Financial Results for FYE 3/2019
Securities code: 4109

1. Consolidated Financial Results for FYE 3/2019
 Financial Summary
 Breakdown of Non-Operating Profit andLoss/Extraordinary Profit and Loss
 Quarterly Operating Profit
 Sales Revenue and Operating Profit by Business Transitions in Trade Statistics Value of Anhydrous
Hydrofluoric Acid Balance Sheet Interest-Bearing Liabilities and D/E Ratio Cash Flows, Capital Expenditures, Depreciation &Amortization, Research & Development Expenses
P.2

<Financial Summary>
Percentage
Increase/
Decrease

Increase/
Decrease(In millions ofFYE 3/2018
yen)(In millions of yen)

FYE 3/2019

Sales Revenue

33,62238,384

4,761

14.2

Gross Profit

6,592

7,931

1,339

20.3

Operating Profit

2,369

3,523

1,153

48.7

Ordinary Profit

1,756

3,810

2,053

116.9

Profit Attributable to Owners of
Parent

1,274

2,350

1,076

84.4

Earnings Per Share (yen)100.49182.06

81.57

81.2

Dividend (yen)

41

45

4

9.8

ROE (%)

4.3

7.3

3.0

69.8

P.3

<Breakdown of Non-Operating Profit and Loss/Extraordinary Profit and Loss>■ Non-operating Profit and Loss

■ Extraordinary Profit and LossFYE 3/2018

FYE 3/2019

FYE 3/2018(In millions of yen)

(In millions of yen)109

Non-Operating Profit

588

Interest income

14

21

Dividend income

22Gain on valuation ofderivatives-

305

Foreign exchange gains

-

72

92

186

722

301

39

40

Share of loss of entities accounted
for using the equity method

120

238

Foreign exchange losses

214-

Loss on valuation ofderivatives

186

-

Other

162

22

Other

Non-Operating Expenses
Interest expenses

P.4

FYE 3/2019

Extraordinary Profit

285

18

Gain on sales of noncurrent assets

285

17

Extraordinary Losses

238

151

Loss on abandonment of
non-current assets

206

151

Loss on sales of noncurrent assets

0-Loss on valuation of
investment securities

32-

<Quarterly Operating Profit>(million yen)

1,600

1,473

1,400
1,209

1,200
1,000

960

1,025

912

888

949

936

727

800

636
600

461

400
200

83

0
(In millions of yen)

Sales Revenue
Operating Profit
Operating Profit Margin (%)

FYE 3/2017
FYE 3/2018
1Q
2Q
3Q
4Q
1Q
2Q
3Q
7,187 6,757 7,941 7,963 8,159 8,561 8,314
960 1,025 1,473
912
888
936
461
13.4% 15.2% 18.6% 11.5% 10.9% 10.9% 5.5%
P.5

FYE 3/2019
4Q
1Q
2Q
3Q
8,587 10,134 9,323 9,275
83
949 1,209727
1.0%
9.4% 13.0% 7.8%

4Q
9,649
636
6.6%

<Sales Revenue and Operating Profit by Business>
FYE 3/2018

Percentage Increase/
Decrease

FYE 3/2019(In millions ofSales yen)
(In millions
of Operating

Sales Revenue Constituent Ratio of HighPurity Chemicals

Revenue

ProfitSales
Revenue

Operating
ProfitSales
Revenue

Operating
ProfitHigh-Purity
Chemical Business

29,1452,500

33,776

3,782

15.9

51.3

Surface
Treatment

1,956[High-Purity Chemical Business: Breakdown](In millions of yen)

yen)

2,080

At home

59.3%

40.7%

6.4

5.2%

2.6%

6.2%

2.7%

Alternatives for
CFCs

2,546

3,618

42.1

Batteries

5,069

3,629

-28.4

Semiconductors/LCDs

15,662

20,093

28.3

Semiconductor
Devices

693

633

-8.6

Catalysts

919

904

-1.6

Gypsum

72

176

143.8

GeneralProducts

1,267

1,762

39.1

Other

958

876

-8.5

Transportation
Business

Abroad

4,269

779

4,382

726

2.6

10.7%
10.7%
1.9%

Other

P.6

Sales
Revenue
FYE 3/2019

59.5%

-6.7

■Surface Treatment ■Alternatives for CFCs ■Semiconductors/LCDs■Semiconductor Devices ■Batteries■Gypsum

