TAIWAN’S NO. 1 MEDICAL SKINCARE

Company Introduction

Presented by Eric Wu

Chairman and CEO

2019

Ticker：6523

Disclaimer

• The information and forecast contained in this presentation and released at the same time,

including the information regarding business outlook, financial status, and business

forecast, is produced according to the internal data of this Company and the status of

overall macroeconomic development.

• The actual operational outcomes, financial status, and sales results in the future may

differ from the forecast for various reasons, including but not limited to market demand;

changes in policies, laws and regulations, and macroeconomic condition; and other risk

factors beyond the reasonable control of this Company.

• Information contained in this presentation reflects the future outlook of this Company

until the present time. This Company makes no guarantee, either expressed or implied, for

its accuracy, integrity, or reliability. This Company assumes no responsibility for the update

or revision of such information according to its future changes or adjustments.

2

Agenda

3

1. Introduction to DR.WU Skincare 4

2. 2019 Q2 Recap and Financial Results 11

3. Forward Growth Strategies 19

1. Introduction to DR.WU Skincare

4

DR.WU – TW’s No.1 Medical Skincare Brand- Quick Facts About Us

Founded 2003 by Dermatologist

160 Staffs HQ in Taipei and Shanghai

Current Market Cap of US$ 100 mn

2200 POS 8 Countries

11 Product Lines - 61 SKU

IPO June 2016

5

DR.WU – TW’s No.1 Medical Skincare Brand - Our Philosophy About Skincare

Taiwan’s No.1 Medical Skincare

DR.WU is a line of highly effective skincare products developed

with advanced patented technologies to target various problems

in Asian skins. Our philosophy behind our pursuit for enhancing

beauty and wellness is through simple, effective products backed

by the latest discovery in Science, Biotechnology and Cosmetics.

We believe in the partnership between innovation and science to

bring about non-surgical solutions in enhancing one’s beauty and

wellness.

6

DR.WU – TW’s No.1 Medical Skincare Brand- Brand Origin of DR.WU

Renowned Dermatologist and Aesthetic Surgeon in Asia

Brand Founder of DR.WU

Clinical Professor of National Taiwan University Hospital (NTUH)

Founder and Chief Physician of WCLINIC and WSPA

• 1978 Opened his first dermatology clinic

• 1981 Institut National de la Santé et de la Recherche Médicale –

Immunology Researcher.

• 1990 Developed esthetic medical treatments and dermatology ointments

and emulsion formula

• 1996 Developed first Intensive Whitening Serum with Arbutin

1.5 Generation Entrepreneur

Founder of DR.WU SKINCARE CO

Columbia University, School of Engineering and Applied Science

• 1998 PwC Chairman’s Office, Corporate Development Associate

• 2001 Return Taiwan to work for VC funds and started planning for re-

organization of family business

• 2003 Founded DR.WU SKINCARE CO and launched first product under the

Brand DR.WU

「Create perfect skin

through simple but effective ways」--Our Philosophy & Goal .

Eric Wu, Chairman & CEO

DR. Wu Ying-Chin

7

DR.WU – TW’s No.1 Medical Skincare Brand- The Milestones of DR.WU

Full Launch in Cosmed Chain Drugstores

DR.WU’s Hydrating and Whitening Serum was recommend by Barbie

Hsu “the Beauty Queen”Launch in SASA, Health Drugstores, Etc.

Expanded business overseas: Hong Kong, U.S.A ,New Zealand and online: Yahoo!

POS of total 500 stores. Product lines add to 6 series .

Launch in Watsons Taiwan and regional expansion to

Singapore.

