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25 February 2013 Presentation at Presentation at S&P S&P Capital IQ Seminar Capital IQ Seminar p Poised for Growth Poised for Growth China Aviation Oil China Aviation Oil Cautionary note on forward-looking statements This

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SLIDE 1

25 February 2013

Presentation at Presentation at S&P S&P Capital IQ Seminar Capital IQ Seminar p “Poised for Growth” Poised for Growth”

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SLIDE 2

China Aviation Oil China Aviation Oil

Cautionary note on forward-looking statements

This presentation slides may contain forward-looking statements that involve risks and uncertainties. These statements reflect management’s current expectations, b li f h i t ti t t i di th f t d ti i th beliefs, hopes, intentions or strategies regarding the future and assumptions in the light of currently available information. Such forward-looking statements are not guarantees of future performance or events. Accordingly, actual performance,

  • utcomes and results may differ materially from those expressed in forward-looking

t t t lt f b f i k t i ti d ti statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, competitive factors and political factors. You are cautioned not to place undue reliance on these forward-looking statements, which are based on current view of management on future events.

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SLIDE 3

Corporate Overview Corporate Overview Corporate Overview Corporate Overview

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SLIDE 4

China Aviation Oil

At a Glance

4

China Aviation Oil

Sole Supplier of Imported Jet Fuel to the PRC Civil Aviation Industry Sole Supplier of Imported Jet Fuel to the PRC Civil Aviation Industry Largest Purchaser & Trader of Physical Jet Fuel in Asia Pacific

Company Information Incorporated 26 May 1993 Listed 6 December 2001 Current Share Price * S$ 1.15 Market Capitalisation S$831.2 million P/E ratio 10x NAV per share S$ 0 75 NAV per share S$ 0.75 Free Float 28.1%

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* Closing price on 22 February 2013

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SLIDE 5

China Aviation Oil

Our Business

5

China Aviation Oil

CAO Jet Fuel Supply and Trading of Other Oil Oil R l t d A t Jet Fuel Supply and Trading Trading of Other Oil Products Oil-Related Assets China Gas Oil Storage Tanks & Jetties International Fuel Oil Pipelines Petrochemical Products Airport Refuelling Facilities

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SLIDE 6

China Aviation Oil

Strong Shareholder Support

6

China Aviation Oil

China National Aviation Fuel Group Corporation (CNAF) – 51%

  • A large Central SOE directly under the administration of SASAC
  • Fortune Global 500 company (ranked 318 in 2012)
  • Largest aviation fuel provider in China
  • Extensive nationwide sales network, logistics and distribution

system

  • Owns jet fuel supply facilities at 169 airports across the PRC
  • Provides refuelling services to over 200 airline companies
  • Offers wholesale, retail, storage and distribution of gasoline, diesel

and petrochemical products in 23 Chinese provinces

CNAF Jet Fuel Refuelling Trading of Other Oil Products Logistics International Business

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SLIDE 7

China Aviation Oil

Strong Shareholder Support

7

China Aviation Oil

BP – 20%

  • One of the world’s leading oil and gas company
  • CAO’s strategic business partner
  • Assists CAO in enhancing its trading and risk management system
  • Business cooperation with BP enables access to new markets

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SLIDE 8

Jet Fuel Supply and Trading Jet Fuel Supply and Trading Jet Fuel Supply and Trading Jet Fuel Supply and Trading

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SLIDE 9

China Aviation Oil

Jet Fuel Supply – Stable Revenue Generator

9

China Aviation Oil

  • Sole importer of jet fuel into China
  • Provides approximately 40% of China’s total jet fuel

Jet Fuel Volume (million tonnes)

Provides approximately 40% of China s total jet fuel demand on a cost plus basis

  • Supplies mainly to three key international airports in

China China

  • Beijing Capital International Airport
  • Shanghai Pudong International Airport
  • Guangzhou Baiyun International Airport

5 19 6.15 7.17 8.37 10.44

Guangzhou Baiyun International Airport and other Chinese airports including Shenzhen Baoan International Airport, Chengdu Shuangliu International Airport, Qingdao Liuting International

4.19 5.19 2007 2008 2009 2010 2011 9M2012

p , Q g g Airport etc.

