Financial Results for 2Q of FYE 3/2018
Securities code: 4109

1. Financial Results for 2Q of FYE 3/2018
 Basic Financial Data (Consolidated)
 Consolidated Statement of Income
 Non-operating Profit and Loss/Extraordinary Profit
and Loss
 Sales Revenue and Operating Profit by Business Quarterly Operating Profit
 Consolidated Balance Sheet Consolidated Cash Flows, Capital Expenditures,
Depreciation & Amortization, Research &Development Expenses
P.2

<Basic Financial Data (Consolidated)>
FYE 3/2018 6M(Apr－Sep)(In millions of yen)

ActualFYE 3/2017 6M(Apr－Sep)

Forecast*

YoY

Increase/
Decrease

ActualVs. Forecast
Percentage
Increase/
Decrease

Increase/
Decrease

Percentage
Increase/
Decrease

Sales Revenue

16,72016,60013,945

2,775

19.9

120

0.7

Operating Profit

1,825

2,200

1,985

-160

-8.1

-374

-17.0

Ordinary Profit

1,698

2,000

1,267

430

33.9

-301

-15.1

Quarterly Profit
Attributable to
Owners of Parent

1,027

1,200

926

100

10.9

-172

-14.4

Sep.30,2017

FYE 3/2017
End of year

Total Assets

50,43052,081-1,650Equity Capital

31,07728,0782,999Interest-bearing
Liabilities

10,31913,967-3,647(In millions of yen)

P.3

Increase/
Decrease*Description of latest financial forecast(Announced on August 8, 2017)

<Consolidated Statement of Income>FYE 3/2018 6M(Apr－Sep)

FYE 3/2017 6M(Apr－Sep)

YoY
Increase/ Decrease

Percentage
Increase/ Decrease

Sales Revenue

16,72013,945

2,775

19.9

Gross Profit

3,804

3,773

31

0.8

22.8

27.1

-

-

SG&A

1,979

1,787

192

10.8

Operating Profit

1,825

1,985

-160

-8.1

10.9

14.2

-

-

Ordinary Profit

1,698

1,267

430

33.9

Profit before Income Taxes

1,528

1,268

260

20.5

Quarterly Profit Attributableto Owners of Parent

1,027

926

100

10.9

Gross Profit Margin (%)

Operating Profit Margin (%)

P.4

<Non-operating Profit and Loss/Extraordinary Profit and Loss>■ Non-operating Profit and Loss

■ Extraordinary Profit and LossFYE 3/2018 6M FYE 3/2017 6M(Apr－Sep)(Apr－Sep)(In millions of yen)

226

69

5
1

5
0

-

3

172

-

47

60

Non-operating Expenses

353

787

Interest expenses

24

25

Share of loss of entities
accounted for using equity
method

69

-

-

274

173
86

421
66

Non-operating Profit
Interest income

Dividend income
Share of profit of entities
accounted for using
equity method
Gain on valuation ofderivatives
Other

Loss on valuation ofderivatives
Foreign exchange losses
Other

P.5

FYE 3/2018 6M FYE 3/2017 6M(Apr－Sep)(Apr－Sep)(In millions of yen)

14

16

Gain on sales of noncurrent assets

14

16

Extraordinary Losses

183

16

183

15

0

0

-

0

Extraordinary Profit

Loss on abandonmentof non-current assets
Loss on sales of noncurrent assets
Loss on sales ofinvestment securities

<Sales Revenue and Operating Profit by Business>(In millions ofyen)(In millionsof(In millions of yen)yen)

FYE 3/2018 6M(Apr－Sep)

FYE 3/2017 6M(Apr－Sep)

Sales
Revenue

Sales
Revenue

Operating
ProfitPercentage Increase/
Decrease

Operating
ProfitSales
Revenue

Operating
Profit

14,534

Surface Treatment

923

959

-3.8

Alternatives for CFCs

1,472

920

60.0

Batteries

2,875

2,508

14.6

Semiconductors/LCDs

7,264

5,756

26.2

Semiconductor Devices

360

198

81.4

Catalysts

452

389

16.3

Gypsum

48

35

36.8

General products

676

691

-2.3

Other

460

365

26.1

[High-purity Chemical Business: Breakdown]

