are all interested in this service,

as we are committed to provide the same

Dash order service.

• After six months of adjustment, our new

Thailand factory can now do Dash orders also.

Dash Orders Should Continue To Expand Increased Dash Order Mix (2015-9M2019)

• GM should have trended up further in 2018

and 9M2019 as DO mix increases.

• BUT, US/China trade war started to have

some impact on GM.

US/China Tariff Started To Have Impact on GM

37% 46% 56% 54% 55%

36.5%

41.8%

42.1%

40.6%

39.5%

32.0%

36.0%

40.0%

44.0%

0%

20%

40%

60%

80%

100%

2015 2016 2017 2018 9M19

Dash Order (LHS) STO(LHS) Gross Margin (RHS)

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Cash Conversion Cycle Analysis – Liability Inventories

Cash Conversion Cycle 2015 2016 2017 2018

A/R (Days) 39 37 37 42

Inventory (Days) 90 82 76 76

A/P (Days) 28 37 38 43

Cash Conversion Cycle 101 83 75 75

Liability inventories

removed2015 2016 2017 2018

A/R (Days) 38 37 37 41

Inventory (Days) 52 48 36 34

A/P (Days) 27 36 37 42

Cash Conversion Cycle 63 49 36 33

• Liability Inventories are guaranteed by

our clients to either use up or buy back

(settle every 6 months)

• Conceptually, we wanted to see what it

looks like if we removed it from our

regular inventory

• This should further demonstrate that our

operations are quite efficient

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StepOur

next

Become the first ever

total solutions service

provider in upholstery

industry

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SYLVAIN SOFA

ANTHONY

SPON-SMITH

BEAM RECTANGULAR DINING TABLE

By Collaborating With These Well Known Furniture Designers

Showcase

our design

Furniture

retailer picks

our design

Our design can only be

serviced through us

Our furniture

occupies more

floor space

More opportunity for

consumers to pick our

furniture; Less space for

competitors product

Increase

client

penetration

More revenue shares for

us, as we have

essentially “locked-in”

on the orders

We collaborate with

famous designers, such

as Thomas Bina, Anthony

Spon-Smith, and many

more…

Becoming A Total Solutions Service Provider In Upholstery

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New Mattress

Business

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US Imposes Anti-Dumping Duties On Chinese Mattresses

Source: US Department of Commerce

Source: US Department of Commerce

Country Exporters/Producers Tariff

China

Those Who Cooperated 57-192%

Everyone Else 1,731%

Final Dumping Duties

North

AmericaChina

No one survives No one will buy

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We Plan To Take Advantage Of The Situation

• New void in the market: Cost comparison between Cambodia and US

Cambodia US

Overhead / Fixed Cost Cheaper

Chemical Used in

Producing Sponge /

Foam

30% cheaper than US

Manufacturing Process More efficient

Labor Cost USD 0.5 per hour USD 12-25 per hour

Oversea Shipping Cost 5-10% per unit None

Overall Cost

20-30% cheaper

than US

Many smaller mattress firms in China do not have the

resources to relocate their factories to other countries. This

creates an opportunity for SGH.

• Already own key technology:

• No fund raising necessary:

We own foam recipes and process know-how from our

upholstery business.

Plan to invest USD 50m; No plans to raise capital as we have

sufficient cash.

Our team is one of the very few teams that has successfully

built and operated mattress plants outside of China.

• Already own a client:

We have locked in on one of the major mattress companies

in the US. It will be a jump start for us.

• Highly experienced management team:

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Our Goals

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Where We Expect To Be In Five Years

7.7%

USD3.2bn

2024

Our Goals

✓ Double our market share: We aim to double our market

share in high-end custom-made furniture in five-years

(from 4% to 8%), by 1) offering a total solutions service, 2)

by penetrating more US clients, as well as 3) growing our

Australia, Europe and Japan customers.

✓ Diversify into other regions: We are ready to gain more

market share from our international (non-US) clients. We

believe our foundation is strong and we are ready to take

on more service subscriptions. We are able to make the

same commitment of service (turnaround time and door-

to-door service) as to our US clients.

✓ New mattress business: We will set up our new mattress

factory in Cambodia in 1H2020, which is expected to bring

in additional USD100m in revenues in five years.

