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					Annual Results 2007
        Stock code: 2002




                           0
Agenda




   1     Key Accomplishments in 2007

   2     Financial Highlights

   3     Business Review

   4     Future Outlook

   5     Open Forum




                                       1
Key Accomplishments
Key Accomplishments



   1   Turnover increased by 125% to RMB1,381.6m while net profit jumped by
       173.7% to RMB137.3mn

   2   Successfully listed on the main board of HKEx

   3
       Consolidate the domination in the production of white-top linerboard


   4
       Commenced production of light-coated linerboard


   5
       Became the designated paper supplier of leading consumer brands


   6
       Acquired controlling interest in Shengshi Thermoelectricity



                                                                              3
Key Accomplishments (Cont’d)


  Successfully listed on the main board of HKEx
    Issued 107.5m shares and raised proceeds of HK$645m
    Listed on the main board of Hong Kong Stock Exchange on 12
    December 2007

  Commenced production of light-coated linerboard
    The largest light-coated linerboard producer by production output in
    2007
    Commenced light-coated linerboard production in May 2007
    PL2, with annual production capacity of 180,000 tonnes, can produce
    light-coated linerboard and white top linerboard
    Substitution of duplex board with grey back and imported like products
Key Accomplishments (Cont’d)


  Became designated paper supplier to leading brands

    In July 2007, the Group signed strategic agreements with Mengniu
    Dairy, Tsingtao Brewery, Yili Dairy, Haier, Huiyuan Juice and Master
    Kong Chef, etc.


  Acquired controlling interest in Shengshi Thermoelectricity

    Power and steam generation plant
        Increased to 80% stake in Changle Shengshi Thermoelectricity Co., Ltd. in
        June 2007
        Shengshi Thermoelectricity’s installed capacity: approx. 60 MW
        Secure stable steam & power supply and lower costs
        The plant contributes a net profit of RMB12.17 million
        in 2007
Financial Overview




                     6
Financial Highlights - FY2006 vs FY2007




  (RMB mn)                     2007       2006    Change

  Revenue                    1,381.6      613.4   125.2%

  Gross profit                269.6       118.7   127.1%

  Profit for the year         137.3        50.2   173.5%

  Profit attributable to
                              133.0        49.9   166.5%
  shareholders

  Basic earnings per share
                               0.69        0.29   137.9%
  (RMB cents)
Consolidated Income Statements


  (RMB mm)                          2007        % of sales   2006       % of sales
  Revenue                            1,381.6         100.0      613.4         100.0
  Cost of sales                     (1,112.0)       (80.5)    (494.7)         80.6

  Gross profit                         269.6          19.5      118.7         19.4
  Other income                           15.1          1.1       12.3          2.0
  Share of result of an associate         2.0          0.1        1.3          0.2
  Distribution expenses                (66.7)          4.8     (41.5)          6.8
  Administrative expenses              (41.1)          3.0     (22.1)          3.6
  Finance costs                        (33.3)          3.4     (12.6)          2.1

  Profit before tax                    145.6          10.5      56.1            9.1
  Income tax expense                     8.3           0.6      (5.9)           1.0
  Profit for the year                  137.3           9.9       50.2           8.2
  Profit attributable to:
   Equity holders of the Company      133.0          9.63       49.9           8.1
   Minority interests
                                         4.3           0.3        0.2           0.0
  Earnings per share (RMB)
   Basic                               0.69            --       0.29            --
   Diluted                                             --         na            --
                                        0.69
Strong Revenue and Profit Growth


              Revenue                            Gross Profit and GP Margin                            Net Profit and NP Margin
  RMB m                                                                                                                           %
1,500                                       RMB m                               %              RMB m
                               1,381.6                                                   150                                      15
                                           300                                      25
                                                                                                                        137.3
                                                                      269.6
                                           250         19.3%
                                                                       21.03%       20                                   9.9%
1,000                                                                                    100                                      10
                                           200                                                          8.2%
                                                                                    15

              613.4                        150
                                                     118.7                          10
 500                                                                                                    49.9
                                           100               127.1%                       50                                      5

                      125.2%                                                                                   173.5%
                                                                                    5
                                            50


   0                                         0                                      0      0                                      0
              2006              2007                  2006            2007                             2006             2007


