CHP — Interim / Quarterly Report 2018

May 16, 2018

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2018 1Q Results

2018.05.16

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

 Pulp

 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

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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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2018 1Q Financial Results

Amount % Amount %	%	Amount %
Net Sales 5,751,826 100.0 6,155,746 100.0	-6.6	5,549,218 100.0
COGS 5,301,119 92.2 5,469,759 88.9	-3.1	4,972,345 89.6
Changes in Biological Assets -4,249 - -3,693 -	-	-1,498 -
Gross Profit 446,458 7.8 682,294 11.1	-34.6	575,375 10.4
Operating Profit 56,364 1.0 267,973 4.4	-79.0	213,846 3.9
Other Income/Expense 50,021 0.9 13,914 0.2	259.5	-31,678 -0.6
Profit Before Tax 106,385 1.8 281,887 4.6	-62.3	182,168 3.3
Profit After Tax 75,956 1.3 183,167 3.0	-58.5	150,785 2.7
Profit Attributable to Owners 45,072 0.8 149,819 2.4	-69.9	135,103 2.4

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2017 Non-Operating Income and Expenses

Unit : NT Thousands	2018 1Q	2017 4Q	2017 1Q
Finance costs	- 14,249	- 9,939	- 14,136
Foreign exchange
gain(losses) and Gain (loss) on financial instruments at	43,104	11,340	- 29,035
FVTPL
Share of profit of associates	9,101	- 7,570	2,010
Other incomes	12,065	20,083	9,483
Total	50,021	13,914	- 31,678

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Quarterly Performance

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

1Q 18 Recap

The 1Q18 consolidated revenue was NTD $5.75 billion. Due to the Chinese New Year and 228 holidays that shorten working days, the consolidated revenue declined 6.6% Q/Q. Attributable to the raising pulp prices this year than the same period of last year, the 1Q18 consolidated revenue growth 3.7% Y/Y.

• The cost of goods sold increased 7% Y/Y due to : price rising on global pulp prices, coals and oil prices, increase imported pulp ratio and maintenance costs after the Hualien earthquake. Therefore, the 1Q18 Gross Margin rate and Operating Profit rate were 7.8% and 1.0% which lower 2.6 ppt. and 2.9ppt. Y/Y respectively.

• Attributable to the foreign exchange gains and the positive interests of related companies, net non-operating income in 1Q18 was NT$ 50 million.

• The net profit after tax was NT$76 million, and attributable to owner was NT$45 million in 1Q18. The 1Q18 EPS was NTD$0.04.

2018 Outlook

Some of the plants in Taiwan will perform annual maintenance in 2Q18. The global environmental regulations tend to raise the standard and resulted to the increasing global raw material prices. CHP continuous focus on the changes of raw material prices and flexible reconcile sales and production, implement managerial strategy, enhance product quality and strengthen competitiveness to maximize the overall operation performance.

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Thank you