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Taiwan Prosperity Chemical Corporation

4Q/2014

Investors’ Conference

April 08, 2015

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Disclaimer

The forward-looking statements contained in this presentation are

subject to risks and uncertainties and actual results may differ

materially from those expressed or implied in these forward-looking

statements.

Taiwan Prosperity Chemical Corporation makes no representation or

warranty as to the accuracy or completeness of these forward-looking

statements and nor does Taiwan Prosperity Chemical Corporation

undertake any obligation to update any forward-looking

statements, whether as a result of new information or future events.

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Agenda

• Company Snapshot

• 4Q/2014 Financial Results

• Business Overview

• Capital Expenditure

• 1H/2015 Business Outlook

3

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Taiwan Prosperity Chemical Corp.

Established: May, 1991

Headquarter: Taipei, Taiwan

IPO in TWSE: October, 2007

Outstanding Shares: 292 million shares

Market Cap:

(as of March 20, 2015,NTD25.05 per share) NTD 7,314 million

(USD/NTD=31.459) ( USD 232 million )

Production facility: Lin Yuan, Kaohsiung, Taiwan

Employees: 223

(as of 12/31/2014)

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Production Facility

Kaohsiung

(TPCC)

Beijing

Shanghai

1.Cumene

(460 KTA)

2.Phenol/Acetone

(360 KTA/221 KTA)

3.Bisphenol-A

(107 KTA)

4.Anone

(150 KTA)

5.MAN

(40 KTA)

6.H2-I

(7K Nm3/hr)

H2-II

(8.1K Nm3/hr)

7. BDO

(34 KTA)

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Agenda

6

• Company Snapshot

• 4Q/2014 Financial Results

• Business Overview

• Capital Expenditure

• 1H/2015 Business Outlook

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4Q/2014 Statement of Comprehensive Income

(In NT millions except otherwise

noted)4Q/14 3Q/14 4Q/13 QoQ % YoY %

Net Sales 4,237 6,257 5,759 (32.3) (26.4)

COGS (4,498) (6,215) (5,917) (27.6) (24.0)

Gross Profit (261) 42 (158) (721.6) (65.2)

Gross Margin -6.2% 0.7% -2.7% (6.9) (3.5)

Operating Expense (111) (127) (132) (12.9) (16.2)

Operating Income (372) (85) (290) (337.2) (28.2)

Operating Margin -8.8% -1.4% -5.0% (7.4) (3.8)

Non-operating

Income/(Expense)(53) (20) (25) (163.6) (112.6)

Income before Tax (424) (105) (315) (304.2) (34.8)

Income Tax Benefit/(Expense) 72 8 54 795.4 32.7

Net Income (Loss) (353) (97) (262) (263.7) (34.7)

Net Margin -8.3% -1.6% -4.5% (6.7) (3.8)

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4Q/2014 Statement of Comprehensive Income

8

(In NT millions except otherwise

noted)4Q/14 3Q/14 4Q/13 QoQ % YoY %

Net Income (Loss) (353) (97) (262) (263.7) (34.7)

Other Compresensive Income

(Loss)(87) 22 57 (498.5) (252.5)

Total Comprehensive Income

(Loss)(440) (75) (205) (483.3) (114.6)

Basic EPS (NT$) (1.21) (0.33) (0.90) (266.7) (34.4)

ROE -23.8% -6.3% -16.8% -17.5% -7.0%

ROA -8.0% -1.2% -6.1% -6.8% -1.9%

Free Cash Flow (70) (583) 228 88.0 (130.7)

Free Cash Flow = Operating Cash Flow - CAPEX –LT Investment

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Year 2014 Statement of Comprehensive Income

9

(In NT millions except otherwise noted) 2014 2013 YoY %

Net Sales 23,107 22,579 2.3

COGS (23,172) (22,786) 1.7

Gross Profit (65) (207) 68.6

Gross Margin -0.3% -0.9% 0.6

Operating Expense (479) (512) 6.5

Operating Income (544) (719) 24.4

Operating Margin -2.4% -3.2% 0.8

Non-operating Income/(Expense) (137) (48) (184.8)

Income before Tax (680) (767) 11.3

Income Tax Benefit/(Expense) 105 114 (8.2)

Net Income (Loss) (576) (653) 11.8

Net Margin -2.5% -2.9% 0.4%

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Year 2014 Statement of Comprehensive Income

