China Synthetic Rubber Corporation2018 Q3

I n v e s t o r s ’ C o n f e r e n c e

Carbon Black

moves civilization

碳黑是文明進步的滾輪

Carbon,

source of life,

foundation of civilization

碳乃生命之源，文明之本

Eco-friendly civilization

Renewable energy and resourcesMission

Vision

CSRC Group –

A circular economy and green life sustainable

company

CSRC Group Business Overview

AMERICAEUROPE/MEA ASIA

Manufacturing Sites

Technology Centers

Licensee Manufacturing Site

Offices

Sunray, TX

Ponca City, OK

Houston, TX

Barberton, OH

Phenix City, AL

Brussels, Belgium

Kemya, Saudi Arabia

New Delhi, India

Liaoning, China

Anhui, China

Chongqing, ChinaTaipei, Taiwan

Kaoshiung, Taiwan

E-ONE MOLI

E-ONE MOLI

E-ONE MOLI

Gujarat, India

2,133 2,050

1,211 1,155

941 795

515 505 400

Cabot Birla Orion Black Cat Tokai & Sid

Richardson

CSRC PCBL OMSK Longxing

America

305

China

285

Taiwan

120

India

85

Source : Notch Consulting Group, 2018

MT (‘000)

Tokai completed acquisition Sid Richardson in Sept.

Capacity of Major Carbon Black Makers

CONTENTS

01

02

03

Business Overview

Business Out look

Q3/2018 Operat ing Resul ts

Business Overview01

Expansion and Globalization will be the inevitable trend

Source: Future Markets “The Global Market for Carbon Black 2018”

MT (‘000)

3.1%

3.1%

3.2% 3.2%3.2%

3.0%

3.0%

3.0%

3.1%

3.1%

3.1%

3.1%

3.1%

3.2%

3.2%

3.2%

3.2%

0

5,000

10,000

15,000

20,000

25,000

2018 2019 2020 2021 2022Demand Growth %

3.5% 3.0% 3.0% 3.0% 3.0%

-5.0%

-3.0%

-1.0%

1.0%

3.0%

5.0%

0

500

1,000

1,500

2,000

2,500

3,000

2018 2019 2020 2021 2022

North America

Demand Growth %

3.0% 3.0% 3.1% 3.1% 3.1%

-5.0%

-3.0%

-1.0%

1.0%

3.0%

5.0%

0

1,000

2,000

3,000

4,000

5,000

2018 2019 2020 2021 2022

ASIA

Demand Growth %

3.0% 3.0%2.5% 2.5% 2.7%

-5.0%

0.0%

5.0%

0

500

1000

1500

2000

2500

3000

2018 2019 2020 2021 2022

W. Europe

Demand Growth %

Carbon Black Industry Overview

Source: Lucintel-Global Specialty Carbon Black Market Trends Forecast and Opportunity Analysis 2018

Developing high value Specialty CB Products

1832 1975 2133 2292 2459

1094 1148 1208 1265 1325

8% 8% 8% 7% 7%

-10%

-5%

0%

5%

10%

-500

500

1500

2500

3500

2018 2019 2020 2021 2022

SCB Worldwide

Value (USD M) Volume (kt) Value Growth Rate

0

500

1000

1500

2000

2018 2019 2020 2021 2022

Value (USD M)

SCB by Application

Plastics Inks Coatings Other

0

500

1000

1500

2018 2019 2020 2021 2022

Value (USD M)

SCB by Region

N. America Europe APAC ROW

Specialty Carbon Black Overview

Low

Rolling

Resistance

Tire

High

Performance

Tire

Long Run

Tire

Plastics

• Cable Wire

• Low Grit

• High color plastics

• Fiber

• Conductive CB

Coating

Valuable Carbon Black

Business Outlook02

Beyond Circular Economy

Globalization

The Future is Worth It

Carbon Black is Circular Economy

• Petrochemical industry

• Coking industry / Steel industry

• Recycling Energy from

Production

• Steam

• Power

• Dramatic reducing Sox, NOx, PM

Transfer industrial waste as raw material

17 days of power consumption

in Taipei city

Source: Taipei City Government

Recycle Energy

Emission Control System

Commitment to Eco-friendly

High Pollution Control

Standard

Advanced Pollution Control System

Taiwan Nox, PM SNCR SCR

China Sox, Nox, PM De-Sox, SNCRSCR

USASox, Nox, PM

(consent decree)De-Sox, SCR

India NCR zone PM issueInvesting in advanced system at new plant

(De-Sox, SCR)

Taiwan: 1 Under Construction

China: 2 Established, 2 Commissioning

USA: 1 Commissioning

India: Designed

AMERICAEUROPE/MEA ASIA

Sunray, TX

Ponca City, OK

Commissioning

SOx 96 %↓NOx 95 %↓

Phenix City, AL

New Delhi, India

Liaoning, China

Anhui, China

Chongqing, China

Reduction Rate of SOx, NOx

Kaohsiung, Taiwan

Under Construction

SOx 90 %↓NOx 90 %↓

Chongqing, China

Established

SOx 90 %↓NOx 90 %↓

Anhui, China

Commissioning

SOx 90 %↓NOx 90 %↓

Liaoning, China

Commissioning

SOx 90 %↓NOx 90 %↓

Gujarat, India

Designed

SOx 95 %↓NOx 95 %↓

New Delhi, India

Social ParticipationFrom the society, for the society

The Impact of IMO 2020 Sulphur Cap

In Oct-2016, IMO decided to bring in a sharp cut in marine fuel Sulphur limit ( from

3.5% to 0.5%) by 2020 for further emission reduction at global marine shipment

industry

Higher demand for low sulfur feedstock

Lower demand for high sulfur feedstock

Continue to look into price change impact

Beyond Circular Economy

Globalization

The Future is Worth It

Globalizing

Global R & D Integration

Global Management System

Global Account Service

Global Feedstock Sources

Global Talent Global Brand

Beyond Circular Economy

Globalization

The Future is Worth It

Industry Holding Company

Synpac

(North Carolina),Inc.