  • Strategic alliances with major Chinese airlines to

supply jet fuel at 20 airports outside China – in Europe (e.g. Amsterdam and Frankfurt), North America (e.g. Los Angeles and Anchorage), Asia Pacific (e.g. Hong Kong, Taiwan and Hanoi) and Middl E t ( D b i d T k )

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Middle East (e.g. Dubai and Turkey)

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SLIDE 10

China Aviation Oil

Optimisation and Trading Enhances Profitability

10

China Aviation Oil

  • Boosts

jet fuel supply business by capitalising

  • n

profit enhancement

  • pportunities via supply optimisation and trading

Profitability

  • ppo u

es a supp y op sa o a d ad g

  • Supported by large volume of supply to China
  • Protected by strict risk management policies

Procurement

  • Term Contracts
  • Airports

Optimisation and Trading Physical Delivery

Storage Term Contracts

  • Spot Market
  • Tenders

Airports

  • Airlines
  • Terminals

Freight/ Transport Derivatives Hedging

  • Time Charter
  • Spot Charter
  • Pipelines

p g g

TSN-PEKCL SPIA

Associate’s Role in Supply Chain

OKYC Xin Yuan

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SLIDE 11

China Aviation Oil

Effective Risk Control System

11

China Aviation Oil

Group Wide Risk Awareness Culture

Audit Committee Risk Management Committee

Board of Directors

Remuneration Committee Nominating Committee

Structure

Management/Company Risk Meeting

Head of Department Head of Risk Management Heads of Department Internal Audit Ri k M t Internal Audit (outsourced) Risk Management Dept Front Office Back Office Pre-deal Checklists

Measures

Evaluation of New Business Risks and/or New Investment Risks Credit Assessments Product Limits Traders’ Guidelines Periodic Stress Testing

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Regular Reporting etc.

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SLIDE 12

China Aviation Oil

Global Network

12

China Aviation Oil

United Korea Europe U ted States China Shanghai Middle East Singapore Asia Pacific Hong Kong Australia New Zealand

Storage Supply locations

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SLIDE 13

Trading of Other Oil Products Trading of Other Oil Products Trading of Other Oil Products Trading of Other Oil Products

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SLIDE 14

China Aviation Oil

Expanding Revenue Stream

14

China Aviation Oil

Strategy: to leverage on trading expertise to expand revenue streams and gy g g p p reduce reliance on jet fuel

  • Established in 2012

Gas Oil

Established in 2012

  • Successfully supplied gasoil to Indonesia
  • To expand presence in South East Asia region by securing more supply

contracts

Fuel Oil

  • Established in 2010
  • Built effective relationships with oil majors, large trading houses and

reliable end users worldwide

ue O

reliable end users worldwide

  • Reliable supplier of bunker fuel
  • Established in 2008, progressively built structural competitive advantage

Petrochemicals

Established in 2008, progressively built structural competitive advantage

  • Products traded included benzene, toluene and paraxylene
  • Sourced from and sold to Asia Pacific, Middle East and US
  • Active player in China and other Asia Pacific markets

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Active player in China and other Asia Pacific markets

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SLIDE 15

Oil Oil-Related Assets Related Assets Oil Oil-Related Assets Related Assets

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SLIDE 16

China Aviation Oil

SPIA

15

China Aviation Oil

  • 33% stake in Shanghai Pudong International Airport Aviation Fuel Supply Company

(SPIA)

  • Other major SPIA shareholders are Shanghai International Airport Co Ltd (40%) and

Sinopec Assets Management Co Ltd (27%)

  • Exclusive jet fuel supplier to China’s second largest airport – Shanghai Pudong

International Airport (Pudong Airport), provides jet fuel distribution and refuelling service to over 100 Chinese and foreign airlines

  • SPIA owns all refuelling facilities at Pudong Airport including a 140,000m3 storage

t i l i t t k f h d t t di fl t f lli t ti d terminal, airport tank farm, hydrant system, dispenser fleet, refuelling stations and 42km jet fuel pipeline

million tonnes

SPIA Refuelling Volumes

2.4 2.6 2.4 2.9 3.1 2.4 2 2.5 3 3.5

SPIA Refuelling Volumes

0.5 1 1.5

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2007 2008 2009 2010 2011 9M 2012

