ACC — Investor Presentation 2019

Sep 20, 2019

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亞洲水泥股份有限公司 Asia Cement Corporation Stock code: 1102 TT

IR presentation

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Sep 2019

Disclaimer

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This presentation contains forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. Actual results may differ materially from those expressed or implied by these forward-looking statements. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this presentation might not occur in the way we expect, or at all. You should not place undue reliance on any forward-looking information.

In preparing the information herein, ACC have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to ACC or which was otherwise reviewed by ACC. Neither ACC nor its advisors have made any representation or warranty as to the accuracy or completeness of such information and nor do they assume any undertaking to supplement such information as further information becomes available or in light of changing circumstances. None of ACC, nor any of their respective affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. Neither this presentation nor any of its contents may be reproduced to a third party without the prior written consent of ACC.

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Table of Contents

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 Company snapshot

• ’

• What s New

• PRC market overview

• Taiwan market overview

• Dividend Policy

• Financials

• CSR achievement

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Company Snapshot

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Company Snapshot

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Market Cap: US$ 5.2 bn / NT$ 159.8 bn (as of 28 Jun 2019)

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• Establish in March 1957
ACC •
The second-largest cement player
Taiwan •
Cement capacity: 5.0 mtpa.
•
Top 10 [th] clinker producer
ACC • Strategic location in Central and Western China
Asia Cement
China •
Cement capacity: 33.0 mtpa.
(1102 TT)
(743 HK) •
Listing in HKEx since May 2008
•
Consolidated entities: cement value-chain
business, IPP, stainless steel, transportation.
Investment
•
Equity investees: FENC (1402 TT), U-Ming
Marine (2606 TT) and Shanshui Cement (691 HK)
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Investment Portfolio in Far Eastern Group

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NT$ mn
Incor- Equity Income
Equity Stock Holdings Market
Hold (3) porated Investees code (1) Value (2) 2016 2017 2018 1Q19 2Q19
Year
2004 Asia Cement (China) Holdings Corp. 743 HK 67.7% 56,157
1997 Far EasTone Telecommunications Lt 4904 TT 1.0% 2,424
1992 Far Eastern International Bank 2845 TT 2.4% 536
1975 Oriental Union Chemical Corp. 1710 TT 7.2% 410
ˇ 1968 U-Ming Marine Transport Corp. 2606 TT 39.3% 11,095 (345) 392 655 37 13
1967 Far Eastern Department Stores Ltd. 2903 TT 5.7% 2,272
1957 Asia Cement Corporation 1102 TT -
ˇ 1949 Far Eastern New Century Corp. 1402 TT 23.8% 42,626 1,347 1,694 2,343 331 518
Others 347 435 1,147 (33) 1,514
Total 115,521 1,350 2,522 4,144 335 2,046
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Note1: Asia Cement comprehensively holds 72.0% of Asia Cement(China) Holdings. (100%-owned AC(Singapore) holds a 4.1% stake and Asia Engineering Pte. holds a 0.2% stake of Asia Cement(China)) Note2: The market value is calculated on the basis of ACC's holding shares and the equity's closing price at 28 Jun 2019. Note3: Since 1 January 2013, Asia Cement (China) Holdings Corp. and most unlisted investees are classified as the consolidated entities.

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What’s New

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What’s New ： Strong ASP and GP growth of ACCH

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ASP by quarter GP/t by quarter
R$/t
2017 2018 1Q19 2018 2017 2019
186
380
368 149
391 167
133
339
127
319 285
314
104
99
55 48
230
233
221 23
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
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What’s New ： Undergoing Investments and Future Prospects

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1. GM of aggregate reached 81% in 2018. Total capacity will raise to 6mt in 3Q19. 2. IPP phase II project is expected to start operation by the end of 2020. Total CAPEX budget is NT$10.7bn.

Aggregate Capacity in China

IPP Phase II project in TW

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Jiangxi Huanggang GM(%)
mt
10 100%
79% 81%
8 80% 670+500MW
6 60% 670MW
4 40%
2 20%
0 0% 2018 End of 2020
2017 2018 3Q 2019
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What’s New ： Growing investment income

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1. BDI index has rebounded, U-Ming Marine’s profit in 2H19 is expected to be promising.