Medical Business

0.5%

-

-960

-

-1,051

-

-

207

34

225

42

8.6

21.5

■Catalysts■General Products ■Other

<Transitions in Trade Statistics Value of Anhydrous Hydrofluoric Acid> *Reference data(yen/kg)

300

250

200

150

100
Apr-14

Average Price(yen/kg)

Oct-14Apr-15Oct-15

Apr-16Oct-16

Apr-17Oct-17

Apr-18Oct-18FYE 3/2015

FYE 3/2016

FYE 3/2017

FYE 3/2018

FYE 3/2019

153

158

135

209

220

Source: Prepared by our company based on the Ministry of Finance’s “Trade Statistics of Japan” (http://www.customs.go.jp/toukei/info/)

P.7

<Balance Sheet>
Percentage
Increase/
Decrease

FYE 3/2018

FYE 3/2019

Increase/
Decrease

51,37355,454

4,080

7.9

Cash and cash equivalents

9,192

14,044

4,852

52.8

Operating receivables

9,753

9,678

-74

-0.8

Inventory assets

6,378

6,183

-194

-3.0

Property, plant, and equipment

21,654

22,329

674

3.1

144

565

420

292.2

18,88821,536

2,647

14.0

Operating liabilities

3,853

4,562

709

18.4

Interest-bearing liabilities

10,857

11,069211

1.932,48533,918

1,433

4.4

31,23332,821

1,588

5.1

51,37355,4544,080

7.9(In millions of yen)

AssetsIntangible assets

Liabilities

Net Assets
Equity capital

Liabilities and Net Assets
P.8

<Interest-Bearing Liabilities and D/E Ratio>(million yen)

Balance of interest-bearing liabilities(-fold)D/E ratio (-fold)

35,0000.9

0.8
30,0000.7
0.7
25,000

0.6

0.6

0.5

20,0000.5

0.3

15,000

0.3

0.4

0.3
10,00015,31013,9750.2

13,967
10,8575,000

11,0690.1

00.0

FYE 3/2015

P.9

FYE 3/2016

FYE 3/2017

FYE 3/2018

FYE 3/2019

<Cash Flows, Capital Expenditures, Depreciation & Amortization, Research &Development Expenses>(1) Consolidated Statement of Cash FlowsFYE 3/2018

FYE 3/2019(In millions of yen)

Cash flows from operating activities
Cash flows from investing activities
Free cash flows (operating CF + investment CF)
Cash flows from financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year

937
-4,673-3,735-1,400-5,238
14,1698,930

7,345-3,532
3,813
-321
3,227
8,930
12,158(2) Capital Expenditures, Depreciation & Amortization, Research & Development Expenses
FYE 3/2018

FYE 3/2019(In millions of yen)

Capital Expenditures
Depreciation & Amortization
Research & Development Expenses

P.10

2,991
3,344
1,484

4,435
3,253
1,566

2. Financial Forecast for FYE 3/2020
 Financial Forecast
 Financial Trends
 Forecast on Sales Revenue andOperating Profit by Business

P.11

<Financial Forecast>
Percentage
Increase/
Decrease(In millions of FYE 3/2019
Actualyen)

FYE 3/2020
Forecast

Sales Revenue

38,38437,800-584-1.5Gross Profit

7,931

7,550

-382

-4.8

Operating Profit

3,523

2,450

-1,074-30.5

Ordinary Profit

3,810

2,550

-1,260-33.1

Profit Attributable to Owners of Parent

2,350

1,700

-651

-27.7

Earnings Per Share (yen)182.06

131.65-50.41-27.7

Dividend (yen)

45

45

-

-

ROE (%)

7.3

5.3

-2.0

-27.4

Capital Expenditures

4,435

4,580

144

3.3

Depreciation & Amortization

3,253

3,490

236

7.3

Research & Development Expenses

1,566

1,770

203

13.0

(In millions of yen)

P.12

Increase/
Decrease<Financial Trends>(million yen)

Operating profit (right axis)

Ordinary profit (right axis)(million(millionyen)
yen)

Sales revenue (left axis)

50,0005,000

38,38440,00037,8004,000

33,622
29,85030,0003,000

27,5094,372

20,000

4,154
3,523

2,4502,550

2,369

10,000

2,000

3,810

1,000

1,756
1,388

1,044

0

0
FYE 3/2016

P.13

FYE 3/2017

FYE 3/2018

FYE 3/2019

FYE 3/2020

<Forecast on Sales Revenue and Operating Profit by Business>
FYE 3/2019
Actual[High-Purity Chemical Business: Breakdown]

