Investor Presentation

August 2010
 Notice of Disclosure

CONFIDENTIAL INFORMATION. This information is published solely for informational purposes and is not to
b construed
be t d as a solicitation
li it ti or an offer
ff tot buy
b any security
it or related
l t d financial
fi i l instrument.
i t t This
Thi
presentation may include “forward‐looking statements” within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Exchange Act of 1934 and are intended to be covered by the safe harbor
provisions for forward looking statements. This information is supplied from sources we believe to be
reliable but we can not guarantee accuracy.
accuracy This document and the information contained herein is
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The agents and the agents’ counsel assume no responsibility or liability of any nature whatsoever for the
accuracy, adequacy or completeness of the publicly available information or as to whether all information
concerning
i the
h Company
C required
i d to be
b disclosed
di l d by b theh Company
C h been
has b generally
ll disclosed.
di l d TheTh agents’’
counsel and the Company's counsel are acting as counsel to the agents and the Company, respectively, and
not as legal counsel to the subscriber. The agents have not engaged in any independent investigation or
verification with respect to any of the information concerning the Company. Prospective purchasers are
responsible for their own due diligence investigation in respect of any investment in the Company.
Company

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 Company Profile

Company: Keyuan Petrochemicals   (OTC BB: KYNP)
Headquarters: Ningbo, China
Industry: Petroleum and Petrochemical Products
US Counsel: Leser, Hunter, Taubman & Taubman 
PRC Counsel: Han Kun Law Offices
Auditor: Patrizio & Zhao LLC
Advisor: TriPoint Capital Advisors
TriPoint Capital Advisors

3
 Company Overview
Keyuan Petrochemical (“Keyuan”) is an independent manufacturer of a wide range of 
petrochemicals with a planned facility expansion
• L t d i Qi hi Ch i l P k i Ni b Zh ji
Located in Qingshi Chemical Park in Ningbo, Zhejiang with over 350 employees
ith 350 l

• Began facility construction in January 2008 ‐ completed within 18 months

• Current annual petrochemical refining capacity of 550,000 metric tons (MT)

• Proposed manufacturing expansion to include increased storage capacity, raw material pre‐treatment 
facility, and an asphalt production facility

• High demand for refined petrochemical products due to China’s robust economic growth and under‐
d l
developed
d domestic supply capacity
d i l i
– orders received exceed the company’s current annual capacity
• Proprietary manufacturing processes with lower raw material costs and higher utilization and yields

• Strong management team consisting of seasoned petrochemical veterans with proven track records 
Strong management team consisting of seasoned petrochemical veterans with proven track records
from China’s largest state owned enterprises
April  June  January  August  October  December 
2007 2007 2008 2009 2009 2009
• Established 
Established • Completed land 
Completed land • Began facility 
Began facility • Began trial 
Began trial • Commenced 
Commenced • Full production 
Full production
company purchase construction production sales and orders online

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 Competitive Advantages

Technology Raw Materials

Raw Materials Location Management Team
Management Team

•Catalytic pyrolysis process  •Uses heavy oil generated  •Facility in close proximity  •Senior Team has over 100 

provides ease of operation  by non‐paraffin based  to raw material suppliers  years of combined 
and higher reaction  crude oil as raw material,  and downstream  experience in the 
temperatures
temperatures,  as opposed to naphtha
as opposed to naphtha manufacturers Petrochemical Industryy
generating 15% higher  •Founder worked for 
yields than the commonly  •Heavy oil as feedstock is  •Ideal location provides  Sinopec
used fluidized catalytic  15% less expensive than  access to suppliers, skilled  •Served as President for 
cracking process  naphtha, and lowers raw  labor and industry  Ningbo Habang Chemical 
which generated $1.4B in 
g $
material costs by 15%
t i l t b 15% resources  annual revenues and was 
•Enhanced technology  purchased by CNOOC
uses a set of dual risers for  •Pre‐treatment facility 
•Served as VP of Ningbo 
one precipitator and one  lowers feedstock costs by  Daxie Liwang 
regenerator, as opposed  utilizing less expensive  Petrochemical which 
t th t diti
to the traditional one riser 
l i grades of heavy oil
d fh il generated $1B in 
$
approach revenues and was bought 
by CNOOC