High-purity Chemical BusinessTransportation Business

1,865

11,825

2,009

22.9

-7.2

2,087

376

2,014

338

3.6

11.3

Medical Business

-

-440

-

-385

-

-

Other Business

98

15

105

14

-6.6

7.5

P.6

<Quarterly Operating Profit>(In millions of yen)

1,600

1,473

1,400
1,200
960

1,000

1,025

936

912

888

4Q
7,963
912
11.5%

FYE 3/2018
2018年3月期
1Q
2Q
3Q
8,159 8,561
888
936
10.9% 10.9%

800
609

600
404

400
200

288
86

0
(In millions of yen)

Sales Revenue
売上高
Operating Profit
営業利益
Operating Profit Margin
営業利益率

FYE 3/2016
2016年3月期
1Q
2Q
3Q
6,745 7,057 6,789
86
288
404
1.3%
4.1%
6.0%

P.7

4Q
6,918
609
8.8%

FYE
3/2016FYE
3/20172017年3月期
1Q
2Q
3Q
7,187 6,757 7,941
960 1,025 1,473
13.4% 15.2% 18.6%

4Q

<Consolidated Balance Sheet>(In millions of yen)

Sep.30,2017

FYE 3/2017
End of Year

Increase/
Decrease

27,132

28,069-937

Cash and Deposits

10,501

14,361-3,860Notes and Accounts
Receivable - trade

10,342

7,867

2,474

23,29824,011-712

Property, Plant andEquipment

21,531

22,072-541

Intangible Assets

121
1,645

129
1,808

-7
-163

10,631

12,566-1,934

Short-term Loans Payable

1,840

2,320

-480

Long-term Loans Payable
within 1 year

3,273

3,684

-410

7,289

9,998

-2,709

5,205

2,000
5,962

-2,000-756

32,51029,516

2,993

Shareholders' Equity

30,78027,771

3,009

Liabilities and Net Assets

50,43052,081-1,650Current Assets

Non-current Assets

Investments and Other Assets

Current liabilities

Non-current liabilities
Bonds Payable
Long-term Loans Payable

Net Assets

P.8

<Consolidated Cash Flows, Capital Expenditures, Depreciation & Amortization,
Research & Development Expenses>(1) Consolidated Statement of Cash Flows(In millions of yen)

FYE 3/2018 6M(Apr－Sep)

FYE 3/2017 6M(Apr－Sep)

Cash flows from operating activities (*1)

-611

1,865

Cash flows from investing activities (*2)

Net increase (decrease) in cash and cash equivalents-1,527-2,138-1,673-3,916

-468
1,396
806
2,034

Cash and cash equivalents, beginning of year

14,16910,154

Cash and cash equivalents, end of year

10,252

12,188

Free Cash Flows (*1 + *2)
Cash flows from financing activities(2) Capital Expenditures, Depreciation & Amortization, Research & Development Expenses(In millions of yen)

FYE 3/2018 6M(Apr－Sep)

FYE 3/2017 6M(Apr－Sep)

Capital Expenditures

1,186

558

Depreciation & Amortization

1,642
695

1,556
618

Research & Development Expenses

P.9

2. Financial Forecast for FYE 3/2018
 Financial Forecast
 Financial Forecast by Segment

P.10

<Financial Forecast>(In millions of yen)

*Description of financial forecast announced on Aug. 8, 2017

FYE 3/2018
Revised Full-year
forecast*

FYE 3/2018
Full-year forecast at
beginning of year

FYE 3/2017
Full-year results

FYE 3/2016
Full-year results

Sales Revenue

33,30030,472

29,85027,509Operating Profit

4,700

3,350

4,372

1,388

Ordinary Profit

4,700

3,323

4,154

1,044

Net Profit Attributable to
Owners of Parent

3,300

2,497

2,824

1,323

Current Net Profit Per
Share

268.20203.01

234.56110.33

Capital Expenditures

3,010

3,010

2,328

1,302

Depreciation &Amortization

3,309

3,309

3,117

3,525

Research & Development
Expenses

1,613

1,557

1,274

1,163

P.11

<Financial Forecast by Segment>
FYE 3/2018
Revised Full-year forecast*(In millions of yen)[High-purity Chemical Business: Breakdown]

High-purity Chemical
Business

Sales
Revenue

Operating
Profit29,1005,030*Description of financial forecast announced on August 8, 2017

