1Q2019 RESULTS PRESENTATION 30 April 2018 CHINA SUNSINE CHEMICAL - PowerPoint PPT Presentation

1Q2019 RESULTS PRESENTATION 30 April 2018 CHINA SUNSINE CHEMICAL HOLDINGS LTD. 中国尚舜化工控股有限公司 1

2 PRESENTATION OUTLINE Our Company Financial Overview Key Developments Industry Info and Outlook

3 Our Company

About China Sunsine Chemical 4 ✓ Specialty rubber chemicals producer ✓ World’s largest producer of Rubber Accelerators ✓ PRC’s biggest producer of Insoluble Sulphur ✓ Superior product-quality and economies of scale ✓ Accredited by a strong customer base of top tire makers ✓ Beneficiary of stringent environmental protection standards

Our Products - Rubber Chemicals 5 Rubber Accelerators Insoluble Anti-Oxidants MBT MBTS CBS TBBS TMTD Sulphur TMQ DPG DCBS …. 6PPD 4010NA

Our Products: Rubber Chemicals 6 Rubber Chemicals are Essential Additives in the production of rubber products

Global Consumption of Rubber 7 Anti-oxidants Other Products 2.2% Latex 10% Vulcanizing agents 2% 4% Other Tire Accelerators 9% 1.7% Boots Car Tyres Rubber 10% 61% Tube/ Tape 6% http://www.chemn.com • By weight, every 100 tons of rubber consumes about 6 tons of rubber chemicals (100:6) Global rubber consumption in 2017: 28.27 million tons - By IRSG • By value , rubber chemical’s cost accounts for about 3% of total tire cost (100:3)

Our Strong Customer Base 8 (2006) (1997) (2003) (2006) • Over 1,000 customers globally • Serves more than 2/3 of the global top 75 tire makers • 1/3 output exported

Market Share: Rubber Accelerators 9 MARKET SHARE 40% 33% 33% 35% 31% 29% 30% 30% PRC Market Share 28% 30% 25% 24% 24% 25% 20% 20% 19% 18% Global Market Share 20% 17% 17% 14% 16% 15% 12% 12% 11% 10% 7% 5% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Our Market Leadership Position 10 GLOBAL TOP 3 PRC TOP 3 ACCELERATOR PRODUCERS INSOLUBLE SULPHUR PRODUCERS Annual Annual Company Company Capacity 2018 Capacity 2018 China Sunsine China Sunsine 30,000 tons 87,000 tons 中国尚舜 中国尚舜 Yanggu Huatai Tianjin Kemai 20,000 tons 51,000 tons 阳谷华泰 天津科迈 Sennics Yanggu Huatai 圣奥化学 15,000 tons 45,000 tons 阳谷华泰

Our Production Bases 11 Five production bases in three locations

12 Financial Overview

P&L Highlights 13 RMB ’ mln Quarter Ended 31 Mar 19 31 Mar 18 Change Group Revenue 686.6 856.9 (20%) Gross Profit 235.7 298.8 (21%) Gross Profit Margin 34.3% 34.9% (0.6 pts) Profit Before Tax 132.3 181.6 (27%) Profit After Tax 110.2 149.5 (26%) EPS 22.43/ 30.40/ (26%) (RMB cents/SGD Cents*) 4.52 6.12 NAV per share 495.45/ 384.36/ (RMB cents/SGD Cents*) 99.80 77.42 * SGD to RMB exchange rate @4.9643

Revenue Growth 14 RMB ’ mln 3,500.0 3,283.30 3,000.0 2,738.4 2,500.0 2,077.3 2,036.9 2,000.0 1,859.1 1,695.9 1,417.3 1,500.0 1,175.1 991.4 1,000.0 797.9 718.4 686.6 619.5 500.0 0.0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 1Q19

