亞洲水泥股份有限公司 Asia Cement Corporation Stock code: 1102 TT IR presentation Aug 2020
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Table of Contents Company Snapshot Financial Highlights Asia Cement (China) Operating Data Shanshui Cement Operating Data PRC Industry Overview Taiwan Industry Overview Financials CSR Achievements 3
Company Snapshot 4
Company Snapshot Market Cap: US$ 4.7 bn / NT$ 140 bn (as of 14 Aug 2020) Consolidated Entities • Established in 1957 ACC • 2 nd largest cement producer Taiwan • Cement capacity: 5.0 mtpa. • 10 th largest cement producer AC(China) • In Central and Southwest China (743 HK) • Cement capacity: 33.0 mtpa. Asia Cement • LNG fired IPP (8% of revenue) (1102 TT) Other • Cold rolled stainless steel Business (6% of revenue) Equity Investments U-Ming Shanshui FENC Marine Cement (1402 TW) (2606 TW) (691 HK) 5
ACC(Taiwan) & Other Business 1. Cement: 2nd Largest Cement Player in Taiwan. 2. IPP: Expanding phase II project with 500MW, COD on 1Q21. 3. Stainless Steel: Producing 300 and 400 series products, export oriented. Cement market share in TW IPP Phase II project in TW (As of 2019) TCC Import Phase I ： 670MW 30% 20% Phase II ： 500MW ACC Others 27% 23% Phase I ： 670MW Capacity in TW Hsinchu plant Hualian plant Nanhwa 1Q21 2018 grinding station 6
AC(China) Overview 1. Located in the Yangtze River Economic Belt. 2. Leading player in top-tier cities of each operating province. 2019 Cement Capacity 33mtpa Jiujiang and Nanchang Chengdu market share Sichuan market share 11 mt Jiangxi 36% and 25% 33% 14 mt 42% 43% No. 1 and No.2 No. 1 Hubei 8 mt 24% Wuhan market share 23% No. 1 7
Shanshui Cement Overview 1. One of the major cement producers in Northern China. 2. 7 th largest National wide and 2 nd largest in Shandong province. 2019 Cement Capacity 102mtpa Xinjiang 4 mt 4% Northeast China 27 mt 27% Shandong 55 mt Shanxi 54% 16 mt 15% Note: Northeast China region includes Liaoning province and Inner Mongolia. Source: China Shanshui Cement Group Ltd. 2019 financial report and 2019 annual report. 8
Investment in Shanshui Timeline Reclassified ACC began ACC the stake as to invest entered the equity Shanshui BOD investment 2010 5/2018 10/2018 Shanshui Shareholder Structure Prior EGM 2018/10/30 Current China ACC & Voting Shanshui China Alliance ACC & Voting Investment Shanshui 20.74% Alliance 19.47% Investment 26.72% 25.09% CNBM Tianrui 12.94% Group CNBM Tianrui 21.85% 16.67% Group Others 28.16% Others 25.00% 3.36% Note: Asia Cement holds 17.46%, and 3.28% of the interests are held through agreement to acquire interests in the Company, required to be disclosed under s.317(1)(a) and s.318 of the SFO. Source: http://www3.hkexnews.hk/listedco/listconews/SEHK/2018/1030/LTN20181030956_C.pdf. 9
Investment Portfolio in Far Eastern Group NT$ mn Incor- Stock porated Investees Holdings Category Company Introduction Code Year 2004 Asia Cement (China) Holdings Corp. 743 HK 67.7% Consolidation Top 10 cement producer in China 1997 Far EasTone Telecommunications Ltd. 4904 TT 1.0% FVTOCI Top 3 telecom company in Taiwan Provide diversified financial services in 1992 Far Eastern International Bank 2845 TT 2.4% FVTOCI Greater China Important supplier of EG and chemical 1975 Oriental Union Chemical Corp. 1710 TT 7.2% FVTOCI products in Asia-Pacific 1968 U-Ming Marine Transport Corp. 2606 TT 39.3% Equity Method Largest dry bulk carrier in Taiwan Leading retailer of department store and 1967 Far Eastern Department Stores Ltd. 2903 TT 5.7% FVTOCI supermarket in Taiwan Holding Company of Far East Group. 1949 Far Eastern New Century Corp. 1402 TT 23.8% Equity Method Core business integrated from petrochemical to textile. Note: Asia Cement comprehensively holds 72.0% of Asia Cement(China) Holdings. � (100%-owned AC(Singapore) holds a 4.1% stake and Asia Engineering Pte. holds a 0.2% stake of Asia Cement(China)) 10
Financial Highlights 11
Asia Cement (1102 TW): Robust financial structure and high dividend payout NT$ mn NT$ mn CAPEX Operating Cash Flow 120,000 Net Debt Net Gearing Ratio 60% 37,272 48% 90,000 45% 39% 60,763 27% 27% 54,341 60,000 30% 39,538 36,651 10,711 30,000 15% 8,139 7,620 4,275 3,755 3,147 1,157 0 0% 2017 2018 2019 2Q20 2017 2018 2019 1H20 NT$/share NT$/share, % 8 50 16% Book Value ROE 6 12.3% 45 12% 43.5 9.9% 41.0 4 40.7 8.4% 40 8% 37.9 2 4.4% 35 4% 0 2017 2018 2019 1H20 EPS 1.63 3.31 5.19 1.61 DPS 1.20 2.80 3.00 30 0% 2017 2018 2019 2Q20 12 Note: EPS is calculated using total outstanding shares.
