CHP — Interim / Quarterly Report 2019

Aug 16, 2019

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2Q19 Earnings Results

2019.08.16

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

 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
Hwa Fong
International
Investment
Corp.
(BVI) Corp.
60%
20.24% 100%
100%
Guangdong Zhaoqing
Syntax
Dingfung Pulp 66.27% Dingfung
Communication Genovella
& Paper Co., Forestry Co.,
(H.K.) Ltd. Renewables Inc.
Ltd. Ltd.
100%
Shenzhen
Jinglun Paper
Co., Ltd.
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O eratin Locations p g

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Shanghai
Taipei
Taichung Hualien
Tainun
Taitung
Zhaoqing Shenzhen Jiutang
Hongkong
Taipei(Sales, Accounting and
Finance Office)
Manufacturing Sites(Hualien,
Jiutang, Taitung and Zhaoqing)
Sales Offices(Taichung, Tainun,
Shenzhen, Shanghai and
Hongkong)
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2019 2Q Financial Results

2019 2Q Financial Results	2019 2Q Financial Results
In NT Thousands 2019 2Q 2018 2Q YoY Amount % Amount % % Net Sales 5,359,818 100.0 6,260,080 100.0 - 14.4 COGS 4,892,906 91.3 5,624,882 89.9 - 13.0 Changes in Biological Assets - 1,792 - - 2,282 - Gross Profit 465,120 8.7 632,916 10.1 - 26.5 Operating Profit 53,284 1.0 220,966 3.5 - 75.9 Other Income/Expense - 47,414 - 0.9 - 29,133 - 0.5 62.8 Profit Before Tax 5,870 0.1 191,833 3.0 - 96.9 Profit After Tax - 5,322 - 0.1 160,443 2.6 - Profit Attributable to Owners - 3,298 - 0.1 130,980 2.1 - After Tax EPS - 0.003 0.12
Net Sales 5,359,818 100.0 6,260,080 100.0 - 14.4
COGS 4,892,906 91.3 5,624,882 89.9	- 13.0
Changes in Biological Assets - 1,792 - - 2,282 -
Gross Profit 465,120 8.7 632,916 10.1	- 26.5
Operating Profit 53,284 1.0 220,966 3.5	- 75.9
Other Income/Expense - 47,414 - 0.9 - 29,133 - 0.5	62.8
Profit Before Tax 5,870 0.1 191,833 3.0	- 96.9
Profit After Tax - 5,322 - 0.1 160,443 2.6	-
Profit Attributable to Owners - 3,298 - 0.1 130,980 2.1	-
After Tax EPS - 0.003 0.12

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2019 2 Non-O eratin Incomes and Ex enses Q p g p

Unit : NT Thousands	2019 2Q	2018 2Q
Finance costs	- 13,229	- 12,987
Foreign exchange gain(losses) and Gain (loss) on financial instruments at FVTPL	- 18,829	- 41,394
Share of profit of associates	- 50,912	14,666
Dividend incomes	1,584	-
Other incomes	33,972	10,582
Total	- 47,414	- 29,133

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2019 1H Financial Results

In NT Thousands 2019 1H 2018 1H YoY Amount % Amount % % Net Sales 10,742,466 100.0 12,029,516 100.0 - 10.7 COGS 9,835,271 91.6 10,924,695 90.8 - 10.0 Changes in Biological Assets - 3,153 - - 6,531 -0.1 - Gross Profit 904,042 8.4 1,098,290 9.1 - 17.7 Operating Profit 101,420 0.9 285,653 2.4 - 64.5 Other Income/Expense - 6,963 - 0.1 20,835 0.1 - Profit Before Tax 94,457 0.9 306,488 2.5 - 69.2 Profit After Tax 103,424 1.0 242,960 2.0 - 57.4 Profit Attributable to Owners 81,336 0.8 176,052 1.5 - 53.8 After Tax EPS 0.07 0.16	In NT Thousands 2019 1H 2018 1H YoY Amount % Amount % % Net Sales 10,742,466 100.0 12,029,516 100.0 - 10.7 COGS 9,835,271 91.6 10,924,695 90.8 - 10.0 Changes in Biological Assets - 3,153 - - 6,531 -0.1 - Gross Profit 904,042 8.4 1,098,290 9.1 - 17.7 Operating Profit 101,420 0.9 285,653 2.4 - 64.5 Other Income/Expense - 6,963 - 0.1 20,835 0.1 - Profit Before Tax 94,457 0.9 306,488 2.5 - 69.2 Profit After Tax 103,424 1.0 242,960 2.0 - 57.4 Profit Attributable to Owners 81,336 0.8 176,052 1.5 - 53.8 After Tax EPS 0.07 0.16
	- 10.7
COGS 9,835,271 91.6 10,924,695 90.8	- 10.0
Changes in Biological Assets - 3,153 - - 6,531 -0.1	-
Gross Profit 904,042 8.4 1,098,290 9.1	- 17.7
Operating Profit 101,420 0.9 285,653 2.4	- 64.5
Other Income/Expense - 6,963 - 0.1 20,835 0.1	-
Profit Before Tax 94,457 0.9 306,488 2.5	- 69.2
Profit After Tax 103,424 1.0 242,960 2.0	- 57.4
Profit Attributable to Owners 81,336 0.8 176,052 1.5	- 53.8
After Tax EPS 0.07 0.16

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Summar y

2Q 19

The 2Q19 consolidated revenue was NTD $5.36 billion. Due to the pulp prices falls and market demand tends to be conservative, the 2Q19 CHP consolidated revenue declined 14.4% Y/Y. The Gross Profit Margin and Operating Profit Margin were 8.7% and 1.0% declined 1.4 and 2.5 ppt. Y/Y respectively.

The non-operating incomes declined due to the losses from the share profits of associates and the F/X losses due to the CNY/TWD exchange rate fluctuation resulted from the international trade disputes. The 2Q19 non-operating lose was NTD 47.4 million, and the 2Q19 net loss attributable to owners of the Company was NT$3.3 million and recorded NT$0.003 EPS.

1H 19

• The 1H19 consolidated revenue was NTD $10.74 billion, with 10.7% Y/Y declined. The 1H19 Gross Profit and Operating Profit were 8.4% and 0.9% respectively, with a decline of 0.7 and 1.5 ppt. Y/Y. The 1H19 net profit after tax to the shareholders was NT$81 million and recorded EPS with NT$0.07.

2019 Outlook

Due to the global economic slowdown and the international trade disputes between the US -China and Japan-Korea, the market tend to have limited visibility on customer orders and the Company remains conservative on outlook of the year. In order to comply with the 2019 Plastic Restriction Act, the company continuous to R & D the specialty features with environmental friendl and food-standard roducts to meet the market demand. y p

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Thank you