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A Leading Fabricated Aluminium Product

Developer and Manufacturer in Asia

2016 Annual Results

Corporate Presentation

24 March 2017

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Disclaimer

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contents or otherwise arising in connection with this document.

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Agenda

2016 Annual Results Highlights.

Operational Highlights

.

Development Strategies.

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2016 Annual Results Highlights

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Stable Profitability and Reward Shareholders:

Sales volume to external customers increased to 765,000 tonnes, among which sales volume of deep-processed products surged by

22.7% to 90,000 tonnes.

Product mix optimization and cost reduction from self-supplied aluminium billets led to an increase in gross margin to 37.7%.

Adjusted net profit rose to RMB3.14 billion yoy, increased by 12.1%.

Proposed final dividend HK$0.10 per share, annual dividend totalled HK$0.21 per share, equivalent to a dividend payout ratio of 45.5%.

Capacity Expansion for Aluminium Extrusion Products:

Ordered 99 extrusion presses, including 19 large-scale presses of 75MN or above to expand the production capacity for high-end and

large-section aluminium extrusion products.

Innovative Deep-processed Products:

Fostered in-depth cooperation with customers, and became exclusive supplier of car body extrusions for Chery’s model S51 and CH

Auto’s model K50.

Results Highlights

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2016 Annual Results Highlights

For the year ended 31 December

(RMB million)2014 2015 2016

2015-2016

Change

Revenue 15,971 16,171 16,695 +3.2%

Gross profit 4,467 5,320 6,288 +18.2%

EBITDA 4,060 4,821 5,366 +11.3%

Profit before taxation 2,970 3,523 3,679 +4.4%

Net profit 2,477 2,805 2,907 +3.6%

Adjusted net profit* 2,477 2,805 3,143 +12.1%

Earnings per share (RMB) 0.36 0.40 0.41 +2.4%

Adjusted earnings per share (RMB)* 0.36 0.40 0.44 +10.8%

Dividend per share (HK$) 0.16 0.17 0.21 +23.5%

2014 2015 2016

2015-2016

Change

(% pt)

Gross margin 28.0% 32.9% 37.7% +4.8

EBITDA margin 25.4% 29.8% 32.1% +2.3

Adjusted net margin* 15.5% 17.3% 18.8% +1.5

* ：Excluding non-recurring special items including internal restructuring expenses in relation to the proposed spin-off and expenses in relation to the grant of share options by

the Group during the Year under Review.

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Rewarding Shareholders’ Support

Dividend Payments Since Listing

Dividend payment

for the year

(HKD million)

1,410 1,240 910 1,130 1,200 1,480

Remarks: In 2011 and 2012, the Group did not make dividend payments due to the significant capital need by the Tianjin project.

0.260.23

0.130.16 0.17

0.21

35.0%

40.0%

34.0%36.2% 35.4%

45.5%

2009 2010 2013 2014 2015 2016

Dividend pershare (HKD)

Payout ratio

7

14,211

2,484

13,047

1,952

1,095

77

Industrial Deep-processed Construction Others

Revenue Analysis

13,204

2,441

1,032

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2015 2016

Revenue by Product

16,171 16,695

(RMB million)

13,798

2,373

China Overseas

2015 2016

Revenue by Geographical Region

16,171

(RMB million)

79.1%

0.1%

14.6%

6.2%

80.6%

12.1%

6.8%

85.3% 85.1%

14.7% 14.9%

Remarks: The figures in percentage show percentage of total revenue, in which revenue represents those sales to external customers.

16,695

0.5%

8

637 665

99100

2015 2016

China Overseas

Sales Volume by Product Sales Volume by Geographical Region

591 608

7390

7267

2015 2016

Industrial Deep-processed Construction

736 765

Sales Volume Analysis

8.8%

11.7%

79.5%

736 765

13.1%

86.9%

13.5%

86.5%

9.8%

9.9%

80.3%

Remarks: 1. The figures in percentage show the percentage of total volume.

2. Sales volume represents the sales volume to external customers.

(‘000 tonnes) (‘000 tonnes)

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ASP Remained Stable

ASP

(RMB / Tonne)

Remarks: ASP of industrial aluminium extrusion products included internal sales.

26,669 27,195

21,084 20,064

15,227 15,319

21,972 21,823

2015 2016

Deep-processed Industrial

Construction Overall

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Analysis on Selling, Finance and Management Costs

136156

0.8%

0.9%

2015 2016

Selling Costs % of revenue

Selling Costs

1,4551,578

9.0% 9.5%

2015 2016

Adjusted Management Expenses

% of revenue

Adjusted Management Expenses*

616

926

3.8%5.5%

2015 2016

Finance Costs % of revenue

Finance Costs

(RMB million) (RMB million) (RMB million)

* ：Excluding non-recurring special items including internal restructuring expenses in relation to the proposed spin-off and expenses in relation to the grant of share options by the Group during the Year under Review.

