2018China Synthetic Rubber Corporation

Investors’ ConferenceMay / 2018

Carbon,

source of life,

foundation of civilization

碳乃生命之源，文明之本

Carbon Black

moves civilization

碳黑是文明進步的滾輪

CSRC Group Carbon Black Business Overview

Capacity of Major Carbon Black Makers

Source : Notch Consulting Group, 2016

MT (‘000)

2,133 2,010 1,285 1,145 790 495 472 465 451 445

CABOT BIRLA OEC JBCCB CSRC LongXing PCBL OCG TOKAI SRCE

Agenda

• Industry Overview

• Business Outlook

• Q1/2018 Operating Results

Industry Overview

1/

Carbon Black Industry Overview

Expansion will be the inevitable trend

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

MT (‘000)

4.0%

3.1% 3.1% 3.2% 3.2%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

0

5,000

10,000

15,000

20,000

25,000

2017 2018 2019 2020 2021Demand Growth %

1.1%

3.5%3.0% 3.0% 3.0%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

0

500

1,000

1,500

2,000

2,500

3,000

2017 2018 2019 2020 2021

North America

Demand Growth %

5.5%

3.0% 3.0% 3.1% 3.1%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

0

1,000

2,000

3,000

4,000

5,000

2017 2018 2019 2020 2021

ASIA

Demand Growth %

Specialty Carbon Black Overview

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

Developing high value Specialty CB Products

1692 1832 1975 2133 2292

1037 1094 1148 1208 1265

9%8% 8% 8% 7%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

0

500

1000

1500

2000

2500

3000

3500

2017 2018 2019 2020 2021

SCB Worldwide

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

0

200

400

600

800

1000

1200

1400

1600

2017 2018 2019 2020 2021

Value (USD M)SCB by Application

Plastics Inks Coatings Other

0

200

400

600

800

1000

1200

2017 2018 2019 2020 2021

Value (USD M) SCB by Region

N. America Europe APAC ROW

BusinessOutlook

2/

Beyond Circular Economy

Globalization

The Future is Worth It

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

Emission Control SystemRecycle Energy

Application:• Tire:

Passenger Car Radial, Truck Tire…

• Mechanical Rubber: Belt, Hose, Auto parts…

• Plastic: Agricultural film, pipe, wire and cable…

• Ink: Package printing…

• Coating: Automotive coating, architectural coating…

• Conductivity: batteries…

Carbon Black is Circular Economy

The source of life Foundation of civilization

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

• Effective Internal

Management

• Industry Transparency

• Enhancing expanding

strategies of each

business unit to higher

level

Industry Holding Company

Industry Holding Company

中國合成橡膠股份有限公司

(CSRC)

Synpac(North Carolina),Inc.

中橡炭黑大陸三廠(鞍山、馬鞍山、重慶)

中橡炭黑美國廠CCC USA Corp.

中橡炭黑印度廠CCIL

能元科技

全循環經濟(股)（名稱暫定）

Synpac(North Carolina),Inc.

中橡炭黑大陸三廠(鞍山、馬鞍山、重慶)

中橡炭黑美國廠CCC USA Corp.

中橡炭黑印度廠CCIL

能元科技

Organizational Chart

轉型前

生技事業群

碳煙事業群

鋰電池事業群

林園先進材料科技股份有限公司

國際中橡投資控股

股份有限公司

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 issueset new plant and invest

advanced system(De-Sox, SCR)

Commitment to Eco-friendly

Expanding in India833.8

3

901.6

1

922.3

6

665.6

4

879.2

6

939.3

3

1,0

06.0

5

1,0

82.6

1

1,1

69.6

5

1,2

68.8

7

1,3

80.1

3

1,5

06.8

0

1,6

51.6

4

1,8

17.3

7

2,0

03.1

4

CAGR 2017E-2026F

By Value: 8.78%

Figure 1: India Carbon Black Market Size, By Value, 2012 - 2026F (USD Million)