2. FENC’s new capacity in PTA and PET sector supports 2019 earnings growth.

3. Thanks to strong demand in northern China, Shanshui Cement’s shipment and profit has improved in 2Q19.

NT$ mn

		Equity income (1102 TT)	Equity income (1102 TT)	Equity income (1102 TT)	Equity income (1102 TT)	Equity income (1102 TT)	Equity income (1102 TT)	Equity income (1102 TT)	Equity income (1102 TT)	Equity income (1102 TT)	Equity income (1102 TT)	Equity income (1102 TT)	Equity income (1102 TT)
Investees	Holdings	1Q17	2Q17	3Q17	4Q17	2017	1Q18	2Q18	3Q18	4Q18	2018	1Q19	2Q19
U-Ming Marine Transport Corp. 39.3% Far Eastern New Century Corp. 23.8% Shanshui Cement Co. Ltd. 17.5% Others (unlisted investees)		(7) 54 189 156 392 83 199 294 79 655 37 13 312 290 791 302 1,694 510 1,000 686 147 2,343 331 518 - - - - - - - - 377 377 (169) 1,119 18 135 105 177 435 136 364 162 108 770 136 395
Total		323 479 1,085 635 2,522 729 1,564 1,142 710 4,144 335 2,046

R$ mn

		Profit Attributable to Shareholders of Parent (691 HK)	Profit Attributable to Shareholders of Parent (691 HK)	Profit Attributable to Shareholders of Parent (691 HK)	Profit Attributable to Shareholders of Parent (691 HK)	Profit Attributable to Shareholders of Parent (691 HK)	Profit Attributable to Shareholders of Parent (691 HK)	Profit Attributable to Shareholders of Parent (691 HK)	Profit Attributable to Shareholders of Parent (691 HK)	Profit Attributable to Shareholders of Parent (691 HK)
Shanshui Cement		1H17	2H17	2017	1Q18	2Q18	2H18	2018	1Q19	2Q19
		601 (471) 1,223 2,197 (211) 1,407 1,445 (44) 645

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What’s New?

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1102 TT:

NT$ mn Improved Financial Fitness

NT$ mn CAPEX : Mainly for IPP phase II.

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150,000 60%
Net Debt Net Gearing Ratio
4,275
47.7%
50%
120,000
42.9%
39.4%
40%
90,000 32.4%
30%
2,128
60,763
57,943
60,000 54,341
45,588 20%
1,157
30,000
10%
486
0 0%
2017 2018 1H18 1H19 2017 2018 1H18 1H19
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Generous Dividend Policy with Steadily High Payout Ratio

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NT$/Share, % Total dividend Dividend payout(%)
100% -
100% 99%
- 89% 89%
2.8
2.2 - -
-
1.1 0.9 1.2
2014 2015 2016 2017 2018
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What’s New?

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743 HK:

Steady CAPEX

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R$ mn Healthier Debt Structure R$ mn Steady CAPEX
10000 49.7% 55%
Net Debt Net Gearing Ratio 177
40.0% 45% 154
7500 135
35%
5000 4,653 25%
3,963
13.4%
15%
2500 5.3% 40
1,615
5%
670
0 -5%
2016 2017 2018 1H19 2016 2017 2018 1H19
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Stable and higher-than-average dividend payout

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R$/Share, %
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Total Dividend Dividend payout
0.62
42% 40%
35%
0.16
0.03
2016 2017 2018
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Note: The average of industry peers’ dividend payout ratio in 2018 is 27%.

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Asia Cement (China) Operating Data

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AC(China): Regional P.O42.5 Price & Inventory Level

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Unit: R$/t ; %

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Hubei (Wuhan)
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R$/t Inventory Level Market Price %
600 90
550
80
500
70
450
400 60
350
50
300
40
250
200 30
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Jiangxi (Nanchang)
Inventory Level Market Price
R$/t %
600 90
550
80
500
70
450
400 60
350
50
300
40
250
200 30
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Sichuan (Chengdu)
R$/t Inventory Level Market Price %
600 90
550
80
500
70
450
400 60
350
50
300
40
250
200 30
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Jiangsu (Nanjing) Inventory Level Market Price R$/t % 600 90 550 80 500 70 450 400 60 350 50 300 40 250 200 30

Source: Digit Cement. Inventory level is based on the average of province.

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AC(China) : 2Q19 Operating data points

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R$/t
ASP
RMC:R$/mm [3]
2Q18 2Q19
485
400
380
346
319 316
58 68
Cement Clinker RMC Aggregate
Note: Net of VAT
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Shipment

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mt Shipment
RMC:mm [3]
2Q18 2Q19
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8.3 8.1
0.9 1.0
0.4 0.3 0.3 0.5
Cement Clinker RMC Aggregate
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Gross Margin

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2Q18 2Q19
83% 82%
53%
49%
44%
40%
14%
12%
Cement Clinker RMC
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Aggregate

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AC(China) : 2Q19 Operating data points

