China Sunsine Chemical Holdings Ltd. · SGX:QES
China Sunsine Chemical — Q1 2018 Earnings Presentation
40 slides from China Sunsine Chemical's earnings presentation, Apr 26, 2018
Slide 1: 1Q2018 Results Briefing
1Q2018 RESULTS BRIEFING 26 April 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 Our Company Financial Overview Key Developments Outlook
Slide 3: About China Sunsine Chemical
About China Sunsine Chemical 3 ✓ Specialty rubber chemicals producer ✓ World’s largest producer of Rubber Accelerators ✓ PRC’s biggest producer of Insoluble Sulphur ✓ Superior product-quality and economies of scale China Sunsine listed in the first batch of the National Champion Manufacturing Enterp
Slide 4: Our Products: Rubber Chemicals
Our Products: Rubber Chemicals 4 Rubber Accelerators Insoluble Anti-Oxidants MBT MBTS CBS TBBS TMTD Sulphur TMQ DPG DCBS …. 6PPD 4010NA
Slide 5: Our Products: Rubber Chemicals
Our Products: Rubber Chemicals 5 Rubber Chemicals are essential additives in the production of rubber products
Slide 6: Global Consumption of Rubber
Global Consumption of Rubber 6 Other Products Car tyres consume 2/3 of Latex 10% 4% Global Rubber Output Other Tire 9% Boots 10% Car Tyres 61% Tube/ Tape 6% http://www.chemn.com
Slide 7: Global Consumption of Rubber Chemicals
Global Consumption of Rubber Chemicals 7 Anti-oxidants 2.2% Vulcanizing agents 2% Accelerators 1.7% • By weight, every 100 tons of rubber consumes about 6 tons of rubber chemicals (100:6) • By value, rubber chemical’s cost Rubber accounts for about 3% of total tyre cost (100:3) Global rubber consump
Slide 8: Our Strong Customer Base
Our Strong Customer Base 8 Over (1997) (2006) 1,000 (2003) customers (2006) globally Serves more than 2/3 of the Global Top 75 tyre makers 1/3 output exported
Slide 9: Market Share: Rubber Accelerators
Market Share: Rubber Accelerators 9 MARKET SHARE 40% 35% 33% 29% 30% 30% 31% PRC Market Share 30% 28% 24% 24% 25% 25% 19% 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
Slide 10: Our Market Leadership Position
Our Market Leadership Position 10 GLOBAL TOP 3 PRC TOP 3 ACCELERATOR PRODUCERS INSOLUBLE SULPHUR PRODUCERS Annual Annual Company Company Capacity 2017 Capacity 2017 China Sunsine 87,000 tons China Sunsine 20,000 tons 中国尚舜 中国尚舜 Tianjin Kemai Yanggu Huatai 10,000 tons 51,000 tons 天津科迈 阳谷华泰 Wuxi Huashe
Slide 11: Our Production Bases
Our Production Bases 11 Five production bases in three locations
Slide 12: Financial Overview
12 Financial Overview
Slide 13: Financial Highlights
Financial Highlights 13 RMB ’mln Quarter Ended 31 Mar 18 31 Mar 17 Change Group Revenue 856.9 574.6 49% Gross Profit 298.8 140.0 113% Gross Profit Margin 34.9% 24.4% 10.5 pts Profit Before Tax 181.6 84.7 114% Profit After Tax 149.5 57.2 161% EPS 30.40/ 12.32/ 147% (RMB cents/SGD Cents*) 6.34 2.57 NA
Slide 14: Revenue Growth
Revenue Growth 14 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 1,500.0 1,417.3 1,175.1 991.4 1,000.0 856.9 797.9 718.4 619.5 500.0 0.0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 1Q18
Slide 15: Revenue By Quarter
Revenue By Quarter 15 RMB ’mln 1000 1Q2018 900 856.9 873.3 800 700 656.2 634.4 1Q18 vs 1Q17 : +49% 575 600 1Q18 vs 4Q17: - 2% 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 16: Sales Volume
Sales Volume 16 Tons 160,000 140,476 140,000 135,791 120,000 114,572 108,973 98,345 100,000 81,371 80,000 60,907 60,000 54,275 45,420 40,000 36,797 31,036 30,787 20,000 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 1Q18 Priority in growing sales volumes and market share through the follow
