Investigation record No.

: CF002303-3
Investigation date: March 14, 2023
Dispatched on: March 15, 2023
------------------------------------------------------------------------------------------------------------------------------------
(credit information)

COMPANY NAME : XXXXXX CHEMICAL CO., LTD.

OUTLINE
========
Country: Japan
Company name: XXXXXX CHEMICAL CO., LTD. XXXXXX
Name in local language: KAGAKU K.K. (XX化学株式会社) X-X-X,
Office address: NXXXXXXXX, Chuo-ku, Tokyo 103-0027
Office tel: 03-5201-XXXX
Office fax: 03-5201-XXXX
Website: https://www.XXXXXXXXXXX.co.jp/
Business type: Manufacturer
Industry: Chemicals
Established: June 1, 1925
Capital: Jp. 89,810,301,434 yen
Employees: 34,654 (as of September 30, 2022, consolidated)
( Note: Info. source; Financial report )
Corporate formation: Listed (Joint Stock Company)
Corporation No.: 0100-01-071327 (Tokyo Legal Affairs Bureau)

Rating: B
Recommended credit limit: US$ 630 million on terms of 90 days.

IDENTIFICATION
===============
Description in Your Order
Company Name: XXXXXXX CHEMICAL CO.,LTD
Address: X-X-X, XXXXXXXXXXXX,CHUO-KU,TOKYO 1048260 JAPAN

Correct Description
Company Name: Exactly the same as per your order.
Address: The quoted address is the previous one.

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Key to rating and appreciation
Rating Meaning Reference
No caution be utilized.
A Excellent Without negative factors and records.
Respected entity with good structure.
No caution be utilized for the time being.
B Sound Well balanced entity with reliable reputation.
Very rare negative factors.
Generally on a right level and will be normally
C Fairly sound conducted.
Negative factors are weak or nil.
Precaution be needed.
D Fair Mitigated credit advice.

Caution be utilize.
E Heavy Comprises negative factors.
Credit line should be reviewed.

MAJOR SHAREHOLDERS
=====================
As of September 30, 2022:
Paid up capital： Jp. 89,810,301,434 yen
Number of authorized shares： 5,000,000,000 shares
Number of outstanding shares： 1,655,860,207 shares
Numbers of shareholders： 147,725

Name of shareholders Number of thousand shares (%)

--------------------------------------------------------------------------------------------------------------------
XXXXXXXXXXX of Japan, Ltd.(Trust account) 248,323 (15.18)
XXXXXXXXXXof Japan, Ltd.(Trust account) 104,674 ( 6.40)
XXXXXXXXXXX Insurance Company 71,000 ( 4.34)
XXXXXXXXXXXX Insurance Company 41,031 ( 2.50)
XXXXXXXXXXXof Japan, Ltd.(#4) 29,538 ( 1.80)
XXXXXXXXJapan, Ltd.(XXXXXXX Insurance
29,000 ( 1.77)
Co. Retirement Benefit Trust Account)
XXXXXXXXXX West Client - Treaty 505234 28,750 ( 1.75)
Employees shareholders fund 24,609 ( 1.50)
XXXXXXXXXX Banking Corporation 23,073 ( 1.41)
XXXXXXXX Bank 21,825 ( 1.33)
--------------------------------------------------------------------------------------------------------------------
Total 621,826 (38.02)

Besides, the subject holds 20,480,700 shares (1.23%) as treasury stock.

The shareholding ratio is calculated after deducting the number of treasury shares above.

Note: Information source; Financial report

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DETAILED PRODUCT CLASSFICATION & ACTIVITY
===========================================
Activity Product/Service Description
-------------------------------------------------------------------------------
Manufacturing Basic chemicals
Manufacturing Petrochemicals
Manufacturing Fine chemical
Manufacturing IT related chemical
Manufacturing Agricultural chemical
Manufacturing Pharmaceutical chemical

COMPANY MANAGEMENT
======================
President Mr. Keiichi XXXX (XXXX) (*)
Nationality: Japanese

Chairman Mr. Masakazu XXXX (XXXX) (*)

Nationality: Japanese

Director Mr. Noriaki XXXX(XXXX) (*)

Nationality: Japanese

Director Mr. Masaki XXXX(XXXX) (*)

Nationality: Japanese

Director Mr. KingoXXXX (XXXX) (*)

Nationality: Japanese

Director Mr. Nobuaki XXXX (XXX) (*)

Nationality: Japanese

Director Mr. Hiroshi XX (XXX)