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Cement Product by Regions

ASP

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R$/t
2Q18 2Q19
415
388
366
354
327 330 337
299
Jiangxi Hubei Sichuan Jiangsu
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Product Type

2Q18

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Low Grade
Cement
12.8%
High Grade
Cement
87.2%
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Shipment

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mt
2Q18 2Q19
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3.0 2.9
2.6 2.6
2.0 1.8
0.7 0.8
Jiangxi Hubei Sichuan Jiangsu
2Q19
Low Grade
Cement
9.2%
High Grade
Cement
90.8%
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AC(China) : 1H19 Operating data points

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ASP
R$/t
RMC:R$/mm [3] 1H18 1H19
489
409
375
317 309
288
56 63
Cement Clinker RMC Aggregate
Note: Net of VAT
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Shipment

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mt
RMC:mm [3 ] 1H18 1H19
13.7 13.6
1.7 2.0
0.8 1.1 0.5 0.8
Cement Clinker RMC Aggregate
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Gross Margin
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1H18 1H19
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83%
80%
46%
43%
39%
37%
16%
13%
Cement Clinker RMC
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Aggregate

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AC(China) : 1H19 Operating data points

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Cement Product by Regions

ASP

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R$/t
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1H18 1H19
408
383
363
350
328 321 330
302
Jiangxi Hubei Sichuan Jiangsu
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Shipment

mt

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1H18 1H19
5.1
4.9
4.5
4.3
3.1
2.9
1.2 1.3
Jiangxi Hubei Sichuan Jiangsu
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Product Type 1H18

1H19

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Low Grade
Cement
12.3%
High Grade
Cement
87.7%
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Low Grade
Cement
9.7%
High Grade
Cement
90.3%
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Shanshui Cement Profile

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Shanshui : Overview by Regions

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Cement Capacity

Clinker Capacity

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Xinjiang Total capacity: 100.38mt
4%
Northeast
China
27%
Shandong
54%
Shanxi
16%
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Xinjiang
3% Total capacity: 50.27mt
Northeast
China
30%
Shandong
50%
Shanxi
17%
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Note: Western Shandong region includes the capacities in Tianjin city. Northeast China region includes Liaoning province and Inner Mongolia. 20 Source: China Shanshui Cement Group Ltd. 1H19 financial report.

Shanshui : Revenue Breakdown

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Source: China Shanshui Cement Group Ltd. 1H19 financial report

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Shanshui : Regional P.O42.5 Price & Inventory Level

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Unit: R$/t ; %
Shandong (Jinan)
Inventory Level Market Price
R$/t %
600 90
550
80
500
450 70
400
350 60
300
50
250
200 40
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Inner Mongolia (Hohhot)
R$/t Inventory Level Market Price %
600 90
550
80
500
450 70
400
350 60
300
50
250
200 40
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Shanxi (Taiyuan)
R$/t Inventory Level Market Price %
600 90
550
80
500
450 70
400
350 60
300
50
250
200 40
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Liaoning (Shenyang)
R$/t Inventory Level Market Price %
600 90
550
80
500
450 70
400
350 60
300
50
250
200 40
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Source: Digit Cement. Inventory level is based on the average of province.

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Shanshui : 1H19 Operating data points

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ASP
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mt
RMC:mm [3 ]
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R$/t
RMC:R$/mm [3]
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1H18 1H19
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496
20.4
446
369 15.2
336
267 275
Cement Clinker RMC Cement
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Shipment

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1H18 1H19
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3.5 3.6
1.3 1.5
Clinker RMC
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Note: Net of sales tax and surcharge.

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Source: China Shanshui Cement Group Ltd. 2019 interim report.

Shanshui : 1H19 Operating data points

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Cement Product by Regions

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R$/t ASP mt Shipment
1H18 1H19 1H18 1H19
449 12.7
421
363 377 10.2
284
268 265
240
4.6
3.1
2.3
1.4
0.5 0.8
Shandong Shanxi Northeast Xinjiang Shandong Shanxi Northeast Xinjiang
Note: Net of sales tax and surcharge.
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Product Type

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Source: China Shanshui Cement Group Ltd. 2019 interim report.

Shanshui : 2018 Operating data points

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R$/t ASP
RMC:R$/mm [3]
2017 2018
449
344
330
271 265
236
Cement Clinker RMC
Note: Net of sales tax and surcharge.
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Shipment

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mt
RMC:mm [3 ]
2017 2018
41.1
39.2
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9.2 10.0
3.4 2.9
Cement Clinker RMC
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Cost Breakdown

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Others
Others
19%
22%
D&A 10%
D&A 8%
Coal Coal
27% 25%
Power 11% Power 9%
Materials Materials
33% 36%
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2017

2018

25

Source: China Shanshui Cement Group Ltd. 2018 annual report.

