China Sunsine Chemical Holdings Ltd. · SGX:QES
China Sunsine Chemical — H1 2020 Earnings Presentation
41 slides from China Sunsine Chemical's earnings presentation, Aug 13, 2020
Slide 1: 1H2020 Results Briefing
1H2020 RESULTS BRIEFING 13 August 2020 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 ✓ World’s 2nd and PRC’s biggest producer of Insoluble Sulphur ✓ Superior product-quality and economies of scale ✓ Accredited by a strong customer base of top tire makers ✓ Beneficia
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 2.2% Latex 10% Vulcanizing 4% agents 2% Other Tire Accelerators 9% 1.7% Boots 10% Car Tyres Rubber 61% Tube/ Tape 6% http://www.chemn.com • By weight, every 100 tons of rubber consumes Global rubber consumption in 2019: about 6 tons of rubb
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: Rubber Accelerators' Market Share
Rubber Accelerators’ Market Share 9 MARKET SHARE 40% 35% 33% 33% 33% 29% 30% 30% 31% PRC Market Share 30% 28% 24% 24% 25% 25% 19% 20% 20% 20% 20% 17% 17% 18% Global Market Share 14% 16% 15% 11% 12% 12% 10% 7% 5% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
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 2019 Capacity 2019 China Sunsine 97,000 tons China Sunsine 30,000 tons 中国尚舜 中国尚舜 Tianjin Kemai 51,000 tons Yanggu Huatai 20,000 tons 天津科迈 阳谷华泰 Sennics Yan
Slide 11: Our Production Bases
Our Production Bases 11 6 production bases in three locations • Yongshun Environmental Technology
Slide 12: Financial Overview
12 Financial Overview
Slide 13: Financial Highlights
Financial Highlights 13 RMB ’mln First Half Year Ended 30/06/20 30/06/19 Change Group Revenue 1,042.6 1,413.6 (26%) Gross Profit 241.9 488.0 (50%) Gross Profit Margin 23.2% 34.5% (11.3 pts) Profit Before Tax 114.9 320.0 (64%) Profit After Tax 82.4 265.9 (69%) EPS 8.46/ 27.09/ (69%) (RMB cents/SGD Ce
Slide 14: Revenue Growth
Revenue Growth 14 RMB ’mln 4000 3500 3,283.3 3000 2,738.4 2,691.6 2500 2,077.3 2,036.9 2000 1,859.1 1,695.9 1500 1,417.3 1,413.6 1,175.1 991.4 1,042.6 1000 797.9 718.4 619.5 500 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 1H19 1H20 1H20 Revenue down 26% y-o-y mainly due to the
Slide 15: Sales Contribution (By Region)
Sales Contribution (By Region) 15 Region 1H2020 FY2019 FY2018 Rest of Asia China 65% 62% 62% 27% Rest of Asia 22% 22% 54% PRC US US 2% 3% 2% 2% 65% Europe Europe 8% 8% 11% 9% Others 3% 2% 2% Others Total 100% 100% 100%
Slide 16: Sales Contribution (By Products)
Sales Contribution (By Products) 16 IS Product 1H2020 FY2019 FY2018 Accelerators 63% 66% 70% Anti- 27% Accelerators oxidants IS 10% 10% 9% 63% Anti-oxidants 26% 23% 20% 2% Others 8% 1% 1% 1% Others Total 100% 100% 100%
Slide 17: Overall Average Selling Price (ASP)
Overall Average Selling Price (ASP) 17 RMB/Ton 30,000 25.9K 25,000 21.5K 19.8K 20,000 19.3K 19.1K 19.4K 18.3K 17.4K 16.2K 16.0K 17.2K 13.6K 15,000 15.8K 15.0K 10,000 5,000 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 1H20
Slide 18: ASP vs Aniline Price (half-yearly)
ASP vs Aniline Price (half-yearly) 18 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 ASP 9.7K Aniline 10,000 8.4K 6.2K 7.1K 6.8K 6.0K 4.8K 5.0K 4.9K 5,000 0 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 • 1H20 ASP declined 21% y-o-y mainly due to the decrease in ra
Slide 19: Sales Volume
Sales Volume 19 Tons 200,000 167,455 160,000 151,486 135,791140,476 120,000 114,572 108,973 98,345 81,371 82,078 76,320 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 1H19 1H20 1H20 sales volume down 7% y-o-y mainly due to: weaken
Slide 20: Sales Volume by Products
Sales Volume by Products 20 Tons 60,000 43,790 40,480 40,000 22,385 21,564 20,000 14,930 13,333 0 1H19 1H20 Accelerator Insoluble Sulphure Anti-oxidants Others Sales Volume 1H2019 1H2019 1H2020 1H2020 Utilization Rate Utilization Rate Accelerators 43,790 92% 40,480 83% Insoluble Sulphur 14,930 99% 1
Slide 21: Sales Volume (half-yearly)
Sales Volume (half-yearly) 21 Tons 100,000 95,000 90,000 85,377 85,000 82,078 1H20 vs 1H19 : -7% 80,000 77,123 76,320 1H20 vs 2H19 : -11% 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
Slide 22: Gross Profit
Gross Profit 22 RMB ’mln 1200.0 1125.9 1000.0 788.1 780.8 800.0 600.0 567.4 547.1 492.0 488.0 400.0 293.4 308.0 226.8 224.1 243.9 241.9 200.0 125.2 160.2 0.0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 1H19 1H20
Slide 23: Net Profit
