Facing the changing situation and building sustainable competitiveness

        In 2022, the world has not been calm, inflation and interest rate hikes are coming with great momentum, geopolitical tensions are at stake, climate change is threatened by drought and flood, raw material prices are difficult to control, and the century's plague is like a big wave, with waves rising one after another. The challenge in 2023 is still dramatic. The central banks of all countries are swinging on the balance of combating inflation and maintaining economic growth. The doubts about interest rate rise, the aftereffects of the epidemic, extreme weather, Supply chain security, scientific and technological innovation, and net zero game are testing the resilience of the world's citizens. Despite the challenges of the crisis, Far Eastern Group still lives up to expectations, demonstrating the resilience of the enterprise, using innovation and transformation as the driving force to face changes and create sustainable competitiveness.

                The international politics, economy, and environment are constantly changing. In terms of politics, the tension between the top two economies, the United States and China, has not yet eased. A new bipartisan pattern has emerged in the United States after the midterm elections, and the focus of attention has been on the 2024 presidential election. Chinese Mainland at the end of the Pacific Ocean, with the conclusion of the 20th National Congress, the setting of development strategy, and the important meeting re elected every five years, has created a new leadership. It is expected that the political front will recover steadily. The EU member states, the third largest economy, have welcomed new leaders, and the new leadership style will have a significant international impact: Germany's Scholz will become the Prime Minister and form a coalition government; France's Mahone became the first successful president to be re elected in 20 years; Italy's first female Prime Minister, Meloni, took office; After Brexit, Britain was formed by the youngest Prime Minister in 200 years, Sunak, to form a new government. Japan, which holds a significant position in Asia, is diligent in communicating with its allies to defend national security. The United Nations said that India will surpass Chinese Mainland, become the most populous country, the most Demographic dividend of India, and surpass the United Kingdom to become the world's fifth largest economy. The outcome of Taiwan's nine in one election will determine future economic trends; The importance of global chips highlights the leading position of Taiwan's semiconductors, making Taiwan a focus of the world economy.

        In terms of economy, in the past year, the prices of energy and food soared, the Cost of living soared, and the high inflation rate was fuelled by high prices and tight supply and demand. In addition, the war between Russia, a major energy supplier, and Ukraine, a European granary, continued. In order to curb inflation, led by the Federal Reserve System of the United States, central banks of various countries have entered a cycle of interest rate hikes, resulting in heavy debt for major countries. After a vicious cycle, it is feared that they will fall into stagnant inflation. The grey rhinoceros effect cannot be underestimated, and countries have proposed economic policy measures to overcome difficulties. The United States has proposed interest rate hikes and debt reduction policies; Chinese Mainland has launched Common prosperity, Guo jin min tui policies for manufacturing overcapacity and real estate difficulties; And Europe is striving to break free from energy shortages and slow transition issues; Enterprises all plan ahead in cash flow, streamline production and sales, control inventory, and reduce operational impact.

        In terms of environment, according to the Paris Agreement, 137 countries in the world have committed to achieving net zero emissions, 90% of which have set the goal of achieving carbon neutrality by 2050, and net zero emissions have become a global consensus. Governments, large international enterprises and Environmental organization are committed to promoting the transformation of industries to net zero emissions. The EU carbon border tax policy will be launched this year, and the United States has also introduced the Inflation Reduction Act. Chinese Mainland plans to incorporate the national carbon market into high energy consuming industries and levy carbon tariffs by 2025, Japan plans to levy a border carbon tax, and Taiwan also announced the path and strategy of 2050 net zero emissions, The determination of all parties to address environmental issues is unstoppable. In addition, the flourishing development of digital technology has changed global consumer behavior, raised concerns about supply chain disruptions during the pandemic, and accelerated digital transformation.

        Despite facing various challenges from global politics, economy, and environment, Far Eastern Group is dedicated to accelerating the layout of environmentally sustainable products and smart transformation. With flexible and resilient organization, it actively faces changes and risks, demonstrates its ambition for Sustainability Development, and continues to move towards becoming a world-class enterprise.

        Among them, Far Eastern New Century Corporation, based on its industrial foundation of more than 70 years, flexibly laid out its business strategy, gave full play to the comprehensive effect of Vertical integration in production, and used multi-point layout flexible scheduling to disperse regional operational risks. At the same time, it focused on green innovation Wuhan Far Eastern New Material, committed to low-carbon transformation, responded to the global carbon reduction vision, and demonstrated sustainability development determination; The steady development of reinvestment and the continuous development of land development will fully leverage the advantages of diversified asset allocation. Far EasTone Telecommunications benefits from strong 5G penetration rate, new economic growth momentum, strong demand for enterprise cloud services and the Internet of Things (IoT). Digital transformation continues to create positive results, with outstanding operational performance. The merger with Asia Pacific Telecom effectively enhances the economic scale of the telecommunications industry, and is expected to promote future profit growth. The cement industry is one of the top ten on both sides of the Taiwan Strait (in terms of clinker scale). The cement industry in Taiwan, as well as the investment businesses such as premix, electricity, and stainless steel, have achieved excellent business performance. Asia Cement Corporation (China) has made organizational adjustments, made innovative breakthroughs, and won the industry competition. There are 47 stores across the Taiwan Strait in the retail industry, and Far Eastern Department Stores continues to lead the market trend. The Zhubei store officially opened in 2022, and the new department store's operating model has successfully driven local economic growth. Overall revenue and profits have both increased compared to last year. Far Eastern International Bank has accelerated the transformation of its digital financial business, benefiting from the growth of interest and handling fee income, resulting in an increase in revenue and driving an increase in net income.

        In order to implement the concept of corporate feedback to society, Far Eastern Group actively develops Philanthropic Organizations, including four major fields: technology, arts and culture, healthcare, and education. In terms of technology, Far Eastern Y.Z.Hsu Science&Technology Memorial Foundation is founded with the principle of "technology and innovation" to reward and cultivate technology research and development talents, and holds the "Y.Z.Hsu Scientific Award", Reward Taiwan's academia for investing in scientific research and innovation to promote overall economic development and improve the quality of life of the whole people. In terms of art and culture, the Far Eastern Memorial Foundation sponsors art, architecture, culture, and other industries both domestically and internationally, and provides long-term support for the development of literature and art. This includes hosting the "Far Eastern Group Architecture Lecture" with the aim of contributing to human welfare or national construction. In terms of medical care, Far Eastern Memorial Hospital provides the best medical services with innovative medical technology. During the epidemic, it undertakes various epidemic prevention tasks deeply trapped in the epidemic hot areas, demonstrates resilience and moral courage, and does a good job of social medical responsibilities. In terms of education, Yuan Ze University is characterized by innovative teaching and key research. The School of Management has entered the top 500 in the world and is a high-quality university with international reputation. It has partnered with Far Eastern Memorial Hospital to establish the Medical R&D Center and cultivate interdisciplinary talents in the medical industry. Our company fully utilizes the group's resources, deepens the connection between industry and academia, and plans industry and academia internships and talent training programs to cultivate future talents.

        The Far Eastern Group, which has been founded for 74 years, has experienced numerous political and economic changes and current situation changes. In each historical track, it has always been unprepared to change, grasped the opportunity for change, and took the entrepreneurial spirit of "honesty, diligence, simplicity, prudence, and innovation" as the Prime Directive for business development. In the future, it will continue to promote the group's resource integration plan, forge sustainability development strategies, and continue to pursue growth with Go Innovative and sustainability, Quenching higher Far Eastern Group brand value. (This article is excerpted from the "Business Report" of Far Eastern New Century Corporation's annual shareholders' meeting.)

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