Nationality: Japanese

Director Mr. Hiroshi XXXXXX (XX)

Nationality: Japanese

Director Mr. Hiroshi XXXX (XX)

Nationality: Japanese

Director Mr. Motoshige XX (XXX)

Nationality: Japanese

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Director Ms. Atsuko XXXX(XXX)
Nationality: Japanese

Director Mr. Akira XXXX (XXXX)

Nationality: Japanese

Auditor Mr. Kunio XXXX(XXXX)

Nationality: Japanese

Auditor Mr. Hiroaki XXXX (XXXX)

Nationality: Japanese

Auditor Mr. Mitsuhiro XXX (XXX)

Nationality: Japanese

Auditor Mr. Yoshitaka XXX (XXX)

Nationality: Japanese

Auditor Mr. Michio XXXX (XXX)

Nationality: Japanese

Note: The names of director(s) and auditor(s) are phonetically spelt.

(*) = representative directors

*Key Personnel*
=============
Mr. Keiichi XXXX
President and representative director
Born on 1957
Education: University of Tokyo
Business career:
Apr. 1982: Employed by the subject.
Apr. 2010: Corporate officer.
Apr. 2019: President.

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FINANCIALS
===========
Currency: (local currency - Jp. yen)
-------------------------------------------------------------------------------------
Year | Sales | Net Income
-------------------------------------------------------------------------------------
2017 1,954,283,000,000 85,482,000,000
2018 2,190,509,000,000 133,768,000,000 (IFRS)
2019 2,318,572,000,000 117,992,000,000 (ditto)
2020 2,225,804,000,000 30,926,000,000 (ditto)
2021 2,286,978,000,000 46,043,000,000 (ditto)
2022 2,765,321,000,000 162,130,000,000 (ditto)

FINANCIAL DESCRIPTION
=====================
*Book Closing*
=============
March 31st

*Financials*
==========
Consolidated Balance Sheet
Unit: millions of JP yen
3/31/2020 3/31/2021 3/31/2022
Current Assets 1,310,906 1,584,471 1,812,642
Cash & deposits 180,648 360,918 365,429
Account receivables 570,413 652,616 720,422
Inventories 492,391 511,529 651,358
Others 67,454 59,408 75,433
Non-current assets 2,343,181 2,405,783 2,495,509
Tangible assets 778,417 793,500 823,022
Goodwill & Intangible assets 666,062 670,467 715,626
Investments & others 898,702 941,816 956,861
Total Assets 3,654,087 3,990,254 4,308,151

Current liabilities 1,162,328 1,090,692 1,173,491

Account payables 436,070 522,887 551,583
Bonds and borrowings 466,527 250,389 261,280
Outstanding taxes 32,116 38,410 24,515
Others 227,615 279,006 336,113
Non-current liabilities 1,099,167 1,417,443 1,432,683
Bonds and borrowings 838,139 1,100,677 1,089,190

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 Retirement benefits 45,770 37,179 33,091
Others 215,258 279,587 310,402
Shareholders' equity 923,990 1,019,230 1,218,101
Paid up capital 89,699 89,699 89,699
Capital reserves 20,784 26,882 27,089
Retained earnings 807,959 854,538 974,382
Treasury stock -8,329 -8,334 -8,343
Others 13,877 56,445 135,274
Minority Interest 468,602 462,889 483,876
Total Net Assets 1,392,592 1,482,119 1,701,977
Total Liabilities & Net Assets 3,654,087 3,990,254 4,308,151

Consolidated Income Statement

Unit : millions of JP yen
3/31/2020 3/31/2021 3/31/2022
Sales 2,225,804 2,286,978 2,765,321
Cost of goods sold 1,519,047 1,515,782 1,891,458
Gross profit 706,757 771,196 873,863
Sales/administrative expenses 575,135 631,270 690,860
Other operating income 11,590 26,673 10,533
Other operation expenses 14,928 17,025 20,713
Profit/loss accounted by equity method 9,233 -12,459 42,180
Operating profit 137,517 137,115 215,003
Financial income 13,178 19,868 59,194
Financial expenses 20,215 19,180 23,061
Pretax profit 130,480 137,803 251,136
Taxes & adjustment 76,081 69,729 64,699
Minority interest 23,473 22,031 24,307
Net profit 30,926 46,043 162,130

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 Financial Ratios
3/31/2020 3/31/2021 3/31/2022
PROFITABILITY
Return on net assets (%) 2.22 3.11 9.53
Return on total assets (%) 0.85 1.15 3.76
Net profit margin (%) 1.39 2.01 5.86

