Dear Shareholders,

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 2023 (“FY2023”).

Despite grappling with significant headwinds, the global economy in 2023 surpassed expectations with a growth rate of 2.7%1 . However, it still faced numerous challenges, including weakening international trade, sluggish investment, a highinterest-rate environment, the Russia-Ukraine conflict, the war in Gaza, and escalating geopolitical tensions. In China, the economy grew 5.2%, hindered by weak domestic demand, reduced external demand, and international trade tensions.

In recent years, competition within the Chinese rubber chemicals industry has been intensifying, placing significant pressure on our selling prices. Nevertheless, the Group’s consistent strategy of “Higher sales volume leads to higher production, which in turn stimulates even higher sales” (also called “Sales and Production Equilibrium”) has proven effective. On the back of our increased capacity, our production and sales volume reached record highs in FY2023. Furthermore, the Group’s market share expanded in both domestic and international markets, while various competitive advantages were further enhanced. In 2023, the Group maintained its position as the world’s largest rubber accelerators producer and China’s largest rubber chemicals enterprise.

The Group has significantly enlarged its production capacity in a calibrated manner in recent years, enabling us to effectively meet the growing demand for our products. Our robust financial strength enables us to implement expansion and operational plans with ease. The high-quality products and services we offer uphold strong and favorable customer relationships.
The Year Under Review

The Group’s revenue in FY2023 decreased by 9% from the year before to RMB 3,490.5 million. This was mainly due to the decrease in average selling price (“ASP’), partially offset by the increase in sales volume. ASP decreased by 18%, from RMB 20,237 per tonne in FY2022 to RMB 16,633 per tonne. This was mainly due to the decrease in raw material prices, as well as the Group’s adoption of more flexible pricing strategy in response to the intensified market competition.

However, sales volume grew 11% from 186,153 tonnes in FY2022 to 206,996 tonnes, reaching a historical high. This was attributed to the Group’s ability to satisfy the increased demand from our customers, supported by the capacity expansion over the years.

The Group’s net profit in FY2023 decreased by 42% year-on-year, from RMB 642.4 million in FY2022 to RMB 372.5 million.

The Group’s earnings per share for FY2023 was RMB 38.67 cents. As at 31 December 2023, its net assets per share stood at RMB 409.34 cents. The Group’s financial position was further strengthened with cash and bank deposits amounting to RMB 1,687.9 million, with no bank loans.

Capacity Expansion Plan

Equipped with land, technology and funds, the Group has been implementing expansion plans orderly throughout the years to meet market demand for our products and further strengthening the Group’s overall competitive advantage, as we strive to further expand our market share. The progress of the Group’s expansion projects in 2023 is as follows:

  • The Group has re-started the construction of Phase II of the 30,000-tonne insoluble sulphur project, with some equipment relocated from Shengtao. The management expects this project to be completed by the end of 2024.
  • The Phase 1, 20,000-tonne per annum Continuous Production of High Quality MBT project is currently undergoing trial run. The management expects the trial run to be completed in 1H2024 and commercial production to commence in 2H2024. MBT serves as an intermediate material in the production of various types of accelerators. The entire project aims to build a total annual capacity of 60,000 tonnes in two phases. This undertaking is designed not only to meet our production requirements but also to provide cost-saving benefits.

Throughout the years, the Group has continuously upgraded and renovated its production processes and equipment through research and development, process improvements, and technological innovations. Significant progress has been achieved, particularly in the areas of automation, continuous, and green production. These efforts have greatly enhanced production efficiency, reduced production costs, lowered pollution and waste emissions, and ensured production safety. The Group has made positive contributions to promoting green production and achieving sustainable development in the rubber chemicals industry.

Outlook and Prospects

According to the International Monetary Fund (“IMF”), with disinflation and steady growth, the likelihood of a hard landing for the global economy has receded, and risks to global growth are broadly balanced. However, risks remain, including geopolitical shocks, supply disruptions, and underlying inflationary pressures. As the world’s second-largest economy, China has set its economic growth target at around 5% this year, serving as a critical pillar of global economic development.

China, as the world’s largest automobile market, is witnessing a notable uptick in per capita car ownership alongside improvements in living standards and increased consumer spending. According to the China Association of Automobile Manufacturers (“CAAM”), new car sales in 2023 saw a respectable 12% increase compared to the previous year. Particularly noteworthy is the surge in sales of new energy vehicles, which skyrocketed by 38%, now constituting 32% of total new car sales.

The automotive industry is showing signs of improvement, and the utilisation rate of the tyre industry has also increased. Replacement tyres constitute approximately 70% of tyre consumption, while tyres for new vehicles make up the remaining 30%. We anticipate that the initiative “Encouraging a new wave of extensive equipment upgrades and consumer goods exchange” implemented by the Chinese government will further drive the growth of the tyre industry.

However, the situation in the rubber chemicals industry where we operate remains challenging, with the industry moving toward polarization and consolidation. The gradual introduction of expansion projects by major players continues to lead to an overcapacity situation, placing significant pressure on the selling prices of our products. This, in turn, poses higher demands and greater challenges to an enterprise’s development.

Our approach to addressing these challenges is to leverage the Group’s competitive advantages, continuously expand and strengthen our presence, and maintain a market leadership position in both the Chinese and international rubber chemicals industry. The Group has significantly enlarged its production capacity in a calibrated manner in recent years, enabling us to effectively meet the growing demand for our products. Our robust financial strength enables us to implement expansion and operational plans with ease. The high-quality products and services we offer uphold strong and favorable customer relationships. Additionally, our outstanding research and innovation capabilities keep us at the forefront of the industry. Moreover, with four decades of dedication to the rubber chemicals industry, the Group’s achievements and industry reputation speak for themselves. The Group’s pragmatic spirit of cautious development and relentless progress is key to our success. We have great confidence in the future development of the Group.

Proposed Dividend

To express our gratitude for the long-standing support of our shareholders and taking into account the Company’s performance for the current financial year and future expansion plans, the Board of Directors recommends distributing a final tax-exempt dividend of SGD 0.015 per ordinary share and a final special dividend of SGD 0.01 per ordinary share for FY2023. This proposal will be discussed and approved at the upcoming Annual General Meeting.


In the face of intensifying market competition, the Group has no fear or nor will it retreat; rather, we have resolutely pursued our established strategies and achieved commendable results. This success is attributed to the collective efforts of the Group’s Board of Directors, management, and all staff. Their professionalism, dedication, and enthusiasm for their work are truly admirable. I extend my sincerest gratitude to each of them for their invaluable contributions.

At the same time, I also wish to thank our valued customers, business partners, suppliers, and the supportive community for their enduring commitment to the Group. Their trust propels us to continuously strive for excellence, deliver more valuable services, and undertake greater social responsibilities.

Last but not least, on behalf of the Board of Directors, I would like to express my sincere appreciation to our shareholders for their enduring trust, understanding, and support of the Group over the years. Striving for the long-term and sustainable development of the Group, and increasing shareholder value, have always been our ultimate goal. We will not waver in our commitment to this mission.

Thank you again!

Xu Cheng Qiu
Executive Chairman
March 2024