DISCUSSION MATERIALS PREPARED BY HOULIHAN LOKEY

EX-99.(C)(2) 3 dex99c2.htm DISCUSSION MATERIALS PREPARED BY HOULIHAN LOKEY DISCUSSION MATERIALS PREPARED BY HOULIHAN LOKEY

Exhibit (C)(2)

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Chemspec International Limited

March 18, 2011

Presentation to the Special Committee

Privileged and Confidential

w w w . H L . c o m U. S. 8 0 0. 7 8 8. 5 3 0 0 E u r o p e + 4 4. 2 0. 7 8 3 9. 3 3 5 5 H o n g K o n g + 8 52.3551. 2 3 0 0 J a p a n + 8 1. 3. 4 5 7 7. 6000

Los Angeles

New York

Chicago

San Francisco

Minneapolis

Washington, D.C.

Dallas

Atlanta

London

Paris

Frankfurt

Hong Kong

Tokyo

Beijing

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Chemspec

International Limited

Table of Contents

Page

Executive Summary 2

Valuation Support 6

Trading Analyses 11

Appendix 18

Additional Financial Analyses 19

Chemspec

International Limited

Table of Contents

Page

Executive Summary 2

Valuation Support 6

Trading Analyses 11

Appendix 18

Additional Financial Analyses 19

Chemspec

International Limited

Table of Contents

Page

Executive Summary 2

Valuation Support 6

Trading Analyses 11

Appendix 18

Additional Financial Analyses 19

Chemspec

International Limited

Table of Contents

Page

Executive Summary 2

Valuation Support 6

Trading Analyses 11

Appendix 18

Additional Financial Analyses 19

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Executive Summary

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Executive Summary

Summary of the Transaction1

Parties to the Transaction

Chemspec International Limited (“Chemspec”, or the “Company”)

Halogen Limited (“Parent”): a Cayman Islands limited liability company, currently owned by:

Dr. Jianhua Yang (“Dr. Yang” or the “Chairman”)

Primavera Capital Management Ltd. (together with Dr. Yang and certain members of Company management, the “Buyer Group”)2

Halogen Mergersub Limited (“Merger Sub”): a Cayman Islands limited liability company with all outstanding shares owned by the Parent

Form of Transaction

Merger: Merger Sub to be merged with and into the Company, with the Company surviving the Merger and becoming a wholly owned subsidiary of the Parent

Form of Consideration

Cash Only: each ordinary share of the Company (a “Share”), including Shares represented by American Depository Shares (“ADS”), each representing 60 Shares, shall be cancelled in exchange for the right to receive US$0.135 in cash per Share, or US$8.10 in cash per ADS (the “Merger Consideration”), with the exception of Excluded Shares and ADSs representing Excluded Shares

“Excluded Shares” means, collectively:

Shares and ADSs beneficially owned (as determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) by Dr. Yang or any person controlled by Dr. Yang

Shares and ADSs beneficially owned (as determined pursuant to Rule 13d-3 under the Exchange Act) by Mr. Yunlong Yuan or Mr. Weinian Qi or any person controlled by either of the foregoing

Shares owned by holders who have validly exercised and not effectively withdrawn or lost their appraisal rights

Adoption of the Agreement is subject to the receipt of:

The approval by a majority in number of the holders of the shares representing at least 75% of the total issued and outstanding shares, unless a revision to the Cayman Companies Law is brought into legal effect prior to the shareholders’ meeting that provides for a different threshold

Majority of the minority: the affirmative vote of shareholders representing more than 50% of the ordinary shares (excluding the Excluded Shares) present and voting at the shareholders’ meeting

The Buyer Group owns, directly or indirectly, approximately 58.9% of the total outstanding shares. In order to obtain the majority of the minority approval, holders of at least approximately 20.6% of the total outstanding shares not held by the Buyer Group must vote in favor of the Transaction, assuming all shareholders are present and voting at the Shareholder Meeting. Dr. David Yunhung Tang (Dr. Tang), who is not considered part of the Buyer Group, owns, directly or indirectly, approximately 14.0% of the total outstanding shares, and his intentions remain unclear.

Financing: Approximately US$120,100,0003 (not including professional fees and other expenses)

Approximately US$50,100,000 equity provided by the Buyer Group3

US$70,000,000 million senior term loan provided by Standard Chartered Bank (“Standard Chartered”)

1. This summary is intended only as an overview of selected terms and is not intended to cover all terms or details of the Transaction.

2. According to Dr. Yang and Primavera, two members of the Company management, Mr. Yunlong Yuan and Mr. Weinian Qi, will join the Buyer Group prior to the closing of the Transactions.

3. Numbers rounded to the nearest hundred thousands. The amount of equity financing required is calculated based on the offer price of $8.10 for approximately 14.8 million of ADSs (41.1% ownership) not owned by the Chairman and his affiliates, minus the $70.0 million Standard Chartered senior term loan. The amount of equity financing calculated do not include the option shares to be cashed out at closing.

Source: Draft dated March 18, 2011 of the Agreement and Plan of Merger among Halogen Limited, Halogen Mergersub Limited and Chemspec International Limited (the “Agreement”).

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Executive Summary

Transaction Value Overview

Summary of Transaction Value

(dollars and ADSs in millions, except per ADS values)

(dollars and ADS in millions, except per ADS values)

Per ADS ADS ConsideratioTransaction Security Outstanding1 n ADS 36.1 $8.10 Implied Values Implied Common Equity $292.1 Adjustments2: Debt 3.8 Cash(15.0) Minority Interest 0.9 Amount Due to Related Parties3 0.8 Implied Enterprise Value $282.6ImpliedTransaction Multiples Implied Revenue Multiple FYE 12/31/2010 1.72x

NFY 12/31/2011 1.62x EBITDA FYE 12/31/2010 5.6x NFY 12/31/2011 5.7x

Implied Premiums to Historical Stock Trading Prices Implied Premium Average Per ADS Transaction

Trading Period Closing Consideration over Prior to 11/12/10 ADS Price Average Closing ADS Price 1 Day $6.32 28.2%

5 Day $6.87 17.9% 10 Day $6.71 20.8% 1 Month $6.50 24.6% 3 Month $6.56 23.5%

6 Month $7.02 15.3%

1 Year $7.04 15.1%

IPO 06/24/2009 $9.00 -10.0%

52 Week High 05/07/2010 $8.50 -4.7%

52 Week Low 12/16/2009 $5.44 48.9%

FYE = Fiscal Year End

NFY = Next Fiscal Year

1. Based on 2,163,458,508 total diluted ordinary shares, or 36,057,642 ADS, as of December 31, 2010 per Company management. The total diluted ordinary shares include 2,163,190,740 outstanding ordinary shares (36,053,179 ADS) and 267,768 option shares (4,463 ADS) exercisable up to and including $8.10 per ADS as of March 17, 2011. Due to the use of rounding and the method of converting ADS to ordinary shares, the stated total may not reflect the exact total shares outstanding. The total ADS is calculated based on the ratio of one ADS for 60 ordinary shares.

