sunvic - corporate presentation-apr 2011sunvic.listedcompany.com/newsroom/20110426_171530... ·...
TRANSCRIPT
April 2011
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Agenda
� Overview
� Leading Manufacturer of AA & AE and PMIDA/Glyphosate
� Industry Outlook
� Financial Performance
� Ongoing Projects
� Investment Merits
Section One
Overview
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Overview Of SunVic
► First-mover and largest PRC-based company to undertake large-scale
production of acrylic acid (“AA”) and acrylate esters (“AE”)
► Leading manufacturer of PMIDA & Glyphosate
► Manufacturing facilities located in Yancheng (Chenjiagang Chemical
Zone, with a 3000-tonne liquid-cargo jetty) and Taixing in Jiangsu, PRC
► Client base of over 500 customers located in PRC and overseas markets
spanning across Asia, Middle East, Europe and North and South America
etc.
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Strategic Location
Yancheng, Chenjiagang Chemical Zone- AA (205Kpa) & AE (250Kpa)- 1,000,000-tonne Cracking Plant (to be
completed by Q2 2011)- A 3,000-tonne liquid cargo jetty
Nantong Port, Zhangjiagang Port, Shanghai Port
Liangyungang Port
Jiangsu province
- Good infrastructure and transportation links
► Located in eastern region of the PRC with highest growth in demand for AA and AE
► Proximity to our major suppliers in Jiangsu province and neighbouring Shandong province
► Convenient land and water transportation links
► Lower labour and land costs compared with Southern Jiangsu province
Tai Xing, Chemical Zone- Phase I of 160 Kpa AA plant (complete by end 2011)- Phase II of 160 Kpa AA plant (complete by 1H2012)
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Expanding Sales & Marketing Coverage
Asia Market
► More than 80% of our products
supplied to Asia (including the
PRC market)
Overseas Markets
► Overseas customers include
large MNCs such as Degussa
and ECEM B.V. in Europe
► Our products have also been
exported to Japan, Taiwan,
Hong Kong, India, Korea,
Southeast Asia, Australia, Europe and South and North
America etc
South and North America
Set up sales offices in Brazil and
Argentina
Over 500 customers around the
world
Over 500 customers around the
world
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AA & AE – Building Blocks For Essential
Industrial & Consumer Products
Source: CMAI
Super Absorbent Polymers (SAP)
Polyacrylates
Detergent Builders
Water Treatment
Detergents
Disposable Baby Diapers
Female Hygiene Products
Emulsions
Plastic Additives
Acrylic Rubber
Textile Treatments
Coatings, Adhesives, Sealants
Automotives
Textiles
AA
AE
Adult Incontinency Products
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PMIDA – Essential Material Of Glyphosate
PMIDA
Glyphosate(herbicide/ weeds killer)
(Effective in transgenic crops plantation)
Section Two
Leading Manufacturer of AA
& AE and PMIDA/Glyphosate
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Global Distribution of AA Production Capacity
Country/Region
America Europe PRC Japan Others Total
Capacity (‘000 tonnes)
1,355 1,290 1,138 600 773 5,156
Source: 2010 AA Industry Summary,
Author: Zheng Chengwang
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Global Top 10 Manufacturers
Company Name Country Global Capacity
(KTp.a.)
BASF Germany 1,140
Dow Chemical U.S.A 600
Akema U.S.A 595
Nippon Shokubai Japan 515
StoHaas Monomer U.S.A 430
Formosa Taiwan 320
Jiangsu Jurong (Sunvic) PRC 205
Shanghai Huayi PRC 200
LG Chemical Korea 193
American Acryl U.S.A 120
(as of Dec 2010)
Source: 2010 AA Industry Summary,
Author: Zheng Chengwang
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PRC major AA manufactures
Company Name Capacity in PRC
(KTp.a.)
