Chairman's Message

On behalf of the Board of Directors of China Sunsine Chemical Holdings Ltd. (“China Sunsine” or the “Company”, together with its subsidiaries, collectively the “Group”), I am pleased to present the annual report for the financial year ended 31 December 2024 (“FY2024”).

The global economic growth in 2024 has been steady but slow, with a growth rate of 3.2%, according to the World Economic Outlook Update (January 2025) issued by the International Monetary Fund (“IMF”). However, the global economy still faced numerous challenges, including a high-interest-rate and high-inflation environment, continuous geopolitical tensions, and the U.S.-China trade war.

China’s economic performance in 2024 saw a return to steady growth as well, achieving a 5% GDP expansion in line with the government’s target. This was driven by stimulus measures, strong exports, and high-tech investment. However, it continued to face challenges such as structural imbalances, weak domestic demand and tariff pressures.

Despite these challenges, China’s tire production soared in 2024. According to the latest data released by the National Bureau of Statistics, China’s production of rubber tires in 2024 reached 1.19 billion units, up by 9.2% compared to the previous year. This growth reflects the vigorous development of China’s tire manufacturing enterprises via continuously expanded production capacity.

Although demand in the downstream tire industry has increased, expansion of production capacity in China’s rubber chemicals industry triggered intense competition in recent years, asserting huge pressure on our average selling price. However, leveraging the Group’s leading position in the industry, and guided by the strategy of “Sales and Production Equilibrium”, the Group achieved record-high production and sales volumes in 2024. The Group has maintained its market leadership position both in China and globally, further strengthening its competitive advantages.

The Group’s revenue in FY2024 increased marginally by 1% from FY2023 to RMB 3,515.5 million. The overall average selling price (“ASP”) declined modestly by 2%, from RMB 16,663 per tonne to RMB 16,226 per tonne in 2024. This was mainly due to the decrease in raw material prices, as well as the Group’s adoption of a more flexible pricing strategy in response to the intense market competition.

However, sales volume grew 3% from 206,996 tonnes in FY2023 to 214,094 tonnes in FY2024, reaching another record-high. This growth highlights the Group’s ability to sustain its market leadership position while meeting rising customer demand, achieved through years of capacity expansion.

The Group’s profit before income tax increased by 29%, from RMB 453.2 million in FY2023 to RMB 585.1 million in FY2024. Due to the expiration of the “High-Tech Enterprise” status of the Group’s main subsidiary, Shandong Sunsine, it no longer enjoys a concessionary corporate tax rate. Despite being subject to the standard tax rate, the Group’s net profit still grew by 14% year-on-year, rising from RMB 372.4 million in FY2023 to RMB 423.9 million in FY2024.

The Group’s earnings per share for FY2024 was RMB 44.34 cents. As at 31 December 2024, its net assets per share stood at RMB 441.45 cents. The Group’s financial position was further strengthened with cash and bank deposits amounting to RMB 2,073.9 million, and no bank borrowings.

Leveraging its advantages in land, technology, and capital, the Group has been implementing its expansion plan orderly in recent years, to meet market demand for its products while continuously enhancing its competitiveness through economies of scale. Set out below is the summary of the Group’s expansion projects in 2024:

• Phase 2, 30,000-tonne per annum Insoluble Sulphur project: The construction and installation of machinery has been completed, and it is expected to commence trial run in the first half of 2025.
• Phase 1, 20,000-tonne per annum Continuous Production of High-Quality MBT project: MBT is an intermediate product used in the production of accelerator products. The total projected capacity is 60,000 tonnes per annum. Phase 1 of the 20,000-tonne project has been completed, and commercial production has commenced. The preparation of the Phase 2, 40,000-tonne per annum project is in progress.

The Group has consistently upgraded its production processes and equipment through R&D, process improvements, and technological innovation. Notably, it has made significant progress in continuous, automated, and environmentally friendly production, greatly enhancing efficiency and reducing costs. At the same time, the Group has pursued internal integration by expanding the production capacity of key raw materials, which not only lowers production costs but also strengthens supply chain security.

Through continuous capacity expansion and internal integration strategies, the Group has further solidified its leading position in the rubber chemicals industry. The Group remains the world’s largest producer of rubber accelerators, a leading manufacturer of insoluble sulphur in China, and a key player in the antioxidant market.

According to projections by the IMF, the global economy has demonstrated resilience and is expected to grow by 3.3%(1) this year, with inflation continuing to ease. However, rising geopolitical tensions, escalating international conflicts, and the ratcheting up of trade protectionism have heightened risks and uncertainties in the economic landscape.

As the world’s second-largest economy, China has forged ahead amid structural headwinds, the ongoing trade war, real estate challenges, and sluggish domestic demand. However, 2025 marks the final year of China’s 14th Five-Year Plan, and the country’s economic development continues to hold significant potential for the future. This cautious optimism is grounded in the Chinese government’s commitment to ramping up stimulus measures and providing stronger policy support to navigate these hurdles.

China is the world’s largest automobile market. According to the China Association of Automobile Manufacturers (“CAAM”), new car sales in China increased by 4.5% in 2024 compared to the previous year, with sales of new energy vehicles soaring by 35.5%. The contribution of new energy vehicle sales further increased, reaching 41% of total new car sales.

The tire industry presents both opportunities and challenges. As Chinese tire companies expand and establish production facilities overseas, China’s global market share of tire production has further increased. However, the rise of trade protectionism has created significant barriers and pressure on tire exports. Despite these challenges, Chinese tire companies are gradually gaining a foothold in the global market, thereby driving increased demand for rubber chemicals.

The rubber chemicals industry in which we operate continues to face an oversupply of capacity, and market competition remains intense. These factors have placed significant pressure on our selling prices. In response to these challenges, the Group’s “Sales and Production Equilibrium” strategy has proven to be effective.

This strategy focuses on maximising sales efforts to drive capacity expansion, while increased production capacity, in turn, further supports sales growth. This strategy strengthens the Group’s market share and enhances its competitiveness.

Over the past 40 years—18 of which as a public company listed on the Singapore Exchange—the Group has strengthened its leadership in both the Chinese and international rubber chemicals markets. It has built a comprehensive competitive edge across branding, scale, financial strength, cost efficiency, customer service, R&D, and environmental sustainability.

Beyond market expansion, the Group is also dedicated to enhancing internal efficiency. By increasing productivity, reducing costs, and improving internal management processes, we strive to maximise profitability. With a strong foundation and a clear vision, we are highly confident of the Group’s future growth and success.

In recognition of the unwavering support of shareholders and considering the Group’s strong earning performance, robust cash position, and strategic expansion plan, the Board of Directors recommends a final one-tier taxexempt dividend of SGD 0.03 per share for FY2024, comprising an ordinary dividend of SGD 0.02 and a special dividend of SGD 0.01. This proposal will be discussed and approved at the upcoming Annual General Meeting.

As we navigate an increasingly competitive market, the Group remains steadfast in its commitment to growth and excellence. Our achievements are a testament to the collective efforts of our Board of Directors, management team, and dedicated employees. Their professionalism, perseverance, and passion continue to drive the Group forward, and I extend my deepest appreciation for their invaluable contributions.

We are also profoundly grateful to our customers, business partners, suppliers, and the wider community for their trust and support. Their confidence fuels our determination to innovate, elevate our service levels, and uphold our corporate social responsibilities.

Above all, I would like to express my sincere gratitude to our shareholders for their enduring trust and belief in the Group. Our pursuit of long-term, sustainable growth and value creation remains at the heart of everything that we do. With their continued support, we will keep striving for excellence, and building a stronger and more resilient future!