EFFICIENCY
Turnover of total assets 0.61 0.57 0.64
Turnover of current assets 1.70 1.44 1.53
Turnover of accounts receivable (days) 93.54 104.16 95.09

SOLVENCY
Liabilities/assets ratio (%) 61.89 62.86 60.49
Current ratio 1.13 1.45 1.54
Quick ratio 0.65 0.93 0.93

GROWTH
Sales growth (%) -4.00 2.75 20.92
Total assets growth (%) 15.21 9.20 7.97

*Latest Financials*
===============
On February 1, 2023, the subject released the following business results and forecast:
As of December 31, 2022 (3Q Mar. 2023 term)
Unit: millions of JPY
Core operating
Year term Sales Operating profit Net profit
profit
3Q 2022 2,037,877 205,669 197,923 133,663
3Q 2023 2,257,045 142,165 71,441 60,310
FY 2023(F) 2,990,000 120,000 0 0

Current assets 2,095,219

Non-current assets 2,455,417
Total assets 4,550,636
Current liabilities 1,317,225
Non-current liabilities 1,430,271
Shareholders' equity 1,310,894
Retained earnings 1,000,663
Total equity 1,803,140
Total liabilities & net assets 4,550,636

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*Bank Details*
============
Bank Name : XXXXXXXXXBanking Corp. Tokyo
Branch : business banking department

Bank Name : XXXXXXXXXTrust Bank, Ltd.

Branch : Head office

Bank Name : XXXXX Bank

Branch : Head office

Bank Name : XXXXXX, Ltd.

Branch : Head office

Bank Name : XXXXX bank,

Branch : Ltd. Head office

Bank Name : XXX Bank,

Branch : Ltd. Tokyo

*Credit Opinion*
=============
The subject is a XXXXXXXX publicly listed corporation (4005), and one of the world's leading
manufacturers of various chemical products. Major bases for petrochemical business are in
XXXXXX and XXXXXX. The money-making business segments are medical, agricultural and
electronic materials at present.

On Feb. 1, 2023 the subject released the 3Q business results (YTD) and the downwardly revised
full-year projection for the Mar. 2023 term as follows:
3Q results (YTD) Full-year projection
--------------------------------------------------------------------------------------------------------------------------------------
Sales: up by 10.8% year-on-year up by 8.1%
Core operating profit: down by 30.9% down by 48.9%
Operating profit: down by 63.9% down by 100.0%
Net profit belonging to
the shareholders of parent: down by 54.9% down by 100.0%

While the agrichemicals have been steady, the petrochemicals have plummeted for the second
half due to the tough situation at the joint-venture in XXXXXXX. The business of electronic
materials has declined in volume due to the reduced orders from the display industry. A sizable
impaired assets have occurred at the medical segment. A weaker currency could not cover such
negative effects so much.

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As for the Mar. 2024 term, the subject predicts some recovery in the field of automotive-related
business. The above impaired assets will be over. In Oct. 2022 the subject merged its 100%
subsidiary, XXXXX, engaged in the development of materials for the next-generation power
semiconductor to enhance that business field.
The subject has succeeded in developing a high-flexibility solid electrolyte jointly with XXXX
University, leading to the lighter weight of all solid state battery. A pilot plant has been set up for
the recycle of wasted plastics, linked up with the commercial-based production in the near future.
A new plant of process chemical for semiconductors is being built in the XXXX, which is slated
to start up in 2024.
Our standard suggestion is up to US$ 630 million on terms of 90 days, based on the latest available
financial data.

*COVID-19 Impacts Assessment*

==========================
Impact on the Industry: High
Overall Impacts Assessment: Medium

BRANCHES
==========
Branch name: Head Office (Osaka)
Branch address: XXXXXXXXXXXXXX, Chuo-ku, Osaka 541-8550
Tel: 06-6220-3211
Fax: 06-6220-3345
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Branch name: XXXXXX Branch
Branch address: XXXXXXXXXXXXXXXXXXXXXXXX., X-X-X, Higashi-sakura,
Higashi-ku, Nagoya-shi, Aichi 461-0005
Tel: 052-952-XXXX
Fax: 052-952-XXXX
----------------------------------------------------------------------------------------------------
Branch name: XXXXXX Branch
Branch address: XXXXXXXXX, Tenjin, Chuo-ku, Fukuoka-shi,
Fukuoka 810-0001
Tel: 092-721-XXX
Fax: 092-721-XXX
----------------------------------------------------------------------------------------------------

