CHP — Interim / Quarterly Report 2017

Nov 15, 2017

==> picture [585 x 93] intentionally omitted <==

2017 3Q Financial Results

2017.11.15

Disclaimer

This presentation is prepared according to the reviewed financial statements by CPA and the financial numbers hereby are based on IFRS, please refer to the published financial statements for full content.

The presentation may contain forward-looking information and may differ materially from the actual results. Chung Hwa Pulp Corp (CHP) does not warranty as to the accuracy or completeness of such information and nor assume any undertaking further information becomes available or in light of changing circumstances. You shall not place undue reliance on any forwardlooking information.

The presentation and its contents may not be reproduced to a third party without the prior written consent of CHP.

==> picture [225 x 38] intentionally omitted <==

2

Com an Profile p y

 Major Products

 Chung Hwa Pulp Corporation

• Stock Code：1905.TW

 Pulp

 Capital：NTD$ 11,028,353,160  Date of Establishment：1968/7/5  Consolidated business with Paper and Board business unit of YFY in Oct 2012

• Paperboard

• Uncoated Board, Core Board

• Chip Board

 Cultural Paper  Woodfree Paper  Coated Paper Pulp  Specialty Paper  Glassine Paper  Masking Paper Cultural Paper  Glass Interleaving Paper, Greaseproof card  Fertilizer  Chemicals Masking Paper Glassine Paper

==> picture [225 x 38] intentionally omitted <==

3

Holdin Structures g

==> picture [472 x 305] intentionally omitted <==

----- Start of picture text -----

Chung Hwa Pulp
Corp.
1905.TW
100% 100%
CHP International
Hwa Fong
Investment Corp.
(BVI) Corp.
60% 20.24%
100%
Guangdong Zhaoqing
66.27% Guang Hwa
Dingfung Pulp & Dingfung
Fertilizer Corp.
Paper Co., Ltd. Forestry Co., Ltd.
----- End of picture text -----

==> picture [225 x 38] intentionally omitted <==

4

O eration Locations p

Taipei Branch (Sales office) Taichung Branch (Sales Position) Hualien Plant Guangdong Dingfung Pulp & Tainun Branch (Pulp and Paper Plant) Paper /Forestry (Sales Position) (Wood, Pulp and Paper Integrated Plant) Taitung Plant Jiutang Plant (Eco Paper Plant) (Specialty Paper Plant)

Leading Specialty Paper Plant Producing Eco Pulp and Paper in Taiwan. by using recycled paper. - Dingfung Pulp &Paper /Forestry Hualien Plant (Pulp Paper Plant) (Wood, Pulp and Paper Integrated Leading Pulp plant in Taiwan. Plant) Leading Pulp -Paper integrated The Indicators FSC Forest Farm in plant in Taiwan. Huanan area of China.

==> picture [225 x 38] intentionally omitted <==

5

2017 3Q Financial Results

Amount % Amount %	%	Amount %
Net Sales 5,679,183 100.0 5,324,001 100.0	6.7	5,348,744 100.0
COGS 5,155,301 90.8 4,790,859 90.0	7.6	4,936,911 92.3
Changes in Biological Assets -1,248 - -1,672 -	-	-2,170 -
Gross Profit 522,634 9.2 531,470 10.0	- 1.7	409,663 7.7
Operating Profit 140,556 2.5 169,680 3.2	- 17.2	46,534 0.9
Other Income/Expense 81,902 1.4 28,695 0.5	185.4	-7,188 -0.1
Profit Before Tax 222,458 3.9 198,375 3.7	12.1	39,346 0.7
Profit After Tax 205,253 3.6 187,010 3.5	9.8	39,337 0.7
Profit Attributable to Owners 171,979 3.0 161,681 3.0	6.4	51,551 1.0

==> picture [225 x 38] intentionally omitted <==

6

2017 3 Non-O eratin Income and Ex enses Q p g p

Unit : NT Thousands	2017 3Q	2017 2Q	2016 3Q
Finance costs	- 17,878	- 11,820	- 8,102
Foreign exchange gain(losses)	25,052	28,439	- 35,586
Share of profit of associates	23,436	3,030	8,118
Dividend income	32,609	-	30,393
Other incomes	18,683	9,046	- 2,011
Total	81,902	28,695	- 7,188

