#1YINGDE GASES GROUP COMPANY LIMITED 盈德氣體集團有限公司 2015 Annual Results Investor Presentation Hong Kong, 22 March, 2016#2Disclaimer YINGDE GASES GROUP COMPANY LIMITED 1D 盈德氣體集團有限公司 The presentation material contains forward-looking statements. Such forward- looking statements are subject to various risks, uncertainties and assumptions, certain of which are not under our control, causing actual results and growth which may differ materially from these direct or indirect forward-looking statements. Forward-looking events and relevant development discussed herein may differ from the expectation of Yingde Gases Group Company Limited (the "Company"), and even never occur due to such risks, uncertainties and assumptions. You should not rely excessively on any forward-looking information. As the presentation material prepared by the Company is not verified independently, there is no direct or indirect statement or guarantee for the accuracy, fairness and completeness of the information or content contained herein, and reliance should not be placed on the accuracy, fairness and completeness of the information or content contained herein. The Company, any of its associates, consultants or representatives shall not assume any responsibilities for losses arising from the information or content contained herein. Information or content contained herein is subject to variation from time to time without prior notice, and its accuracy is not assured. In addition, all of the forward-looking statements quoted herein by the Company are as of the day of the presentation; the Company is not obligated to update the statements. 2#3Presenters YINGDE GASES GROUP COMPANY LIMITED 1D 盈德氣體集團有限公司 Mr. Mark Zhongguo Sun Chairman and Chief Executive Officer Mr. Trevor Raymond Strutt Executive Director and Chief Operating Officer Ms. Samantha Sze Wing Wong Chief Financial Officer and Joint Company Secretary 3#42015 Financial review Industry and business overview Q & A Session YINGDE GASES GROUP COMPANY LIMITED 盈德氣體集團有限公司 4#5Increase in Operating Efficiency YINGDE GASES GROUP COMPANY LIMITED 盈德氣體集團有限公司 Steady increase in profitability despite industrial gas market was affected by weakening global economy and slowdown of China's economy growth in 2015 Revenue (RMB million) 2.6% 7,716 7,919 2014 2015 Adjusted profit for the year (RMB million) 919 912 6.7% 857 324 533 Gross Profit (RMB million) 2.9% 2,479 2,550 2014 EBITDA (RMB million) 6.5% 2015 2,480 2,641 2014 2015 2014 2015 Foreign curreny exchange loss Profit for the year as reported 5#6Revenue by Business YINGDE GASES GROUP COMPANY LIMITED 盈德氣體集團有限公司 Our defensive business model was proven in this tough economic environment Steady revenue growth in on-site business Others Merchant gas On-site gas 1.3% 11.8% 2014 2015 Change Main RMB'000 % RMB'000 % RMB'000 % Business 2.6% 10.4% On-site customers 6,703,504 86.9 6,886,264 87.0 182,760 2.7 Merchant 914,237 11.8 824,593 10.4 (89,644) (9.8) customers 87.0% 86.9% Other related service 98,420 1.3 208,004 2.6 109,584 111.3 2014 2015 Total 7,716,161 100.0 7,918,861 100.0 202,700 2.6 6#7Stable Cash Flow Revenue (RMB in million) 752 3,488 2011 On-site Merchant ■Others EBITDA and margin (RMB in million) EBITDA EBITDA Magin 32.2% 1,367 YINGDE GASES GROUP COMPANY LIMITED D 盈德氣體集團有限公司 98 914 208 825 762 