Ho Tung Chemical Corp.

Investor ConferenceTime: 2:30PM, November 16th , 2017

Address: GFORTUNE

(7F., No.5, Sec. 1, Zhongxiao W. Rd.)

Keynote Speaker: Hsu Jung-Huei

Disclaimer

This material has been prepared by Ho Tung Chemical Corp., (“HoTung”).

Any opinions expressed in this material are subject to change without notice as a result of using

different assumptions. HoTung is under no obligation to update or keep current the information

contained herein. The information contained in this presentation is HoTung’s confidential

information.

Any disclosure, copying, distribution or any action taken or omitted to be taken in reliance on it is

prohibited and may be unlawful.

No representation or warranty, express or implied, is or will be made in or in relation to, and no

responsibility or liability is or will be accepted by the Company as to, the accuracy or

completeness of this material and any liability therefore is hereby expressly disclaimed.

Statements made in this material include forward-looking statements, which include, without

limitation, statements about the issues, plans and expectations of Ho Tung. Without limiting the

foregoing, statements including the words “believes”, “anticipates”, “plans”, “expects” and similar

expressions are also forward-looking statements. Forward-looking statements reflect, among

other things, management’s plans and objectives for future operations, current views with respect

to future events and future economic performances and projections of various financial items.

These forward looking statements involve known and unknown risks, uncertainties and other

factors which may cause actual results to differ materially from those implied by such forward-

looking statements.

Outline

Company Profile

Financial Report

Q&A

Brief Introduction

Company Name: Ho Tung Chemical Corp. (Stock

Exchange Code:1714)

Date Established: August 1st, 1980

Chairman: Yang Yu-Chieh

General Manager:

Hsu Jung-Huei (Commercial & Operation),

Tsai Yi-Tung (Administration & Management)

Listed in The Taiwan Stock Exchange: August 30th, 1991

Capital: NTD 10,215,928,080

Consolidated Revenue: NTD 30,642,870,000 (Year 2016)

Individual Revenue: NTD 5,184,627,000 (Year 2016)

Group History

‘80 ‘90 ‘06 ‘10‘95 ‘00

•’80 Ho Tung Chemical Corp. was established.

•’87 Normal Paraffin Plant started commissioning in Kaoshiung.•’91 Ho Tung Chemical became listed in Taiwan Stock Exchange.

•‘98 License for West Terminal

at Taichung Port was approved

• ‘93 Jintung Petrochemical Corp. Ltd. was founded in Nanjing, China by Joint Venture with Sinopec Jinling. (LAB)

• ‘96 First LAB unit was completed and started commissioning in Nanjing, China.• ‘03 Jiangsu Jintung began plant construction

Base in Taiwan

Developin China

Grow inInternational

• China : Resource Integration

(Procurement/Sales), Gulei

Investment Project

• S.E.A: Establishing Logistic Center,

Downstream Distribution

• America/ Africa: Developing New

customers, Downstream Distribution,

Establishing Logistics

‘17

NTD 12.5 Million

Paid-up Capital

Company Established in 1980

NTD 560 Million Capital

Listed in The Taiwan Stock Exchange in 1991

Over NTD 10 Billion Capital

Current (Year 2017)

Group Structure

Ho Tung Group

Oil Chemical Cement

Taiwan: Normal Paraffin

China: Petrochemical(Linear Alkylbenzene Series)Oleochemical

(Fatty Alcohol Ethoxylates Series)

Distribution/Blending

Ho Tung CementCement、Slag

Powder

Chemical, 76.68%

Oil, 20.79%

Cement,2.53%

2016 Business Ratio

Income Ratio

Unit: NTD One Thousand

2016 Q3 2017 Q3

Amount % Amount %

Chemical 16,864,564 77.96 17,249,922 73.16

Oil 4,199,786 19.42 5,693,423 24.15

Cement 566,205 2.62 634,008 2.69

Total 21,630,555 100 23,577,353 100

Key Markets

Area 2016 Sales %

Taiwan 4,215,861 13.76

China 19,085,684 62.28

S.E.A 2,739,699 8.94

Other 4,601,626 15.02

Total: 30,642,870 100.00

Taiwan14%

China62%

South East Asia

9%

Other15%

Production Capacities

Taiwan: Kaohsiung

Normal Paraffin: 90,000MTDe-Aromatic Solvent: 22,000MT

ChinaLinear 1st Unit. 120,000 MTAlkylbenzene: 2nd Unit. 130,000 MT

3rd Unit. 100,000 MTFatty Alcohol: 100,000MTEthoxylation: 200,000MTSulfonation & Sulfation: More than 600,000MT