2. Per the latest unaudited financial statements for the year ended December 31, 2010. For valuation purposes, the value of the adjustments have been converted from RMB to USD according to the exchange rate provided by Capital IQ as of March 17, 2011.

3. Per Company management, RMB 5.6 million in related party loans are due to Chairman Dr. Yang and Kang Qi Investments as of December 31, 2010. The related party loan was the remainder of the purchase consideration for Kangpeng Nong Hua, which the Company purchased in 2009. Kangpeng Nong Hua was previously directly and indirectly owned by Dr. Yang and Dr. Tang, among others.

4. Multiples based on Company management projections.

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Executive Summary

Financial Analyses Summary

Implied per ADS Reference Range

Price Per ADS

$12.00

$11.00

$10.00

$9.33

$8.99

$8.85

$9.00

$5.00

$4.00

$6.00

Transaction Consideration of $8.10 per ADS $8.00

$7.94

$7.59

$7.00

$7.48

$7.37

Pre-announcement Price per ADS of $6.32 as of 11/10/2010

Selected Companies Analysis Selected Companies Analysis Selected Transactions Analysis Discounted Cash Flow Analysis

5.25x—6.25x 5.25x—6.25x 5.50x—6.50x Discount Rate: 10.5%—11.5%

FYE 2010 NFY 2011 FYE 2010 Perpetuity Growth Rate:

Adjusted EBITDA Adjusted EBITDA Adjusted EBITDA 4.75%—5.25%

Note:

No particular weight was attributed to any analysis. Based on 2,163,458,508 total diluted ordinary shares, or 36,057,642 ADS, as of December 31, 2010 per Company management. The total diluted ordinary shares include 2,163,190,740 outstanding ordinary shares (36,053,179 ADS) and 267,768 option shares (4,463 ADS) exercisable up to and including $8.10 per ADS as of March 17, 2011. Due to the use of rounding and the method of converting ADS to ordinary shares, the stated total may not reflect the exact total shares outstanding. The total ADS is calculated based on the ratio of one ADS for 60 ordinary shares.

Financial adjustment items (minority interest, due to related parties, cash and debt) are based on the latest Company-provided financial statements for the fiscal year ended December 31, 2010. For valuation purposes, the value of the adjustment items have been converted from RMB to USD according to the exchange rate provided by Capital IQ as of March 17, 2011.

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Valuation Support

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Valuation Support

Selected Historical and Projected Financial Data

(Dollars in millions)

Fiscal Year Ended December 31, Fiscal Year Ending December 31,

2008 2009 2010 2011E 2012E 2013E

Reported Revenue $138.1 $120.2 $164.2 $174.8 $200.6 $244.7

Revenue Grow th % N A -13.0% 36.6% 6.4% 14.8% 22.0%

Cost of Goods Sold(80.4)(72.6)(100.2)(111.6)(133.3)(165.0)

Gross Profit $57.7 $47.6 $64.0 $63.2 $67.3 $79.6

Gross Margin % 41.8% 39.6% 39.0% 36.2% 33.6% 32.5%

Selling, General & Administrative Expenses(14.6)(17.3)(23.5)(24.8)(34.3)(43.2)

Depreciation & Amortization 3.8 5.6 11.0 11.1 9.3 11.9

Total Adjustments1 0.3 3.0(1.1) 0.0 0.0 0.0

Adjusted EBITDA $47.3 $38.9 $50.3 $49.5 $42.2 $48.3

EBITDA Margin % 34.2% 32.4% 30.6% 28.3% 21.1% 19.8%

Depreciation & Amortization(3.8)(5.6)(11.0)(11.1)(9.3)(11.9)

Adjusted EBIT $43.5 $33.3 $39.4 $38.4 $33.0 $36.5

EBIT Margin % 31.5% 27.7% 24.0% 22.0% 16.4% 14.9%

Currency Conversion Rate (RMB to USD)2 0.147 0.147 0.152 0.152 0.152 0.152

As of Date 12/31/2008 12/31/2009 12/31/2010 03/17/2011 03/17/2011 03/17/2011

1. Total Adjustments:

O ther O perating Expenses (a) $0.2 $0.9 $0.1 $0.0 $0.0 $0.0

Inventory W rite-dow n (b) 0.2 2.2(0.6) 0.0 0.0 0.0

Equity in Loss of an Affiliate 0.0(0.0)(0.5) 0.0 0.0 0.0

Total Adjustments $0.3 $3.0($1.1) $0.0 $0.0 $0.0

(a) O ther operating expenses consist primarily of loss on disposal of property, plant and equipment and miscellaneous costs and expenses.

(b) According to management, during 2010 the Company had a reverse in inventory w rite-dow n, resulting in a gain of $0.6 million. The inventory w rite-dow n charge w as a part of Cost of Goods Sold.

2. Historical 2008 and 2009 audited financials are converted from RMB to USD based on the exchange rates presented in the Company’s public filings. The unaudited fiscal year 2010 financials are provided by management and converted from RMB to USD based on the exchange rate as of December 31, 2010 per Capital IQ . Financial forecasts for fiscal year 2011-2013 are converted from RMB to USD at the conversion rate as of March 17, 2011 per Capital IQ .

Sources: Historical financial statements from the Company’s public filings. The unaudited fiscal year 2010 financials and the 2011-2013 forecasts w ere provided by Company management.

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Valuation Support

Selected Companies Analysis1 – EV/EBITDA

(dollars in millions, except per exchange rate and ADS values)

Enterprise Value2 to Adjusted EBITDA3

Stock Trading Exchange Rate Share Equity Market Enterprise FYE5 FYE6 FYE6

Exchange Currency to USD Price4 Value4 Value4 12/31/2010 12/31/2011 12/31/2012

ATMI Inc. NasdaqGS USD 1.00 $17.03 $534.5 $407.3 5.1x 5.3x 4.7x

* Cabot Microelectronics Corp. NasdaqGS USD 1.00 $45.90 $1,061.6 $798.6 7.7x 6.3x N A

Cambrex Corporation. NYSE USD 1.00 $4.43 $131.1 $217.3 4.9x N A N A

Ferro Corp. NYSE USD 1.00 $14.92 $1,286.0 $1,571.7 6.5x 5.2x N A

* Fujimi Inc. TSE JPY 0.01 $12.79 $357.5 $157.2 2.3x 2.1x N A

Lonza Group AG SWX CHF 1.11 $80.50 $4,260.1 $5,540.1 7.2x 7.4x 6.5x

Royal DSM N.V. ENXTAM EUR 1.41 $57.58 $9,584.8 $9,448.2 5.4x 4.9x 4.5x

Sigma-Aldrich Corporation NasdaqGS USD 1.00 $61.30 $7,597.3 $7,567.3 11.2x 10.5x 9.8x

PCAS SA ENXTPA EUR 1.41 $3.59 $49.2 $110.9 5.2x N A N A

* American Pacific Corp. NasdaqGM USD 1.00 $5.97 $45.0 $119.5 8.5x N A N A

EcoGreen Fine Chemicals Group Ltd. SEHK HKD 0.13 $0.30 $143.5 $119.9 4.4x 3.3x 2.7x

* Stella Chemifa Corp. TSE JPY 0.01 $38.36 $471.8 $577.7 10.2x 7.7x 6.4x

Zhejiang Yongtai Technology Co., Ltd SZSE CNY 0.15 $7.81 $887.0 $857.0 55.8x* 29.3x * 15.8x *

Low 2.3x 2.1x 2.7x

High 11.2x 10.5x 9.8x

Median 5.9x 5.3x 5.6x

Mean 6.5x 5.8x 5.8x

Chemspec International Limited NYSE USD 1.00 $7.14 $257.4 $247.9 4.9x 5.0x 5.9x

Proposed Chemspec Transaction Multiple NYSE USD 1.00 $8.10 $292.1 $282.6 5.6x 5.7x 6.7x

1. No company used in this analysis for comparative purposes is identical to the Company.

2. Enterprise Value equals equity market value + debt outstanding + preferred stock + minority interest – cash and cash equivalents.

