China Sunsine Chemical Holdings Ltd. · SGX:QES
China Sunsine Chemical — H1 2018 Earnings Presentation
30 slides from China Sunsine Chemical's earnings presentation, Aug 8, 2018
Slide 1: 2Q & 1H 2018 Results Briefing
2Q & 1H 2018 RESULTS BRIEFING 8 August 2018 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 Financial Overview Key Developments Outlook
Slide 3: Financial Overview
3 Financial Overview
Slide 4: Financial Highlights
Financial Highlights 4 RMB ’mln 2nd Quarter Ended 6 Months Ended 30 Jun 18 30 Jun 17 Change 30 Jun 18 30 Jun 17 Change Group Revenue 880.6 656.2 34% 1,737.5 1,230.7 41% Gross Profit 323.6 187.1 73% 622.4 327.1 90% Gross Profit Margin 36.7% 28.5% 8.2 pts 35.8% 26.6% 9.2 pts Profit Before Tax 214.8 92
Slide 5: Revenue Growth
Revenue Growth 5 RMB ’mln 3,000.0 2,738.4 2,500.0 2,077.3 2,036.9 2,000.0 1,859.1 1,695.9 1,737.50 1,500.0 1,417.3 1,175.1 1,230.7 991.4 1,000.0 797.9 718.4 619.5 500.0 0.0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 1H17 1H18 1H18 Revenue up 41% y-o-y mainly boosted by higher ASP
Slide 6: Revenue By Quarter
Revenue By Quarter 6 RMB ’mln 2Q2018 1000 1Q2018 900 856.9 880.6 873.3 800 700 656.2 2Q18 vs 2Q17 : +34% 634.4 575 2Q18 vs 1Q18: +2.8% 600 547.3 553.4 491.1 497.3 475.9 500 445.1 453.8 432.1 400 300 200 100 0 1Q 2Q 3Q 4Q 2015 2016 2017 2018
Slide 7: Sales Volume
Sales Volume 7 Tons 160,000 140,476 140,000 135,791 120,000 114,572 108,973 98,345 100,000 81,371 80,000 74,364 67,604 60,907 60,000 54,275 45,420 40,000 31,036 30,787 20,000 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 1H17 1H18 1H2018 Sales volume up 10% y-o-y due mainly to more orders
Slide 8: Sales Volume by Products
Sales Volume by Products 8 Tons 90,000 82,767 83,335 80,000 76,089 76,090 72,710 70,000 64,252 60,000 50,148 50,000 46,343 40,196 41,692 41,469 40,000 34,858 31,036 29,805 31,214 30,000 21,640 20,031 22,283 19,903 20,011 20,000 10,724 11,948 12,102 15,417 15,074 12,884 3,468 4,413 7,873 12,281 10,02
Slide 9: Sales Volume By Quarter
Sales Volume By Quarter 9 Tons 45,000 1Q2018 2Q2018 40,000 38,774 36,797 37,567 36,797 34,558 34,098 34,460 35,000 33,046 34,483 30,948 2Q18 vs 2Q17 : +9% 30,051 29,045 30,000 29,203 2Q18 vs 1Q18: +2% 25,377 25,000 20,000 15,000 10,000 5,000 0 1Q 2Q 3Q 4Q 2015 2016 2017 2018
Slide 10: Sales Contribution (By Region)
Sales Contribution (By Region) 10 1H18 Sales Contribution (y-o-y) PRC EXPORT Rest of Asia Sales: RMB 656.2 mln +49% Sales: RMB 1,072.8 mln +37% Volume: 49,941 tons +9% 27% Volume: 24,423 tons +13% International sales increase PRC sales increase due mainly PRC due to higher ASP and higher to the rise
Slide 11: Overall Average Selling Price (ASP)
Overall Average Selling Price (ASP) 11 RMB/Ton 30,000 25.9K 25,000 23.3K 19.4K 20,000 19.3K 19.1K 18.3K 17.4K 19.8K 16.2K 17.2K 15,000 15.8K 15.0K 10,000 5,000 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 1H18
Slide 12: ASP by Quarter
ASP by Quarter 12 RMB/Ton 25,000 23.2K 23.3K 22.4K 20,000 18.9K 18.5K 17.0K 17.3K 16.0K 16.3K 15.6K 16.0K 14.8K 14.2K 14.8K 15,000 10,000 5,000 0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 • 2Q18 ASP up 23% y-o-y due mainly to continued short supply situation in China sinc
Slide 13: Main Raw Materials Cost
Main Raw Materials Cost 13 Key Raw Materials Price Trend RMB/ Ton 22,000 18,000 Aniline 14,000 Tert-butylamine Cyclohexylamine 10,000 Ketone 6,000 Aniline Dicyclohexylamine Carbon Disulfide 2,000
Slide 14: Gross Profit
Gross Profit 14 RMB ’mln 900.0 788.1 800.0 700.0 622.4 600.0 567.4 547.1 492.0 500.0 400.0 308.0 327.1 293.4 300.0 243.9 226.8 224.1 200.0 160.2 125.2 100.0 0.0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 1H17 1H18 1H18 Gross profit grew 90% y-o-y due to higher ASP and sales volume
Slide 15: Net Profit
Net Profit 15 RMB ’mln 450 389.2 400 341.3 350 300 250 220.2 221.7 195.2 200 150 131.7 106.7 115.3 88.3 99.4 100 76.1 76.7 50 32 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 1H17 1H18 Group’s main subsidiary, Shandong Sunsine, obtained “High-tech Enterprise” status which allows the compa
