China Sunsine Chemical Holdings Ltd. · SGX:QES
China Sunsine Chemical — FY2020 Earnings Presentation
42 slides from China Sunsine Chemical's earnings presentation, Mar 2, 2021
Slide 1: 2H & FY 2020 Results Briefing
2H & FY 2020 RESULTS BRIEFING 2 March 2021 CHINA SUNSINE CHEMICAL HOLDINGS LTD. 中国尚舜化工控股有限公司 1
Slide 2: Presentation Outline
2 PRESENTATION OUTLINE Our Company Financial Overview Key Developments Outlook and Strategy
Slide 3: Our Company
3 Our Company
Slide 4: About China Sunsine Chemical
About China Sunsine Chemical 4 ✓ Specialty rubber chemicals producer ✓ World’s largest producer of Rubber Accelerators ✓ One of the world’s largest producers of Insoluble Sulphur ✓ Superior product-quality and economies of scale ✓ Accredited by a strong customer base of top tire makers ✓ Beneficiary
Slide 5: Our Products - Rubber Chemicals
Our Products - Rubber Chemicals 5 Rubber Accelerators Insoluble Anti-Oxidants MBT MBTS CBS TBBS TMTD Sulphur TMQ DPG DCBS …. 6PPD 4010NA
Slide 6: Our Products: Rubber Chemicals
Our Products: Rubber Chemicals 6 Rubber Chemicals are Essential Additives in the production of rubber products
Slide 7: Global Consumption of Rubber
Global Consumption of Rubber 7 Anti-oxidants Other Products Latex 10% Vulcanizing 2.2% agents 2% 4% Other Tire Accelerators 9% 1.7% Boots 10% Car Tyres Rubber 61% Tube/ Tape 6% • By weight, every 100 tons of rubber consumes http://www.chemn.com about 6 tons of rubber chemicals (100:6) • By value, ru
Slide 8: Our Strong Customer Base
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
Slide 9: Our Rubber Accelerators Products' Market Share
Our Rubber Accelerators Products’ Market Share 9 MARKET SHARE 40% 33% 33% 34% 35% 33% 29% 30% 30% 31% PRC Market Share 30% 28% 24% 24% 25% 25% 22% 19% 20% 20% 20% 20% 17% 17% 18% Global Market Share 14% 16% (Est.) 15% 11% 12% 12% 10% 7% 5% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20
Slide 10: Our Market Leadership Position
Our Market Leadership Position 10 GLOBAL TOP 3 PRC TOP 3 ACCELERATOR PRODUCERS INSOLUBLE SULPHUR PRODUCERS Annual Company Annual Company Capacity 2020 Capacity 2020 China Sunsine 117,000 tons Yanggu Huatai 40,000 tons 中国尚舜 阳谷华泰 Yanggu Huatai 60,000 tons China Sunsine 30,000 tons 阳谷华泰 中国尚舜 +30,000 to
Slide 11: Our Production Bases
Our Production Bases 11 Weifang Plant: • RA: 27,500-ton Dingtao Base: • 20,000-ton IS Shanxian: • Home base: - RA: 59,500-ton - IS: 10,000-ton - AO: 45,000-ton • Sub-base: - RA(TBBS): 30,000-ton • Heating plant: Centralised steam production • Hengshun New Materials: RA: Rubber Accelerators - IS: 30,
Slide 12: Financial Overview
12 Financial Overview
Slide 13: 2H20 Financial Summary
2H20 Financial Summary 13 • Average Selling Price (ASP) recovery solid • Record sales volume backed by enlarged capacity • Nearly full capacity utilization • Income tax rate adjusted back to statutory rate of 25% • Robust balance sheet with no debt
Slide 14: Financial Highlights
Financial Highlights 14 RMB ’mln 2nd half year Ended 12 Months Ended 31/12/20 31/12/19 Change 31/12/20 31/12/19 Change Group Revenue 1,291.1 1,278.0 1% 2,333.7 2,691.6 (13%) Gross Profit 358.4 292.8 22% 600.3 780.8 (23%) Gross Profit Margin 27.8% 22.9% 4.9 pts 25.7 29.0% (3.3 pts) Profit Before Tax
Slide 15: Revenue Growth
Revenue Growth 15 RMB ’mln 4000 3500 3,283.3 3000 2,738.4 2,691.6 2500 2,333.7 2,077.3 2,036.9 2000 1,859.1 1,695.9 1500 1,417.3 1,042.61,291.10 1,175.1 991.4 1000 797.9 718.4 619.5 500 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 2H19 2H20 2H20 Revenue increased marginall
Slide 16: Sales Contribution (By Region)
Sales Contribution (By Region) 16 Rest of Asia Region FY2020 FY2019 FY2018 China 68% 62% 62% US Rest of Asia 27% 21% 22% 24% PRC Europe US 2% 3% 2% 68% Others Europe 2% 6% 11% 9% 8% Others 3% 2% 2% Total 100% 100% 100% • International sales affected by a decline in demand due to the COVID-19; • Chin
