Ho Tung Chemical Corp. Investor Conference Time: 2:30PM, November 16Th , 2017 Address: GFORTUNE (7F., No.5, Sec

Ho Tung Chemical Corp. Investor Conference Time: 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 Ho Tung Chemical Corp. • ‘93 Jintung Petrochemical Corp. Ltd. • China : Resource Integration was established. was founded in Nanjing, China by Joint (Procurement/Sales), Gulei •’87 Normal Paraffin Plant started Venture with Sinopec Jinling. (LAB) Investment Project commissioning in Kaoshiung. • ‘96 First LAB unit was completed and started • S.E.A: Establishing Logistic Center, •’91 Ho Tung Chemical became commissioning in Nanjing, China. Downstream Distribution listed in Taiwan Stock Exchange. • ‘03 Jiangsu Jintung began plant construction • America/ Africa: Developing New customers, Downstream Distribution, •‘98 License for West Terminal Establishing Logistics at Taichung Port was approved

Base in Develop Grow in Taiwan in China International

‘80 ‘90 ‘95 ‘00 ‘06 ‘10 ‘17

Company Listed in The Taiwan Established Stock Exchange in Current (Year 2017) in 1980 1991

NTD 12.5 Million NTD 560 Million Over NTD 10 Billion Capital Capital Paid-up Capital Group Structure

Ho Tung Group

2016 Business Ratio Oil Chemical Cement Cement, 2.53%

Ho Tung Cement Oil, 20.79% Distribution/ Taiwan: Cement、Slag Blending Normal Paraffin Powder

Chemical, 76.68% China: Petrochemical (Linear Alkylbenzene Series) Oleochemical (Fatty Alcohol Ethoxylates Series) 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 % Other Taiwan Taiwan 4,215,861 13.76 15% 14%

South China 19,085,684 62.28 East Asia 9% S.E.A 2,739,699 8.94

Other 4,601,626 15.02 China 62% Total: 30,642,870 100.00 Production Capacities

Chemical Oil

Taiwan: Kaohsiung Taiwan: Taichung Port Normal Paraffin: 90,000MT 26 Tanks:130,000cbm De-Aromatic Solvent: 22,000MT Products: Gas Oil

China Linear 1st Unit. 120,000 MT Alkylbenzene: 2nd Unit. 130,000 MT China: Tianjin Port 3rd Unit. 100,000 MT Fatty Alcohol: 100,000MT 10 Tanks: 60,000cbm Ethoxylation: 200,000MT Products: Fuel Oil Sulfonation & Sulfation: More than 600,000MT Supply Chain

氯化腊潤滑油 CP BO

煤油正烷屬烴清潔劑 Home Care: 直鏈烷基苯 Detergent KERO NP 烷基苯磺酸LAS LAB DETERGENT

航空燃油高碳數醇其他油品 FO HC ALCOHOL OTHERS

工業用溶劑 SOLVENT Personal Care: Shampoo 乙稀脂肪醇硫酸鹽 Body wash Ethylene AS Conditioner 脂肪醇醇醚醇醚磺酸鹽 (天然/合成) AEO Fatty Alcohol AES 棕櫚仁油 (N/S) 工業用界面活性劑 PKO Surfactant

羥乙基磺酸鹽 Antiseptic SI 椰子油環氧乙烷 Coconut Oil EO 乙醇胺,碳酸乙酯, 電子用化學品及其他衍生物 Chemical for EA,EC,EOD Electron

Products made by Ho Tung Chemical Operation Location

Tianjin LAS/AES

Anhui LAS/AES Nanjing LAB/LAS Shanghai LAS Xiamen LAS Taiwan Chengdu NP LAS/AES Huizhou Guangzhou AEO/AES LAS/AES Philippines LAB/LAS 2017 LAB Global Capacities

LAB Suppliers QTY(KT/Y) %

NO 1 CEPSA 560 14.42 CEPSA, 14.42% Ho Tung, NO 2 Ho Tung 350 9.01 9.01%

SASOL, 8.88% NO 3 SASOL 345 8.88 Others, 67.69% TOP 3 Capacities 1,255 32.31

Global Capacities 4,034 100

++ 

LAB: Top market share in Asia since 2010 2017 Sulphonation Capacities in China

LAS/AES Suppliers QTY(KT/Y) %

Others, NO 1 Ho Tung 812 46.48 13.11%

NO 2 Zanyu 480 27.47 Resun, 12.94% Ho Tung, NO 3 Resun 226 12.94 46.48%

TOP 3 Capacities 1518 86.89 Zanyu, 27.47% China Capacities 1,747 100.00

LAS: Top market share in the World since 2013 AES: Top market share in Asia since 2012 Strategic Partners Proud Customers Review and Improvement of Factors Influencing Profit in the Past Years

Failure in Joint-Venture(Shatong 2.00 Taixing, Jiangsu Shengtai) EPS Investment Sold in 2015Q2/Q3, thus 1.74 revenue had decreased, but the gross profit margin had 1.50 1.53 increased

Kaohsiung Plant was in short supply in the past three years due to the side 1.00 effect of gas explosion and shut down of No.5 Naphtha Cracker in Kaohsiung

