China Sunsine Chemical Holdings Ltd. · SGX:QES
China Sunsine Chemical — FY2018 Earnings Presentation
39 slides from China Sunsine Chemical's earnings presentation, Mar 5, 2019
Slide 1: FY2018 Company Presentation
FY2018 COMPANY PRESENTATION 5 March 2019 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 Industry Info and Outlook
Slide 3: Our Company
3 Our Company
Slide 4: About China Sunsine Chemical
About China Sunsine Chemical 4 ✓ 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 ✓ Accredited by a strong customer base
Slide 5: Our Products - Rubber Chemicals
Our Products - Rubber Chemicals 5 Rubber Accelerators Insoluble Anti-Oxidants MBT MBTS CBS TBBS TMTD Sulphur TMQ DPG DCBS …. 6PPD 4010NA
Slide 6: Our Products: Rubber Chemicals
Our Products: Rubber Chemicals 6 Rubber Chemicals are Essential Additives in the production of rubber products
Slide 7: Global Consumption of Rubber
Global Consumption of Rubber 7 Anti-oxidants Other Products 2.2% Latex 10% Vulcanizing 4% agents 2% Other Tire Accelerators 9% 1.7% Boots 10% Car Tyres Rubber 61% Tube/ Tape 6% http://www.chemn.com • By weight, every 100 tons of rubber consumes Global natural and synthetic rubber consumption in 2018
Slide 8: Our Strong Customer Base
Our Strong Customer Base 8 (2006) (1997) (2003) (2006) • Over 1,000 customers globally • Serves more than 2/3 of the global top 75 tire makers • 1/3 output exported
Slide 9: Market Share: Rubber Accelerators
Market Share: Rubber Accelerators 9 MARKET SHARE 40% 35% 31% 33% 33% 29% 30% 30% PRC Market Share 30% 28% 24% 24% 25% 25% 19% 20% 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 2018
Slide 10: Our Market Leadership Position
Our Market Leadership Position 10 GLOBAL TOP 3 PRC TOP 3 ACCELERATOR PRODUCERS INSOLUBLE SULPHUR PRODUCERS Annual Company Annual Company Capacity 2018 Capacity 2018 China Sunsine 87,000 tons China Sunsine 30,000 tons 中国尚舜 中国尚舜 Tianjin Kemai 51,000 tons Yanggu Huatai 20,000 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: P&L Highlights
P&L Highlights 13 RMB ’mln Year Ended 31 Dec 18 31 Dec 17 Change Group Revenue 3,283.3 2,738.4 20% Gross Profit 1,125.9 788.1 43% Gross Profit Margin 34.3% 28.8% 5.5 pts Profit Before Tax 711.6 476.8 49% Profit After Tax 641.3 341.3 88% EPS 130.45/ 70.83/ 84% (RMB cents/SGD Cents*) 26.06 14.15 * SGD
Slide 14: Revenue Growth
Revenue Growth 14 RMB ’mln 3,500.0 3,283.30 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 1,000.0 797.9 718.4 619.5 500.0 0.0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY18 Revenue up 20% y-o-y boosted by higher average selling price
Slide 15: Sales Contribution (By Region)
Sales Contribution (By Region) 15 FY18 Sales Contribution (y-o-y) Region FY2018 FY2017 Rest of Asia China 62% 64% 27% Rest of Asia 25% 24% PRC US 2% 5% US 2% 62% 9% 5% Europe 8% Europe Others 2% 2% Others Total 100% 100%
Slide 16: Sales Volume
Sales Volume 16 Tons 160,000 151,486 140,476 140,000 135,791 120,000 114,572 108,973 98,345 100,000 81,371 80,000 60,907 60,000 54,275 45,420 40,000 31,036 30,787 20,000 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY18 Sales volume up 8% y-o-y due mainly to higher sales volume of I
Slide 17: Sales Volume by Products
Sales Volume by Products 17 Tons 90,000 82,767 83,335 83,255 80,000 76,089 76,090 72,710 70,000 64,252 60,000 50,148 50,000 46,343 40,196 42,472 40,000 34,858 31,036 29,805 31,214 30,000 25,759 19,903 21,640 20,031 22,283 20,000 10,724 11,948 12,102 15,417 3,468 4,413 7,873 12,281 10,000 464 2,971 2
Slide 18: Overall Average Selling Price (ASP)
Overall Average Selling Price (ASP) 18 RMB/Ton 30,000 25.9K 25,000 21.5K 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 FY18
Slide 19: ASP vs Aniline Price
ASP vs Aniline Price 19 RMB/Ton 25,000 23,168 23,334 22,384 20,706 20,000 18,904 18,541 19,110 17,009 17,300 16,01916,28115,566 16,000 14,76514,19314,849 15,000 ASP 9,553 10,166 9,229 Aniline 10,000 7818 7,539 7168 6078 6412 6405 6,146 5746 5398 4737 4814 4627 4945 5,000 0 1Q15 2Q15 3Q15 4Q15 1Q16 2
Slide 20: Gross Profit
Gross Profit 20 RMB ’mln 1200.0 1125.9 1100.0 1000.0 900.0 788.1 800.0 700.0 600.0 567.4 540.4 492.0 500.0 400.0 308.0 293.4 300.0 226.8 224.1 243.9 200.0 125.2 160.2 100.0 0.0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY18 Gross profit grew 43% y-o-y due to higher ASP and sales vo