Jiangsu Jurong 江苏裕廊江苏裕廊江苏裕廊江苏裕廊((((昇立化工昇立化工昇立化工昇立化工)))) 205
Formosa(台塑集团) 160
Yangzi-BASF(扬子石化-巴斯夫) 160
Shanghai Huayi(上海华谊) 200
Shenyang Chemical(沈阳石蜡化工) 80
Lanzhou Chemical(兰州化工) 80
Beijing Dongfang(北京东方) 80
Zhejiang Weixing (浙江卫星) 40
Shandong Zhenghe(正和石化) 60
Others 73
Total 1,138
Source: 2010 AA Industry Summary,
Author: Zheng Chengwang
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Major Manufactures of Glyphosate in PRC
Company Current
Capacity(Tonnes)
Expanding
Capacity(Tonnes)
Total
Capacity(Tonnes)
Zhejiang Xinan 30,000 50,000 80,0000
Nantong Jiangshan 27,000 25,000 52,000
Zhejiang Jiema 15,000 30,000 45,000
Jiangsu Jurong 40,000 (PMIDA) 40,000 (PMIDA)
Anhui Huaxing 15,000 20,000 35,000
Nanjing Red Sun 20,000 20,000
Jiangsu Yinyan 15,000 15,000
Zhejiang Jinfanda 12,000 12,000
Source: 《草甘膦市场调研报告》
Section Three
Industry Outlook
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Industry Outlook
► Our wide-application AA & AE products tapping into the strong
recovery of the PRC domestic market
► Demand for AA & AE in the PRC expected to grow at CAGR of
15-20% in next few years
► High entry barrier for new player
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AA & AE- Strong demand from Downstream Industries in PRC
Super Absorbent
Polymers (SAP)
As the improvement of living standard,
SAP consumption expected to grow at 20% in next few years
Coatings, paints
Adhesives, Sealants
Water Treatment
Booming property and automobile markets bring the increase in coatings and paints products, expected growth rate at 15%
Estimated growth at 5%
New water treatment technology increase the demand for AA & AE
Source : various media reports
Section Four
Financial Performance
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Financial Highlight
RMB ’ million Full Year Ended
31 Dec 10 31 Dec 09 Change
Group Revenue 3,363.4 1,819.5 85%
Gross Profit 982.2 151.8 547%
Gross Profit Margin 29% 8% +11 pts
Profit Before Tax 736.0 10.9 6640%
Net Profit Attr to the Company 650.1 4.1 NM
EPS(RMB cents/SGD Cents)
119.0/23.3
0.7/0.1
NM
NAV per share (RMB cents/SGD Cents)
250.4/49.1
130.6/25.6
92%
In FY2010, the Group’s subsidiary received tax incentive amounted to RMB112.1 million
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RevenuesRMB’mln
► Sales growth from FY05 to FY08 backed by increasing capacities
► Due to the global financial crisis, the revenue decreased significantly in FY2009
► In FY2010, revenue increased due to higher ASP and higher sales volume in AA & AE resulted from strong demand in PRC and overseas markets
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Geographical Sales
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Profitability
Gross and Net ProfitsRMB’000
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Margin Analysis
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Sales Volume
▶ AA & AE sales volume increased by CAGR of 39.5% for FY05 to FY10
▶ Sales volume for FY10 increased by30.9% due to strong demand from downstream
industries
Tonnes
AA & AE Sales Volume
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Sales Volume
▶ PMIDA production ceased since Q2 2010 due to weak demand from export market
7,4858,200
19,641
17,24216,095
2,283
0
5,000
10,000
15,000
20,000
25,000
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010
Tonnes
PMIDA Sales Volume
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AA & AE Average Selling Price
AA & AE ASP vs Raw material- PropyleneRMB/ tonne
▶ AA conversion ratio from propylene is 1:0.76
▶ The average price is based on simple average price
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AA Price TrendRMB per tonne
21,500
AA’s raw material- Propylene Price Trend
Strong Demand Led to a Rising Selling Price
11,350
Source: www.16ds.com
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Utilisation Rate
AA and AE Capacity Utilisation
▶ AA and AE production are convertible, we have flexibility to adjust AA or AE
production to better facilitate the market requirement
▶ In Q3 & Q4 10, AA plant partially shut down for repair, maintenance or change
of catalyst
%
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Balance Sheet Highlight
RMB’ mln FY 2010 FY2009 FY2008
Current Assets 1,604.6 957.2 608.8
Current Liabilities 1,569.6 891.1 574.1
Non-current Assets 1,747.2 677.1 739.1
Non-current Liabilities 292.5 0 0
Shareholders’ Equity 1,368.4 743.2 773.8
Bank borrowings, net of deposits pledged
604.4 267.6 310.8
Cash and Bank Bal ( after net of deposits pledged)
157.9 81.2 128.7
D/E ratio 0.44 0.36 0.40
Section Five
Ongoing Projects
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Ongoing Projects for Sustainable Growth
► Produce AA’s raw material- Propylene and other petroleum products
► Synergy in cost saving, production efficiency and sources sharing
► New streams to Group’s revenue and profit through sales of petroleum
related products
► Commence production in Q2 2011
1,000,000-tonne Cracking Plant
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Ongoing Projects for Sustainable Growth
► Tapping into robust demand for AA&AE products
► Phase I of 160,000-tonne to commence production by end of 2011
► Phase II of another 160-tonne to be completed by 1H2012
► With totaling 525,000-tonne AA capacity, Sunvic to be the LARGEST
manufactures in the PRC or
Top 5 in the world
► Expect to bring significant
contributions
320,000-tonne new AA Plants in Taixing
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Ongoing Projects for Sustainable Growth
► Glyphosate is weeds killer which is effective in plantation of transgenic
crops
► Technology and network advantage in producing and marketing
Glyphosate
► Built up sales offices in South America, Brazil and Argentina
► Expect Glyphosate production licence to be granted in 2011
► Well-positioned to capitalise on opportunities when this segment
recovers
PMIDA Downstream Product-Glyphosate
Section Six
Investment Merits
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Investment Merits
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Share Performance
Earnings Per Share: RMB 1.19 or SGD0.2353Closing Price (21/04/2011): SGD0.765, 3X PEDividend for FY2010: SGD 2 cents (1 cent ordinary + 1 cent special)
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“We are optimistic about the outlook of the AA & AE industry in the PRC. We are well-positioned to capture the opportunity and stay competitive through our economies of scale and upstream integrated productions.
“ With our cracking plant and new AA plants coming on board in 2011 and 2012 respectively, we will be able to pursue a long-term sustainable growth and create more values for our shareholders.”
Sun Liping Executive Chairman & CEO
Thank You
External Auditor: KPMGInternal Auditor: Ernst & Young
For more information, pls contact:
Lim Jin Sin, Financial Controller, [email protected] Liu, IR Manager, [email protected]
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