Shanshui : 2018 Operating data points

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Cement Product by Regions

ASP

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R$/t
2017 2018
398
364
310
289
247 257 267
227
Shandong Shanxi Northeast Xinjiang
Note: Net of sales tax and surcharge.
Product Type
2017
Low Grade
Cement
27%
High Grade
Cement
73%
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Shipment

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mt
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2017 2018
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25.9
24.8
9.9
9.1
3.7 4.2
1.6 1.1
Shandong Shanxi Northeast Xinjiang
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2018
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Low Grade
Cement
22%
High Grade
Cement
78%
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Source: China Shanshui Cement Group Ltd. 2018 annual report.

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Shanshui : Shareholder Structure

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Prior EGM 2018/10/30

Current

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China
China
Shanshui Asia Cement
Shanshui
Asia Cement Investment & Voting
Investment
19.47% Alliance
& Voting
25.09%
20.74%
Alliance
26.72%
CNBM
Tianrui 12.94%
Group
CNBM 21.85%
Tianrui 16.67%
Group
28.16%
Others
25.00%
Others
3.36%
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Note: Asia Cement holds 17.46%, and 3.28% of the interests are held through agreement to acquire interests in the Company, required to be disclosed under s.317(1)(a) and s.318 of the SFO.

Source: http://www3.hkexnews.hk/listedco/listconews/SEHK/2018/1030/LTN20181030956_C.pdf.

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PRC Market Overview

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China Cement Demand: The New Normal

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2016-2020:

2009-2011: Demand boosted by R$4 trillion stimulus

2012-2015:

Demand increase slowed down and oversupply weakened ASP

“New Normal Economy” urges Supply-Side Reform and industry evolution.

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mt
3,000 Cement Production
2,432 [2,476 ]
2,500 2,348 2,403 2,316
2,210
2,063 [2,184 ]
2,000 1,868
1,629
1,500
1,000
500
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
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2019 cement demand :

• Demand from infrastructure is expected to pick up as government is carrying out a R$2.6tn transportation investment in 2019.

• Demand from real estate could be stable for 1H19 and slowing down in 2H19.

• Several Tier 1 and 2 cities have loosen the property restriction measures, providing upside risk of the property demand.

Source: Ministry of Industry and Information Technology(MIIT), National Development and Reform Commission(NDRC), China Cement Association(CCA)

29

China Cement Supply-side Reform:

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1. Stricter policy for clinker replacement

Control capacity 2. Tightening regulation for cross-

expansion provincial capacity swap.

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Phase out capacities by lifting industry standards

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1. Raise UT rate from 70% to 80% 2. Eliminate PC 32.5R grade of cement 3. Promote intelligent manufacturing

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1. Government to play a more active Schedule production role on implementing. halt to restrain output 2. Differentiation measures provide

2. Differentiation measures provide uncertainty in 2019.

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1. M&A, cross holding, JVs, sales platform

Encourage consolidation 2. Carry out pilot program to subsidize capacity out

Source: China Cement Association “De-capacity action plan”, ”Cement industry 13[th] five year plan”, PRC State Council “Guiding policies to facilitate structural upgrade of building materials industry”

30

AC(China): Survival of the Fittest

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Strength of AC(China)

• Superior to regulatory requirements in energy efficiency and GHG emission

• 85% sales are high-grade cement

• 90% UT rate and no ≦ 2500 t/d clinker lines

• Sufficient limestone resources and reserves

Energy Consumption and Emission

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2017 2018
120.0
110.2 109.9
110.0 103.3102.8
100.0 94.8 94.6
90.0
79.3 78.9
80.0
70.0
57.0 57.2
60.0
50.0
40.0
Coal Power Energy Power Energy
consumption consumption consumption consumption consumption
of clinker of clinker of clinker of cement of cement
(kgce/t) (kWh/t) (kgce/t) (kWh/t) (kgce/t)
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Unit: mg/m3	SO2	SO2	NOX	NOX	Dust Particles	Dust Particles
	2017	2018	2017	2018	2017	2018
ACC Jiangxi	80 59		309 282		10 16
ACC Hubei	40 18		262 252		12 8
ACC Sichuan	13 4		294 130		14 5
National Standard	200		400		30
Special Limit	100		320		20
Ultra-low Standard	35		100		10

Note: Averaged by capacity

31

AC(China): Foreseeable Solid Regional Demand

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Yangtze River Economic Belt

Rise of Metropolitan Regions

Rigid demand for real estate

Hubei & Sichuan: Production Halt well-implemented, forming market efficiency

Source: National & Provincial Development and Reform Commission

32

AC(China) Strategy: to Dominate Locally

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2018: Capacity Rank top 10 nationwide