Source: TechSci Research Private Limited

Figure 2: India Carbon Black Market Size, By Volume, 2012 - 2026F (‘000 Metric Ton)

645.7

6

690.1

2

720.2

3

760.7

7

806.4

9

852.2

2

903.6

2

962.5

6

1,0

29.3

5

1,1

05.1

8

1,1

89.6

0

1,2

85.1

5

1,3

93.7

7

1,5

17.2

4

1,6

54.3

1

CAGR 2012-2016

By Volume: 5.71%

• Current CCIL capacity is 85,000 Mt

• Through further capacity expansion to track profit and market

share growth

New Tire Expansion in Gujarat

Current Carbon Black deployment

Source: All India Tire Manufacturer Association

Expanding in India

Expanding in India

Capacity 450,000 Mt

Production

Sector

• Carbon Black (Rubber Carbon Black and

Specialty Carbon Black)

• Steam

• Power

Expected

CapexUSD 200 Million

Expected

Timeline

Three Phases

Phase I will complete in

2021

Battery Power

24

Focusing on Cylindrical cell

• Cylindrical cell Size: Current: 18650/20700Development: 21700

• Applied Field:

ESS, Power Tool, EV, Vacuum Cleaner, Medical….

Q3'17 Q1'18 Q3'18 Q1'19 Q3'19

K cellsE-ONE MOLI Capacity

21700 Characteristics:

• Dimension increase 10%• Energy cost decrease 20%• Capacity increase 30~40%• Cell amount in the pack

decrease 30%

: 18 20 or 21mm

L:

65

70m

m

25

• Establishing 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

R & D Investment

ResourceConsolidation

Niche Product Development

Investing in Future

Q1/2018 Operating Results

3/

3,876 4,701

1,099 1,317

24% 23% 23% 24%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

FY2016

FY2017

Q1/2017

Q1/2018

EBITDA EBITDA / Sales

4,570 5,570

1,299 1,511

29% 28% 26% 28%

FY2016

FY2017

Q1/2017

Q1/2018

Gross Margin Gross Margin %

Q1/2018 ResultsSale Revenue Gross Margin & %

EBITDA Net Income& EPS

15,889

20,114

4,857 5,435

FY2016

FY2017

Q1/2017

Q1/2018

NTD million

NTD million

1,414

2,300

495 822

2.39

3.69

0.78 1.29

-2.00

-1.00

0.00

1.00

2.00

3.00

4.00

5.00

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

FY2016

FY2017

Q1/2017

Q1/2018

Net Income Basic EPS (NT$)NTD million

NTD million

Operating Income by Business Units

28

NTD Million

Y2016 Y2017

Q1/2018

Carbon Black

Biotech

Energy

Others

3233

-20919-108

3134

-2118

510

915

15-5

181

Carbon Black Sales & GM%

29

NTD millionGM %

2,493

2,639 2,807 2,667

3,444 3,514 3,405

3,719 3,849

7.1%3.5%

10.6%15.4%

11.5%15.8%

10.4%9.2% 12.2%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

0

1,000

2,000

3,000

4,000

5,000

6,000

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18

Financial Structure

30

29.4%27.6% 28.4%

26.9%

32.1%

29.6%

16.9%

-0.3%-6.1% -6.0%

-0.5% -4.8%

-10%

0%

10%

20%

30%

40%

2013 2014 2015 2016 2017 2018Q1

Debt/ Asset (consolidated) Net Debt/ Equity (consolidated)

Leverage Ratios (%)1.9 2.0 2.0

2.3 2.2 2.2

1

2

3

2013 2014 2015 2016 2017 2018Q1

Current Ratio

32.8

36.2

29.0

31.4 31.8

34.7

20

30

40

2013 2014 2015 2016 2017 2018Q1

Book Value / share

39 37 38 37

44 42

30

35

40

45

50

2013 2014 2015 2016 2017 2018Q1

Debt Ratio ( L/A)

END OF PRESENTATION

THANK YOU

Disclaimer

32

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.