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PRODUCT, TECHNOLOGY, SERVICE DESCRIPTION
========================================
*Products*
=========
One of the leading manufacturers of a wide range of chemical products in the nation

- Energy & Functional Materials Sector

Main Products:
Alumina
Aluminium
Resorcinol
Synthetic Rubber
Super Engineering Plastics
Lithium-ion secondary battery materials

- Petrochemicals & Plastics Sector

Main Products:
Propylene Oxide
Caprolactam
Polypropylene
Polyethylene
Methyl methacrylate (MMA) polymer

- IT-related Chemicals Sector

Main Products:
Polarizing Films
Touch screen sensor panels
Color Resists
Photoresists
Compound Semiconductor Materials
Polymer OLED Materials

- Health & Crop Sciences Sector

Main Products:
Crop Protection Chemicals
Products for Insecticides
Products for Control of Infectious Diseases
Feed Additives
Pharmaceutical Chemicals

- Pharmaceuticals Sector & Others

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For the Mar. 2022 term
Petrochemicals..................................30%
Energy, Functional materials...........11%
Information, electronics....................17%
Health and agriculture.....................17%
Medical products...............................21%
Others..................................................4%

Overseas business.............................68%

FACTORY & FACILITIES

====================
Plants
=====
Ehime Works
XXXXXXXXXXXXXXXXXX, Ehime 792-XXXX

Chiba Works
XXXXXXXXXXXXXXXXXXXXXX, Chiba 299-
XXXX
Osaka Works
XXXXXXXXXXXXXXXXXXXXXXXX, Osaka 554-XXXX

Ohe Works
XXXXXXXXXXXXX Ehime 792-XXXX

Ibaraki Works
XXXXXXXXXXXXXXXXX Ibaraki 319-XXXX

Oita Works
XXXXXXXXXXXXX, Oita 870-XXXX

Utajima Pilot Production Dept.

XXXXXXXXXXXXXXXXXXX, Osaka 555-XXXX

Okayama Plant
XXXXXXXXXXXXXXXXXXXXXX, Okayama 711-XXXX

Gifu Plant
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX, Gifu 503-XXXX

Misawa Works
XXXXXXXXXXXXXXXXXXXXXXXXXXXXX, Aomori 033-XXX

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Major Research Laboratories
======================
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XX

Industrial Technology & Research Laboratory

(Osaka)
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

(Ehime)
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

(Chiba)
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXX
Environmental Health Science Laboratory
(Osaka)
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Advanced Materials Development Laboratory

(Tsukuba)
XXXXXXXXXXXXXXXXXXXXXXXX

Energy & Functional Materials Research Laboratory

5XXXXXXXXXXXXXXXXXXXXXXXXXXX

IT-related Chemicals Research Laboratory

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Health & Crop Sciences Research Laboratory

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

ORGANIZATION STRUCTURE
======================
*Address*
=========
The registered address is the same as the operational head office.

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*Company History*
==================
Date Development
-------------------------------------------------------------------------------------------
1913 The House of XXXXXXXXXXX opens a fertilizer plant at Ehime to produce
fertilizers from sulfur dioxide recovered from copper smelting emissions.
Jun. 1, 1925 XXXXXXXXXXXX Manufacturing Co., Ltd.(XXXXXXXXX) is incorporated
with operations at what is now the Ehime Works.
Feb. 1934 XXXXXXXXXXXX Manufacturing changes its name to XXXXXXXX
Chemical Co., Ltd.(XXXXXXX株式会社).
1944 XXXXXXXChemical acquires Japan XXXXXXXXX Company, starting a fine
chemical business at the Osaka Works and the Oita Works. Listed on the
May 1949 stock market.
Dec. 1949 XXXXXXXXXXChemical takes over the aluminum business of
XXXXXXXXXXXX Co., starting the integrated production of aluminum
from alumina.
1958 XXXXXXXXX Chemical starts petrochemical operations at its Ehime Works.
1978 The Misawa Works is opened to expand production of pyrethroid household
insecticides.
1982 XXXXXXXXXXXXXXXXX, a Japan-Indonesia economic cooperation project,
of which XXXXXXXXXXXXX Chemical is a member, begins aluminum
smelting operations.
1983 XXXXXXXXXXChemical integrates the petrochemical operations at its
Ehime Works into its Chiba Works.
1984 XXXXXXXXXXXXPharmaceuticals Co., Ltd. is established by consolidating
the pharmaceuticals operations of XXXXXXXXXXXX Chemical and the
pharmaceuticals division of XXXXXXXXX & Co., Ltd.
The Petrochemical Complex in XXXXXXXXX, a Japan-XXXXXXXXX
economic cooperation project, in which XXXXXXXXXXXXXChemical is a
leading participant, begins operations.
1997 The Petrochemical Corporation of XXXXXXXXXXXX Ltd., an affiliate in
XXXXXXXXXX, commences operation of a new ethylene cracker in April
under its Second Phase expansion, bringing the total ethylene capacity to
one million tons per year, and making it the largest petrochemical complex
in East Asia consisting of various downstream units.
1998 New facilities in XXXXXXXXXXX for the manufacture of acrylic acid and its
derivatives, including methyl methacrylate resins, under a project which
XXXXXXXXXXXXX Chemical was promoting with other Japanese
companies, are completed in October.
1999 XXXXXXXXXChemical obtains international environmental management
certification, or ISO14001, for all of its manufacturing plants in Japan.
2001 XXXXXXXXXXX Chemical establishes the IT-related Chemicals Sector as a
new business sector.

