YY STRATEGIC BUSINESS REVIEW

CONFIDENTIAL

YOU YOUNG

May. 2022

1. Introduction 2. Localization 3. Innovation 4. New Catalog

CONFIDENTIAL

Global Innovation Leader

1. INTRODUCTION

May. 2022

CONFIDENTIAL

1. Introduction - History & Global Locations

2020 (Jun) Upgraded YY Digital Communication Tools

2017 (Dec) Governance Change (Acquisition by VIG Partners)

2009 JV Alliance w/ PT. SU (IDN Entry)

1991(Jun) Established YY KOR

2007 (Apr) Established YY VTN (VTN Entry)

2021 L4L, by migration to VTN New Factory

2019 (Jun)

2021 Established YY PDX

YY VTN New Factory Investment

•

COVID-19

2019 (Oct)

Established YY IDN

•

YY KOR (Since 1991) - R&D Hub at South Korea

YY PDX (Since 2022) - PDX Communication Center

YY VTN (Since 2007 / New Factory Since 2021) - The Largest Textile Factory in VTN

YY IDN (Since 2009 / New Established Since 2019) - Specialized Engineer Material Platform Factory in IDN

2

1. Introduction - Overall Revenue

• Overall revenue has decreased slightly since 2017 • Significant drop due to COVID-19 in 2020, but YY has recovered since 2021

Unit: $1M

Overall Revenue

71.4

61.4

COVID-19

53.8

51.2

50.4

44.0

40.8

31.6

Rapid growth with CKJ

22.8

YY VTN New Factory Investment

17.7

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Total

* Stand of Calendar Year

3

CONFIDENTIAL

1. Introduction - Org. Chart

• Strong “Teamwork” across countries and between functions • Chris Choi is leading the company as a CEO, & Rio Park, Sr. Director, is leading sales & marketing

# of Employees 473 • YY KOR : 169 • YY VTN : 278 • YY IDN : 23 • YY PDX : 3

CEO

Founder & Former CEO

US Rep. (PDX) Rio Park Heather James Sabrina Mallen

Chris Choi

R&D Advisor

169

23

278

Group HQ Function & KOR Operation

IDN Operation

VTN Operation

Sales & Marketing Division (17)

Management Division (12) Finance Human Resource HSE Operation Division (93) Manufacturing SCM QA

Lead: Jeff Lee

Lead: WJ Song

Lead: Rio Park

HQ Response

Sales

Support: Bryan Park

Support: Dedeng Sujana

Planning Marketing

Manufacturing (14)

Manufacturing (157)

R&D Division (47)

Lead: BC Min

Quality/Delivery (2)

Quality/Delivery (62)

Innovation Center Purchasing LAB

Management (7)

Management (59)

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CONFIDENTIAL

1. Introduction - Key Strength

• Specialized CKJ Supplier - Global No.1 CKJ Supplier with 7+ years experience - CKJ being highly upgraded in terms of physical, aesthetic & price competitiveness

• Global Operations - VTN size up x 4 with New Factory : New facility and machines - IDN to be transformed into main upper material platform factory

YY IDN

YY VTN

• Aggressive Investment - Strong willingness for Aggressive Investment with abundant budget - Especially focusing on “Innovation” & “Localization”

• Sustainability & Innovation - Continuous R&D efforts for Sustainability & Fashion Trend - R&D for Warp Knit Eng. Mesh - Re-used Yarn, TENCEL, Natural Dyeing, etc.

• Digitalization Eco-System - Various Digital Communication Channels with Brands - YY App, Digital Flip-Book, QR-Book, Diary Book, YY Channel, etc.

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CONFIDENTIAL

1. Introduction - Digital Eco System

 Material Library APP - More than 2,000 materials up to now - Fast update of Newly developed materials

 Multi-media Flip Book - Multi-Media E-Catalog - High Quality Image, Embed pop-up images, GIFs and various links - Easy access & sharing only with quick link

DIGITAL ECO-SYSTEM

 QR-coded Diary Book - Private hands & Portable - Scan-able QR code for each material spec .

