#1Envisioning the better, Building the Future 美好 洞見未來 LESSO 联塑 CHINA LESSO GROUP HOLDINGS LIMITED 中國聯塑集團控股有限公司 Incorporated in the Cayman Islands with limited liability 於開曼群島註冊成立的有限公司 Stock Code 股份代號:2128 2021 Annual Results Corporate Presentation March 2022#2Disclaimer The slides/materials used in this presentation are strictly confidential. The information contained in this presentation is being furnished to you solely for your information and may not be taken away, reproduced, redistributed, or passed on, directly or indirectly to any other person (whether within or outside your organisation/ firm), or published, in whole or in part, for any purpose. The slides/ materials do not constitute an offer of securities in the United Kingdom, Australia, the PRC, United States, Canada or Japan. In particular, neither the information contained in this presentation nor any copy hereof may be transmitted, reproduced, taken or transmitted into the United Kingdom, Australia, the PRC, United States, Canada or Japan or redistributed, in whole or in part, directly or indirectly, within the United States or to any U.S. person. By attending this presentation, you are agreeing to be bound by the foregoing restrictions and to maintain absolute confidentiality regarding the information disclosed in these materials. Any failure to comply with these restrictions may constitute a violation of applicable securities laws. These slides/ materials do not constitute an offer or invitation to purchase or subscribe for any securities and no part of it shall form the basis of or be relied upon in connection with any contract, commitment or investment decision in relation thereto. The shares of China Lesso Group Holdings Limited (the "Company") have not been, and will not be, registered under the U.S Securities Act of 1933, as amended (the "U.S Securities Act") or the securities laws of any state of the United States and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and any applicable state or local securities laws. There will be no public offering of the Company's shares in the United States. This document shall not constitute an offer to sell or a solicitation of an offer to buy the Company's securities nor shall there be any sale of such securities in any state or country in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or country. In Hong Kong, no shares of the Company may be offered to the public unless it is conducted in compliance with the Securities and Futures Ordinance, Chapter 571 of the laws of Hong Kong and a prospectus in connection with the offering for subscription of such shares has been formally approved by the Stock Exchange of Hong Kong Limited and duly registered by the Registrar of Companies of Hong Kong which contains all the information as required under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of the laws of Hong Kong and the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited. Any decision to purchase securities in any offering should be made solely on the basis of the information contained such prospectus or international offering circular to be published in relation to such offering. This presentation may contain forward-looking statements. Any such forward-looking statements are based on a number of assumptions about the operations of the Company and factors beyond the Company's control and are subject to significant risks and uncertainties, and accordingly, actual results may differ materially from these forward- looking statements. The Company undertakes no obligation to update these forward-looking statements for events or circumstances that occur subsequent to such dates. The information in this presentation should be considered in the context of the circumstances prevailing at the time of its presentation and has not been, and will not be, updated to reflect material developments which may occur after the date of this presentation. The information is not intended to provide, and you may not rely on these materials as providing a complete or comprehensive analysis of the Company's financial or trading position or prospects. Some of the information is still in draft form. This presentation also contains information and statistics relating to the plastic pipes industry. The Company has derived such information and data from unofficial sources, without independent verification. The Company cannot ensure that these sources have compiled such data and information on the same basis or with the same degree of accuracy or completeness as are found in other industries. You should not place undue reliance on statements in this presentation regarding the plastic pipes industries. The information contained in this presentation does not constitute a due diligence review and should not be construed as such. The information contained in these materials has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be place on, the fairness, accuracy, completeness or correctness of any information or opinion contained herein. None of the Company, or any of their respective directors, officers, employees, agents or advisers shall be in any way responsible for the contents hereof, or shall be liable whatsoever (in negligence or otherwise) for any loss or damage whatsoever arising from use of the information contained in this presentation or otherwise arising in connection therewith and none of them shall owe you any fiduciary duty in relation to this presentation. 