4.1%

Worlwide

SGH Market Share

USD3.2bn

2019

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Company

Overview

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Revenue Breakdown - Products

Sofa58.2%

Dinning Chair18.3%

Bed15.1%

Ottoman2.8%

Others5.6%

2018

Sofa Dinning Chair Bed Ottoman Others

Sofa56.6%

Dinning Chair17.8%

Bed16.6%

Ottoman3.2%

Others5.8%

1H19

Sofa Dinning Chair Bed Ottoman Others

Sofa60.1%

Dinning Chair18.4%

Bed13.2%

Ottoman3.0%

Others5.4%

2017

Sofa Dinning Chair Bed Ottoman Others

Continue to diversify into other product portfolio; Non-sofa products have increased to 43%

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Revenue Breakdown - Region

US91.8%

Australia4.5%

Europe2.0%

China0.7%

Others0.9%

2018

US Australia Europe China Others

US89.9%

Australia5.0%

Europe1.6%

China1.1%

Others2.4%

1H19

US Australia Europe China Others

US92.5%

Australia3.5%

Europe1.6%

China0.5%

Others1.8%

2017

US Australia Europe China Others

Continue to diversify into other markets; US is now below 90% of revenue

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Production Sites and Company Structure

Hangzhou

Thailand

Shane Global

Holding Inc.

Shayne

International

Holdings Limited

Shayne

International

Holdings Limited,

Taiwan Branch

Hangzhou

Rilong Leather

Products Co.,

Ltd

Hangzhou

Huatong

Industries Inc.

Couture

Furniture

(Shanghai) Co.,

Ltd

Hangzhou

Couture Home

Furnishing Co.,

Ltd.

Shayne USA,

LLC

JV

International,

LLC

Spectra Home,

LLC

Shayne

Holding Inc.

Shayne

Furniture

(Thailand) Co.,

Ltd.

Shayne

(Macao

Commercial

Offshore)

Limited

100%

100%

100%

100%

100%

100%

97%

100%

100%

100%

100%

5 Factories

Production: Interior furniture, fittings

Personnel: 2,000

1 Factory

Production: Interior furniture, fittings

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Company Milestones

Hangzhou Rilong

Leather Products

Set up our 1st furniture

factory in Hangzhou Tonglu

Customized furniture (Dash Order) rolled out

• Set up Shayne Holding Inc.

and Shayne International

Holdings Limited

• Huatong 2nd plant started up

Spectra Home LLC

JV International, LLC

• Established relationships

with US leading brands

• Set Up Couture Shanghai

Shayne USA, LLC & Couture Hangzhou

• Taiwan Branch of Shayne

International

• Restructure underway with

IPO entity-Shane Global

Holding Inc.

Acquired Hilkinson (Macao

commercial offshore) Ltd and

renamed as Shayne (Macao

commercial offshore) Ltd

• Debut in China market with

opening the flag shop in

Hangzhou

• Huatong 3rd site ready

Huatong 4rd plant, set up to

produce wood furniture

2018/08/15 listed in Taiwan

Stock Exchange

Shayne Furniture

(Thailand)

Hangzhou Huatong Industries

1993 2002 20082006 2009 2011 2012 2013 2014 2015 2016 2017 2018 20191999

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Financial

Summary

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Financial Highlights

0%

10%

20%

30%

40%

50%

1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

Quarterly Margin

Gross Margin Operating Margin Net Margin

0

1

2

3

4

1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

EPS

EPS

-30%

-15%

0%

15%

30%

0

300

600

900

1,200

1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

Quarterly Revenue & Growth

Revenue Revenue Growth(YoY)

-50%

-25%

0%

25%

50%

0

100

200

300

400

1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

Quarterly Earnings & Growth

Operating Profit Net Income Net Income Growth(YoY)

NTD m

NTD mNTD

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Financial Highlights

0.0%

10.0%

20.0%

30.0%

40.0%

0

1

2

3

4

2016 2017 2018 9M19

Dupont Analysis

Sales turnover (LHS) Financial leverage (LHS) Net margin (RHS)

0.0%

20.0%

40.0%

60.0%

80.0%

2016 2017 2018 9M19*

ROE

0%

25%

50%

75%

100%

0

750

1,500

2,250

3,000

1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

Net Cash & Net Cash to Equity

Net Cash (Debt) Net Cash (Debt) / Equity0

75

150

225

300

375

1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

Free cash flowNTD m NTD m

*9M19 ROE is annualized number

to Equity

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Income Statements Highlights - Quarterly

NTD million 3Q19 2Q19 3Q18 QoQ YoY

Sales 942 1,097 1,191 -14% -21%

Gross Profit 370 415 506 -11% -27%

Gross Margin 39.2% 37.8% 42.5%

Operating Expenses -197 -182 -194 8% 1%

Opex Ratio 19.8% 15.2% 15.3%

Operating Income 173 233 311 -26% -45%

Operating Margin 18.3% 21.2% 26.1%

Non-Operating Income / (Loss) 23 57 17

Pre-Tax Income 196 290 328 -33% -40%

Income Tax -9 -13 -38

Minority Interest -1 -1 -2

Net Income 186 276 288 -33% -36%

Net Margin 19.7% 25.2% 24.2%

EPS (NTD) 1.7 2.49 2.72 -32% -38%

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Income Statement Highlights

NTD million 2014 2015 2016 2017 2018 9M19Y-Y (%)