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SLIDE 17

China Aviation Oil

TSN-PEKCL

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China Aviation Oil

  • 49% stake in China National Aviation Fuel TSN-PEK Pipeline Transportation

Corporation Ltd (TSN-PEKCL)

  • CNAF Logistics holds the remaining 51% stake
  • Key asset is a 185km long pipeline transporting majority of jet fuel requirements
  • f Beijing Capital International Airport and Tianjin Binhai International Airport
  • Longest multi-oil product pipeline with the biggest diameter and highest transfer

volume in the PRC civil aviation industry

illi t 2 2.5 3 million tonnes

TSN-PEKCL Pipeline Volumes

1 1.5 2 0.5 2007 2008 2009 2010 2011 9M 2012

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SLIDE 18

China Aviation Oil

Xin Yuan

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China Aviation Oil

  • 39% stake in China Aviation Oil Xin Yuan Petrochemicals Co. Ltd

R i i t k h ld b Sh h J h P t h i l C Ltd

  • Remaining stakes are held by Shenzhen Juzhengyuan Petrochemical Co Ltd

(60%) and CNAF (1%)

  • Engaged in the storage and trading of jet fuel and other oil products

O t t k f 50 000

3

it Sh id h b i G d

  • Owns a storage tank of 50,000m3 capacity near Shuidong harbour in Guangdong

Province

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SLIDE 19

China Aviation Oil

Oilhub Korea Yeosu Co Ltd

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China Aviation Oil

  • 26% stake in Oilhub Korea Yeosu Co Ltd (OKYC)
  • CAO is second largest shareholder after Korea National Oil Corporation (KNOC),

C O s seco d a ges s a e o de a e

  • ea

a o a O Co po a o ( OC), with a 29% stake. Other shareholders include SK Energy Co, GS Caltex Corporation, Seoul Line Corporation, Samsung C&T Corporation and LG International Corp.

  • OKYC will develop, own, operate, manage and maintain the Northeast Asia Hub

Terminal in Yeosu, Korea. Completion expected in first quarter of 2013

  • Korea is a main source of jet fuel for CAO

Northeast Asia Hub Terminal Information Storage Capacity 1,300,000m3 Shi i Ti 1 88 d t Ti ji Chi Shipping Time

  • 1.88 days to Tianjin, China
  • 1.21 days to Shanghai, China

Terminal Facilities

  • 4 berths with draft of 17.8 metres
  • Capacities ranging between 10,000 to 200,000 dwt

p g g , ,

  • Able to access KNOC owned jetty with 330,000 dwt

capacity Others Able to support trading activities to the west coast of United States and Southeast Asia

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States and Southeast Asia

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SLIDE 20

Growth Strategy Growth Strategy Growth Strategy Growth Strategy

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SLIDE 21

China Aviation Oil

Vision

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China Aviation Oil

To become an internationally competitive and growth-oriented integrated energy trading company with synergetic assets, characterised b integrit and inno ation

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characterised by integrity and innovation

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SLIDE 22

China Aviation Oil

5 Year Corporate Goal to 2014

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China Aviation Oil

Double Digit Annual Growth Rate : i) Volumes ii) Revenue iii) Net Profit

  • Consolidate position in China

L d t f b i l t h i l t d f j t f l i A i Jet Fuel Supply & Trading

  • Leverage on advantage of being largest physical trader of jet fuel in Asia

Pacific to expand into markets outside of China, build up global trading network

  • Aviation fuel marketing and supply to airlines outside the PRC

g pp y Trading of Other

  • Gas Oil – build up customer base, target specialised/niche markets,

arbitrage trading

  • Fuel Oil – expand bunker customer base lease storage to strengthen

Trading of Other Oil Products Fuel Oil expand bunker customer base, lease storage to strengthen competitive edge

