Sinostar PEC : Second Quarter And/ Or Half Yearly Results

SINOSTAR PEC HOLDINGS LIMITED

(Company Registration No.: 200609833N)

UNAUDITED FINANCIAL STATEMENT FOR THE SECOND QUARTER ENDED 30 JUNE 2020

PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF YEAR AND FULL YEAR RESULTS

1(a) An income statement and statement of comprehensive income or a statement of comprehensive income for the group together with a comparative statement for the corresponding period of the immediately preceding year.

Consolidated statement of comprehensive income for the

Second quarter for the period ended 30 June 2020

		2nd Qtr 2020		2nd Qtr 2019	+/(-)	1st Half 2020		1st Half 2019	+/(-)
		RMB'000		RMB'000	%	RMB'000		RMB'000	%
REVENUE	732,610	946,693	(23)	1,516,845	1,926,195	(21)
Cost of sales	(666,448)	(931,629)	(28)	(1,437,132)	(1,842,221)	(22)
Gross profit	66,162	15,064	339	79,713	83,974	(5)
Other income	988	573	72	6,137	2,175	182
Distribution costs	(23)	(187)	(87)	(50)	(312)	(84)
Administrative costs	(9,392)	(7,421)	27	(17,333)	(13,649)	27
Other operating expenses	(22)	(21)	NM	(45)	(39)	14
Finance costs	(10,461)	(12,890)	(19)	(21,058)	(26,602)	(21)
Profit before taxation	47,252	(4,882)	NM	47,364	45,547	4
Taxation	(11,835)	(249)	NM	(14,698)	(11,871)	24
Total comprehensive income /
(expense) for the financial period	35,417	(5,131)	NM	32,666	33,676	(3)
Attributable to:
Equity holders of the Company	32,813	(1,876)		33,614	30,553
Non-controlling interests	2,604	(3,255)		(948)	3,123
		35,417	(5,131)		32,666	33,676

Page 1 of 19

Notes to the consolidated statement of comprehensive income

30/6/2020	30/6/2019	Change (+/-)
RMB'000	RMB'000	%

Profit/(loss) before taxation is arrived at after (crediting)/charging:

Other operating income included;-
-	Interest income	(988)	(873)	(13)
Depreciation of property, plant and equipment	58,732	31,578	86
Amortisation of land use rights	387	244	58

N.M. - Not meaningful

Page 2 of 19

1(b)(i) A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year.

	GROUP		COMPANY
	30/6/2020	31/12/2019	30/6/2020	31/12/2019
	RMB'000		RMB'000		RMB'000		RMB'000
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment	1,807,100	1,635,133	-	-
Right-of-use assets	4,852	4,852	-	-
Land use rights	91,828	92,368	-	-
Goodwill on consolidation	10,345	10,345	-	-
Investment securities	30,450	30,450	-	-
Investment in subsidiaries	-	-	250,041	250,041
	1,944,575	1,773,148	250,041	250,041
CURRENT ASSETS
Land use rights	1,085	1,085	-	-
Inventories	14,430	92,766	-	-
Trade and other receivables	9,222	42,879	-	-
Prepayments	3,465	8,400	-	-
Amount owing by a subsidiary	-	-	10,186	14,376
Amounts owing by affiliated companies	253	2,810	-	-
Amount owing by non-controlling interests	-	137,757	-	-
Cash and bank balances	478,915	66,247	1,485	500
	507,370	351,944	11,671	14,876
TOTAL ASSETS
2,451,945		2,125,092		261,712		264,917

EQUITY
Equity attributable to equity holders of the parent
Share capital	316,125	316,125	316,125	316,125
Retained profits/(accumulated losses)	225,968	192,354	(55,381)	(52,907)
Capital reserves	250,000	250,000	-	-
Other reserves	75,123	75,123	-	-
		867,216	833,602	260,744	263,218
Non-controlling interests	156,213	157,161	-	-
TOTAL EQUITY	1,023,429	990,763	260,744	263,218

Page 3 of 19

1(b)(i) A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year.