3. Adjusted EBITDA refers to Earnings Before Interest, Taxes, Depreciation and Amortization adjusted for certain non-recurring items.

4. Based on reported fully-diluted shares and closing prices as of March 17, 2011.

5. As of March 17, 2011, the following companies have not released their full calendar year 2010 financial information: EcoGreen Fine Chemicals Group Ltd., Stella Chemifa Corp. and Zhejiang Yongtai Technology Co., Ltd. Their FYE 2010 trading multiples were calculated based on compiled research from selected Wall Street research institutions and Capital IQ.

6. FYE 2011 and 2012 trading multiples were calculated based on compiled research from selected Wall Street research institutions and Capital IQ. Chemspec’s projected financial metrics are based on Company management-provided forecasts.

*Trading multiples are calculated based on financial information calendarized to the Company’s fiscal year end of December 31. Values shaded in gray are excluded from valuation range.

NA refers to not available.

Sources: Public filings, Capital IQ and select analyst reports from Wall Street research institutions.

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Valuation Support

Selected Transactions Analysis1

(dollars in millions)

Transaction Transaction Value/ EBITDA

Announced Effective Target Acquiror Value2 EBITDA3 Margin %3

09/16/2010 11/19/2010 KemFine UK Ltd. Aurelius AG NA NA NA

09/13/2010 11/18/2010 Synthetech Inc. W. R. Grace & Co.- Conn $17.2 NMF NMF

09/06/2010 Pending Panreac Química, S.A.U. Illinois Tool Works Inc. $73.0 NA NA

05/26/2010 08/30/2010 Mallinckrodt Baker, Inc. (nka:Avantor Performance Materials, Inc.) New Mountain Capital, LLC $280.0 5.5x 12.7%

02/17/2010 02/17/2010 Excelsyn Limited Albany Molecular Research Inc. $19.0 NA NA

02/12/2010 03/31/2010 Isochem SA Aurelius AG $76.7 NA NA

02/02/2010 03/31/2010 Ineos Fluor Holdings Ltd. Mexichem Fluor, S.A. de C.V. $350.1 NA NA

12/17/2008 06/25/2009 Shanghai Synica Corporation Ltd. Shanghai Pengxin Group Co., Ltd. $87.2 NA NA

08/05/2008 08/22/2008 Interpharma Praha, a.s. Otsuka Pharmaceutical Co., Ltd. NA NA NA

06/06/2008 06/06/2008 DanChem Technologies, Inc. Ensign-Bickford Industries, Inc. NA NA NA

01/04/2008 01/04/2008 FineTech Laboratories Ltd. RxElite Inc. $12.2 3.2x 71.9%

10/07/2007 12/31/2007 Rockwood Specialties Group Inc., Electronics Business OM Group Inc. $315.6 8.9x 19.1%

09/17/2007 11/30/2007 PPG Industries Inc., Fine Chemicals Business ZaCh System S.p.A. $65.0 5.4x 13.0%

09/10/2007 11/30/2007 Evotec AG, Chemical and Pharmaceutical Development Business Aptuit, Inc. $56.2 NA NA

11/29/2006 01/09/2007 Groupe Novasep SAS Azulis Capital; Gilde Buy-Out Fund III; Gilde Buy Out Partners $562.1 8.0x 19.5%

Low $12.2 3.2x 12.7%

High $562.1 8.9x 71.9%

Median $74.9 5.5x 19.1%

Mean $159.5 6.2x 27.2%

1. No transaction used in this analysis for comparative purposes is identical to the Transaction.

2. Transaction Value refers to the implied enterprise value of the target company, based on the announced transaction equity price and other public information available at the time of the announcement. Eliminated transactions with transaction value below $10 million.

3. Based on reported metric for the most recent LTM period prior to the announcement of the transaction.

NMF refers to not meaningful. NA refers to not available.

Source: Capital IQ, Merger market, Company websites and filings.

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Valuation Support

Discounted Cash Flow Analysis1

(dollars in millions, except per share values) Projected Fiscal Year Ending December 31, 2011E (2) 2012E 2013E Revenue $138.4 $200.6 $244.7

Revenue Grow th % 6.4% 14.8% 22.0% Cost of Goods Sold3(88.3)(133.3)(165.0) SG&A4(19.6)(34.3)(43.2)

Depreciation and Amortization5 8.8 9.3 11.9 EBITDA $39.2 $42.2 $48.3 EBITDA Margin % 28.3% 21.1% 19.8% Depreciation and Amortization5(8.8)(9.3)(11.9)

EBIT $30.4 $33.0 $36.5 Taxes @ 15.0% 6(4.6)(4.9)(5.5) Unlevered Earnings $25.9 $28.0 $31.0 Depreciation and Amortization5 8.8 9.3 11.9

Capital Expenditures7(24.1)(30.4)(30.4) Change in Working Capital8 20.4(4.5)(7.7) Unlevered Free Cash Flows $31.0 $2.4 $4.7 Discount Period 0.40 1.29 2.29

Discount Factor @ 11.0% 0.96 0.87 0.79 Present Value of Net Debt-Free Cash Flows $29.8 $2.1 $3.7 Terminal Value Assumptions Implied Terminal Year EBITDA

Revenue based on 5% perpetual growth rate $256.9 Terminal Multiple9 5.0% Discount Rate 4.75% 5.00% 5.25% Cost of Goods Sold3(180.6) 10.50% 6.6x 6.9x 7.2xSG& A4(45.3) 10.75% 6.3x 6.6x 6.9x Depreciation and Amortization5 19.8 11.00% 6.0x 6.3x 6.6x EBITDA $50.7 11.25% 5.8x 6.0x 6.3x

EBITDA Margin 19.8% 11.50% 5.6x 5.8x 6.1x Depreciation and Amortization5(19.8)

EBIT $31.0 Taxes @ 15.0% 6(4.6) PV of Terminal Value Unlevered Earnings $26.3 as a % of Enterprise Value Depreciation and Amortization5 19.8 Discount Rate 4.75% 5.00% 5.25% Capital Expenditures7—10% of Revenue(25.7) 10.50% 88.1% 88.6% 89.1% Working Capital8—17.5% of revenue(2.1) 10.75% 87.6% 88.1% 88.6% Unlevered Free Cash Flows $18.3 11.00% 87.1% 87.6% 88.1%