==> picture [225 x 38] intentionally omitted <==

7

2017 3QYTD Financial Results

Unit : NT Thousands 2017 3QYTD 2016 3QYTD YoY Amount % Amount % % Net Sales 16,552,402 100.0 16,193,760 100.0 2.2 COGS 14,918,505 90.1 14,859,738 91.8 0.4 Changes in Biological Assets - 4,418 - - 9,088 - - Gross Profit 1,629,479 9.9 1,324,934 8.2 23.0 Operating Profit 524,082 3.1 237,802 1.5 120.4 Other Income/Expense 78,919 0.5 - 32,302 - 0.2 - Profit Before Tax 603,001 3.6 205,500 1.3 193.4 Profit After Tax 543,048 3.3 198,591 1.2 173.5 Profit Attributable to Owners 468,763 2.8 236,346 1.5 98.3 After Tax EPS 0.43 0.21	Unit : NT Thousands 2017 3QYTD 2016 3QYTD YoY Amount % Amount % % Net Sales 16,552,402 100.0 16,193,760 100.0 2.2 COGS 14,918,505 90.1 14,859,738 91.8 0.4 Changes in Biological Assets - 4,418 - - 9,088 - - Gross Profit 1,629,479 9.9 1,324,934 8.2 23.0 Operating Profit 524,082 3.1 237,802 1.5 120.4 Other Income/Expense 78,919 0.5 - 32,302 - 0.2 - Profit Before Tax 603,001 3.6 205,500 1.3 193.4 Profit After Tax 543,048 3.3 198,591 1.2 173.5 Profit Attributable to Owners 468,763 2.8 236,346 1.5 98.3 After Tax EPS 0.43 0.21
	2.2
COGS 14,918,505 90.1 14,859,738 91.8	0.4
Changes in Biological Assets - 4,418 - - 9,088 -	-
Gross Profit 1,629,479 9.9 1,324,934 8.2	23.0
Operating Profit 524,082 3.1 237,802 1.5	120.4
Other Income/Expense 78,919 0.5 - 32,302 - 0.2	-
Profit Before Tax 603,001 3.6 205,500 1.3	193.4
Profit After Tax 543,048 3.3 198,591 1.2	173.5
Profit Attributable to Owners 468,763 2.8 236,346 1.5	98.3
After Tax EPS 0.43 0.21

==> picture [225 x 38] intentionally omitted <==

8

Quarterly Performance

==> picture [519 x 388] intentionally omitted <==

----- Start of picture text -----

15.0% 0.30
11.0% 10.9% 10.9%
10.5% $0.23 9.5% [10.4% 10.0% ]
10.0% 9.0% 9.20% 0.20
7.7%
$0.17 7.9%
$0.15 [$0.16 ]
$0.13 $0.13 $0.14 $0.12
$0.10
5.0% 0.10
$0.07
3.9%
3.8% [3.4% 4.0% ] 3.6% $0.04 3.2%
2.5% 2.50%
2.2%
1.4%
0.0% 0.9% 0.00
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
-5.0% -0.10
EPS
Gross Profit
Operating Profit
-10.0% -0.20
----- End of picture text -----

==> picture [225 x 38] intentionally omitted <==

9

CHP Reca p

3Q 2017

The 3Q17 consolidated revenue was NTD $5.68 billion. Thanks to the rise of global pulp prices and solid demand in Paper market, the 3Q17 revenue growths 6.7% Q/Q and 6.2% Y/Y. It reached second highest historical quarterly revenue in 3Q17.

•  The Gross Margin rate and Operating Profit rate were 9.2% and 2.5%, growths of 1.5 ppt. and 1.6ppt. Y/Y respectively.

The appreciation of CNY EX rate and soft appreciation on NTD resulted foreign exchange gained NTD$25 million. On the other hand, the dividend income contributed NTD$32.6 million and resulted non-operating income growth Y/Y. The net profit attributable to owner of 3Q17 was NT$172 million, growth 6.4% Q/Q and 233.6% Y/Y. The 3Q17 EPS was NTD$0.16. 3Q17 YTD

• The 3QYTD 2017 consolidated revenue was NTD $16.55 billion, driven by the rising global pulp prices, the consolidated revenue growth 2.2% Y/Y . The Gross Profit rate and Operating Profit rate were 9.9% and 3.1% respectively, which growth 1.7 ppt. and 1.6ppt. Y/Y respectively. The 3Q17 YTD net profit attributable to owner was NTD$469 million with a 98.3% growth Y/Y and EPS of 3Q17 YTD recorded NT$0.43, doubled Y/Y.

Outlook

• The 4[th] Quarter is traditional busy season and the supply of pulp market remain tight. We expect the global pulp prices remain stable under the situation. CHP is prudent on the market outlook and continuously focus on new product development ,strengthen customer services to enhance the company's competitiveness.

==> picture [248 x 26] intentionally omitted <==

10

Thank you