POS of total 900 stores

DR.WU Clinical Skincare brand and the Company were formally incepted

DR.WU becomes No.1 leading Taiwan’s Medical Skincare Sector and

launched over 60 SKU

Expanded business into Malaysia

Have received recognitions from major Beauty Awards

Launched product in Canada

Chairman Eric Wu won TOP 100 MVP Managers award

Received investment from L Capital Asia of LVMH

Started E-commerce sales channel in China

Chairman Eric Wu received 2014 EY Entrepreneur Of The Year award

Went public and listed on Emerging Stock Market Board

Received 2015 National Cornerstone Award & Entrepreneur Recognition

Setup first counter in Shanghai and launch in 40 FIONA Beauty China stores

2003

2005

2006

2007

2008

2011

2012

2013

2014

2015

20032003

20092009

20162016

Complete Listing on TPEX (6/16)

Expand to Myanmar

Increase to 5 counters in Beijing and Shanghai

2016

8

Launched in Watsons China and Malaysia

Launched CRM System with unique QR code2017

2018 Received the first 5% of the 4th (2017) Corporate

Governance Evaluation

High effectiveness

High priceLow price

Low effectiveness

• DR.WU is a PROFESSIONAL brand positioned to offer Non-Surgical Cosmetic Medicine Concept Skincare with fast effective functional skincare

• Mid- to High-end Skincare solutions developed by renowned Asian dermatologist for Asian skins, targeting 18-40-year-old segment

9

DR.WU – TW’s No.1 Medical Skincare Brand - Brand Positioning Among Derma Skincare and Doctors’ Brands

DR.WU – TW’s No.1 Medical Skincare Brand - Competitive Advantages and Our Success Formula

GrowthSales

Power

• 100% penetration in drugstore

chains

• Full coverage of virtual online stores

• Present footprint in overseas

Chinese-speaking market

• First Taiwanese brand entering

cosmeceutical market

• Non-surgical cosmetic medicine

more common and reaching

younger market which drives

growth of cosmeceuticals

• Consumption habits changing from

emotional to rational. Consumers

trying to select cosmeceutical vs

general skincare products

• Cosmeceutical market growing at

double digits

Complete Coverage of Online/Offline Channels

High Potential Markets+ Necessity of Skincare

10

Brand

Power

• Market leader: Taiwan’s No.1

Medical Skincare /First to enter the

cosmeceutical market

• High popularity, high reputation,

high reliability from consumers

• One of few Asian cosmeceutical

brands to truly stem from doctors

and clinics

• Only IPO cosmeceutical company

founded by professional teams with

medical background

LeadingCosmeceutical Brand

Product

Power

• Complete product line developed by

authoritative dermatologists with

patented formula in Asia

• 15% new product development rate

• Advanced knowledge and skills in R&D

• 100 patented active ingredients from

global pharmaceutical companies

• 10 full product lines (cyclical, risk

diversification, synergy), satisfying

needs of Asian skin care

• Insist on applying 5 principles to

develop high effectiveness,

hypoallergenic and high quality

products

R&D by Authoritative Dermatologist in Asia

2. 2019 Q2 Recap and Financial Results

11

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

-

200

400

600

800

1,000

1,200

16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2 18Q3 18Q4 19Q1

The Number of Chinese Tourists

Chinese Tourists YOY(%)-YTD

2.8%

1.2%1.9% 1.7%

-0.6% -0.4%

1.9%

3.6%

4.8% 4.6%

2.4%

1.2%

-0.4%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

800

900

1,000

1,100

Retail Sales Revenue YOY

Financial Performance 2019 Taiwan Macro Economy Status

12

53.8% 54.8%

26.8% 27.1%

6.6% 6.8%6.5% 7.6%4.1% 1.7%

2.0%

0%0%0%0%

100%100%100%100%

2017 2018

Derma Market Share

Labo Labo VichyNeogence CurelDR. WU Others(Dr.Cink、AVENE、Bio、FOB…..)

