Letter to Shareholders

Dear Shareholders: 

        First, we would like to express our gratitude for the support and encouragement of all shareholders in the past year. 

        Swancor Holding Company Limited (hereinafter referred to as "Swancor Holdings") is an investment holding company. 

Its main subsidiaries are Swancor Advanced Materials Co., Ltd. (hereinafter referred to as "Swancor Advanced Materials"), Sunwell Carbon Fiber Composite Corporation (hereinafter referred to as "Swancor Carbon Composites"), and Swancor Innovation & Incubation Co., Ltd. (hereinafter referred to as "Swancor Innovation & Incubation"). Its main businesses include the research and development of precision chemicals, carbon composite materials, and innovative materials as well as new business incubation. 

        Swancor Holdings established the integrated industrial structure and independent development strategies by focusing on combining precision chemicals and composite materials with green energy and carbon-neutral industries to enhance its overall operating performance and market competitiveness. 

        The 2021 business results and 2022 business plan are listed as follows:

    I.  2021 Business Report 

       (I) Implementation results of business plan: 

                 Swancor’s consolidated sales was NT$10.71 billion in 2021, grew by 8.54% compared with 2020, of which sales of anti-corrosion resin

           increased by 51.75%, and environmental protection and green energy materials revenue decreased by 10.71%. 

                 The Company’s gross profit margin decreased by 5.16ppt YoY to 12.51%, which was mainly due to the rising cost of raw materials.

                 Net profit attributable to the Company slumped by 70.30% YoY to NT$186 million, with EPS of NT$2.01 in 2021, which decreased by NT$4.81

           compared to that in 2020.

      (II) Implementation status:


     (III) The financial income and expenditure and profitability analysis are listed below:


II. Technology Development 

             Swancor Holdings’has innovation and execution abilities, providing products and technologies that meet customer needs, and supporting

       corporate growth as well as enhancing profitability. 

    (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 apabilities 

       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.

        Composite materials produced with Swancor’s Recyclable Thermoset Epoxy Resin retain the performance and all the characteristics of 

        conventional epoxy resins. In addition, at the end of the product life cycle, resin solutions and fibers can be obtained by soaking the composite

        materials in Swancor’s self-developed solvent followed by appropriate heating. The process produces no pollution, such as wastewater or

        exhaust gases, which meets the requirements of a circular economy. 

              Swancor’s Recyclable Thermoset Epoxy Resin is an epoxy base that can be used for not only wind power applications, but also across a wide

        range of uses and can replace epoxy resins used in existing processes and products, such as PCB, sporting goods, vehicles, etc., transforming

        previously non-recyclable thermoset epoxy resins into environmentally friendly products. 

    (III) Wind Turbine Laminar Epoxy Resin 

              Swancor’s two innovative products, Recyclable Thermoset Epoxy Resin 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


    (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 a pultruded

          glass fiber plate for wind power spars by integrating its epoxy resin formula, self-developed carbon fiber and forward-looking technology. The

          products have been certified by the wind turbine manufacturers in China and have started shipping in large quantities. 

III. Recent Corporate Development Overview

           The subsidiary, Swancor Advanced Materials, announced its investment in Anhui Meijia New Materials in April, 2021. With the investment,

      Swancor Advanced Materials strives to strategically integrate the upstream supply chain operations from resin suppliers up to basic epoxy resin

     (main raw materials) manufacturers, thereby ensuring stable supply of raw materials and increasing competitiveness. 

           The subsidiary, Sunwell Carbon Fiber, has Sunwell (Jiangsu) Carbon Fiber Composite Co., Ltd.’s equity restructured under its ownership to

     accommodate Swancor’s future overall operation plan. Sunwell Carbon Fiber further announced its investment in COTECH INC. in December 2021.

     With the investment, Sunwell Carbon Fiber strives to integrate the downstream supply chain operations and expand its products from carbon fiber

     prepreg sheets and pultruded plates to molding components. 

          Swancor Holdings announced its establishment of a subsidiary, Swancor Innovation & Incubation, in April 2021. The new subsidiary strives to

     reinforce the research and development of forward-looking innovative materials as well as incubate new businesses. 

 IV. Business Plan for 2022

           Swancor Holding is an investment holding company, and its 2022 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: Promote the innovative SWANCOR HYVER to increase market share and profitability, consolidate supply chain and distribution

                             channels through the establishment of wind turbine blade OEM pilot plants, and promote the Recyclable Thermoset Epoxy Resin at

                             the same time. Keep in line with market development and policy trends; continue to strengthen the strategic alliance with the machine

                             factory in China; improve technical services and Swancor’s brand influence; and actively develop new customers on the back of

                             continuous market expansion. 

                  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. Swancor will actively

                              explore new customers, promote the Recyclable Thermoset Epoxy Resin and SWANCOR HYVER, and establish production capacity

                              cooperation with strategic partners in Europe to increase competitiveness, while securing its foothold in Taiwan’s offshore wind

                              power and relevant emerging industries and continuing to seize new business opportunities in order to maintain market leadership

                              and increase profitability. The medium and long-term goal of green energy material business unit is to become the leader of wind

                              turbine blade materials. 

       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: Swancor will actively explore new customers and new applications beyond the wind power industry to increase capacity

                                       utilization and accelerate sustainable growth. 

                Besides continuing development of the two major products, Swancor will further integrate the resources of COTECH INC. to expand its

           business from materials to carbon fibre molding components, harnessing the synergy to tap into a new customer base of carbon fiber

           composites’applications in the aerospace and new energy vehicle sectors. 

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

          new businesses: 

                Swancor will continue to deepen industry-academia cooperation and devote to research and development on 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.  Future Prospects   

          In the coming year, Swancor’s advanced materials business strategy will be mainly focused on “maintaining the core business and developing

     new businesses” on the basis of past business developments, with a particular emphasize on SWANCOR HYVER’s mass production and demand

     growth and the promotion of the Recyclable Thermoset Epoxy Resin, in order to solidify its leading market position and achieve continuous profit

     growth. 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. 

          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.


    I wish you all the best.   

   Good Health and Good Luck.       

                                                                                                                                                                    Chairman Jau-Yang Tsai

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