FYE 3/2018
Full-year forecast at
beginning of year
Sales
Revenue

FYE 3/2017
Full-year results

Operating
Profit26,016

3,687

Sales
Revenue

FYE 3/2016
Full-year results

Operating
Profit25,501

4,422

Sales
Revenue

Operating
Profit23,087

Surface Treatment

1,720

1,808

2,033

2,097

Alternatives for CFCs

3,410

2,089

2,463

2,023

Batteries

5,670

6,438

5,072

2,989

Semiconductors/LCDs

14,35012,304

12,31012,224

Semiconductor
Devices

760

464

527

545

Catalysts

770

814

854

846

Gypsum

110

80

94

107

General products

1,450

1,374

1,342

1,461

Other

860

640

803

791

Transportation
Business
Medical Business
Other Business

P.12

1,390

4,020

720

4,269

635

4,143

698

4,195

664

-

-1,080--1,019

-

-792

-

-691

180

30

187

31

204

30

226

6

3. STELLA CHEMIFA CORPORATION
 Corporate Profile/Sales Office Locations/Plant
Locations (as of September 30, 2017)
 List of Affiliated Companies
 Manufacture and Sale of High-purity Chemical Business

P.13

<Corporate Profile/Sales Office Locations/Plant Locations (as of September 30, 2017)>

 Corporate profile
Corporate name:Head Office:Founded:Established:
Capital:Representatives:

URL

STELLA CHEMIFA CORPORATION
Midosuji MTR Building 3F, 3-6-3 Awaji-machi, Chuo-ku, Osaka
February 1916
February 1944
4,829,782,512 yen
Chairperson, Representative Director: Junko Fukada
President, Representative Director: Aki Hashimoto
http://www.stella-chemifa.co.jp/

 Sales officeOsaka Sales Department:
Tokyo Sales Department:

Midosuji MTR Building 4F, 3-6-3 Awaji-machi,
Chuo-ku, Osaka
Tokyo Tatemono Yaesu Building 2F, 1-4-16 Yaesu,
Chuo-ku, Tokyo Factory addresses
Sanpo Factory:
7-227 Kaisan-cho, Sakai-ku, Sakai
Izumi Factory:
1-41 Rinkai-cho, Izumiotsu
Kitakyushu Factory: 1-1 Kurosakishiroishi, Yahatanishi-ku, Kitakyushu
P.14

<List of Affiliated Companies>
Logo

AbroadAt home

Base

P.15

Corporate NameBusiness Segment

Head Office:Stella Chemifa Corporation

High-purity Chemical
Business

Chuo-ku, Osaka

Blue Express, Inc.

Transportation BusinessSakai-ku, Sakai

Blue Auto Trust Co., Ltd.

Other BusinessSakai-ku, Sakai

Stella Pharma Corporation

Medical Business

Chuo-ku, Osaka

Stella Chemifa Singapore
Pte Ltd.

High-purity Chemical
Business

Singapore

Stella Express (Singapore) 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

<Manufacture and Sale of High-purity Chemical Business>
Our products, fluorine compounds, have continued to be used in the manufacturing process of various products.

Segment nameMain 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

Lithium hexafluorophosphate

Electrolyte for electrolytic solution of 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.16

Semiconductors and LCDs
 Features of our products
 Results and forecast of world semiconductor
market scale by regions
 New business development in growing market
 Maintenance and strengthening of quality edge
 Change in shipping volume of high-purity
hydrofluoric acid (semiconductors and LCDs)

P.17

<Features of our 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) Product Lineups are readied to respond the customer requirements, including suppression of adhering particles,
suppression of increased roughness of wafer surfaces, and others, for the semiconductor and FPD manufacturing
process.
Product name(Semiconductor and LCDs)

Ultra-high-purity hydrofluoric acid
Ultra-high-purity bufferedhydrofluoric acid
BHF
(buffered hydrofluoric acid)

Description
The ultra-high-purity chemicals used for wet etching and wet cleaning of silicon wafers inmanufacturing semiconductors, FPDs, solar batteries, and MEMS.
The ultra-high-purity chemical mixed hydrofluoric acid and ammonium fluoride.
The chemical mixed 50% hydrofluoric acid and 40% ammonium fluoride solutions.

LL BHFBHF with various functionalities by adding a surfactant

LAL BHF

BHF containing a surfactant which has achieved extended service life and other advantages by
optimizing the concentration of ammonium fluoride.