1.51%

3.08%

2.63%

2.27%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

2016 2017 2018 2019E

Taiwan GDP Growth

13

Financial Performance- 2019Q2 Revenue Updates

2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2

Sales 234,133 271,854 291,389 353,219 257,982 199,945 216,535 262,460 214,307 232,007 229,182 287,501 258,316 254,336

YTD net sales 234,133 505,987 797,376 1,150,59 257,982 457,927 674,462 936,922 214,307 446,314 675,496 962,998 258,316 512,652

YOY Change 60.4% 47.4% 17.0% 23.6% 10.2% -26.5% -25.7% -25.7% -16.9% 16.0% 5.8% 9.5% 20.5% 9.6%

YTD YOY Change 60.4% 53.2% 37.6% 33.0% 10.2% -9.5% -15.4% -18.6% -16.9% -2.5% 0.2% 2.8% 20.5% 14.9%

QOQ Change -18.1% 16.1% 7.2% 21.2% -27.0% -22.5% 8.3% 21.2% -18.3% 8.3% -1.2% 25.4% -10.2% -1.5%

-40%

-20%

0%

20%

40%

60%

80%

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

(NT$’000) Consolidated Revenues

Offline

Taiwan

52%

Online

Taiwan

11%

Offline

China

5%

Online

China

28%

Overseas

4%

Off line

Taiwan

53%

On line

Taiwan

13%

Off line

China

5%

On line

China

25%

Overseas

4%

Channel 2016 2017 2018 YOY 2018H1 2019H1 YOY

Off line Taiwan 696,218 504,062 506,922 0.6% 233,495 269,440 15.4%

On line Taiwan 161,445 108,731 121,637 11.9% 48,764 55,844 14.5%

Taiwan subtotal 857,663 612,793 628,559 2.6% 282,259 325,284 15.2%

Off line China 47,401 50,534 50,251 -0.5% 29,196 23,886 -18.2%

On line China 179,026 219,409 243,645 11.0% 114,023 142,128 24.6%

China subtotal 226,427 269,943 293,896 8.9% 143,219 166,014 15.9%

Overseas 66,505 54,186 40,543 -25.2% 20,837 21,354 2.5%

Total 1,150,595 936,922 962,998 2.8% 446,315 512,652 14.9%

Channel Strategy: Distribution Split - Sales Contribution by Channel

NT$'000

14

2017 2018

Sales in Taiwan's offline channels make up about 52% of total revenue.

Sales in China market contribute to 33% of total revenue.

China

28%

2019H1

China

33%

Off line

Taiwan

54%

On line

Taiwan

12%

Off line China

5%

On line

China

23%

Overseas

6%

China

28%

15

Financial Performance- 2016-2019 Monthly revenue Updates

Unit: NT$'0002016 2017 2018 2019 YOY YTD

Jan 67,423 70,005 74,732 99,150 32.7% 32.7%

Feb 46,577 62,940 59,075 67,215 13.8% 24.3%

Mar 120,133 125,037 80,500 91,951 14.2% 20.5%

Apr 94,562 50,172 62,856 90,182 43.5% 25.7%

May 75,228 76,574 73,734 85,997 16.6% 23.8%

Jun 102,064 73,199 95,417 78,157 -18.1% 14.9%

Jul 77,278 64,479 83,461

Aug 101,596 76,595 83,176

Sep 112,515 75,461 62,545

Oct 126,953 70,682 89,216

Nov 130,033 138,001 133,782

Dec 96,233 53,777 64,504

Total 1,150,595 936,922 962,998 512,652

2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1

Net profit 67,019 73,503 72,609 98,992 67,917 17,125 19,716 22,497 28,046 15,714 9,110 -28,030 55,083

YTD net profit 67,019 140,522 213,131 312,123 67,917 85,042 104,758 127,255 28,046 43,760 52,870 24,840 55,083

EPS 1.58 1.71 1.58 2.19 1.48 0.37 0.43 0.50 0.62 0.35 0.20 -0.62 1.22

Net margin 28.6% 27.0% 24.9% 28.0% 26.3% 8.6% 9.1% 8.6% 13.1% 6.8% 4.0% -9.7% 21.3%

YOY change 78.1% 288.2% -9.6% 8.2% 1.3% -76.7% -72.8% -77.3% -58.7% -8.2% -53.8% -224.6% 96.4%

YTD YOY Change 78.1% 148.4% 55.7% 36.7% 1.3% -39.5% -50.8% -59.2% -58.7% -48.5% -49.5% -80.5% 96.4%

-300%

-200%

-100%

0%

100%

200%

300%

400%

(40,000)

