CPDC — Investor Presentation 2019

Sep 6, 2019

China Petrochemical Development Corporation 中國石油化學工業開發股份有限公司

Investor Conference

==> picture [177 x 88] intentionally omitted <==

==> picture [192 x 155] intentionally omitted <==

==> picture [114 x 155] intentionally omitted <==

==> picture [176 x 156] intentionally omitted <==

==> picture [232 x 153] intentionally omitted <==

==> picture [106 x 101] intentionally omitted <==

China Petrochemical Development Corporation

． ． ． ． Respect Innovation Care Excellence Green Business

Disclaimer

• This presentation is for informational purposes only, contains preliminary financial and other information about China Petrochemical Development Corporation and is subject to updating, revision, amendment and completion. This presentation does not and is not intended to constitute or contain any offer of securities for sale or a solicitation of an offer to purchase any securities of China Petrochemical Development Corporation or any other company and neither this presentation nor anything contained herein shall form the basis of any contract or commitment.

• Certain statements contained in this presentation may be statements of future expectations and other forward-looking statements or trend information that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those in the forward-looking statements in this presentation. In addition to statements which are forward-looking by reason of context, including without limitation, statements referring to risk limitations, operational profitability, financial strength, performance targets, profitable growth opportunities, and risk adequate pricing, the words “may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, or continue”, “potential, future, or further”, and similar expressions are intended to identify forward-looking statements. China Petrochemical Development Corporation assumes no obligation to update or revise any such statements or any other information contained herein to reflect events or circumstances that may arise after the date of this presentation.

==> picture [41 x 46] intentionally omitted <==

2

4 1 2 3 Future Operation Company Financial s and Developments Profile Summary and Challenges Products

==> picture [41 x 46] intentionally omitted <==

3

Company Profile

． ． ． ． Respect Innovation Care Excellence Green Business

==> picture [691 x 15] intentionally omitted <==

Effective integration of the Petrochemical Industry Expand new business in Land Development

2019

==> picture [117 x 101] intentionally omitted <==

中國石油化學工業開發 股份有限公司

China Petrochemical Development Corporation

==> picture [400 x 93] intentionally omitted <==

• • Providing products With forward looking and services thinking, continue to Market improve, and develop a • Excellence Creating customer Focused smart management value system. Principles • Develop talents, • take responsibility, Develop new technology, new team work, and Develop products, integrate resources, Innovation smart production, and develop a work hard towards Talents global viewpoint, towards the the vision and development of the dual focus achieve our goals. strategy

==> picture [41 x 46] intentionally omitted <==

5

==> picture [714 x 79] intentionally omitted <==

==> picture [120 x 119] intentionally omitted <==

Taiwan

Global

CPL manufacturer in Taiwan Only

Top2 AN manufacturer in Taiwan

Top5 CPL manufacturer in the world AN manufacturer in the world

==> picture [41 x 46] intentionally omitted <==

6

Jiangsu Shanghai Rudong WeiQiang Jiangsu Weiming Rudong Petrochem Trading Weihua Trading CPDC Jiangsu Kunshan Taipei HQ China HQ Changzhou Toufen Weicai New CPL Production Material 200k tons/yr Nylon Chips Production 36k tons / yr Dashe CPDC HQ AN Hsiaokang Production CPL Production 224k tons/yr 200k tons/yr

7

==> picture [545 x 501] intentionally omitted <==

==> picture [322 x 173] intentionally omitted <==

==> picture [155 x 183] intentionally omitted <==

==> picture [41 x 46] intentionally omitted <==

8

==> picture [287 x 43] intentionally omitted <==

1969 1991 1994 2001 2011 2012 2015 2016 2017 2019

==> picture [41 x 46] intentionally omitted <==

9

10

==> picture [902 x 520] intentionally omitted <==

----- Start of picture text -----

Shareholders’ Meeting
Secretariat
Audit Committee
｜ OrganizationOrganization｜
B oard of Directors Audit Office
Remuneration Committee
Shareholder Services Office
CPDC CSR Committee
Chairman Chairman’s Office
CEO
President President’s Office
Administrative Finance Petrochemical Business Trading Land Development New Venture
Resources epartment Division Production Department Division Department Department
10
Center Legal Counsel R&D Center
Office Office Office office Office Office Office Division Office
Workplace Safety and Health And Pollution Protection Center Environmental Protection Administrative Office Joint Procurement Equipment Purchasing Information Office Human Resources Office Corporate Relations Office Investment Management Accounting Office Financial Resources office Overseas roduction office Hsiao-Kang Factory Da-She Factory Tou-Fen Factory Engineering Technology Overseas Business Sales Office Procurement Raw Materials Overseas Development Management Office Development Plan and Project Operation Overseas New Products Integration Office Resource Development Corporate Strategy Planning
----- End of picture text -----