LA BHFBHF which etches silicon oxide at high speed.

HSN Series

Silicon oxide etchant with High Selectivity for silicon nitride.

LPL BHF

Silicon oxide etchant without damaging to silicon and poly-silicon absolutely.

P.18

<Results and forecast of world semiconductor market scale by regions>
Forecast($ million)

400,000

Results

350,000
300,000
250,000

234,288

240,884

239,358

34,40835,06935,21935,54336,66937,110194,230

201,070

208,395

34,83031,10232,29237,45934,25832,707

69,324

68,73865,53773,56175,33475,471

2014
2014

2015
2015

2016
2016

2017
2017

2018
2018

FY
2019
2019

Asia-PacificAsia-PacificSource: World Semiconductor Trade Statistics Inc. (WSTS)

200,000
150,000
100,000
50,000

0
USA
USA
P.19

Europe

Japan
Japan

<New business developments in growing markets>
Place of
建設地
construction

Manufacturer
メーカー
Toshiba Memory

Base name

拠点名

Produced
item ウェハサイズ
Wafer size
生産品目

N-Y2
N-Y2

3D-NAND
3D-NAND

12
inches
12インチ

Y6
Y6

3D-NAND
3D-NAND

12
inches
12インチ

Production

Plan
計画

生産能力などcapacity, etc.
100,000

Productionlines will be installed by FY 20172017年度にかけライン導入
１0万枚／月wafers/month

東芝メモリ

Yokkaichi
四日市

インテル

Intel

Dalian
大連

Fab
Fab22

3D-NAND
3D-NAND

12
inches
12インチ

8万枚／月
wafers/monthグローバルファウンドリーズ

Global Foundries

Chengdu成都

FabFab 11

Foundry
ファンドリー

12
inches
12インチ

2万枚／月
wafers/month

Micron Technology
マイクロンテクノロジー

Hiroshima
広島

FabFab 15
15

DRAM
DRAM

12
inches
12インチ

16万枚／月
1Xnmの量産に向けて新棟建設中。
production of 1Xnm DRAMs
wafers/monthSamsung Electronics

サムスン電子Xian
西安

17 Line (II)17ライン（Ⅱ）

3D-NAND
3D-NAND

12
inches12インチ

200,000 wafers/month in 2019
20万枚／月
13万枚／月から2019年に20万枚／月に拡張
wafers/month

TSMC

TSMC

Nanjing
南京Foundry
ファンドリー

12
inches
12インチ

8万枚／月
wafers/month

Production
will start in the second half of 20182018年後半から生産開始

Fujian Electronics & Information;
福建省電子信息；JHICC
JHICC*Technology licensed by UMC

Quanzhou
泉州

Niche DRAM

ニッチDRAM

12 inches

12インチ

60,000wafers/month
6万枚／月

The factory building is expected to be completed in October 2017To
go online in 1Q 20182017年10月建屋竣工。2018年1Qに稼働。

Hefei
合肥

LCD driver
液晶ドライバー
IC
IC

12
inches12インチ

wafers/month
4万枚／月

40,000Equipment to produce 3,000 wafers/month was installed in April2017年4～6月に0.3万枚／月の装置挿入。
June 2017
Capacity
will be increased by 10,000 wafers/month in 1Q 2018.
2018年1Qに1万枚／月追加。

Foundry
ファンドリー

12
inches
12インチ

40,000wafers/month
4万枚／月

2018年2Qに装置導入。

※ UMCが技術供与
Nexchip
Nexchip(Powerchip)（パワーチップ)
ホワリー； HLMC

Huali; HLMC

Shanghai上海

イノトロンメモリー

Innotron Memory

Hefei
合肥

DRAM
DRAM

12
inches12インチ

長江存儲科技； YMTC

Wuhan
武漢

3D-NAND
3D-NAND

12
inches
12インチ

Yangtze Memory Technologies; YMTC*Tsinghua Unigroup acquired capital in XMC.

