CHP — Interim / Quarterly Report 2019

May 16, 2019

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1Q19 Earnings Results

2019.05.16

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

 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
Systax
Dingfung Pulp 66.27% Dingfung
Communication Genovella
& Paper Co., Forestry Co.,
(H.K.) Ltd. Renewables Inc.
Ltd. Ltd.
100%
Shenzhen
Systax 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 1Q Financial Results

In NT Thousands 2019 1Q 2018 4Q QoQ 2018 1Q YoY	In NT Thousands 2019 1Q 2018 4Q QoQ 2018 1Q YoY	In NT Thousands 2019 1Q 2018 4Q QoQ 2018 1Q YoY	In NT Thousands 2019 1Q 2018 4Q QoQ 2018 1Q YoY
Amount % Amount % % Amount % %
Net Sales 5,382,648 100.0 5,991,154 100.0 -10.2 5,769,436 100.0 -6.7
COGS 4,942,365 91.8 5,288,106 88.3	-6.5	5,299,813 91.9	-6.7
Changes in Biological Assets - 1,361 - - 2,045 -	-	- 4,249 -
Gross Profit 438,922 8.2 701,003 11.7	-37.4	465,374 8.1	-5.7
Operating Profit 48,136 0.9 148,330 2.5	-67.5	64,687 1.1	-25.6
Other Income/Expense 40,451 0.8 38,848 0.6	4.1	49,968 0.9	-19.0
Profit Before Tax 88,587 1.6 187,178 3.1	-52.7	114,655 2.0	-22.7
Profit After Tax 108,746 2.0 137,850 2.3	-21.1	82,517 1.4	31.8
Profit Attributable to Owners 84,634 1.6 94,467 1.6	-10.4	45,072 0.8	87.8
After Tax EPS 0.08 0.08 0.04

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2019 1 Non-O eratin Incomes and Ex enses Q p g p

Unit : NT Thousands	2019 1Q	2018 4Q	2018 1Q
Finance costs	- 16,439	- 12,030	- 14,172
Foreign exchange gain(losses)
and Gain (loss) on financial	35,261	12,426	43,076
instruments at FVTPL
Share of profit of associates	10,875	17,287	9,101
Other incomes	10,754	21,165	11,963
Total	40,451	38,848	49,968

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Summar y

1Q 19

The 1Q19 consolidated revenue was NTD $5.38 billion. Due to the international trade conflicts, the market demand tends to be conservative. Therefore, the 1Q19 CHP consolidated revenue declined 6.7% Y/Y. The Gross Profit Margin and Operating Profit Margin were 8.2% and 0.9% which lower 0.1 and 0.2 ppt. Y/Y respectively. Thanks to tax expenses reduced during the 1[st] quarter, the net profit attributable to owner as NT$85 million in 1Q19 . The 1Q19 EPS reported as NTD$0.08, doubled Y/Y.

2019 Outlook

• Due to some of the equipments in Taiwan will perform annual maintenance in 2Q and conservative customer orders under international trade conflicts, CHP remain prudent outlook of the year.

• Viewing from the volatile situation of global financial market, the company pay attention to the changes of international foreign exchanges, and the company performs proactive FX hedging policy to reduce the impact from FX fluctuation.

• CHP remain focus on the specialty paper market development , improving product quality to enhance product competitiveness.

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Thank you