		GROUP			GROUP		COMPANY		COMPANY
		31/6/2020			31/12/2019	31/6/2020	31/12/2019
		RMB'000			RMB'000		RMB'000		RMB'000
LIABILITIES
NON-CURRENT LIABILITIES
Lease liabilities	4,781	1	4,781	-	-
Bank borrowings	531,250			31,250	-	-
		536,031			36,031	-	-
CURRENT LIABILITIES
Trade and other payables	86,016			97,429	968	1,699
Amounts owing to affiliated companies	-			25	-	-
Loan from non-controlling interests	735,000			850,000	-	-
Lease liabilities	356			356	-	-
Bank borrowings	62,500			125,000	-	-
Current tax payable	8,613			25,488	-	-
		892,485			1,098,298	968	1,699
TOTAL EQUITY AND LIABILITIES
2,451,945			2,125,092	261,712	264,917

Page 4 of 19

1(b)(ii) Aggregate amount of group's borrowings and debt securities.

Amount repayable in one year or less, or on demand

	As at 30/6/2020	As at 31/12/2019
	Secured	Unsecured	Secured	Unsecured
	RMB'000	RMB'000	RMB'000	RMB'000
	62,500(1)	735,000(3)	125,000(1)	850,000（3）
Amount repayable after one year
	As at 30/6/2020	As at 31/12/2019
	Secured	Unsecured	Secured	Unsecured
	RMB'000	RMB'000	RMB'000	RMB'000
	531,250(1),(2)	-	31,250(1)	-

Details of any collateral

1. Bank borrowings of the subsidiary Dongming Qianhai is secured by a mortgage over the property, plant and equipment of an affiliated company, Dongming Runze Petrochemical Co.,Ltd (东明润泽化 工有限公司);
2. Bank borrowings of the subsidiary Dongming Hengchang is secured by a corporate guarantee from an affiliated company, Dongming Zhongyou Fuel and Petrochemical Co., Ltd (东明中油燃料石化有限 公司)；
3. Unsecured loan from non-controlling interest("NCI"), Shandong Dongming Petrochem Group Co., Ltd (山东东明石化集团有限公司). On 2 April 2020, the group has entered into a new loan agreement ("Interim loan") with the NCI for the aggregate amount of the outstanding four tranches of Loan Agreements, amounted to RMB 750 million. The term of the Interim Loan Agreement is six (6) months, commencing on 2 April 2020 and expiring on 1 October 2020. The purpose of the Interim Loan Agreement is to refinance the outstanding amounts owing under the outstanding four tranches Loan Agreements and with a scheduled repayment of RMB 15.0 million each due on 20 June 2020 and 20 September 2020. The remaining amount owed under the Interim Loan Agreement will be at RMB 720.0 million. To mitigate the loan repayment, the board has negotiated with our NCI to agree and will be converting the balance RMB 720 million loan to a longer repayment term of 5 years, with a scheduled and fixed quarterly payment. However, this loan convertible will be subjected to a call for EGM and shareholders' approval.

Page 5 of 19

1(c) A statement of cash flows (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year.

Consolidated statement of cash flows for the period ended 30 June 2020

Cash flows from operating activities

Profit/(loss) for the period Adjustments for:-

Depreciation of property,plant and equipment Amortisation of land use rights

Interest expense Interest income

Operating profit before working capital changes

Changes in working capital:

Change in inventories

Change in operating receivables

Change in operating payables

Amount owing to affiliate companies

Cash generated from operations

Interest paid

Income tax paid

Net cash generated from operating activities Cash flows from investing activities

Acquisition of property, plant and equipment Acquisition of land use rights

Change in amount owing to non-controlling interests Interest received

Net cash used in investing activities

Cash flows from financing activity

Repayment of loan to non-controlling interests Repayment of bank borrowings

Dividends paid

Net cash used in financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

30/6/2020	30/6/2019
RMB'000	RMB'000
47,252	(4,882)
58,732	31,578
387	244
10,461	12,890

1. (873)

115,84439,257

16,41635,893

3,87969,431

18,868(68,861)

74710,404

155,75486,124

(10,461)(12,980)

(6,085)(8,931)

139,20864,303

(166,860)(50,470)

--

4,796-

988573

(161,076) (49,897)

(15,000)-

(31,250)(31,250)

• (15,940)

(46,250) (47,190)

(68,118)(32,784)

547,033300,584

478,915267,800

Page 6 of 19

For the purpose of the consolidated statement of cash flows, the cash and cash equivalents comprise the following:

Cash on hand	72	151
Bank balances	478,843	210,649
Fixed deposit placed with financial institutions	-	57,000
	478,915	267,800

Page 7 of 19

1(d) (i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalization issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year.