Revenue By Quarter 15 RMB ’ mln 1Q2019 1000 856.9 880.6 873.3 900 775.6 770.1 800 686.9 656.2 700 634.4 575 553.4 600 547.3 491.1 500 445.1 1Q19 vs 1Q18 : -20% 400 1Q19 vs 4Q18 : - 11% 300 200 100 0 1Q 2Q 3Q 4Q 2016 2017 2018 2019 1Q19 Revenue down 20% y-o-y due to lower average selling price (ASP)

Sales Contribution (By Region) 16 1Q2019 Sales Contribution (y-o-y) Region 1Q2019 FY2018 FY2017 Rest of Asia 56% 62% 64% China 27% Rest of Asia 23% 25% 24% PRC US 4% 2% 5% US 2% 62% Europe 14% 9% 5% 8% Europe Others 3% 2% 2% Others 100% 100% 100% Total

Sales Volume 17 Tons 160,000 151,486 135,791140,476 140,000 114,572 120,000 108,973 98,345 100,000 81,371 80,000 54,27560,907 60,000 45,420 38,715 40,000 31,03630,787 20,000 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 1Q19

Sales Volume by Products 18 Tons 90,000 83,335 83,255 82,767 76,089 76,090 80,000 72,710 70,000 64,252 60,000 50,148 46,343 50,000 42,472 40,196 40,000 34,858 31,036 31,214 29,805 30,000 25,759 22,283 21,640 20,207 19,903 20,031 20,000 11,948 12,102 15,417 10,724 11,155 7,873 12,281 4,413 3,468 7,353 10,000 5,183 464 2,061 2,971 185 0 0 1,361 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 1Q19 Accelerator Insoluble Sulphure Anti-oxidant and others Sales Volume 1Q2018 1Q2019 Utilization Rate Accelerators 19,907 20,207 Almost fully utilized Insoluble Sulphur 6,212 7,353 Fully utilized Anti-oxidants 10,353 10,684 About 90%

Sales Volume By Quarter 19 Tons 1Q2019 45,000 39,957 38,715 38,774 37,567 40,000 37,166 36,797 36,797 34,483 34,098 34,460 34,558 35,000 1Q19 vs 1Q18 : +5% 33,046 1Q19 vs 4Q18: -3 % 30,051 30,000 25,000 20,000 15,000 10,000 1Q 2Q 3Q 4Q 2016 2017 2018 2019

Overall Average Selling Price (ASP) 20 RMB/Ton 30,000 25.9K 25,000 21.5K 19.4K 18.3K 19.3K 19.1K 20,000 17.4K 19.8K 16.2K 17.2K 17.6K 15,000 15.8K 15.0K 10,000 5,000 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 1Q19

ASP vs Aniline Price 21 RMB/Ton 25,000 22.4K23.2K23.3K 20.7K 19.1K 18.9K 18.5K 20,000 17,637 17.3K 17K 16K 16.3K15.6K14.8K 14.2K14.8K 16K 15,000 ASP 9.6K 10.2K Aniline 9.2K 10,000 7.8K 7.5K 5.4K 4.8K 4.6K4.9K 6.1K 6.4K 7.2K 5.7K 6.1K 6.4K 4.7K 5,000 4895 0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 • 1Q19 ASP dropped 24% y-o-y mainly due to the decrease in raw material prices

Main Raw Materials Price Trend 22 RMB/ Ton 22,000 Aniline 18,000 Tert-butylamine 14,000 Cyclohexylamine 10,000 Ketone Dicyclohexylamine Aniline 6,000 Carbon Disulfide 2,000

Gross Profit 23 RMB ’ mln 1200.0 1125.9 1100.0 1000.0 900.0 788.1 800.0 700.0 567.4 492.0 547.1 600.0 500.0 400.0 308.0 293.4 243.9 235.7 300.0 226.8 224.1 160.2 200.0 125.2 100.0 0.0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 1Q19

Net Profit 24 RMB ’ mln Net Profit 700 641.3 600 500 400 341.3 300 221.7 220.2 195.2 200 115.3 110.2 106.7 99.4 88.3 76.1 76.7 100 32 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 1Q19