USA Plants

CCC USA Corp.

E-ONE MOLI

Bio Tech

BU

Carbon

Black

BU

Energy

BU

Linyuan Advanced

Materials Technology

Co., Ltd.

International CSRC

Investment Holding

Co., Ltd.

China Plants

MAS, AS, CQ

India Plants

CCIL, CCET

Circular Commitment

Company • Effective Internal Management

• Industry Transparency

• Enhancing expanding strategies of each

business unit to higher level

Capacity Phase I - 150,000 Mt(450,000 Total)

Production Sector

• Carbon Black (Rubber Carbon Black and Specialty Carbon Black)

• Steam• Power

Expected Capex

Phase I - USD 83 Million

Expected Timeline

Three PhasesPhase I will complete by 2021

Expanding in India

Dahej,

Gujarat

• Advantageous Geographical Location

• Customers and Feedstock Cluster

• Well Developed Infrastructure

• Higher Economic Growth

• Friendly Investment Environment

Battery Power

Expansion Plan

850 million

Decrease in

Capital

3,500 million

Increase in

Capital

Capital: 3,013 M -> 5,663 M

Complete By Q1 2019

New Capacity

in Taiwan

18 Million Cells/Month

by 2020Double Capacity –

9 Million Cells/Month

by Jan. 2019 through

Talent Management,

Process Optimization,

R&D and Technology

Investment

Achieved

4.5 Million Cells

/Month

Battery Power

Product Strategy:

1. Niche Market

2. High Capacity with Extremely

High Power

Application:

• Home Appliances

• Medical & Military

• ESS

• Power and Outdoor

Solution

• Personal Device

• E-Bike

• Aerospace & Seismic

• BBU for Data Center

• E-Call

• 5G

21700:

• P42A: 4.2Ah/45A

• M50A: 5Ah/20A

18650:

• P28A: 2.8Ah/35A

• M30A: 3Ah/10A

• M35A: 3.5Ah/10A

New Product in 2019:

Investing in Future

• Investing in R&D

Center

• Investing in Talent

and Technology

Development

• Investing in

Pharmaceutical• Integrating Global

Resources and

Technologies

• High-Performance CB

• Specialty CB

• New Generation CB

for EV tire

• Next Stage Battery

Design

R & D Investment

ResourceConsolidation

Niche Product Development

Q3/2018 Operating Results03

Q3/2018 Results

Sales Revenue Gross Margin & %

EBITDA Net Income& EPS

NTD million

NTD million

NTD million

NTD million

15,889

20,114

14,843

18,149

FY

2016

FY

2017

1-3Q/

2017

1-3Q/

2018

3,876 4,701

3,854 4,692

24% 23% 26% 26%

FY

2016

FY

2017

1-3Q/

2017

1-3Q/

2018

EBITDA EBITDA / Sales

1,414

2,300 1,960

2,820 2.39

3.69

2.84

3.88

FY

2016

FY

2017

1-3Q/

2017

1-3Q/

2018

Net Income Basic EPS (NT$)

4,570 5,570 4,186

5,051

29% 28% 28% 28%

FY

2016

FY

2017

1-3Q/

2017

1-3Q/

2018

Gross Margin Gross Margin %

Operating Income by Business Units

NTD Million

-108 510721

-209-21

206

3233

3134

2788

Y2016 Y2017 1-3Q 2018

Carbon Black Battery Biotech

75%

6%

19%

Carbon Black Sales & GM%

NTD million

GM %

Financial Structure

27.6%

28.4%

26.9%

32.1%

30.1%

20%

30%

40%

Y2014 Y2015 Y2016 Y2017 20183Q

Interest Bearing Debt/ Asset

(consolidated)

2.0 2.0 2.3 2.2

2.0

1

2

3

Y2014 Y2015 Y2016 Y2017 Y2018Q3

Current Ratio

36.2

29.0

31.4 31.8 34.3

20

30

40

50

Y2014 Y2015 Y2016 Y2017 Y20183Q

Book Value / share

37 38 37

44 42

30

35

40

45

50

Y2014 Y2015 Y2016 Y2017 Y2018Q3

% Debt Ratio ( L/A)

THANK YOU

csrcir@csrcgroup.com

Disclaimer

The forward-looking statements contained in this presentation are subject to risks

and uncertainties and actual results may differ materially from those expressed or

implied in these forward-looking statements.

China Synthetic Rubber Corporation makes no representation or warranty as to the

accuracy or completeness of these forward-looking statements and nor does China

Synthetic Rubber Corporation undertake any obligation to update any forward-

looking statements, whether as a result of new information or future events.