China Sunsine Chemical Holdings Ltd. · SGX:QES
China Sunsine Chemical — Q3 2018 Earnings Presentation
35 slides from China Sunsine Chemical's earnings presentation, Nov 7, 2018
Slide 1: 3Q & 9M 2018 Results Briefing
3Q & 9M 2018 RESULTS BRIEFING 7 November 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 Industry Info and Outlook
Slide 3: Financial Overview
3 Financial Overview
Slide 4: P&L Highlights
P&L Highlights 4 RMB ’mln 3rd Quarter Ended 9 Months Ended 30 Sept 18 30 Sept 17 Change 30 Sept 18 30 Sept 17 Change Group Revenue 775.6 634.4 22% 2,513.1 1,865.1 35% Gross Profit 254.0 169.8 50% 876.4 496.9 76% Gross Profit Margin 32.7% 26.8% 5.9 pts 34.9% 26.6% 8.3 pts Profit Before Tax 172.8 103.
Slide 5: Revenue Growth
Revenue Growth 5 RMB ’mln 3,000.0 2,738.4 2,513.10 2,500.0 2,077.3 2,036.9 2,000.0 1,859.1 1,865.1 1,695.9 1,500.0 1,417.3 1,175.1 991.4 1,000.0 797.9 718.4 619.5 500.0 0.0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 9M17 9M18 9M18 Revenue up 35% y-o-y boosted by higher ASP and sales volu
Slide 6: Revenue By Quarter
Revenue By Quarter 6 RMB ’mln 2Q2018 1000 1Q2018 3Q2018 900 856.9 880.6 873.3 775.6 800 700 656.2 3Q18 vs 3Q17 : +22% 634.4 575 3Q18 vs 2Q18 : - 12% 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 160,000 140,476 140,000 135,791 120,000 114,572 111,529 108,973 98,345 101,702 100,000 81,371 80,000 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 9M17 9M18 9M2018 Sales volume up 10% y-o-y due mainly to more orde
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 62,294 61,613 60,000 50,148 50,000 46,343 40,196 40,000 34,858 31,036 29,805 31,214 30,201 30,000 22,283 23,816 19,903 21,640 20,031 19,034 20,000 10,724 11,948 15,417 16,273 12,102 3,468 4,413 7,873 12,28
Slide 9: Sales Volume By Quarter
Sales Volume By Quarter 9 Tons 1Q2018 2Q2018 3Q2018 45,000 40,000 38,774 36,797 37,567 36,797 37,166 34,558 34,098 34,460 35,000 33,046 34,483 30,948 3Q18 vs 3Q17 : +9% 30,051 29,045 30,000 29,203 3Q18 vs 2Q18: -1% 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 9M18 Sales Contribution (y-o-y) Region 3Q2018 9M2018 9M2017 Rest of Asia China 59% 61% 64% 27% Rest of Asia 23% 25% 25% PRC US 3% 2% 6% US 2% 61% 10% 9% 4% Europe 8% Europe Others 5% 2% 1% Others Total 100% 100% 100%
Slide 11: Overall Average Selling Price (ASP)
Overall Average Selling Price (ASP) 11 RMB/Ton 30,000 25.9K 25,000 22.4K 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 9M
Slide 12: ASP by Quarter
ASP by Quarter 12 RMB/Ton 25,000 23.2K 23.3K 22.4K 20.7K 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 3Q18 • 3Q18 ASP up 12% y-o-y due mainly to continued short supply situation in
Slide 13: Main Raw Materials Cost
Main Raw Materials Cost 13 Key Raw Materials Price Trend RMB/ Ton 22,000 Aniline 18,000 Tert-butylamine 14,000 Cyclohexylamine 10,000 Ketone Dicyclohexylamine 6,000 Aniline Carbon Disulfide 2,000
Slide 14: Gross Profit
Gross Profit 14 RMB ’mln 900.0 876.4 788.1 800.0 700.0 600.0 567.4 547.1 492.0 496.9 500.0 400.0 293.4 308.0 300.0 243.9 226.8 224.1 200.0 160.2 125.2 100.0 0.0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 9M17 9M18 9M18 Gross profit grew 76% y-o-y due to higher ASP and sales volume
Slide 15: Net Profit
Net Profit 15 RMB ’mln 600 532.6 500 400 341.3 300 220.2 221.7 209.3 195.2 200 106.7 115.3 99.4 76.1 88.3 76.7 100 32 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 9M17 9M18 • Net Profit surge due to higher ASP and higher sales volume. • Group’s main subsidiary-Shangdong Sunsine enjoys a
Slide 16: Net Profit By Quarter
Net Profit By Quarter 16 RMB ’mln 2Q2018 3Q18 vs 3Q17: +85% 250.0 239.7 3Q18 vs 2Q18: - 25% 200.0 1Q2018 48 3Q2018 149.5 191.7 143.4 150.0 132.0 100.0 74.5 72.8 77.6 66.3 57.2 55.3 47.4 47.1 49.0 45.5 50.0 33.6 0.0 1Q 2Q 3Q 4Q 2015 2016 2017 2018 • 3Q18 Net profit jumped 85% y-o-y mainly due to high
Slide 17: Margins Analysis
Margins Analysis 17 40.0% 34.9% 35.0% 30.0% 28.4% 28.8% 27.3% 26.5% 26.9% 25.0% 25.0% 22.3% 22.6% 21.2% Gross Profit Margin 20.2% (GPM) 20.0% 17.2% 18.2% 19.3% 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
Slide 18: Margins Analysis By Quarter
Margins Analysis By Quarter 18 40.0% 36.7% 34.9% 35.0% 33.3% 32.7% 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% 18.5% 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
Slide 19: Balance Sheet Highlight
Balance Sheet Highlight 19 30/09/2018 31/12/2017 31/12/2016 Current Assets (RMB’mln) * 1,932.9 1,424.6 1,050.5 Current Liabilities (RMB’mln) 443.2 385.3 280.8 Current Ratio 4.36 3.70 3.74 Shareholders’ Equity (RMB’mln) 2,212.3 1,742.4 1,361.6 D/E ratio ** 0 0 0 NAV per share (RMB cents) 450.28/ 354.