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：
Capacity 11 mt / year
：
Capacity 14 mt / year
Chengdu - Sichuan
Jiujiang - Jiangxi
60%
Market Share
Market Share 45%
50%
41% 38% 38% 39%
40% 37%
40% 35% 35%
31% 32% 31% 35%
28%
30%
21% 30%
20% 25%
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
：
Capacity 8 mt / year
Nanchang - Jiangxi
Wuhan - Hubei 40%
Market Share
35%
40%
35% Market Share 30% 27% 26% 26% 26% 29% 28%
30% 27% 27% 27% 27% 25%
26%
24%
25% 20%
2013 2014 2015 2016 2017 2018
20%
2013 2014 2015 2016 2017 2018
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Source: ACC(C) annual report

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Taiwan Market Overview

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TW Cement Market: Sophisticated and Highly Concentrated

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Mature and net export cement market

Oligopoly keep ASP steady

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91.58% Anti-dumping tariff

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NT$/t 91.58% Anti-dumping tariff
imposed on cement products from China
2,600
2011/5/30~2022/2/19
2,400
2,400
2,273
2,200
2,100
2,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1H19
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• Demand bottomed in 2017 due to private sector weakness.

• Catalyst: NT$420 billion infrastructure budget from 2018~2021

• ACC & TCC dominate 75% of production

• ASP remains steady since anti-dumping tariff blocked import from China

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Source: Taiwan Cement Manufacturers’ Association, TCMA

ACC: 2nd Largest Cement Player in Taiwan

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• Domestic market shares

• ACC: Cement & Clinker Sales Volume

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• 1H19 Export market coverage

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Dividend & Financials

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Steady Payout with Enjoyable Yields

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• Payout guide: >= 80%

Note1: Payable EPS= Net income – Investment property adjustment Note2: Dividend yield= Cash dividend / Last 12-month average share price

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Operating Performance (IFRS-consolidated basis)

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NT$ mn
	2Q19	2Q18	YoY	1H19 1H18 YoY
Operating Revenue Operating Cost Net Gross Profit SG&A expenses Operating profit	24,420 16,344 8,076 985 7,091	22,435 16,435 6,000 949 5,051	9% 43,806 39,009 12% -1% 31,071 29,680 5% 35% 12,735 9,330 36% 4% 1,866 1,605 16% 40% 10,869 7,725 41% 3,798 2,114 31% 2,380 2,293 4% (459) (683) 421 425 81 52 93 72 1,164 251 118 (296) 14,667 9,839 3,232 2,058 42% 11,435 7,781 47% 43% 9,119 6,227 46% 43% 2.91 1.98 47% 29.1% 23.9% 24.8% 19.8% 30.5% 25.9% 13,341 10,088
Non-operating income(net) Equity Income Net Interest Expense Dividend Income Gain (loss) on Investment Property Gain (loss) on exchange Gain (loss) on FVTPL Financial Assets and Liabilities Others Pre tax Income Tax Net income	2,833	1,737
	2,046	1,564
	(198)	(327)
	418	423
	46	25
	71 405 45	168 136 (251)
	9,923	6,788
	2,299 7,625	1,423 5,366
Profit Attributable to Owners of Parent EPS (NT$/share)	6,190 1.97	4,330 1.38
Gross margin	33.1%	26.7%
Operating margin	29.0%	22.5%
EBITDA margin	34.1%	27.5%
EBITDA	8,324	6,173

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Performance by Segments (IFRS-consolidated basis)

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Note: Cement revenue= Taiwan cement operation(cement, RMC and other downstream value chain) + China cement operation

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NT$ mn
2Q19 2Q18 YoY 1H19 1H18 YoY
Operating Revenue 24,420 22,435 9% 43,806 39,009 12%
Cement business 20,277 17,776 14% 35,918 30,374 18%
Power business 1,902 1,717 11% 3,479 3,034 15%
Stainless Steel business 1,349 2,005 -33% 2,998 3,930 -24%
Others 892 937 -5% 1,411 1,670 -16%
Operating Cost 16,344 16,435 -1% 31,071 29,680 5%
Net Gross Profit 8,076 6,000 35% 12,735 9,330 36%
SG&A expenses 985 949 4% 1,866 1,605 16%
Operating profit 7,091 5,051 40% 10,869 7,725 41%
Cement business 6,382 4,274 49% 9,932 6,476 53%
Power business 366 360 2% 612 583 5%
Stainless Steel business 17 78 -78% 47 133 -64%
Others 326 340 -4% 278 533 -48%
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Revenue (1H19)