｜ OrganizationOrganization｜

==> picture [41 x 46] intentionally omitted <==

CSR Committee Structure

==> picture [638 x 470] intentionally omitted <==

----- Start of picture text -----

Board of
Regular Directors Suggested
return Feedback
CSR
Chairman: Secretary Lin
Committee Secretariat
Secretaries-General: General Manager
Executive Secretary
Industrial and Security Environmental
Protection Center/Enterprise Relations
Group
Business Governance Section Social Relations Group Environmental Sustainability Group
Sustainable Development Vision and Feedback / Public Welfare Activities Energy and Climate Change
Strategy
Product Quality / Innovation
Labor Human Rights/ethics
Operations / Financial Risk and
Performance
Green Process and Products
Regulatory Compliance/Information
Purchasing and Supply Chain Disclosure
Management Lauanwei/pollution prevention and
control
Stakeholder Communication Market/Customer Analysis survey
Environment and community
Community
participation
----- End of picture text -----

==> picture [41 x 46] intentionally omitted <==

11

CSR Committee Officially established Held Charitable activities

2013

(already served 70 groups up to 2019Q3/22,402 person)

CSR Performance

2014

2015

2016

Award of The eleventh session A+ Evaluation of information disclosure Award of Top 50 Corporate Sustainability Report in Taiwan Silver Award of Traditional manufacturing of large enterprise

Award of The twelfth session A++ Evaluation of information disclosure Award of Top 20% of the 1[st] annual Corporate Governance Evaluation of listed company

Award of Top 20% of the 2[nd] annual Corporate Governance Evaluation of listed company

Won the Clean Production Certification (Hsiaokang Plant)

2017

Awarded of top 20% of the 3[rd] annual Corporate Governance Evaluation Won Taiwan TOP50 Corporate Sustainability Report Traditional Manufacturing Gold Award

Won the Clean Production Certification (Dashe & Toufen Plant) Won BSI Sustainability Implementation Award

2018

Awarded of top 20% of the 4[rd] annual Corporate Governance Evaluation Selected as a constituent in the Corporate Governance 100 Index Dasheh Plant Control Building won the ”Green Architecture Diamond Award” Certification

Toufen Nylon Plant won the ”Green Architecture Silver” Certification Won Taiwan TOP50 Corporate Sustainability Report Traditional Manufacturing Platinum Award

2019

Awarded of top 20% of the 5[rd] annual Corporate Governance Evaluation Dasheh Plant Office Building won the ”Green Architecture Diamond Award” Certification

12

Operations and Products

． ． ． ． Respect Innovation Care Excellence Green Business

==> picture [691 x 15] intentionally omitted <==

Effective integration of the Petrochemical Industry Expand new business in Land Development 2019

==> picture [117 x 101] intentionally omitted <==

中國石油化學工業開發 股份有限公司

China Petrochemical Development Corporation

Product Development

==> picture [702 x 397] intentionally omitted <==

----- Start of picture text -----

CPL AN
Downstream Downstream
PMMA
----- End of picture text -----

==> picture [41 x 46] intentionally omitted <==

14

~~Ny~~ lon Products

Caprolactam(CPL)

Downstream Applications

Nylon Chips

Textile Fiber

Engineering plastics

Film

Fiber Nylon chips

==> picture [209 x 132] intentionally omitted <==

==> picture [127 x 129] intentionally omitted <==

==> picture [126 x 129] intentionally omitted <==

Stockings, material for Auto parts, gear clothing Packaging film Umbrella, parachute, High pressure resistant air bag tube Curtains, carpets

==> picture [161 x 120] intentionally omitted <==

Food

packaging, medical packaging, electronic products

==> picture [154 x 135] intentionally omitted <==

==> picture [138 x 135] intentionally omitted <==

Stockings, material for clothing Umbrella, parachute, air bag Curtains, carpets, Tire cord Conveyor belt, rope Fishnet, fishline

==> picture [41 x 46] intentionally omitted <==

15

AN Products

Acrylonitrile(AN)

Downstream Applications

Acrylic Fiber

==> picture [166 x 123] intentionally omitted <==

Material for clothing Blanket, carpet Wool, sweater, stuff toy

ABS/AS Plastic

Acrylamide

NBR Rubber

==> picture [152 x 123] intentionally omitted <==

==> picture [151 x 105] intentionally omitted <==

==> picture [147 x 120] intentionally omitted <==

Electric wire insulating material Oil-resistant rubber components for automobile and machinery (e.g. oil seal, coil) Vesicant insulator

PC casing Automobile (dash board, wheel cap, reflector box) Home appliance casing High intensity tool (hair dryer, mixer, mower)

Water treatment agent Soil absorption agent, conditioning agent, Flocculant Plastic additives, leather metal coating