Slide 17: Sales Volume by Products
Sales Volume by Products 17 Tons 90,000 83,335 82,767 80,000 76,089 76,090 72,710 70,000 64,252 60,000 50,148 50,000 46,343 40,196 40,000 34,858 31,036 29,805 31,214 30,000 21,640 20,031 22,283 19,903 19,907 20,000 10,724 11,948 15,417 12,102 10,678 3,468 4,413 7,873 12,281 10,000 464 5,183 6,212 0
Slide 18: Sales Volume By Quarter
Sales Volume By Quarter 18 Tons 45,000 1Q2018 40,000 34,483 36,797 38,774 36,797 34,558 34,098 34,460 35,000 33,046 30,051 30,948 29,203 29,045 30,000 25,377 1Q18 vs 1Q17: +11% 25,000 1Q18 vs 4Q17: - 5% 20,000 15,000 10,000 5,000 0 1Q 2Q 3Q 4Q 2015 2016 2017 2018 • 1Q18 Sales volume increased y-o-y
Slide 19: Sales Contribution (By Region)
Sales Contribution (By Region) 19 1Q18 Sales Contribution (y-o-y) PRC EXPORT Rest of Asia Sales: RMB 545.3 mln +47% Sales: RMB 307.2 mln +54% Volume: 25,155 tons +11% 26% Volume: 11,642 tons +12% PRC sales increased due mainly to the increase in overall ASP PRC International sales increase 2% Americ
Slide 20: Overall Average Selling Price (ASP)
Overall Average Selling Price (ASP) 20 RMB/Ton 30,000 25.9K 25,000 23.2K 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 1Q18
Slide 21: ASP by Quarter
ASP by Quarter 21 RMB/Ton 25,000 23.2K 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 • 1Q18 ASP up 34% y-o-y due mainly to continued short supply situation in China as in 4Q17
Slide 22: Main Raw Materials Cost
Main Raw Materials Cost 22 Key Raw Materials Price Trend RMB/ Ton 22,000 18,000 Aniline Tert-butylamine 14,000 Cyclohexylamine Ketone 10,000 Dicyclohexylamine Carbon Disulfide 6,000 Aniline 2,000
Slide 23: Gross Profit
Gross Profit 23 RMB ’mln 900.0 788.1 800.0 700.0 600.0 567.4 547.1 492.0 500.0 400.0 293.4 308.0 298.8 300.0 243.9 226.8 224.1 200.0 160.2 125.2 100.0 0.0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 1Q18 Since 2014, the Chinese government started to enforce stringent environmental protect
Slide 24: Net Profit
Net Profit 24 RMB ’mln 400 341.3 350 300 250 220.2 221.7 195.2 200 149.5 150 106.7 115.3 99.4 100 88.3 76.1 76.7 50 32 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 1Q18 • Adopted flexible pricing strategy since FY09 to gain more market share • FY12: One-off R&D cost for 6PPD abt RMB60 ml
Slide 25: Net Profit By Quarter
Net Profit By Quarter 25 RMB ’mln 1Q2018 1Q18 vs 1Q17: +161% 160.0 149.5 1Q18 vs 4Q17: + 13% 140.0 132.0 120.0 100.0 80.0 74.5 72.8 77.6 66.3 57.2 55.3 60.0 47.4 47.1 49.0 45.5 40.0 33.6 20.0 0.0 1Q 2Q 3Q 4Q 2015 2016 2017 2018 • 1Q18 Net profit surged due to higher ASP and strong sales volume • Sub
Slide 26: Margins Analysis
Margins Analysis 26 34.9% 35.0% 30.0% 28.4% 28.8% 27.3% 26.5% 26.9% 25.0% 25.0% 22.3% 22.6% 20.2% Gross Profit Margin 20.0% 18.2% 17.4% 17.2% (GPM) 15.0% 13.3% Net Profit Margin 12.3% 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%
Slide 27: Margins Analysis By Quarter
Margins Analysis By Quarter 27 40.0% 34.9% 35.0% 33.3% 31.7% 28.5% 30.0% 26.8% 27.3% 28.2% 27.2% 26.8% 24.3% 23.5% 24.2% 24.4% Gross Profit 25.0% Margin (GPM) 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% 0.0%
Slide 28: Balance Sheet Highlight
Balance Sheet Highlight 28 31/03/2018 31/12/2017 31/12/2016 Current assets (RMB’mln) * 1,601.8 1,424.6 1,050.5 Current liabilities (RMB’mln) 423.9 385.3 280.8 Current Ratio 3.77 3.70 3.74 Shareholders’ equity (RMB’mln) 1,889.9 1,742.4 1,361.6 D/E ratio ** 0 0 0 NAV per share (RMB cents) 384.36/ 354.