13
2002 XXXXXXXXXXXXXChemical XXXXXXXXXAgro Co., Ltd., a joint venture
between XXXXXXXXX Chemical and XXXXXXX Chemical Industries, Ltd.,
succeeds XXXXXXXXXChemical’s agrochemical business and commences
2003 operation. XXXXXXXXXX Chemical subsidiary XXXXXXXXXXX STI Co., Ltd.
commences operation of a large-scale fifth-generation TFT-LCD color filters
production plant in XXXXXXX.
XXXXXXXXXX Chemical begins operations of new caprolactam and propylene
oxide (PO) production facilities utilizing its proprietary novel processes.
Oct. 1, 2004 Changed its XXXXXXXXX company name to the current one.
Sep. 2009 XXXXXXXXXXXXXX Pharma, a consolidated subsidiary of the subject,
announced that XXXXXXXXXX Inc., XXXXXXXXXX would become a
consolidated subsidiary through T.O.B. action.
The amount of purchase is US$ 2,300 million.
Apr. 2011 Closed “Fine Chemical Division” and integrated into the “Agri-chemical
Division,” which was renamed as “Health & Agricultural Products
Division.”
Apr. 2015 The Fundamental Chemical Division was divided into Energy and
Functional Materials divisions.
Nov. 10, 2021 Relocated the head office to the current address from:
TXXXXXXXXXXXBldg. EXXXXXXXXXXXXXXXXXXXX Tokyo Sumitomo
Apr. 2022 Chemical to change the name of its Petrochemicals & Plastics Sector to
Essential Chemicals & Plastics Sector.
XXXXXXXXXXXXXXXXXXXXXX changes its name to XXXXXXXXXXXXXX
Pharma.

TRADE REFERENCES
================
*Suppliers*
==========
XXXXX Petrochemical Co., Ltd.
XXXXXXXXXXXXX Co., Ltd.
XXXXX Industrial Co., Ltd.

Note: Information source; Interview

*Customers*
==========
XXXXXXXX, Inc.
XXXXXXXXXXX Co., Ltd.
XXXXXXXXXX Film Co., Ltd.

Note: Information source; Interview

14
MAJOR SUBSIDIARIES, JOINT-VENTURES & AFFILIATES
================================================
Company name: XXXXX America, Inc.
Country: USA
Status: Subsidiary
----------------------------------------------------------------------------------------------------
Company name: XXXXXXXXXXXXXXX Co., Ltd.
Country: Japan
Status: Subsidiary
----------------------------------------------------------------------------------------------------
Company name: XXXXXXXXXXXXXX Corporation
Country: Japan
Status: Subsidiary
----------------------------------------------------------------------------------------------------
Company name: XXXXXXXXXXXXXXX (Wuxi) Co., Ltd.
Country: China
Status: Subsidiary
----------------------------------------------------------------------------------------------------
Company name: XXXXXXXXXXXXXXX Asia Pte Ltd
Country: Singapore
Status: Subsidiary
----------------------------------------------------------------------------------------------------

RELATED PARTIES DESCRIPTION

===========================
*Subsidiaries*
============
As of March 31, 2022 the subject owns and controls a total of 296 subsidiaries and affiliates at
home and abroad.

******* END OF REPORT *******

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