Taiwan: Taichung Port

26 Tanks:130,000cbm

Products: Gas Oil

China: Tianjin Port

10 Tanks: 60,000cbm

Products: Fuel Oil

Chemical Oil

Supply Chain

Products made by Ho Tung Chemical

Home Care:

Detergent

Personal Care:

Shampoo

Body wash

Conditioner

Antiseptic

清潔劑

DETERGENT

煤油

KERO

正烷屬烴

NP直鏈烷基苯

LAB烷基苯磺酸LAS

航空燃油

FO

氯化腊

CP

高碳數醇

HC ALCOHOL

工業用溶劑

SOLVENT

脂肪醇硫酸鹽

AS

醇醚

AEO醇醚磺酸鹽

AES

工業用界面活性劑

Surfactant

乙醇胺,碳酸乙酯,

及其他衍生物

EA,EC,EOD

電子用化學品

Chemical for

Electron

潤滑油

BO

其他油品

OTHERS

環氧乙烷

EO

羥乙基磺酸鹽

SI

脂肪醇(天然/合成)

Fatty Alcohol

(N/S)

椰子油

Coconut Oil

棕櫚仁油

PKO

乙稀

Ethylene

Operation Location

Tianjin

LAS/AES

Taiwan

NPChengdu

LAS/AES

Guangzhou

LAS/AES

Anhui

LAS/AES

Nanjing

LAB/LAS

Shanghai

LAS

Xiamen

LAS

Huizhou

AEO/AES

Philippines

LAB/LAS

2017 LAB Global Capacities

LAB Suppliers QTY(KT/Y) %

NO 1 CEPSA 560 14.42

NO 2 Ho Tung 350 9.01

NO 3 SASOL 345 8.88

TOP 3 Capacities 1,255 32.31

Global Capacities 4,034 100

LAB: Top market share in Asia since 2010

+ +

CEPSA, 14.42%

Ho Tung, 9.01%

SASOL, 8.88%

Others, 67.69%

2017 Sulphonation Capacities in China

AES: Top market share in Asia since 2012

LAS: Top market share in the World since 2013

Ho Tung, 46.48%

Zanyu, 27.47%

Resun, 12.94%

Others, 13.11%

LAS/AES Suppliers QTY(KT/Y) %

NO 1 Ho Tung 812 46.48

NO 2 Zanyu 480 27.47

NO 3 Resun 226 12.94

TOP 3 Capacities 1518 86.89

China Capacities 1,747 100.00

Strategic Partners

Proud Customers

Review and Improvement of Factors

Influencing Profit in the Past Years

1.74

1.53

0.72

0.53

(0.42)

0.37 0.42

(0.50)

0.00

0.50

1.00

1.50

2.00

2010 2011 2012 2013 2014 2015 2016

EPS

Sold in 2015Q2/Q3, thus revenue had decreased, but the

gross profit margin had increased

Stable supply from CPC since Q3 2017

Globalization,

the Belt and Road

Failure in Joint-Venture(Shatong

Taixing, Jiangsu Shengtai)

Investment

Kaohsiung Plant was in short supply in

the past three years due to the side

effect of gas explosion and shut down

of No.5 Naphtha Cracker in Kaohsiung

China Market for Detergent Raw

Material is slowly growing

Note: EPS is $0.36 in Q3 2017

Chemical Development

& Strategic Planning

America

1. Establishing logistic center2. Downstream distribution

Asia Pacific

1. To ensure source of raw material

2. Downstream distribution3. Developing logistic channels

Africa

1. Developing new customers 2. Downstream distribution3. Developing logistics

TWNBusiness Center

China

1. Set-up Operation Centerin China to perform ResourceIntegration (Procurement/ Sales)2. Gulei Investment

Directions:1. Strengthen in vertical integration of supply chain, business globalization

and adding core competency2. Initiate market development in differentiated/ high value adding products,

and to increase margin of product3. Building stronger relationship with downstream customers

and to expand logistics and business field

Tianjin(Completed in

2015)

• NTD 1 Billion from compensation for relocation includes: Loss in plant shutdown,Reconstruction fee,Remaining from compensation for relocation

• Annual Capacity: 61,600MT →91,200MT

• Plant Relocation Completed in May 2016: Production Efficiency ↑Production Period ↑

Nanjing(Processing)

• To cooperate the city renewal program running by Nanjing Government, the industrial zone will become commercial & residential area where Ho Tung’s existed plants will be prepared to relocate by 2020. The site is about 30 hectares which is 4.4% out of 680 hectares in “New Yao Block” planned by Nanjing government. Therefore, Ho Tung’s site in Nanjing is in the priority list to be relocated..

