1

LUZHOU BIO-CHEM TECHNOLOGYLIMITED

9MFY13Results Notes

November 12, 2013

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Financial Overview

Business Outlook

Growth Strategies

Company Profile

Content

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Financial Overview

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Group Revenue decreased by 7.7% y-o-y

Corn refining

Sales volume decreased by 2.3%; weighted average selling price

decreased by 6.8%

Animal feeds

Sales volume increased by 13.9%; weighted average selling price

increased by 4.4%

Gross profit margin of 6.7%, 27.2% lower y-o-y;

Corn refining: 7.5%, 23.5% lower y-o-y;

Animal feeds: 2.5%, 13.8% lower y-o-y;

Others: (4.6%), 128.8% lower y-o-y;

Net Profit Margin of (3.4%)

780.0% lower y-o-y

Cash and cash equivalents of RMB134.7 million as at September 30, 2013

(RMB119.5 million as at December 31, 2012)

9MFY13 Financial Highlights

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RMB’mil 3QFY13y-o-y

Chg (%)

q-o-q

Chg (%) 9MFY13

y-o-y

Chg (%)

Revenue 751.3 （14.6） (10.8) 2, 391.0 (7.7)

Gross Profit 50.6 （36.4） (5.2) 161.0 (32.5)

(Loss)/Profit Before Tax (30.2) （516.6） 11.7 (76.6) (486.0)

Net (Loss)/Profit (31.3) （714.9） 11.4 (81.8) (717.7)

Gross Profit Margin 6.7% （25.6） 6.3 6.7% (27.2)

Net Profit Margin (4.2%) （800.0） - (3.4%) (780.0)

3Q:Three months ended September 30 9M:Nine months ended September 30

FY: Year ended December 31

Income Statement Highlights

6

212268

281

310

296

365

400

406

392

532

586

691

586

736

697

575

481

520

557

811

647

695

767

940

873

1034

935

1064

809

901

880

810

797

842

751

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

RMB’mil

Revenue

1Q Revenue2Q Revenue3Q Revenue4Q Revenue

FY: Year ended December 31 1Q: Three months ended March 31

2Q:Three months ended June 30 3Q:Three months ended September 30

4Q:Three months ended December 31

1,071

1,467

2,201

2,5942,369

3,049

3,906

3,400

2,391

4

7

Animal

feeds, 10%

Corn

refining,

89%

Others, 1%9MFY13

Animal

Feeds,

13%

Corn

refining,

86%

Others,

1%

9MFY12

Revenue by Product Categories

Total Revenue: RMB2,391.0 mil

9M: Nine months ended September 30 FY: Year ended December 31

Total Revenue: RMB2,589.9 mil

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9MFY13

9MFY12

Revenue by Industries

Beverage,

22%

Fermentation,

8%

Food, 32%Others,

38%

Total Revenue: RMB2,391.0 mil

9M: Nine months ended September 30 FY: Year ended December 31

Beverage, 14%

Others, 39%

Fermentation,

14%

Food, 33%

Total Revenue: RMB2,589.9 mil

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RMB’milAs at

end 9MFY13As at

end FY12Chg (%)

Current Assets 702.6 744.8 (5.7)

- Cash & Cash Equivalents 134.7 119.5 12.7

- Inventories 229.0 303.3 (24.5)

- Trade and Other Receivables 331.0 321.8 2.9

Fixed Assets 929.7 984.4 (5.6)

Total Assets 1,680.8 1,778.9 (5.5)

Current Liabilities 583.7 676.9 (13.8)

- Trade and Other Payables 346.4 429.4 (19.3)

- Short Term Borrowings 223.3 200.0 11.7

Long Term Borrowings 607.4 512.4 18.5

Total Liabilities 1,236.8 1,243.4 (0.5)

Net Assets 444.0 535.5 (17.1)

Balance Sheet Highlights

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RMB’milAs at

end 9MFY13As at

end FY12Chg (%)

Inventory Turnover Days 33 37 (10.8)

Receivables Turnover Days 27 24 12.5

Payables Turnover Days 29 35 (17.1)