※XMCに紫光集団が資本参加

Fab
Fab 22To
be completed in summer of FY 20182018年度夏完成
80,000Under construction Equipment will be installed in
建設中。2018
2018年2月に装置導入
February

20,000Under construction To go online in late 2018

160,000

A new factory building is under construction for mass

200,000

Capacity will be increased from 130,000 wafers/month to

80,000125,000

建設中。 2018年末に稼働

Equipment will be installed in 2Q 2018

Equipment will be installed in November 201712.5万枚／月
2017年11月に装置搬入。
wafers/month
50,000
5万枚／月
wafers/month

Equipment
will be installed in 2Q 20182018年2Qに装置導入。2030年に100万枚／月
Aiming to increase capacity to 1 million wafers/month by 2030

構想も。

Large investments in semiconductor factories are in the pipeline for China and other parts of East Asia by 2019.
While the Chinese semiconductor market is currently small, the industry in Taiwan and China is expected to grow increasingly.
*We will move ahead by implementing effective sales strategies in the Chinese market.

P.20

<Maintenance and strengthening of quality edge>◆ SA Grade HF quality ◆Product technology generation

Our product gradeMetal impurities level
Management sizeof particle≥45 nm28 nm≤16 nm

SA/SA-X

SA-XX

SA-XXX
Succeeded inultra-high-purity<100 ppt< 10 ppt<1 ppt0.2/0.1 um

0.05 um

0.03 um

Further strengthening particle management

We respond the needs of semiconductor manufacturers
with introducing the World’s most advanced analytical instruments.

©RION CO., LTD.

Liquid-borne particle counter
P.21©Thermo Fisher Scientific K. K.

High resolution ICP-MS

<Change in shipping volume of high-purity hydrofluoric acid (semiconductors and LCDs)>
80,00070,000Volume of sales (tons)(Full-year)
69,13260,000(Full-year)
65,177(Full-year)
65,241(Full-year)
66,06950,00040,000(2Q)
39,66530,000(2Q)
34,199(2Q)
33,669(2Q)
32,698

2013

2014
2014

2015
2015

(2Q)
31,25720,00010,000
0
P.22

2016
2016

2017
2017

Batteries
 Features of our products
 Changes in lithium-ion battery market size and trends
in electric-powered vehicles
 Launch of electrolyte business for lithium-ion
secondary batteries in China
 Additive for lithium-ion batteries

P.23

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

Product name

Description(related to batteries)

Lithium
hexafluorophosphate

Electrolyte for lithium-ion secondary batteries
Electrolyte for other batteries

Lithium tetra fluoroborate

Electrolyte and additives for lithium-ion primary and secondary
batteries

Additive for batteries

Additive for lithium-ion batteries<Lithium hexafluorophosphate particle form>

P.24<Lithium tetra fluoroborate><Large-size container: 1 m3>

<Changes in lithium-ion battery market size and trends in electric-powered vehicles>

世界のLIB
販売金額
[億円]
yen]
[100 million
LIB sales
Global（実績ならびに予測）(Results and forecast)

30000(Results)(Prospects and forecast)

車載用LIB

25000

In-car LIB

Growth of in-car
LIB is expected.

Consumer LIB
民生用LIB

20000

15000
10000
5000

0
2013 2014 2015 2016 2017 2018 2019 2020 (year)
年
Source: Materials of Fuji Chimera Research Institute, Inc.

P.25

Market rollout of electricpowered vehicles will be
accelerated in the years
to come.

<Launch of electrolyte business for lithium-ion secondary batteries in China>
Outline*Converted at the rate of 1 Chinese yuan = 19 yen (as of October 27, 2015)

Name

Quzhou BDX New Chemical Materials Co., Ltd. (established in December 2015)

Location

17 Nianhua Road, Kecheng District, Quzhou City, Zhejiang Province, People's Republic of China

BusinesslineupLithium hexafluorophosphate (LiPF6)
Research & development and production of byproduct hydrofluoric acid for industrial use, hydrochloric acidand other fluorine-containing chemical system products
Sales of in-house products and provision of related services

Capital fund

70 million Chinese yuan (1,330 million yen*) Stella: 25.0%; Quzhou NGF Chemicals Co., Ltd.: 75.0%

Objectives

In China, continuous growth of lithium-ion secondary battery industry is anticipated. A local production systemis established to handle the demand in China.

Details ofcooperation

Part of the manufacturing facilities of electrolyte for lithium-ion batteries is relocated to a joint company.
The joint company produces the electrolyte for lithium-ion batteries by the relocated facilities and markets theelectrolyte in and outside China.

P.26

<Launch of electrolyte business for lithium-ion secondary batteries in China>■Quzhou BDX New Chemical Materials Co., Ltd.