  • Petrochemicals – leverage on strong Chinese demand to build up

structural competitive advantage Asset Investments

  • To invest in synergetic assets along our value chain to achieve vertical

integration

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SLIDE 23

Results Update Results Update Results Update Results Update

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SLIDE 24

China Aviation Oil

Revenue Breakdown By Products

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China Aviation Oil

Middle Distillates Other Oil Products

US$’ m

1252.5

10 000 12,000

Middle Distillates Other Oil Products

US$ m

381.2 261 8

8,000 10,000

0.1 241.6 261.8

6,000

0.0 137.5

2,000 4,000

2958.0 5370.2 3496.8 5211.0 8630.8 6605.9 9148.5

2007 2008 2009 2010 2011 9M 2011 9M 2012

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SLIDE 25

China Aviation Oil

Gross Profit Trend

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China Aviation Oil

Gross Profit Total Volume

US$’ m million tonnes

9 2 10.4

10 0 12.0 40.0 45.0

6.4 7.9 9.2 6.96

8.0 10.0 25 0 30.0 35.0

30 7 29 7 40.0 32.1 34.2 4.2 5.2 6.4

4 0 6.0 15 0 20.0 25.0

11.5 22.5 30.7 29.7

2.0 4.0 5.0 10.0 15.0 0.0 0.0 2007 2008 2009 2010 2011 9M 2011 9M 2012

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SLIDE 26

China Aviation Oil

Net Profit Contribution Breakdown

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China Aviation Oil

Jet Fuel Supply and Trading of All Oil Products SPIA Other Associates

US$’ m

1.8 2.3 1.9 60 70 37.9 32.9 0.1 3.3 1.7 40 50 27.6 10.4 20.9 35.8 32.9 26.2 20 30 10 8 27.8 21.0 17.1 23.2 22.9 20.1 10 20 10.8

  • 2.1
  • 10

2007 2008 2009 2010 2011 9M 2011 9M 2012

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SLIDE 27

China Aviation Oil

Robust Financial Position

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China Aviation Oil

2008 2009 2010 2011 9M 2012 T t l A t (US$ ) 495 1 758 7 945 8 1 194 3 1 591 2 Total Assets (US$m) 495.1 758.7 945.8 1,194.3 1,591.2 Debt equity ratio 8.8% 7.5% 7.3% Debt equity ratio 8.8% 7.5% 7.3% NAV/share (US cents) 38.14 42.91 48.07 55.99 61.19 Return on equity 14.1% 15.4% 16.7% 17.0% 12.9%

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SLIDE 28

China Aviation Oil

Dividend Trend

27

China Aviation Oil S$ 0.07 0.07 0.08 0.04 0.05 0.06 0.02 0.02 0.02 0 02 0.03 0.04 ‐ 0.01 0.02 2007 2008 2009 2010 2011

CAO’s dividend policy is to maintain a stable distribution of S$0.02 per share per annum

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SLIDE 29

China Aviation Oil

CAGR Growth

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China Aviation Oil

12% 37% Jet Fuel Volume (2006-2011) 12% Revenue (2006-2011) 37% (2006 2011) 23% 15% Gross Profit (2006-2011) 23% Net Profit (2006-2011) 15%

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SLIDE 30

Industry Outlook and Prospects Industry Outlook and Prospects Industry Outlook and Prospects Industry Outlook and Prospects

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SLIDE 31

China Aviation Oil

FY2013 Growth Drivers

30 30

China Aviation Oil

  • Capturing change in global product flows
  • By 2020, Northwest Europe’s demand for jet fuel expected to increase by 180 kb/d,

driven by rising share of budget airlines and increasing passenger-kilometres

  • Meanwhile, the European refinery throughput is expected to fall, leading to deficit in jet

f l d lli i A i d Middl E t l Thi t d i t d t ti fuel and pulling in Asian and Middle East surplus. This trend is expected to continue towards 2020

  • CAO plans to establish a Europe trading subsidiary to capture this opportunity

Source: FACTS 2012 Annual World Refining Outlook

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SLIDE 32

China Aviation Oil

FY2013 Growth Drivers

31 31 31

China Aviation Oil

  • China’s civil aviation market to continue to grow
  • Foundation of our optimisation and trading activities
  • Foundation of our optimisation and trading activities
  • Moderate growth expected for jet fuel supply into China
  • SPIA’s refuelling volumes expected to grow in tandem with air traffic growth at Pudong