High-Purity
Chemical Business

Percentage Increase/
Decrease

Sales
Revenue

Operating
ProfitSales
Revenue

Operating
ProfitSales
Revenue

Operating
Profit33,776

3,782

33,020

2,880

-2.2

-23.9

Sales Revenue Constituent Ratio of HighPurity Chemicals
AbroadSurface
Treatment

2,080

1,730

-16.8

Alternatives for
CFCs

3,618

3,500

-3.3

Batteries

3,629

2,700

-25.6

Semiconductors/LCDs

20,093

20,4101.6

Semiconductor
Devices

633

530

-16.4

Catalysts

904

840

-7.2

Gypsum

176

150

-15.0

GeneralProducts

1,762

2,360

33.9

Other

876

800

-8.7

Transportation
Business

At home

39.0%

61.0%
2.4%
7.1%

4,382

726

4,570

760

4.3

5.2%

2.5%

10.6%

8.2%
1.6%

0.5%

Sales
Revenue
Forecast
FYE 3/2020

61.8%

4.6

■Surface Treatment ■Alternatives for CFCs ■Semiconductors/LCDs■Semiconductor Devices ■Batteries ■Catalysts--1,051--1,220

-

-

225

42

210

30

-7.0

-28.8

Medical Business
Other

FYE 3/2020
Forecast

P.14■Gypsum■General Products ■Other

3. STELLA CHEMIFA CORPORATION
 Corporate Profile/Sales Office Locations/Plant Locations(as of March 31, 2019) List of Affiliated Companies
 High-Purity Chemical Business

P.15

<Corporate Profile/Sales Office Locations/Plant Locations (as of March 31, 2019)>
 Corporate profile
Corporate name:Head office:FoundedEstablished
Capital fund

STELLA CHEMIFA CORPORATION
Meiji Yasuda Seimei Osaka Midosuji Bldg. 10F, 4-1-1 Fushimi-machi, Chuo-ku,
Osaka City, Osaka
February 1916
February 1944
4,829,782,512 yen

Representatives

Chairperson, Representative Director: Junko Fukada
Representative Director,
President and Chief Executive Officer: Aki Hashimoto

URL

https://www.stella-chemifa.co.jp/

 Sales officeOsaka Sales Department Meiji Yasuda Seimei Osaka Midosuji Bldg. 10F,
4-1-1 Fushimi-machi, Chuo-ku, Osaka City, Osaka
Tokyo Sales Department Tokyo Tatemono Yaesu Building 2F,
1-4-16 Yaesu, Chuo-ku, Tokyo Factory addresses
Sanpo Factory
Izumi Factory
Kitakyushu Factory
P.16

7-227 Kaisan-cho, Sakai-ku, Sakai City, Osaka
1-41 Rinkai-cho, Izumiotsu City, Osaka
1-1 Kurosakishiroishi, Yahatanishi-ku, Kitakyushu City, Fukuoka

<List of Affiliated Companies>
Logo

AbroadAt home

Base

P.17

Corporate NameBusiness Segment

Head Office

STELLA CHEMIFA CORPORATION

High-Purity Chemical
Business

Chuo-ku, Osaka City,
Osaka

Blue Express, Inc.

Transportation BusinessSakai-ku, Sakai City,
Osaka

Blue Auto Trust Co., Ltd.

Other BusinessSakai-ku, Sakai City,
Osaka

Stella Pharma Corporation

Medical Business

Chuo-ku Osaka City,
Osaka

STELLA CHEMIFA SINGAPORE
PTE LTD

High-Purity Chemical
Business

Singapore

STELLA EXPRESS PTE LTD

Transportation BusinessSingapore

Blue Express (Shanghai) International Trade
Inc.

High-Purity Chemical
Business

China

Blue Express (Shanghai) International Freight
Forwarding Co., Ltd.

Transportation Business

China

Zhejiang Blue Star Chemical Co., Ltd.

High-Purity Chemical
Business

China

FECT Co., Ltd.

High-Purity Chemical
Business

South Korea

Quzhou BDX New Chemical Materials Co., Ltd.