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(In NT millions except otherwise noted) 2014 2013 YoY %

Net Income (Loss) (576) (653) 11.8

Other Compresensive Income (Loss) (26) 239 (111.0)

Total Comprehensive Income (Loss) (602) (414) (45.6)

Basic EPS (NT$) (1.97) (2.24) 12%

ROE -9.6% -9.9% 0.3%

ROA -2.5% -4.3% 1.8%

Free Cash Flow (891) 245 (464.4)

Free Cash Flow = Operating Cash Flow - CAPEX -LTInvestment

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4Q/2014 Statement of Cash Flow

11

(In NT millions except otherwise noted) 4Q / 14 3Q / 14 4Q / 13

Cash Flows From Operating Activities

Income before Tax (425) (105) (316)

Adjustments to reconcile income

to net cash provided by operating activities391 (414) 669

Net cash generated from operating activities (34) (519) 353

Cash Flows From Investing Activities (103) (91) (172)

Cash Flows From Financing Activities (1,080) 1,119 (505)

Net Increase In Cash And Cash Equivalents (1,218) 509 (323)

Cash And Cash Equivalents, Begining Of Period 1,358 849 1,171

Cash And Cash Equivalents, End Of Period 140 1,358 848

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2014 Statement of Cash Flow

12

(In NT millions except otherwise noted) 2014 2013

Cash Flows From Operating Activities

Income before Tax (680) (768)

Adjustments to reconcile income

to net cash provided by operating activities33 1,316

Net cash generated from operating activities (647) 548

Cash Flows From Investing Activities (317) (313)

Cash Flows From Financing Activities 255 172

Net Increase In Cash And Cash Equivalents (708) 407

Cash And Cash Equivalents, Begining Of Period 848 441

Cash And Cash Equivalents, End Of Period 140 848

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Sales/ GM & PAT

13

3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14

Sales 6,489 6,235 5,310 5,922 5,588 5,759 6116 6498 6257 4,23

PAT -124 -118 -53 -105 -233 -262 -51 -75 -97 -353

GM 0.1% 0.3% 1.1% 0.7% -2.7% -2.7% 1.2% 1.3% 0.7% -6.2%

-10%

-5%

0%

5%

10%

15%

20%

25%

-1,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000 NT$,M GM (%)

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Financial Structure

14

2.0

2.1 1.1

1.3

1.3

0.0

0.5

1.0

1.5

2.0

2.5

2010Y 2011Y 2012Y 2013Y 2014Y

45%38%

45%

58%

59%

0%

20%

40%

60%

80%

2010Y 2011Y 2012Y 2013Y 2014Y

31.1 29.823.5 21.6

19.610

15

20

25

30

35

40

2010Y 2011Y 2012Y 2013Y 2014Y

Current ratio

D/A Ratio

Book Value-1.2%

2.5%

30.6% 29.0%

56.9%

29.6%26.3%

25.5%23.6%

30.5%

-20%

0%

20%

40%

60%

2010 2011 2012 2013 2014

Net Debt/ Equity Debt/ Asset

Leverage Ratios (%)

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Agenda

• Company Snapshot

• 4Q/2014 Financial Results

• Business Overview

• Capital Expenditure

• 1H/2015 Business Outlook

15

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300

400

500

600

700

800

900

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1,800

1 3 5 7 9

11 1 3 5 7 9

11 1 3 5 7 9

11 1 3 5 7 9

11 1 3 5 7 9

11 1 3 5 7 9

11 1 3 5 7 9

11 1 3 5 7 9

11 1 3 5 7 9

11 1 3 5 7 9

11 1 3

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Year - Month

CPC Propylene/Benzene (USD/MT)

Propylene

Benzene

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0

500

1,000

1,500

2,000

2,500

1 3 5 7 91

1 1 3 5 7 91

1 1 3 5 7 91

1 1 3 5 7 91

1 1 3 5 7 91

1 1 3 5 7 91

1 1 3 5 7 91

1 1 3 5 7 91

1 1 3 5 7 91

1 1 3 5 7 91

1 1 3

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Year、Month

BPA

Phenol

Anone

Phenol/BPA/Anone monthly average Price (USD/MT)

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Worldwide Phenol Capacity & Demand Outlook

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Unit：KT/YR 2013 2014 2015 ( E ) 2016 ( E )