(20,000)

-

20,000

40,000

60,000

80,000

100,000

(NT$’000) Consolidated Net Profit

16

Financial Performance- 2019 Q1 Net Profit Updates

Item 2017 2018 2018 Q1 2019 Q1

YOYAmount % Amount % Amount % Amount %

Revenue 936,922 100.0% 962,998 100.0% 214,307 100.0% 258,316 100.0% 20.5%

Cost of Sales 347,034 37.0% 377,137 39.2% 76,886 35.9% 80,318 31.1%

Gross Profit 589,888 63.0% 585,861 60.8% 137,421 64.1% 177,998 68.9% 29.5%

Selling expenses 381,455 40.7% 442,381 46.0% 93,933 43.8% 88,388 34.2%

Administrative expenses 55,855 6.0% 61,712 6.4% 13,251 6.2% 21,686 8.4%

Research and development expenses 9,499 1.0% 10,296 1.1% 3,011 1.4% 2,860 1.1%

Expected credit loss (gain) - - 660 0.1% -27 0.0% 1,383 0.5%

Operating Expenses 446,809 47.7% 515,049 53.6% 110,168 51.4% 114,317 44.2% 3.8%

Operating Profit 143,079 15.3% 70,812 7.2% 27,253 12.7% 63,681 24.7% 133.7%

Non-Op Income & Expenses 5,147 0.5% -7,562 -0.8% 4,127 1.9% 10,121 3.9%

Profit Before Taxes 148,226 15.8% 63,250 6.4% 31,380 14.6% 73,802 28.6% 135.2%

Income Tax Expense 20,971 2.2% 38,411 4.0% 3,334 1.5% 18,719 7.1%

Net Profit 127,255 13.6% 24,839 2.4% 28,046 13.1% 55,083 21.5% 96.4%

EPS (NT$) 2.78 0.55 0.62 1.22

Financial Performance- Income Statement Summary

17

Unit: NT$'000Consolidated

18

Unit: NT$'000

Balance Sheet & Key Indices

2018.3.31 2018.12.31 2019.3.31

Cash and Cash Equivalents 440,364 503,880 401,849

Accounts Receivable 186,775 169,055 211,916

Inventories 219,010 163,214 210,633

Other Financial Assets(Time deposits) 940,500 940,500 1,040,500

Total Assets 1,960,809 1,912,163 2,030,410

Total Liabilities 134,441 201,391 263,901

Total Shareholders' Equity 1,826,368 1,710,772 1,766,509

Key Indices

A/R Turnover Days 72 61 68

Inventory Turnover Days 231 200 209

A/P Turnover Days 65 73 101

Liability Ratio (%) 7 11 13

ROE(%) 6 1 13

Cash from OP activities -61,704 120,671 5,761

3.Forward Growth Strategies

- Sales Strategy

- Product Strategy

- Marketing Strategy

19

1

2

3

Sales Strategy: Market Expansion- Focus on China and ASEAN Regions

20SOURCE: EUROMONITOR

Taiwan-

Physical

52%

Taiwan-

Online

11%

China-

Physical

5%

China-

Online

28%

Overseas

4%

DR.WU Sales Breakdown 2019H1

1

� NT$ 3.3tn global skincare market

62x Taiwan MKT

� NT$ 54bn Taiwan skincare market

#1 brand in Taiwan’s cosmeceutical market

� NT$693bn China skincare

market

13x Taiwan MKT

� NT$157bn ASEAN skincare market

3x Taiwan MKTSingapore, Malaysia

Thailand, Philippines

Vietnam, Indonesia

21

DR.WU Sales Channel Landscape- Taiwan & Overseas Markets

Complete Distribution Coverage of Online and Offline Sales Channels

Physical

Online

Overseas74.7%

13.7%

11.6%

(579)

(395)

(203)

(26)

(3)

Drug Store

(11)

(1)

Duty Free

(4)

Clinic

HK+MO

Singapore

(334)

Myanmar

(13)

(65)

Vietnam Canada

(23)

Malaysia

(90) (72) (1)

Korea

Thailand

(27)

(1+online)

(1) (1)(1)

1

22

DR.WU Sale Channel Landscape- China Market

Complete Distribution Coverage of Online and Offline Sale Channels

Online

Physical

83.44%

16.56%

大貿

上海劲捷

跨境

美洁金信

1

Videos of Hannah sharing her beauty

tips using DR.WU Serum and Mask

during New York Fashion Week,

attracting 35M Unique Visitors.