High-Purity Chemical
Business

China<High-Purity Chemical Business>
Our products, fluorine compounds, are still used in the manufacture of various products.
Segment Name

Main ProductApplications

Surface treatment

Hydrofluoric acid for industrial use

Used for acid cleaning of stainless steel and for thinning glass
substrates for LCDs

Alternatives for CFCs

Anhydrous hydrofluoric acid

Material for chlorofluorocarbon and fluorine resin

Batteries

Additive for batteries
Lithium hexafluorophosphate

Additive for electrolyte to improve the performance of lithium-ion
secondary batteries
Electrolyte for lithium-ion secondary batteries

High-purity hydrofluoric acid
Semiconductors and
LCDs

Semiconductor
devices

General products

High-purity buffered hydrofluoric
acid

Cleaning solution for silicon wafers and LCDs
Solar batteries

High-purity fluoride(CaF2, PbF2, MgF2, AlF3 andothers)Lens material for i-line steppers and cameras

Potassium fluoride

Auxiliary agent for manufacturing tantalum for tantalum
capacitors

Tin fluoride

Quasi-drug

P.18

Semiconductors and LCDs
 Features of Our Products and New Products
 Results and Forecast of World Semiconductor
Market Scale by Product Development of a New Memory Market
 Maintenance and Strengthening of Quality Edge
 Change of Shipping Volume of High-Purity
Hydrofluoric Acid (Semiconductors and LCDs)
 Boosting Production of Semiconductor
Chemicals
P.19

<Features of Our Products and New Products>(1) With our ultra purification technology and ultra sensitive technology, we are able to supply the ultra-high-purity
hydrofluoric acid and the ultra-high-purity buffered hydrofluoric acid with the best quality in the world.
(2) Products Lineups are readied to respond the customer requirements, including like suppression of adhering
particles, and suppression of increased roughness of wafer surfaces, and others, for the semiconductor and
FPD manufacturing process.
Product name

Description(Semiconductor and LCDs)

Ultra-high-purity hydrofluoricacid

An ultra-high-purity chemical used for wet cleaning of silicon wafers in manufacturing semiconductors,
FPDs, solar batteries, and MEMS

HF with various functionalities made possible by adding a surfactant. It is mainly used for cleaning silicon

LL HF

wafers.

Ultra-high-purity bufferedhydrofluoric acid

A chemical mixed with 50% hydrofluoric acid and 40% ammonium fluoride solutions

LL BHFBHF with various functionalities made possible by adding a surfactant

LAL BHF

BHF that contains an additive has enabled it to achieve extended service life and given other advantages by optimizing the concentration ofammonium fluoride at 15% to 25%, about half the concentration of ammonium fluoride contained in conventional BHF.

Ex-LAL BHF

BHF containing an environmentally friendly additive with a maximum ammonium fluoride concentration of
5%

HSN Series

An etchant for silicon nitride with selectivity to silicon oxide, which is mainly used in the DRAM
manufacturing process

LPL BHF

A silicon oxide etchant with minimum damage to silicon or polysilicon film

P.20

<Results and Forecast of World Semiconductor Market Size by Product>(million $)550,000

Actual

500,000

Forecast

The semiconductor market has
witnesses rapid growthrecently.

450,000
400,000
350,000
300,000
250,000
200,000

18,201
27,571
8,036
98,805

20,17029,868
8,502

18,61233,256
8,816

19,41831,994
10,821

106,437

106,526

108,433

21,651
34,813
12,571

24,19438,715
13,40225,14441,354
14,091

126,844

131,132

109,672

113,879

117,004

102,209
150,000
100,000
50,00085,92891,63390,753The memory market more thandoubled in two years.

91,49867,043

79,232

77,20576,767

123,974

2013

2014

2015

2016

2017

MemoryLogic

165,110

164,543

0
Other

Sensor

2018

Optoelectronics

2019

Total Discrete

Source: World Semiconductor Trade Statistics Inc. (WSTS)

P.21

<Development of a New Memory Market>
Place ofConstruction

Base Name

Produced Item

Wafer Size

Production
Capacity, etc.

Plan

Xian

Fab2

3D-NAND

12 inches

70,000wafers/month

Under construction It is scheduled to be completed in
the second half of 2019.

Pyeongtaek

Phase2DRAM

12 inches

Wuxi

C2F

DRAM

12 inches

130,000
wafers/month

Flushing started in October 2018

Cheongju

M15

3D-NAND

12 inches

Mass production to start in the second half of 2019

Y6 Phase1

3D-NAND

12 inches

Operating rate increasing

Y6 Phase2

3D-NAND

12 inches

Flushing started.

Iwate

K1

3D-NAND

12 inches

Under construction
Flushing is scheduled for the first half of 2019.