2#3Agenda 01 Results Highlights 02 Financial Review 03 Business Review 04 Outlook / | \#4Results highlights Though benefited from the support of various favorable policies, the Group's overall business performance was still affected by the waxing and waning of Covid-19 at home and abroad, deterioration of external economic environment, significant fluctuations in raw material prices and continued uncertainty in real estate sector in 2nd half. of the year Revenue: RMB 32.058 billion Gross profit: RMB 8.448 billion Profit attributable to the owners of the Company : RMB 3.044 billion Final dividend: HK 26 cents per share (2020: HK38 cents per share) Revenue: RMB 27.457 billion, +12.0% Sales volume of plastic piping systems: 2.55 million tonnes ❖ Started strategic brand upgrade and committed to provide sustainable green products and services Fully implemented automated and intelligent production and made use of the internet to upgrade production facilities to smart factories, to achieve intelligent manufacturing and improve quality 美 灯 新升级 重新定义 CLESSO 联塑集团数字化智能工厂 启动仪式 LESSO COCHESSO 联塑#5Results highlights Shifted focus to projects led by state-owned enterprises and municipal governments which had with stronger demand Announced the establishment of "Lesso Banhao" in early January 2022 to expand into photovoltaic industry Created a new model of “BBC” home improvement and worked with distributors and business partners to explore new business opportunities 联塑家装精品财富签约启动仪式 LESSO联塑 LESSORE 新模式新商机 RANG Actively expanded overseas markets with a focus on the Southeast Asian market Expedited the development of its environmental protection business to further expand its layout ✰ Maintained stable and healthy financial position with cash and bank deposits of approx. RMB 7.646 billion 5#6Agenda 01 Results Highlights 02 Financial Review 03 Business Review 04 Outlook い B.#7O Steady revenue growth Total revenue Total revenue (by business segment) (RMB million) + 14.2% 2021 32,058 28,073 693 301 521 856 354 2,751 689 1,997 24,512 2020 27,457 2021 Supply Chain Service Platform Business 2.7% Building materials & home improvement 8.6% Plastic piping systems 85.6% Environmental protection 0.9% Others* 2.2% 2020 Supply Chain Service Platform Business 2.5% Building materials & home improvement 7.1% Environmental protection 1.2% Others* Environmental protection Supply Chain Servide Platform Business Building materials and home improvement Plastic piping systems Remark: Others* including finance, plastic film, connection materials and other businesses Plastic piping systems 87.3% Others* 1.9% 7#8O Overall cost structure Other overheads 1.9% Depreciation & amortisation 3.9% Utilities 2.9% Wages 11.0% 2020 Other overheads 1.6% Depreciation & amortisation 4.0% Utilities 2.6% Wages 8.8% Raw materials 80.3% Raw materials 83.0% 2021 8#9GP & NP (RMB million) GP & GP margin 29.9% 28.6% 9,000 8,384 8,448 7,537 4,500 (RMB million) 32% 4,500 NP & NP margin 13.4% 11.5% 3,757 26.4% 24% 3,019 3,028 3,000 9.4% 16% 1,500 8% 14% 7% 0% 0% 2019 2020 2021 2019 2020 2021 6#10Healthy & stable key financial indicators (days) (days) 39 2019 Trade receivable days (days) 46 46 2020 Trade payable days 107 98 102 2019 2020 2021 2021 Inventory turnover days* 83 76 67 2019 (RMB million) Cash & bank deposits 7,604 7,447 7,646 2020 2021 2019 2020 2021 * Remark: excluding properties 10 10#11Return ratios pe Return ratios performance Return on equity(1) 18.5% 17.7% 2019 2020 13.8% 2021 Return on assets (2) Return on invested capital (3) 8.1% 7.4% 5.5% 10.3% 9.9% 7.5% 2019 2020 2021 2019 2020 2021 (1) Net profit divided by total equity at the end of the period (2) Net profit divided by total asset at the end of the period (3) Net profit divided by (total debt + total equity) 11#12Agenda 01 Results Highlights 02 Financial Review 03 Business Review 04 Outlook い#13O Plastic piping systems business: revenue & sales volume Segment revenue Segment sales volume (tonnes) 27,457 2,608,958 2,548,755 24,512 (RMB million) 2020 2021 2020 2021 13#14O Plastic piping systems business: revenue breakdown by region Outside Southern China 45.2% 2020 Outside China 1.8% Outside Southern China 45.8% 2021 Outside China 2.8% Southern Southern China 53.0% China 51.4% 14#15Plastic piping systems business: revenue analysis Gas 1.7% Power