CHP — Interim / Quarterly Report 2019

Mar 26, 2020

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4Q19 Earnings Results

2020.3.26

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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----- Start of picture text ----- Chung HwaPulp Corp.1905.TW100% 100%CHPHwa FongInternationalInvestmentCorp.(BVI) Corp.60% 20.24% 100%100%Guangdong ZhaoqingSyntaxDingfung Pulp 66.27% DingfungCommunication Genovella& Paper Co., Forestry Co.,(H.K.) Ltd. Renewables Inc.Ltd. Ltd.100% 100%ZhaoqingShenzhenXinchung GreenJinglun PaperTechnology Co.,Co., Ltd.Ltd.----- End of picture text -----

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O eratin Locations p g

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----- Start of picture text ----- ShanghaiTaipeiTaichung HualienTainunTaitungZhaoqing Shenzhen JiutangHongkongTaipei(Sales, Accounting andFinance Office)Manufacturing Sites(Hualien,Jiutang, Taitung and Zhaoqing)Sales Offices(Taichung, Tainun,Shenzhen, Shanghai andHongkong)----- End of picture text -----

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2019 Financial Results

Amount%Amount%Amount%
Net Sales5,025,036100.020,689,397100.024,025,221100.0	- 1
COGS4,909,76797.719,470,28694.121,677,68890.2	- 1
Changes inBiological Assets- 1,472-- 6,089-- 10,695-
Gross Profit113,7972.31,213,0225.92,336,8389.7	- 4
Operating Profit- 268,541- 5.3- 383,777- 1.9592,0422.5	-16
OtherIncome/Expense- 16,820- 0.321,3650.177,0540.3	- 7
Profit Before Tax- 285,361- 5.7- 362,412- 1.8669,0962.8	-15
Profit After Tax- 248,239- 4.9- 302,084- 1.5532,2452.2	-15
Profit Attributableto Owners- 215,452- 4.3- 245,098- 1.2445,6631.9	-15

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2019 Non-Operating Incomes and Expenses

Unit: NT Thousands	2019 Q4	2019	2018
Finance costs	- 17,936	- 63,925	- 51,978
Foreign exchange
gain(losses) and Gain (loss)on financial instruments at	- 34,294	- 68,520	- 38,612
FVTPL
Share of profit of associates	12,526	- 3,987	57,270
Dividend incomes	-	76,543	55,783
Other incomes	22,884	81,254	54,591
Total	-16,820	21,365	77,054

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Summar y

4Q19

• Due to the weakness of global pulp prices, major raw material-wood chips pricing remained in the high level, and the pulp mill`s equipment modification took longer time to complete, the 4QYTD19 Gross Profit Margin and Operating Profit Margin were 2.3% and -5.3%. The Net loss attributable to owner was NT$215 million in 4Q19 and recorded NTD$ -0.19 EPS.

2019

• The 2019 consolidated revenue was NTD $20.69 billion, which declined 13.9% Y/Y. The Gross Profit and Operating Profit Margins as 5.9% and -1.9% respectively, with a decline of 3.8 and 4.4 ppt. Y/Y. The Net loss attributable to owner was NT$245 million, and the EPS was NT$ - 0.22.

1Q20 Outlook

• Due to the COVID-19 spread globally, the market demand visibility became limited. The solid precaution execution in Taiwan had increase customers 'order. While there was lower working days after lunar new years holidays , annual maintenance had performed in the production lines and epidemic causes gloomy global economic outlook . The company remain conservatives to the operation of the first quarter.

• As the epidemic situation has not eased, the company noticed an increasing demand of food packages and label backing paper drive by the situation. The impact of the epidemic will be expected prolonged . The company will pay attention to the international business situation to prepare sufficient raw materials , improve product competitiveness, and focus on high-valueadded specialty papers to fulfill the market demand.

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Thank you