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 Projections
Revenue and Net Income projections

USD millions
USD millions 2010P
Revenue $550
Net Income* $36.3
Average Sales Volume 666,000 MT
Fiscal year ends December 31st
* Excludes public company expenses

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 Income Summaryy

USD millions
USD illi Q2 2010
Q2 2010 Q1 2010
Q1 2010 USD millions
USD illi 1H 2010
1H 2010 1H 2009
1H 2009

Revenue Revenue
$132.0 $117.4  $249.4 N/A

Gross Profit Gross Profit
$8.6 $8.8 $17.5 N/A

Net Income Net Income
$4.9
$ $5.7 
$ $10.7
$ N/A
/

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 Petrochemical Products
Keyuan Petrochemicals ingredients used for Finished Goods
BTX  Benzene, toluene, xylene and other chemical  Used in paint, ink, construction coating and 
Aromatics components for further processing into oil 
f f h l pesticides
d
resin, gasoline and solvent materials
Propylene A chemical intermediate for an array of  Used for paints, household detergents, 
chemical and plastic products such as  automotive brake fluids, carpeting, textile, 
polypropylene, acrylonitrile, oxo chemicals, 
polypropylene, acrylonitrile, oxo chemicals, insulating materials, auto parts and electrical 
insulating materials, auto parts and electrical
propylene oxide, cumene, isopropyl alcohol,  appliances
acrylic acid and other chemicals 
Styrene A precursor to polystyrene and several  Used for packaging materials, construction 
copolymers materials, electronic parts, home appliances, 
household goods, home furnishings, toys and 
sporting goods
Liquefied  A mixture of hydrocarbon gases and a  Used as fuel in heating appliances and vehicles
Petroleum  replacement for chlorofluorocarbons as an 
aerosol propellant and a refrigerant
aerosol propellant and a refrigerant which 
which
G (LPG)
Gas (LPG)
produces less damage to the ozone layer
MTBE &  MTBE, oil slurry, sulphur and other chemicals Used for fuel components, refrigeration 
Other  systems, fertilizers, insecticides and fungicides
Chemicals

8
 Product Mix / Capacity Breakdown

Current Capacity Breakdown (550

(550,000
000 MT) Capacity Breakdown with Asphalt (850,000
(850 000 MT)

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 Customer Demand

Customers request orders in excess of Keyuan’s production

Keyuan’s 
Customer 
Annual  Requests/ 
Product Line Requests
Capacity Capacity
(MT)
(MT)

BTX Aromatics 345,000 480,000 1.39x

Propylene 51 500
51,500 90 000
90,000 1 75x
1.75x

Styrene 36,000 48,000 1.33x

LPG 77,500 93,000 1.20x

Note 1: Contracts are “blanket orders” which define transaction terms and fees. Some customers are 
required to provide a deposit
Note 2: The actual quantities sold is based on Keyuan’s capacity to satisfy the order as well as customer 
demand. On an order‐to‐order basis, Keyuan and customers agree to a minimum and maximum quantity 
amount, of which Keyuan commits to fulfill the minimum order 
Note 3: Customers who fail to accept minimum obligation agree to pay a penalty of 5%

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 Sales Strategy & Pricing
Favorable gross margins for domestic Chinese petrochemical refiners

Sales Strategy
• Target Customers: component  •
manufacturers in the Yangtze River Delta 
manufacturers in the Yangtze River Delta
and Pearl River Delta
– 80% direct sales
– 20% via distributors
• Payment Terms: 90%+ cash in advance or 
Payment Terms: 90%+ cash in advance or
credit sales to core customers with  agencies and/or on negotiated prices with
excellent credit history and ratings
– A/R DSO: 0‐10 days
• R M
Raw Material‐to‐Sales Cycle:
i l S l C l 30 days 30 d
Pricing
Raw material price fluctuations are 
primarily based on supply and demand and 
primarily based on supply and demand and
international oil prices
• Keyuan’s selling prices are based on 
benchmark prices published by national 
petrochemical companies and recognized 
h i l i d i d
 
customers
• BTX aromatic prices are influenced by 
p y
benchmark prices set by the National 
Development and Reform Commission 
(NDRC)*

