CHP — Interim / Quarterly Report 2017

May 15, 2017

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2017 1Q Financial Results

2017/5/15

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.

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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 1Q Financial Results

In NT Thousands	2017 1Q		2016 4Q		QoQ	2016 1Q		YoY
	Amount	%	Amount	%	%	Amount	%	%
Net Sales	5,549,218	100.0	5,807,776	100.0	-4.5	5,266,308	100.0	5.4
COGS	4,972,345	89.6	5,252,444	90.5	-5.3	4,787,141	91.0	3.9
Changes in Biological Assets	-1,498	-	-4,207	-	-	-7,058	-	-
Gross Profit	575,375	10.3	551,125	9.5	4.4	472,109	9.0	21.9
Operating Profit	213,846	3.9	147,306	2.5	45.2	115,579	2.2	85
Other Income/Expense	-31,678	-0.6	-19,686	-0.3	60.9	-36,015	-0.7	-12.0
Profit Before Tax	182,168	3.3	127,620	2.2	42.7	79,564	1.5	129.0
Profit Attributable to Owners	135,103	2.4	154,768	2.7	-12.7	78,024	1.5	73.2
After Tax EPS	0.12		0.14			0.07

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Non-Operating Income and Expenses

Unit : NT Thousands	2017 1Q	2016 4Q	2016 1Q
Finance costs	- 14,136	- 14,245	- 10,220
Foreign exchange gain(losses)	- 29,035	- 27,901	- 36,049
Share of profit of associates	2,010	12,657	855
Dividend income	9,483	9,803	9,399
Total	- 31,678	- 19,686	- 36,015

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Quarterly Performance

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15.0% 0.30
10.90% 10.90%
11.0% 10.50% $0.23
10.30%
9.9%
9.00% 9.50%
10.0% 0.20
$0.17 $0.17 7.90% 7.70%
5.8%
$0.13 $0.13 $0.14 $0.12
5.2% 5.1%
$0.10
5.0% 0.10
$0.07
$0.04
3.90%
3.8% 3.4% [4.0% ] 3.60%
3.2%
2.50%
2.20%
1.4%
0.0% 0.90% 0.00
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17
-$0.03 -$0.03
-1.5% -2.5% -1.9%
-5.0% -0.10
-$0.09
EPS
Groff Profit
Operating Profit
-10.0% -0.20
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CHP Reca p

1Q 2017

The 1Q17 consolidated revenue was NTD $5.55 billion. Due to the Chinese New Year and 228 holidays that shorten working days in the first quarter, the consolidated revenue declined 4.5% Q/Q. Attributable to the raise of global pulp prices and paper prices, the 1Q17 consolidated revenue growth 5.4% Y/Y.

The margin of CHP pulp went profitable due to the raise of global pulp prices, and the operating expenses were well controlled, resulted the gross margin and operating margin amounts growth 4.4% and 45.2% Q/Q respectively, and growth 21.9% and 85.0% Y/Y respectively. The 1Q17 gross profit margin rate and operating profit rates were 10.3% and 3.9% ,respectively.

As the result from the rapid appreciation of NTD, the Foreign exchange loss was NTD$29 million. The 4Q16 net profit attributable to parent was NTD 135 million with a growth of 73% Y/Y ,and CHP reported EPS NTD $0.12 in 1Q17.

2017 outlook

During 2Q17, some factory sites in Taiwan will perform annual maintenance and machinery upgrade, hence the capacity will be effected. As the paper product market demand remain stable, CHP will try our best to accommodate the demand from the customers. In 2017, CHP will continuously develop Specialty paper product and its market. Concurrently, CHP will also flexible adjust the product mix according to the market situation. Last but not least, CHP will invest in Pulp recipe R&D to improve the competitiveness of the company.

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Thank you