==> picture [41 x 46] intentionally omitted <==

16

Specialty Products

O - phenylphenol (OPP)

Downstream Applications

Bactericidal Preservatives & Other

==> picture [228 x 144] intentionally omitted <==

Bactericidal Preservatives, New Medicine Intermediate, Dye Carrier

High-end Optical Materials

==> picture [164 x 157] intentionally omitted <==

High Refraction Material, New High Poly Monomer

Electronic Materials

==> picture [182 x 156] intentionally omitted <==

Flame Retardant Material

==> picture [41 x 46] intentionally omitted <==

17

Engineering Plastic Products

Engineering Plastic

Downstream Applications

Mechanical Electronic Auto & Locomotive Components Components industries

==> picture [168 x 118] intentionally omitted <==

==> picture [135 x 116] intentionally omitted <==

==> picture [135 x 116] intentionally omitted <==

Sporting OA goods furniture

==> picture [135 x 117] intentionally omitted <==

==> picture [135 x 116] intentionally omitted <==

==> picture [41 x 46] intentionally omitted <==

18

Product commitment

==> picture [497 x 262] intentionally omitted <==

----- Start of picture text -----

CPL
Engineering
AN
Nylon Plastic
Clean
Fine Production
&
chemicals Environment
Sustainable
----- End of picture text -----

==> picture [133 x 140] intentionally omitted <==

==> picture [41 x 46] intentionally omitted <==

19

19

｜ 2018 Products Mix ｜

31% 60% 9% Other Acrylonitrile (AN) and Byproducts

Caprolactam(CPL). Nylon Chips (Nylon 6)

==> picture [139 x 151] intentionally omitted <==

==> picture [178 x 149] intentionally omitted <==

==> picture [41 x 46] intentionally omitted <==

20

Unit：10k Tons	Unit：10k Tons	Unit：10k Tons	5	Year Production	Year Production	Year Production	Year Production
70.0
60.0
50.0
40.0				38.0	37.4		2017-2018 YOY
20.0 30.0	25.1	25.7	30.7			17.2	AN CPL-1.58% 0.48%
0.0 10.0	20.4 2014	19.4 2015	19.8 2016	20.7 2017	20.8 2018	10.8 2019 H1	ANCPL Nylon6
21

CPL Nylon6

==> picture [832 x 364] intentionally omitted <==

----- Start of picture text -----

100% 1% 1% 1% 1% 4% 3%
80%
60%
Exports
99% 99% 99% 99% 96% 97%
40%
Domestic
20%
0%
2014 2015 2016 2017 2018 2019H1
Total sales
24.6 23.4 29.4 36.5 35.6 16.6
Unit：10k Tons
----- End of picture text -----

==> picture [41 x 46] intentionally omitted <==

22

==> picture [895 x 464] intentionally omitted <==

----- Start of picture text -----

5 Year Sales Volumes
100%
29% 28%
80% 37% 35%
47%
52%
60%
Exports
40%
71% 72% Domestic
63% 65%
53%
48%
20%
0%
2014 2015 2016 2017 2018 2019H1
Total sales 20.5 19.7 19.8 21 21.6 11.3
----- End of picture text -----

AN

Unit：10k Tons

==> picture [41 x 46] intentionally omitted <==

23

Future Development

． ． ． ． Respect Innovation Care Excellence Green Business Effective integration of the Petrochemical Industry Expand new business in Land Development

2019

==> picture [117 x 101] intentionally omitted <==

中國石油化學工業開發 股份有限公司

China Petrochemical Development Corporation

==> picture [143 x 143] intentionally omitted <==

Dual Focus Development Strategy

CPDC develops Petrochemical Industry and Land development as the main strategy with the goals of sustainable development, creating value for stockholder and accomplished CSR

Petrochemical Core Business

Land Development

==> picture [41 x 46] intentionally omitted <==

25

Sustainable development

Effectively integrated Petrochemical Industry

Developing land development business

Improving management system and recreating business culture

Activating land asset and creating permanent value

Construct a command management system for transnational operations and corporate competitiveness

Establishing integrated production base

Integration of the upstream and downstream Launch Smart Manufacturing project

Develop downstream high value products and materials

Expand applications of nylon products, create high profit margin applications, develop fine chemicals

Promotion of Asia's New Bay Area and Strategic cooperation development

Deploying real estate having investment potential oversea

Accelerating entering global market and land development, Features to create new towns

Planning multiple innovative residence design and advocating green building

Developing green building complying the regulation

==> picture [41 x 46] intentionally omitted <==

26

27

Challenges in recent years and strategies

Challenges

Strategies

==> picture [81 x 80] intentionally omitted <==

Excess capacity in China area

==> picture [95 x 96] intentionally omitted <==

US-China Trade War

Accelerate

Expand

Vertical Chances in integration China, USA and Development of South-East Asia new materials