Operating Profit (1H19)

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Summary of Balance Sheets (IFRS-consolidated basis)

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NT$ mn
	1H19	1Q19 2018
Current Assets Cash&Cash equivalents Short-term Investments Others Non-Current Assets Long-term Investment Fixed Assets Intangible Assets Other Assets Total Assets Current Liabilities Short-term debt Others Non-Current Liabilities Bonds Payable Bank Loans Others Total Liabilities Total Shareholders’ Equity Book Value(NT$/Share)	91,146 16,380 36,727 38,039 204,594 92,791 88,926 3,702 19,176 295,740 69,289 47,885 21,404 63,805 18,737 32,074 12,995 133,094 162,646 41.9	81,800 80,359 15,998 14,929 30,958 27,170 34,844 38,259 205,109 198,829 93,038 88,646 89,012 88,515 3,755 3,695 19,305 17,975 286,910 279,188 62,634 62,804 51,385 50,655 11,249 12,150 58,306 57,335 12,215 12,193 33,223 33,594 12,868 11,549 120,939 120,140 165,970 159,048 42.7 41.0
ROE	10.2%	8.9% 8.4%
Net Debt Net Gearing Ratio Net Debt/EBITDA	45,588 32.4% 1.7	49,867 54,341 34.7% 39.4% 2.1 2.4

Note: Net gearing = Nebt debt / (total shareholders' equity - minority interest)

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Summary of Cash Flow Statement (IFRS-consolidated basis)

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**basis) **
NT mn		1H18 YoY 6,227 2,463 (4,459) 160 (1,946) 2,444 507% (486) 1,886 (347) 8 1,062 -1409% (1,739) - (482) (2,221) 117% 103 1,388 5% 1,959 549%	YoY	2018 2017 YoY 11,117 5,469 4,919 5,178 (8,926) (3,786) (3,051) 37 5,205 1,278 9,264 8,139 14% (4,275) (1,157) (9,538) (2,037) (556) (1,110) (90) (2,447) (14,459) (6,785) -113% 15,793 2,832 (4,034) (3,025) 679 (586) 12,439 (780) 1696% (54) (285) 7,190 289 2384% 4,989 6,982 -29%	YoY
	1H19	1H18
Net Income Depr&Amort Changes of non-cash WC Disposal/(Acquisition) of FVTPL FA(1) Other Ope. CF Items Operating Cash Flow CAPEX Disposal/(Acquisition) of AC financial assets(2) Disposal/(Acquisition) of FVTOCI financial assets Other Inv. CF Items Investing Cash Flow Changes in Debt/Borrowings Dividends Paid Other Fin. CF Items Financing Cash Flow Effect of FX Net Changes in Cash Free Cash Flow	9,119 2,473 5,165 1,316 (3,242) 14,830 (2,128) (9,446) (57) (2,260) (13,890) 1,627 - (1,251) 375 135 1,451 12,703	6,227 2,463 (4,459) 160 (1,946) 2,444 (486) 1,886 (347) 8 1,062 (1,739) - (482) (2,221) 103 1,388 1,959

Note1: Under the IFRS 9 applied since 2018, mutual fund investment has been classified as operating activities.

Note2: Mainly over 3 months time deposit.

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AC(China):Summary of P&L

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R$ mn
	2Q19	2Q18		YoY	1H19 1H18	YoY
Operating revenue Operating cost Gross Profit Other net income/(loss) Selling&marketing costs Administative expenses Operating income Finance costs Shares of results of jointly controlled entities Pre tax Income Tax Net Income	3,531 1,873 1,658 48 122 130 1,453 75 2 1,380 414 966	2,997 1,820 1,177 (6) 117 74 980 57 3 926 254 672		18% 6,043 4,946 3% 3,400 3,130 41% 2,643 1,816 93 18 221 219 242 146 48% 2,274 1,469 143 118 2 4 2,134 1,355 585 365 44% 1,549 991 45% 1,510 959 38 32 45% 0.96 0.61 43.7% 36.7% 37.6% 29.7% 25.6% 20.0% 44.5% 38.5% 39% 2,690 1,905		22% 9% 46% 55% 56% 58% 58% 41%
Profit Attributable to Owners of Parent Minority interests EPS (RMB/share)	942 24 0.60	651 21 0.42
Gross margin	47.0%	39.3%
Operating margin	41.2%	32.7%
Net margin	27.4%	22.4%
EBITDA margin	47.2%	40.1%
EBITDA	1,667	1,201

