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KAYEE INTERNATIONAL GROUP 2939 TT INVESTOR PRESENTATION June 2020

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Our Vision

“We’re strong believers in the power of innovation at Kayee. Over the past 30 years, our brands/products have been touching and improving consumers’ lives in a small but meaningful way everyday. For us, innovation is not invention. It’s the conversion of a new idea into consumers’ delight, and ultimately into our revenues and profits.”

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2

Executive Summary

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Our Goals

We strive to become one of the largest innovative lifestyle and general merchandising suppliers in Asia. Currently we are the #1 supplier to Direct Response TV in the US, and we will continue to use that as a base to expand to other channels such as retail, direct selling and e-Commerce. We believe 2020 will be the year to regain growth for Kayee.

Financial Highlights

We operate an asset light business model with high margins (GM consistently at +25%), which result in high operating leverage. We believe these are solid foundations for high ROE. We generate strong free cash flow, and we are net cash (net cash to equity at 97%, as of 1Q20).

Dividend Policy

Given our strong balance sheet, we will continue to payout +80% of earnings to our shareholders. We paid out 90% of 2019 earnings in March 2020. We will pay cash dividends semi-annually starting this year.

3

Company Overview

We Offer A Variety Of Products To Channels

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We
2019
supply
Health & Fitness, 0.3%
lifestyle and Home Appliance Kitchenware Beauty, 8%
general
merchandizing products Kitchenware,
41%
Outdoor
Living, Revenue
26% Breakdown
By Products
Home
Appliance,
Health & Beauty Outdoor Living Fitness 24%
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5

Over 30 Years Of Product Development Experience

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Our core competence allows our channels to gain and occupy market share in their product space very rapidly, particularly DRTV

Experience

Keen

Market Sense

Product Development

Managing Manufacturers

Over 30 years of brand building, product development and sourcing experience; We also have a comprehensive “black book” of who’s who in manufacturing

We know what product will sell, and we know how to tweak it to sell even better

We insert our own creativity and innovation (IP) into our products and are very mindful of time to market

We run an asset light model. However, we can ramp up volume quickly without sacrificing quality via our manufacturing partners (ex. Copper chef)

6

Innovations In Product Improvement

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Clever Spin
Before After
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Copper Chef Square Pan
Before After
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We improved the single-chamber system to two-chamber system which separate waste water from clean water.

Our square design gives up to 25% more room to cook vs. ordinary round pans.

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Aero 360 Steam Pro
Before After
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Fireplace Heater + Humidifier
Before After
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We improved upon the idea of iron, our Aero 360 Steam Pro gets clothes crease-free in minutes

We added heater in gen 2, and in Gen 3 we added built-in humidifier to add humidity to dry, winter air

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7

Our Best Sellers

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Our Best Sellers

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Our Best Sellers

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Our Best Sellers

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Home Appliance

Outdoor Living

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• Expandable Hose

• Air Fryer

• Buzz Off

• Ironing Device

• Solar LED Ground Spot Light

• 2-IN-1 Smokeless Grill

• Stainless Steel Solar Gutter Lights

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• LED Fireplace Lantern

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Fitness

• AB5 Body Shaper

• Compact Foldable Electric Treadmill

• AB CORE for A Special Developed Torso Training

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Health & Beauty

• French Lace Zipper Bra

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• Reusable Cleansing Pads

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11

Our Brands

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International Brand

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• Kitchenware – Copper Chef

• • Kitchenware – Copper Chef Black Diamond

• Kitchenware – Copper Chef Titan Series

• Home Steam Dryer – Aero 360

• Air Fryer Oven – Miracle Chef

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Taiwan Brand

• Kitchenware – Copper Chef in Taiwan

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• Fitness & Body Care – K Fit

• Household Solutions – K Easy

• Electrical Indoor & Outdoor – Impress

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Licensed Brand

• Air Fryer – Karalla

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12

Our Channels

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• DRTV Channels

• Retail Channels

• Home Shopping

• E-Commerce Channels

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13

Our Marketing Campaigns

Product Endorser

• TV Show Host: Jacky Wu

• Celebrity Chef: Eric Theiss

• NBA Player: Charles Oakley

• Celebrity Chef: Jet Tila

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DRTV Industry

What Is Direct Response TV Marketing

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Direct Response TV is any television advertising that asks consumers to respond directly to the company — by calling a toll-free number, SMS message, or by visiting a web site. This is a form of direct response marketing.