Net Profit By Quarter 25 RMB ’ mln 250.0 1Q19 vs 1Q18: - 26% 239.7 1Q19 vs 4Q18: +1.5% 48 200.0 1Q2019 149.5 143.4 150.0 132.0 110.2 108.6 100.0 77.6 74.5 72.8 66.3 57.2 49.0 50.0 33.6 0.0 1Q 2Q 3Q 4Q 2016 2017 2018 2019 • 1Q19 Net profit down 26% y-o-y due to the decrease in ASP

Margins Analysis 26 40.0% 34.3% 34.3% 35.0% 28.8% 28.4% 30.0% 27.3% 26.5% 26.9% 25.0% 25.0% 22.3% 22.6% Gross Profit 20.2% 19.5% Margin (GPM) 17.2% 18.2% 20.0% 16.0% Net Profit Margin 12.3% 13.3% 12.3% 11.6% (NPM) 15.0% 10.6% 10.5% 10.9% 12.5% 18.1% 8.5% 10.0% 4.5% 5.0% 2.3% 0.0% --- Adjusted by taking out the one-time credit of tax expense of RMB 48 mln in FY17

Margins Analysis By Quarter 27 40.0% 36.7% 34.9% 34.3% 33.3% 32.7% 35.0% 31.7% 32.4% 28.5% 28.2% 30.0% 27.3% 27.2% 27.2% 26.8% 26.8% 24.4% 24.3% Gross Profit 24.2% 23.5% 25.0% Margin (GPM) 21.8% 17.4% 18.5% 20.0% Net Profit 16.0% 15.1% Margin (NPM) 14.1% 13.3% 15.0% 12.2% 11.6% 11.4% 11.0% 9.5% 11.0% 10.0% 10.0% 10.0% 10.0% 7.5% 5.0% 0.0% --- Adjusted by taking out the one-time credit of tax expense of RMB 48 mln in FY17

Balance Sheet Highlight 28 31/03/2019 31/12/2018 31/12/2017 2,107.8 2,016.4 1,424.6 Current Assets ( RMB’mln ) * 395.5 421.8 385.3 Current Liabilities ( RMB’mln ) 5.33 4.78 3.70 Current Ratio 2,434.2 2,325.5 1,742.4 Shareholders’ Equity (RMB’mln ) 0 0 0 D/E ratio ** 495.45/ 473.32/ 354.37/ NAV per share (RMB cents) 99.80 94.6 70.8 (equivalent to SGD cents) 238.1/ 211.4 101.6/ Net Cash per share (RMB cents) （ equivalent to SGD cents) 48.0 42.2 20.3 * Including Cash RMB 1,169.8 mln ** No bank borrowing

29 Key Developments

Expansion Projects 30 Project Status CapEx 30,000-ton fully-automated, high-end Whole project was approved in Accelerator TBBS at Shanxian: Jan 2019 Commercial production started in 1. Phase I of 10,000-ton capacity RMB 100 mln Jan 2019 2. Phase II of 20,000-ton capacity New line to be installed in 2019 RMB 60 mln Sunsine Chemical Zone Signed Investment Agreement to Not finalized (In phases) acquire a piece of land yet

Annual Capacity 31 2007 FY17 FY18 FY9e (before IPO) Rubber 32,000 87,000 87,000 97,000 Accelerators Insoluble nil 20,000 30,000 30,000 Sulphur Anti-oxidant nil 45,000 45,000 45,000 (TMQ & 6PPD) Total 32,000 152,000 162,000 172,000

32 Industry Info and Outlook

China’s New Car Sales 33 in million units % 35 50 28.9 30 28.1 40 28 24.6 23.5 25 30 22 19.3 18.5 20 18.1 sales 20 13.6 growth yoy 15 10 9.4 8.8 10 0 6.37 5 -10 0 -20 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1Q9 • 6.37 mln cars sold in China in 1Q2019, down 13.7% y-o-y • China’s new car sales expected to be slower after robust growth over 28 years