中国尚舜化工控股有限公司

CHINA SUNSINE CHEMICAL HOLDINGS LTD.

1

2Q & 1H 2018RESULTS BRIEFING

8 August 2018

PRESENTATION OUTLINE

Financial Overview

Key Developments

Outlook

2

Financial Overview

3

Financial Highlights4

* SGD to RMB exchange rate @4.8386

RMB ’mln 2nd Quarter Ended 6 Months Ended

30 Jun 18 30 Jun 17 Change 30 Jun 18 30 Jun 17 Change

Group Revenue 880.6 656.2 34% 1,737.5 1,230.7 41%

Gross Profit 323.6 187.1 73% 622.4 327.1 90%

Gross Profit Margin 36.7% 28.5% 8.2 pts 35.8% 26.6% 9.2 pts

Profit Before Tax 214.8 92.9 131% 396.4 177.6 123%

Profit After Tax 239.7 74.5 222% 389.2 131.7 196%

EPS

(RMB cents/SGD

Cents*)

48.75/

10.08

15.53/

3.21

214% 79.15/

16.36

27.90/

5.77

184%

NAV per share

(RMB cents/SGD

Cents*)

421.14/

87.04

314.30/

64.96

Revenue Growth5

RMB ’mln

619.5

797.9718.4

991.4

1,175.1

1,417.3

1,695.9

2,077.3

1,859.1

2,036.9

2,738.4

1,230.7

1,737.50

0.0

500.0

1,000.0

1,500.0

2,000.0

2,500.0

3,000.0

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 1H17 1H18

1H18 Revenue up 41% y-o-y mainly boosted by higher ASP

Revenue By Quarter6

RMB ’mln

2Q18 vs 2Q17 : +34%

2Q18 vs 1Q18: +2.8%

432.1

497.3475.9

453.8445.1

491.1547.3 553.4

575656.2

634.4

873.3856.9 880.6

0

100

200

300

400

500

600

700

800

900

1000

1Q 2Q 3Q 4Q

2015 2016 2017 2018

1Q20182Q2018

Sales Volume7

Tons

31,03630,787

45,42054,275

60,907

81,371

98,345

108,973114,572

135,791140,476

67,60474,364

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 1H17 1H18

1H2018 Sales volume up 10% y-o-y due mainly to more orders received as tire makers

recognize the Group’s ability to provide stable supply

Sales Volume by Products8

Tons

31,036 29,805

40,196

46,34350,148

64,252

72,71076,089 76,090

82,767 83,335

41,692 41,469

0464

3,468 4,413 7,873

10,724 11,94812,102

15,41720,031 22,283

10,02412,884

0 185 1,361 2,971 2,0615,183

12,281

19,903 21,640

31,21434,858

15,07420,011

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 1H17 1H18

Accelerator Insoluble Sulphure Anti-oxidant and others

Sales Volume 1H18 vs 1H17

Accelerators - 0.5%

Insoluble Sulphur + 29%

Anti-oxidants + 28%

Sales Volume By Quarter9

25,377

30,948

29,203 29,04530,051

34,483

36,797

34,46033,046

34,55834,098

38,77436,797 37,567

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

1Q 2Q 3Q 4Q

2015 2016 2017 2018

Tons

1Q2018 2Q2018

2Q18 vs 2Q17 : +9%

2Q18 vs 1Q18: +2%

Sales Contribution (By Region)10

Rest of Asia

America

Europe

Others

PRC

62%

PRC

Sales: RMB 1,072.8 mln +37%

Volume: 49,941 tons +9%

PRC sales increase due mainly

to the rise in overall ASP and

volume fueled by the continued

short supply situation

EXPORT

Sales: RMB 656.2 mln +49%

Volume: 24,423 tons +13%

International sales increase

due to higher ASP and higher

sales volume to South East Asia

and Europe.

