Financial Results for
1st Half of FYE 3/2020
Securities code: 4109

1. Consolidated Financial Results for
1st Half of FYE 3/2020
 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 Cash Flows, Capital Expenditures, Depreciation &Amortization, Research & Development Expenses
P.2

<Financial Summary>
Increase/
Decrease

Percentage
Increase/
Decrease

1st Halfof FYE 3/2019

1st Halfof FYE 3/2020

Sales Revenue

19,45817,140-2,318-11.9

Gross Profit

4,314

3,201

-1,112-25.8

Operating Profit

2,159

996

-1,163-53.9

Ordinary Profit

2,367

955

-1,411-59.6

Quarterly Profit Attributable to
Owners of Parent

1,494

630

-863

-57.8

Earnings Per Share (yen)115.7348.85-66.88-57.8(In millions of yen)

P.3

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

(In millions of yen)

■ Extraordinary Profit and Loss

1st Halfof FYE 3/2019

1st Halfof FYE 3/2020(In millions of yen)

1st Halfof FYE 3/2019

1st Halfof FYE 3/2020

435

93

Extraordinary Profit

1131Interest income

79Gain on sales of noncurrent assets

1031

Dividend income

1

1

Extraordinary Losses

28

73

348

-

28

72

-

40

Loss on abandonment of
non-current assets
Loss on sales of noncurrent assets

-

0

77

42

Non-Operating Expenses

227

134

Interest expenses

20

18

Foreign exchange losses-

79

Loss on valuation ofderivatives

-

1

191

-

15

35

Non-Operating Profit

Gain on valuation ofderivatives
Share of profit of entities
accounted for using the equity
methodOther

Share of loss of entities accounted
for using the equity method

Other

P.4

<Quarterly Operating Profit>(millions of yen)

1,600

1,400
1,209

1,200
1,000

949

936

888

847

727

800

636

600

461

400
200

148

83

0
FYE 3/2018(In millions of yen)
1Q
2Q
3Q
Sales Revenue
8,159 8,561 8,314
Operating Profit
888
936
461
Operating Prof it Margin
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%

1Q
9,733
847
8.7%

FYE 3/2020
2Q
3Q
7,406
148
2.0%

4Q

<Sales Revenue and Operating Profit by Business>
1st Halfof FYE 3/2019

Percentage
Increase/Decrease

1st Halfof FYE 3/2020

Sales
Revenue

Operating
ProfitSales
Revenue

Operating
ProfitSales
Revenue

Operating
ProfitHigh-Purity
Chemical Business

17,1992,220

14,783

1,268

-14.0

-42.9

Surface
Treatment

1,115

710

-36.3

Alternatives for
CFCs

2,161

2,509

16.1

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

Sales Revenue Constituent Ratio of HighPurity Chemicals
AbroadBatteries

2,081

1,320

-36.5

Semiconductors
/LCDs

9,737

8,137

-16.4

Semiconductor
Devices

349

200

-42.8

Catalysts

472

437

-7.5

Gypsum

82

93

13.8

GeneralProducts

723

857

18.6

Other

475

515

8.3

At Home

60.7%

39.3%
5.8%

3.5%

4.8%

3.0%

1.4%

17.0%
0.6%

Sales Revenue
1st Halfof FYE 3/2020

8.9%

55.0%

Transportation
Business

2,159-

Medical Business

99

Other

P.6

413

-505
21

2,241

115

244

-536
16

3.8

16.1

-40.9

-21.8

■ Surface Treatment■ Alternatives for CFCs

■ Batteries■ Semiconductors/LCDs■ Semiconductor Devices■ Catalysts■ Gypsum■ General Products■ Other<Transitions in Trade Statistics Value of Anhydrous Hydrofluoric Acid> *Reference data(yen/kg)