Slide 20: Key Developments
20 Key Developments
Slide 21: Ongoing Projects
Ongoing Projects 21 Project Status CapEx 30,000-ton Accelerator TBBS: At final stage of trial Phase I of 10,000-ton capacity at RMB 100 mln run approval Shanxian Plant Insoluble Sulphur: At final stage of trial 10,000-ton production line at RMB 50 mln run approval Dingtao plant Heating Plant: Starte
Slide 22: Annual Capacity
Annual Capacity 22 2007 FY17 FY18 FY9e (before IPO) Rubber Accelerators 32,000 87,000 87,000 97,000 Insoluble Sulphur nil 20,000 20,000 30,000 Anti-oxidant (TMQ & 6PPD) nil 45,000 45,000 45,000 Total 32,000 152,000 152,000 172,000
Slide 23: Industry Info and Outlook
23 Industry Info and Outlook
Slide 24: China's New Car Sales
China’s New Car Sales 24 in million units PRC New Car Sales % 35 50 28.9 45 30 28 40 24.6 25 22 23.5 35 20.5 19.3 30 20 18.1 18.5 15 13.6 25 sales 20 8.8 9.4 15 growth yoy 10 10 5 5 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 9M18 • 20.5 mln cars sold in China in the first 9 months of
Slide 25: Global Vehicle Population
Global Vehicle Population 25 PRC Motor Vehicle Population Mln units 400 350 310 322 295 300 260 279 240 250 250 200 150 100 50 0 2012 2013 2014 2015 2016 2017 9M18 http://www.chyxx.com/industry/201705/521742.html http://subscribers.wardsintelligence.com/analysis/world-vehicle- population-rose-46-201
Slide 26: Riding on Rising Tire Consumption
Riding on Rising Tire Consumption 26 PRC Tire Production Volume Projected worldwide tire market volume from 2014 to 2018 in million units in million units 5000 700 653 610 600 562 565 4000 3660 •529 3140 3400 500 443 456 470 2990 3000 2840 400 300 2000 200 1000 100 0 0 2010 2011 2012 2013 2014 2015
Slide 27: Competitive Strengths
Competitive Strengths 27 - 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 28: Some Investors' Concerns -1
Some Investors’ Concerns -1 28 Q : Are rubber chemical products commodities? A : NO – They are products in the niche market. Reasons: 1. Rubber chemicals are not produced in a large scale 2. Renowned tire makers, which account for the bulk of the global tire production, require rubber chemicals to s
Slide 29: Some Investors' Concerns -2
Some Investors’ Concerns -2 29 Q : Are entry barriers high for the rubber chemical industry? A : Yes. Reasons: 1. Capital intensive -- land, environmental protection and safety infrastructure. 2. Know-how -- technology, talents and management skills also required to produce specialty chemicals. 3. S
Slide 30: Some Investors' Concerns -3
Some Investors’ Concerns -3 30 Q : Will weakening car sales affect the rubber chemical industry? A : There will be material impact only if the new car sales experience significant negative growth Reasons: 1. New cars accounts for only 30% of tire consumption. Existing cars consume the remaining 70%
Slide 31: Turning Challenges into Opportunities
Turning Challenges into Opportunities 31 Challenges Opportunities The 3-year “Battle for a Blue Sky” initiative The policy affects smaller producers more affects all chemical companies in China and will lead to industry consolidation, benefiting bigger players Short supply situation may ease as some
Slide 32: Listed On SGX Mainboard
Listed On SGX Mainboard 32 SHARE PERFORMANCE • No rights issue and new share placement since IPO • P/E less than 4 times (Rolling EPS for last four quarters SGD 0.27) • P/B ratio 1.13 times (NAV per share SGD 0.895)
Slide 33: Dividend Payment History
Dividend Payment History 33 Net Profit Dividend (in RMB ’mln) (in SGD cents) Net Profit Dividend 400 3.5 341.3 Total SGD 3 cents 350 3 300 2.5 250 220.2 221.7 195.2 2 200 115.3 1.5 150 106.7 88.3 99.4 1 100 76.1 76.7 50 32 0.5 0 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 IPO price : SG
Slide 34: Chairman's Message
Chairman’s Message 34 Despite a decline in ASP in this quarter, the Group was able to maintain a reasonably good margin level due to its core competences of stable delivery and superior quality. Stringent environmental protection and safety requirements and frequent inspections remain key imperative
Slide 35: Q&A / Media and Investor Contact
35 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 — Q3 2018 Earnings Presentation on 6ix