Product and material warehouse

Manufacturing building<Plan and schedule>■ June 2017
Start of operation of manufacturing
facilities.
(Manufacturing capacity: 1,300 t/year at
maximum)

Utilities building
P.27

On completion of product evaluation(including suppliers), sales are slated to
be started.

<Additive for lithium-ion batteries><Schematic diagram of lithium-ion battery inside>
Electrolytic solution

Roles that additive play

Discharge

Positive-electrode material◆ High-temperature
endurance◆ High conductivity (lowtemperature)◆ Increased capacity◆ Low resistance◆ Flame retardanceChargeSeparator

Negative-electrode material

The solid electrolyte interface (SEI), wherein the electrode comes in contact with theelectrolyte, is important.

2012

2013

2014

2015

2016

Fiscal Year
Results
Prospects
P.28

2017

2018

2019

GMP-related GMP(Good Manufacturing Practice)

P.29

<GMP(Good Manufacturing Practice)>
Standards for Manufacturing Control and Quality Control for Drugs and Quasi-drugs
Three principles: “Reducing human errors to the lowest level"“Preventing contamination and product quality loss““Designing systems to assure high product quality"

Inside Izumi Factory (Izumi Otsu City)

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<GMP(Good Manufacturing Practice)>

Expanded to products related todaily commodities

For manufacturing
semiconductors<Examples of products for drugs>

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Tin fluoride

Sodium fluoride
Sodium monofluorophosphate<Actions of fluorine on teeth>■ To suppress Streptococcus mutans fromproducing acid
(Cavity prevention)■ To promote tooth remineralization■ To form tooth resistance to acid(To form fluoroapatite)

Sales
started.

4. Medical Business Corporate Profile (as of September 30, 2017) Boron Neutron Capture Therapy (BNCT) Establishment of enrichment technology/Features of enriched
Boron/Applications of 10B compounds
 World’s First Accelerator-based BNCT Clinical Trial Boron-based Drug SPM-011 for BNCT Designated for MHLW
Prioritized Review System for innovative medicines“SAKIGAKE”
 Participation in Development of Cancer Diagnosis Technology

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<Corporate Profile (as of September 30, 2017)>
Corporate name:

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

Representatives:

Tomoyuki Asano, Representative Director and President

Established:

June 2007

Business lineup

Research and development, manufacture and marketing, etc. of drugs andmedical devices

Capital:1,900 million yen

Shareholders:

Stella Chemifa Corporation
Innovation Network Corporation of Japan
Sumitomo Heavy Industries, Ltd.

Laboratory:

Sakai Drug Discovery Research Center(Naka-ku, Sakai-shi, Osaka)

URL

http://www.stella-pharma.co.jp/
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<Boron Neutron Capture Therapy (BNCT)>
Boron Neutron Capture Therapy (BNCT) is a particle beam radiation therapy which
damages cancer cells specifically by making the best of nuclear fission reactions between
boron 10, stable isotope of boron, and thermal neutrons using small energy.

Administration of boron (Boron-10)
compoundBoron (Boron-10) compound isselectively brought into cancer cells.
Prompt gamma ray
478 keV4He nucleus (α particle)

1.47 MeV

9 μm
Thermal neutron
10B

4 μm
Irradiating with thermal neutron ray
causes boron (Boron-10) to fission.

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7Li Recoil nucleus

0.84 MeV

Cancer cell which brought in boron (Boron10) compound is selectively destroyed.

■ Establishment of enrichment technology
We established a mass production technology of 10B for the first time in Japan and in November
2000, the only enrichment plant in Japan was completed.

10B

10B

10B

10B
Enrichment andseparation

10B
10B

Generation
10B

10B
10B

10B

10B

10B

<The only 10B enrichment plant in Japan> (completed in November 2000)■ Features of enriched Boron
10B offers properties of remarkably high neutron absorption capacity, and by increasing 10B concentration, theabsorption capacity is improved significantly.