300

250

200

150

100
Apr-15

AveragePrice

Oct-15

Apr-16Oct-16

Apr-17Oct-17

Apr-18Oct-18Apr-19Oct-19FYE 3/2016

FYE 3/2017

FYE 3/2018

FYE 3/2019

1st Halfof FYE 3/2020

158

135

209

220

195

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>
Sep.30,2019

Increase/
Decrease

Percentage
Increase/
Decrease

55,45452,177-3,277-5.9

Cash and deposits

14,044

13,042-1,002-7.1

Operating receivables

9,678

7,556

-2,122-21.9

Inventory assets

6,183

5,829

-354

-5.7

Property, plant, and equipment

22,32922,415

86

0.4

565

633

68

12.2

21,53618,326-3,209-14.9

Operating liabilities

4,562

3,374

-1,188-26.0

Interest-bearing liabilities

11,06910,561-507-4.6

33,91833,850-68-0.2

32,821

32,935113

0.3

55,45452,177-3,277-5.9(In millions of yen)

AssetsIntangible assets

Liabilities

Net Assets
Equity capital

Liabilities and Net Assets
P.8

FYE 3/2019
End-of-Year<Cash Flows, Capital Expenditures, Depreciation & Amortization, Research &Development Expenses>(1) Consolidated Statement of Cash Flows(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

1st Halfof FYE 3/2019

1st Halfof FYE 3/2020

3,209-1,854
1,354
1,459
2,671
8,930
11,601

2,757-1,294
1,463
-844
583
12,15812,741(2) Capital Expenditures, Depreciation & Amortization, Research & Development Expenses(In millions of yen)

Capital Expenditures

Depreciation & Amortization
Research & Development Expenses

P.9

1st Halfof FYE 3/2019

1,404
1,579
742

1st Halfof FYE 3/2020

1,744
1,646
775

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

P.10

<Financial Forecast>
Percentage
Increase/
Decrease

FYE 3/2019(In millions ofActualFYE 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

5.1

-2.2

-30.1

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) yen)

P.11

Increase/
Decrease<Forecast on Sales Revenue and Operating Profit by Business>
FYE 3/2019
ActualFYE 3/2020
Forecast

Percentage Increase/
Decrease

Operating
ProfitSales
Revenue

Operating
ProfitSales
Revenue

Operating
ProfitHigh-Purity
Chemical Business

33,776

3,782

33,020

2,880

-2.2

-23.9

Surface
Treatment

2,080

1,730

-16.8

Alternatives for
CFCs

3,618

3,500

-3.3

[High-Purity Chemical Business: Breakdown]

Sales
Revenue

Abroad

3,629

2,700

-25.6

Semiconductors/LCDs

20,093

20,4101.6

39.0%

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

2.4%

5.2%

2.5%

10.6%

1.6%
0.5%

4,382

Medical Business
Other

At Home

61.0%
7.1%

Batteries

Transportation
Business

Sales Revenue Constituent Ratio of HighPurity Chemicals

726

4,570

760

4.3

Sales
Revenue
Forecast
FYE 3/2020
61.8%

4.6

-

-1,051--1,220

-

-

225

42

210

30

-7.0

-28.8

P.12

8.2%

■ Surface Treatment■ Alternatives for CFCs

■ Batteries■ Semiconductors/LCDs■ Semiconductor Devices■ Catalysts■ Gypsum■ General Products■ Other

3. STELLA CHEMIFA CORPORATION
 Corporate Profile/Sales Office Locations/Plant Locations(as of September 30, 2019) List of Affiliated Companies
 High-Purity Chemical Business

P.13

<Corporate Profile/Sales Office Locations/Plant Locations(as of September 30, 2019)>
 Corporate Profile
Corporate Name
Head Office

FoundedEstablished
Capital Fund
Representatives

URL

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
Chairperson, Representative Director: Junko Fukada
Representative Director,
President and Chief Executive Officer: Aki Hashimoto
Representative Director, Senior Managing Executive Officer(Products Management Group): Kiyonori Saka
https://www.stella-chemifa.co.jp/