Slide 29: Key Developments
29 Key Developments
Slide 30: Ongoing Projects
Ongoing Projects 30 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 Plant Insoluble Sulphur: Construction completed Pending
Slide 31: Annual Capacity
Annual Capacity 31 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 32: Outlook
32 Outlook
Slide 33: Rising Tire Consumption
Rising Tire Consumption 33 Pcs ‘ mln PRC Tire Production Volume 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: Goodyear Annual report 2016 • Replacement tires and new car tire sales account for 70% and
Slide 34: Riding on Rapid Growth of Car Market
Riding on Rapid Growth of Car Market 34 Units ‘mln PRC Car Sales 35 30 28.9 28 24.6 25 23.5 22 19.3 20 18.1 18.5 15 13.6 8.8 9.4 10 7.2 7.2 5.1 5.8 4.4 5 2.4 3.2 2.1 0 www.caam.org.cn • 1Q2018 PRC car sales totaling 7.2 mln units, up 2.8% y-o-y • PRC car sales remains robust due to the improvement o
Slide 35: General Concerns and Opportunities Ahead
General Concerns and Opportunities Ahead 35 General Concerns Opportunities • Automobile industry in China is still poised for further growth • Environmental protection and safety inspection in China have become • Industry consolidation may benefit bigger commonplace and prevalent players • Shortage
Slide 36: Dividend Payment History
Dividend Payment History 36 Net Profit Dividend (in RMB ’mln) (in SGD cents) Net Profit Dividend 400 3.5 341.3 350 3 300 2.5 250 220.2 221.7 2 200 195.2 Final Dividend 150 115.3 1.5 SGD 2.5 cents 106.7 88.3 99.4 1 100 76.1 76.7 50 32 0.5 Interim Dividend 0 0 SGD 0.5 cents FY07 FY08 FY09 FY10 FY11 FY
Slide 37: Listed On SGX Mainboard
Listed On SGX Mainboard 37 SHARE PERFORMANCE IPO SGD0.39 On 05/07/2007 • No rights issue or new share placement since IPO • Total share buyback 5.5% or 27,653,200 shares of issued shares • Placed out all treasury shares in May 2017 to institutional investors to expand investor base and increase liqu
Slide 38: Investment Merits
Investment Merits 38 ✓ Leverage on the increasing demand of tire and car markets ✓ Market leadership position and largest market share in rubber accelerators ✓ Strong customer base ✓ Organic growth supported by ready resources (such as cash, land, the build-up of infrastructures, etc.) ✓ Strong oper
Slide 39: Chairman's Message
Chairman’s Message 39 “As we have said previously, we believe that the price of rubber chemicals is likely to normalise, with the bigger players investing more in environmental protection and safety production measures, and some smaller players eventually complying with the environmental protection
Slide 40: Q&A
40 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 — Q1 2018 Earnings Presentation on 6ix