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Balance Sheet Summary (RMB million) As at 31 December 2015 As at 31 December 2016

Total assets 71,401 79,038

Bank balances and cash4 13,495 14,249

Net assets5 25,991 28,016

Net asset value per share (RMB) 3.68 3.96

Gearing ratio6 63.6% 57.0%

Turnover Days (Days) 2015 2016

Trade receivable turnover days1 25 36

Trade payable turnover days2 121 176

Inventory turnover days3 110 124

Sound Management and Solid Financial Position

Remarks:

1. Trade receivable turnover days = 365*((trade and bills receivables balance at the beginning of the period+ trade and bills receivables balance at the end of the period)／2) ／sales for the period

2. Trade payable turnover days = 365*((trade and bills payables balance at the beginning of the period + trade and bills payables balance at the end of the period) ／2) ／cost of sales for the period

3. Inventory turnover days = 365*((inventory balance at the beginning of the period + inventory balance at the end of the period)／2) ／cost of sales for the period

4. Bank balances and cash = cash and cash equivalents + short-term deposits + pledged bank deposits

5. The net assets as at 31 December 2016 excludes the amount of the perpetual capital instruments

6. Gearing ratio = (total liabilities / total assets)*100%

12

7 4

19 21

76

30

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2015 2016

Liaoyang Plant Yingkou Plant

Tianjin Plant Others

Capital Expenditure Overview

Overall Capex Capex of Tianjin Aluminium Flat Rolling Project

43

29 39

50

67

23

15 5

15

9

7

2011 2012 2013 2014 2015 2016

Machinery & Equipment Land & Plants

43 44 44

65

76

30

102

64

(RMB 100 million) (RMB 100 million)

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Operational Highlights

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Japan

• Overseas sales office

Germany

• Overseas

sales office

Liaoyang (Headquarter)

• Industrial aluminium extrusion &

deep processing production base

• Area: 7.4 km2

• Operation capacity: 1 mn tonnes

• Special Vehicle Factory

• Area: 1.4 km2

• Initial planned capacity: 5,500

vehicles

Tianjin (In

Construction)

• High value-added

aluminium flat

rolling production

base

• Area: 7 km2

• Planned capacity：1.8 mn tonnes

Hong Kong

• Office

Yingkou

• High-precision

aluminium alloy &

aluminium extrusion

production base

• Area: 7.8 km2

• Planned capacity:

800,000 tonnes

Beijing

• Office

Production Base

Office

Overseas Sales Office

Strategic Planning of Overseas and Domestic Business Footprint

Daqing（In Planning）

Panjin（In Construction）

• Industrial aluminium

extrusion production base

• Area: 4.4 km2

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Three Core Businesses

Aluminium Extrusion

Aluminium Flat Rolling

Deep Processing

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Aluminium Extrusion and Deep Processing Businesses

Diversify Product Mix

Products included large-sized

parts for railway vehicles, body

frames for new energy cars, and

etc.

In-depth Cooperation

Participated in the key processes

from the early stage of R&D.

Supplier of aluminium-intensive

body parts for Chery’s BEV model

S51.

Supplier of aluminium extrusions

of CH Auto’s electric sports car

model K50.

. .

Deep Processing

BusinessAdjust and Upgrade

Production Capacity

One of the two ultra-large 225MN

extrusion presses are expected to

commence production during the year,

and the other press is being installed.

99 sets of newly ordered extrusion

presses will commerce operation in

the next two to three years.

Optimize Product Mix

Increased the contribution from

higher added value products such

as large-section industrial products,

large-sized parts for transportation,

and construction formworks.

.

Extrusion Business

.

Transition into an integrated light-weight solutions provider

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Aluminium Flat Rolling Business

Accredited with three

Quality Management

System Certifications,

namely AS9100,

TS16949, and ISO9001,

in aerospace and

automotive industries.

Produced an ultra-

large aluminium alloy

plate of 4,300mm in

width, set a new

record in Asia.

Produced high-

end 7055

aluminium alloy

plates.

Obtained ISO14001

& OHSAS18001

management system

certifications.

Apr Jun Aug OctReceive authoritative

accreditations

Project OverviewFirst

production line

Second

production line

LocationAuto parts industrial park, Wuqing District,

Tianjin

Designed

Capacity600,000 tonnes 1.2mn tonnes

Production

ProcedureCasting, Hot Rolling, Cold Rolling, Finishing

ProductsAluminium plates &

sheetsSheets

Product

Application

Transportation, machinery and equipment,

chemical containers, tankers, packaging,

industrial, durable consumer goods, etc.