 Sales Offices
Osaka Sales Department
Tokyo Sales Department

Meiji Yasuda Seimei Osaka Midosuji Bldg. 10F,
4-1-1 Fushimi-machi, Chuo-ku, Osaka City, Osaka
Marunouchi Trust Tower North 12F,
1-8-1 Marunouchi, Chiyoda-ku, Tokyo Factory Addresses
Sanpo Factory
Izumi Factory
Kitakyushu Factory

P.14

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.15

Corporate NameBusiness Segment

Head office

STELLA CHEMIFA CORPORATION

High-Purity Chemical
Business

Osaka, Japan

BLUE EXPRESS, Inc.

Transportation BusinessOsaka, Japan

BLUE AUTO TRUST Co., Ltd.

Other BusinessOsaka, JapanSTELLA PHARMA CORPORATION

Medical BusinessOsaka, JapanSTELLA 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 electrolytes to improve the performance of lithiumion 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.16

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)

P.17

<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.

Product name(Semiconductors and LCDs)
Ultra-high-purity hydrofluoricacid
Ultra-high-purity bufferedhydrofluoric acid

Description
An ultra-high-purity chemical used for wet cleaning of silicon wafers in manufacturing semiconductors,
FPDs, solar batteries, and MEMS
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 a surfactant has enabled it to achieve extended service life and given other advantages by optimizing theconcentration of ammonium fluoride at 15% to 25%, about half the concentration of ammonium fluoride contained inconventional BHF.

Ex-LAL BHF

An environmentally friendly BHF with a maximum ammonium fluoride concentration of 5% and added surface-active
properties that give it a longer life than any other type of BHF

HSN Series

A functional BHF for etching silicon nitride with selectivity to silicon oxide, which is expected to bemainly used in the next-generation DRAM manufacturing process

LPL BHF

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

Joint development of etchant for next-generation non-silicon semiconductor wafers is currently underway.

P.18

<Results and Forecast of World Semiconductor Market Scale by Product>(million $)600,000
500,000

ActualGrowth of the memory market will dip in 2019
but bounce back positively in 2020.

400,000
300,000

18,201
27,571
8,036

200,000

98,805100,000

Forecast

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

24,102
38,032
13,356
126,018

117,004

91,63390,753

127,786

122,365
110,450

109,303102,20985,92824,45037,474
13,29525,68939,69913,892

104,91291,498
164,543
157,967

67,043

79,232

77,20576,767

123,974

2013
Memory

2014
Logic

2015
Other

2016
Sensor2017
2018
Optoelectronics

109,590

0
2019
2020
Total Discrete

Source: World Semiconductor Trade Statistics Inc. (WSTS)

P.19

<Development of a New Memory Market>
Base Name

Produced Item

Wafer Size

Production
Capacity

X2

3D-NAND

12 inches

70K wafers/monthPlanning to increase production from the current 5K wafers/month to 30K
wafers/month by the end of 2019.
Looking to increase production to 60K wafers/month by the end of 2020.

P2

DRAM

12 inches

40K wafers/monthPlanning to install equipment in February 2020 and produce
40K wafers/month by the end of 2020.

M15

3D-NAND

12 inches

25K wafers/monthPlanning to produce 50K wafers/month by the end of 2020.

M16

DRAM/NAND

12 inches

C2F

DRAM

12 inches

Y6

3D-NAND

12 inches

K1

3D-NAND

12 inches

Y7

3D-NAND

12 inches

Fab2

DRAM

12 inches

Slated to go partially online at the end of 2019.

Fab10

3D-NAND

12 inches

Opening ceremony held in August 2019.

Fab15

DRAM

12 inches

Investments still being made.

Fab16

DRAM

12 inches

Construction of new building started.

ChangXin Memory Technologies(CXMT)

Phase1DRAM

12 inches

10K wafers/month

Trial production started.