Slide 17: Sales Contribution (By Products)
Sales Contribution (By Products) 17 IS Product FY2020 FY2019 FY2018 Accelerators 63% 66% 70% 27% Anti- IS 10% 10% 9% Accelerators oxidants Anti-oxidants 26% 23% 20% 63% 2% Others 8% 1% 1% 1% Others Total 100% 100% 100%
Slide 18: Overall Average Selling Price (ASP)
Overall Average Selling Price (ASP) 18 RMB/Ton 30,000 25.9K 25,000 21.5K 19.8K 19.3K 19.1K 19.4K 20,000 18.3K 17.4K 16.2K 16.0K 15,000 17.2K 13.6K 15.8K 15.0K 10,000 5,000 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 • FY20 ASP declined 15% y-o-y mainly due to the decrease
Slide 19: ASP vs Aniline Price (half-yearly)
ASP vs Aniline Price (half-yearly) 19 RMB/Ton 25,000 23.3K 20.5K 19.9K 20,000 18.1K 17.2K 15.4K 14.3K 14.9K 15,000 13.6K 13.6K ASP 9.7K Aniline 10,000 8.4K 6.2K 7.1K 6.8K 6.0K 5.0K 4.8K 5.0K 4.9K 5,000 0 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20
Slide 20: Sales Volume
Sales Volume 20 Tons 200,000 169,876 167,455 160,000 151,486 135,791 140,476 120,000 114,572 108,973 98,345 81,371 80,000 60,907 54,275 45,420 40,000 31,036 30,787 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY20 sales volume up 10% y-o-y mainly due to: • Chinese market r
Slide 21: Sales Volume by Products
Sales Volume by Products 21 Tons 100,000 88,262 90,950 80,000 47,283 60,000 46,035 40,000 29,916 30,655 20,000 0 FY19 FY20 Accelerator Insoluble Sulphure Anti-oxidants Others Sales Volume FY2019 FY2019 FY2020 FY2020 Utilization Rate Utilization Rate Accelerators 88,262 91% 90,950 78% Insoluble Sulph
Slide 22: Sales Volume (half-yearly)
Sales Volume (half-yearly) 22 Tons 100,000 Record High 95,000 93,556 90,000 85,377 85,000 82,078 2H20 vs 2H19 : +10% 80,000 77,123 76,320 2H20 vs 1H20 : +23% 74,364 75,000 72,872 71,257 70,000 67,604 64,534 65,000 60,000 55,000 50,000 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20
Slide 23: Gross Profit
Gross Profit 23 RMB ’mln 1200.0 1125.9 1000.0 788.1 780.8 800.0 567.4 600.3 600.0 547.1 492.0 400.0 354.8 293.4 308.0 292.8 226.8 224.1 243.9 200.0 125.2 160.2 0.0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 2H19 2H20
Slide 24: Net Profit
Net Profit 24 RMB ’mln 700 641.3 600 500 388.9 400 341.3 300 220.2 221.7 218.8 195.2 200 106.7 88.3 115.3 99.4 100 76.1 76.7 32 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 From FY2020, our main subsidiary’s income tax rate adjusted back to the statutory rate of 25% due to
Slide 25: Net Profit (half-yearly)
Net Profit (half-yearly) 25 RMB ’mln 400.0 350.0 341.2 300.0 2H20 vs 2H19: +11% 266.0 252.0 2H20 vs 1H19: +66% 250.0 209.6 200.0 150.0 139.1 131.7 136.4 123.0 100.0 82.6 82.4 50.0 0.0 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H
Slide 26: Margins Analysis
Margins Analysis 26 40.0% 34.3% 35.0% 28.4% 28.8% 29.0% 30.0% 27.3% 26.5%26.9% 25.7% 25.0% 25.0% 22.3% 22.6% 20.2% Gross Profit Margin 19.5% 20.0% 17.2% 18.2% (GPM) 13.3% 14.4% 15.0% 12.3%11.6% 12.3% Net Profit Margin 10.6% 10.9% 12.5% 8.5% 9.4% (NPM) 10.0% 10.5% 2.3% 4.5% 5.0% 0.0% FY07 FY08 FY09 F
Slide 27: Margins Analysis (half-yearly)
Margins Analysis (half-yearly) 27 40.0% 35.8% 34.5% 35.0% 32.6% 30.6% 30.0% 27.7% 26.6% 27.8% 25.8% 25.0% 22.4% 22.9% 23.2% Gross Profit 20.0% 18.8% Margin (GPM) 16.3% 13.9% Net Profit 15.0% 12.6% Margin (NPM) 10.7% 9.6% 10.6% 10.0% 8.8% 7.9% 5.0% 0.0% 2H20 GPM improved y-o-y due mainly to lower raw
Slide 28: Balance Sheet Highlight
Balance Sheet Highlight 28 31/12/2020 31/12/2019 31/12/2018 Current Assets (RMB’mln) * 2,239.2 2,219.6 2,016.4 Current Liabilities (RMB’mln) 451.4 347.4 421.8 Current Ratio 4.96 6.39 4.78 Shareholders’ Equity (RMB’mln) 2,720.7 2,561.6 2,325.5 D/E ratio * 0 0 0 NAV per share (RMB cents) 280.28/ 262.5