599 6,045 6,704 6,886 4,356 2012 2013 2014 2015 33.3% 32.1% 29.3% 29.5% 2,480 2,641 2,024 1,450 2011 2012 2013 2014 2015 Net operating cash flow (RMB in million) 1,374 974 919 955 925 2011 2012 2013 2014 2015 7#8More Optimal Finance Structure YINGDE GASES GROUP COMPANY LIMITED D 盈德氣體集團有限公司 (RMB million) 67.9% Fixed assets Cash & Cash equivalents (RMB million) 67.9% 13,070 3,055 13,287 3,013 10,015 2014 PP&E (RMB million) 47.3% 11.9% 678 10,274 606 2015 CIP % of total assets Total borrowings 2014 Borrowings (RMB million) 49.4% 9,101 9,664 2014 2015 2015 7,380 8,060 1,721 1,603 2014 2015 Within 1 year After 1 year Total debt % of total assets 8#9Key Credit Metrics YINGDE GASES GROUP COMPANY LIMITED 11D 盈德氣體集團有限公司 Debt to EBITDA ratios Debt to capital(1) ratios Total debt to EBITDA Net debt to EBITDA 3.9x Total debt / Total capital Net debt / Total capital 59.2% 59.4% 54.7% 3.8x 53.6% 2014 3.6x 2015 3.4x Cash flow from operation (RMB million) 48.5% 1,374 925 2014 2015 (1) Total capital = Total debt + Total equity Capital Expenditure (RMB million) 2,013 44.2% 1,123 2014 2015 2014 2015 9#10Sample On-site Project Development Time Frame Sign contract Under Construction Contract Duration: 10 - 30 years YINGDE GASES GROUP COMPANY LIMITED D 盈德氣體集團有限公司 ➤Capacity increase fully reflect at 1st year of operation ➤Partial on-site revenue reflect after 1st year of operation and will be stabilized at least MTOP from 2nd year onward Merchant revenue need at least 2 - 3 years to catch up the on-site revenue, achieving existing revenue mix from on-site and merchant ➤ As a result, stabilized profit and cash flow will only appear after year 3 Project commencement, capacity kick-in Cash outflow Cash inflow Profit and loss Number of operating facilities Start-ups and ramp-ups during the year Existing facilities 7 16 5 8 57 64 28 36 41 2011 2012 Year -2 Year -1 Year O Year 1 Year 2 Year 3 Year 30 2013 2014 2015 10#112014 Financial review Industry and business overview Q & A Session YINGDE GASES GROUP COMPANY LIMITED 盈德氣體集團有限公司 11#12Global and China Industrial Gas Market YINGDE GASES GROUP COMPANY LIMITED 1) 盈德氣體集團有限公司 US$ in Billion World industrial gas market size 2009-2015 CAGR: 7.3% 2016-2020 CAGR: 6.4% 53.2 57.4 62.3 67.0 71.7 76.7 81.3 86.1 91.0 97.0 103.5 110.3 2009 2010 2011 2012 2013 2014 US$ in Billion 2015 2016E 2017E 2018E 2019E 2020E China industrial gas market size - 2009 2015 CAGR: 10.3% I 2016-2020 CAGR: 6.9% 5.1 5.8 6.5 7.2 7.9 8.6 9.2 9.8 10.4 11.2 12.0 12.8 2009 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E Source: SAI Report as of March 2016 12#13China Industrial Gas Market US$ in billion 5.00 Revenue growth 2015-2020 by supply mode 2015 2017 2020 CAGR 2015-2020 YINGDE GASES GROUP COMPANY LIMITED 盈德氣體集團有限公司 20.0% 4.00 15.0% 11.4% 10.7% 3.00 9.7% 10.0% 2.00 2.4% 5.0% 1.00 3.62 3.78 4.08 2.86 3.50 4.75 1.21 1.50 2.08 1.2% 0.82 0.83 0.87 0.66 0.80 1.05 0.00 0.0% Captive On-site outsourcing Liquid Pipeline Cylinder Evolution of market mix by supply mode Market share Supply mode 2015 Market share 2020 2015- 2020 change Yingde participation Captive 40% 32% 8% x On-site outsourcing Captive 40% Gas supply mode breakdown in 2015 Gas supply mode breakdown in 2020 Liquid 16% Pipeline 7% Cylinder 8% On-site outsourcing 31% 37% 6% Liquid 13% 16% 3% Cylinder 31% 