Letter to Shareholders

                 (I) Anti-Corrosion Resin

                            Swancor has launched SWANCOR HYVER, an innovative product that offers customers an additional choice of high performance and

                     cost-effective anti-corrosion resins, especially for applications in vessels, where the shipbuilding process can be streamlined to improve

                     production efficiency and performance. The product has successfully entered the international market.

                            In addition, Swancor has cooperated with its strategic partner, Anhui Meijia New Materials Co., Ltd. (hereinafter referred to as “Anhui 

                      Meijia New   Materials”), in developing a special-purpose epoxy resin, to enhance and accumulate its independent research and

                      development capabilities with a   particular focus on upstream materials.

                (II) Recyclable Thermoset Epoxy Resin

                            In response to the growing trends of carbon neutrality and carbon reduction, Swancor has developed the Recyclable Thermoset

                      Epoxy  Resin “EzCiclo”. When making composite materials using Swancor EzCiclo, in addition to the performance and characteristics

                      of  traditional epoxy resins, at   the end of the product's life cycle, the recycled fibers and oligomers can be obtained by immersing the

                      composite materials in CleaVER, a degradation   solution developed by Swancor, with appropriate heat treatment. The process does

                      not  produce waste solvents or waste gas, which is in full   compliance with the requirements of circular economy. 

                              EzCiclo of Swancor is a basic epoxy resin that can be used not only in the wind power industry, but also in a wide range of

                       applications, and replace many processes and products that require epoxy resins, such as the sports and leisure, bicycle, rail traffic,

                       marine,  and automotive industries. It can transform the thermosetting epoxy resins that are not recyclable to environmentally friendly

                       products that can be recycled.

               (III) Wind Turbine Laminar Epoxy Resin

                              Swancor’s two innovative products, Swancor EzCiclo and SWANCOR HYVER, can substitute for the traditional wind turbine blade

                       infusion resins, providing more choices for the wind turbine blade manufacturers. The Recyclable Thermoset Epoxy Resin is currently

                       undergoing certification testing by international and Chinese customers, while SWANCOR HYVER is undergoing certification testing by

                       Chinese customers. 

                (IV) High-Performance Carbon Fiber Prepreg Sheets and Pultruded Carbon Fiber Plates

                              In addition to the carbon fiber prepreg sheets and pultruded carbon fiber plates originally provided, Swancor has developed and

                      used  "SWANCOR HYVER" and "EzCiclo" prepregs and pultruded sheets to provide customers with more diversified product choices.

      III. Recent Corporate Development Overview

                 In June 2022, Swancor announced the establishment of a subsidiary, S-Wanlai Co., LTD., to manufacture and sell circular economy products. 

           Swancor is strategically integrating upstream resources, in addition to external investments, it has also invested resources in developing new raw

           materials. 

                  EzCiclo products have passed ISO 14021 certification, and a declaration of recycled material has been made. The composite materials made

            with EzCiclo can reach a recycling rate of ≥95%. The certification fully demonstrates the sustainable recycling of EzCiclo, providing users with a  

            reliable product declaration.

       IV. Business Plan for 2023

                  Swancor Holding is an investment holding company, and its 2023 plan and strategy for the main subsidiaries, Swancor Advanced Materials,

            Sunwell Carbon Fiber, and Swancor Innovation & Incubation are described as follows.

            1. The main products of Swancor Advanced Materials are anti-corrosion resin and green energy materials.

                1.1 Anti-corrosion resin: 

                     China: Actively seize business opportunities in various applications of environmental protection in accordance with China’s 

                                environmental  protection policies, collaborate with investment partner, Anhui Meijia New Materials, to expand outreach to

                                composite materials customers, focus on new products and new applications, reinforce geographical expansion strategy, and

                                strengthen marketing in remote areas through distributors, in order to solidify its leading market position and achieve continuous

                                sales growth.

                    Global: With our successful experience in Taiwan and China markets, we will deepen the market penetration in cooperation with

                                 distributors, increase our market share in major target regions including Southeast Asia, India and the Middle East, reinforce the

                                 use  of  SWANCOR HYVER in vessel applications, and establish production capacity cooperation with strategic partners in 

                                 European and American regions to improve competitiveness, increase market share and enhance profitability. 

                     The medium and long-term goal of anti-corrosion material business unit is to achieve the No. 1 market share in Asian market.

               1.2 Eco-friendly green energy materials:

                     China: We are promoting new recyclable epoxy products, grasping the development trends of the industrial market, closely following

                                 government policies, strengthening the strategic partnerships with OEMs in mainland China, improving our technical services and

                                 brand image, exploring new customers, and increasing our market penetration rate. We will continue to promote the application of

                                 SWANCOR HYVER products in blade components to increase market share and profitability.

                     Global: By virtue of Swancor’s product quality, technical capabilities and achievements in Taiwan offshore wind power, its wind power

                                  laminar resins have obtained orders after being certified by the international wind turbine manufacturers. We will actively explore

                                  new customers, promote the recyclable epoxy products and HYVER, establish capacity cooperation with strategic partners in

                                  Europe to enhance competitiveness, 4 grasp emerging industries such as offshore wind power in Taiwan, and continue to seek new

                                  application opportunities to maintain its leading market share and increase profitability. 

