Yip's Chemical Holdings Limited · HKEX:408

Yip's Chemical — FY2018 Earnings Presentation

28 slides from Yip's Chemical's earnings presentation, Mar 20, 2019

  1. Slide 1: 2018 Annual Results Announcement

    (SEHK: 00408) 2018 Annual Results Announcement 20 March 2019

  2. Slide 2: Disclaimer

    Disclaimer The information on these slides does not constitute a recommendation by financial adviser or selling agent that any recipient should invest in the Company. Recipients should make their own independent appraisal, evaluation, assessment and investigation as deemed necessary by them.

  3. Slide 3: Unique Product Portfolio in China

    Unique Product Portfolio in China Solvents Solvents * Coatings Inks Lubricants 71% 15% 12% Inks * 2%  No. 1 player  Built on 37  Market leader in  Branded in the years of food packaging player in acetate coatings inks automobile solvents market lubricants commodity experience market 3

  4. Slide 4: Agenda

    1 Financial Highlights Consolidated Financial 2 Statements 3 Core Business Analysis & Growth Strategies 4 ESG Journey 5 Appendix

  5. Slide 5: Sustained Strong Growth in Sales

    Sustained Strong Growth in Sales Total Sales Total Sales Volume Revenue 9% 20.5%  Record high in total sales revenue again, mainly driven by the substantial growth of the solvents segment Gross Profit = HK$1.53 billion Profit Attributable to Owners = HK$185 million 8.4%  Solvents segment continued

  6. Slide 6: Financial Highlights

    Financial Highlights For the Year Ended 31 Dec (HK$ million, audited) 2018 2017 % Change Revenue 12,388 10,280 +20.5% Gross Profit 1,533 1,541 - Gross Profit Margin 12% 15% -3% points Profit Attributable 185 171 +8.4% to Owners Earnings Per Share HK32.8 cents HK30.2 cents +8.6% Dividends Per Share -

  7. Slide 7: Segment Highlights

    Segment Highlights For the Year Ended 31 Dec (HK$ million, audited) Revenue (HK$ million)# % Breakdown# Segments^ 2018 2017 % Change 2018 2017 Solvents* 8,948 7,047 +27% 71% 68% Coatings 1,826 1,650 +11% 15% 16% Inks* 1,475 1,410 +5% 12% 13% Lubricants 271 293 -8% 2% 3% ^Properties segment contribut

  8. Slide 8: Consolidated Financial Statements

    1 Financial Highlights 2 Consolidated Financial Statements 3 Core Business Analysis & Growth Strategies 4 ESG Journey 5 Appendix

  9. Slide 9: Revenue & Sales Volume

    Revenue & Sales Volume Full Year Revenue (Year ended 31 Dec, audited) Full Year Sales Volume (Year ended 31 Dec, audited) Interim Revenue (Period ended 30 Jun, unaudited) Interim Sales Volume (Period ended 30 Jun, unaudited) HK$ million metric ton 14,000 1,388,135 1,276,803 12,388 1,400,000 12,000 1

  10. Slide 10: Profit Attributable to Owners

    Profit Attributable to Owners Full Year (Year ended 31 Dec, audited) Interim (Period ended 30 Jun, unaudited) HK$ million 400 300 223.2 200 184.8 169.3 170.6 100 82.8 87.3 51.4 47.8 56.4 53.6 0 2014 2015 2016 2017 2018 10

  11. Slide 11: Earnings Per Share

    Earnings Per Share Full Year (Year ended 31 Dec, audited) Interim (Period ended 30 Jun, unaudited) HK cents 60 50 39.7 40 32.8 30.0 30.2 30 20 14.7 15.5 9.1 8.5 10.0 9.5 10 0 2014 2015 2016 2017 2018 11

  12. Slide 12: Dividends Per Share

    Dividends Per Share Final (Year ended 31 Dec, audited) Interim (Period ended 30 Jun, unaudited) Special (Year ended 31 Dec, audited) HK cents 30 25 25 20 15 16 14.5 15 15 15 4.5 10 10 10 10 10 10 5 5 5 6 0 2014 2015 2016 2017 2018 Long-held dividend policy of rewarding shareholders earnestly 12

  13. Slide 13: Consolidated Statement of Financial Position

    Consolidated Statement of Financial Position As of 31 Dec 18 As of 31 Dec 17 % (HK$ million, audited) (HK$ million, audited) Change Non-current Assets 2,368 2,397 -1% Current Assets 5,953 5,671 +5% Current Liabilities (3,556) (3,214) +11% Net Current Assets 2,397 2,457 -2% Non-current Liabilities (1