Debt to Equity Ratio# 1.85 1.33 39.1

Balance Sheet Highlights

Price to Book Value* 0.29 0.35 (17.1)

# Total interest bearing loans / Total equity

* Based on share price of RMB 0.33 as at October 22, 2013

9M: Nine months ended September 30

FY: Year ended December 31

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RMB’mil 9MFY13 9MFY12 Chg (%)

Net Cash Used in Operating Activities (33.2) 13.5 (345.9)

Net Cash Used in Investing Activities (12.9) (75.3) 82.9

Net Cash Generated from Financing Activities 61.2 162.4 (62.3)

Net Decrease/Increase in Cash & Bank Balances 15.2 100.6 (84.9)

Cash & Bank Balances at Beginning of Period 119.5 103.1 15.9

Cash & Bank Balances at End of Period 134.7 203.7 (33.9)

Cash Flow Statement Highlights

9M: Nine months ended September 30 FY: Year ended December 31

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Business Outlook

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13

2749

2438

1834

2078

1,400

1,600

1,800

2,000

2,200

2,400

2,600

2,800

3,000

3,200

3,400

Oct-

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Nov-

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Corn Sweetener Corn Starch By-Products Corn

RMB/tonnes(excluding taxes)

Price Trends

Source: Company

1414

2,4712,536

3,127

5,334

1,200

1,700

2,2002,700

3,200

3,700

4,2004,700

5,200

5,700

6,2006,700

7,200

7,700

Oc

t-

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No

v-

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Ja

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Fe

b-

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M

ar-

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Ap

r-

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M

ay-

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Ju

n-

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Ju

l-

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Au

g-

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Se

p-

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Oc

t-

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No

v-

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c-

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b-

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ar-

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ay-

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High Maltose Syrup Dextrose Fructose Cane Sugar

RMB/tonnes

Price Comparisons to Cane Sugar

Source: Company

8

15

Growth Strategies

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Increase capacity utilisation rates

Expand market reach

Enhance profit levels from modified existing

production lines

Growth Strategies

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Corn Sweeteners

3QFY13 3QFY12

Facility /Location

Region Served ProductionCapacity / (Output)

(tonnes)

UtilisationRate

ProductionCapacity / (Output)

(tonnes)

UtilisationRate

Yishui,Shandong

Shandong, Hebei,Anhui, Guangdong,Zhejiang

110,000(91,874)

83.5% 110,000(100,717)

91.6%

Pengshan,Sichuan

South-western region ofPRC

35,000(30,796)

88.0% 35,000(27,104)

77.4%

Fushun,Liaoning

Northeast of PRC 40,000(6,821)

17.1% 40,000(-)

0.0%

Xingping,Shaanxi

Shaanxi, Shanxi,Gansu, Chongqing,Sichuan, InnerMongolia

40,000(31,491)

78.7% 40,000(38,335)

95.8%

Xiping,Henan

Henan, Hubei, Hunan,Anhui, Jiangxi

35,000(28,693)

82.0% 35,000(30,456)

87.0%

Total Capacity 260,000 tonnes 73.0% 260,000 tonnes 75.6%

Our Capacity & Utilization Rates

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Corn Sweeteners

9MFY13 9MFY12

Facility /Location

Region Served ProductionCapacity / (Output)

(tonnes)

UtilisationRate

ProductionCapacity / (Output)

(tonnes)

UtilisationRate

Yishui,Shandong

Shandong, Hebei,Anhui, Guangdong,Zhejiang

330,000(245,211)

74.3% 330,000(307,232)

93.1%

Pengshan,Sichuan

South-western region ofPRC

105,000(82,081)

78.2% 105,000(83,671)

79.7%

Fushun,Liaoning

Northeast of PRC 120,000(47,582)

39.7% 120,000(5,117)

4.3%

Xingping,Shaanxi

Shaanxi, Shanxi,Gansu, Chongqing,Sichuan, InnerMongolia

120,000(110,852)

92.4% 120,000(108,900)

90.8%

Xiping,Henan

Henan, Hubei, Hunan,Anhui, Jiangxi

105,000(96,176)

91.6% 105,000(81,198)