Yangtze Memory Technology (YMTC)

Phase1

3D-NAND

12 inches

20K wafers/month

Trial production started.

Manufacturer

Samsung Electronics

SK Hynix

KioxiaPlan

Slated to be completed in the second half of 2020.
130K wafers/month Currently 40K wafers/month.
Phase 2 trial production started.
Planning to start phase 1 trial production by the end of 2020
(7.5K wafers/month).
Construction to start in December 2020 and be completed in
2022.

Micron Technology

Source: STELLA CHEMIFAThe Chinese market, where large-scale investments have been made in new memory factories, is losing steam in FYE 3/2020 due to the U.S.-China
trade friction but it is expected to grow in FYE 3/2021 despite some uncertainties.
Semiconductor-related investments remain strong in Japan, Taiwan, and Korea, and widespread use of 5G, IoT and AI is expected to keep demand formemory products up.
We will implement aggressive sales strategies in the memory market.

P.20

<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

Metal impurities level<100 ppt< 10 ppt< 1 ppt

Management
size of particle

0.2/0.1um

0.05um

0.03um

Succeeded inultra-high-purity

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.21

<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 (t)70,00060,000(Full-year)
65,241(Full-year)
66,06950,00040,00030,000（1st Half）
39,665（1st Half）
32,698（1st Half）
31,257FYE 3/2016

FYE 3/2017

20,000（1st Half）
45,659(1st Half)
36,583

10,0000

P.22

FYE 3/2018

FYE 3/2019

FYE 3/2020

Batteries
 Features of Our Products/Business Development inChina
 Widespread Use of EVs and the Future of Mobility EV Applications Drive LiB Market Growth Construction Rush for Giant Battery Plants
 Sales Results and Forecast of Additives for LiB

P.23

<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: 95 million Chinese yuan
(STELLA CHEMIFA’s stake: 25%) *As of September 30, 2019
■ Some of the facilities used to manufacture electrolytes for lithiumion secondary batteries were relocated to this joint venturecompany. (Maximum production capacity: 1,300 t/year)
The joint venture company uses the relocated facilities to produce
electrolytes for lithium-ion secondary batteries and sells them inand outside China.

P.24

<Widespread Use of EVs and the Future of Mobility>
Environmental (emissions) regulations ofdifferent countries and industrial development⇒ Diffusion policies with subsidies

Contributing to the development of the EV
marketDevelopment of a new mobility society• Enhanced convenience in urban means of transport• CASE; advancement and electrification of vehicle controls• Maas; spurring new mobility businesses
CASE (Connected, Autonomous, Shared, Electric)
Maas (Mobility as a Service)

Development of social systems designed for EVs
will drive EV sales up
P.25

<EV Applications Drive LiB Market Growth>(billion yen)

Automotive lithium-ion battery sales

140,000
120,000

Widespread use of EVs will drive LiB
Widespread use of EVs will drive LiB
sales up in the 2020ssales up in the 2020s

100,000
80,00060,00040,00020,000
0
2017
2017

2018
2018

2019
2020
2019
2020
(projection) (forecast)(prospects) (forecast)

2021
2025
2030
2021
2025
2030
(forecast) (forecast) (forecast)(forecast) (forecast) (forecast)Fig. Change in sales in automotive lithium-ion secondary battery (results and forecasts)(Source: Materials released by Fuji Keizai)

P.26

<Construction Rush for Giant Battery Plants> * Source: STELLA CHEMIFA
China
Europe

1098
GWh

659
GWh

USA

2023
(forecast)Tesla/Panasonic,
State of Nevada

2028(forecast)Fig. Change in production capacity for Li-ion secondary batteries by region(output-basis)