Airport of around 7%

  • PRC civil aviation industry expected to achieve 12% average annual growth from

2011-2015, translating into 11% growth on average per year for total jet fuel demand* J f l d d i d h 40 illi b 2020*

  • Jet fuel demand is expected to reach 40 million tonnes by 2020*
  • Ability to handle air passenger traffic volume of 1.5 billion

N b f i t d 300

Strategic Growth Targets of Chinese Civil Aviation Industry

2020

  • Ability to handle air passenger traffic volume of 700 million people

2030

  • Number of airports exceed 300
  • Air passenger traffic volume to rank first globally; international air traffic

turnover to place in the world’s top two

2011

  • Total air passenger traffic volume was 290 million

2020

  • Number of airports to exceed 240
  • International air traffic turnover to rank in the top three globally

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2011

p g

  • 180 airports

*Source: CAAC

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China Aviation Oil

FY2013 Growth Drivers

32 32 32 32

China Aviation Oil

  • Proactively grow airlines marketing and supply business
  • Chinese airlines’ overseas refuelling volume expected to grow
  • To leverage on our strategic alliance with major Chinese airlines to expand refuelling

volumes

  • To expand supply locations at airports in Asia Pacific, Europe and North America

CAO Group's Airline Marketing Business Volume

90000

International Traffic of Major Chinese Airlines

600,000 700,000 800,000

60000 70000 80000 90000 nger Km (mil)

tonnes 100 000 200,000 300,000 400,000 500,000

30000 40000 50000 Revenue Passen

100,000 2011 2012F 2013F

20000

2009 2010 2011 9M 2011 9M 2012

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SLIDE 34

China Aviation Oil

FY2013 Growth Drivers

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China Aviation Oil

  • Increasing diversification into other oil products – petrochemicals
  • CAO has successfully made inroads into China’s petrochemicals market. We are

currently one of the largest suppliers of imported paraxylene (PX)

  • We will continue to grow our presence in this market as China’s demand for

t h i l d t t d t i t petrochemical products expected to remain strong

30

Gl b l T l S l /D d

China will continue to be a major importer of PX and toluene in Asia and in the world

20 25 30

tons Global Toluene Supply/Demand

5 10 15

Million China Asia World

2010 Demand 2016 Forecast 2010 Supply 2016 Forecast

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Source: Nexant 2012 Petrochemical Market Dynamics - Aromatics Source: Forecast of Global Supply and Demand Trends for Petrochemical Products, June 2012, Ministry of Economy, Trade and Industry of Japan

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SLIDE 35

China Aviation Oil

FY2013 Growth Drivers

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China Aviation Oil

  • Increasing diversification into other oil products – fuel oil
  • To continue to build up the business in Singapore, develop business in the Middle

To continue to build up the business in Singapore, develop business in the Middle East and leverage on our links to establish presence in China

  • To build up an integrated supply chain of procurement, storage, blending and sales

and leasing storage in Singapore

Major Bunker Ports – Top Ten 2010

40 45

Million mt/yr

Million mt/yr2010 2020 2030

World Demand forecast

20 25 30 35 40

Million mt/yr2010 2020 2030 West of Suez130 160 175 East of Suez 100 150 225

5 10 15 20

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Source: Trizen

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SLIDE 36

China Aviation Oil

FY2013 Growth Drivers

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China Aviation Oil

  • Evaluating the acquisition of strategic assets across the supply chain
  • Storage and transportation assets, such as storage, jetties, pipelines, shipping
  • Jet fuel and bunkering refuelling facilities

Penetrating supply

End User Refining

Storage &

Logistics

Penetrating supply markets, invest in jet fuel and bunkering refuelling facilities Access refineries to extend supply chain Storage & transportation facilities (jetties, tankages, pipelines, shipping etc)

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SLIDE 37

Thank You

Loh Woon Yen Head of Investor Relations Head of Investor Relations Email: woonyen@caosco.com Phone: +65 6330 1209