*S
* Source: www.eia.doe.gov
i d

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 Petrochemical Market in China
• World petrochemical market totaled $4.0 trillion in 2008

• Petrochemical industry consisted of approximately 20% of China’s 2008 GDP and 24% of the global 
market

• The world’s second largest behind the US in terms of production and consumption

• Output value grew from $150 billion in 2000 to $964 billion in 2008, representing a CAGR of 23.2%

• China Petrol and Chemical Industry  China’s Petrochemical Market Size from 
Association (CPCIA) expects total profit in  2000‐2008 (USD billions)
the petrochemical industry to increase
the petrochemical industry to increase 
between 8% and 10% in 2010* 
– revenue expected to increase 14%
– total export and import volume expected 
to increase 14%
– i
investment expected to increase 15%
t t t dt i 15%

* Source: http://english.peopledaily.com.cn

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 Asphalt Market in China

• Asphalt market in China equaled $5.7 billion  Supply and Demand of Asphalt (million MT)
i 2008
in 2008
Supply Demand
• China’s demand for asphalt has outpaced  20.00

supply for five consecutive years with total  15.00
15.12
12.92
12.37 11.7 11.69
imports of 3.3 million MT in 2008 9.23
9 23 9 36
9.36
10.00 8.48
8 48

• Asphalt is used for highways, roads, airport  5.00
pavement and also as raw material for 
0.00
emulsified, diluted and modified asphalt  2005 2006 2007 2008
based products
based products

• China currently ranks second in the world in 
Import of Asphalt (million MT)
length of highways at 75,000 km and this is  4.00
3.40 3.55
3.25 3.30
expected to continue growing rapidly
3.00 2 50
2.50 2 40
2.40
2.17
• To ensure roads and highways are in good  2.00
condition, the Chinese government requests 
1.00
pavement maintenance projects every 5 yrs
0.00
2002 2003 2004 2005 2006 2007 2008

Source: www.chem99.com

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 Technology and R&D
Overall Advantage
Proprietary petrochemical 
manufacturing process combines 
f b
unique technologies which allows for 
less costly raw materials, and higher 
utilization and yields

Better Use of Raw Materials Higher Utilization Higher Yields

Use of heavy oil instead of the  Enhanced technologies in  Catalytic pyrolysis process provides 
commonly used naphtha as raw
commonly used naphtha as raw  production design and applications
production design and applications  ease of operation and higher
ease of operation and higher 
material; heavy oil is generally  allows lower capital investment and  reaction temperatures, generating 
RMB1,000 per MT cheaper and  enhanced operation efficiency 15% higher yield than the commonly 
more readily available than naphtha used fluidized catalytic cracking 
process

Strong Research & Development Capabilities
Experienced engineers and technicians with state‐of‐the‐art research and laboratory facilities
Working with several leading petrochemical R&D institutions to design and combine various 
technologies into Keyuan’s proprietary manufacturing processes
h l ’ f

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 Environmental Protection & Safety
Keyuan’s state of the art facility maintains a strict commitment to 
environmental protection, facility safety and quality control

Waste  Safety Measures
Management
Distribution control system
Water
Recycle Emergency shutdown mechanism
h d h i

Pollutant  Automatic interlocking system
Treatment
Detection & alarm system for flammable and toxic gas
Environmental 
Environmental
Measures meet  Fire detection & automatic sprinkler system
Waste
Disposal
National 
Real‐time system and process monitoring system
Standards
Emission
Control Quality Control
y
Keyuan products meet all national standards of 
petrochemical products set by General 
Odor Sulphur  Administration of Quality Supervision, Inspection and 
Treatment Recovery Quarantine of the PRC and National Standardization 
C
Committee
itt

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 Keyuan’s Facility & Equipment
• Major processing equipment
– heavy oil catalytic pyrolysis processing
y y py y p g
– gas fractionation processing
– ethylbenzene and styrene processing
– LPG and sulphur recovery processing
• $132M invested in the facility to date
– total of 1.2M sq ft including 594,000 sq ft for 
f f f f
production and 19,500 sq ft for laboratories and offices
• 100,000 MT of storage capacity
– 50,000 MT for raw materials
– 50 000 MT for finished products
50,000 MT for finished products
– additional 100,000 MT of storage facility planned
• 5,000 MT capacity on‐site ocean shipping dock
– roughly 90% of feedstock and finished products use the 
shipping dock
– adjacent access to additional 50,000 MT of ocean 
shipping capacity
– also has a 10‐truck loading facility