Slide 16: Net Profit By Quarter
Net Profit By Quarter 16 RMB ’mln 2Q2018 2Q18 vs 2Q17: +222% 300.0 2Q18 vs 1Q18: + 60% 239.7 250.0 1Q2018 200.0 149.5 150.0 132.0 100.0 74.5 72.8 77.6 57.2 66.3 47.4 47.1 49.0 55.3 45.5 50.0 33.6 0.0 1Q 2Q 3Q 4Q 2015 2016 2017 2018 • 2Q18 Net profit surged 222% y-o-y due mainly to higher ASP with ex
Slide 17: Margins Analysis
Margins Analysis 17 40.0% 35.8% 35.0% 30.0% 28.4% 28.8% 27.3% 26.5% 26.9% 25.0% 25.0% 22.3% 22.6% 22.4% Gross Profit Margin 20.2% (GPM) 19.6% 20.0% 17.2% 18.2% Net Profit Margin 15.0% 12.3% 13.3% 12.3% 11.6% 12.5% (NPM) 10.6% 10.5% 10.9% 10.0% 8.5% 4.5% 5.0% 2.3% 0.0% Adjusted by taking out the one-
Slide 18: Margins Analysis By Quarter
Margins Analysis By Quarter 18 40.0% 36.7% 34.9% 35.0% 33.3% 31.7% 28.5% 30.0% 26.8% 27.3% 28.2% 27.2% 26.8% 27.2% 24.3% 23.5% 24.2% 24.4% Gross Profit 25.0% Margin (GPM) 21.8% 20.0% 17.4% Net Profit Margin 15.1% (NPM) 15.0% 13.3% 12.2% 11.0% 11.6% 11.0% 10.0% 11.4% 9.5% 10.0% 10.0% 10.0% 7.5% 5.0%
Slide 19: Balance Sheet Highlight
Balance Sheet Highlight 19 30/06/2018 31/12/2017 31/12/2016 Current assets (RMB’mln) * 1,738.8 1,424.6 1,050.5 Current liabilities (RMB’mln) 390.8 385.3 280.8 Current Ratio 4.45 3.70 3.74 Shareholders’ equity (RMB’mln) 2,070.7 1,742.4 1,361.6 D/E ratio ** 0 0 0 NAV per share (RMB cents) 421.14/ 354.
Slide 20: Key Developments
20 Key Developments
Slide 21: Ongoing Projects
Ongoing Projects 21 Scheduled Project Status CapEx Completion Date 30,000-ton Accelerator TBBS: Phase I construction and installation completed Pending trial run approval RMB 100 mln Phase I of 10,000-ton at the end of 2016 capacity at Shanxian P lant Insoluble Sulphur: Construction completed Pendin
Slide 22: Annual Capacity
Annual Capacity 22 2007 FY17 FY18e Note (before IPO) Shanxian: Rubber 71,000-ton Accelerators 32,000 87,000 97,000 Weifang: 26,000-ton Shanxian: Insoluble 10,000-ton Sulphur nil 20,000 30,000 Dingtao: 20,000-ton Shanxian: Anti-oxidant 10,000-ton TMQ (TMQ & 6PPD) nil 45,000 45,000 30,000-ton 6PPD 5,0
Slide 23: Outlook
23 Outlook
Slide 24: Rising Tire Consumption
Rising Tire Consumption 24 PRC Tire Production Volume Pcs ‘ mln 700 653 610 600 562 565 529 500 456 470 443 385 400 337 355 285 300 200 100 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: http://www.tyrefh.org/ • Replacement tires and new car tire sales account for 70% and 30%
Slide 25: Riding on Rapid Growth of Car Market
Riding on Rapid Growth of Car Market 25 Units ‘mln PRC Car Sales PRC Car Parc Forecast 35 30 28 28.9 24.6 25 23.5 22 19.3 20 14.1 15 10 5 0 2012 2013 2014 2015 2016 2017 1H2018 www.caam.org.cn • 1H2018 PRC car sales totaling 14.1 mln units, up 0.83% y-o-y • After a robust growth in the past decade,
Slide 26: Competitive Strengths
Competitive Strengths 26 - 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” - High quality Products - Stable supply - Full range o
Slide 27: Challenges and Opportunities Ahead
Challenges and Opportunities Ahead 27 Challenges Opportunities The 3-year “Battle for a Blue Sky” initiative Environmental rectification causing industry affects all chemical companies in China consolidation which may benefit bigger players Short supply situation may ease as some affected production
Slide 28: Listed On SGX Mainboard
Listed On SGX Mainboard 28 SHARE PERFORMANCE (China Sunsine vs STI) ▪ P/E below 6 times (Rolling EPS SGD0.25 for last four quarters) ▪ P/B ratio about 1.6
Slide 29: Chairman's Message
Chairman’s Message 29 I am proud that the Group has achieved such outstanding performance in the first half of 2018. As China’s economy is facing a slowdown in its growth amidst trade war tensions, China’s tire capacity utilisation rate is falling. We expect the selling price of rubber chemicals to
Slide 30: Q&A Media/Investor Contact
30 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 — H1 2018 Earnings Presentation on 6ix