11.25% 86.6% 87.1% 87.6% 11.50% 86.2% 86.6% 87.1% Present Value PV of Terminal Value

Net Debt of Cash Flows Based on Perpetual Growth Rate for Implied Enterprise Value Implied Total Equity Value Implied Equity Value Per ADS11 and Other10Discount Rate 2011—2013 2013 Unlevered Free Cash Flow

$35.6 4.75% 5.00% 5.25% 4.75% 5.00% 5.25% 4.75% 5.00% 5.25% 4.75% 5.00% 5.25%

10.50% 10.5% $35.7 $264.7 $277.4 $291.3 $300.4 $313.1 $327.0($9.5) $309.9 $322.6 $336.5 $8.59 $8.95 $9.33

10.75% 10.8% $35.6 $252.4 $264.0 $276.6 $288.0 $299.6 $312.3($9.5) $297.5 $309.1 $321.8 $8.25 $8.57 $8.92

11.00% 11.0% $35.6 + $241.0 $251.7 $263.2 = $276.6 $287.3 $298.8 -($9.5) = $286.1 $296.8 $308.3 = $7.94 $8.23 $8.55

11.25% 11.3% $35.5 $230.6 $240.4 $251.0 $266.1 $275.9 $286.5($9.5) $275.6 $285.4 $296.0 $7.64 $7.92 $8.21

11.50% 11.5% $35.5 $220.9 $229.9 $239.7 $256.4 $265.4 $275.2($9.5) $265.9 $274.9 $284.7 $7.37 $7.62 $7.90

1. Present values as of March 17, 2011; mid-year convention applied. Refer to WACC calculation for derivation of discount rate.

2. Represents a 9.5-month stub period with Valuation Date as of March 17, 2011.

3. Projected Cost of Goods Sold (“COGS”) for 2011-2013 were provided by the Company management. Terminal year COGS based on the ratio of COGS to revenue in 2013.

4. Projected Selling, General & Administrative (“SG&A”) expenses for 2011-2013 were provided by the Company management. Terminal year SG&A based on the ratio of SG&A to revenue in 2013.

5. Projected depreciation expenses for 2011-2013 were provided by the Company management. Terminal depreciation expense based on assumptions of long term depreciation reaching a steady state of 77.0% of capital expenditures based on the Company management’s projections for capital expenditures and useful life of assets of 11.25 years for new fixed assets.

6. Tax at 15.0% for 2011-2013 per Company management.

7. Per Company management, capital expenditure is expected to total approximately RMB 200 million or $30.4 million per year from 2011-2013. Company management expects to spend approximately 10.0% of revenue per year on capital investments once the Company reaches a mature, steady state of operations.

8. Net unlevered cash-free working capital is approximately 34.3% of revenue as of year-end 2010. Per discussion with Company management, the Company’s long-term normalized working capital level is between 15%-20% of revenue. Accordingly, the change in working capital for 2011-2013 is calculated based on the assumption that unlevered cash-free working capital will reach 17.5% of revenue in 2011 and throughout the reminder of the forecast period.

9. Implied from corresponding discount rate and perpetual growth rate applied to terminal year unlevered free cash flow.

10. Net debt amount based on Company management-provided unaudited financial statements as of December 31, 2010 and includes cash, minority interest and amount due to related party. This amount has been converted from RMB to USD according to the exchange rate as of March 17, 2011 as provided by Capital IQ.

11. Based on 2,163,458,508 total diluted ordinary shares, or 36,057,642 ADS, as of December 31, 2010 per Company management. The total diluted ordinary shares include 2,163,190,740 outstanding ordinary shares (36,053,179 ADS) and 267,768 option shares (4,463 ADS) exercisable up to and including $8.10 per ADS as of March 17, 2011. Due to the use of rounding and the method of converting ADS to ordinary shares, the stated total may not reflect the exact total shares outstanding. The total ADS is calculated based on the ratio of one ADS for 60 ordinary shares.

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Trading Analyses

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Trading Analyses

Stock Trading History

Common Stock Price & Volume History

Closing ADS Price (US $) Daily Volume (In Millions)

$12.00 September 22, 2010 1.0

June 24, 2009 CPC announced $10MM March 10, 2011

CPC went public on September 29, 2009 share repurchase program to The Chairman and his

the NYSE at $9.00 CPC announced share be conducted within one year consortium raised the 0.9

per ADS repurchase program of up to of the announcement

$10.00 offer to $8.10 per ADS

$15MM; $1.2MM of ADS 0.8

were purchased by the year-end

0.7

$8.00

0.6

Per ADS

Transaction $6.00 March 10, 2010 0.5

Consideration CPC announced

dividend of $0.003 per November 11, 2010 0.4

ordinary share ($0.18 Dr. Jianhua Yang, Chairman and

$4.00 per ADS) CEO announced a non-binding 0.3

offer to acquire CPC’s

outstanding shares at $8.00 per

$2.00 ADS in cash 0.2

0.1

$0.00 0.0

Daily Volume Closing Stock Price

Source: Capital IQ

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Trading Analyses

Relative Stock Performance

Company vs. S&P 500 Index & Selected Companies Index

190.0%

180.0%

170.0%

160.0%

150.0%

140.0%

Prices 130.0%

120.0%

Indexed 110.0%

100.0%

90.0%

80.0%

70.0%

60.0%

50.0%

6/24/09

7/24/09

8/24/09

10/24/09

11/24/09

12/24/09

1/24/10

2/24/10

3/24/10

4/24/10

5/24/10

6/24/10

7/24/10

8/24/10

9/24/10

10/24/10

11/24/10

12/24/10

1/24/11

2/24/11

1. Equal Weighted Index of Selected Companies comprised of: ATMI Inc., Cabot Microelectronics Corporation, Cambrex Corporation, Ferro Corporation, Fujimi Inc., Lonza Group AG, Royal DSM N.V., Sigma-Aldrich Corporation, PCAS SA, American Pacific Corporation, EcoGreen Fine Chemical Group Inc., Stella Chemifa Corp. and Zhejiang Yongtai Technology Co.

Source: Capital IQ

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Trading Analyses

Top Shareholders

Other Public shareholders 20.2%

Total insider Holdings 58.9%

Total Institutional Holdings 20.9%

(figures in millions) Current Shareholders ADS Held1 Ownership %1

Insider Holdings

Insiders:

Yang, Jianhua 20.0 55.6%

Solar Stone Limited2 1.2 3.3%

Total Insider Holdings 21.2 58.9%

Public Holdings

Top Institutional Holders:

Columbia Wanger Asset Management, L.P. 2.1 5.7%

Goldman Sachs Asset Management, L.P. 1.4 3.9%

Martin Currie Investment Management Ltd. 1.1 3.1%

Fidelity Investments 0.9 2.6%

Concord Wise Limited 0.7 1.9%

Total Top Institutional Holders 6.3 17.3%

Other Institutional Holdings 1.3 3.6%

Total Institutional Holdings 7.5 20.9%

Tang, David Yunhung3 3.6 9.9%

JP Morgan Tang Family 2006 Irrevocable Trust3 1.5 4.1%

Other Public Shareholders 2.2 6.2%

Total Other Public Shareholders 7.3 20.2%

Total Public Holdings4 14.8 41.1%

ADS Outstanding 36.1 100.0%

Option Shares Exercisable (Converted to ADS) 0.0 0.0%

Total Diluted ADS Outstanding 36.1 100.0%

2. Solar Stone Limited is 30%, 30%, 20% and 20% owned by Wujun Yang, Yunlong Yuan, Weinian Qi and Yueping Zha, each an employee of the Company. Mr. Yang is a vice president responsible for overseeing the construction of facilities and purchase of raw materials; Mr. Yuan is a vice president responsible for overseeing manufacturing processes and operations; and Mr. Qi and Ms. Zha are non-executive employees.