■ Applications of 10B 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 immersing them in primary cooling water
Cancer drug for boron neutron capture therapy (BNCT)
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<World’s First Accelerator-based BNCT Clinical Trial>
The world’s first BNCT clinical trials using the boron-based drug for BNCT (SPM-011) , which Stella
Pharma developed as well as accelerator-based irradiation system for BNCT, developed by Sumitomo
Heavy Industries, “Phase II study for recurrent malignant glioma (high-grade brain tumor)” started in
December 2015 and “Phase II study for head and neck cancer” in June 2016. These trials were started
after submitting the clinical trial plan notification, and are still ongoing.
Pharmaceuticalsolution bag made by
Stella Pharma

Accelerator-based
irradiation system made by
Sumitomo Heavy Industries

World’s first BNCT clinical trial
Recurrent malignant glioma (high-grade brain tumor)” December 2015, Phase II study started.
Head and neck cancer
 June 2016, Phase II study started.

Assumed flow chart, from clinical trial to approval application
Phase I study
Neutron dose is increased stepwise to check safety.

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Phase II study
Verification of effect by the dose decided.

Approval application(scheduled)<Boron-based Drug SPM-011 for BNCT Designated for MHLW Prioritized Review
System for innovative medicines “SAKIGAKE”>
Boron-based drug “SPM-011” for BNCT for which Stella Pharma Corporation performs clinicaldevelopment was designated by Ministry of Health, Labour, and Welfare (MHLW) for “Prioritized
Review System for innovative medicines ‘SAKIGAKE’” On April 21, 2017.

Drug name

Intended indications and effects

Name or trade name of
applicant

SPM-011• Recurrent malignant gliomas• Unresectable locally recurrent headand neck cancer and locally-advanced
head and neck cancer(non-squamous cell carcinoma)

Stella Pharma Corporation

The BNCT system (accelerator-based irradiation system) of Sumitomo Heavy Industries, Ltd., which
jointly carries out the clinical study was assigned for the target item of the said system as a medical
device on February 28, 2017, too.

“Prioritized Review System for innovative medicines ‘SAKIGAKE’”
When an innovative new drug or medical device satisfies severity and other specified requirementof applicable diseases, the drug or the medical device which MHLW evaluates and assigns is given
priorities in consultation and review process for its approval by using this system, and the target
NDA review period can be shortened to six months, one half of that required in ordinal review.
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<Participation in Development of Cancer Diagnostic Technology>
We have undertaken the development of PET diagnostic technology using [18F]FBPA, which attracts
researchers and industry attention as a new PET drug used for “PET diagnosis,” which is atechnology useful for early detection of cancers.
Features of PET diagnosis using [18F]FBPA To be able to detect “brain tumor,” which is difficult to
detect at present.
 Able to simply carry out PET diagnosis by [18F]FBPA
for institutes where PET diagnosis is conducted atpresent.
 To be able to judge whether BNCT can be applied.

(Left) MRI image of brain tumors(Right) [18F]FBPA PET image of brain tumors

Signing the joint development agreement with Sumitomo Heavy Industries, Ltd., which has expertisein the automated synthesis of PET drugs, enabled us to develop PET drugs and take a major step
forward to commercialization.
Joint research is ongoing with Osaka Prefecture University, Osaka University, the National Cancer
Center, and other well-established research organizations though a project adopted by the Japan
Agency for Medical Research and Development (AMED).

In order to provide total medical care from early cancer diagnosis to therapy, we
will continue to carry out research and development in coming years.
Photo: Courtesy of Professor Ono at Kyoto University Research Reactor Institute

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5. Transportation Business Corporate Profile (as of September 30, 2017)
 Transportation System by Cooperation with Domestic
Bases Overseas Bases International Intermodal Logistics System Future Activities

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<Corporate Profile (as of September 30, 2017)>
Corporate name:

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

Representatives:

Kiyonori Saka, Representative Director and President

Established:

June 1991

Capital:

350 million yen

Business lineup

Common motor trucking / International intermodal transport /Warehousing / Customs clearing agent / sales, rental and lease ofcontainers, tanks, etc. /Automobile maintenance services / Business related to life insurance andnon-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
Tokyo Office
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>

Transportation

Storage●High-purity chemicals●Poisonous and deleterious substances●Hazardous material●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
To further improve quality, etc. of international intermodal logistics service■ To maintain continuous investment for further growth
To establish the additional hazardous substance warehouse(construction to be started in April 2018)■ To further strengthen business operation base and revenue base
To develop compliance system and securing personnel

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6. Future Activities
 Approaches to Advanced Energy Devices
 New additive for advanced lithium-ion Batteries Electrolyte for Post Lithium-ion Batteries Development of Catalysts for Polymer Electrolyte
Fuel Cells (PEFCs)
 Fluorinated Carbon Nanotubes
 Fluoride Nanoparticles