Northvolt,
SwedenLG chem,State of Georgia

LG chem,
PolandCATL andTerraE,
Germany

Panasonic/Toyota,Japan

BYD and
Samsung SDI,
Xian

Lishen, Tianjin

LG Chem, Nanjing
BYD,
XiningLG chem andSamsung SDI,
Hungary

SK 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.27

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

Negative-electrode material

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.28

2nd Half

FYE 3/2019

FYE 3/2020(prospects)

GMP-related GMP (Good Manufacturing Practice)Oral Care-related ~ Tin Fluoride (SnF2) ~P.29

< 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, Osaka)

P.30

<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)
140
120
100
80
60
40
20
0

FYE 3/2017

FYE 3/2018

ActualP.31

FYE 3/2019

Prospects

FYE 3/2020

4. Medical Business Corporate Profile (as of September 30, 2019)
 Development of New Radiotherapy Technology -BNCT Establishment of Enrichment Technology/Features ofEnriched Boron/Applications of Enriched Boron
Compounds Filing of Marketing Application of Head and Neck Cancer
Drug Updates on the Development of SPM-011
 Clinical Trials for Melanoma and Angiosarcoma
 Participation in Development of Imaging Diagnostic
Technology - PET Diagnosis P.32

<Corporate Profile (as of September 30, 2019)>
Corporate name STELLA PHARMA CORPORATIONHead Office

3-2-7 Koraibashi, Chuo-ku, Osaka City, Osaka

Representative

President: Tomoyuki Asano

Established

June 2007

Capital Fund

1,900,000,000 yen

Business Lineup Research and Development, Manufacture, and Marketing etc. of Drugs andMedical Devices
Shareholders

STELLA CHEMIFA CORPORATION
INCJ, Ltd.
Sumitomo Heavy Industries, Ltd.

Research Facility Sakai Drug Discovery Research Center(Naka-ku, Sakai City, Osaka)P.33

<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.

P.34

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)

P.35

10B

10B

<Filing of Marketing Application of Head and Neck Cancer
Drug>
In October 2019, Stella Pharma filed a marketing application for boron-based drug (Development Code:SPM-011) for BNCT based on the results of a phase II study for head and neck cancer*1 conducted inJapan.
Since the boron-based drug for treatment of head and neck cancer has been designated as a productsubject to the Prioritized Review System for innovative medicines (SAKIGAKE Designation System), it
will be given priority in the approval application and reviewed more quickly than usual.
*1 Head and neck cancer:

We conducted a phase II study in Japan for the treatment of unresectablelocally recurrent head and neck cancer and unresectable advanced nonsquamous cell carcinoma of the head and neck.

Characteristics of head andneck cancer

A group of cancers that develops in the facial area
below the brain and above the collarbone, such as
the nose, mouth, throat, upper or lower jaw, or ear,which is typically the area where the organs thatallow us to lead our normal daily lives are located.

*2 QOL:

Development of treatment
methods that enable theconservation of importantorgan functions andmaintain QOL*2 is needed.

QOL, an acronym for quality of life, means the overall quality of the physical, mental, social, and economic
aspects of a patient’s life.

P.36

<Updates on Development of SPM-011>
In order to expand the possibility of BNCT that uses SPM-011, Stella Pharma has establishedorganizations that are conducting R&D on the target diseases and the treatment system used for BNCT.

Head and neck cancer

Brain tumor (recurrent malignant glioma)(recurrent head and neck cancer)

A phase II study is underway.
(We are currently conducting an ongoing follow-up
study only)

Melanoma/angiosarcoma
A phase I study plan has been
accepted

A marketing application for pharmaceutical product isnow under review.

Recurrent high-grade meningioma
A physician-led phase II study is underway.
(An investigational new drug has been provided)<<Flow chart of planned steps from clinical trial to approval application>>
Phase I study
Neutron dose is increased stepwise to check safety.