Intel

DalianFab2

3D-NAND

12 inches

Micron Technology

Hiroshima

Fab15

DRAM

12 inches

Innotron Memory

Hefei

Phase1DRAM

12 inches

125,000
wafers/month

Trial production started.

Yangtze River Storage Technology(YRST); YMTC
* Tsinghua Unigroup acquired
capital in XMC.

ChengduPhase1

3D-NAND

12 inches

50,000wafers/month

Trial production started.
200,000 wafers/month in 2020, and 1 million
wafers/month in 2030

Manufacturer

Samsung Electronics

SK Hynix

Yokkaichi

Toshiba Memory

80,000wafers/month

Trial production started.
Currently gearing up for mass production of 1Xnm

Large-scale investments are planned in new memory factories, mainly in China.
Source: STELLA CHEMIFA
Even though there was a slowdown in 2019, further growth is expected in 2020.
Demand for memories is expected to continue in the future with sophistication of the Internet, popularization of IoT, utilization of artificial
intelligence (AI) and so on.

We pursue sales in the memory market through aggressive strategies.

P.22

<Maintenance and Strengthening of Quality Edge>◆SA Grade HF quality◆
Product technology generation≥45 nm28 nm≤16 nmOur product grade

SA/SA-X

SA-XX

SA-XXX
Succeeded inultra-high-purity

Metal impurities level<100 ppt<10 ppt<1 pptManagement
size of particle

0.2/0.1 um

0.05 um

0.03 um

Further strengthening particle management

With Introducing the world’s most advanced analytical instruments.

©RION CO., LTD.

©Thermo Fisher
Scientific K. K.

High resolution ICP-MS
Liquid-borne particle counter
P.23

<Change of Shipping Volume of High-Purity Hydrofluoric Acid
(Semiconductors and LCDs)>
100,000(full-year)
94,10090,00080,000(full-year)
83,424

Volume sold (ton)70,00060,000(full-year)
65,177(full-year)
65,241(full-year)
66,06950,00040,00030,000(1st Half)
39,665(1st Half)
33,669(1st Half)
32,698(1st Half)
31,257FYE 3/2015

FYE 3/2016

FYE 3/2017(1st Half)
45,65920,00010,0000
P.24

FYE 3/2018

FYE 3/2019

<Boosting Production of Semiconductor Chemicals>
The shipping volume exceeded 90,000 t in FYE 3/2019 highest ever.
The shipping volume in FYE 3/2020 is expected to be 97,000 t.
To expand our share further and strengthen the stable supply system

Establish the supply system with 105,000 t/year in FYE 3/2020.

P.25

Batteries
 Features of Our Products/Business Development in
China
 EV Applications Drive LiB Market Growth Construction Rush for Giant Battery Plants
 Sales Results and Forecast of Additives for LiB

P.26

<Features of Our Products>(1) Used as main material comprising the lithium-ion secondary batteries and commercialized ahead of other companies.
(2) Because of the product’s high purity, it is being used for high-performance lithium-ion secondary batteries.

Product Name (Related
to Batteries)

Description

Additive for batteries

Additive for electrolytic solution to improve theperformance of lithium-ion secondary batteries

Lithium
hexafluorophosphate

Electrolyte for lithium-ion secondary batteries<Business Development in China>■ Quzhou BDX New Chemical Materials Co., Ltd.
(established in December 2015)■ Capital fund: 70 million Chinese yuan
(STELLA CHEMIFA’s stake: 25%) *As of March 31, 2019
■ Some of the facilities used to manufacture electrolytes for lithiumion secondary batteries were relocated to this joint venturecompany.
The joint venture company uses the relocated facilities to produce
electrolytes for lithium-ion secondary batteries and sells them inand outside China.

P.27

<EV Applications Drive LiB Market Growth>(100 million yen)

Small, consumer use(cylinder, square,laminate types)

x EV use

Use in ESS, UPS,
and BTS
2016

2017

2018
2019
Projection Forecast

2020
Forecast

2021
Forecast

2022
Forecast

Fig. Change in sales in Li-ion secondary batteries market by application (results and forecasts)(Source: Materials released by Fuji Keizai)

Establishment of production system to meet the demand
P.28

<Construction Rush for Giant Battery Plants>
Asia
Europe

659
GWh

1098
GWh

2023
(forecast)

2028(forecast)

222
GWh

UnitedStates2018(projection)
Fig.