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AC(China):Summary of Balance Sheets

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R$ mn Current Assets Inventories Trade and other receivables Bank balances and cash Non-Current Assets Property,Plant&Equipment Total Assets Current Liabilities Borrowings- due within one year Trade and other payables Non-Current Liabilities Borrowings- due after one year Total Liabilities Total Equity Equity Attributable to Parent Book Value(RMB/Share)	1H19 1Q19 2018 11,480 10,148 10,452 737 699 726 3,716 3,772 4,105 6,878 5,527 5,009 10,558 10,722 10,271 8,258 8,423 8,598 22,037 20,870 20,722 5,751 4,194 4,055 4,422 2,888 2,475 943 864 988 3,325 3,652 4,225 3,133 3,486 4,155 9,076 7,846 8,280 12,961 13,025 12,442 12,627 12,656 12,088 8.1 8.1 7.7	1H19 1Q19 2018 11,480 10,148 10,452 737 699 726 3,716 3,772 4,105 6,878 5,527 5,009 10,558 10,722 10,271 8,258 8,423 8,598 22,037 20,870 20,722 5,751 4,194 4,055 4,422 2,888 2,475 943 864 988 3,325 3,652 4,225 3,133 3,486 4,155 9,076 7,846 8,280 12,961 13,025 12,442 12,627 12,656 12,088 8.1 8.1 7.7
	1H19 11,480 737 3,716 6,878 10,558 8,258 22,037 5,751 4,422 943 3,325 3,133 9,076 12,961 12,627 8.1
ROE	25.6%	23.4% 22.0%
ROA	15.4%	14.4% 13.0%
Net Gearing Ratio	5.3%	6.7% 13.4%
Net Debt	670	844 1,615

Note: Net gearing = Net debt / (total shareholders’ equity – minority interests)

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AC(China):Summary of Cash Flow

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R$ mn		1H18 YoY 982 135% (20) -961% (928) 75% 34 5361%	YoY	2018 2017 YoY 2,421 602 871 891 (1,071) (880) 687 555 2,908 1,169 149% (154) (135) 83 (2) (71) (138) 48% 1,727 (288) (243) (47) (252) (289) 1,232 (624) 297% 4,068 407 900% 2,754 1,034 166%	YoY
	1H19	1H18
Net Income Depr&Amort Changes of non-cash WC Other Ope. CF Items Operating Cash Flow CAPEX Other Inv. CF Items Investing Cash Flow Changes in Debt/Borrowings Dividends Paid Other Fin. CF Items Financing Cash Flow Effect of FX Net Changes in Cash Free Cash Flow	2,307 (207) (231) 1,869	982 (20) (928) 34

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Shanshui:Summary of P&L

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R$ mn		1H18 6,650 4,269 2,380 212 201 936 1,455 401 9 1,063 352 711 752 (41) 0.22 35.8% 21.9% 10.7% 32.20% 2,144	YoY	2H18 2H17 YoY 2018 2017 YoY 10,989 8,450 30% 17,638 14,765 19% 7,446 5,912 26% 11,715 10,361 13% 3,543 2,539 40% 5,923 4,404 34% 195 239 407 228 327 325 528 581 1,087 1,047 2,023 2,071 2,324 1,406 65% 3,779 1,981 91% 377 490 778 1,021 37 8 46 8 1,984 924 3,047 967 526 277 878 421 1,458 647 125% 2,169 546 297% 1,445 645 124% 2,197 601 266% 13 2 (28) (54) 0.41 0.19 114% 0.62 0.18 248% 32.2% 30.0% 33.6% 29.8% 21.1% 16.6% 21.4% 13.4% 13.3% 7.7% 12.3% 3.7% 28.1% 25.5% 29.7% 23.4% 3,086 2,155 43% 5,231 3,448 52%	YoY
Operating revenue Operating cost Gross Profit Other net income/(loss) Selling&marketing costs Administative expenses Operating income Finance costs Shares of results of jointly controlled entities Pre tax Income Tax Net Income	1H19 9,441 6,159 3,282 115 274 1,184 1,939 244 19 1,714 508 1,206	1H18 6,650 4,269 2,380 212 201 936 1,455 401 9 1,063 352 711
			42% 44% 38% 33% 70% 59% 23% 25%
Profit Attributable to Owners of Parent Minority interests EPS(RMB/share)	1,196 9 0.27	752 (41) 0.22
Cash Dividend
Gross margin	34.8%	35.8%
Operating margin	20.5%	21.9%
Net margin	12.8%	10.7%
EBITDA margin	28.4%	32.20%
EBITDA	2,685	2,144

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Shanshui:Summary of Balance Sheets