Phenol Capacity 11,981 12,536 13,381 13,901

Bisphenol A 4,126 4,233 4,438 4,619

Phenolic Resins 2,532 2,567 2,666 2,763

Anone 1,134 1,221 1,327 1,345

Others 1,385 1,409 1,447 1,479

Phenol Demand 9,177 9,430 9,878 10,206

Capacity - Demand 2,804 3,106 3,503 1,264

Utilization Rate, % 77% 75% 74% 73%

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China Phenol Capacity & Demand

Source:

19

0

500

1,000

1,500

2,000

2,500

3,000

2013 2014 2015 2016

Capacity DemandUnit：KT

Capacity Annual Grouth Rate:15.4% Demand Annual Grouth Rate:9.3%

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TPCC Sales Volume in Recent Years(Unit : MT)

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2009 2010 2011 2012 2013 2014

486,148 587,477 601,101 624,392 527,039 538,790

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Sales Destination of 2014 vs 2013

21

0%

10%

20%

30%

40%

50%

60%

Taiwan India America North Asia China Others South & East Asia

Middle-East

2014

2013

Taiwan India America North Asia China OthersSouth & East

AsiaMiddle-East

2014 43% 15% 13% 8% 6% 6% 5% 2%

2013 52% 18% 2% 8% 8% 5% 4% 4%

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TPCC Business

Cumene PlantPhenol/Acetone/AMS Plant

Anone Plant

BPA Plant

Propylene

Benzene

cumene

Phenol

Acetone

Anone

BPA

Acetone

Phenol

Cumene

AMSAMS

H2-II Plant

H2-I Plant

No 1 Steam/MAnPlant

No 2 Steam/MAnPlant

BDO Plant THF Plant

LNG

BDO

THF

GBL

MAn

LNG

nC4

nC4

10 Sites And 10 Products

Possessed Capacity Leased Capacity – To Be Completed By Q1 2015

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TPCC BDO Derivatives Development Plant

C4 SPLITER

MAN PLANT

BDO PLANT

PTMEGPLANT

NMPPLANT

NHEPPLANT

POLYOLPLANT

PBTPLANT

C4

n-C4

Crude Man

GBLTHF

BDO

NVPPLANT

PVPPLANT

PVP

NHEP

NVP

NMP

SPANDEXPLANT

TPU COPOLYESTER

SPANDEXFIBER

PUPLANT

PUPaint

PUFoam

PUAdhesive

PULeather

PBT COMPOUNDINGPLANT

ENGINEERINGPLASTICS

The High Value-added Petrochemical

23

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MAn Series Production Capacity

2013*2012

80 KTA40 KTA

BDO eq. Expansion

34 KTA

MAn Expansion

*: TPCC estimation

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Agenda

• Company Snapshot

• 2Q/2014 Financial Results

• Business Overview

• Capital Expenditure

• 2H/2014 Business Outlook

25

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Capital Expenditures NT$ M

26

0

100

200

300

400

500

600

700

2010 2011 2012 2013 2014 2015 ( E )

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Agenda

• Company Snapshot

• 4Q/2014 Financial Results

• Business Overview

• Capital Expenditure

• 1H/2015 Business Outlook

27

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1H/2015 Business Outlook-1

• Benzene

1. Supply from Asia will be increased by 1 million tons in 1H/2015 due to new capacity put in service.

2. Benzene price in 2015 shall be more stable due to new capacity on stream.

• Propylene

1. The CPC supply will be improved in 2015, due to CPC completed turn around for new Naphtha Cracker and RFCC in 2014.

2. Propylene price in 1H/2015 would increase, due to shut down of many crackers during March-May 2015.

3. Four PDH plants in China put in service, propylene production would increase by around two million mt to untighten supply after Jun/2015.

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1H/2015 Business Outlook-2

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• Phenol Chain Market – U.S. and Europe economics recover, and

China remained stable. Demand will be picked up gradually in Year 2015

compared to last year. In Asia, four new plants (one million MT) will be on

stream in 1H/2015, it will impact overall capacity utilization.

• Corporate strategy – To cope with threats in over supply market

trends, heavy attention will be paid to achievement of best possible margin

rather than highest production. Reduce operation cost by flexible operation

lines.

• Business strategy – Our strategy is to increase our sales to different

countries/areas to reduce the dependence on China market. Utilized

equipment leasing strategies to maintain revenue growth and promote sales

on new series of products (BDO/THF/GBL).

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Thank You

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