Projects Updates During the Year

Received accreditations on quality

control system, environmental

management system, safety

management systems and so on.

In early 2017, the Group received

aviation certification from Nadcap

and two shipping certifications from

DNV and NK.

Casted aluminium

alloy slab of

2,670mm in width,

set a new record in

China.

..

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Development Strategies

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High-end Applications of New Materials Driven by Favorable Policies

Non-ferrous Metals Industry Development Plan (2016 -2020)

• Vigorously develop high-end materials, such as aluminium alloys, and broaden its application in various sectors including aviation and

aerospace, vessel, transportation and construction, etc

• Aluminium alloy body will be applied in 30% of the oil tankers, trailers and railway freight trains by 2020, resulting in an increase of 6.5

million tonnes of aluminium consumption

Three-Year Action Plan for Major Construction of

Transportation Infrastructure

• During 2016 to 2018, total investments in construction of railway,

road, urban rail transit will amount to approximately RMB4.7

trillion

Fuel Consumption Limits for Passenger Cars

• During 2017 to 2020, passenger cars produced in China have to

reduce the average fuel consumption from 6.4 liters to 5.0 litersper 100 kilometers

Long-term Development Plan for the Automobile Industry

• By 2020, annual output of new energy cars in China will amount to

2 million units

• By 2025, sales of new energy cars will account for over 20% of

total sales of passenger cars

Roadmap for Energy Conservation and New Energy

Automobiles

• Logistics vehicles used in urban delivery will be

completely replaced with aluminium-intensive new energy vehicles

in the coming five years

Mid- to Long-term Railway Network Planning (2016–2030)

• The existing grid network of China high-speed railways is upgraded

from “four horizontal and four vertical tracks”( 「四縱四橫」) to

“eight horizontal and eight vertical tracks”(「八縱八橫」)

• By 2025, the mileage of high-speed railways in China will reach

38,000 kilometers

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Growth Potential of High-end Aluminium Application in Different Countries

26%

54% 58%67%

53%

33%

37% 20%

9%

6%

4%12%

7%

1%

13%

China U.S. Japan Germany

Plate and Sheet Extrusion Products Foil Others

Fabricated Aluminium Product Mix Comparison by

Country (2016)

Source: “Development Report of the Aluminium Fabrication Industry” and “Market Research Report on Domestic and Overseas Aluminium Extrusion Industry” prepared by Antaike

in January 2017 and April 2016, respectively.

30%

48% 46%51%

23%

19% 21%17%11%

15% 12% 8%

31%

14% 13%8%

5% 4%8%

16%

China North America Europe Japan

Transporation Machinery and EquipmentElectric Power Engineering Consumer GoodsOthers

Comparison of Industrial Aluminium Extrusion

Product Applications by Country (2015)

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Growth Potential of High-end Aluminium Application in China

57%

68%

27%

18%

7%

6%

2%

1%

7%

7%

2016E 2020E

16E-20E

CAGR

2.90

1.88

Demand Forecast for Aluminium Extrusion

Products in China’s Transportation Sector

30%

32%

23%

22%11%

11%

31%

31%

5%

4%

2016E 2020E

16E-20E

CAGR

Transportation

Electric

Power Engineering

Machinery

and Equipment

Consumer

Goods

12%

9%

10%

10%

Others 5%

Demand Forecast of Industrial

Aluminium Extrusion Product

Applications

6.23

9.13(million tonnes) (million tonnes)

Automobiles

Railway

Bicycle and

Motorcycle

Vessels

16%

1%

6%

7%

Others 8%

Source: “Speculation on Future Development of the Aluminium Fabrication Industry in China” and “Market Research Report on Domestic and Overseas Aluminium Extrusion Industry” prepared by Antaike

in June 2016 and April 2016, respectively.

5,650 6,230

6,870 7,570

8,260

9,130

2015 2016E 2017E 2018E 2019E 2020E

(‘000 tonnes)

Demand Forecast for Industrial

Aluminium Extrusion Products in China

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Achieve commercial production of the first production line of the

aluminium flat rolling project in Tianjin, adding impetus to the Group’s

steady development in the long term.

Continue to optimize and expand capacities to reinforce the Group’s

profitability.

Enhance the diversity of high value-added product offerings and

increase the contribution of the deep processing business.

Strengthen R&D and promote technological innovation to enhance

our comprehensive strengths.

Production

Optimization

Expansion

R&D

Future Growth Drivers

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www.zhongwang.com

For enquiries, please email to corpcomm@zhongwang.com

The Leading Fabricated

Aluminium Product

Developer and Manufacturer

in Asia