0.72 Stable supply from CPC 0.50 since Q3 2017 0.53 0.37 0.42 China Market for Detergent Raw 0.00 Material is slowly growing 2010 2011 2012 2013 2014 2015 2016

(0.42) Globalization, the Belt and Road (0.50)

Note: EPS is $0.36 in Q3 2017 Chemical Development & Strategic Planning

China Asia Pacific

1. Set-up Operation Center 1. To ensure source of in China to perform Resource raw material Integration (Procurement/ Sales) 2. Downstream distribution 2. Gulei Investment 3. Developing logistic channels TWN Business Africa Center America

1. Developing new customers 1. Establishing logistic center 2. Downstream distribution 2. Downstream distribution 3. Developing logistics

Directions: 1. Strengthen in vertical integration of supply chain, business globalization and adding core competency 2. Initiate market development in differentiated/ high value adding products, and to increase margin of product 3. Building stronger relationship with downstream customers and to expand logistics and business field Asset Activation – China

Tianjin Other Location Nanjing (Completed in (eg. Xiamen, (Processing) 2015) Shanghai..etc) • NTD 1 Billion from • To cooperate the city renewal program running by Nanjing • To cooperate the compensation for Government, the industrial zone urbanization relocation includes: will become commercial & developing in China, Loss in plant shutdown, residential area where Ho Reconstruction fee, Tung’s existed plants will be Ho Tung’s operations Remaining from prepared to relocate by 2020. in each city might be The site is about 30 hectares relocated gradually. compensation for which is 4.4% out of 680 relocation hectares in “New Yao Block” planned by Nanjing government. Therefore, Ho • Annual Capacity: Tung’s site in Nanjing is in the 61,600MT →91,200MT priority list to be relocated..

• Plant Relocation • Applying compensation for Completed in May 2016: relocation Production Efficiency ↑ • There are 5.6 hectares of land Production Period ↑ ready to be activate in advance. A professional team was hired to evaluate and to plan 18 construction of commercial buildings and hotel apartments. Nanjing Plant Geographical Location

Industrial Zone

North East of Nanjing CBD Many metro stations nearby with excellent external traffic conditions 20.4KM away from Jiangsu Province R&D Office Government (38 mins by car) Area 5.7KM away from Nanjing East Station (15 mins by car) 18.5KM away from Nanjing City Project Government (32 mins by car) Location 56KM away from Xianlin High Speed Railway Station (20 mins by car) 7.2KM away from Qixia District Government (18 mins by car) 56KM away from Nanjing Railway Station (23 mins by car) Residential 56KM away from Nanjing Lukou Area International Airport (1 hour by car) 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. Asset Activation – Land in Taipei Danangang

Section 3, Nangang Road  Ho Tung 100% of

subsidiary Ho Shin Lane Lane 149, Section 3, Cheng engineering has joint development with 7 construction companies’

eg: KSECO, KUO YANG Nangang  This property includes more than 6,339 Ping, Ho

Road Shin Cheng holds 12.5%

Civic Blvd Land after Rezoning Gulei Integrated Petrochemical Complex Project Introduction

Purpose of Investment： Gulei Joint-Venture Company • Taiwanese Shareholders :50% In order to obtain sufficient, long term stable • Chinese Shareholders: 50% 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 Investment Project Project Milestone： • DEC 2015：Gulei Zone was founded. Investment Capital： • MAY 2016：The Joint-Venture contract and the • Total Investment: RMB27.38 Billion articles of association was signed. • Ho Tung had made investment via a • NOV 2016：Fujian Gulei Petrochemical Co., Ltd. in Zhangzhou City Zhangpu County third party with investment of: Ho industrial and commercial sector registration Tung: USD83.7Million、Hsin Tay: was completed. USD15.82Million、Chenergy: • DEC 2017: Planned construction begin. USD14.5Million，Total 17.8% of Taiwanese Joint Venture Company Outline

Company Profile

Financial Report

Q&A Consolidated Income Statement

2017/09/30 2016/09/30 Accounting Subjects 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 19,997 0.08 45,624 0.21 and Expenses 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 360,085 1.53 248,342 1.15 owners of parent 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

Shareholders' equity as asset ratio 53.82% 50.28% Financial Structure Liabilities to asset ratio 46.18% 49.72%

Current ratio 171.22% 148.38% Solvency Quick ratio 114.74% 97.64%

Gross margin 7.60% 9.42% Profitability Operating interest rate 2.03% 2.64%

Operational Average collection period 60 Days 62 Days capacity Average payment period 34 Days 25 Days

Shareholders' return on equity 4.31% 2.98% Rate of return Total return on assets 2.40% 1.78% EPS and Dividends

2 1.74 1.53 1.5

0.72 1.2 1.2 0.53 0.5 0.5 0.37 0.42 0.5 0.35 0.2 0.3 0 0 2010 2011 2012 2013 2014 2015 2016 -0.42 -0.5

-1 Cash Dividend Share Dividend EPS Note: EPS is $0.36 in Q3 2017 和桐化學 2017年度法人說明會