• Applying compensation for relocation

• There are 5.6 hectares of land ready to be activate in advance. A professional team was hired to evaluate and to plan construction of commercial buildings and hotel apartments.

Other Location(eg. Xiamen,

Shanghai..etc)

• To cooperate the urbanization developing in China, Ho Tung’s operations in each city might be relocated gradually.

Asset Activation – China

18

Nanjing Plant Geographical Location

Residential

Area

R&D Office

Area

Project

Location

The site is located in the belt of

residential area, R&D office area and

industrial zone, and its in transition

between residential area and R&D office

area. Extending office and residential

functions to keep regional advantages.

Industrial

Zone

North East of Nanjing CBD

20.4KM away from Jiangsu Province

Government (38 mins by car)

18.5KM away from Nanjing City

Government (32 mins by car)

7.2KM away from Qixia District

Government (18 mins by car)

56KM away from Nanjing Lukou

International Airport (1 hour by car)

Many metro stations nearby with

excellent external traffic conditions

5.7KM away from Nanjing East Station

(15 mins by car)

56KM away from Xianlin High Speed

Railway Station (20 mins by car)

56KM away from Nanjing Railway

Station (23 mins by car)

Asset Activation – Land in Taipei Danangang

Ho Tung 100% of

subsidiary Ho Shin

Cheng engineering has

joint development with 7

construction companies’

eg: KSECO, KUO YANG

This property includes

more than 6,339 Ping, Ho

Shin Cheng holds 12.5%

Land after RezoningCivic Blvd

Section 3, Nangang Road

La

ne

14

9, S

ectio

n 3

, Na

ng

an

gR

oa

d

Gulei Integrated Petrochemical

Complex Project Introduction

Purpose of Investment：

In order to obtain sufficient, long term stable supply in petrochemical upstream feedstocks, to explore development opportunities and business scale expansion. The investment of this Joint Venture Project to China has been running by six Taiwanese companies.

Gulei Joint-Venture Company

• Taiwanese Shareholders :50%

• Chinese Shareholders: 50%

Gulei Investment Project

Project Milestone：• DEC 2015：Gulei Zone was founded.

• MAY 2016：The Joint-Venture contract and the

articles of association was signed.

• NOV 2016：Fujian Gulei Petrochemical Co.,

Ltd. in Zhangzhou City Zhangpu County

industrial and commercial sector registration

was completed.

• DEC 2017: Planned construction begin.

Investment Capital：• Total Investment: RMB27.38 Billion

• Ho Tung had made investment via a

third party with investment of: Ho

Tung: USD83.7Million、Hsin Tay:

USD15.82Million、Chenergy:

USD14.5Million，Total 17.8% of

Taiwanese Joint Venture Company

Company Profile

Financial Report

Q&A

Outline

Consolidated Income Statement

Accounting Subjects2017/09/30 2016/09/30

Amount(Thousand) % Amount(Thousand) %

Operating Revenue 23,577,353 100.00 21,630,555 100.00

Operating Costs 21,784,627 92.40 19,593,392 90.58

Gross Profit 1,792,726 7.60 2.037,163 9.42

Operating Expenses 1,313,050 5.57 1,465,248 6.77

Operating Income 479,676 2.03 571,915 2.64

Non-Operating Income

and Expenses19,997 0.08 45,624 0.21

Profit Before Tax 499,673 2.12 617,539 2.85

Tax Expense 63,309 0.27 170,643 0.79

Profit 436,364 1.85 446,896 2.07

Profit attributable to

owners of parent360,085 1.53 248,342 1.15

Non-Controlling Interest 76,279 0.32 198,554 0.92

Basic Earning Per Share 0.36 0.25

Financial Ratio Analysis

Financial Ratio 2017/09/30 2016/09/30

Financial StructureShareholders' equity as asset ratio 53.82% 50.28%

Liabilities to asset ratio 46.18% 49.72%

SolvencyCurrent ratio 171.22% 148.38%

Quick ratio 114.74% 97.64%

ProfitabilityGross margin 7.60% 9.42%

Operating interest rate 2.03% 2.64%

Operational

capacity

Average collection period 60 Days 62 Days

Average payment period 34 Days 25 Days

Rate of returnShareholders' return on equity 4.31% 2.98%

Total return on assets 2.40% 1.78%

EPS and Dividends

Note: EPS is $0.36 in Q3 2017

0.2

1.2 1.2

0.5

0.5

0

0.3 0.35

1.74

1.53

0.72 0.53

-0.42

0.37 0.42

-1

-0.5

0

0.5

1

1.5

2

2010 2011 2012 2013 2014 2015 2016

Cash Dividend Share Dividend EPS

和桐化學2017年度法人說明會