        Reasons for the increase in revenue:
          –    Increase in demand for white top linerboard and core board driven by the growing
               consumer and industrial markets
          –    Increase in selling price
        Reason for profit margin improvement:
          –    shareholding increase in Shengshi Thermoelectricity
          –    economies of scales                                                                                                     9
Revenue Breakdown by Products



                    Revenue Breakdown by Products


   100%                                         3.3%
                    10.7%
                                               10.0%

    80%              20.2%                     10.4%                 Light-coated linerboard


    60%                                                              Specialized paper products


    40%                                                              Core board
                     69.1%                     76.3%

    20%                                                              White top linerboard


     0%
                     2006                      2007

   Change of composition due to sales of white top linerboard substantially increased by
   149%
   Light-coated linerboard only contributes revenue since May 2007 as its production just
   commenced
                                                                                                  10
ASP and Costs by products


 White Top Linerboard ASP and Average Cost                       Core Board ASP and Average Cost

  (RMB/tonne)                                                (RMB/tonne)
  4,000
                                     +0.5%               2,700
                                                                                                  5.39%
                3,594
                                                         2,500
  3,500                      3,612                                                        2,362

                                                         2,300              2,241


  3,000         2,837          2,882                     2,100


                                                         1,900              1,803
                                       1.6%                                                         -3.8%
                                                                                            1,735
  2,500
                                                         1,700


                                                         1,500
  2,000                                                                     2006          2007
                2006          2007


            ASP         Average Cost                                       ASP      Average Cost


                                                  ASP                               Average Cost

  Light-coated linerboard                     RMB3,852/ton                          RMB2,990/ton
Gross Profit / Margin Analysis by products


RMB million              White Top Linerboard                      %      RMB million       Core Board                    %
                                                                   30     50                                         30
                                                                                                             26.5%

                                                                   25                                                25
  200                                21.1%                                40
                21.2%                                     20.2%
                                                                                              19.6%
                                                                   20               15.9%                            20
                                                                          30
                                                         213.4     15                                                15
                                                                                                             38.0
  100                                                                     20
                                                                                                                     10
                                                                   10                         24.2

                                     89.3                                 10
                71.0                                               5                17.0                             5



    0                                                              0       0                                         0
                2005                 2006                 2007                      2005      2006           2007

                                            Gross Profit Margin*         Gross Profit
        *Gross profit of each segment/ Revenue of each segment


                                                                        Gross Profit             GP Margin
                                  Light-coated linerboard                 10.1 mn                    22.4%


        GP margin of core board increased from 19.6% in 2006 to 26.5% in 2007, mainly attributable to
        economies of scale and increasing demand


                                                                                                                              12
    Sales and Sales Volume by Products



                      White Top Linerboard
RMB’000                                                            (tonnes)
                                                                                                        Core Board
                                                                                  RMB’000                                           (tonnes)
1,200,000                                                             400000                                           143,124
                                                                               150,000                                                 80,000
                                                   1,054,899
                                                                                                           123,804
1,000,000
                                                                                              107,139
                                                                      300000
                                                                                                                                       60,000
                                                         292,043
 800,000                                                                       100,000                                     55,247

                                                                                                              48,818
                                                                                              21,276
 600,000                   424,004                                    200000                                                           40,000

                 334,209                     117,982
 400,000                                                                        50,000
                                                                      100000                                                           20,000
 200,000         93,964



       0                                                              0             0                                                  0
               2005                  2006               2007                                 2005             2006          2006




                                            Sales Revenue (LHS)                          Sales Volume (RHS)


            Remarks: Light-coated linerboard commenced production in 2007. Sales were RMB45.3 million,
                     sales volumes was 11,752 tonnes and ASP after tax was RMB 3,852 per ton
                                                                                                                                                13
Stable Cost Structure



                  Cost of Sales Breakdown in 1H 2007

                                                                         Labour & Overhead Costs
    100%                                                                       Breakdown
                     19.8%                      18.2%
    80%
                     16.4%                      18.3%
                                                                              Others*
    60%                                                                       32.5%
                     20.4%                      14.8%
                                                                                         Electricity
                                                                                        and Steam
    40%                                         17.7%
                     16.1%                                                                67.5%


    20%
                     27.3%                      28.8%               *Others include labour and depreciation, etc.