 B2B Comm. Channel

- New material intro Channel - Not for Mass, Private access

 YY Digital News Letter - Newly developed materials - Investment or R&D news

https://youtu.be/UtlyAZxwya4

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CONFIDENTIAL

Global Innovation Leader

2. LOCALIZATION

May. 2022

CONFIDENTIAL

2. Localization - Operational Strategy (by Location)

• High Level JQD Platform & Innovation Center

- Long experiences in CKJ & armed with unrivaled know-how

- Double Raschel JQD will be our continuous core capability

- High Tech & Various Post Treatment

• All-in-one Eco Platform Factory

- Large-scale factory site of 40,000 ㎡ with various production facilities (Woven,

Tricot, S/W, CKJ, and CK), and excellent scalability

- Go for sustainability (Solar, Water Reuse, Bio Fuel, etc.)

• Upper & Core material Platform Factory

- Produce core material (D/Raschel JQD, Woven, etc.) centered on upper

- Stable production and quality to satisfy customer’s needs

- Additional investment to expand capacity

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CONFIDENTIAL

2. Localization - Capability (by Location)

• YY KOR : New Facility Investment - Focus on R&D / Special or high-tech products • YY VTN & IDN : Capacity increase and upgrade - Focus on efficient mass production

Unit: 1,000YD / Mon.

YY KOR

YY VTN

YY IDN

TYPE

# Capa (YD/Month)

# Capa (YD/Month)

# Capa (YD/Month)

C/Knit

86

1,100

121

3,900

33

1,200

CKJ

67

420

10

100

2

20

Tricot

52

2,100

22

2,000

4

400

S/W

29

200

12

190

3

50

Knitting

Warp Knit Eng. Mesh

3

30

-

-

-

-

Woven

161

830

40

300

12

120

Non-Woven

1

310

-

-

-

-

EMB M/C

1

3 (Prs.)

-

-

-

-

Fabric

44

3,300 (1,000t)

64

6,200 (1,400t)

12

670 (200t)

Dyeing

Yarn

16

850 (260t)

-

-

-

-

Finishing

Tentering

5

2,500

5

6,700

1

900

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CONFIDENTIAL

2. Localization - YY KOR Innovation Center Expansion

• New Innovation Center launched in Aug. 2021 (Korea): Collaboration with VTN R&D Team

Unit: YD

Layout

Capacity

Unit: YD

Daily Capacity / MC

# of MC

Monthly Capacity

Type

Description

Sandwich Engineered Mesh

SWEM24

250

1

5,250

Space for additional R&D M/C

DRSL22 Double Raschel

320

6

40,000

TRI20

Tricot (RM4)

1,200

1

25,200

Warping M/C

Warping M/C

TRI24

Tricot (RM4)

1,000

1

21,000

DRSL 22

SWEM 24GG

TRI20

TRI24

Warping M/C

2

N/A

DRSL 22

DRSL 22

DRSL 22

DRSL 22

DRSL 22

TBD

TOTAL

11

85,050

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CONFIDENTIAL

2. Localization - YY VTN New Factory 1/2

• The Newest & Biggest shoe textile factory in Vietnam - Starting from Jun.2021 and full-spectrum operation from Oct.2021

Brand-New Facilities and Machines

WWTE

Boiler

WOVEN Facility

Warehouse for Finished Goods

Green Zone (Keep and Grow)

Sports Complex Zone for employee

Canteen

• Total Area : 130,179 ㎡ - Manufacturing Area I : 30,903 ㎡ - Manufacturing Area II (Woven & EMB) : 22,456 ㎡ - Wastewater Treatment Equipment : 6,766 ㎡ - Boiler Room : 4,098 ㎡

Dormitory

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CONFIDENTIAL

2. Localization - YY VTN New Factory 2/2

• The New Factory with well-equipped Eco-Friendly Facilities - To be reinforced step by step for the coming 1~1.5 years

WWTE Waste Water Treatment Equipment

*I-REC : International Renewable Energy Certificate

Biomass Boiler

Solar Power

• Total Capacity : 5,000 ton/day • Recycling Capacity : 2,500 ton/day (Plan) • Recycling dyeing water within 2022 (Testing needed, Darker → Lighter)