Focus on one product at a time to

quickly catch customers’ eyeball.

Sales Strategy- China Expansion- 4 years of Launching in China

STAGE 1

2015-2016

STAGE 2

2016-2017

STAGE 3

2018

23

Focus on One Start ProductFocus on One Start Product Celebrity Brings Eye BallsCelebrity Brings Eye Balls Channel centric Channel centric

Centralized marketing investment on

leading eCommerce channels to drive

growth.

B2C Cross Border

1

+

�Focus on star online sales channels such as Tmall、

Taobao、JD.com, and develop potential uprising channels,

such as Xiaohongshu and Pinduoduo.

�Expand regional distribution for Offline sales channels

and penetrate in local drugstore chains, such as Watsons.

�New team base in Beijing

Sales Strategy- China Expansion- Adjustment for the Future

STAGE 4

2019-2020

24

New Beijing Team

New Adjustment on Channel Strategy

New Beijing Team

New Adjustment on Channel Strategy

1

New Product Strategy- Complete Product Lines: 11 Key Lines x 61 SKU

HYALUCOMPLEX HYDRATING SYSTEM玻尿酸保濕系列

x11

ACNECURANTI-ACNE SYSTEM皮脂調理系列

x5

AGEVERSALREPAIRING SYSTEM超逆齡修復系列

x7

MANDALICRENEWAL SYSTEM杏仁酸煥膚系列

x4

SKINCARE FOR MEN男士速效保養系列

x4MINERAL MAKE UP礦質無瑕底妝系列

x3

mild-O Cleansing SYSTEM溫和潔淨系列

x4

UV PROTECTSUNCARE SYSTEM全方位防護系列

x3CAPSULE MASK膠囊面膜系列

x14

GLUTALIGHTWHITENING SYSTEM潤透光美白系列

x4

dermLabSolutions SERIES實驗室精華列

x2

Advanced Skincare Solution

High Efficacy and No Additives

2

25

SUNSCREEN+ SUNCARE

SYSTEM*1sku

SUPER FOOD

CAPSULE MASK SERIES*5sku

GLUTALIGHT WHITENING

SYSTEM*4sku

DERMLAB SOLUTIONS

SERIES*2sku

Jan Feb Mar Apr May Jun Jul Aug Sep

HYALUCOMPLEX

HYDRATING SYSTEM*2sku

New Product Strategy- 2019 Total of 17 SKU New Products and New Formulation

INTENSIVE HYDRATING LIMITED

JUMBO EDITION*3sku

2

26

27

In order to solve the issues of dullness and uneven skin tone, DR.WU has developed a whole new formula,

Glutalight, which simulate the formulation of whitening injection: Using Glutathione as its main ingredient,

pairing with AA2G, Silybum Marianum extract, Vitamin B3, B5, B6, and micro molecule hyaluronic acid, can

successfully avoid, restrain, and recover melanin. Reaching the effect of Whitening, Brightening, Clearness,

Tenderness, and Even Skin tone. In addition, without any sensitizing or photosensitive ingredients, it is perfectly

safe for sensitive skin, even after aesthetic medicine.

• 潤透光美白精華化妝水 150ml/$950

GLUTALIGHT INTENSIVE WHITENING ESSENCE TONER

• 潤透光美白精華液 35ml/$1800

GLUTALIGHT INTENSIVE WHITENING SERUM

• 潤透光美白精華乳 50ml/$1200

GLUTALIGHT INTENSIVE WHITENING LOTION

• 潤透光美白眼部精華液 15ml/$950

GLUTALIGHT WHITENING EYE SERUM

New Product Strategy- All New Glutalight Whitening System

Glutalight Whitening System

2

With 40 years of clinical experience specializing on

skin immunology, Taiwan’s No. 1 leading medical

skincare brand DR. WU’s new developed [dermLab.

