Changtian Plastic & Chemical : Financial Statements And Related Announcement - Half Yearly Results

− Revenue increases by 12.0% to RMB32.0 million while net profit improves by

54.2% to RMB2.0 million

− Balance sheet remains strong with net cash of RMB966 million at end June

2014.

*The calculation of EPS is computed on the Group's profit for the period attributable to the

owners of the Company divided by 660,000,000 ordinary shares in issue throughout the three and six months ended 30 June 2013 and 2014.

Singapore, 13 August 2014 - Changtian Plastic & Chemical Limited ("长天实业有限 公司") ("Changtian" or the "Group") announced its results for the six months ended
30 June 2014 ("1HFY14"). The Group's net profit increased by 179.6% to RMB5.8 million, while revenue increased by 2.5% to RMB60.7 million.

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18 Xinsheng Road, Xinyang Industrial Zone, Haicang District, Xiamen City, Fujian Province, People's Republic of China 361026 Tel: 86-592-6517000 Fax: 86-592-6519700

For the three months ended 30 June 2014 ("2QFY14"), the Group's net profit increased by 46.4% to RMB1.9 million on the back of a 12.0% increase in revenue to RMB32.0 million.
Revenue improvement for 2QFY14 was due to higher customers' orders and higher sales volume.
For the quarter under review, sales of adhesive tapes increased 26.2% to RMB18.2 million and accounted for 57.0% of total revenue. UV cured release film contributed
23.5% of overall revenue after a 19.3% improvement in revenue to RMB7.5 million. Revenue from release papers increased by 25.2% to RMB6.2 million and accounted for 19.5% of group revenue. There were no sales of 2-A2MPS in 2Q14 as its production has been suspended since 3Q2013.
Gross profit margin for the Group improved by 7.4 percentage point from 12.8% in
2Q13 to 20.2% in 2Q14 due to lower cost of raw materials. The Group also reported lower depreciation charges in 2Q14 due to impairment costs recorded in previous years for its property, plant and equipment.
Selling and distribution costs decreased by 2.8% to RMB1.1 million. Higher transportation costs due to growth of sales was offset by lower staff costs due to the suspension of selling 2-A2MPS and reduction of other costs as stringent cost controls were imposed.
The Group incurred other operating expenses of RMB1.5 million which represents the write-off of construction in progress incurred on the original plot of land ("original site") for Nylon-6 Chip Development. The Group accepted an offer from the relevant local authority to provide an alternate site at the same industrial park in exchange for the original site. The costs incurred on the original site were written off in
2Q2014.

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As at 30 June 2014, the Group maintained a net cash position with cash and cash equivalents of approximately RMB966.8 million.

Chairman and Executive Director of Changtian, Mr Yang Qingjin (杨清金), said: "For our existing products, the global market continues to fluctuate and market competition remains uncertain. The Group will continue to monitor the markets closely for positive sign of industry recovery, as well as impose stringent cost controls to maintain profitability."
The Company refers to the announcement dated 14 March 2014 in relation to the Nylon-6 Chip Development and related announcements thereto. The Company is currently in discussions with the relevant local authorities with regard to the land use right of the land located at Nanxing Village, Wangchuan Town, Hui'an County, Quanzhou City, Fujian Province, the People's Republic of China ("Previous Site") and a notice has been issued by the local department to the Company informing the Company that an alternate site may be granted to the Company subject to fulfilment and completion of certain procedures and conditions, including the entry into of definitive agreement for the transfer of such alternate site to the Company ("Definitive Agreement"). The indicative alternate site is located at Quan Hui Petrochemical Industrial Park (East Bridge) Intersection of Zhong Jian Road and
Tong Gang Road, Hui'an County, Quanzhou City, Fujian Province, the PRC (泉惠石
化工业园区（东桥）重件路与通港路交叉位置 ), with an aggregate land area of approximately 100 MU ("Alternate Site"). As the Company has made payment for the Previous Site, it is unlikely that the Company will be required to make any further payment for the Alternate Site.
The Company has placed orders for certain machinery for the purposes of the constructing the Nylon-6 Chip Plant. It has signed a contract for the acquisitions of

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machinery amounting to Euro12.6 million (equivalent to S$22.1 million) for which it has made deposit payments of approximately RMB25.3 million (equivalent to S$5.2 million). The machinery & equipment have already been made to order and the Company cannot delay further, therefore decision needs to be made urgently to house them once they arrive in PRC (either in the intended factory or temporary warehouse, where latter has further costs to incurred). In order to avoid such cost and expense, the Company will be proceeding with the preparatory works on the Alternate Site, notwithstanding that the Definitive Agreement has not been entered into as yet. Delivery can only be received when the Alternate Site is ready.
In respect of the preparatory works, we have engaged Fujian Quanzhou
Engineering Survey Institute (福建省泉州工程勘察院) to conduct geological survey on the Alternate Site. Upon completion of the geological survey and the results of such geological survey being satisfactory to the Company, construction works for the Nylon Chip Plant will be carried out on the Alternate Site.
In order to mitigate the risks pertaining to the Nylon-6 Chip Development, the Company will put in places certain cautionary measures. To this end, the management will prepare the preparatory works and construction budget relating to the Nylon-6 Chip Development and this will be closely monitored by the Audit Committee, taking note of the construction progress and cost incurred, in keeping with the pre-determined budget for the Nylon-6 Chip Development.
The Group will continue to provide further update to all shareholders as and when appropriate.

Based in Xiamen, Fujian Province, PRC, Changtian started off as a manufacturer of adhesive tapes before leveraging on its technical expertise to expand into the
production of release papers, release film, BOPA film and 2-A2MPS. The Group

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expanded into the production of UV cured release film in 2008, which has varied applications in the manufacturing process of personal hygiene products.
The Group did not have any production of BOPA film since the fourth quarter of
2010, and has suspended production of 2-A2MPS since the third quarter of 2013. Changtian has been listed on the SGX Mainboard since 9 November 2007.

ISSUED BY : Changtian Plastic & Chemical Limited
18 Xinsheng Road Xinyang Industrial Zone Haicang District
Xiamen City, Fujian Province
People's Republic of China
CONTACT : Mr Tan Khow Siong,
(VP, Corporate Communications & IR)
at telephone
DURING OFFICE HOURS : 9327-3970 (Handphone) EMAIL : tanks@chang-tian.com.cn

13 August 2014

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