37% Captive 32% Pipeline 9% 7% 2% 7% Cylinder 7% 8% 1% Pipeline Liquid 9% 13% Source: SAI Report as of March 2016 13#14Leading Industrial Gas Supplier (Revenue in US$ million) 1,244 We are the number 1 industrial gas supplier in China YINGDE GASES GROUP COMPANY LIMITED 盈德氣體集團有限公司 Global "Big Four" gas companies 133 1071 171 852 Pipeline 722 77 Merchant 418 144 438 490 1,111 460 On-site 318 66 196 140 39 482 315 260 232 255 Yingde Gases Linde-BOC Air Liquide Praxair APCI Hang Yang (Total Market Share by Revenue) 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% Yingde Gases Linde-BOC Praxair APCI 0.0% 2011 2012 2013 2014 2015 (On-site Market Share by Revenue) 50.0% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% Air Liquide 5.0% 0.0% 2011 2012 2013 2014 Yingde Gases Linde-BOC Praxair APCI Air Liquide 2015 Source: SAI Report as of March 2016 14#15On-site Facilities YINGDE GASES GROUP COMPANY LIMITED 1 盈德氣體集團有限公司 2014 2015 1 4 facilities started operation No. of on-site facilities 61 65 in 2015 added 190,000Nm3/hr Oxygen capacity New contracts signed 9 1 2 Production capacity - Oxygen (Nm³/hr) 1,749,300 1,939,300 Production capacity - 2,273,600 2,466,600 Nitrogen (Nm³/hr) 3 Production capacity - Argon (Nm3/hr) 45,400 48,900 Protected by long term take- or-pay contracts to generate stable and lasting earnings Strong pipe-line to secure future growth and further customer diversification 15#16Diversified and Optimized Geographic Coverage and Self-supporting Network YINGDE GASES GROUP COMPANY LIMITED 盈德氣體集團有限公司 68 gas production facilities in operation were well diversified across 19 provinces in China as of December 31, 2015 Since 2011, on-site oxygen installed capacity has grown at CAGR of 20% 2011-2015 CAGR: 20% 1,042,400 940,400 Nm3/hr Nm3/hr 1,565,900 Nm3/hr Production facilities Customer industry On-site Oxygen capacity (Nm3/hr) In operation 1,366,900 (70%) 572,400 (30%) 1,939,300 Steel Non-steel Subtotal 1,942,300 Nm3/hr 1,752,300 Nm3/hr Merchant n/a Total 2011 2012 2013 2014 2015 Capacity (Nm3/hr) Production facilities covered 19 provinces O uncovered provinces Contracted and under development Steel Non-steel Total 3,000 (0%) 1,942,300 84,000 (39%) 133,500 (61%) 217,500 Self-supporting network Engaged in a selective expansion of facility network ■Taking into account the strategic value to overall expansion strategy ■Targeted locations that are highly industrial or resource rich ■Leverage existing production plants to complement new production facilities in order to - • Support each other during the ramp-up period of new production plant Minimize disruptions to customers and business 16#17Merchant Gas Operation 2014 2015 1 Volume of sold Oxygen 470.6 377.8 (Million Nm³) Volume of sold 515.3 533.2 Nitrogen (Million Nm³) Volume of sold Argon 124.0 130.5 (Million Nm³) YINGDE GASES GROUP COMPANY LIMITED 1D 盈德氣體集團有限公司 Price and volume drop of Oxygen due to decrease in demand from metal processing industry 2 Capitalize on our leading position in on-site market: with the best self supporting network in China, we are able to secure merchant customers over the nation. 17#182014 Financial review Industry and business overview Q & A Session YINGDE GASES GROUP COMPANY LIMITED 盈德氣體集團有限公司 18#19YINGDE GASES GROUP COMPANY LIMITED ① 盈德氣體集團有限公司 Q & A Session 19