     0%
                     2006                       2007

           Domestic recovered paper   Overseas recovered paper   Kraft pulp
           Chemicals and others       Labour & overhead costs


                                                                                                              14
Key Financial Ratios



                                               As of 31 December

                                              2007          2006    Change

         Total Assets (RMB million)          2,392.6       942.1     154.0%

         Net Assets (RMB million)            1,138.2       180.3     531.3%

         Raw Materials Turnover (days)         49.9         53.4    3.5 days

         Finished Goods Turnover (days)          8.3        24.1   15.8 days

         Trade Receivables Turnover (days)     29.0         38.2    9.2 days

         Trade Payables Turnover (days)       127.4        101.7   25.7 days

         Current Ratio (times)                 1.27         0.57    0.7 times

         Net Gearing ratio* (times)            0.01         1.73   1.72 times




  * Net debt to equity
                                                                                15
 Balance Sheet


                                     As at        As at
                                    31 Dec       31 Dec     Change                                              As at        As at
(RMB mm)                             2007         2006                                                         31 Dec       31 Dec       Change
                                                                       (RMB mm)                                 2007         2006
Property, plant and equipment          891.1        446.2       99.7
                                                                       Trade payables                             388.0        137.8        181.6
Prepaid lease payments – non-
                                        88.3         39.7      122.4   Bills payable                                    -       67.0          na
current portion
Interest in an associate                     -       18.2        Na    Other payables                             194.8        231.8       (16.0)

Goodwill                                19.2          0.6     3100.0   Income tax payable                           5.5          1.0         450

Deferred tax assets                      1.1          0.5      120.0   Dividend payable                                 -        1.0          na

Non-current assets                     999.7        505.2       97.9   Deferred income                              0.9              -        na
                                                                       Bank borrowing – due within 1 yr           508.1        323.3         57.2
Prepaid lease payments – current
                                         1.9          0.9      111.1   Current liabilities                       1097.3        761.8         44.0
portion
Inventories                            177.2        105.1       68.6
                                                                       Bank borrowings – due after 1 yr           133.0              -        na
Trade receivables                      109.8         64.3       70.8
                                                                       Other borrowings                            17.6              -        na
Bills receivable                       382.4        169.0      126.3
                                                                       Deferred tax liabilities                     6.6              -        na
Prepayments and other receivables       32.0         21.2       50.9
                                                                       Non-current liabilities                    157.1              -        na
Restricted bank deposit                 40.7         64.6     (63.0)

Bank balances and cash                 648.9         11.9     5352.9   Total liabilities                         1254.4        761.8         64.7
Current assets                       1,392.9        436.9      218.8   Total equity and liabilities              2392.6        942.1        214.1
                                                                       Net current assets/ (liabilities)          295.6       -324.9          n/a
Total assets                          2392.6        942.1      154.0
                                                                       Total assets less current liabilities    1,295.3        180.3        618.4
Capital and reserves                  1062.8        171.6      519.3
Minority interests                      37.5          8.6      336.0
Total equity                         1,138.2        180.3      531.3
Business Review




                  17
Production Capabilities


  Five high level of production lines
  Production line / Location   Primary Product(s)      Estimated Annual    Commencement of
                                                      Maximum Production   Production
                                                       Output (Tonnes)
  PL1/ Weifang                 White top linerboard        110,000         June 2004

  PL2 / Weifang                White top linerboard        180,000         White top linerboard –
                               and/or light-coated                         November 2006
                               linerboard                                  Light-coated linerboard –
                                                                           May 2007
  PL3 / Weifang                Core board                   40,000         January 2001

  PL4 / Weifang                Core board                   20,000         May 2002

  PL5 / Kunshan                Specialized paper            10,000         August 2005
                               products
  Total                                                    360,000


  Multiple production lines enjoy economies of scale and able to provide
  a variety of products simultaneously
  Product mix and effective production planning to maximise resource
  usage and minimise both wastage and production lead time
                                                                                                       18
 Utilization Rates


        Utilization rates of the Group’s principal products

                           2004                                   2005                                 2006                                  2007