(Direct sales to US accounted

2% of total revenue)

1H18 Sales Contribution (y-o-y)

1%

27%

2%

8%

Overall Average Selling Price (ASP)11

RMB/Ton

19.8K

25.9K

15.8K

18.3K19.3K

17.4K

17.2K

19.1K

16.2K

15.0K

19.4K

23.3K

0

5,000

10,000

15,000

20,000

25,000

30,000

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 1H18

ASP by Quarter12

RMB/Ton

17.0K16.0K 16.3K

15.6K14.8K 14.2K

14.8K16.0K

17.3K

18.9K 18.5K

22.4K23.2K 23.3K

0

5,000

10,000

15,000

20,000

25,000

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18

• 2Q18 ASP up 23% y-o-y due mainly to continued short supply situation in China since 2017

13

RMB/ Ton

Main Raw Materials Cost

2,000

6,000

10,000

14,000

18,000

22,000

Key Raw Materials Price Trend

Aniline

Tert-butylamine

Cyclohexylamine

Ketone

Dicyclohexylamine

Carbon Disulfide

Aniline

Gross Profit

1H18 Gross profit grew 90% y-o-y due to higher ASP and sales volume

14

125.2

226.8

160.2

224.1

293.4243.9

308.0

567.4

492.0

547.1

788.1

327.1

622.4

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 1H17 1H18

RMB ’mln

Net Profit15

RMB ’mln

76.1

106.788.3

115.399.4

32

76.7

220.2195.2

221.7

341.3

131.7

389.2

0

50

100

150

200

250

300

350

400

450

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 1H17 1H18

Group’s main subsidiary, Shandong Sunsine, obtained “High-tech Enterprise” status

which allows the company to enjoy a concessionary tax rate of 15% for 3 years with

effect from 1 Jan 2017

Net Profit By Quarter16

47.4 47.1 55.345.5

33.649.0

72.8 66.357.2

74.5 77.6

132.0149.5

239.7

0.0

50.0

100.0

150.0

200.0

250.0

300.0

1Q 2Q 3Q 4Q

2015 2016 2017 2018

2Q18 vs 2Q17: +222%

2Q18 vs 1Q18: + 60%

1Q2018

RMB ’mln

• 2Q18 Net profit surged 222% y-o-y due mainly to higher ASP with expanded profit margin

• As the “High-tech Enterprise” status was approved at end of FY2017, approximately RMB 48 mln

tax expensed was credited back in 2Q2018

2Q2018

Margins Analysis17

20.2%

28.4%

22.3% 22.6%

25.0%

17.2%18.2%

27.3% 26.5% 26.9%28.8%

35.8%

12.3%13.3%

12.3% 11.6%

8.5%

2.3%4.5%

10.6% 10.5% 10.9%12.5%

22.4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Gross Profit Margin(GPM)

Net Profit Margin(NPM)

19.6%

Adjusted by taking out the one-time credit of tax expense of RMB 48 mln in FY17

Margins Analysis By Quarter18

31.7%

24.3%

26.8%

23.5% 24.2%

27.3% 28.2%27.2%

24.4%

28.5%26.8%

33.3%34.9%

36.7%

11.0%9.5%

11.6%10.0%

7.5%

10.0%

13.3%11.0%

10.0%11.4% 12.2%

15.1%17.4%

27.2%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Gross ProfitMargin (GPM)

Net Profit Margin(NPM)

21.8%

Adjusted by taking out the one-time credit of tax expense of RMB 48 mln in FY17

Balance Sheet Highlight

30/06/2018 31/12/2017 31/12/2016

Current assets (RMB’mln) * 1,738.8 1,424.6 1,050.5

Current liabilities (RMB’mln) 390.8 385.3 280.8

Current Ratio 4.45 3.70 3.74

Shareholders’ equity (RMB’mln) 2,070.7 1,742.4 1,361.6

D/E ratio ** 0 0 0

NAV per share (RMB cents) (equivalent to SGD cents)

421.14/

87.04

354.37/

73.23

293.42/

60.64

19

* Including Cash RMB 566.4 mln + Notes RMB 357.9 mln

** No bank borrowing since end of FY2016

Key Developments

20

Ongoing Projects

ProjectScheduled

Completion DateStatus CapEx

30,000-ton Accelerator TBBS:

Phase I of 10,000-ton

capacity at Shanxian P lant

Phase I construction and

installation completed

at the end of 2016

Pending trial run approval RMB 100 mln

Insoluble Sulphur:

10,000-ton production line at

Dingtao plant

Construction completed

by end of 2017Pending trial run approval RMB 50 mln

Heating Plant:

Add one boiler and one

electric generator

Construction completed

by end of 2017

Undergoing grid

integration RMB 100 mln

21

Annual Capacity

2007

(before IPO)FY17 FY18e Note

Rubber

Accelerators 32,000 87,000 97,000

Shanxian:

71,000-ton

Weifang:

26,000-ton

Insoluble

Sulphur nil 20,000 30,000

Shanxian:

10,000-ton

Dingtao:

20,000-ton

Anti-oxidant

(TMQ & 6PPD) nil 45,000 45,000

Shanxian:

10,000-ton TMQ

30,000-ton 6PPD

5,000-ton 4010

Total 32,000 152,000 172,000

22

Outlook

23

Rising Tire Consumption24

• Replacement tires and new car tire sales account for 70% and 30% respectively

• For passenger cars, every car needs to replace 1.5 piece of tires every year

(source: Linglong Tyre’s IPO prospectus)

Pcs ‘ mln

285337 355

385

443 456 470

529562 565

610653

0

100

200

300

400

500

600

700

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

PRC Tire Production Volume

Source: http://www.tyrefh.org/

Riding on Rapid Growth of Car Market25

• 1H2018 PRC car sales totaling 14.1 mln units, up 0.83% y-o-y

• After a robust growth in the past decade, China’s new car sales forecasted to grow moderately

• China’s motor parc as of 1H2018 reached 319 million makes the demand for tire strong and sustainable

Units ‘mln

19.3

2223.5

24.6

28 28.9

14.1

0

5

10

15

20

25

30

35

2012 2013 2014 2015 2016 2017 1H2018

PRC Car Sales

www.caam.org.cn

PRC Car Parc Forecast

Competitive Strengths26

Market Leadership

Products

Strong Customer Base

Environmental Protection advantage

R&D Capability

Ready Resources for Future Expansion

- World largest accelerators and China’s biggest IS producer

- Capturing 20% of global and 33% of China’s accelerators markets

- Listed in the first batch of “National Champion Manufacturing Enterprise”

- “High-tech Enterprise” Status

- Academician R&D workstation in collaboration with Tsinghua and CAS

- R&D Centre partnered with Qingdao University of Science and Technology

- Early adopter of Environmental protection initiative

- 1/3 of capex invested in environmental protection and safety

- Transformation and upgrading towards “Green, Intelligent & Miniaturized”

- Strong cash position

- Land spaces available in our production facilities

- Built-up infrastructures

- Over 1,000 customers worldwide spanning over 40 countries

- Serving 2/3 of global top 75 tire manufacturers

- 1/3 output exported

- High quality

- Stable supply

- Full range of varieties

Declining tire demand may result in lower

utilization rate of tire manufacturing

Trade war tension between US and China makes

the world economy uncertain and weakens

China’s tire export to US

Challenges and Opportunities Ahead27

Challenges Opportunities

The 3-year “Battle for a Blue Sky” initiative

affects all chemical companies in China

Short supply situation may ease as some

affected productions resuming gradually which

could lead to the normalisation of ASP

Environmental rectification causing industry

consolidation which may benefit bigger players

Group’s sustainable growth driven by organic

expansion of capacity for a long-term

Group’s sales to US account for about 2-3%.

The impact on our exports is minimal, indirect

and manageable

China is the world largest tire and auto market.

It provides a stable consumption based on a

strong replacement tire market

Fluctuation of raw material prices, a perennial

concern

Group is able to maintain a reasonable margin

and pass on the increased material price onto

customers

Listed On SGX Mainboard28

SHARE PERFORMANCE(China Sunsine vs STI)

▪ P/E below 6 times (Rolling EPS SGD0.25 for last four quarters)

▪ P/B ratio about 1.6

Chairman’s Message29

Mr. Xu Chengqiu

Executive Chairman

I am proud that the Group has achieved such outstanding performance in the first

half of 2018. As China’s economy is facing a slowdown in its growth amidst trade

war tensions, China’s tire capacity utilisation rate is falling. We expect the selling

price of rubber chemicals to continue to normalise. In addition, as the Chinese

government continues to enforce stringent environmental protection regulations

and conduct frequent inspections under “The Battle for a Blue Sky”, this may

materially affect all chemical companies in China. We remain positive of our

performance in the next 12 months.

30

Q & A

MEDIA/INVESTOR CONTACT

Tong Yiping, CFO, tongyiping@ChinaSunsine.com

Jennie Liu, IR Manager, jennie@ChinaSunsine.com

112 Robinson Road #11-01

Singapore 068902

(+65) 6220-9070

www.ChinaSunsine.com