Solutions Series], selects popular high efficiency

ingredients: Ceramide and Niacinamide, with the

best composition and concentration, to create a

high efficiency, high concentration, and high

purity formula. Add this to your daily skincare

routine to address different skin concerns, with

effective ingredients to soothe dry and sensitive

skin!

New Product Strategy- New Dermlab Series/Capsule Mask Super Fruit Series

dermLab Solutions SeriesDR.WU has searched all over the world for the most

precious and nutritious super food, pairing with the

patented microinject cotton fabric mask to create

an all-new series “Super Food Capsule Mask Series”.

The Supefood Capsule mask series provides a fast

supply of nutrients for different skin conditions and

create your own skin care recipe to bring you the

healthy glowing skin.

Super Food Capsule Mask Series

2

28

Marketing Strategy: Endorser- Enlisted famous Actor as DR.WU Endorser

29

3

2015-2016 Endorser

Hannah Quinlivan� Employed Celebrity as brand endorser for the first time.

� Hannah's marriage to Jay Chou who is the most popular

singer in Asia and her recent has children announcement

has created tremendous online chatter and followers,

successfully enhanced brand awareness throughout ASIA.

2017 New Endorser

Mark Chao� Employed famous actor as brand endorser for

the first time.

� Mark Chao starred China TV Drama” Eternal

Love “，which reached more than 40 billions of

network playback volume, and the number of

Mark Chao weibo fans are skyrocketed to 12M .

Engage famous celebrity as new endorser to

bring more eye balls .

2018 China New Endorser

Janine Chang� Duration：2018

� Corporation Content：Capsule Mask Series

� Weibo fans 11M、Baidu Index 28952

� Representative works –

TV：The Empress of China ;

The Advisors Alliance

Here to Heart

Movie：Girls 2

Marketing Strategy: Endorser- Enlisted professionals as DR.WU Endorser

30

Group of renown professionals in 2019 : dermatologists、cosmetic science doctors、beauty masters

3

Marketing Strategy : New Social Media Concept- Build broad and depth of user generated contents (UGC)

3

Professionals:Doctors

Professors

Beauticians

Industry Experts

Media:Beauty Editors

Reporters

Celebrities:Musicians Actors

ArtistsKOLs:Internet Celebrities

Bloggers

Youtubers

IGmers

Loyal Customers:VIPs

Wu Club Fans

Channel Members

Utilizing different opinion leaders ( doctors,

artists, KOL and ordinary persons) to express their

professional view or exercise influence to build

broad and depth of user generated contents so as

to enhance our brand image.

32

Transactions

Guessing Preferences

Relationships

Prediction for Customization

Cross-channel Integration

• Engage with customers through QRcode across any channel interaction, physical and digital

• Integration of all data flow from multi-channels

CRM

• Analyzation of customer data through systems

• Deliver relevant experience to match behaviors, needs and increasing expectations.

Loyalty Program

• Through loyalty program design toretain customers and boost their engagement

• Seamless, orchestrated, and personalized

CRM

SOCIAL MEDIA

BIG DATA

LOYALTY PROGRAM

PRM

3

Marketing Strategy : Omni-Channel- From Transactions to Relationships

33

Marketing Strategy : Focus on Digital Media- Elevate Internet Exposure and recruit new users

37% 40%

15% 11%

WU CLUB

Member

80,000+

Media

Exposure

NT$30,000,000(in value)

FB+IG FANS

120,000+Active Search

Google/Yahoo

For DR.WU

Total

Digital

Power

搜尋量

曝光量會員

粉絲

Boost brand volume Expand new customer base

3

34

Thank YouThank You“Your Personal Doctor

For Your Perfect Skin”

-DR.WU

Contact Information

Eric Wu, CEO

Monica Wang, CFO

TEL：+886-2-2517-9888

E-mail：ir@drwu.com