UNAUDITED STATEMENT OF CHANGES IN EQUITY - GROUP

1 January 2020 to 30 June 2020

Balance as at 1 January 2020 Transfer to statutory common reserves Total comprehensive income for the period Dividends paid

Balance as at 30 June 2020

1 January 2019 to 30 June 2019

Balance as at 1 January 2019 Transfer to statutory common reserves Total comprehensive income for the period Dividends paid

Balance as at 30 June 2019

				Other reserves
Share	Retained	Capital	Statutory common	Voluntary common			Controlling	Non-controlling
capital	profits	reserve	reserve	w elfare fund		Subtotal	interest	interest	Total
RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
316,125	192,354	250,000				75,123	833,602	157,161	990,763
74,326	797
-	-	-	-	-		-	-	-	-
-	33,614	-	-	-		-	33,614	(948)	32,666
-	-	-	-	-		-	-	-	-
316,125	225,968	250,000	74,326	797	75,123	867,216	156,213	1,023,429
				Other reserves
Share	Retained	Capital	Statutory common	Voluntary common			Controlling	Non-controlling
capital	profits	reserve	reserve	w elfare fund		Subtotal	interest	interest	Total
RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
316,125	109,123	250,000				736,030	132,838	868,868
59,985	797	60,782
-	-	-	-	-	-	-	-	-
-	30,553	-	-	-	-	30,553	3,123	33,676
-	(15,940)	-	-	-	-	(15,940)	-	(15,940)
316,125	123,736	250,000	59,985	797	60,782	750,643	135,961	886,604

Page 8 of 19

UNAUDITED STATEMENT OF CHANGES IN EQUITY - COMPANY
1 January 2020 to 30 June 2020	Share Capital	Accumulated losses	Total
	RMB'000	RMB'000	RMB'000
Balance as at 1 January 2019	316,125	(52,907)	263,218
Total comprehensive expenditure for the period	-	(2,474)	(2,474)
Dividend paid	-	-	-
Balance as at 30 June 2019	316,125	(55,381)	260,744
1 January 2019 to 30 June 2019	Share Capital	Accumulated losses	Total
	RMB'000	RMB'000	RMB'000
Balance as at 1 January 2019	316,125	(51,006)	265,119
Total comprehensive income for the period	-	17,786	17,786
Dividend paid	-	(15,940)	(15,940)
Balance as at 30 June 2019	316,125	(49,160)	266,965

Page 9 of 19

1(d) (ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles, as well as the number of shares held as treasury shares, if any, against the total number of issued shares excluding treasury shares of the issuer, as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year.

There were no changes in the Company's share capital since the end of the previous period reported on. There were no outstanding convertibles issued or treasury shares held by the Company as at 30 June 2020.

1(d) (iii) Total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year.

	30/06/2020	31/12/2019
Number of issued shares (excluding	640,000,000	640,000,000
treasury shares)
Number of treasury shares held	NIL	NIL

1(d) (iv) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at the end of the current financial period reported on.

Not applicable.

• Whether the figures have been audited or reviewed and in accordance with which auditing standard or practice.
  The figures have not been audited or reviewed by the auditors.

• Where the figures have been audited or reviewed, the auditors' report (including any qualifications or emphasis of matter).
  Not applicable.

• Whether the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statements have been applied.
  The Group had applied the same accounting policies and methods of computation in the financial statements for the current financial period as those adopted in the audited financial statements for the financial year ended 31 December 2019.

• If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change.
  There are no changes in accounting policies and methods of computation since 31 December 2019.

Page 10 of 19

• Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends.

	2nd Quarter Ended
	30/06/2020	30/06/2019
	RMB (cents)	RMB (cents)
Profit/(loss) per share for the period based on net profit attributable to
owners of the parent company
(a) Based on basic number of ordinary shares on issue	5.13	(0.29)
No. of shares in issue (weighted average)	640,000,000	640,000,000
(b) On a fully diluted basis	5.13	(0.29)
No. of shares in issue (weighted average)	640,000,000	640,000,000

• Net asset value (for the issuer and group) per ordinary share based on the total number of issued shares excluding treasury shares of the issuer at the end of the (a) current financial period reported on and (b) immediately preceding financial year.

	Group	Company
30/06/2020	31/12/2019	30/06/2020	31/12/2019
RMB	RMB	RMB	RMB
Net asset value per	1.30	0.41	0.42
1.36
ordinary share

• A review of the performance of the group, to the extent necessary for a reasonable understanding of the group's business. The review must discuss any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors. It must also discuss any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on.