Products     Production   Approx.     Approx.      Production   Approx.     Approx.      Production   Approx.     Approx.      Production   Approx.     Approx.
              capacity     output    utilisation    capacity     output    utilisation    capacity     output    utilisation    capacity     output    utilisation
              (tonnes)    (tonnes)       rate       (tonnes)    (tonnes)       rate       (tonnes)    (tonnes)       rate       (tonnes)    (tonnes)       rate

White top     53,760      51,231      95.3%         107,023     95,147      88.9%         132,968     120,998     91.0%         318,777     305,444     98.3%
linerboard

Core          28,849      22,372      77.5%         56,065      48,734      86.9%         58,809      55,323      94.1%         60,913      59,691      98.0%
board

Copper           -           -            -           972         936       96.3%          5,700       4,347      76.3%          7,600       6,223      81.9%
plate
paper

Total         82,609      73,603      89.1%         164,060     144,817     88.3%         197,477     180,668     91.5%         379,290     371,358     97.9%




        Production know-how allows the Group to use an increased variety of
        recovered paper grades while maintaining product quality and
        performance characteristics



                                                                                                                                                                     19
Relationships with Consumer Brand Customers



 End-users in various industries, such as food and beverages, electronics and
 textile, etc.
 In July 2007, the Group signed strategic agreements with Mengniu Dairy,
 Tsingtao Brewery, Yili Dairy, Haier, Huiyuan Juice and Master Kong Chef, etc.




                                                                                 20
Future Outlook




                 21
Government Policy




 Encourage large-scale, integrated    As one of the large-scale paper manufacturers
                                      in China, Sunshine Paper falls into the
   paper manufacturing projects       category of manufacturers that government
                                      encourages


     Small plants with outdated
                                     Faster market consolidation favors the growth of
     paper making equipments         large-scale manufacturers
        have to close down


                                     [Preparation of our 200,000 tonnes core board
          Anti-trust rules           production line and 500,000 tonnes white top
                                     linerboard are in good progress]




     New Labour Contract Law         In 2007, staff cost is only 2.4% of revenue
         implemented on              Sunshine Paper considers its staff as an
        1st January 2008             important asset and strives to provide them with
                                     good working environment
Strategies for Future Growth




   1   Add new production lines


   2   Expand raw material sources


   3   Accelerate growth via strategic acquisitions and JVs




                                                              23
Expansion through New Production Lines and
Production Base

   Existing and proposed production lines:
     Primary products              Estimated annual maximum   Commencement of productions
                                        production output
     White top linerboard                  110,000            June 2004
     White top linerboard and/or           180,000            November 2006 for White top
     light-coated linerboard                                  linerboard and May 2007 for
                                                              Light-coated linerboard
     White top linerboard and/or
                                           500,000            Estimated to be around 3Q 2009
     light-coated linerboard

     Core board                             40,000            January 2001
     Core board                             20,000            May 2002

     Core board                            200,000            Estimated to be around 3Q 2008

     Copper plate paper*                    10,000            August 2005

     Total                                1,060,000


   Upon completion of the two additional production lines, total annual production
   will increase to 1,060,000 tonnes by Q3 2009



* Production line in Kunshan                                                                   24
Expand Raw Material Sources


 Set up another 8 recovered paper collection points in 2008
 – Beijing, Qingdao, Shenyang and Tianjin, and
 – Another 4 collection points under planning
 Expand network of collection points in various first and second-tier cities in
 Eastern and Northern China
                                                               Production base in Weifang
                                                               Production base in Kunshan
                                                     3      Proposed recovered paper
                                                            collection points:
                                                             1 Tianjin      2 Shenyang
                                                 2
                                          5                 Existing recovered paper
                                              1
                                                            collection points:
                                              4 6
                                                             3 Harbin       4 Weifang
                                                             5 Beijing      66 Qingdao


                                                               Northeast China
                                                               Northern China
                                                               Central Plains
                                                               Eastern China
                                                               Southern China
                                                               Undeveloped

         Secure stable source of raw materials and lower costs
                                                                                            25
Accelerate Growth via Strategic Acquisitions and JVs



  Accelerate growth via strategic acquisitions and JVs

    Strategic acquisitions and joint ventures to accelerate the business
    development
    Intend to acquire the companies that can complement or create
    synergies with the existing business




                                                                           26
Open Forum




             27

				
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