3. Dr. David Yunhung Tang owns 213,300,000 ordinary shares of the Company. Dr. Tang’s family also holds 89,100,000 shares via the Tang Family 2006 Irrevocable Trust u/a dated August 23, 2006. Ms. Lan-Fen Hu Tang, the wife of Dr. Tang, controls the voting and investment power over the shares held by J.P. Morgan Trust Company of Delaware.

4. Total Public Holdings denotes shares not owned by Executive Officers, Directors and affiliates.

5. Calculated based on the ratio of 60 ordinary shares per ADS.

Source: Capital IQ

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Trading Analyses

Selected Analysts’ Views

(dollars in millions, except per share values)

Opening Price on

Research House1 Date of Report Date of Report View Target Price EV/2011E Revenue EV/2011E EBITDA 2011E Target P/E

Credit Suisse 11/15/2010 $7.90 Buy $9.10 1.0 x 3.2 x 6.7 x

Citi 8/15/2010 $7.60 Buy $8.20 1.1 x 3.2 x 7.1 x

Piper Jaffray 11/12/2010 $7.76 Buy $11.00 1.6 x 5.3 x 8.2 x

Oppenheimer2 9/23/2010 $6.15 Buy $9.00 1.3 x 4.4 x 7.0 x

(Discontinued Coverage on 11/11/2010)3

Low $6.15 $8.20 1.0 x 3.2 x 6.7 x

High $7.90 $11.00 1.6 x 5.3 x 8.2 x

Median $7.68 $9.05 1.2 x 3.8 x 7.1 x

Mean $7.35 $9.33 1.3 x 4.0 x 7.3 x

Note:

1. Other analyst research not included in this analysis: Datamonitor Financial Deals, Life Science Analytics Therapeutic Competitors and Globaldata.

2. 2011E Revenue and EBITDA multiples for Oppenheimer are derived from calculating the actual enterprise value of Chemspec as of the date the report was issued.

3. Oppenheimer discontinued coverage on November 11, 2010, stating in its research report that it believes the stock will no longer trade on the fundamentals due to the take-private transaction. In the prior research report issued on September 23, 2010, Oppenheimer rated the Company’s ADS as a “Buy”.

Source: Thomson Reuters

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Trading Analyses

Summary Company Management Projection vs. Wall Street Analysts Projection (2011 & 2012)

Revenue

(dollars in millions)

250.0 $232.1 230.0

210.0 $195.0 $200.9

190.0

$175.0 $184.1

170.0

$167.0

150.0

2011 2012

Range of Analyst

= Estimates = Management Projections

Comparison Table

(dollars in millions)

Analyst Estimates Management

Date Max Min Projections

Revenue 2011 $195.0 $167.0 $175.0

2012 $232.1 $184.1 $200.9

EBITDA 2011 $67.3 $48.7 $49.6

2012 $82.0 $54.1 $42.3

EBITDA Margin 2011 35.6% 29.2% 28.3%

2012 35.3% 29.4% 21.1%

The Wall Street financial consensus forecasts were calculated based on the latest research reports published by Citigroup,

Credit Suisse, Oppenheimer and Piper Jaffray

The 2011 and 2012 financial forecasts were provided by

Company management

EBITDA

(dollars in millions)

90.0

$82.0

80.0

$67.3

70.0

60.0

50.0 $54.1

$49.6

$48.7 $42.3

40.0

30.0

Range of Analyst2011 2012

= Estimates = Management Projections

EBITDA Margin

40.0%

35.6% 35.3%

35.0%

30.0%

29.2% 28.3% 29.4%

25.0%

21.1%

20.0%

15.0%

Range of Analyst 2011 2012

= Estimates = Management Projections

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Trading Analyses

Summary Company Management Projection vs. Wall Street Analysts Projection (2011 & 2012) (cont.)

Revenue

(dollars in millions)

$250.0 $215.7

$200.9

$200.0 $175.0 $183.0

$150.0

$100.0

$50.0

$0.0

2011 2012

= Management Forecast = Consensus Analyst Forecast (Mean)

Comparison Table

(dollars in millions)

2011 2012

Company Company

Management Wall Street Management Wall Street

Revenue $175.0 $183.0 $200.9 $215.7

EBITDA 49.6 58.6 42.3 70.2

EBITDA Margin 28.3% 32.1% 21.1% 32.5%

The Wall Street financial consensus forecasts were calculated based on the latest research reports published by Citigroup, Credit Suisse,

Oppenheimer and Piper Jaffray

The 2011 and 2012 financial forecasts were provided by Company management

EBITDA

(dollars in millions)

$80.0 $70.2

$58.6

$60.0 $49.6

$42.3

$40.0

$20.0

$0.0

2011 2012

= Management Forecast = Consensus Analyst Forecast (Mean)

EBITDA Margin

35.0% 32.1% 32.5%

30.0% 28.3%

25.0% 21.1%

20.0%

15.0%

10.0%

5.0%

0.0%

2011 2012

= Management Forecast = Consensus Analyst Forecast (Mean)

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Appendix

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Appendix

Additional Financial Analyses

Appendix

Additional Financial Analyses

Appendix

Additional Financial Analyses

Appendix

Additional Financial Analyses

Appendix

Additional Financial Analyses

Appendix

Additional Financial Analyses

Appendix

Additional Financial Analyses

Appendix

Additional Financial Analyses

Appendix

Additional Financial Analyses

Appendix

Additional Financial Analyses

Appendix

Additional Financial Analyses

Appendix

Additional Financial Analyses

Appendix

Additional Financial Analyses

Appendix

Additional Financial Analyses

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Additional Financial Analyses

Appendix

Additional Financial Analyses

Appendix

Additional Financial Analyses

Appendix

Additional Financial Analyses

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Additional Financial Analyses

Financial Analyses Summary

(ADSs outstanding and dollars in millions, except per ADS values)

Selected Companies Selected Companies Selected Transactions Discounted Cash Flow

Analysis Analysis Analysis Analysis

FYE 12/31/2010 Adjusted NFY 12/31/2011 Adjusted FYE 12/31/2010 Adjusted

EBITDA EBITDA EBITDA

Corresponding Base Amount $50.3 $49.5 $50.3

Selected Multiples Range 5.25x 6.25x 5.25x 6.25x 5.50x 6.50x

Implied Enterprise Value from Operations Reference Range $264.2 $314.5 $260.1 $309.7 $276.8 $327.1 $256.4 $327.0

