Page 19 - Microsoft Word - One-Report-Eng 2024 Final.docx

Tycoons Worldwide Group (Thailand) Plc.

China's real estate crisis, the possibility of a cycle of rising interest rates in the Japanese yen and
interest rate cuts in the US dollar and the euro... etc. Many factors may have an impact on demand
in the steel industry, requiring Company to be more vigilant and flexible in responding to market
changes.

2. Product and raw material price

TYCN’s major raw materials for downstream products are billets and wire rods. Therefore, billet and
wire rod prices play an important role when it comes to sales, cost, and profit. Currently TYCN’s raw
materials sources are diversified by countries such as China, Oman, Vietnam and Thailand. As the
largest steel producing country, China ‘s policy on producing and selling steel will directly affect
global steel prices. As the wars in Russia and Ukraine have also caused limitations in the
company's sources of raw materials, further influencing the company’s revenue and profit.

Recently, the global raw material market has faced various unstable factors, such as geopolitical
conflicts, supply chain disruptions and climate change events, which may lead to fluctuations in
raw material prices. Tensions between Russia and Ukraine have led to concerns about the supply
of key raw materials such as iron ore, further adding to market uncertainty.

3. Potential competitors

As far as the steel industry is concerned, China's new policy of moving production capacity
overseas and the entry of a large number of low-priced products into the ASEAN market have
caused major negative impacts on ASEAN countries. After Thailand's steel industry experiences a
wave of bankruptcies in 2024, its future development depends on whether the Thai government's
economic policies can effectively boost growth and prevent the dumping of low-priced steel
products from China.

2.2.2 Financial risks

1. Credit policy

There is no significant credit risk between TYCN and its customers. TYCN set credit lines for its
customers by market, products and payment terms. TYCN controls shipment and collection by
using ERP, which allows TYCN to instantly monitor the status of customers’ credit lines. An approval
is necessary for any shipment which is over credit line. A guarantee deposit, advance payment, or
AR insurance is required when a shipment is made with long payment term or to a high-risk market.
Customers are required to provide a deposit, advance payment or the Company directly purchases
accounts receivable insurance to reduce credit risk.

2. Exchange rate and interest rate
The Company's foreign exchange position may vary depending on the import-export ratio.
The company also has the ability to use derivatives to hedge risks and can also avoid the foreign
exchange risk by signing forward contracts to offset the net foreign exchange position. TYCN group
uses USD loans for working capital and long term investment. Therefore, the interest rate should be

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