Analysis of Revenue		2st Qtr		2st Qtr
( in RMB'000)		2020	%	2019	%
Processed LPG - Total		203,636	27.8%	323,576	34.2%
- Inter-company *		(125,104)	-17.1%	(173,080)	-18.3%
Propylene		66,971	9.1%	83,349	8.8%
Polypropylene		73,258	10.0%	81,557	8.6%
MTBE		233,328	31.8%	320,192	33.8%
Propylene II		136,249	18.6%	185,903	19.6%
Hydrogen		49,856	6.8%	46,272	4.9%
Isobutylene		30,281	4.1%	48,428	5.1%
Other Gas		3,311	0.5%	5,536	0.6%
Logistics & transport related services		60,854	8.3%	24,960	2.6%
TOTAL		732,610	100.0%	946,693	100.0%
*supplied of LPG to subsidairy Dongming Qianhai

Page 11 of 19

1. Processed LPG
   Sale of processed LPG decreases by 37.1% from RMB 323.6 million in 2Q19 to RMB 203.6 million in 2Q20. Decrease is due to lower output and average selling prices ("ASP") by 5.6% and 33.3% respectively, however the average cost of production ("ACP") seeing a greater decrease of 37.5% ascompare to 2Q19.
2. Propylene
   Sale of propylene decreases by 19.6% from RMB 83.3 million in 2Q19 to RMB 66.9 million in 2Q20. Production output and ASP decrease by 8.9% and 11.8% respectively but being offset by decrease in ACP of 17.7% as compare to 2Q19.
3. Polypropylene
   Polypropylene decreases by 10.2% from RMB 81.5 million in 2Q19 to RMB 73.2 million in 2Q20. Though the production output increase by 0.7%, both the ASP and ACP during the reporting period decreases by 10.8% and 17.6% respectively as compare to 2Q19.
4. MTBE
   MTBE decreases by 27.1% from RMB 320.2 million in 2Q19 to RMB 233.3 million in 2Q20. Despite production output increase by 8.7%, ASP and ACP during the reporting period decreases significantly by 32.9% and 39.3% respectively as compare to 2Q19.
5. Propylene II
   Propylene II decreases by 26.7% from RMB 185.9 million in 2Q19 to RMB 136.2 million in 2Q20. Mainly due to decrease in production output and ASP during the reporting periods by 17.1% and 11.6% respectively as compare to 2Q19.
6. Hydrogen
   Hydrogen is mainly transacted with an affiliate party for its production utilities consumption. During the periods, production output increases by 7.7% resulted the revenue to increase from RMB 46.2 million in 2Q19 to RMB 49.8 million in 2Q20.
7. Isobutylene
   Isobutylene decreases by 37.5% from RMB 48.2 million in 2Q2019 to RMB 30.3 million in 2Q20. Mainly due to production output, ASP and ACP during the reporting periods decreases by 5.2%, 34.0% and 44.8% respectively as compare to 2Q19.
8. Logistics & transport related service
   Revenue from this business increase by 143.8% from RMB 24.9 million in 2Q19 to RMB 60.8 million in 2Q20. Increase is mainly due to acquire of a new customer in Jiangsu area and increase in demands from existing customers.

Page 12 of 19

Gross profit

Gross profit increase from RMB 15.0 million in 2Q19 to RMB 66.2 million in 2Q20, mainly due to much higher decrease in average cost of production recorded during the reporting periods as compare to the decrease in average selling prices, couple with increase in revenue generated from logistics and transport related services.

Other income and expenses

1. Other income

Comprise mainly bank interest earned amounted to RMB 0.8 million on short-term deposits placed with financial institution. Balances are from a traffic incident compensation and grant from the Heze city government for 科技创新发展资金.

1. Administration costs
   Increase is mainly due to the increases of production workers employed for the new polypropylene plant, an addition of RMB 2.3 million during the reporting period.
2. Finance expense
   Interests incurred mainly RMB 9.0M on loan from non-controlling interest and balance on the bank borrowing.

The Group made a profit of RMB 32.8 million in 2Q20 attributed to the equity holders of the company, as compared to a loss of RMB 1.9 million in 2Q19.

Balance Sheet

Highlights on changes in balance sheet items of the Group are as follows ;-

1. Property, plant and equipment

The increase mainly due to the capitalisation of initial costs on the construction-in-progress of newly polypropylene production plant in subsidiary Dongming Hengchang. As of reporting date a total of RMB 529.6 million has been capitalised.