Tesla/Panasonic,
State of Nevada

Change in production capacity for Li-ion secondary batteries by region(output-based)

LG chem,State of Georgia

Northvolt,
SwedenPanasonic/Toyota,Japan

BYD and
Samsung SDI,
Xian

CATL andTerraE,
Germany

LG chem,
PolandLG chem andSamsung SDI,
Hungary

Lishen, Tianjin
LG Chem, Nanjing

BYD,
XiningSK Innovation, Changshu
Tesla, Shanghai
Funeng,Ganzhou

CATL,
NingdeThe medium-term demand for batteries for EVs will be supplied by Giga plants,
which are being constructed around the world
P.29

<Sales Results and Forecast of Additives for LiB>
<Schematic diagram of the inside of a lithium-ion secondary battery>
Electrolytic solution

Roles that additives play
Discharge

Positive-electrodematerial

ChargeSeparator

Negative-electrodematerial◆ High-temperature
endurance◆ High conductivity (lowtemperature)◆ Increased capacity◆ Low resistance◆ Flame retardance

The Solid Electrolyte Interface (SEI), where the electrode comes in contact withthe electrolytic solution, is important.

FYE 3/2016

FYE 3/2017

FYE 3/2018

1st Half
P.30

FYE 3/2019

2nd Half

FYE 3/2020 (prospects)

GMP-related GMP(Good Manufacturing Practice)Oral Care-related ~ Tin Fluoride (SnF2) ~P.31

< GMP(Good Manufacturing Practice) >The GMP inspection by USFDA

for tin fluoride, an active
ingredient of OTC anticaries
drugs, was completed in
November 2017.

Obtained official
approval by a publicorganization in the US

Started selling GMPcertified products in 2018

Standards for Manufacturing Control andQuality Control for Drugs and Quasi-drugs

Three principles:“Reducing human errors to the lowest level"“Preventing contamination and productquality loss"“Designing systems to assure high productquality"
Inside Izumi Factory (Izumiotsu City)

P.32

<Oral Care-related ~ Tin Fluoride (SnF2) ~><Actions of fluorine on teeth>▪ To suppress Streptococcus mutans from producing acid (Cavity prevention)▪ To promote tooth remineralization▪ To form acid-resistant teeth (to form fluorapatite)
We expect to see big demand mainly in Europe and the US, where there is strong
interest in dental health and beauty.
Trend in shipping volume of tin fluoride (t/year)
140
120
100
80

60
40
20
0

FYE 3/2017

FYE 3/2018

ActualP.33

FYE 3/2019

Prospects

FYE 3/2020

4. Medical Business Corporate Profile (as of March 31, 2019)
 Development of New Radiotherapy Technology -BNCT Establishment of Enrichment Technology/Features ofEnriched Boron/Applications of Enriched Boron
Compounds
 World’s First Accelerator-based BNCT Clinical Trial
 Participation in Development of Imaging Diagnostic
Technology - PET Diagnosis  Establishment of 18FBPA-PET Development System

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<Corporate Profile (as of March 31, 2019)>
Corporate name:

STELLA PHARMA CORPORATIONHead Office:3-2-7 Koraibashi, Chuo-ku, Osaka City, Osaka

Representatives

Tomoyuki Asano, Representative Director and President

Established

June 2007

Capital Fund

1.9 billion yen

Business Lineup Research and development, manufacture, and marketing, etc.
of drugs and medical devices

Shareholders

STELLA CHEMIFA CORPORATION
Innovation Network Corporation of Japan
Sumitomo Heavy Industries, Ltd.

Research Facility Sakai Drug Discovery Research Center(Naka-ku, Sakai City, Osaka)P.35

<Development of New Radiotherapy Technology -BNCT->
Boron Neutron Capture Therapy (BNCT) is a particle beam radiation therapy,
which specifically damages cancer cells by making the best of nuclear fission
reactions between boron-10 and thermal neutrons with low energy.

Administration of Boron-10 compound (BPA)

Boron-10 compound (BPA) is selectively
brought into cancer cells.
4He nucleus (α particle)

Prompt gamma ray
478 keV

1.47 MeV
9 μm

Thermalneutron10B

4 μm

Irradiating with thermal neutron
ray causes Boron-10 to fission.

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7Li recoil nucleus

0.84 MeV

Cancer cells with Boron-10 compound(BPA) are selectively destroyed.

<Establishment of Enrichment Technology/Features of Enriched Boron/
Applications of Enriched Boron Compounds>▪ Establishment of enrichment technology
STELLA CHEMIFA established mass production technology of 10B for the first time in Japan.
In November 2000, the only enrichment plant in Japan was established.

