Material Information

2020-04-01

YFY clarify news report

1.Date of occurrence of the event:2020/04/01
2.Company name:YFY Inc.
3.Relationship to the Company (please enter ”head office” or
”subsidiaries”):The Company
4.Reciprocal shareholding ratios:NA
5.Name of the reporting media:The Journalist
6.Content of the report:YFY Inc. held SinoPac Holdings' shares by debt and
impact the shareholders' equity
7.Cause of occurrence:Not applicable
8.Countermeasures:
According to the article in Issue1726 of The Journalist magazine, mentioned
YFY Inc. held SinoPac Holdings' shares by debt and impact the shareholders'
equity and YFY would like to clarify the content was twisted from fact and
the Journalist did not take the responsibility of appropriate news release.

(1) YFY had focus on long term investment since established, and officially
transformed into an investment holding company in 2012, taking investment
holding and creating long term shareholders value growth with stable
performance. In 2019, YFY’s audited consolidated net profit after tax
was NTD 2.286 billion, an increase of 58.7% compared with the previous
year, which was the new peak since the transformation of a holding
company. The 2019 EPS was NTD 1.38, it is also a new record high since
2004. The financial structure of the company is sound, and the revenue
and profit were both growing. The article is in a presupposed position,
and the content is biased, which is greatly different from the fact.

(2) The Company not only invested in Pulp and Fine Paper, Containerboard
and Packaging, Consumer Products, but also extended into various
industries including Financial Investment, Technology, Bio-Technology,
Chemical Materials. Due to the diversified investment and the majority
of dominant stock rights, YFY's financial statement consolidated more
than 100 companies across more than 10 industries. The consolidated
liabilities are the sum of bank loans and account payables from the
operation, and not only for any specific investment. According to the
YFY's audited individual financial statement, the total equity was
NTD 39.3 billion and the total liabilities was NTD 24.9 billion.
According to the article, the Journalist mentioned YFY borrowed NTD
70 billion, which showed the suspicion of deliberately misleading to
the public.

(3) The article of the Journalist indicates YFY made investment by debt
raising. It is a reasonable situation for corporate raising fund from
financial institutions to invest in shares acquisition or equipments.
The company takes Investment holding as its major, and the investment
funds originally come from equity and financing loans. This article
regards the legitimate behaviors of dealing with financial
institutions and normal equity investment as extremely evil, which
is not based on the fact of normal business habits, and actually has
the intention to slander maliciously.

(4) The article also alleged that the price of SinoPac Holdings’ stock
fell sharply in this wave, resulting in high unrealized losses of YFY,
which damaged the rights and interests of more than 70,000 shareholders.
YFY had invested in the SinoPac holdings (previously as International
Bank of Taipei) since 1984. It is the long term financial investment
for more than 35 years with stable dividends annually. Since the
Company transformed into a holding company, the investment of SinoPac
holdings contributed to our dividend revenue around NTD 200 to 670
million annually with average cash dividend yield 4%. The cash dividend
yield of the upcoming year even reached 6.4%. During 2012 to 2019, the
average dividend yield of SinoPac holdings reached 7%, which shows that
the investment profit is stable and rich. Due to the international
COVID-19 situation, the global stock market had been impacted
dramatically. All the governments had been dealing the situation
seriously while the volatility of the stock market is a force majeure
clause. The share price volatility of SinoPac holdings is relatively
the same with the volatility of TAIEX in the mean time. Which shows
that the article is inappropriate, not balanced, extremely unfair and
not objective.

It is hoped that the Journalists will maintain the principles of fairness
and verification of media reports and correct them immediately. YFY, hereby
expresses its solemn and clear position, will also take necessary legal
actions to fully defend the goodwill and shareholders' rights and interests
of the company.
9.Any other matters that need to be specified:None