1. Right-of-useassets / lease liabilities

As a result of the adoption of SFRS (I)-16 on 1 January 2019, the Group recognised its existing operating lease arrangements as right-of-use assets with corresponding lease liabilities. Adjustments will be made annually.

1. Inventories

Inventories comprise mainly the finished goods and value at cost.

1. Bank Borrowing

Comprise of two bank borrowing as follow;-

1. Bank borrowing relates to a long-term capital loan obtained from the bank by subsidiary Dongming Qianhai. The loan is carrying an interest rate of 4.75% per annum with a fixed repayment term of RMB 31.25 million in each quarterly till settle fully by March FY 2021.

Page 13 of 19

1. 1. Dongming hengchang has obtained a new long-term capital loan from bank to financing the new polypropylene construction. The loan is carrying at interest rate of 4.41% per annum and repayment is scheduled to commence from June of FY2021.
2. Non-controllinginterest

Represent 30% controlling stake in subsidiary Dongming Qianhai by Dongming Petrochem Group.

1. Loan from non-controlling interests

Pending a long term loan agreement to be approved by shareholders, this Loans which is from non-controlling interest Dongming Petrochem Group to financing the working capital use in Dongming Qianhai prior to acquisition completed, has been converted to interim short-term loan for 2 April 2020 to 1 October 2020. Another loan repayment of RMB 15 million will be in September 2020. Loan is unsecured and bearing interest at 4.35% per annum. (also refers to above 1(b)(iI) Details of collateral (3))

Cash flow

During the reporting periods, the group generated RMB 139.2 million net cash from operating, offset RMB

161.0 and RMB 46.2 million net cash used in both investing and financing activities, respectively. As a result, the Group's cash and cash equivalent amounted to RMB 478.9 million.

• Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results.
  None.

10 A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months.

COVID-19 had a significant impact on the global economy in the first half of 2020. The Chinese government has introduced huge stimulus including preferential tax policies to try cushion part of thenegative impact of the virus.

As the Group maneuver through this challenging operating environment, the safety of our employees is of utmost importance to us. Upon the outbreak of the virus, the Group has immediately set up an epidemic prevention task group to implement the necessary measures needed to ensure the wellbeing of our employees and the smooth continuity of our operations. These measures include temperature measurement of incoming personnel, contact tracing for outsiders, and distribution of disinfectant and mask protective equipment to our employees. We have also granted RMB1,000 to each of our employees as subsidies for their epidemic prevention measures.

Nonetheless, COVID-19 has had an impact on our operations. The Group saw a significant drop in sales volume which resulted in a decline in our revenue and an increase in our product inventory backlog. Focus will be on the production of polypropylene as the demand for polypropylene fibre continues to be robust, as it is used in the production of protective surgical masks and related products manufacturing.

Most of our payment terms for sales of petrochemical products have been cash on delivery. Consequently, the Group does not have a significant number of receivables in relation to the revenue. The majority of the trade receivables held on our balance sheet pertains to our transport and logistic business, which the

Page 14 of 19

Group adopted a stringent customer policy, the Group will only transact with customers of credible and proven credit history and obtaining sufficient security where appropriate to mitigate credit risk.

The construction of the new polypropylene production plant, which has an annual production capacity of 200,000 tonnes/year, also remains on track and is scheduled to be commencing production trial-run by the fourth quarter of fiscal 2020. We will continue to be prudent in cash flow management while managingrisks and focusing on cost efficiency and stable production.

11 Dividend

(a) Current Financial Period Reported On

Any dividend recommended for the current financial period reported on?

None.

(b) Corresponding Period of the Immediately Preceding Financial Year

Any dividend declared for the corresponding period of the immediately preceding financial year?

None.

(c) Date payable

Not applicable.

(d) Books closure date

Not applicable.

12 If no dividend has been declared / recommended, a statement to that effect.

No dividend has been declared / recommended for the half-year ended 30 June 2020.

13 If the Group has obtained a general mandate from shareholders for IPTs, the aggregate value of such transactions as required under Rule 920(1)(a)(ii). If no IPT mandate has been obtained, a statement to that effect.,

Note Rule 920(1)(a)(ii) - An issuer must announce the aggregate value of transactions conducted pursuant to the general mandate (if any) for interested person transactions for the financial periods which it is required to report on pursuant to Rule 705.

