CHP — Interim / Quarterly Report 2017

Mar 28, 2018

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2017 4Q Financial Results

2018.3.28

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

• Pulp

 Capital：NTD$ 11,028 million  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

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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 4Q Financial Results

Amount % Amount %	%	Amount %
Net Sales 6,155,746 100.0 5,679,183 100.0	8.4	5,807,776 100.0
COGS 5,469,759 88.9 5,155,301 90.8	6.1	5,252,444 92.3
Changes in Biological Assets -3,693 - -1,248 -	-	-4,207 -
Gross Profit 682,294 11.1 522,634 9.2	30.5	551,125 7.7
Operating Profit 267,973 4.4 140,556 2.5	90.7	147,306 0.9
Other Income/Expense 13,914 0.2 81,902 1.4	-83.0	-19,686 -0.1
Profit Before Tax 281,887 4.6 222,458 3.9	26.7	127,620 0.7
Profit After Tax 183,167 3.0 205,253 3.6	-10.8	151,127 0.7
Profit Attributable to Owners 149,819 2.4 171,979 3.0	-12.9	154,768 1.0

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2017 Financial Results

2017 Financial Results	2017 Financial Results
Unit : NT Thousands 2017 2016 YoY
Amount % Amount % %
Net Sales 22,708,148 100.0 22,001,536 100.0 3.2
COGS 20,388,264 89.8 20,112,182 91.4	1.4
Changes in Biological Assets - 8,111 - - 13,295 -	-
Gross Profit 2,311,773 10.2 1,876,059 8.5	23.2
Operating Profit 792,055 3.5 385,108 1.8	105.7
Other Income/Expense 92,833 0.4 - 51,988 - 0.2	-
Profit Before Tax 884,888 3.9 333,120 1.5	165.6
Profit After Tax 726,215 3.2 349,718 1.6	107.7
Profit Attributable to Owners 618,582 2.7 391,114 1.8	58.2
After Tax EPS ( NTD) 0.56 0.35

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2017 Non-Operating Income and Expenses

Unit : NT Thousands	2016		2017
Finance costs	-	53,773	-40,430
Foreign exchange gain(losses)		35,796	-116,085
Share of profit of associates		20,906		44,714
Dividend income		32,609		30,393
Other incomes		57,295		29,420
Total		92,833	-	51,988

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Quarterly Performance

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15.0% 0.30
11.1%
10.4%
9.5% 10.0% 9.2%
9.0%
10.0% 0.20
7.7%
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
3.2%
2.5%
2.5%
0.0% 2.2% 1.4% 0.00
0.9%
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
-5.0% (0.10)
EPS
Gross Profit
Operating Profit
-10.0% (0.20)
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CHP Reca p

4Q 2017

The 4Q17 consolidated revenue was NTD $6.16 billion. Thanks to the rise of global pulp prices and solid seasonal demand in Paper market, the 4Q17 revenue growths 8.4% Q/Q and 6.0% Y/Y. It was recorded the highest historical quarterly revenue in 4Q17.

 The Gross Margin rate and Operating Profit rate were 11.1% and 4.4%. Attributable to the top-line expansion and benefit from the vertical integration synergy under the pulp supply shortage due to raising environmental protection standard. The Gross Margin rate and Operating Margin rate growths 3.4 ppt. and 3.5ppt. Y/Y respectively.

The 4Q17 net profit after tax was NTD$183 million, and net profit attributable to owner was NTD$150 million. The 4Q17 EPS was NTD$0.13.

2017

The 2017 consolidated revenue was NTD $22.71 billion, and growth 3.2% Y/Y driven by the rising global pulp prices , recorded CHP historical record high consolidated revenue . The Gross Profit rate and Operating Profit rate were 10.2% and 3.5% respectively, both has a growth 1.7ppt Y/Y. The 2017 net profit after tax was NTD$726 million, and net profit attributable to owner was NTD$619 million with 58.2% growth Y/Y . The 2017 EPS recorded NTD$0.56, growth 60% Y/Y.

Dividend

• The Board approved cash dividend of NTD$ 0.50 per share and the payout ratio reached 90%.

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Thank you