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Production Expansion Plan

• Increase storage capacity 

• Raw material pre‐treatment facility

• Asphalt production facility

17
 Keyuan’s Petrochemical Process
Lower quality 
Heavy  Pre‐treatment  raw material Asphalt Production 
oil Equipment Facility Expanded production

Higher quality raw material Current production
Proprietary Catalytic  BTX Aromatics 
Pyrolysis Processing & Oil Slurry

LPG to Desulfurization
Gas Fractionation
Processing

Refined Gas to Acid Gas to Sulphur Recovery

Ethylbenzene
Propylene & 
py Dry Gas & 
y Sulphur
p
LPG Sulphur
Carbon 4 Ethylbenzene Recovery

Isobutane Ethylbenzene
to Styrene

MTBE St
Styrene F lG
Fuel Gas

Note: A key component of Keyuan’s asphalt production is raw material pre‐treatment equipment 
which will greatly enhance its capability to handle tougher raw materials and reduce raw material 
costs. Keyuan currently uses the remaining heavy residuals for heating exchange and oil slurry 18
 Pretreatment & Asphalt Process
Solvent‐based Pretreatment Secondary Pretreatment Asphalt Production 
Higher quality raw material    Lower quality raw material  
Raw Materials
Raw Materials

Asphalt Stripping 
Extractor
Heat Exchanger Tower

Buffer Tank Raw Material For 
Solvent Separator
Asphalt Production
Extractor

Pump
Stripping Tower for 
Modifying Process
Demetallized Oil

Mixer

Current Catalytic 
Asphalt Products
Solvent Pyrolysis Process
Pyrolysis Process

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 Management Team
Chunfeng Tao, Founder, Chairman & Chief Executive Officer
• Industry veteran with over 20 years’ extensive experience in the petrochemical industry
y y p p y
• Served as President of Ningbo Hebang Chemical Co. (later purchased by CNOOC) which had annual 
revenue of $1.5B. Managed and built the company to an annual production capacity of 250K MT for 
aromatic and heavy oil cracking products
• Served as Executive Vice President of Ningbo Daxie Liwan Petrochemicals Co. (also purchased by 
CNOOC) which had annual revenue of $1B. Managed and built the company to an annual production 
CNOOC) which had annual revenue of $1B Managed and built the company to an annual production
of 500K MT of high grade asphalt
• Served in various senior management and technical positions at Sinopec Zhenhai Refining & Chemical 
Co., the largest base for crude oil processing and sour crude oil processing in China, and won over 30 
technological innovations, management awards and distinctions during his tenure
• Bachelor of Science in Petroleum Processing from Guangdong Petrochemical College and Master of 
Science in Chemical Engineering from China University of Petroleum

Angela Li, Chief Financial Officer, CPA
• Industry veteran with over 10 years of experience in Corporate Finance, Accounting and Tax
• Served on the CFO team at Bank of America (BAC) and Nucor Corporation (NU)
• Consultant for Deloitte & Touche LLP
• Independent board member for Huifeng Bio‐Pharmaceutical Technology 
• MBA from Fuqua School at Duke University and M.S. in Accounting from Wake Forest University

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 Management Team (cont’d)
Dr. Jingtao Ma, Executive Vice President Shifa Wang, Vice President & Chief Engineer
• Over 20 years’ experience in corporate management, 
y p p g , • 30 years’ management experience in petrochemical 
y g p p
research & development, sales & marketing, and business  technology and manufacturing, specializing in oil refining and 
development catalytic cracking
• Served in management and technical positions at Sinopec  • Served as General Manager at Guangdong Yingchang Heavy 
Zhenhai Refining & Chemical Co. in various functions  Road Asphalt Co., Ltd., Chief Engineer at Sinopec Anqing 
including manufacturing and operations, and chemical and 
including manufacturing and operations, and chemical and Refinery Co., Ltd. and Head of Operations for Phase II 
Refinery Co., Ltd. and Head of Operations for Phase II
technical analysis  production line expansion at Guangdong Tiyi Group Co., Ltd. 
• Master of Science and Doctorate in Physical Chemistry from  • Bachelor of Science from Chemical Engineering Department 
Lanzhou Chemistry & Physics Research Institute of CSA of China Petroleum University and Master of Art in Enterprise 
Management from Qinghua University 