Page 15 of 19

Name of Interested Person

Aggregate

value

of

all

Aggregate

value of

all

interested person

transactions

interested

person transactions

during the financial year under

conducted during the financial

review (excluding

transactions

year under

review

under

less than $100,000 and

shareholders'

mandate

transactions

conducted

under

pursuant

to

Rule

920

shareholders'

mandate

(excluding

transactions

less

pursuant to Rule 920)

than $100,000)

For periods from April 2020 to

June 2020 ;-

Dongming

Zhongyou

Fuel and

Petrochemical

Company

Limited

(东 明 中 油 燃 料 石 化 有 限

公 司)

-

Purchase of raw LPG

RMB 332,815,891

-

Purchase of utilities

RMB 2,023,713

-

Logistics

& transport

related

RMB 2,319,745

services provided to

-

Sale of waste oil

RMB 2,212,490

Shandong

Dongming

Petrochem

Group Co., Ltd. (山东东明石化集团

有限公司)

-

Purchase of utilities, part &

RMB 2,157,010

components

-

Sale of processed LPG

RMB 11,974,988

-

Logistics

& transport

related

RMB 21,180

services provided to

-

Accrued Interest on loan from

RMB 9,056,562

non-controlling interest

Dongming

Runze

Petrochemical

Co., Ltd (东明润泽化工有限公司)

-

Purchase of utilities, part &

RMB 11,858,652

components

-

Sale of Hydrogen gas

RMB 49,856,322

-

Sale of utilities

RMB 7,285,407

Dongming

Crude

Oil

Distribution

Co., Ltd (东明石油经销有限公司)

- Purchase of processed LPG

RMB 11,713,250

-

Logistics

& transport

related

RMB 13,922,623

services provided to

Page 16 of 19

	-	Consignment fee		RMB 933,521
	Shandong	Dongming	Lishu
	Petroluem Co., Ltd (山东东明梨树
	化学有限公司
	-	Sales of processed LPG		RMB 54,108,844
	-	Purchase of LPG			RMB 38,864,348
	-	Purchase of utilities			RMB 3,490
	Dongming Runming Oil	Products
	Distribution Co., Limited (东明润明油
	品销售有限公司)
	-	Logistics	& transport related		RMB 10,470
		services provide to

14. NEGATIVE CONFIRMATION BY THE BOARD PURSUANT TO RULE 705(5)

The Board of Directors has confirmed that, to the best of their knowledge, nothing has come to their attention which may render these financial results to be false or misleading in any material aspect.

PART II - ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT

(This part is not applicable to Q1, Q2, Q3 or Half Year Results)

1. Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer's most recently audited annual financial statements, with comparative information for the immediately preceding year.
   Not applicable.
2. In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments.
   Not applicable.
3. A breakdown of sales.

Not applicable.

18 A breakdown of the total annual dividend (in dollar value) for the issuer's latest full year and its previous full year.

Not applicable.

Page 17 of 19

19 Disclosure of person occupying a managerial position in the issuer or any of its principal subsidiaries who is a relative of a director or chief executive officer or substantial shareholder of the issuer pursuant to Rule 704(11) in the format below. If there are no such persons, the issuer must make an appropriate negative statement.

Name	Age	Family	Current position	Details	of changes in
		relationship with	and	duties,	and	duties	and position
		any director and/or	the	year	the	held, if any, during the
		substantial	position was held	year
		shareholder
Li Xiangping	60	Father of Li Zhi,	Non-Executive		None
		non-executive	Chairman Since
		Director of the	2006, Substantial
		Company	shareholder of the
			Company.
Li Zhi	35	Son of Mr Li	Non-Executive		Appointed in year
		Xiangping, the	Director of the		2019.
		Non-Executive	Company Since
		Chairman of the	2019
		Company

BY ORDER OF THE BOARD

ZHANG LIU CHENG

EXECUTIVE DIRECTOR AND CHIEF EXECUTIVE OFFICER

Page 18 of 19

CONFIRMATION BY THE BOARD PURSUANT TO RULE 705(5)

OF THE SGX-ST LISTING MANUAL

We, Zhang Liucheng and Li Xiang Ping, being Directors of the Company, do hereby confirm for and on behalf of the Board of Directors of the Company that, to the best of our knowledge, nothing has come to the attention of the Board of Directors of the Company which may render the unaudited financial results for the second quarter ended 30 June 2020 to be false or misleading in any material aspect.

On behalf of the Board of Directors

Sinostar PEC Holdings Limited

______________________	______________________
Zhang Liucheng	Li Xiang Ping
Executive Director and	Non-executive Chairman
Chief Executive Officer

Page 19 of 19