  14. Slide 14: Consolidated Statement of Cash Flows

    Consolidated Statement of Cash Flows Year Ended Year Ended (HK$ million, audited) 31 Dec 2018 31 Dec 2017 Net cash inflow (outflow) from: - Operating activities 741 65 - Investing activities (334) (194) - Financing activities 3 52 Net increase (decrease) in cash and cash 410 (77) equivalents Cash &

  15. Slide 15: Liquidity and Financial Resources

    Liquidity and Financial Resources 31 Dec 2018 30 Jun 2018 31 Dec 2017 Net Borrowing (HK$ million) 1,305 1,956 1,522 Gearing Ratio 46.0% 66.2% 51.1% Capital 2018 2017 Investments in PP&E 225 199 (HK$ million) Banking Facilities Utilization Utilized 2,887 (HK$ million) Reserved 3,219 As of 31 Dec 2018

  16. Slide 16: Core Business Analysis & Growth Strategies

    1 Financial Highlights 2 Consolidated Financial Statements 3 Core Business Analysis & Growth Strategies 4 ESG Journey 5 Appendix

  17. Slide 17: Solvents: Sustained Growth Momentum

    Solvents Sustained Growth Momentum (HK$ million) 2018 2017 % Change Revenue 8,948 7,047 +27% Gross Profit 715 776 -8% GP Margin 8% 11% -3% points Operating Profit 345 393 -12%  Domestic and export sales both achieved  New production line of 550,000 tonnes of a strong double-digit growth acetate so

  18. Slide 18: Coatings: Segment Focus to Drive Growth

    Coatings Segment Focus to Drive Growth (HK$ million) 2018 2017 % Change Revenue 1,826 1,650 +11% Gross Profit 441 398 +11% GP Margin 24% 24% - Operating (Loss) / Profit (6.5) 8.3 N/A  Notable growth in sales revenue, sales volume and gross profit as raw material prices started to stabilize in the 2

  19. Slide 19: Inks: Optimization Continues

    Inks Optimization Continues (HK$ million) 2018 2017 % Change Revenue 1,475 1,410 +5% Gross Profit 281 273 +3% GP Margin 19% 19% - Operating Profit 40 55 -28%  Pursuit of quality sales may lead to decline of sales volume, but will help improve business performance in the long run  Expenses will sta

  20. Slide 20: Lubricants: Focus on Operational Excellence

    Lubricants Focus on Operational Excellence (HK$ million) 2018 2017 % Change Revenue 271 293 -8% Gross Profit 58 69 -15% GP Margin 22% 23% -1% point Operating Loss (38.7) (8.4) -360%  Operating loss widened because of provisions made for slow-moving goods and equipment, as well as the loss during th

  21. Slide 21: Investment in Damai Tapping Huge Car Aftermarket

    Investment in Damai Tapping Huge Car Aftermarket Chain Store Network of Damai (As of end of Dec 2018) Shandong • 15 self-operated stores • 10 franchise stores  Invested RMB30 million in Damai, Jiangsu a car maintenance chain brand • 6 self-operated in China, increasing shareholding stores from 28%

  22. Slide 22: Properties: Effective Use of Assets

    Properties Effective Use of Assets Group’s Headquarters & Plants Network (Vacating)  Properties contributed HK$139 million of operating profit, which came mainly from fair values increment of the former factory premises in Qingpu, Shanghai and former headquarters building in Fanling, HK, as well as

  23. Slide 23: Three-pronged Development

    Three-pronged Development 23

  24. Slide 24: ESG Journey

    1 Financial Highlights 2 Consolidated Financial Statements 3 Core Business Analysis & Growth Strategies 4 ESG Journey 5 Appendix

  25. Slide 25: Towards a Century of Revered Leadership

    Towards a Century of Revered Leadership Cataract patients treated > 86,000 2017 Yip’s Chemical ESG Report http://www.yipschemical.com 25

  26. Slide 26: Appendix

    1 Financial Highlights 2 Consolidated Financial Statements 3 Core Business Analysis & Growth Strategies 4 ESG Journey 5 Appendix

  27. Slide 27: Production Capacity

    Production Capacity As of 31 Dec 2018 Solvents  Acetate Solvents: 890,000 MT  Butyl Acrylate: 80,000 MT Coatings  Architectural Paints: 187,000 MT  Industrial Paints: 70,000 MT  Resins: 60,000 MT Inks  Inks: 87,500 MT Lubricants  Automotive and Industrial Lubricants: 60,000 MT 27

  28. Slide 28: Thank You!

    SRLI YIPSCHEMICAL __ Yip's Chemical gg

Yip's Chemical Holdings — FY2018 Earnings Presentation on 6ix