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 2025 (“FY2025”).

According to projections issued by the International Monetary Fund (“IMF”) in January 2026, global economic growth is expected to reach 3.3% in 2025. This suggests that the global economy remains in a moderate-growth environment while facing various uncertainties and risks. Rising geopolitical tensions, escalating regional conflicts and growing trade protectionism have contributed to increased volatility in the global economic landscape, disrupting global supply chains and placing continued pressure on export-oriented economies.

China’s economy continued to demonstrate resilience in 2025, with GDP growth of 5.0% for the year. The automotive sector reached a new milestone, with total vehicle sales hitting a record 34.4 million units, up 9.4% from the previous year. Sales of New Energy Vehicles (“NEVs”) surged by 28.2% to 16.49 million units, accounting for 47.9% of total new vehicle sales. The sustained growth of the automotive and NEVs segments provides strong structural support for long-term demand in the rubber chemicals industry.

Nevertheless, the rubber chemicals sector in which the Group operates continues to face formidable challenges. The industry’s concentrated capacity expansion in prior years has resulted in persistent oversupply, intensifying market competition and product prices being under constant pressure. Meanwhile, prices of key raw materials remained subdued for most of 2025—declining further in the second half—which, while lowering production costs to some extent, also directly dragged down market selling prices, thereby creating a squeeze on margins.

Faced with such complex operating landscape, China Sunsine once again delivered a resilient set of results, achieved through its deep industry expertise and agility. Leveraging our strengths in cost-control and large-scale production capabilities, we held our ground amid fierce competition—not only achieving another record-high sales volume but also sustaining healthy profitability, further consolidating our market leadership position.

The Group’s revenue in FY2025 amounted to RMB 3,277.4 million. The overall average selling price (“ASP”) decreased by 10% year-on-year to RMB 14,545 per tonne from RMB 16,226 per tonne in FY2024, mainly due to the decrease in raw material prices and intensified competition.

In response to intense market competition, the Group adopted a more flexible pricing strategy. Supported by expanded production capacity and sustained customer demand, sales volume continued to grow, increasing by 4% from 214,094 tonnes in FY2024 to a record high of 222,243 tonnes in FY2025.

The Group’s profit before income tax amounted to RMB 503.6 million, with net profit of RMB 404.9 million. Although net profit decreased slightly by 4% year-onyear, this result is a testament to the Group’s strong operational foundation and earnings resilience amid a highly challenging operating environment.

The Group’s earnings per share for FY2025 was RMB 42.47 cents. As at 31 December 2025, its net assets per share stood at RMB 465.45 cents (equivalent to approximately SGD 0.85). The Group’s financial position was further strengthened with cash and bank balances amounting to RMB 2,328.9 million, net cash per share of SGD 0.45, and a zero-debt balance sheet.

Capitalising on years of accumulated advantages in land, technology, and capital, the Group has been orderly implementing its expansion plan in recent years, to meet market demand for its products while continuously enhancing its competitiveness through economies of scale. Set out below is an update of the Group’s expansion projects in 2025:

• Phase 2, 30,000-tonne per annum IS project (located in Hengshun plant)
  Commercial production has commenced.
• Phase 2, 40,000-tonne per annum Continuous Production of High Quality Solvent MBT project (located at Hengshun plant)
  The trial run is in progress. Commercial production is expected to commence in 1Q2026.
• High-Quality Solvent MBT project (located at Weifang plant)
  The project is at the construction phase. Management expects that the project will be ready for trial run by 1H2026.
• Transform TBBS2 workshop to CBS workshop (located at Shandong Sunsine plant)
  The project is at the construction phase. Management expects that the project will be ready for trial run by 1H2026.

MBT, a critical intermediate product in accelerator production, plays a vital role in ensuring the security of the Group’s supply chain. With the completion of the two MBT projects, the Group’s total MBT production capacity has increased to 125,000 tonnes per annum (such capacity is excluded from the Group’s reported finished product capacity)—sufficient to fully meet internal requirements. Current output is primarily allocated to captive use, with any surplus potentially offered for external sales depending on market conditions.

Through a series of capacity expansions and technological upgrades, the Group has made notable strides in enhancing cost efficiency and reducing production wastage, further entrenching its industry leadership position. Today, China Sunsine remains the world’s largest rubber accelerator producer, a leading insoluble sulphur manufacturer in China, and a major player in the anti-oxidants market.

Looking ahead to 2026, the global economy is expected to face increasing challenges amid a more uncertain geopolitical and economic environment. The recent escalation of tensions in the Middle East, including attacks by the United States on Iran, has further heightened uncertainties in the global economic landscape. Such developments may disrupt global energy supply and increase volatility in oil prices, which may in turn lead to fluctuations in the prices of certain raw materials used in the production of rubber chemicals. Against this backdrop, businesses may continue to face a more volatile operating environment.

The tire industry presents both opportunities and challenges. In China’s rubber chemicals market, overcapacity and intensifying competition are expected to persist, continuing to exert pressure on selling prices. As Chinese tire companies expand and establish production facilities overseas, China’s share of global tire production will continue to increase. However, the rise of regional trade protectionism has created significant barriers and pressure on tire exports. Despite these challenges, Chinese tire production maintains a pivotal position in the global market, thereby driving increased demand for rubber chemicals.

We firmly believe that with challenges lie opportunities, and only the prudent can navigate farther.

In response to the complex and evolving market environment, the Group will continue to adhere to its core “Sales-Production Equilibrium” strategy, adopting a more flexible pricing approach to drive sales volume growth and reinforce our market leadership position. Concurrently, we will optimise our product mix, and increase the proportion of higher-value-added products to enhance earnings stability.

While oversupply and price competition are unlikely to abate in the near term, the Group’s deep-rooted advantages in scale, cost control, and customer relationships form a robust moat. We are well-positioned to sustain our competitive edge and deliver operational performance surpassing industry averages.

After more than four decades of relentless effort— including 18 years as a listed company on the Singapore Exchange—the Group has firmly established its leadership in both China and the global rubber chemicals market. Our comprehensive competitive advantages—spanning brand equity, production scale, financial strength, cost efficiency, customer service, R&D innovation, and environmental compliance—have laid a solid foundation for sustainable long-term growth.

In appreciation of the unwavering support from our shareholders and taking into account the Group’s earnings performance, strong financial position and strategic expansion plans, the Board of Directors is pleased to propose a final one-tier tax-exempt dividend of SGD 0.027 per share for FY2025, comprising an ordinary dividend of SGD 0.02 per share and a special dividend of SGD 0.007 per share. Together with the interim special dividend of SGD 0.005 per share paid in September 2025, the total dividend for FY2025 amounts to SGD 0.032 per share, representing a payout ratio of approximately 41% of the Group’s net profit for the financial year, in line with the Group’s dividend policy. This proposal will be discussed and approved at the upcoming Annual General Meeting to be held in April 2026.

With this dividend payment, if approved, the Group would have paid out approximately RMB 1.2 billion in total dividends since its listing in 2007 (compared to IPO proceeds of RMB 264 million raised in 2007).

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, enhance our services, 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 we do. With your continued support, we will keep striving for excellence, and building a stronger and brighter future!