Chairman Douglas Hsu’s Address on Chinese New Year Mass Greetings

　　Though operating across diversified industries, the Far Eastern Group continues to hold the traditional Mass Greetings just like every family would get together during Chinese New Year period to congratulate one another, exchange warm wishes, and enhance cohesiveness.

　　Facing with global changes in 2016 coupled with uncertain economic outlook, the Far Eastern Group companies are still able to strive to maintain targets of their overall revenues, profits and total assets.  Thanks to all of your tremendous efforts.  However, under the impact of market recession, the Group suffers sluggish growth, in particular with Orient Union Chemical and U-Ming Marine Transport.  We hope that Orient Union Chemical will strengthen the integration of energy and the related products and elevate added-value for its products in order to reap advantages when the market rebounds.  In addition, U-Ming Marine Transport will continue to renew its fleet and improve operating efficiency.  In the banking sector, the scale of Far Eastern International Bank is increasing gradually to engage in digital financial services.  In the game play of the Fintech age, the scale of the bank is no longer an important edge; only the ones with the right talents and infrastructure will be fully equipped to ensure future success.

　　Despite keen competition among local telecom operators, Far EasTone Telecommunications (FET) has performed well and is about to celebrate its 20th founding anniversary.  Aside from being the leading player in digital convergence era, the Company is also committed to developing 5G and IoT.  We also encourage FET colleagues to enhance mobile application capabilities in order to win the battles in this swift mobile age.  Additionally, the retail industry is also under the impact of digital advancement to undergo tremendous changes.  Being established for 50 years, the Far Eastern Department Stores (FEDS) registered record high revenues in 2016.  FEDS plans to lead its subsidiaries including SOGO, Amart, and city’super to introduce digital payment services and offer new consumer experiences to achieve even stellar performance.  In the cement sector, although facing challenges due to downturn in the construction industry, Asia Cement in Taiwan is expected to improve thanks to its diversified operations and the current market recovery.  In addition, Asia Cement China already ranks among China’s top ten producers of clinker, and will continue to seek merger targets.  On the other hand, the Far Eastern New Century (FENC) managed to maintain its position under extremely competitive environment last year.  With newly added production lines in Vietnam, and the new world-renowned eco-friendly products such as DynaFeed, 100% Bio Polyester Shirt, Ocean Plastic Recycled Yarn, FENC is confident to register more outstanding performance in 2017.

　　Aside from the parent company, each affiliate under the Far Eastern Group has also performed equally well.  Chiahui Power Corporation shall continue its growth and expansion.  Yuan Long Stainless Steel has undergone restructuring and recorded new high in net profit after tax in 2016.  Yuan Ze Unversity has been recognized for its excellent academic performance.  There are now more than 300 doctorates in the university, and hope that each company can tap this talent pool to help spur our future growth.

　　Operating in this era of globalization, world changes inevitably affect our business mindset.   Since Mr. Donald J. Trump’s winning the election to be the new U. S. President in November 2016, Dow Jones and various economic indexes have been rising significantly.  However, with the announcements of new policies such as US withdrawal from TPP, building walls at the US-Mexico border, demanding for capital inflow and immigration ban, a lot of unforeseen variables will pose uncertainty for the US stocks and Dow Jones index outlook.  In Taiwan, there are recent social disputes caused by the adjustments of certain laws and policies.  In this respect, we can only help ourselves by making more and more efforts.

　　In the end of 2016, we shared with you during the FEG annual strategy meeting the four major forces that will disrupt the new world including the age of urbanization, accelerating technological changes, an aging world, and integrated global connectedness.  To deal with these challenges, all companies should dedicate to the 6 action plans aimed to innovating business model, optimizing manpower, adapting to climate change, strengthening public and industrial safety, elevating resource allocation, and creating group synergy.  In particular facing with tremendous changes in consumption pattern, consumer behavior, and competition mode in this new economic age, how to innovate business model and optimize manpower are main priorities for us this year.  We have to expedite in transforming traditional talent into globalized workforce in order to remain competitive.  Of course, we also need to work on enhancing the group synergy among the retail, financial and telecom systems via connecting and integrating the logistics, money and information flows to achieve maximum benefits of the Far Eastern Ecosystem.

　　Furthermore, facing with these changes, aside from possessing agility and executing action plans, we should also clearly define ourselves by asking: “Who are you?”  “Why are you here?”  More importantly, “What do you want to be?”  Our Founder Y. Z. Hsu had long set up the objective for us early upon establishment that Far Eastern is a growth type of enterprise.  We must always strive to maintain the growth momentum.

　　Reflecting on what Bill Gates said: “The complacent company is a dead company.  Success today requires the agility and drive to constantly rethink, reinvigorate, react, and reinvent.”  We sincerely urge you all to keep up with innovation, make changes to win in the future.

　　Quoting some classic phrases from the U. S. President Donald J. Trump, just change a few words should be able to apply to us as well.  He wishes to “Make America great Again.”  Our goal is also to “Make Far Eastern great!”  Furthermore, he said Americans are “incredible people,” in my view, all Far Easterners are also “incredible people!”  He believes that “we will win,” Far Eastern also aims to win.  Last but not least, he also expressed: “The time for empty talk is over.”  Yes, the time for empty talk is over, it is time for action!  Facing with challenges of the upcoming new year, we hope that you all march forward with a cheerful and motivated mood!＃