Message from Management

For Taiwan's stainless steel industry, 2025 is a year fraught with challenges and pressure to transform.

While global market demand has not seen significant growth, competition on the supply side continues to intensify; in particular, overcapacity and low-priced exports from Chinese firms have kept international prices under prolonged pressure, posing a direct competitive threat to Taiwanese manufacturers.

Meanwhile, demand recovery in European and American markets remains limited due to economic slowdowns and conservative inventory strategies, though Southeast Asia and India continue to offer growth potential. As the global market shifts from a "growth-oriented" to a "structure-oriented" model, enterprises that rely on scale expansion as their primary strategy will face heightened operational risks.

Furthermore, changes in the international trade environment and policies have had a profound impact; notably, the U.S. decision to raise tariffs on steel and aluminum from 25% to 50%—effective April 2025—has directly disrupted global markets. As nations strengthen tariff measures and policies favoring localized supply chains, markets are increasingly becoming regionalized.
In light of this operating environment, the Company remains committed to prudent management principles and is actively advancing several core strategies:

First, regarding product strategy, the company is continuously streamlining its product portfolio—moving away from a "high-variety, low-volume" model—and reducing inventory levels to enhance product competitiveness and profitability.

Second, concerning market positioning, the strategy focuses on expanding domestic market share and growing export sales. In addition to consolidating existing markets, the company is actively targeting Japan, Southeast Asia, and other high-potential regions to mitigate market volatility risks while achieving the dual benefits of increased production and reduced costs.

Third, in terms of operational management, the company is strengthening cost control and efficiency. By fostering close coordination across procurement, production, and sales, it aims to boost overall operational performance and ensure stable profitability amidst a competitive pricing environment.

Finally, regarding sustainable development, we continue to advance energy conservation, carbon reduction, and ESG-related initiatives. By proactively addressing international clients' requirements concerning carbon footprints and supply chain responsibility, we are laying a solid foundation for the company's long-term growth.

Taiwan's stainless steel industry is entering a new phase characterized by "de-scaling" and a focus on strengthening fundamentals. Corporate competitiveness will no longer hinge on production volume; instead, it will depend on product mix, cost control capabilities, and the ability to meet low-carbon standards and overcome barriers to entry in international markets. We remain committed to prudent management and a measured response to market fluctuations, while continuously enhancing our core competencies to ensure we maintain a leading position amidst the industry's restructuring.

Finally, we extend our gratitude to our shareholders and clients for their long-standing support, as well as to all our colleagues for their hard work and dedication. We will continue to refine our operations and move forward steadily, creating long-term, stable value for our shareholders.