Slide 29: Key Developments
29 Key Developments
Slide 30: Expansion Projects-1
Expansion Projects-1 30 Project Status CapEx 30,000-ton fully-automated Whole project was approved in total RMB160 mln Accelerator TBBS at Shanxian: Jan 2019 Completed in 1H2020 Phase II of 20,000-ton capacity RMB 60 mln Commercial production started Comprehensive Chemical Zone (Hengshun New Materia
Slide 31: Expansion Projects-2
Expansion Projects-2 31 Project Status CapEx 700,000-ton Controlled Landfill total RMB 600 mln (funded by internal resources) Phase I 50,000-ton with land area Start and complete in 2021 RMB 80 mln of 50 mu depending on the market Future phases condition Rationale for the project: - Treat inorganic
Slide 32: Annual Capacity
Annual Capacity 32 2007 FY17 FY18 FY19 FY20 FY21e (before IPO) Rubber Accelerators 32,000 87,000 87,000 97,000 117,000 117,000 Insoluble Sulphur nil 20,000 30,000 30,000 30,000 60,000 Anti-oxidant (TMQ & 6PPD) nil 45,000 45,000 45,000 45,000 75,000 Total 32,000 152,000 162,000 172,000 192,000 252,00
Slide 33: Outlook and Strategy
33 Outlook and Strategy
Slide 34: Macro Economy
Macro Economy 34 • After a 3.5 percent contraction in 2020, the global economy is projected to grow 5.5 percent this year, reflecting expectations of a vaccine- powered strengthening of activity later in the year and additional policy support in a few large economies. – IMF forecast • The Chinese ec
Slide 35: Industry Outlook
Industry Outlook 35 • Strong growth forecast of global auto sales in 2021 after a heavy hit by COVID-19 in 2020 • The utilization rate of tire manufacturing is improving, driven by the economy recovery and robust auto market • Raw material prices have steadily recovered from their trough in 2020, pr
Slide 36: Group's Strategy
Group’s Strategy 36 Production and Sales Equilibrium Higher production leads to higher sales volume, which in turn stimulates even higher production • Our goal - Increase market share and strengthen our market leadership position • Capacity expansion to meet the increased demand of our products • Fo
Slide 37: Competitive Strengths
Competitive Strengths 37 - World largest accelerators and China’s biggest IS producer Market Leadership - Our accelerator products capture 34% of PRC market and 22% of global market - Listed in the first batch of “National Champion Manufacturing Enterprise” - Superior quality and Full range of varie
Slide 38: Listed On SGX Mainboard
Listed On SGX Mainboard 38 SHARE PERFORMANCE • Since IPO, no new share placement and rights issue
Slide 39: Dividend Payment History
Dividend Payment History 39 Net Profit Dividend (in RMB ’mln) (in SGD cents) 700 6 5.5 600 5 4.5 500 4 400 3.5 3 Net Profit 300 2.5 Dividend 2 200 1.5 100 1 0.5 0 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 -- 1: 2 share split in Nov 2019 -- FY20 payout ratio 22%
Slide 40: Investment Merits
Investment Merits 40 ✓ Market leadership position and largest market share in rubber accelerators ✓ Strong customer base ✓ Capacity expansion ongoing, aiming to grow sales volume and market share ✓ Strong cash position (cash per share SGD0.277) with no bank loan ✓ 14-year track record & annual divid
Slide 41: Chairman's Message
Chairman’s Message 41 “Overall, I believe the Group achieved a set of satisfactory results during this difficult time, thanks to its strategy of ‘sales and production equilibrium’. I am pleased that we are on track for progressive capacity expansion, which allows us to produce more to meet the incre
Slide 42: Q&A Media/Investor Contact
42 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
China Sunsine Chemical Holdings — FY2020 Earnings Presentation on 6ix