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DRTV Drive awareness via TV ads
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6-10 weeks of Ad campaign

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E-
Commerce Launch around the same time as DRTV
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Retail Launch 6-10 weeks after DRTV program,
Stores but this is what drives volume.
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1) Further TV Ad time 2) InStore TV Ad 3) No TV Ads needed

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US DRTV Market

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Total Addressable Market: We estimate the DRTV market in the US is about USD3bn

The Top 6 DRTV Companies in the US Product Price Range Product Price Range

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Tristar, Emson, Telebrands, Thane, Allstar and Tristar
USD 100
IdeaVillage, these 6 companies occupy around 80% of
& up
the market.
Emson
USD 50-99.99
With Tristar leading the market as it is able to move the Telebrands
Thane
higher priced items, followed by Emson and Telebrands. Allstar
IdeaVillage
USD 9.99-49.99
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Traditional Retail vs Direct Marketing Value Chain

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Manufacturer Exporter Importer Wholesaler Jobber Retailer Consumer
Traditional
Retail M B B B B B C
Manufacturer Exporter Importer Consumer
Direct
M B B B C
Marketing
M: Manufacturer
B: Business
C: Consumer
Direct TV & TV Catalog, Magazine, Online Telemarketing Direct Mail Face to Face
Shopping Channel Mail Order Shopping Marketing
Products Distributors/Stores Consumers
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Direct Response

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Different Methods of Displaying TV Ads

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.
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In Store TV
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Home Shopping Channel

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Social Media

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Online Shopping

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Retail Stores Display

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Due to our advertising exposures on TV, physical retail stores are not only happy to carry our products, but usually give us prime shelf locations and large display areas

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Goals
&
Strategies

Product Development – Shifting Our Focus To Higher Margin Products

Kayee’s Own Development

High We develop our own product from scratch or improve (add our innovation/IP) on existing product

Customized Products

Customized Kayee’s Own Products Development

Client comes to us with a concept. We develop the product from scratch (design, materials, manufacturers, time to market, QA/QC, all with end Focus price hitting the targeted price range in mind)

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SWOT Products

Client Inquiry SWOT Products

Our internal SWOT analysis meetings to evaluate potential products to sell. Key points to evaluate includes cost, materials, time to market, product uniqueness, etc…

Client Inquiry

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Low
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Client comes to us to source a product that’s already in the market. We may or may not insert our own product development know-how, depends on price and product.

High

Low

Margin

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Market Environment Offers Attractive Growth Opportunities

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Stay-At-Home Economy

Sanitary Products

Fitness

Healthy Cookware

Health & Beauty

TV shopping, Online The need for sanitary shopping has products have surged increased due to covid19 dramatically due to covid19

Increased awareness for health and fitness

Increased awareness for cooking healthy

Increased awareness for health induced beauty

23

Channel and Sales Strategy

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DRTV and Wholesalers 1

• Continue to promote Kayee’s value in innovation, IP and service, particularly in QA and QC

• • Acquired know-how for taping our own video clips to penetrate into more DRTV clients

• • Six senior level hires with developed client network

• Enter trade shows to showcase products and meet potential clients for further international geographic expansion

E-Commerce 2

• Easy for us to create another vertical such as Amazon US, since we already own the products

• • Offline and online integration

3 Increase Efficiency

• Realign KPI and sales target

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Gain more revenue shares from our biggest US channel - Tristar

Diversify and grow our channel business in Europe, Japan, Taiwan, and China

Ready To Regain Growth in 2020

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Regain revenue growth in 2020F, amidst Covid-19 pandemic

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Aim to achieve 15% CAGR in revenue for the next five years

Continue to payout 80% of earnings to our shareholders

25

2020
New
Products

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NEW PRODUCT CATEGORY

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SANITARY PRODUCTS

• Forehead Thermometer - Air Purifier - Masks - Hand sanitizers + dispenser - Air Ionizer - UV Sterilization products

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The Touchless, Motion Sensing Soap Dispenser That Puts Soap Right In The Palm Of Your Hand

Triple Layer, Disposable Masks to Cover Your Nose, Mouth & Chin

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c
c
c
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COPPER CHEF

TITAN SERIES KNIFE SET & TRI-PLY PAN

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POWER IMPACT WAND

Power Impact Wand Helps Rapidly Activate And Energize Your Muscles

The secret is Deep-Tissue Percussive Therapy. Rapid pulses of pressure impact your muscles to reach deep down to the source of trigger points, knots, and other discomfort. It Helps Relax, Soothe, and Ease

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POWERFIT ELITE

The Feel Of A Full-Body Workout In Minutes With The Extreme Vibrations Of PowerFit Elite! POWERFIT ELITE is great for supercharging traditional exercises

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POWERLEGS BY POWERFIT

PowerLegs Gives You A Relaxing, Refreshing Foot And Leg Massage Right At Home PowerLegs allows you to control the intensity of your massages &

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SMART AIRSTYLER

Revolutionary Styling Tool Replaces Damaging Blow Dryers & Hot Tools

Breakthrough Smart Air Function combines air flow with safe far infrared heat and a powerful negative ion generator that dries hair up to twice as fast.