77.3%

Total Capacity 780,000 tonnes 74.6% 780,000 tonnes 75.1%

Our Capacity & Utilisation Rates

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Improve domestic and overseas marketing efforts and enhance sales

Re-strategise local and overseas marketing efforts

Reaching out to new customers

Expand Market Reach

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Company Profile

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Market leader in maltose-related products

More than 20 years of growth

Capacity to produce 1,040,000 tonnes of corn sweeteners per year

OUR COMPETITIVE EDGE

Long-serving core management team

Production facilities located at the corn producing belt of China

Ensuring ample and competitively priced raw materials

Quality products and strong branding

Enhanced production efficiency:

Own power generating capabilities and water resources

Economies of scale through higher capacities and utilisation of plant facilities

Who We Are

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1988 1993 1997 1999 2000 2006 2007 2008

• Establishedto producehard and

soft candies

• Upstreamdiversification

to produceliquid

glucose

• EstablishedLiaoning

Luzhou toexpand reach

to NortheasternPRC

• EstablishedShaanxi Luzhou

to expandreach to

NorthwesternPRC

• Set up R&Dcentre in

Shandong

• Commencedoperations in

new productionfacilities in

Shandong &Sichuan

• Listing on SGX-ST Mainboard• Commenced production of sugar alcohol (Shandong),

• Expansion of production capacity of dextrose powder (Liaoning),high maltose syrup (Liaoning & Shaanxi) & high fructose syrup (Henan & Shaanxi)

• Commenced production of animalfeeds and corn oil in Shandong

• Expansion of production capacityof sugar alcohol in Shandong

• Completion of thermoelectricitygenerators in Liaoning & Shaanxi

Company Milestones

2003

• Completion ofthermoelectricity

generator inShandong

Luzhou

2009

• Productionof amino

acidscommenced

in 2QFY09

2010

• Productionof HFCS 55

commencedin 4QFY10

2012

• Relocated our Liaoningplant to new premisesand completed theconstruction of newplant.•Completion of Acquisitionof the entire non-controllinginterest in our two jointventure subsidiaries

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CornCorn

Starch

Corn

oil

Maltose Sweeteners-Maltodextrin

-High Maltose Syrup-Isomaltooligo

Saccharide-Maltitol

Glucose Sweeteners-Liquid glucose

-Dextrose powder-High fructose syrup

-Sorbitol

Production Process

Corn

germ

Corn

gluten

meal

Corn

fibre

Corn

steep

Liquid

corn

Animal

feeds

Steep

water

CornSweeteners

Amino Acids

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Shandong

Liaoning

Shaanxi

Henan

Sichuan

PRC

Location of Luzhoufactories:

Port of Yingkou

Port of Qingdao

Port of Rizhao

Production facilities in Liaoning and Shandong

gain easy access to nearby ports for exports

Port of Dalian

Location Advantage

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Luzhou Bio-chem Technology Limited

Luzhou Bio-chemTechnology(Liaoning)

Co. Ltd.

Luzhou Bio-chemTechnology(Shaanxi)Co. Ltd.

Luzhou Bio-chemTechnology(Shandong)

Co. Ltd.

ShandongHongzhouChemical

Equipment Co. Ltd.

Luzhou Bio-chemTechnology(Sichuan)Co. Ltd.

100% 100% 100% *100%

ShandongLuzhou

Amino AcidCo. Ltd.

YishuiBranch Office

100%

Animal FeedBranch Office

Corporate Structure

100%

* The paid up share capital of Luzhou Bio-chem Technology (Sichuan) Co. Ltd, is RMB96.0m, of which theCompany holds 37.2% (RMB35.7m) and Luzhou Bio-chem Technology (Shandong) Co., Ltd holds 62.8%(RMB60.3m).

** the Company has establisheda new wholly-owned subsidiary, Luzhou Bio-chem Technology (Henan)Co., Ltd. in 9 August 2013 through the separation of the Xiping Branch Office of Luzhou Bio-chemTechnology (Shandong) Co., Ltd..

Luzhou Bio-chemTechnology

(Henan)Co. Ltd. **

LUZHOU BIO-CHEM TECHNOLOGYLIMITED

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