Net Profit 23 RMB ’mln 700 641.3 600 500 388.9 400 341.3 300 265.9 220.2 221.7 195.2 200 106.7 88.3 115.3 99.4 100 76.1 76.7 82.4 32 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 1H19 1H20
Slide 24: Net Profit (half-yearly)
Net Profit (half-yearly) 24 RMB ’mln 400.0 350.0 341.2 300.0 1H20 vs 1H19: - 69% 266.0 252.0 1H20 vs 2H19: - 33% 250.0 209.6 200.0 150.0 139.1 131.7 123.0 100.0 82.6 82.4 50.0 0.0 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20
Slide 25: Margins Analysis
Margins Analysis 25 40.0% 34.3% 35.0% 28.8% 29.0% 30.0% 28.4% 27.3% 26.5%26.9% 25.0% 23.2% 25.0% 22.3% 22.6% 20.2% Gross Profit Margin 20.0% 17.2% 18.2% 19.5% (GPM) 13.3% 14.4% 15.0% 12.3% 12.3%11.6% Net Profit 10.6% 10.9% 12.5% Margin 10.0% 8.5% 7.9% (NPM) 10.5% 2.3% 4.5% 5.0% 0.0% FY07 FY08 FY09 F
Slide 26: Margins Analysis (half-yearly)
Margins Analysis (half-yearly) 26 40.0% 35.8% 34.5% 35.0% 32.6% 30.6% 30.0% 27.7% 26.6% 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% 10.0% 8.8% 7.9% 5.0% 0.0%
Slide 27: Balance Sheet Highlight
Balance Sheet Highlight 27 30/06/2020 31/12/2019 31/12/2018 Current Assets (RMB’mln) * 2,175.6 2,219.6 2,016.4 Current Liabilities (RMB’mln) 331.2 347.4 421.8 Current Ratio 6.57 6.39 4.78 Shareholders’ Equity (RMB’mln) 2,588.1 2,561.6 2,325.5 D/E ratio * 0 0 0 NAV per share (RMB cents) 266.19/ 262.5
Slide 28: Key Developments
28 Key Developments
Slide 29: Expansion Projects
Expansion Projects 29 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 With land area of 680 m
Slide 30: Newly Acquired Project
Newly Acquired Project 30 Heze Yongshun Environmental Protection Technology Co., Ltd Located : Shanxian, near our factories Land area : 215 mu Capacity : 15,000 tons per annum Net Book Value : RMB 36 mln Consideration : RMB 43 mln Rationale : • Yongshun is the only qualified dangerous waste treatmen
Slide 31: Annual Capacity
Annual Capacity 31 2007 FY17 FY18 FY19 FY20e (before IPO) Rubber Accelerators 32,000 87,000 87,000 97,000 117,000 Insoluble Sulphur nil 20,000 30,000 30,000 30,000 Anti-oxidant (TMQ & nil 45,000 45,000 45,000 45,000 6PPD) Total 32,000 152,000 162,000 172,000 192,000
Slide 32: Outlook and Strategy
32 Outlook and Strategy
Slide 33: Macro Economy
Macro Economy 33 • The COVID-19 pandemic outside China still very severe. It may lead into the economic recession around the world • Ongoing geopolitical tensions, particularly between the US and China, are causing economic uncertainties • China’s GDP grew by 3.2% in 2Q2020, up from -6.8% in 1Q2020,
Slide 34: Industry Outlook
Industry Outlook 34 • China’s new car sales in 1H2020 recorded 10.26 units, down 16.9% from a year ago. Global new car sales in 2020 expected to be hit by the COVID-19 pandemic • The utilization rate of tire manufacturing remains low. The demand of tires is primarily catagorized from two end-user se
Slide 35: Group's Strategy
Group’s Strategy 35 “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 to our products • Focusing on operational improveme
Slide 36: Competitive Strengths
Competitive Strengths 36 - World largest accelerators and China’s biggest IS producer Market Leadership - Capturing 20% of global and 33% of China’s accelerators markets - Listed in the first batch of “National Champion Manufacturing Enterprise” - Superior quality and Full range of varieties Product
Slide 37: Listed On SGX Mainboard
Listed On SGX Mainboard 37 SHARE PERFORMANCE • Since IPO, no new share placement and rights issue
Slide 38: Dividend Payment History
Dividend Payment History 38 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 -- If there is no share split, the dividend would be SGD 2 cents per s
Slide 39: Investment Merits
Investment Merits 39 ✓ Market leadership position and largest market share in rubber accelerators ✓ Strong customer base ✓ Capacity expansion ongoing with acquired land of 680 mu ✓ Strong cash position (cash per share SGD0.27) with no bank loan ✓ 13-year track record & annual dividend payment since
Slide 40: Chairman's Message
Chairman’s Message 40 “The market sentiment remains bearish due to the impact of the COVID-19 pandemic and slowing down economies. The Group’s ASP is still under pressure, resulting from lower raw material costs and higher competition in our industry. However, our strong balance sheet and other adva
Slide 41: Q & A
41 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
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