Slide 21: Net Profit
Net Profit 21 RMB ’mln Net Profit 700 641.3 600 500 400 341.3 300 220.2 221.7 195.2 200 106.7 115.3 99.4 76.1 88.3 76.7 100 32 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 • Net Profit surge due to higher ASP and higher sales volume. • Group’s main subsidiary-Shangdong Sunsine enjoy
Slide 22: Margins Analysis
Margins Analysis 22 40.0% 34.3% 35.0% 30.0% 28.4% 28.8% 27.3% 26.5% 26.9% 25.0% 25.0% 22.3% 22.6% Gross Profit 20.2% 19.5% Margin (GPM) 20.0% 17.2% 18.2% Net Profit Margin 15.0% 12.3% 13.3% 12.3% 11.6% 12.5% 18.1% (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 23: Balance Sheet Highlight
Balance Sheet Highlight 23 31/12/2018 31/12/2017 31/12/2016 Current Assets (RMB’mln) * 2,016.4 1,424.6 1,050.5 Current Liabilities (RMB’mln) 421.8 385.3 280.8 Current Ratio 4.78 3.70 3.74 Shareholders’ Equity (RMB’mln) 2,325.5 1,742.4 1,361.6 D/E ratio ** 0 0 0 NAV per share (RMB cents) 473.32/ 354.
Slide 24: Key Developments
24 Key Developments
Slide 25: Ongoing Projects
Ongoing Projects 25 Project Status CapEx 30,000-ton fully-automated, high-end Whole project was approved in Accelerator TBBS at Shanxian: Jan 2019 1. Phase I of 10,000-ton capacity Commercial production commenced RMB 100 mln Production line to be installed in 2. Phase II of 20,000-ton capacity RMB 6
Slide 26: Annual Capacity
Annual Capacity 26 2007 FY17 FY18 FY9e (before IPO) Rubber Accelerators 32,000 87,000 87,000 117,000 Insoluble Sulphur nil 20,000 30,000 30,000 Anti-oxidant (TMQ & 6PPD) nil 45,000 45,000 45,000 Total 32,000 152,000 162,000 192,000
Slide 27: Industry Info and Outlook
27 Industry Info and Outlook
Slide 28: China's New Car Sales
China’s New Car Sales 28 in million units % 35 50 30 28 28.9 28.1 40 23.5 24.6 25 22 30 18.5 19.3 20 18.1 sales 20 15 13.6 growth yoy 8.8 9.4 10 10 5 0 0 -10 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 • 28.1 mln cars sold in China in 2018, down 2.8% y-o-y • New car sales volume have
Slide 29: Global Vehicle Population
Global Vehicle Population 29 PRC Motor Vehicle Population Mln units 400 350 310 327 295 300 260 279 240 250 250 200 150 100 50 0 2012 2013 2014 2015 2016 2017 2018 http://subscribers.wardsintelligence.com/analysis/world-vehicle- http://www.sohu.com/a/289093749_390500 population-rose-46-2016 • Global
Slide 30: Riding on Rising Tire Consumption
Riding on Rising Tire Consumption 30 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 31: Competitive Strengths
Competitive Strengths 31 - 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” - Superior quality and Full range of varieties Product
Slide 32: Some Investors' Concerns -1
Some Investors’ Concerns -1 32 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 33: Some Investors' Concerns -2
Some Investors’ Concerns -2 33 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 34: Some Investors' Concerns -3
Some Investors’ Concerns -3 34 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 35: Turning Challenges into Opportunities
Turning Challenges into Opportunities 35 Challenges Opportunities The policy affects smaller producers more Stringent environmental and safety enforcement and will lead to industry consolidation, may affects all chemical companies in China benefiting bigger players Short supply situation may ease as
Slide 36: Strategy and Objectives
Strategy and Objectives 36 Objectives Leveraging Staying ahead in the rubber Strategy chemical Industry advantages in Higher production • Quality Strengthening RA’s global market leads to higher sales • Economies of scale leadership position volume, which in turn • Product range stimulates even • Lo
Slide 37: Listed On SGX Mainboard
Listed On SGX Mainboard 37 SHARE PERFORMANCE IPO 39 cents • No rights issue and new share placement since IPO • P/E 4X times, P/B 1.2 times • Dividend yield 4.8%
Slide 38: Dividend Payment History
Dividend Payment History 38 Net Profit Dividend (in RMB ’mln) (in SGD cents) 700 6 5.5 600 5 4.5 500 4 400 3.5 3 Net Profit 300 2.5 Dividend 2 200 1.5 100 1 0.5 0 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
Slide 39: Q&A Media/Investor Contact
39 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 — FY2018 Earnings Presentation on 6ix