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<Approaches to Advanced Energy Devices>
Development of catalysts
for fuel cells

New additive foradvanced lithium-ion
batteries

Fluorinechemistry(core technology)

LIB
additives
know-howRoll-out to automotive applications

Mass
production
technology forhigh-purity
electrolytes

Surfacetreatment
technology

Fuel cell vehicle (FCV)

Development of electrolyte for post
lithium-ion batteries
Residential fuel cell system

Roll-out to residential applications

Launch of sodium ion battery prototypes (Image is forillustrative purposes only)

We are leveraging our expertise and experience in fluorine chemistry with an aim to makeoriginal products that would serve as our next-generation prime source of earnings.
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<New Additive for Advanced Lithium-ion Batteries>
Development Phase

Conducted trials for a wide range of applications fromin-car to stationary LIBs across the globe
We were highly rated for our advanced highcapacity battery mechanism
Future Developments

Combine with user battery materials
Work on developing mass production techniqueElectrolytic solution

Slower degradation under hightemperatures
Discharge

Lower resistance under low
temperatures

Discharge capacity
retention ratio [%]Separator

Appearance of the new additive

ChargeWith additive
No additive

Improvedcharacteristics

Longer battery life
Positive-electrodematerial
Improved characteristics

Negative-electrodematerial

Charge-discharge cycle [times]by film forming

New Additive Concept

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Effect of improved characteristics by
new additive

<Electrolyte for Post Lithium-ion Batteries>
Development Phase
Developed a production process for high-purity NaPF6
to be used in future mass production

Users rated our world-quality samples very highFuture Developments

Work on developing mass production technique
High-purity electrolyte for sodium-ion batteries(NaPF6)
Clarke numbers(relative abundance of elements inEarth's crust)

Importance of sodium-ion batteries

1. Abundant resources (400 times more than Li)
2. Similar battery production process as LIB

Li

NaAlkali metals/alkaline-earth metals

Comparison of resource amounts

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Na-ion battery-equipped electric bicycle(Image is for illustrative purposes only)<Development of Catalysts for Polymer Electrolyte Fuel Cells (PEFCs)>
Development Phase

Verified that the original surface treatment improved
performance in a low humidity environment
Future Developments

To promote and begin trials for users

Appearance of developed fuel cell
catalyst

Move on to non-platinum catalyst research(Electron)

Hydrogen gas

Air (oxygen gas)

Fuel electrodeH+

Air electrodeOutput potential [V]e-Conventional
product

Output [W/cm2]

Developed
Catalyst

Motor rotation

Current density [mA/cm2]
Conventional catalysts do not perform
well in a low humidity environment.

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The newly developed catalyst performs better in a
low humidity environment.

<Fluorinated Carbon Nanotubes>
Fluorinated carbon nanotube dispersed liquid

Fluorination of carbon nanotube

F

F

F

F

Fluorinated
CNT

F

F

F-CNT dispersed liquid with highdispersibility without using any
surfactant.

Nonfluorinat
ed
CNT

F
Composite material(compounding of CNT
and resin)Transparent conducting film
and antistatic film

NonfluorinatedConductive film made with fluorinated CNT

Applications in displays

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Coated withfluorinated CNT

Antistatic film prototype sample

Applications in exterior coatings

Epoxy resin
25% stronger

Fluorinated CNT
epoxy composite

Applications in engineering plastics

<Fluoride Nanoparticles>
Development of low refractive index fluoride material for antireflection film

Evolution and market expansion of smart cars, IoT, and wearable devices*Image illustration

Increased demand of coating material that increases display panel visibility

Hollow introduced in particles
by particle morphology control

Hollow nano particle

Achievement of low
refractive index
http://style.nikkei.com/article/DGXMZO11794240X10C17A1000000

Conventional product n=1.38

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50nm

50nm
Developed product n=1.32

Corporate slogan

Beyond the Chemical

We are drawing upon the 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

Medicalbusiness field

Items related to the business forecast posted in this presentation material are created on the basis of theinformation available as of the date of announcement of this presentation material and do not guarantee any
future business achievements. The actual business achievements may differ from assessment figures due
to future events.
Please note that the description stipulated 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 theinformation, etc. 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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