Hung Hing Printing Group Limited · HKEX:450

Hung Hing Printing — FY2013 Earnings Presentation

25 slides from Hung Hing Printing's earnings presentation, 2014

1. Slide 1: Annual Results Presentation

   Annual Results Presentation For the year ended 31 Dec. 2013 0

2. Slide 2: Disclaimer

   Disclaimer The presentation is prepared by Hung Hing Printing Group Limited (the “Company”) and is solely for the purpose of corporate communication and general reference only. The presentation is not intended as an offer to sell, or to solicit an offer to buy or to form any basis of investment deci

3. Slide 3: Highlights - Year ended 31 Dec. 2013

   Highlights - Year ended 31 Dec. 2013 Solid Financial Results leveraging core competences, diversified business portfolio, economies of scale and commitment to deliver customer value:  Group sales exceeded $3 billion; grew by +25% vs. prior financial report period (or +1% vs. comparable period last

4. Slide 4: Established infrastructure in the PRD region & East China

   Established infrastructure in the PRD region & East China Zhongshan Wuxi  Printing & mfg. of folding cartons, litho  Printing and manufacturing of folding lam and corrugated containers cartons, litho lam and corrugated  Awarded ISO9001 and ISO14001 containers certifications  Awarded ISO9001 cert

5. Slide 5: Hung Hing operates four complementary business segments

   Hung Hing operates four complementary business segments Book & Package Consumer Product Corrugated Box Paper Trading Printing Packaging  Leader globally  Major player in China  Major player in South  Major player in South Market position China China  57% (HK$1,728mm)  26% (HK$786mm)  8% (HK$2

6. Slide 6: Group sales exceeded $3 billion and grew by +1%

   Group sales exceeded $3 billion and grew by +1 % 2,988 3,013 3,000 2,854 2,765 293 271 310 316 255 228 2,500 2,407 264 290 228 Paper Trading 206 744 786 2,000 768 Corrugated Box (HK$ million) 706 573 1,500 Consumer Product Packaging 1,000 1,696 1,728 Book and Package 1,452 1,513 1,399 Printing 500 0

7. Slide 7: Group EBITDA increased by +22% to HK$ 216m

   Group EBITDA increased by +22% to HK$ 216m EBITDA (HK$ million) Commentary 11% EBITDA as % of Sales 400 11%  EBITDA up +22% to HK$216m  EBITDA margin as % of sales 312 9% improved by +1.3 ppt. to 7.2% 300 7% 7%  Net cash jumped by +HK$230m to 6% 6% 7% HK$471m; driven by earnings growth 216 and wo

8. Slide 8: Group Sales by Segments: Core Segments Growth Continued

   Group Sales by Segments: Core Segments Growth Continued FY 2013 Commentary 271 HK$3,013m Book and Package  Core segments BPP & CPP continued 228 (9%) Printing (BPP) growing (2% and 6% respectively) and (8%) now account for 83% of total sales Consumer Product 1,728 Packaging (CPP)  Commitment to de

9. Slide 9: Business Segments Profit Contribution

   Business Segments Profit Contribution FY 2013 Commentary 7 HK$88m Book and Package (8%) BPP profit contribution increased 13 Printing (BPP)  (15%) +47% with sales growth and Consumer Product productivity improvement (through Packaging (CPP) 54 automation, staff training and workload 14 (61%) (16%)

10. Slide 10: Key Cost Drivers: RMB appreciation & Labor Cost Inflation

    Key Cost Drivers: RMB appreciation & Labor Cost Inflation USD/CNY Exchange: Jan 2011 – Dec 2013 Jan RBM 6.59 / Appreciate with Dec Higher Volatility 6.28 2013 +2.8% 6.22 2012 +0.9% 6.05 2011 +4.9% Minimum Wage Rate: Shenzhen / Wuxi / Zhongshan (in RMB) Min. Wage Rate Incr% 1,800 2011 2012 2013 6.7%

11. Slide 11: Income Statement

    Income Statement 2013 2012* Commentary (HK$ Mil.) Sales % Chg Profit % Chg Profit Book & Package Printing 1,728 2% 54 47% 37  Profit margin% maintained Consumer Product Packaging 786 6% 14 -31% 20 at same level as prior year: Corrugated box 228 -11% 13 -38% 21 Paper trading 271 -8% 7 -6% 8 1. Direc