10B

Enrichment andseparation

10B

Generation

10B▪ Features of enriched boron

10B
10B

10B
10B

10B

10B
10B

<The only 10B enrichment plant in Japan>(completed in November 2000)

10B offers properties of remarkably high neutron absorption capacity, and by increasing 10B
concentration, the absorption capacity is improved significantly.

▪ Applications of Enriched Boron Compounds· Neutron-absorbing material of spent nuclear fuel transportation and storage containers· Material of control rods of nuclear reactors and rack material of spent nuclear fuel pools· Excess reaction control of pressurized-water reactors by dissolving into primary cooling water.
· Cancer drug for boron neutron capture therapy (BNCT)
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10B

10B

<World’s First Accelerator-based BNCT Clinical Trial>
The world’s first clinical trials using the boron-based drug (SPM-011) developed by Stella
Pharma and the accelerator-based irradiation system (BNCT 30) developed by Sumitomo
Heavy Industries, are on-going.

Phase II study for brain tumor

Having completed BNCT irradiation on
all subjects slated for testing, we are
now conducting an ongoing follow-up
study. (As of the end of March 2019)

Phase II study for head andneck cancer
Having completed BNCT irradiation on
all subjects slated for testing, we are
now conducting an ongoing follow-up
study.(As of the end of March 2019)<<Flow chart of planned steps from clinical trial to approval application>>
Phase I study
Neutron dose is increased stepwise to check safety.

Phase II study
Verification of the effect at the determined dose.

SPM-011 and BNCT30 were designated as the products subject tothe MHLW Prioritized Review System for innovative medicines“SAKIGAKE” in 2017.
This allows the drug and device to be given priority in the
consultation and review process for approval, and hence we areundertaking efforts to speed up their development.
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Approval application(scheduled)<Participation in Development of Imaging Diagnostic Technology - PET Diagnosis ->The “PET diagnosis” that attracts attention as a technology useful for the early detection of cancers
We have undertaken the development of 18FBPA, which has been studied as a new drug to be used
for the technology.

Features of 18FBPA-PET
 It is expected that 18FBPA-PET will contribute to the development of BNCT because
the accumulation of the boron-based drug (BPA) against cancer can be checked
beforehand (before treatment).

Current BNCT scheme
BNCT
Administration ofboron-based drug
(BPA)

Cancer diagnosis(CT, MRI)

Checking the accumulation of BPA(18FBPA-PET)

Radiation ofthermal neutron
beams(Left) MRI image of brain tumors(Right) 18F-BPA PET image of brain tumors
Photo: Courtesy of Professor Ono at Kyoto
University Research Reactor InstituteP.39

<Establishment of 18FBPA-PET Development System>
To implement this project, we have been conducting joint research with Osaka Prefecture
University, Osaka University, and Sumitomo Heavy Industries, through the following
projects adopted by the Japan Agency for Medical Research and Development (AMED).
We have also been proceeding with the specific development of an automated synthesis
equipment required for the commercialization jointly with Sumitomo Heavy Industries,
Ltd.
Projects adopted by AMED

Osaka Prefecture
University

Stella Pharma

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Osaka University

Joint development
agreement

Sumitomo Heavy
Industries

5.Transportation Business Corporate Profile (as of March 31, 2019)
 Transportation System by Cooperation with Domestic
Bases Overseas Bases International Intermodal Logistics System Future Activities

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<Corporate Profile (as of March 31, 2019)>
Corporate name:

BLUE EXPRESS CORPORATIONHead Office:10 Ohamanishi-machi, Sakai-ku, Sakai City, Osaka

Representatives

Kiyonori Saka, Representative Director and President

Established

June 1991

Capital Fund

350 million yen

Business Lineup Common motor trucking/International intermodal transport
Warehousing/Customs clearing agent/Sales, rental and lease of containers, tanks,etc.
Automobile maintenance services/Business related to life insurance and non-life
insurance agent, etc.
URL

http://www.blue-express.co.jp/

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<Transportation System by Cooperation with Domestic Bases>
Shipping terminals
Sendai Office
Kanto Office
Yokohama OfficeShimizu Office
Nagoya Office
Ohama Office
Kobe Office
Kitakyushu Office

Customs clearance sites
Yokohama OfficeOsaka Office
Ohama Office

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Kitakyushu OfficeOpened in October 2014

<Overseas Bases>

China (Shanghai)Blue Express (Shanghai) International Trade Inc.
Blue Express (Shanghai) International Freight Forwarding Co., Ltd.

