COMPANY PRESENTATION & 2Q2017 RESULTS UPDATE

Transcription

1 COMPANY PRESENTATION & 2Q2017 RESULTS UPDATE 28th July 2017 CHINA SUNSINE CHEMICAL HOLDINGS LTD. 中国尚舜化工控股有限公司 1

2 2 PRESENTATION OUTLINE Our Company Financial Overview Key Developments Outlook

3 About China Sunsine Chemical 3 Specialty rubber chemicals producer World largest producer of Rubber Accelerators PRC biggest producer of Insoluble Sulphur Superior products quality and economies of scale Accreditation from strong customer base of top global and local tire manufacturers China Sunsine listed in the first batch of the National Champion Manufacturing Enterprises Beneficiary of stringent environmental protection standards

4 Our Products: Rubber Chemicals 4 Rubber Accelerators MBT MBTS CBS TBBS TMTD DPG DCBS. Insoluble Sulphur Anti-Oxidants TMQ 6PPD 4010NA

5 Our Products: Rubber Chemicals 5 Rubber Chemicals are essential additives in the production of rubber products

6 Global Consumption of Rubber 6 Other Tire 9% Other Products Latex 10% 4% Car tyres consume 2/3 of Global Rubber Output Boots 10% Tube/ Tape 6% Car Tyres 61%

7 Global Consumption of Rubber Chemicals 7 Rubber Chemicals 6% Anti-oxidants 2.2% Vulcanizing agents 2% Accelerators 1.7% By weight, every 100 tons of rubber consumes about 6 tons of rubber chemicals Rubber Rubber consumed in 2016: 27.1 million tons

8 Our Strong Customer Base 8 Over 1,000 customers globally Serves more than 2/3 of the Global Top 75 tyre makers 1/3 output exported

9 Market Share: Rubber Accelerators 9 35% 30% 25% 24% 24% 25% 28% 29% 30% 30% 31% PRC Market Share 20% 15% 19% 11% 12% 12% 14% 16% 17% 17% 18% Global Market Share 10% 7% 5% 0%

10 Our Market Leadership Position 10 GLOBAL TOP 3 ACCELERATOR PRODUCERS PRC TOP 3 INSOLUBLE SULPHUR PRODUCERS Company Annual Capacity 2016 Company Annual Capacity 2016 China Sunsine 中国尚舜 87,000 tons China Sunsine 中国尚舜 20,000 tons Tianjin Kemai 天津科迈 51,000 tons Yanggu Huatai 阳谷华泰 10,000 tons Yanggu Huatai 阳谷华泰 30,000 tons Jiangxi Hengxingyuan 江西恒兴源 5,000 tons

11 Our Production Bases 11

12 Financial Overview 12

13 Financial Highlights 13 RMB mln 2 nd Quarter Ended 6 Months Ended 30 Jun Jun 16 Change 30 Jun Jun 16 Change Group Revenue % 1, % Gross Profit % % Gross Profit Margin 28.5% 27.3% 1.2 pts 26.6% 25.8% 0.8 pts Profit Before Tax % % Profit After Tax % % EPS (RMB cents/sgd Cents*) NAV per share (RMB cents/sgd Cents*) 15.53/ 3.16 * SGD to RMB exchange 10.53/ % 27.90/ / / / %

14 RMB mln Revenue Growth 14 2, , , , , , , , , , , FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 1H17 Revenue growth is mainly driven by the increased sales volume

15 Revenue By Quarter 15 RMB mln 1Q2017 2Q Q17 vs 1Q17 : +14% 2Q17 vs 2Q16: +34% Q 2Q 3Q 4Q

16 Sales Volume 16 Tons 160, , , , ,000 80,000 60,000 40,000 31,036 30,787 45,420 54,275 60,907 81,371 98, , ,572 67,604 20,000 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 1H17