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R$ mn
	1H19	2018 2017
Current Assets Inventories Trade and other receivables Bank balances and cash Non-Current Assets Property,Plant&Equipment Total Assets Current Liabilities Borrowings- due within one year Trade and other payables Non-Current Liabilities Borrowings- due after one year Total Liabilities Total Equity Equity Attributable to Parent Book Value(RMB/Share)	6,573 1,951 2,305 1,356 20,252 18,073 26,825 11,785 4,093 3,740 4,267 3,459 16,051 10,774 10,717 2.5	5,858 4,337 1,459 1,507 2,127 1,806 1,304 308 20,215 20,753 18,131 19,012 26,073 25,090 13,228 19,745 5,919 12,505 3,240 3,226 3,258 1,328 2,501 801 16,486 21,072 9,586 4,018 9,522 3,915 2.2 1.2
ROE	34.5%	32.7% 17.1%
ROA	10.1%	8.6% 2.4%
Net Gearing Ratio	55.3%	67.8% 330.4%
Net Debt	5,929	6,452 12,935

Note: Net gearing = Net debt / (total shareholders’ equity – minority interests)

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Shanshui:Summary of Cash Flow

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R$ mn
	1H19	2018 2017
Net Income Depr&Amort Changes of non-cash WC Other Ope. CF Items Operating Cash Flow CAPEX Other Inv. CF Items Investing Cash Flow Changes in Debt/Borrowings Issuance of Common Stock Dividends Paid Other Fin. CF Items(1) Financing Cash Flow Effect of FX Net Changes in Cash Free Cash Flow	1,196 721 (401) 126 1,642 (682) (76) (758) (819) - - (11) (830) (2) 54 960	2,197 601 1,395 1,442 (1,350) (133) (25) 1,334 2,216 3,243 (713) (463) (136) (115) (849) (577) (1,639) (1,317) 339 - - - 917 63 (384) (1,253) 13 (3) 983 35 1,503 2,781

Note1: 2018 Mainly increase of Proceed from bills discounted.

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CSR Achievement

49

Awards: ACC

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Taiwan Corporate Sustainability Awards: 2018 Top 50

5 years listed in

“Taiwan Corporate Governance 100 Index” and “Taiwan High Salary 100 Index”

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Included as a member of the FTSE4Good TIP Taiwan Index by FTSE Russel

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Ministry of Economics Affairs:

6 times award winner of Excellent Company in GHG Reduction

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Asia Responsible Entrepreneurship Awards: Winner of Green Leadership

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Carbon Disclosure Project: 2018 B List

by TWSE

50

Sustainable Green Cycling

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Local Communication

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Mining Area Safety

• Conducting “mining area safety” hearing in Fushi village.

• Create LINE group talk for instant message and communicating.

• Feelingless explosion ： Vibration value under 1.5mm/s.

• Water draining and flood detention.

• • Slope stability enhancement.

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Mining Mountain Greenery

• Mimic natural eco vegetation.

• 23.7 thousand tons of CO2 reduction.

• 25% waste heat power used in the plant.

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Community Caring

• 25% aboriginal hiring in Hualien plant.

• • Electric bill subsidy and property repair.

• Promoting tribe education.

51

CSR: AC(China)

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Awards/Recognition

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• Jiangxi Yadong and Huanggang Yadong awarded the third prize of Green Mines Techniques by Green Mine Industry Alliance

• Jiangxi Yadong awarded the name Remarkable Eco-friendly Cement Corporation by China Cement Association

• AC(China) assessed by China Building Materials Federation to be the Demonstration Company of Energy conservation and Emission Reduction

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Low-carbon Green Intelligent Manufacturing

• Greatly reduce the use of ammonia water and NO x by applying the denitrification

• techniques of low-nitrogen combustion.

• Reduced the amount of clinker used and saved electricity, equivalent to decrease of 0.21mt on CO emission in 2018. 2

• 29.6% waste heat power used in the plant.

• Emissions of pollutants all above the .

• national requirements

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Sustainable Mines

Completed the experimental scheme for green mines in 2018.

Circular Economy

Disposed 12 thousand tons of wastes in 2018 and strictly follow classification, recycling, and reuse . Actively engage in waste co-processing.

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Social Care

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Donate cement to the neighboring communities, help the disadvantaged , and actively participate in charity activities.

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Capacity in Jiangxi, China

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Capacity in Hualien, Taiwan Capacity in Jiangxi, China

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54

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Thank you

ir@acc.com.tw http:// www.acc.com.tw

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Q&A: Mining Concerns

ACC Eco-friendly Achievements

Download: ACC Financials

55