12. Slide 12: Solid Financial Position: Strong Net Cash with Low Gearing

    Solid Financial Position: Strong Net Cash with Low Gearing As of Mar 31 As of Dec 31 (HK$ million) 2010 2011 2012 2012 2013 Assets Non-current 1,467 1,569 1,572 1,520 1,499 Current 2,356 2,076 2,214 2,109 2,319 3,823 3,645 3,786 3,629 3,818 Liabilities Non-current 41 57 358 276 250 Current 795 776 6

13. Slide 13: CAPEX: Investment in the future with value-added offerings

    CAPEX: Investment in the future with value-added offerings 180 Commentary 157 160  Significant Capex 141 investment commitments 140 (total HK$86m in 2013) continued to drive 120 technological capabilities, (HK$ million ) Total 2013 Capex process automation and 100 HK$ 86m including commitments capa

14. Slide 14: EPS improved significantly by +81% to HK₵ 8.5 per share

    EPS improved significantly by +81% to HK₵ 8.5 per share Profit Attributable to Owners of HHPG Basic Earnings per share 180 20 160 156 18 17.3 140 16 14 120 +82% +81% (HK$ million) (HK Cents) 12 100 10 80 77 8.5 8 60 54 6.0 6 4.7 42 40 4 26 2.8 20 2 0 0 FY10/11 FY11/12 FY2012* 2012** FY2013 FY10/11 F

15. Slide 15: Proposed Dividends: 40% YoY Growth at 82% Payout

    Proposed Dividends: 40% YoY Growth at 82% Payout 35 Commentary 30 27  2013 Dividends Interim (paid) 1.7 cents 25 23 Final (proposed) 5.3 cents (HK Cents) 20 Total 2013 7.0 cents 17 15 9 +40%  Y-o-Y Growth +40% 7  Dividend yield: 6% 10 10 5 5  Payout ratio: 82% 4 5 5.3 2 5 2 4 3 2 1.7 0 FY09/10 F

16. Slide 16: Current Business Outlook

    Current Business Outlook 1. Export Markets Anticipate that gradual recovery of the global economy is imminent despite uncertainties may persist longer in near-term; We remain confident to increase exports order intake as Europe/UK gradually pull out of recession with minimal growth while fiscal cond

17. Slide 17: Current Business Outlook (Cont')

    Current Business Outlook (Cont’) 3. Increasing consolidation among export printers Our financial strength, breadth of capabilities, and commitment on green and quality products render Hung Hing a vendor of choice among large / MNC customers; thus, a beneficiary to this trend. 4. Investment in the fu

18. Slide 18: Hung Hing's Commitment in Green & Quality Product

    Hung Hing’s Commitment in Green & Quality Product 17

19. Slide 19: Hung Hing's Commitment in Green & Quality Product

    Hung Hing’s Commitment in Green & Quality Product 18

20. Slide 20: Hung Hing's Commitment in Green & Quality Product

    Hung Hing’s Commitment in Green & Quality Product 19

21. Slide 21: BelugaBloo – Latest Update

    BelugaBloo – Latest Update The BelugaBloo Kids Bookstore • Features over 300 children’s applications; Almost 400k downloads since launch • Healthy platform to connect parents and children • Opportunities for future promotion, marketing, cross-selling and up-selling The Group continues to search for

22. Slide 22: Little Musician

    Little Musician The Little Musician Series is the joint creation of YCCPAC and BelugaBloo. Children learn music by tapping specially printed flash cards on an iPad to trigger different sounds and information. 21

23. Slide 23: Touchcode

    Touchcode Touchcode is an invisible printed electronic code, that can be integrated into almost any printed product and bridges the gap between offline and digital just by a simple touch. *patented 22

24. Slide 24: BridgingBook

    BridgingBook BridgingBook is a special printed book that is placed side by side to an electronic device. Thumbing through the book pages let the printed illustrations come to life on the screen through animations, sound and interaction. *patent pending 23

25. Slide 25: Thank you Q&A

    Thank you Q&A A Leading Printer in Asia With unrivalled market leadership, well-balanced portfolio and sustained growth for over six decades, Hung Hing is in an excellent position to take advantage of growing opportunities as the economic recovery continues to build momentum. 24

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