Weifeng Xue, Vice President, Accounting  Mingliang Liu, Vice President, Manufacturing
• Over 20 years’ experience in accounting and finance, account  • Over 30 years’ of experience in petrochemical manufacturing 
settlement, capital planning, commercial banking, corporate  and production management specializing in oil refining, 
credit, loan operations and management heavy oil cracking and crude oil processing. Served in various 
supervisory and managerial positions at Sinopec Zhenhai 
d l h h
• Served as Supervisor of Accounting and Finance at Aux Group 
Refining & Chemical Co.
Co., Ltd., a privately‐held electronics manufacturer and 
finance Director at China Agriculture Bank, Ningbo Branch • Majored in Economics & Management at Zhejiang CCP 
Institute
• Bachelor of Science in Economics from Hangzhou Electronics 
& Industrial Institute
& Industrial Institute

21
 Board of Directors
• Chunfeng Tao, Chairman of the board
¾ Mr. Tao is an industry veteran with over 20 years of experience in the petrochemical industry. Served as President
of Ningbo Hebang Chemical Co Co. which had annual revenue of $1$1.5B.
5B Served as Executive Vice President of Ningbo
Daxie Liwan Petrochemicals Co. which had annual revenue of $1B.
• Gerry Goldberg, Independent Director
¾ Mr. Goldberg has over 30 years experience in the accounting industry and currently serves as senior partner in
the accounting firm Schwatrz Levitsky Feldman LLP, one of the top ten accounting firms in Canada. At the firm,
he heads the US Public Company audit division,
division and is actively involved in the audits of various Canadian
Canadian, US
US,
Chinese and other foreign companies listed in the US and Canada.
• Michael Rosenberg, Independent Director
¾ Mr. Rosenberg has over 35 years experience in energy trading, currently as managing director of Saugatuck Energy
where he is responsible for identifying investment opportunities in Asia. He was founder and chief executive officer
of Swiss-based
Swiss based Oceana Petrochemicals,
Petrochemicals a major petrochemicals trading company with annual revenue of
approximately $1 Billion.
• Dishen Shen, Independent Director
¾ Mr. Shen is a senior petrochemical engineer with nearly 40 years of oil refining and petrochemical industry
expertise and management experience, and has made significant contributions to the oil refining and
petrochemical industries in China. Mr. Shen has served in a variety of leadership roles in planning and
economic development in Zhejiang Province, focusing primarily on development of the petrochemical industry.
• Steven Xin Yue, Director
¾ Mr. Yue has 20 years of experience in management and operations, information technology, equity trading,
sales and marketing, financial consulting and investment and real estate financing and development. Currently
he is a Co-founder
Co founder and Chief Executive Officer of Cmark Capital Co., Ltd. Previously he also co-founded
co founded
Golden Spider Co., Ltd., and New Shengtong Technology Co., Ltd.

22
 Summary Highlights
• High demand for refined petrochemical products due 
to China’ss robust economic growth and under
to China robust economic growth and under‐
developed domestic supply capacity
• 550,000 MT of production capacity for essential 
petrochemical products with a planned production 
expansion

• Proprietary technology lowers feedstock cost by 
utilizing less expensive heavy oil 
• Projected 2010 Revenue and Net Income of $550M 
and $36.3M
– first full month of operation in Dec. 2009
– utilization rate tracking at 100%
• Robust customer base with long‐term purchase 
contracts provide revenue and net income visibility

• A proven and committed management with industry 
renowned technology experts and advisers

23
 Contact Information

Investor Relations 
Investor Relations – HC International
HC International
Mr. Ted Haberfield
San Diego, CA
Tel: (760) 755‐2716
Email: thaberfield@hcinternational.net

Company –
p y Keyuan Petrochemicals, Inc.
y ,
7810 Ballantyne Commons Pkwy, Suite 300
Charlotte, NC 28277
Tel: (704) 841‐7604 

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