P.37

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

Approval application

<Clinical Trials for Melanoma and Angiosarcoma>
Working jointly with Cancer Intelligence Care Systems, Inc. (CICS), Stella Pharma will begin
its phase I study for melanoma and angiosarcoma. (The clinical trial plan has been
accepted).
The study will use the CICS-1, a new medical device designed for BNCT, which was installedat the National Cancer Center Hospital during a joint development project conducted by
CICS and the hospital.
Characteristics of melanoma

Clinical trial team
Clinical trial requester

Melanoma is a type of skin cancer. While it mostcommonly occurs on the sole of the foot, it canalso develop in other areas of the body.

Characteristics of angiosarcoma
Angiosarcoma is a malignant tumor formed in the inner
lining of blood vessels or lymph vessels. It commonlyoccurs in the skin, especially on the head in elderly
people. It’s an extremely rare type of cancer and is highly
malignant.

P.38

Stella Pharma
Investigational
new drug

CICS
MedicaldeviceRequestclinical trial

National Cancer Center
Hospital
Radiation/observation

<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 theaccumulation of the boron-based drug against cancer can be checked beforehand (before
treatment).

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

Cancer diagnosis(CT, MRI)

Checking the accumulationof boron-based drug
(18FBPA-PET)

P.39

Radiation ofthermal neutron
beams(Left) MRI image of brain tumors(Right) 18FBPA-PET image of brain tumors
Photo: Courtesy of Professor Ono at Kyoto University
Research Reactor Institute5. Transportation Business Corporate Profile (as of September 30, 2019)
 Transportation System by Cooperation with Domestic
Bases Overseas Bases Activity Policy 1
 Activity Policy 2
 Activity Policy 3

P.40

<Corporate Profile (as of September 30, 2019)>
Corporate NameBLUE EXPRESS CORPORATIONHead Office

10 Ohamanishi-machi, Sakai-ku, Sakai City, Osaka

Representative

Representative Director and President: Kiyonori Saka

Established

June 1991

Capital Fund

350,000,000 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/

P.41

<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

P.42

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

P.43

<Activity Policy 1>
1. To enhance compliance capability
 To stop reckless driving and overworking through the use of dashboard cameras and digitaltachographs, and revisions to fleet tracking operations, etc.
 To improve long-haul transportation (consider changing mode of transport) in order to mitigate
excessive driver workload❏ Our mission is to pioneer the future of logistics services with aneye to discovering a better tomorrow and an undying
commitment to the pursuit of safety and sustainability.
▶ All our offices have been G-Mark certified (given to businessestablishments with excellent safety standards)▶ Obtained ISO 14001
Certificate No.: JQA-EM5789
Certified locations: Headquarter, Sanpo Office Transport Section
Yokohama Office, and Warehouse Division
Operations covered: Freight transportation, warehousing,container services, and customs clearance❏ Ensure compliance across the Blue Express Group▶ Blue Auto Trust Co., Ltd.
▶ Blue Express (Shanghai) International Freight Forwarding Co., Ltd.
▶ Blue Express (Shanghai) International Trade Inc.
▶ Stella Express (Singapore) Pte Ltd

P.44

<Activity Policy 2>
2. To carry out intra-group operations with a focus on safety and accuracy
 Working in line with Stella Chemifa’s business policies, make investments aimed at relocating and expanding
offices that serve as our transportation hubs and systematically hire drivers and customs specialists with aneye to enhancing the safety and accuracy of intra-group logistics.
 To work on the effective use of buildings to prepare for future transport volume growth.

★ Offices planning to relocate/expand(1) Sendai Office(2) Nagoya Office(3) Kitakyushu Office
Headquarters Sanpo Office(completed in April 2018)

Kitakyushu Office(completed in October 2014)

P.45

Headquarters new hazardous materials
warehouse(completed in December 2018)

<Activity Policy 3>
3. To seek international intermodal logistics services and make business deals with a keen
focus on profits.
 To, as a hazardous materials transport expert, seek added value for international intermodal logistics
services, which includes transport, customs clearance, and container services.