supply & tele- By communication application 17.2% Drainage 38.0% By material Non-PVC (2) 37.9% 2020 Gas Others (1) 4.5% 1.7% Power supply & Water tele- supply 38.6% communication 17.5% PVC 62.1% (1) ลิ Total pipe products revenue: RMB 24.512 billion Others include agricultural applications, floor heating and fire services (2) Non-PVC includes PE, PP-R. etc Drainage 37.8% Non-PVC (2) 38.3% 2021 Total pipe products revenue: RMB 27.457 billion Others (1) 5.3% Water supply 37.7% PVC 61.7% 15#16Plastic piping systems business: ASP & GP margin analysis ASP per tonne - by material GP margin-by material (RMB) 15,431 14,250 8,116 7,781 (RMB) 2019 MPVC products 2020 9,143 15,118 33.2% 29.1% 30.1% 28.7% 28.4% 23.3% 2021 2019 2020 PVC products Non-PVC products ASP per tonne - overall 28.9% 10,773 9,887 9,395 2021 Non-PVC products GP margin overall - 30.2% 25.9% 2019 2020 2021 2019 2020 2021 16#17Plastic piping systems business: production capacity & utilisation rate //// Annual designed production capacity & average utilisation rate (million tonnes) 88.0% 3.00 2.50 2.00 87.9% 81.1% 90.0% Δ 70.0% 50.0% 3.20 1.50 3.03 30.0% 2.78 1.00 0.50 10.0% -10.0% 0.00 -30.0% 2019 2020 2021 17#18Plastic piping systems business ✓ Actively expanded market share Optimised customer portfolio Shifted its focus to projects led by state-owned enterprises and municipal governments which had with stronger demand Kept on seeking prospective business partners to achieve synergies among them ✰ Actively expanded the agricultural business Enriched income sources and expanded market share Innovated new products and new technologies For stainess-steel pipeline product, an additional production line will be set up in Foshan plant in 2022 for mass production Opportunely capitalising on the implementation of new national policies Expected the government will introduce a series of policies to expedite infrastructure projects Xiong'an New Area Pipeline project Hong Kong-Zhuhai-Macao Bridge Stainless-Steel Pipe Product Beijing Daxing International Airport 软州西站 Nanchang-Ganzhou High- speed Railway 联塑农业 为农业 更专业 MORORONOWNE LESSO 18#19O Plastic piping systems business Expanded overseas market and scaled up production Set up sales centers and sales sub-teams in 11 countries to promote the internationalisation of the brand Expect production base in Cambodia commence production in 1st half of 2022. Phase II of the production base in Indonesia will be built in 2022 Accelerated the construction of production bases in Thailand, Malaysia, Philippines and Bangladesh Made use of internet to upgrade and build smart factories Fully implemented automated and intelligent production Established more production bases in Gansu, Sichuan, Jiangxi, Guangdong, Fujian, Xinjiang and Indonesia etc. Gangsu: Built an intelligent high-tech and environmental-friendly production base. Expected an annual sales of approx. 100k-150k tonnes of plastic pipe at full capacity Guandong: Digital intelligent factory put into operation, gave a strong impetus to intelligent manufacturing and high-quality development 19#20☐ Building materials & home improvement to deep In 2021, China's real estate market experienced a change from strong performance in 1H2021 to deep adjustment in 2H2021 Revenue from building materials and home improvement business: RMB 2,751 million, +37.8% Diversified customer portfolio Shifted focus to projects led by government and state-owned enterprise Actively explored possibilities for collaboration with various industries Bring more stable growth in revenue LESSO 联塑 家装精品专卖店 Established a unique ecological chain Created a new model of "BBC" interior decoration by taking advantages of of well- developed businesses along the value chain, supply chain and scale of operation Developed a one-stop integrated solution for the supply of all categories of products for home improvement Actively set up home improvement boutique stores and held promotion meetings in Hubei, Guangdong; Hunan, Jiangxi, Anhui and Shandong Provide "Good Housekeeping "free value-added services to fully address the user's concern for home improvement Increase investment in scientific research to innovate and upgrade eco-friendly products, to further advance the healthy development of the supply chain of the property sector 20#21Scope of Business Water Treatment Solid Waste Disposal Environmental protection business ✓ Steady business development Actively responded to the government's call for environmental protection and vigorously developed environmental protection business In 2021, revenue amounted to RMB 301 million due to the impact of the repeated pandemic outbreak Planning to establish hazardous solid waste treatment centres in Guangdong and Hunan to further expand environmental protection business Seize new opportunities brought by "double carbon" policy, continue to integrate various resources for