17 Tons 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10, ,036 29,805 0 Sales Volume by Products 40,196 46,343 50,148 3,468 4,413 7, ,361 2,971 2,061 64,252 72,710 76,089 76,090 19,903 21,640 10,724 11,948 15,417 12,102 12,281 5,183 Priority in growing sales volume and market share through the following methods: Expanding capacities to meet the growing market demand Continual emphasis on environmental protection measures over the years 82,767 31,214 20,031 41,692 15,888 10,024 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 1H17 Accelerator Insoluble Sulphure Anti-oxidant 17

18 Sales Volume By Quarter 18 Tons 40,000 35,000 30,000 25,000 30,051 25,377 23,899 33,046 1Q2017 2Q ,483 34,558 30,948 29,470 29,203 28,905 36,797 29,045 26,699 34,460 2Q17 vs 1Q17 : +5% 2Q17 vs 2Q16: +0% 20,000 15,000 10,000 5, Q 2Q 3Q 4Q

19 Sales Contribution (By Region) 19 1H2017 Sales Contribution (y-o-y) PRC EXPORT Sales: RMB mln +33% Volume: 45,910 tons +3% Rest of Asia 24% Sales: RMB mln +29% Volume: 21,694 tons +8% PRC sales volume increased due to our unceasing efforts in implementing stringent environmental protection measures PRC 64% America 6% Europe 5% Others 1% International sales volume increased mainly due to sales boost in Southeast Asia and US market

20 Overall Average Selling Price (ASP) 20 RMB/Ton 30,000 25, K 20,000 15, K 15.8K 18.3K 19.3K 17.4K 17.2K 19.1K 16.2K 15.0K 18.1K 10,000 5,000 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 1H17

21 ASP by Quarter 21 RMB/Ton 25,000 20,000 15, K 20.1K 19.6K 17.9K 17.0K 16.0K 16.3K 15.6K 14.8K 14.2K 14.8K 16.0K 17.3K 18.9K 10,000 5, Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 2Q17 ASP up 33% y-o-y as the Group was able to pass increased material cost to customers

22 Main Raw Materials Cost 22 RMB/ Ton Raw Materials Price Trend 18,500 14,500 10,500 Aniline Tert-butylamine Cyclohexylamine Ketone 6,500 2,500 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Aniline Raw material cost accounts for above 80% of total cost

23 Gross Profit 23 RMB mln FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 1H17 Since 2014, the Chinese government started to enforce stringent environmental protection measures. Some of our competitors had to cease their operations as they failed to meet the new environmental requirements

24 Net Profit 24 RMB mln FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 1H17

25 Net Profit By Quarter 25 Tons Q Q Q17 vs 1Q17 : +30% 2Q17 vs 2Q16: +52% Q 2Q 3Q 4Q

26 Margins Analysis % 30.0% 25.0% 20.0% 20.2% 28.4% 22.3% 22.6% 25.0% 17.2% 18.2% 27.3% 26.5% 26.9% 26.6% Gross Profit Margin (GPM) 15.0% 10.0% 12.3% 13.3% 12.3% 11.6% 8.5% 10.6% 10.5% 10.9% 10.7% Net Profit Margin (NPM) 5.0% 0.0% 2.3% 4.5%

27 Margins Analysis By Quarter % 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 19.2% 5.3% 25.3% 11.0% 31.1% 31.9% 31.7% 24.3% 14.3% 10.0% 11.0% 9.5% 26.8% 23.5% 24.2% 11.6% 10.0% 7.5% 27.3% 28.2% 27.2% 10.0% 13.3% 24.4% 28.5% 11.0% 10.0% 11.4% Gross Profit Margin (GPM) Net Profit Margin (NPM) 0.0%

28 Balance Sheet Highlight 28 30/06/ /12/ /12/2015 Current assets (RMB mln) * 1, , Current liabilities (RMB mln) Current Ratio Shareholders equity (RMB mln) 1, , ,175.3 D/E ratio ** NAV per share (RMB cents) (equivalent to SGD cents**) / / * Including Cash RMB mln + Notes RMB 97.6 mln ** Bank borrowings fully repaid in FY2016