Asia Cement (China)(743 HK): Excellent profitability and rich cash flow R$ mn R$ mn CAPEX Operating Cash Flow Net Debt Net Gearing Ratio 7,500 50% 40.0% 4,883 6,000 40% 3,963 4,500 30% 3,000 13.4% 20% 2,908 1,621 1,500 10% (1,728) (2,270) 1,520 0 0% 1,169 -1,500 -10% 228 135 154 143 -12.1% -3,000 -20% -15.8% 2017 2018 2019 2Q20 2017 2018 2019 1H20 R$/share R$/share, % 30% 3.0 15 Book Value ROE 23.9% 2.5 25% 12 22.0% 2.0 18.6% 9.1 20% 9.2 9 7.7 1.5 15% 6.3 1.0 6 10% 0.5 3 6.3% 5% 0.0 2017 2018 2019 1H20 0 0% EPS 0.38 1.55 2.01 0.56 2017 2018 2019 2Q20 DPS 0.16 0.62 0.50 13
Asia Cement (China) Operating Data 14
AC(China): Regional P.O42.5 Price & Inventory Level Unit: R$/t ; % Jiangxi (Nanchang) Hubei (Wuhan) % % Inventory Level Market Price R$/t Inventory Level Market Price R$/t 600 90 600 90 550 550 80 80 500 500 70 70 450 450 400 60 400 60 350 350 50 50 300 300 40 40 250 250 200 30 200 30 Jan-19 Apr-19 Jul-19 Sep-19 Dec-19 Apr-20 Jun-20 Jan-19 Apr-19 Jul-19 Sep-19 Dec-19 Apr-20 Jun-20 Sichuan (Chengdu) Jiangsu (Nanjing) Inventory Level Market Price Inventory Level Market Price R$/t % R$/t % 600 90 600 90 550 550 80 80 500 500 70 70 450 450 400 60 400 60 350 350 50 50 300 300 40 40 250 250 200 30 200 30 Jan-19 Apr-19 Jul-19 Sep-19 Dec-19 Apr-20 Jun-20 Jan-19 Apr-19 Jul-19 Sep-19 Dec-19 Apr-20 Jun-20 15 Source: Digit Cement. Inventory level is based on the average of province.
AC(China): Quarterly ASP and GP/t R$/t ASP by Quarter 344 1Q17 1Q17 2Q17 2Q17 3Q17 3Q17 4Q17 4Q17 1Q18 1Q18 2Q18 2Q18 3Q18 3Q18 4Q18 4Q18 1Q19 1Q19 2Q19 2Q19 3Q19 3Q19 4Q19 4Q19 1Q20 1Q20 2Q20 2Q20 221 233 230 285 314 319 339 391 368 380 366 403 385 344 GP/t by Quarter R$/t 144 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 23 55 48 99 104 127 133 167 149 186 151 178 178 144 Note: According to IFRS, losses on work stoppages, which is the fixed operating cost RMB 115mn in 1Q20, were recognized as operating expense. 16
AC(China): 2Q20 Operating Data R$/t mt ASP Shipment RMC:R$/mm 3 RMC:mm 3 2Q19 2Q20 2Q19 2Q20 485 462 380 8.1 7.7 344 346 281 68 62 1.0 1.1 0.5 0.3 0.4 0.4 Cement Clinker RMC Aggregate Cement Clinker RMC Aggregate Note: Net of VAT Gross Margin 2Q19 2Q20 82% 76% 53% 49% 42% 39% 16% 14% Cement Clinker RMC Aggregate 17
AC(China): 2Q20 Operating Data Cement Product by Regions ASP Shipment R$/t mt 2Q19 2Q20 2Q19 2Q20 415 388 366 354 357 355 342 336 2.9 2.9 2.6 2.6 1.8 1.5 0.8 0.8 Jiangxi Hubei Sichuan Jiangsu Jiangxi Hubei Sichuan Jiangsu Product Type 18
AC(China): 1H20 Operating Data R$/t mt ASP Shipment RMC:R$/mm 3 RMC:mm 3 1H19 1H20 13.6 1H19 1H20 489 469 10.3 375 355 309 292 2.0 1.9 63 63 1.1 0.8 0.8 0.5 Cement Clinker RMC Aggregate Cement Clinker RMC Aggregate Note: Net of VAT Gross Margin 1H19 1H20 80% 74% 46% 43% 43% 37% 16% 14% Cement Clinker RMC Aggregate 19
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