Singapore
Stella Express (Singapore) Pte Ltd

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<International Intermodal Logistics System>

StorageTransportation● High-purity chemicals● Poisonous anddeleterious substances● Hazardous materials● High-pressure gas● General cargo, etc.

Customs
clearance

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Container
service<Future Activities>■

To steadily expand business, with priority given to the improvement of customer satisfaction.
Further quality improvement of international intermodal logistics service■

To maintain continuous investment for further growth Completion of a new hazardous materials warehouse=> Operations start (December 2018)■

To further strengthen business operations and increase
revenue base Completion of a new office building at Sanpo Office=> Streamlining through integration of Headquarters’
Transportation Section at Sanpo (April 2018)
 Working to secure human resources

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6.Future Activities Our Company’s Approach to the Batteries Field
 Response to the Battery Roadmap
 New Additives for High-Performance LiB
 Approaches to Advanced Energy Devices
 Dental Materials Field Phosphor Materials Field

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<Our Company’s Approach to the Batteries Field>
Next-generation
battery materials
Development and proposal of
new materials for nextgeneration batteries

New additives
Development of
production technology
Response to customer
requests (quality and cost)

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Response to constantly
evolving battery performance<Response to the Battery Roadmap>
Market share by each battery type100%
New batteries

Conventional

High-performance

LiB

LiB

(liquid system)(liquid system)

LiB

Post
(Na-ion batteries, etc.)

All-solid

Fuel cells

LiB

50%

0%

Stable supply of current additives

2020

2015

Proposal of new additives

2025

Proposal of new materials

2030

Fig. Image for future changes in battery technology

2035[year]
Source: STELLA CHEMIFA

Concentrating on the development of new additives and materials with a focus on
medium- to long-term battery technology
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<New Additives for High-Performance LiB>
Improvement of battery performance and durability in EV batteries

Separator

Positive
electrode

Negative electrode

Electrolyte

Li+

Forms a uniform coating on the surface of the electrodewhich improves its characteristics and life

Appearance of a newly developed additive

Evaluation ongoing while tuning it to the customer’s battery system
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<Approaches to Advanced Energy Devices>
Metal-ion secondary batteries

All-solid lithium-ion batteries

High-purity electrolytes for sodium-ion batteries, etc.

Forms a bonding layer at the electrode/electrolyte interface

Mass production of high-purity electrolytes

Fuel cells

Characteristics improvement throughApproaches tointerface control
Advanced
Energy Devices Fluorine-ion batteries

Catalyst performance and durability
improvement through proprietary technologies

Reduction in use of precious metals

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Fluorine-ion conductor and electrode materials

Development of core technologies into key materials
for new devices

<Dental Materials Field>
Filler for dental composite resins; fluoride nanoparticles[1] Radiolucency[2] Transparency
Conventional resin

Fluoride nanoparticle resin

Fluoride
nanoparticle
resin filling

Also applicable to CADCAM blocks
Dental X-ray image

Easy identification of fillings

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Wide tone width

Addresses treatments with better esthetics

<Phosphor Materials Field>

Market size [100 million yen]

Development of high-efficiency, long-life fluoride
phosphors utilizing our company’s core technology
1200

1000
800
600
400
200
0
2017

2018

2019

2020

2021

2025

Source: 2018 Comprehensive Survey on LED/LD Market (Fuji Chimera Research Institute, Inc.)

Market Forecast for Phosphors for LEDs (prospect for 2018 and later)
Demands also increasing for Mini LEDs and PIDs (Public Information Displays)

No light emission

Light emitting state

Fluoride phosphor by our company

Under evaluation by the customer
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Corporate slogan

Beyond the Chemical
Beyond the Chemical

We are drawing upon our strengths in the chemical field, whose
growth we have nurtured so far, and moving toward even greater
development in the future.

High-purity chemicalbusiness field
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Transportation
business field

Medical business
fieldItems related to the business forecast posted in this presentation material are created based on theinformation available as of the date of this announcement. We do not guarantee any future financial
results. The actual business results may be different from assessment figures due to future events.
Please note that the information stated in this presentation material may be changed without any priornotice. We shall not assume any responsibility for any damages etc. resulting from any mistake in any
information posted in this presentation material.
This presentation material is created to help you understand our businesses.
Please kindly note that it is your sole responsibility to make any decision on your investment.

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