Add: Cash and Cash Equivalents as of 12/31/2010 $15.0 $15.0 $15.0 $15.0 $15.0 $15.0 $15.0 $15.0

Implied Total Enterprise Value Reference Range $279.2 $329.5 $275.1 $324.7 $291.8 $342.1 $271.4 $342.0

Less: Total Debt as of 12/31/2010 $3.8 $3.8 $3.8 $3.8 $3.8 $3.8 $3.8 $3.8

Less: Amount Due to Related Parties as of 12/31/20102 $0.8 $0.8 $0.8 $0.8 $0.8 $0.8 $0.8 $0.8

Less: Minority Interest as of 12/31/2010 $0.9 $0.9 $0.9 $0.9 $0.9 $0.9 $0.9 $0.9

Implied Total Equity Value Reference Range $273.7 $324.0 $269.6 $319.1 $286.2 $336.6 $265.9 $336.5

ADSs Outstanding3 36.1 36.1 36.1 36.1 36.1 36.1 36.1 36.1

Implied Per ADS Reference Range $7.59 $8.99 $7.48 $8.85 $7.94 $9.33 $7.37 $9.33

1. Financial adjustment items (minority interest, due to related parties, cash and debt) are based on the latest Company-provided financial statements for the fiscal year ended December 31, 2010. For valuation purposes, the value of the adjustment items have been converted from RMB to USD according to the exchange rate provided by Capital IQ as of March 17, 2011.

2. Per Company management, RMB 5.6 million in related party loans are due to Chairman Dr. Yang and Kang Qi Investments as of December 31, 2010. The related party loan was the reminder of the purchase consideration for Kangpeng Nong Hua, which the Company purchased in 2009. Kangpeng Nong Hua was previously directly and indirectly owned by Dr. Yang and Dr. Tang, among others.

3. Based on 2,163,458,508 total diluted ordinary shares, or 36,057,642 ADS, as of December 31, 2010 per Company management. The total diluted ordinary shares include 2,163,190,740 outstanding ordinary shares (36,053,179 ADS) and 267,768 option shares (4,463 ADS) exercisable up to and including $8.10 per ADS as of March 17, 2011. Due to the use of rounding and the method of converting ADS to ordinary shares, the stated total may not reflect the exact total shares outstanding. The total ADS is calculated based on the ratio of one ADS for 60 ordinary shares.

Source: Public filings and Company management-provided unaudited financials.

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Additional Financial Analyses

Historical Income Statement

(dollars in millions)

Audited Audited Unaudited

2008 2009 2010

Revenues, Net $138.1 $120.2 $164.2

Cost of Sales (Goods Sold) 80.4 72.6 100.2

Gross Profit 57.7 47.6 64.0

Operating Expenses:

Selling, General & Administrative 14.4 16.4 23.5

Other Operating Expenses 0.2 0.9 0.1

Total Operating Expenses 14.6 17.3 23.5

Operating Income 43.2 30.3 40.4

Interest Expense 0.4 0.3 0.0

Interest (Income)(0.3)(0.3)(0.3)

Other Expenses (Income) 1.4 0.2 0.6

Nonrecurring Loss (Gain)(0.0)(0.1)(0.8)

Pre-tax Income (Loss) 41.7 30.2 40.9

Income Taxes (Credit)(4.7) 4.2 5.9

Minority Interest(0.6)(0.7)(0.1)

Net Income (Loss) $45.8 $25.3 $34.9

Depreciation & Amortization $3.8 $5.6 $11.0

Stock Compensation 2.6 2.3 0.0

Capital Expenditures 18.7 33.4 37.7

Adjustments $0.3 $3.0($1.1)

Adjusted EBITDA $47.3 $38.9 $50.3

Adjusted EBIT $43.5 $33.3 $39.4

Currency Conversion Rate (RMB to USD) 0.147 0.147 0.152

As of Date 12/31/2008 12/31/2009 12/31/2010

Note:

1. The Company’s 2008 and 2009 historical financial data are converted from RMB to USD at the exchange rate presented in the Company’s 20F and 6K filings. The 2010 unaudited income statement was provided by the Company management and converted from RMB to USD at the exchange rate as of December 31, 2010 per Capital IQ.

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Additional Financial Analyses

Historical Balance Sheet

(Dollars in millions) Audited Audited Audited Unaudited

Assets 12/31/2007 12/31/2008 12/31/2009 12/31/2010

Current Assets:

Cash & Cash Equivalents $7.8 $26.5 $51.4 $15.0

Restricted Cash 0.5 3.2 5.6 8.6

Accounts Receivable 0.0 11.9 20.0 13.8 20.9

Inventories 0.0 15.2 32.0 39.8 71.4

Bills Receivable 0.0 0.0 0.2 0.2

Prepayment and Other Receivables 4.8 3.6 5.7 11.1

Deferred Tax Assets 0.0 0.1 0.5 1.0

Receivables from Related Parties 2.3 0.4 0.0 0.0

Total Current Assets 42.7 85.7 116.9 128.2

Net Fixed Assets 29.7 59.4 102.4 132.2

Intangible Assets 4.8 9.3 9.4 10.2

Investment in an Affiliate 0.0 0.0 1.9 1.9

Deferred Assets 0.1 1.5 0.0 0.0

Total Assets 0.0 $77.3 $155.9 $230.8 $272.6

Liabilities & Stockholders’ Equity

Current Liabilities:

Accounts Payable 0.0 $5.9 $11.9 $12.0 $21.6

Bills Payable 1.2 4.0 7.3 9.8

Current Maturities 5.5 9.5 0.0 3.8

Accrued Expenses 4.0 9.6 26.8 22.5

Amount Due to Related Parties 5.5 7.5 3.5 0.8

Deferred Income 0.0 0.0 0.0 2.2

Income Taxes Payable 1.1 0.9 0.2 0.8

Total Current Liabilities 23.2 43.5 49.8 61.5

Long-Term Debt 0.0 0.0 1.5 0.0

Deferred Taxes 0.0 2.3 2.6 3.3

Deferred Income 0.0 0.8 2.2 0.5

Total Liabilities 0.0 23.2 46.6 56.1 65.2

Minority Interest 1.0 2.2 0.9 0.9

Net Stockholders’ Equity 53.1 107.0 173.8 206.5

Total Liabilities & Stockholders’ Equity $77.3 $155.9 $230.8 $272.6

Working Capital

Net Unlevered Cash-free Working Capital $20.4 $32.3 $19.2 $56.4

As % of Revenue 14.8% 26.9% 11.7% 34.3%

Gross Working Capital $19.5 $42.1 $67.1 $66.7

As % of Revenue 14.1% 35.1% 40.9% 40.6%

Exchange Rate (as of fiscal year-end) 0.137 0.147 0.147 0.152

As of Date 12/31/2007 12/31/2008 12/31/2009 12/31/2010

Note: All historical financial data are converted from RMB to USD at the prevailing exchange rate as of the end of each fiscal period. The exchange rates for year-end 2007-2009 and interim 2010 are based on the exchange rates reported in the Company’s 20F and 6K filings. The exchange rate for year-end 2010 is provided by Capital IQ.