• 1st Step : Completed Streetlight • 2 nd Step : Structural Reviewing - Manufacturing area (2022) - Capacity : 1.8MWP - Carbon Emission Reduction : 1,000~2,000 ton/yr - Certification : *I-REC (2022)

• Using for : Dyeing & Tentering • Capacity : 20 ton/hr. & 6 ton/hr. • Raw Material : Biofuel / Coal

• Recycling domestic water (Purification of rainwater)

Low Liquor Dyeing

• Total Area : 130,179 ㎡ - Main Production : 30,903 ㎡ - Collaboration : 22,456 ㎡ - Wastewater Treatment Equipment : 6,766 ㎡ - Boiler Room : 4,098 ㎡

• Saving more than 30% of Dyeing Water & Chemicals • New M/C #9 out of #64 (15%) • Increasing # for changing old M/Cs

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CONFIDENTIAL

2. Localization - YY IDN History of YY IDN Investment

• The factory is a result of continuous effort to establish our own production base in Indonesia. - YOUYOUNG has 10+ year experience in Indonesia. We understand market and environment. • YY IDN will be our Upper & Engineer material platform factory as well as localized production base of linings. - Short & Mid term : CKJ, S/W, S/L Mesh (Rec. Poly), Linings - Mid-to-Long term : Woven, Warp Knit Eng. Mesh, Single JQD, S/W-type C/Knit, Low-gauge C/Knit

• 2 nd YY Settle Down in IDN (PT. YOUYOUNG Indonesia) - Established YY IDN branch (100% Direct Investment) - Approved by 4 Global Footwear Brands (in 2020)

• 1 st YY Settle Down in IDN (PT.SU) - Strategic Cooperation to pioneer Indonesia production base

2022

2018

2019

2009

• Production by PT. SU but, Development, Sales& Marketing by YY HQ

• Next-phase YY Indonesia ▶ 100% owned production base of

- 2012 Rev.: $5,705K - 2018 Rev.: $14,679K

CKJ, Warp knit Eng. Mesh (with New M/C) ▶ Engineer material production base

• Serious Issues - Raised issue for old facilities, low- performance and sustainability - YY HQ decided to establish more controllable factory in Indonesia

- Competitive Pricing, Short lead time - High quality upper as well as lining and reinforcement items

13

CONFIDENTIAL

2. Localization - YY IDN Facility & Capability

• Ownership of Knitting and Weaving Factory (incl. Land & Buildings)

Unit: 1,000YD/Month

Facility Status in Mar. 2022 (#) : # of M/C

Type

Sub-Type # of M/C Capacity

 Finishing Building - Dyeing (12) - Tentering (1)

 WWTE

C/Knit

33

1,200

CKJ

2

20

 Mfg. Building A - Tricot (4)

 Mfg. Building B - C/Knit (33) - CKJ (2) - WVN (12)

 Boiler

Tricot

4

400

- Sandwich (2) - S/W JQD (1) - Office & Lab

Knitting

Sandwich

2

30

S/W JQD

1

20

 Mfg. Building C (New) Under construction (Jun. 2022)

Woven

12

120

Dyeing

12

670

Finishing

Tentering

1

900

Brushing

Post Treatment

3

250

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CONFIDENTIAL

Global Innovation Leader

3. INNOVATION

May. 2022

15

CONFIDENTIAL

3. Innovation - Next Tech: CKJ Development

• Global No.1 CKJ Supplier • CKJ being highly upgraded in terms of physical, aesthetic & price competitiveness

CKJD

CKJ Mono

Sandwich type CKJ

Light weight

16gauge machine renovation No reinforcement → cost save

• • •

CKJ 500g VS CKJ Mono 340g

• •

Unique structures make CKJ lighter

Fit performance, Maximize shoe shape

16

CONFIDENTIAL

3. Innovation - EMB Needle Flocking

• Make up for the weak points of traditional needle punching

Process of EMB Needle Flocking

Sample

Computer Design

Material Bonding

Needle Punching

Press

Back

Face

Capacity

Feature

• As-is : 15,000pr./mon. (Now 2 machines) • To be : 150,000pr./season by the end of 2022 • Sample & R&D in KOR • Mass production (over 100,000pr./season) in VTN