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Hair Stays
Negative Ions Heated Center
Set, Even in
Obliterate Static & Bristles Straighten
Intense
Frizz & Smooth
Humidity
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GENIE BRA

The Revolutionary Genie True Lift Comfort Bra The lift, shape and smoothing support of a traditional wire bra with the seamless, luxurious comfort all women wish for – wire free.

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CLEAN-A-ROO

The Super Absorbent, Self-Cleaning Mop That Makes Cleaning A Breeze

The secret is the dual tank with integrated deep cleaning brush, that keeps dirty water on one side & an adjustable pressure ringer to keep clean water in the other side.

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POWER XL STEAM MOP

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33

Financial Summary

Financial Highlights

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NT$m Quarterly Revenue & Growth Quarterly Margin
1,200 25% 40%
900 0% 30%
600 -25% 20%
300 -50% 10%
0 -75% 0%
2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20
Revenue Revenue Growth(YoY) Gross Margin Operating Margin Net Margin
NT$m
Quarterly Earnings & Growth EPS
200 4.00
45%
150 3.00
15%
100 -15% 2.00
50 -45% 1.00
0 -75% 0.00
2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20
Operating Profit Net Income Net Income Growth(YoY) EPS
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Quarterly Income Statement

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Income Statement 1Q20 (NTD$m)	1Q20	4Q19	1Q19	QoQ	YoY
Net Revenue	367	501	623	(27)	(41)
Gross Profit	122	145	184	(16)	(34)
Gross Margin	33.3%	28.9%	29.5%
Operating Expenses	71	72	91	(1)	(21)
Opex Ratio	19.5%	14.4%	14.6%
Operating Income	50	72	92	(30)	(45)
Operating Margin	13.7%	14.3%	14.8%
Net Non-Operating Income (Loss)	(4)	(32)	15	(88)	(125)
Pre-Tax Income	47	39	107	18	(56)
Income Tax Expense	9	13	26
Minority Interest	(0)	1	4
Net Income	37	25	77	50	(51)
Net Margin	10.2%	5.0%	12.4%
EPS (NT$)	0.80	0.53	1.63	51	(51)
ROE – not annualized	2.9%	1.8%	4.7%
Depreciation	8	7	5
CAPEX	3	12	3

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Quarterly Balance Sheet

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Balance Sheet 1Q20 (NTD$m)	2020/03/31		2019/12/31		2019/03/31
Cash and Cash Equivalents	779	46	571	32	887	43
Notes and Accounts Receivable, Net	316	19	390	22	476	23
Inventories	82	5	91	5	61	3
Other Current Assets	402	24	602	34	558	27
Fixed Assets	29	2	27	2	32	2
Other Long-term Assets	99	6	102	6	55	3
Total Assets	1,706	100	1,784	100	2,068	100
Current Liabilities	485	28	312	17	345	17
LT Debt	0	0	0	0	0	0
Other Non-Current Liabilities	45	3	44	2	18	1
Total Liabilities	530	31	355	20	363	18
Common Stock	472		472		472
Total Equity	1,176	69	1,429	80	1,705	82
Book Value per Share (NT$)	24.58		29.93		35.71
Key Indices
Current Ratio ( Current Assets / Current Liabilities)	326%		531%		574%
Net Cash (Debt) to Equity	97%		77%		83%

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Quarterly Cash Flow Statement

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Cash Flow Statement 1Q20 (NTD$m)	1Q20	4Q19	1Q19
Beginning Balance	571	464	636
Depreciation & Amortization	8	7	5
Cash from Operating Activities	136	123	91
Capital Expenditure	(3)	(12)	(3)
Cash from Investing Activities	145	26	166
Cash from Financing Activities	(83)	(14)	(4)
FX Impact	10	(28)	(2)
Change in Cash	208	106	250
Ending Balance	779	571	887
Free Cash Flow	99	152	64