 To make business deals with a keen focus on profits
 To focus on business transactions aimed at ensuring optimal operations

Transportation

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

Customs
clearance

P.46

Container
services6. Future Activities
 R&D Initiatives
 Functional Fluoride 1
 Functional Fluoride 2
 Future Energy Devices 1
 Future Energy Devices 2
 Future Energy Devices 3
 Chemicals for Future Semiconductor Device Manufacturing

P.47

<R&D Initiatives>

Functional Fluoride

Future Energy
Devices

Applying fluorine technology
to light-emitting devices, etc.

Development and proposal ofmaterials for next future batteries

P.48

Chemicals for Future
Semiconductor
Device Manufacturing
For LSI miniaturization
technology that supports an
IT-driven society

<Functional Fluoride 1>
Low refractive index materials

Dental materials

Fluoride nanoparticles with low refractive index
for antireflection coatings

Fluoride nanoparticles for dental composite resins

Ensures antireflection and other optical
functions of cutting-edge devices withoutcompromising the design(1) Radiolucency(2) Transparency

Nano fluoride resin

X-ray image

Nano fluoride
Conventional
resin
resin
Addresses treatments with better
aesthetics

Easy-to-identify boundary
Between dentino and dental fillings

https://pixta.jp/tags/ヘッドアップディスプレイ
Conventional product: n = 1.38

Development of Fluoride
nanoparticle dispersion
with low refractive index

Newly developed
product: n ≤ 1.35
P.49

Applicable to CADCAM blocks

<Functional Fluoride 2>

Phosphor Materials

Market size [100 million yen]

Development of high-efficiency, long-life fluoride phosphor materials 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 of Phosphors for LEDs (prospect for 2018 and later)
Demands also increasing for Mini LEDs and PIDs (Public Information Displays)

Under evaluation by customers
P.50

No light emission

Light emitting state

Our fluoride phosphor materials

<Future Energy Devices 1>

Market share by each battery type

Approaches to the Battery Roadmap
100%
Post LiB

New batteries(Na-ion batteries, etc.)
All-solid

50%

Conventional

LiB

LiB

LiB

High-performance(liquid system)(liquid system)

Stable supply of current additives

0%
2015

2020

Proposal of new additives

2025

Proposal of newmaterials

2030

2035

[year]

Source: STELLA CHEMIFA

Fig. Image for future changes in battery technology

Focusing on the development of new materials for post
lithium-ion battery technologies
P.51

<Future Energy Devices 2>
Development of high-performance LiB materials
Improvement of battery performance and durability in EV batteries

Positive electrode/
Negative electrode

Proposing materials for electrode

Image of electrode additive

Electrolyte
Proposing materials for electrolyte

Appearance of a new additive

Evaluation is ongoing for proposed materials that have been finetuned to customers’ battery systems.
P.52

<Future Energy Devices 3>

Proposing materials for post lithium-ion secondary batteries
Metal-ion secondary
batteries
High-purity electrolytes for other types
of ion batteries, such as sodium- or
calcium-ion batteries

All-solid lithium-ion
secondary batteries

Fluoride-ion secondary
batteries

All-solid lithium-ion battery materials Fluoride-ion conductor and electrodedesigned for enhanced safetymaterials

Fluoride-ion conductor material

Material for all-solid battery electrode

Molded electrolyte

High-purity electrolyte
Mass production of high-purity
electrolytes

P.53

Evaluation of products underdevelopment following the establishmentof evaluation system

Applying core technologies to makecandidate materials for more futuresecondary batteries

<Chemicals for Future Semiconductor Device Manufacturing>Working with customers and universities to develop chemicals for future semiconductor
device manufacturing

MemoryDeveloping chemicals for 3DNAND and future memories

SensorOpticalDiscrete

Logic

Looking at ways to enhance
performance of existing products

P.54

Developing chemicals for new
types of power semiconductors

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
P.55

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.

P.56