2015 2016 2017 2018 9M19

Sales 4,233 4,537 4,570 4,535 4,439 2,973 7.2% 0.7% (0.8%) (2.1%) (26.3%)

Gross Profit 1,548 1,655 1,912 1,910 1,801 1,175 6.9% 15.5% (0.1%) (5.7%) (27.1%)

Operating Expenses (709) (652) (808) (736) (755) (571) (8.0%) 23.9% (8.9%) 2.5% (26.6%)

Operating Income 839 1,003 1,103 1,173 1,047 604 19.5% 10.1% 6.3% (10.8%) (27.5%)

Non-Operating Income/(Loss) (76) (63) 112 (7) 57 88 (17.4%) - (106.1%) - (28.7%)

Pre-tax Income 763 940 1,215 1,167 1,104 693 23.1% 29.3% (4.0%) (5.4%) (27.5%)

Income Tax (145) (99) (118) (102) (89) (31) (31.8%) 19.4% (13.7%) (12.2%) (16.3%)

Net Income 616 839 1,093 1,063 1,012 661 36.1% 30.3% (2.7%) (4.8%) (28.5%)

EPS (NTD) $8.21 $10.42 $10.93 $10.63 $9.70 $5.99 26.9% 4.9% (2.7%) (8.7%) (26.9%)

Gross Margin 36.6% 36.5% 41.8% 42.1% 40.6% 39.5%

Operating Margin 19.8% 22.1% 24.1% 25.9% 23.6% 20.3%

Net Margin 14.6% 18.5% 23.9% 23.4% 22.8% 22.2%

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Balance Sheet Highlights

NTD million 2014 2015 2016 2017 2018 9M19Y-Y (%)

2015 2016 2017 2018 9M19

TOTAL ASSETS 3,467 3,607 3,730 3,441 4,857 4,016 4.1% 3.4% (7.7%) 41.2% (11.8%)

Cash 979 1,451 1,450 1,088 2,759 1,892 48.2% (0.1%) (25.0%) 153.7% (18.5%)

NR & AR 488 479 459 467 547 446 (1.7%) (4.2%) 1.8% 17.0% (16.0%)

Inventories 760 658 533 554 550 461 (13.4%) (19.1%) 3.9% (0.7%) 3.1%

Fixed Assets 354 434 531 656 649 777 22.7% 22.4% 23.5% (1.0%) 20.1%

TOTAL LIABILITIES 2,706 2,129 1,385 1,349 1,172 985 (21.3%) (34.9%) (2.6%) (13.2%) (16.6%)

NP&AP 164 271 261 282 338 215 65.7% (3.6%) 7.9% 19.7% (19.9%)

TOTAL EQUITY 761 1,478 2,344 2,091 3,685 3,031 94.3% 58.6% (10.8%) 76.2% (10.1%)

A/R turnover days 48 39 37 37 42 60

Inventory turnover days 98 90 82 76 76 92

A/P turnover days 28 28 37 38 43 49

Cash conversion cycle 118 101 83 75 75 103

ROE* (%) 129% 78% 58% 49% 36% 28%

ROA*(%) 17% 24% 30% 30% 24% 21%

Net Cash to Equity (%) -5% 85% 71% 61% 77% 66%

*9M19 ROE and ROA are annualized numbers

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Dividend Payout & Capex

NTD million 2014 2015 2016 2017 2018 2019

Net profit 616 839 1,093 1,063 1,012

Dividend Paid 393 546 655 1,208 699 889

DPS (NT$) 12.08 6.99 8.00

Payout ratio 143% 89% 78% 111% 66% 88%

Dividend yield 5.63%

Capex 61 131 191 162 93

Capex/Sales 1.44% 2.88% 4.18% 3.58% 2.10%

* Yield calculated using market cap on the day prior to ex-dividend date

Dividend Policy

We are committed to return our earnings back to our shareholders. We paid out on average +80% of

our earnings over the past five years.

Appendix

High Vertical Integration ( I )

Fabric, Leather, Sponge Stocking

Fabric, Leather, Sponge Cutting

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High Vertical Integration ( II )

Sewing Assembling Carton Box

PaintingFramingCarving

This presentation and release may contain forward-looking statements which may include projections on future results of

operations, financial condition and business prospects based on our own information and other sources. The actual results

of operations, financial condition and business prospects may differ from those explicitly or implicitly indicated in those

forward-looking statements for a variety of reasons, including but not limited to market demand, price fluctuations,

competition, supply chain issues, global economic conditions, exchange rate fluctuation and other risks and factors beyond

Shane Global’s controls. The forward-looking statements in this presentation, if any, only reflect the current view of Shane

Global Holding Inc. as of the date of its release. Shane Global undertakes no obligation to update those forward-looking

statements for events or circumstances that occur subsequently.

Disclaimer

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