==> picture [80 x 80] intentionally omitted <==

Tariff trade barriers

==> picture [116 x 113] intentionally omitted <==

Environmental awareness rising

==> picture [332 x 158] intentionally omitted <==

----- Start of picture text -----

Advantageous
Invest in local
Advanced
technology
----- End of picture text -----

==> picture [41 x 46] intentionally omitted <==

27

Financials Summary

． ． ． ． Respect Innovation Care Excellence Green Business

==> picture [691 x 15] intentionally omitted <==

Effective integration of the Petrochemical Industry Expand new business in Land Development 2019

==> picture [117 x 101] intentionally omitted <==

中國石油化學工業開發 股份有限公司

China Petrochemical Development Corporation

Unit：NT$ Billion

Last 6Q Performance

==> picture [897 x 465] intentionally omitted <==

----- Start of picture text -----

Operating Income Net Income Gross Revenue
30.00 120.00
109.68
25.00
100.00
94.95
94.48
85.92
20.00
82.97 80.00
16.50 81.38
15.00
13.04
12.17
60.00
11.03
10.00
9.12
8.04
6.42
40.00
5.00 4.04
3.11
3.09
0.55
20.00
0.00
-1.43
(5.00) 0.00
2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2
----- End of picture text -----

29

Last 6Q CPL/AN Price Trend Chart

==> picture [688 x 394] intentionally omitted <==

----- Start of picture text -----

USD/MT
AN CPL
2,300
2,140
2,120
2,082
2,074
2,100
2,157
2,053
1,833
1,900 1,998
1,860
1,673
1,700
1,700
1,500
1,444
1,300
2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2
----- End of picture text -----

==> picture [41 x 46] intentionally omitted <==

Source :PCI

30

Last 6Q Operating Margin

==> picture [667 x 442] intentionally omitted <==

----- Start of picture text -----

18
16.39
16 14.68
15.04
14 13.25
12.88
11.88
12
11.05
11.62
9.66
10
8.54
7.74
8
8.47
6
4.87
3.62 3.80
4
3.78
2 毛利率(%)
0.64
0 營業淨利率(%)
-1.75
-2 稅後淨利率(%)
-4
2018 2018 2018 2018 2019 2019
Q1 Q2 Q3 Q4 Q1 Q2
----- End of picture text -----

==> picture [41 x 46] intentionally omitted <==

31

Last 6Q EPS

==> picture [755 x 422] intentionally omitted <==

----- Start of picture text -----

0.7
EPS(元) 0.61
0.6
0.5 0.45
0.41
0.4
0.3 0.23
0.2
0.12
0.11
0.1
0
2018 2018 2018 2018 2019 2019
Q1 Q2 Q3 Q4 Q1 Q2
----- End of picture text -----

==> picture [41 x 46] intentionally omitted <==

32

Unit：NT$ Billion	2016	2017	2018	2019H1
Operating revenue	253.77	333.36	385.03	164.35
Gross Profit	(0.90)	53.72	51.76	12.25
Profit from operations	(13.95)	35.84	30.75	2.62
Non-operating income and expense	(4.09)	27.14	16.02	7.40
Income Before income tax	(18.04)	62.98	46.77	10.02
Net Income	(18.78)	60.87	42.81	9.51
EPS	(0.81)	2.53	1.58	0.34

==> picture [41 x 46] intentionally omitted <==

33

Last three years Balance Sheet

Unit：NT$ **Billion **	2016	2017	2018	2019H1
Current Assets	160.83	188.39	216.23	212.10
Non-current assets	603.73	627.90	680.82	708.15
Total Assets	764.55	816.29	897.05	920.25
Current Liab	104.63	42.42	74.88	76.51
Non-current Liab	149.30	148.39	150.26	174.76
Total Liabilities	253.93	190.81	225.14	251.28
Total Equity	510.63	625.48	671.91	668.97

==> picture [41 x 46] intentionally omitted <==

34

Last three years finacial rateio

	2016	2017	2018	2019H1
Debt Ratio	33%	23%	25%	27%
Current Ratio	154%	444%	289%	277%
Net profit Margin	-7%	18%	11%	6%
ROA(%)Note	-4%	15%	9%	2%
ROE(%)Note	-3%	11%	7%	2%

Note:Except investment property

==> picture [41 x 46] intentionally omitted <==

35

Q&A

==> picture [114 x 155] intentionally omitted <==

==> picture [176 x 156] intentionally omitted <==

==> picture [191 x 154] intentionally omitted <==

==> picture [232 x 152] intentionally omitted <==

• 中國石油化學工業開發股份有限公司 China Petrochemical Development Corporation

==> picture [41 x 46] intentionally omitted <==

36