Report To Shareholders

Up-to-date facts and figures on our company to you

For future development, we will make continual improvement to pursue sustained operations.

Dear Shareholders:
In review of 2015's operational advancement, TSRC (Nantong) Industries Ltd. gained new customers' approval on SIS granulation and Kaohsiung plant accomplished modification of TPE SEBS production line in expansion of our high value added product business to better off the Company's revenue and profitability. At the aspect of HSEQ, the Company was honored and awarded by the Industrial Development Bureau of Ministry of Economic Affairs for its implementation and accomplishment of the district-joint-reaction mechanism and the joint-defense network in prevention of incident by toxic substance.

Achievement of 2015

Business Achievement

In the bumpy 2015, synthetic rubber industry underwent the inert automobile and tire markets stagnated by China's slow economy and hammered by US anti-dumping and anti-subsidy sanctions against Chinese tire manufacturers. Moreover, the plummet of oil price causing price plunge of butadiene and synthetic rubber gave another heavy punch onto the industry in terms of the macro environment. Meanwhile, at the industry's micro aspect, new production volume flooding into the market speeded up and exacerbated the imbalance between supply and demand of synthetic rubber market. Nonetheless, to overcome such harsh and rigorous challenges for assurance of profitability, the TSRC team has been everlastingly devoting in cost improvement, enhancement of production flexibility and coalition reinforcement with strategic customers. Furthermore, an SBS line in Kaohsiung plant had been modified into SEBS line to grow a richer product mix in high-margin and high-end TPE products.
In sum, to the 2015, the Company approached consolidated revenue of NTD25.98 billion, 18% less than previous year, which turned out to be NTD3.37 billion in gross profit and NTD1.39 billion in operating profit, presenting 15% and 28% respectively less than previous year. Finally the net income after tax of 2015 winded up with an amount of NTD529 million, a 54% decrease from the previous year, posing a net profit margin of 2.31% and EPS NTD0.64 for the year of 2015.

R&D Achievement

In adapting to the global oversupply plight of synthetic rubber, we have devoted ourselves in product differentiation efforts, like developing high performance and ECO tire application in providing better wet-grip performance and handling capacity and offering customers all-around technical service to meet customers' demand and needs.
To grasp the high-end TPE advantage and meet global major players' demand and needs, the team has been advancing into the applied materials with the market's commanding niche, e.g. High-end shoe materials, special adhesives, ultra-film materials, high-tech medical materials. The team also continues to enhance the TPE product quality and process improvement, and establish the global product technical service network for being an accountable and trustful partner to our global customers.
Meanwhile, the Company filed 4 patent applications and obtained 28 patent approvals in the year.

Business Outlook of 2016

2016 is expected to be a year with steady recovery of European and U.S. economies and slight growth in Asian automobile and tire markets. However, the plight of oversupply in synthetic rubber industry remains unrelieved in the short run. In maintaining the volume growth in production and sales over years and improving the capacity utilization and market share, the Company will not only enhance the production and marketing integration and increase the global sales volume in high-valued TPE fields, but also accelerate our procurement of global brand's certification in high-end shoe materials to reach the goal for profit making.

Development Strategy

The Company will continue proactively taking the initiative to upgrading and transformation, enlarging the proportion of TPE business, moving forwards to the specialty niche markets for specialty chemical products and applied materials, and enhancement of R&D capabilities in high-end technology and customization. Furthermore, the Company will continue to adhere to the concept of treasuring global resources and implementing the corporate social responsibility and sustainable operation, and make all its efforts in developing ECO materials and creating business success in return of the support and encouragement from all shareholders.

Shao-Yu, Wang

Chairman Shao-Yu, Wang | TSRC