                     In the medium and long term, our goal is to become a technology leader in wind turbine blade materials and a pioneer in circular

                                  economy.

             2. The main products of Sunwell Carbon Fiber are pultruded plates and prepreg sheets:

                 Pultruded plates: The products have been certified by leading international wind turbine manufacturers and major customers in China and

                                               have received orders from them. The products are mainly used for wind turbine blade spars. Swancor will continue to refine

                                               its product quality, improve its yield of products and technological capabilities, and actively explore and obtain

                                               accreditation from new customers to ensure the stable supply of upstream carbon and glass fibers and accelerate

                                               sustainable growth.

                 Prepreg sheets: We will actively explore new customers and applications outside of wind power industry, increase capacity utilization rate,

                                             and develop innovative recyclable prepreg sheets in combination with recyclable resins to accelerate sustainable growth.

                                             In addition to the sustainable development of the two major products, we will integrate the resources of Cotech Inc. and

                                             move from materials to carbon fiber molded components, so as to exploit the combined effect and develop more customers

                                             for carbon fiber composite material applications in aerospace industry and new energy vehicles. We are also actively 

                                             developing new products as a new growth engine.

              3. Swancor Innovation & Incubation mainly focuses on forward-looking research and development of innovative materials and the incubation

                  of new businesses: 

                          We will continue to deepen the cooperation between the Company and schools, and devote ourselves to the R&D of carbon neutrality.

                  Swancor will focus on forward-looking research and development of carbon capture, utilization and storage; identify suitable sites and

                  collaborative partners for carbon capture testing; utilize the test equipment to perform carbon capture in practice; and consolidate existing

                  resources to explore carbon utilization and storage channels. Swancor will also invest resources in the development of carbon fiber recycling

                  applications, including recycling technologies and the market for applications, to achieve the goal of a circular economy.

       V. Impact by external competition environment, regulatory environment and overall operating environment

                  Fixed export ratio of the Company was approximately 90%, and the competitors were peers all over the world, where, with sales volume

          accounting for 60%, Mainland China was our main market. Enterprises in Mainland China used to take price competition as the sales strategy,

          therefore, the Company had adjusted procurement strategy for important raw materials, in order to reduce inventory and improve product

          competitiveness; the Company also continued to expand niche markets beyond Mainland China to strengthen customer relationships.

                  In response to global warming caused by climate change, all countries had begun to face up to energy conservation and carbon reduction, 

          aiming for net zero emission. The Company has been deeply engaged in the filed of environmental protection. Our produces are environmental

          friendly and corrosion-proof materials with corrosion prevention performance as the core, and environmental friendly green-energy materials as

          well as lightweight carbon fiber composite materials supplied in the field of green wind power energy. In recent years, the Company has

          launched recyclable thermosetting epoxy EzCiclo series products to further change the recycling problem of 5 “thermosetting composite

          materials” since 1930s, which would bring about new opportunities and outlook for net zero transformation of the Company. In addition, the

          Company continued to keep track of the changes in legal environment, and align with its ESG goals to reduce business risks. 

                   Although the border blockade of many countries was slightly relaxed at the beginning of the year, the risk of infection did not seem to have

           slowed down, therefore, China continued with strict lockdowns and control, and the management of Chinese people's autonomy was not

           relaxed; the outbreak of Russo-Ukrainian War, the Federal Reserve raised its interest rates in 2022 to curb inflation, and so on, all of which had

           slowed down the overall market demand in all countries, leading to severe economic situation as a whole, resulting in the increase of various

           costs, making governmental construction and private enterprise investment, etc. suspended. The business operation was not optimistic, and

           hidden risks emerged gradually. Therefore, we would continue to reduce the risk factors through various competitive advantages to achieve

           operational goals.

       VI. Future Prospects 

                    This year, we will, based on the business foundation developed in the past few years, continue to develop our new material business under

            the two main development strategies, and focus on the mass production of EzCiclo and CleaVER and diversified applications to become a

            leading company in recycled materials. Swancor’s carbon composite materials have obtained orders from the international wind turbine

            manufacturers and Chinese machine factories. Swancor will ensure the stable supply of upstream carbon and glass fibers and continuously

            improve the yield of products, so that the revenue will continue to grow and profits will be improved. At the same time, Swancor will integrate 

            COTECH INC.’s resources to tap into a new customer base of carbon fiber composites’ applications in the aerospace and new energy vehicle

            sectors. Meanwhile, Swancor Innovation & Incubation will focus on the research and development of carbon capture, utilization and storage

            and carbon fiber recycling applications along with early investments in businesses related to carbon neutrality. We are actively involved in the

            development of the circular economy and are committed to becoming a carbon reduction and carbon neutrality expert.

                     In addition to developing new businesses, Swancor Holdings plans to merge companies with excellent teams and products, in the hope to

            generate synergy and strengthen competitiveness to accomplish its mission of “Devoted to carbon neutrality and new materials innovation”

            and lay a broader foundation for corporate sustainability and profitability. 

                     Finally, we would like to express our sincere gratitude to all shareholders for your love and care over the past years, and we would

            appreciate your continued support for the future. Please feel free to give us any advice or opinions.