38

Five-Year Income Statement

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(NTD m) 2015 2016 2017 2018 2019	YoY(%) 2015 2016 2017 2018 2019 25.9 115.7 49.6 (44.2) (28.2) 41.8 115.6 41.4 (45.5) (24.8) - - - - - (3.1) 243.8 54.3 (56.5) (40.3) 15.2 (26.2) - - (86.8) (1.2) 211.1 39.8 (40.3) (50.5) - - - - - - - - - - 1.1 204.9 40.9 (40.9) (53.3) 0.2 175.4 40.9 (44.7) (51.5) 39 Opex line is between NTD330m-390m for the past three years, regardless of revenue volatility, suggests high operating leverage. In 2016, we achieved NTD$3.7bn in sales and opex was NTD344m; In 2017, sales was NTD$5.6bn while opex was NTD$392m. Opex increased NTD$50m, but revenue increased NTD$2bn.
Revenue 1,737 3,747 5,605 3,126 2,245
Gross Profit 498 1,073 1,518 828 622
Operating Expenses (286) (344) (393) (339) (331)
Operating Profit 212 729 1,125 489 292
Non Operating Income/(Loss) 29 22 (76) 137 18
Pretax Income 241 750 1,049 626 310
Tax Expenses (42) (146) (193) (110) (71)
Minority Interest 0 4 1 (9) (2) Net Income 199 608 857 506 236 EPS (NTD) 4.80 13.22 18.63 10.31 5.00
Key Financial Ratios (%) 2015 2016 2017 2018 2019 •
Gross Margin 28.6 28.6 27.1 26.5 27.7
Operating Expense Ratio 16.4 9.0 7.0 10.8 14.7 •
Operating Margin 12.2 19.6 20.1 15.7 13.0
Effect Tax Rate 17.3 19.4 18.4 17.6 23.0
Net Margin 11.5 16.2 15.3 16.2 10.5

Five-Year Balance Sheet

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(NTD m) 2015 2016 2017 2018 2019	% of Total Assets
	2015 2016 2017 2018 2019
Total Assets 879 1,570 2,042 2,040 1,784	100.0 100.0 100.0 100.0 100.0
Cash & Marketable Securities 424 799 505 1,328 1,102	48.2 50.9 24.7 65.1 61.7
AR & NR 167 609 620 504 390	19.0 38.8 30.4 24.7 21.9
Inventories 44 71 64 107 91	5.0 4.5 3.1 5.3 5.1
Fixed Assets 28 38 32 31 27	3.2 2.4 1.6 1.5 1.5
Total Liabilities 167 437 516 418 355	19.1 27.8 25.3 20.5 19.9
AP & NP 38 189 217 205 152	4.3 12.0 10.6 10.1 8.5
Total Equity 712 1,133 1,526 1,622 1,429	80.9 72.2 74.7 79.5 80.1
Key Financial Ratios (%) 2015 2016 2017 2018 2019	• Our cash conversion cycle has always been
A/R Turnover Days 44.2 37.9 40.0 65.7 72.7	very efficient, as you can see we collect our AR
Inventory Turnover Days 8.6 7.9 6.0 13.6 22.4	quite fast and don’t have too much inventory.
A/P Turnover Days 19.5 15.4 18.1 32.9 40.2	• But on the flip side, we pay our manufacturers
Cash Conversion Days 33.3 30.4 27.9 46.4 54.8	very quickly as well, in exchange for better
ROE (%) 34.3 65.5 64.3 32.8 15.6	service, quality, and capacity (quick capacity
ROA (%) 25.8 49.7 47.4 24.8 12.4	ramp up if needed).
Net Cash/Equity (%) 59.5 70.5 82.9 81.9 77.1

40

Five-Year Cash Flow Statement

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(NTD m)	2015	2016	2017	2018	2019
Beginning Balance	310	424	799	505	636
Depreciation & Amortization	4	8	9	10	23
Cash from Operating Activities	91	586	978	474	272
Capital Expenditure	(14)	(27)	(5)	(14)	(15)
Cash from Investing Activities	(17)	(31)	(767)	58	151
Cash from Financing Activities	41	(178)	(465)	(418)	(449)
FX Impact	(1)	(3)	(40)	18	(40)
Change in Cash	114	375	(294)	131	(65)
Ending Balance	424	799	505	636	571
Free Cash Flow	157	247	958	437	305

41

Dividend Payout and Capex

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(NT$ m)	2016	2017	2018	2019
Net profit	608	857	506	236
Cash dividend	469	750	425	209
DPS (NTD)	10.7	15.0	9.0	4.5
Payout ratio (%)	77.1	87.6	83.9	88.3
Cash yield (%)	-	9.9	8.6	3.4
Capex	27	5	14	15
Capex to sales (%)	0.7	0.1	0.4	0.7

Note: 2017-2018 cash yield calculated using market cap on the day prior to ex-dividend date for all years. 2019 yield calculated using market cap on 2020/05/29.

42

Disclaimer

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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 Kayee’s controls. The forward-looking statements in this presentation, if any, only reflect the current view of Kayee International Group Co., Ltd. as of the date of its release. Kayee undertakes no obligation to update those forward-looking statements for events or circumstances that occur subsequently.

43

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Thank You!