29 Key Developments 29

30 Ongoing Projects 30 Project Scheduled Completion Date Status CapEx 30,000-ton Accelerator TBBS: Phase I of 10,000-ton capacity at Shanxian plant Insoluble Sulphur: 10,000-ton production line in Dingtao plant Heating Plant: Add one boiler and one electricity generator Phase I construction and installation completed at the end of 2016 Construction to be completed by end of 2017 Machineries Testing Completed Prepare to trial run Ongoing RMB 100 mln RMB 50 mln By end of 2017 Ongoing RMB 100 mln

31 Annual Capacity (before IPO) FY16 FY17e Note Rubber Accelerators Insoluble Sulphur Anti-oxidant (TMQ & 6PPD) 32,000 87,000 97,000 nil 20,000 30,000 nil 45,000 45,000 Shanxian: 71,000-ton Weifang: 26,000-ton Shanxian: 10,000-ton Dingtao: 20,000-ton Shanxian: 10,000-ton TMQ 30,000-ton 6PPD 5,000-ton 4010 Total 32, , ,000

32 Outlook 32

33 Stable Growth of Tyre Market 33 Piece mln PRC Tyre Sales Volume Tyre sales include new car tyre sales and replacement tyre sales

34 Units mln 30 Riding on Rapid Growth of Car Market PRC Car Sales PRC car sales totaling 28.03mln units, up 13.7% y-o-y, ranked no. 1 in the world for 8 consecutive years PRC car sales remains robust due to the improvement of people s disposable income and higher living standards

35 General Concerns and Opportunities Ahead General Concerns Opportunities 35 Uncertainty of both China and global economies The auto and tire industries in China continues to face overcapacity situation Rubber price remaining depressed, the utilisation rate of China s tyre industry may be impacted Environmental protection and safety in China getting more frequent and severe Automobile industry in China is still poised for further growth Our market leader position as world largest accelerator producer and PRC largest insoluble sulphur producer Large competitive advantage due to our stringent standards in environmental protection Stay competitive through our ability to provide stable supply and quality products supported by strong brand reputation, economies of scales and flexible pricing strategy

36 Dividend Payment History 36 Net Profit (in RMB mln) Dividend (in SGD cents) Net Profit Dividend FY07 FY08 FY09 FY10 FY11 FY12 FY12 FY14 FY15 FY16 0 IPO price : SGD 39 cents Total dividend paid : SGD 11.5 cents (for 10 consecutive years) FY2017 : SGD 0.5 cents (interim dividend) Dividend Policy : Payout not less than 20% of net profit for FY17 & FY18

37 Listed On SGX Mainboard SHARE PERFORMANCE 37 IPO SGD0.39 On 05/07/2007 No rights issue or new share placement since IPO Total share buyback 5.5% or 27,653,200 shares of issued shares Placed out all treasury shares in May 2017 to institutional investors to expand investor base and increase liquidity

38 Investment Merits 38 Leverage on the increased demand of tyre and car markets Market leadership position and largest market share in rubber accelerators Strong customer base Organic growth supported by ready resources (such as cash, land, build-up infrastructures, etc.) Strong operating cashflows, RMB409 million cash on hand with no bank loan 10-year track record & annual dividend payment (min 20% payout for FY17 & FY18) Trailing P/E at 7-8 times

39 Chairman s Message 39 Our sustained efforts in implementing stringent environmental protection measures has allowed the Group stand out from the intense market competition, thereby further strengthening our market leadership position. Our Group will continue to focus on growing sales volume and market share to achieve equilibrium in production and sales volume, and work on technological innovation to achieve sustainable growth. I am confident of the Group s performance and outlook in Mr. Xu Chengqiu Executive Chairman

40 40 Q & A MEDIA/INVESTOR CONTACT Tong Yiping, CFO, tongyiping@chinasunsine.com Jennie Liu, IR Manager, jennie@chinasunsine.com 112 Robinson Road #11-01 Singapore (+65)