CHP — Interim / Quarterly Report 2017

Aug 16, 2017

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2017 2Q Financial Results

2017.8.16

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.

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Com an Profile p y

 Major Products

 Chung Hwa Pulp Corporation

 Stock Code：1905.TW  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

 Pulp

• 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

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Holdin Structures g

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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.
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O eration Locations p

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Taipei
Taichung Hualien
Tainun
Taitung
Zhaoqing Jiutang
Sales and Administration Office
Manufacturing Sites
Sales Offices
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2017 2Q Financial Results

Amount % Amount %	%	Amount %
Net Sales 5,324,001 100.0 5,549,218 100.0	-4.1	5,578,708 100.0
COGS 4,790,859 90.0 4,972,345 89.6	-3.6	5,135,686 92.1
Changes in Biological Assets -1,672 - -1,498 -	-	140 -
Gross Profit 531,470 10.0 575,375 10.4	-7.6	443,162 7.9
Operating Profit 169,680 3.2 213,846 3.9	-20.7	75,689 1.4
Other Income/Expense 28,695 0.5 -31,678 -0.6	-	10,901 0.2
Profit Before Tax 198,375 3.7 182,168 3.3	8.9	86,590 1.6
Profit Attributable to Owners 161,681 3.0 135,103 2.4	19.7	106,771 1.9

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2017 2 Non-O eratin Income and Ex enses Q p g p

Unit : NT Thousands	2017 2Q	2017 1Q	2016 2Q
Finance costs	- 11,820	- 14,136	- 7,863
Foreign exchange gain(losses)	28,439	- 29,035	- 16,549
Share of profit of associates	3,030	2,010	23,084
Other incomes	9,046	9,483	12,229
Total	28,695	- 31,678	10,901

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2017 H1 Financial Results

Unit : NT Thousands	2017 H1		2016 H1		YoY
	Amount	%	Amount	%	%
Net Sales	10,873,219	100.0	10,845,016	100.0	0.3
COGS	9,763,204	89.8	9,922,827	91.5	-1.6
Changes in Biological Assets	-3,170	-	-6,918	-
Gross Profit	1,106,845	10.2	915,271	8.4	20.9
Operating Profit	383,526	3.5	191,268	1.8	100.5
Other Income/Expense	-2,983	-	- 25,114	- 0.2	-
Profit Before Tax	380,543	3.5	166,154	1.5	129.0
Profit Attributable to Owners	296,784	2.7	184,795	1.7	60.6
After Tax EPS	0.27		0.17

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Quarterly Performance

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15.0% 0.30
11.0% 10.9% 10.9%
10.5% $0.23 9.5% [10.4% 10.0% ]
10.0% 9.0% 0.20
7.7%
$0.17 7.9%
$0.15
$0.13 $0.13 $0.14 $0.12
$0.10
5.0% 0.10
$0.07
3.9%
4.0%
3.8% 3.4% 3.6% $0.04 3.2%
2.5%
2.2%
1.4%
0.0% 0.9% 0.00
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
-5.0% -0.10
EPS
Gross Profit
Operating Profit
-10.0% -0.20
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Dividends in The Last Three Years

Year	EPS	Cash Dividends	Dividend Yield	Payout Ratio
2016	0.35	0.35	3.76%	100.0%
2015	0.66	0.60	6.36%	90.9%
2014	0.02	0.10	1.10%	500.0%

Note：The 2016 Cash dividends will be issued on 2017//08/18.

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CHP Reca p

2Q 2017

The 2Q17 consolidated revenue was NTD $5.32 billion. Due to the routine annual maintenance in Taiwan area that shorten working days, the consolidated revenue declined 4.1% Q/Q and 4.6% Y/Y. The Gross Margin rate and Operating Profit rate were 10.0% and 3.2% , with annual growths of 2.1 ppt. and 1.8ppt. respectively.

The lower fluctuation of USD FX rate and appreciation of CNY EX rate resulted foreign exchange gained NT$28 million, and helped the non-operating income to be improved Y/Y. The net profit of 2Q17 was NT$162 million, growth 19.7% Q/Qand 51.4% Y/Y. 2Q17 EPS was NT$0.15.

H1 2017

The 1H17 consolidated revenue was NTD $10.87 billion, with 0.3% Y/Y growth. The 1H17 Gross Profit rate and Operating Profit rate were 10.2% and 3.5% respectively, with a growth of 1.8 ppt. and 1.7ppt. Y/Y. The net profit after tax of 1H 2017 was NT$297 million, growth 60.6% Y/Y and EPS of 1H17 was NT$0.27. 2017 outlook

• The market demand remain stable under the fluctuated macro environment, CHP remain prudent on the development of the year.

• In marketing strategy, CHP continue to focus on the market development and product R & D of the Specialty paper and strengthen customer service to enlarge the company's overall operational competitiveness.

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Thank you