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Additional Financial Analyses

Benchmarking Data1 Size Size2 Historical Growth Historical Growth Projected Growth

(2010 Revenue, millions)(Enterprise Value as of 03/17/2011, millions)(2008-2010 Revenue)(2009-2010 Revenue)(2010-2011 Revenue)

Name Value Name Value Name Value

Royal DSM N.V. $12,746.5 Royal DSM N.V. $9,448.2 Zhejiang Yongtai Technology Co., Ltd 15.7% ATMI Inc. 44.2% Zhejiang Yongtai Technology Co., Ltd 52.9%

Lonza Group AG $2,977.8 Sigma-Aldrich Corporation $7,567.3 EcoGreen Fine Chemicals Group Ltd. 11.5% Chemspec International Limited 36.6% EcoGreen Fine Chemicals Group Ltd. 39.9%

Sigma-Aldrich Corporation $2,271.0 Lonza Group AG $5,540.1 Cabot Microelectronics Corp. 11.0% Stella Chemifa Corp. 31.1% Chemspec (Analyst Forecast) 11.1%

Ferro Corp. $2,101.9 Ferro Corp. $1,571.7 Chemspec International Limited 9.0% Cabot Microelectronics Corp. 30.3% Cabot Microelectronics Corp. 10.9% Cabot Microelectronics Corp. $424.7 Zhejiang Yongtai Technology Co., Ltd $857.0 ATMI Inc. 4.1% Ferro Corp. 26.8% Ferro Corp. 10.8%

Fujimi Inc. $401.0 Cabot Microelectronics Corp. $798.6 Sigma-Aldrich Corporation 1.6% EcoGreen Fine Chemicals Group Ltd. 26.4% ATMI Inc. 10.0%

ATMI Inc. $367.3 Stella Chemifa Corp. $577.7 Royal DSM N.V. -0.2% Fujimi Inc. 24.3% Chemspec (Management Forecast) 6.4%

Stella Chemifa Corp. $346.4 ATMI Inc. $407.3 Stella Chemifa Corp. -2.5% Royal DSM N.V. 15.1% Lonza Group AG 6.0%

Cambrex Corporation. $227.0 Chemspec International Limited $247.9 PCAS SA -3.0% Zhejiang Yongtai Technology Co., Ltd 6.8% Sigma-Aldrich Corporation 5.4%

PCAS SA $223.2 Cambrex Corporation. $217.3 Ferro Corp. -3.2% Sigma-Aldrich Corporation 5.7% Fujimi Inc. 5.1%

American Pacific Corp. $177.3 Fujimi Inc. $157.2 Lonza Group AG -4.5% PCAS SA 3.9% Cambrex Corporation. 5.0%

Chemspec International Limited $164.2 EcoGreen Fine Chemicals Group Ltd. $119.9 Cambrex Corporation. -4.6% Lonza Group AG -0.4% Stella Chemifa Corp. 3.3%

EcoGreen Fine Chemicals Group Ltd. $104.2 American Pacific Corp. $119.5 American Pacific Corp. -6.3% Cambrex Corporation. -3.2% Royal DSM N.V. 1.7%

Zhejiang Yongtai Technology Co., Ltd $79.7 PCAS SA $110.9 Fujimi Inc. -10.8% American Pacific Corp. -4.5% PCAS SA N A

American Pacific Corp. N A

Historical Growth Historical Growth Projected Growth Projected Growth Profitability

(2008-2010 EBITDA)(2009-2010 EBITDA)(2010-2011 EBITDA)(5-Fiscal Year EPS)(2010 EBIT to 2010 Revenue)

Name Value Name Value Name Value Name Value Name Value

Cabot Microelectronics Corp. 33.5% ATMI Inc. 226.7% Zhejiang Yongtai Technology Co., Ltd 90.0% Fujimi Inc. 28.8% Sigma-Aldrich Corporation 25.6%

Ferro Corp. 15.6% Fujimi Inc. 100.8% EcoGreen Fine Chemicals Group Ltd. 34.2% EcoGreen Fine Chemicals Group Ltd. 25.8% Chemspec International Limited 24.0%

ATMI Inc. 10.6% Ferro Corp. 85.8% Ferro Corp. 24.7% Cabot Microelectronics Corp. 16.7% Cabot Microelectronics Corp. 18.4%

EcoGreen Fine Chemicals Group Ltd. 8.3% Cabot Microelectronics Corp. 63.6% Cabot Microelectronics Corp. 22.3% Lonza Group AG 12.8% EcoGreen Fine Chemicals Group Ltd. 17.5%

Zhejiang Yongtai Technology Co., Ltd 7.5% Stella Chemifa Corp. 34.2% Chemspec (Analyst Forecast) 16.2% ATMI Inc. 12.5% Zhejiang Yongtai Technology Co., Ltd 15.3%

Sigma-Aldrich Corporation 5.9% Zhejiang Yongtai Technology Co., Ltd 31.0% Royal DSM N.V. 10.1% Ferro Corp. 12.0% Lonza Group AG 14.0%

Stella Chemifa Corp. 3.8% Chemspec International Limited 29.3% Stella Chemifa Corp. 8.6% Sigma-Aldrich Corporation 7.5% Stella Chemifa Corp. 12.7%

Chemspec International Limited 3.2% Lonza Group AG 25.6% Sigma-Aldrich Corporation 6.9% Royal DSM N.V. 5.3% ATMI Inc. 11.4%

Lonza Group AG 2.9% Sigma-Aldrich Corporation 12.3% Fujimi Inc. 5.7% Chemspec International Limited N A Fujimi Inc. 10.9%

Royal DSM N.V. 1.6% PCAS SA 9.7% Chemspec (Management Forecast) -1.5% Cambrex Corporation. N A Cambrex Corporation. 9.8%

PCAS SA -1.4% Cambrex Corporation. -6.5% Lonza Group AG -2.2% PCAS SA N A Royal DSM N.V. 9.1%

Cambrex Corporation. -2.8% EcoGreen Fine Chemicals Group Ltd. -8.2% ATMI Inc. -4.4% American Pacific Corp. N A Ferro Corp. 7.8%

Fujimi Inc. -16.8% Royal DSM N.V. -12.1% Cambrex Corporation. N A Zhejiang Yongtai Technology Co., Ltd N A PCAS SA 2.1%

American Pacific Corp. -38.0% American Pacific Corp. -50.5% PCAS SA N A Stella Chemifa Corp. N A American Pacific Corp. 1.0%

American Pacific Corp. N A

Profitability Profitability Profitability Profitability Relative Depreciation

(2010 EBITDA to 2010 Revenue)(Average 2008-2010 EBITDA to Revenue)(Average 2008-2010 EBIT to Revenue)(2011 EBITDA to 2011 Revenue)(2010 Depreciation to 2010 EBITDA)

Name Value Name Name Value Name Value Name Value

Chemspec International Limited 30.6% Chemspec International Limited 32.4% Chemspec International Limited 27.7% Chemspec (Analyst Forecast) 32.1% American Pacific Corp. 87.8%