winning more projects, striving to rank among China's top, large environmental companies 发展循环经济 保护绿色生态 Developing Circular Economy and rolecting Green Ecology Waste Gas Treatment Soil Remediation Technical Consultancy & Environmental Monitoring Scientific Research Service Service 21#22Supply chain service platform business Achieved steady growth in business Recorded revenue of RMB 856 million, +24.2% With its focus on the development in Southeast Asian market, the Group has projects in Thailand and Indonesia Further expand the distribution network for its supply chain service platform business in Southeast Asia and capture the opportunities to drive its long-term development accordingly to the Group's business plan LESSO LESSO America CHINA LESSO GROUP HOLDING LIMITED LESSOHOME TOTO 22 22#23Photovoltaic Business Achieved green transformation and expanded into new industry Announced the establishment of "Lesso Banhao" in early January 2022 to expanded into photovoltaic industry Provide an integrated energy solution for global industrial and commercial enterprises and households Create strong synergies with existing businesses and sales channels Product and System Operation All-in-one professional service Installation and Maintenance Consultation Design and R&D Engineering الزمنية Provide an array of more diverse green products and services Include sales and design of solar panels and after-sales services Sell building applied photovoltaic (BAPV) solutions to existing customers and will have three production lines to assemble and produce photovoltaic products Actively invest resources in R&D with the aim to develop market-leading building integrated photovoltaic (BIPV) products and solutions, expecting to be launched at the end of 2022 23#24Agenda 01 Results Highlights 02 Financial Review 03 Business Review 04 Outlook い (3)#25Future prospect Production & Operation Deepen intelligent manufacturing & automated production Introduce high-precision equipment to enhance production automation and intelligent operation, build smart factories and optimise products Continue to expand existing plants and increase production equipment Build new production bases in Guangxi and Gansu Develop products and technologies and increase investment in R&D innovation Emphasise the cultivation of technical talents and establish a product research centre to innovate and upgrade green products Expedite industry transformation and upgrading to offer sustainable green products and services and actively expand market network Lead the industry's green and sustainable development through technological R&D Business Expansion ness Exp Grasp green opportunity and actively expand into new business Broaden the scope of applications of plastic pipes fittings in all aspects Proactively seek potential partners with various industries Grasp opportunities arising from the government's initiatives and infrastructure construction Actively expand into photovoltaic industry and broaden the array of green industries Focus on Southeast Asia Region Dedicated to scale up its production New production bases Indonesia and Cambodia are under planning Accelerate the construction of production bases in Thailand, Malaysia, Philippines and Bangladesh Optimise overseas supply chain and promote the internationalisation of its brand Tap huge local demand of the region's market and capitalise on the local infrastructure development Product Development Become a global business group in pipelines and building materials Provide sustainable green products and services Overseas Expansion 25#26O Q&A A#27Appendix: financial summary Statement of profit and loss (RMB million) Statement of financial position (RMB million) 2019 2020 2021 2019 2020 2021 Revenue 26,345 28,073 32,058 Cash & bank 7,604 7,447 7,646 Gross profit 7,537 8,384 8,448 deposits EBITDA 5,556 6,195 5,720 Total assets 40,785 46,528 54,483 EBIT 4,559 5,189 4,353 Total debts 13,537 16,236 18,276 Net profit 3,028 3,757 3,019 Total equity 17,094 20,354 21,807 Ratio analysis Profit ratio (%) 2019 2020 2021 Gross profit margin 28.6% 29.9% 26.4% EBITDA margin 21.1% 22.1% 17.8% EBIT margin 17.3% 18.5% 13.6% Net profit margin 11.5% 13.4% 9.4% Growth rate (%) Revenue 11.0% 6.6% 14.2% Gross profit 21.0% 11.2% 0.8% EBITDA 26.0% 11.5% -7.7% EBIT 24.9% 13.8% -16.1% 23.8% 24.1% -19.7% Net profit Liability ratio (times) EBITDA/ financing costs 9.63x 14.21x 10.47x 27 Total debts/ (total debts + total equity) 44.2% 44.4% 45.6%#28Appendix: Layout of production bases With over 30 advanced production bases in 18 provinces of China and in foreign countries Production base(s) 生產基地 Los Angeles (USA) 洛杉磯(美國) Xinjiang Uygur Autonomous Region 新疆維吾爾自治區 ASEAN 東南亞國家聯盟 Hebei 河北 Shandong 山東 Shaanxi Henan 陝西 河南 Sichuan Hubei 四川 湖北 Guizhou 貴州 Yunnan 雲南 Hunan 湖南 Hainan 海南 Jiangsu 江蘇 Anhui 安徽 Jiangxi Zhejiang 浙江 Fujian 江西 福建 Guangdong 廣東 Jilin 吉林 28