• Gradation effect • shell & roll repeat pattern • Complicated Design

17

CONFIDENTIAL

3. Innovation - Engineered Mesh (D/RSL JQD)

• Design for All Mixed Layers - (Top / Middle / Bottom) • See-through / Breathability with Good Performance - (Stoll abrasion ▲ )

Warp Knit Eng. Mesh

TOP

MIDDLE

BOTTOM

TOP

MIDDLE

BOTTOM

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CONFIDENTIAL

3. Innovation - Sustainability Material / Re-Used

• Post Industrial (Pre-Consumer) • Finished Yarn Type : Poly, Wool - Tip : Re-use wool get more thinner denier. • Available Colors : Natural, Dope Dyed Black → Limited Colors will be provided soon

Sample

Re-used Process

Step 1 : Grinding

Step 2 : Spread out and Spinning

Garment Insert

Grinding

Making Fiber

Spread Out

Spinning

History

Next Step

Re-used History & In-House Plan

Q4.2019

2022

Q2.2019

Q1.2019

Q3~Q4.2021

New Facilities in YY VTN

Complete Step 1 & Step2

Circular Knit : 5G & 7G Woven & Non-Woven

Introduced to Brand

JV with Local Supplier

19

CONFIDENTIAL

3. Innovation - Sustainability Material / Natural Dyeing & TENCEL

• Botanical Dyestuff on Poly & Nylon (Under Testing) • Collaboration with natural dyeing R&D partner (Strategic Alliance, MOU) • Natural & Comfortable Color

Tencel + Natural Dyeing

• CODY ND KNIT TC-TEC-P EPM1

Botanical Dyestuff

- MTL Code : YK21-0361

- MTL Type : CKJ Repeated

Natural Indigo

Pomegranate

Himalayan Rhubarb

- Composition : TC-70%, Tencel-23%,

Rec PDTY-7%

- Weight : 265g/SQM

- Width : 52 Inch

Natural Dyeing

Tencel + Botanical Digital Print

• 12OZ CANVAS TEC BDP-1 EPM5

- MTL Code : YK21-0507

- MTL Type : Woven

Botanical Digital Printing

- Composition : Tencel-100%

- Weight : 352g/SQM

- Width : 44 Inch

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Global Innovation Leader

4. NEW CATALOG

Mar. 2022

21

4. New Catalog

• New Catalog

- TEXSKIN : https://user-J128Zhw.cld.bz/TEXSKIN

- FW23 E-Catalog : https://user-J128Zhw.cld.bz/FW23-YOUYOUNG-TEXTILE

• Other Links

YY Youtube

Digital Eco System https://youtu.be/5AWxrpYvwp0

Re-use Textile

https://youtu.be/UP8t0WMZaqU

YY Daily Life

https://youtu.be/-ndubZXPuYg

Natural Dyeing

https://youtu.be/X4vKsmRmTJA

YY Embroidery

https://www.youtube.com/watch?v=hG9ME3Xf1Yg

Vietnam 3.0

https://youtu.be/b6RZG1SxgT0

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CONFIDENTIAL

For more Information ....

• Homepage : www.youyoungtx.com

• HEAD OFFICE & FACTORY 14, Sinsan-Ro, Saha-Gu, Busan, Korea Tel: +82-51-831-6511, Fax: +82-51-831-6514 E-mail: peter@youyoungtx.co.kr • YOUYOUNG PDX INC 12725 SW Millikan Way, Suite 300 (Office 321) Beaverton, OR 97005, USA Tel: +82-10-3879-9402 E-mail: riopark@youyoungtx.co.kr heather.james@youyoungtx.com

Thank You

• YOUYOUNG VINA Lot L, Viet Huong II IP, An Tay, Ben Cat, Binh Duong, Vietnam Tel: (84) 274 3579 007~10 E-mail : jenny.kim@youyoungtx.co.kr

• PT. YOUYOUNG TEXTILE INDONESIA Taman Industri Tigaraksa Sentasa, Blok A2-A3, JI, Raya Kutruk, RT 02/03, Tigaraksa, Cikupa, Kab. Tangerang, Indonesia Tel: (62) 2129698517 E-mail : dedeng@youyoungtx.co.kr