CHP — Interim / Quarterly Report 2018

Aug 14, 2018

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2018 2Q Results

2018.08.14

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 Million  Date of Establishment：1968/7/5  Consolidated business with Paper and Board business unit of YFY in Oct 2012

 Pulp

 Cultural Paper & Paperboard Date of Establishment：1968/7/5  Cultural Paper Consolidated business with Paper and  Woodfree Paper Board business unit of YFY in Oct 2012  Coated Paper  Copy paper  Specialty Paper  Glassine Paper Pulp  Masking Paper  Fertilizer  Chemicals Cultural Paper Masking Paper Glassine Paper

Pulp

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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 eratin Locations p g

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Taipei
Taichung Hualien
Tainun
Taitung
Zhaoqing Jiutang
Sales and Administration Office
Manufacturing Sites
Sales Offices
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2018 2Q Financial Results

In NT Thousands 2018 2Q 2018 1Q QoQ 2017 2Q YoY	In NT Thousands 2018 2Q 2018 1Q QoQ 2017 2Q YoY	In NT Thousands 2018 2Q 2018 1Q QoQ 2017 2Q YoY	In NT Thousands 2018 2Q 2018 1Q QoQ 2017 2Q YoY
Amount % Amount % % Amount % %
Net Sales 6,201,622 100.0 5,751,826 100.0	7.8	5,324,001 100.0 16.5
COGS 5,590,616 90.2 5,301,119 92.2	5.5	4,790,859 90.0	16.7
Changes in Biological Assets - 2,282 - - 4,249 -	-	- 1,672 -	-
Gross Profit 608,724 9.8 446,458 7.8	36.3	531,470 10.0	14.5
Operating Profit 203,659 3.3 56,364 1.0	261.3	169,680 3.2	20.0
Other Income/Expense - 29,480 - 0.5 50,021 0.9	-	28,695 0.5	-
Profit Before Tax 174,179 2.8 106,385 1.8	63.7	198,375 3.7	- 12.2
Profit After Tax 146,796 2.4 75,956 1.3	93.3	187,010 3.5	- 21.5
Profit Attributable to Owners 130,980 2.1 45,072 0.8	190.6	161,681 3.0	- 19.0
After Tax EPS 0.12 0.04 0.15

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2018 1H Financial Results

In NT Thousands 2018 1H 2017 1H YoY Amount % Amount % % Net Sales 11,953,448 100.0 10,873,219 100.0 9.9 COGS 10,891,735 91.1 9,763,204 89.8 11.6 Changes in Biological Assets - 6,531 - - 3,170 - - Gross Profit 1,055,182 8.8 1,106,845 10.2 - 4.7 Operating Profit 260,023 2.2 383,526 3.5 - 32.2 Other Income/Expense 20,541 0.2 - 2,983 - - Profit Before Tax 280,564 2.3 380,543 3.5 - 26.3 Profit After Tax 222,752 1.9 337,795 3.1 - 34.1 Profit Attributable to Owners 176,052 1.5 296,784 2.7 - 40.7 After Tax EPS 0.16 0.27	In NT Thousands 2018 1H 2017 1H YoY Amount % Amount % % Net Sales 11,953,448 100.0 10,873,219 100.0 9.9 COGS 10,891,735 91.1 9,763,204 89.8 11.6 Changes in Biological Assets - 6,531 - - 3,170 - - Gross Profit 1,055,182 8.8 1,106,845 10.2 - 4.7 Operating Profit 260,023 2.2 383,526 3.5 - 32.2 Other Income/Expense 20,541 0.2 - 2,983 - - Profit Before Tax 280,564 2.3 380,543 3.5 - 26.3 Profit After Tax 222,752 1.9 337,795 3.1 - 34.1 Profit Attributable to Owners 176,052 1.5 296,784 2.7 - 40.7 After Tax EPS 0.16 0.27
	9.9
COGS 10,891,735 91.1 9,763,204 89.8	11.6
Changes in Biological Assets - 6,531 - - 3,170 -	-
Gross Profit 1,055,182 8.8 1,106,845 10.2	- 4.7
Operating Profit 260,023 2.2 383,526 3.5	- 32.2
Other Income/Expense 20,541 0.2 - 2,983 -	-
Profit Before Tax 280,564 2.3 380,543 3.5	- 26.3
Profit After Tax 222,752 1.9 337,795 3.1	- 34.1
Profit Attributable to Owners 176,052 1.5 296,784 2.7	- 40.7
After Tax EPS 0.16 0.27

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2018 1H Non-Operating Incomes and Expenses

Unit : NT Thousands	2018 1H	2017 1H
Finance costs	- 27,609	- 25,956
Foreign exchange gain(losses) and Gain (loss) on financial instruments at FVTPL	1,718		- 596
Share of profit of associates	23,767		5,040
Other incomes	22,665	18,529
Total	20,541	-	2,983

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Quarterly Performance

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15.0% 0.30 NTD$
11.1%
9.5% [10.4% ] 10.0% 9.2% 9.8%
9.0%
10.0% 0.20
7.8%
7.9% [7.7% ]
$0.15 $0.16
$0.14 $0.12 $0.13 $0.12
$0.10
5.0% 0.10
$0.07
4.4% $0.04
$0.04 4.0%
3.2% 3.2%
2.5%
2.5%
0.0% 2.2% 1.4% 0.00
3.9%
0.9%
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18
-5.0% -0.10
EPS
Gross Profit
Operating Profit
-10.0% -0.20
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Summar y

2Q 18

The 2Q18 consolidated revenue was NTD $6.20 billion. Due to the global pulp price remained in the high level and the paper prices raised sequentially, the 2Q18 consolidated revenue increased 7.8% Q/Q and increased 16.5% Y/Y. The Gross Profit and Operating Profit were 9.8% and 3.3% , increased 2.0 and 2.3 ppt. Q/Q respectively, which was equivalent to the profit ratios with 2Q17. The Net profit after tax was NT$ 147 million, and attributable to owner was NT$131 million in 2Q18. The 2Q18 EPS was NTD$0.12.

2018 1H

• The 1H18 consolidated revenue was NTD $11.95 billion, with 10% Y/Y growth. The 1H18 Gross Profit and Operating Profit were 8.8% and 2.2% respectively, with a decline of 1.4 and 1.3 ppt. Y/Y. The 1H18 net profit after tax was NT$223 million and recorded EPS with NT$0.16.

2018 Outlook

Some of the equipments in Taiwan will perform annual maintenance in 3Q to meet seasonal demand at the end of the year. Although the global pulp prices remain stable and there are sustainable demand in the pulp and paper market, the impact from the international trade war are unclear, the international environmental protection is becoming more rigorous and the price of raw materials still has the possibility of rising. CHP pays attention on the changes in the market and flexibly reconcile sales and production, enhance product quality and strengthen competitiveness to maximize the overall operation performance.

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Thank you