Sigma-Aldrich Corporation 29.7% Sigma-Aldrich Corporation 28.4% Sigma-Aldrich Corporation 24.1% Sigma-Aldrich Corporation 30.1% PCAS SA 77.6%

Lonza Group AG 25.8% EcoGreen Fine Chemicals Group Ltd. 23.4% EcoGreen Fine Chemicals Group Ltd. 19.2% Chemspec (Management Forecast) 28.3% Cambrex Corporation. 49.5%

Cabot Microelectronics Corp. 24.4% Lonza Group AG 22.9% Zhejiang Yongtai Technology Co., Ltd 15.7% Cabot Microelectronics Corp. 26.9% ATMI Inc. 48.0%

EcoGreen Fine Chemicals Group Ltd. 22.1% Zhejiang Yongtai Technology Co., Ltd 21.3% Cabot Microelectronics Corp. 13.2% Zhejiang Yongtai Technology Co., Ltd 23.9% Lonza Group AG 46.0%

ATMI Inc. 21.9% Cabot Microelectronics Corp. 20.3% Lonza Group AG 12.6% Lonza Group AG 23.8% Fujimi Inc. 36.6%

Zhejiang Yongtai Technology Co., Ltd 21.7% Cambrex Corporation. 19.4% Cambrex Corporation. 10.5% EcoGreen Fine Chemicals Group Ltd. 22.3% Stella Chemifa Corp. 36.3%

Stella Chemifa Corp. 19.9% Stella Chemifa Corp. 19.0% Stella Chemifa Corp. 9.7% Stella Chemifa Corp. 21.0% Royal DSM N.V. 33.9%

Cambrex Corporation. 19.4% ATMI Inc. 17.0% Royal DSM N.V. 9.1% ATMI Inc. 19.1% Ferro Corp. 31.8%

Fujimi Inc. 17.3% Fujimi Inc. 15.9% ATMI Inc. 7.6% Fujimi Inc. 17.3% Zhejiang Yongtai Technology Co., Ltd 29.3%

Royal DSM N.V. 13.8% Royal DSM N.V. 15.1% Fujimi Inc. 6.6% Royal DSM N.V. 14.9% Cabot Microelectronics Corp. 24.7%

Ferro Corp. 11.5% American Pacific Corp. 13.8% American Pacific Corp. 6.0% Ferro Corp. 13.0% Chemspec International Limited 21.8%

PCAS SA 9.6% PCAS SA 9.3% Ferro Corp. 5.0% Cambrex Corporation. N A EcoGreen Fine Chemicals Group Ltd. 20.8%

American Pacific Corp. 8.0% Ferro Corp. 9.1% PCAS SA 1.7% PCAS SA N A Sigma-Aldrich Corporation 13.8%

American Pacific Corp. N A

1. No company used for comparative purposes is identical to Chemspec.

2. Based on public trading prices of common stock as of March 17, 2011.

3. Projected 2011 financial metrics for the comparable companies are based on select Wall Street equity research reports. Projected 2011 financial metrics for the subject company are calculated based on figures provided by the Company management.

4. Certain companies have not released their 2010 earnings as of the Valuation Date. According, the financial metrics presented herein are based on consensus 2010 estimates as provided by Wall Street analysts or as compiled by Capital IQ. Such companies are: EcoGreen Fine Chemicals Group Ltd., Stella Chemifa Corp. and Zhejiang Yongtai Technology Co., Ltd.

NA refers to not available.

Source: Capital IQ

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Additional Financial Analyses

Weighted Average Cost of Capital Calculation (dollars in millions) Debt to Debt Preferred Equity Market

Preferred Equity Market Total Equity Market to Total Stock to Total Value to Total

Debt1 Stock2 Value3 Capitalization4 Value Capitalization Capitalization Capitalization

ATMI Inc. $0.0 $0.0 $534.5 $534.5 0.0% 0.0% 0.0% 100.0% Cabot Microelectronics Corp. 0.0 0.0 1,061.6 1,061.6 0.0% 0.0% 0.0% 100.0% Cambrex Corporation. 115.9 0.0 131.1 247.0 88.4% 46.9% 0.0% 53.1% Ferro Corp. 294.6 9.4 1,286.0 1,590.0 22.9% 18.5% 0.6% 80.9%

Fujimi Inc. 2.1 0.0 357.5 359.6 0.6% 0.6% 0.0% 99.4% Lonza Group AG 1,555.6 0.0 4,260.1 5,815.6 36.5% 26.7% 0.0% 73.3%

Royal DSM N.V. 2,953.5 0.0 9,584.8 12,538.3 30.8% 23.6% 0.0% 76.4%

Sigma-Aldrich Corporation 539.0 0.0 7,597.3 8,136.3 7.1% 6.6% 0.0% 93.4%

PCAS SA 71.9 0.0 49.2 121.1 146.0%* 59.4%* 0.0% 40.6%

American Pacific Corp. 105.2 0.0 45.0 150.2 233.6%* 70.0%* 0.0% 30.0%

EcoGreen Fine Chemicals Group Ltd. 41.7 0.0 143.5 185.2 29.1% 22.5% 0.0% 77.5%

Stella Chemifa Corp. 182.0 0.0 471.8 653.8 38.6% 27.8% 0.0% 72.2%

Zhejiang Yongtai Technology Co., Ltd 33.0 0.0 887.0 919.9 3.7% 3.6% 0.0% 96.4%

Median $105.2 $9.4 $534.5 $653.8 22.9% 18.5% 0.6% 80.9%

Mean $453.4 $9.4 $2,031.5 $2,485.6 23.4% 16.1% 0.6% 83.9%

Chemspec International Limited 3.8 0.0 257.4 261.2 1.5% 1.5% 0.0% 98.5%

Levered Unlevered Equity Risk Size Cost of Cost of Cost of

Beta5 Beta6 Premium7 Premium8 Equity9 Debt10 Preferred Stock11 WACC12

ATMI Inc. 1.35 1.35 5.25% 2.49% 13.7% 0.0%* 0.0% 13.7%

Cabot Microelectronics Corp. 1.08 1.08 5.25% 1.73% 11.5% 0.0%* 0.0% 11.5%

Cambrex Corporation. 1.46 0.83 5.25% 6.28% 18.1% 3.3% 0.0% 10.9%

Ferro Corp. 2.12 1.77 5.25% 1.73% 17.0% 7.7% 7.0% 15.0%

Fujimi Inc. 0.71 0.70 5.25% 2.85% 10.7% 3.3% 0.0% 10.6%

Lonza Group AG 0.62 0.47 5.25% 0.85% 8.2% 3.0% 0.0% 6.7%

Royal DSM N.V. 0.88 0.70 5.25% 0.74% 9.5% 4.0% 0.0% 8.0%

Sigma-Aldrich Corporation 0.87 0.82 5.25% 0.74% 9.4% 2.9% 0.0% 8.9%

PCAS SA 0.89 0.40 5.25% 6.28% 15.0% 5.5% 0.0% 8.9%

American Pacific Corp. 0.47 0.16 5.25% 6.28% 12.8% 9.0% 0.0% 9.2%

EcoGreen Fine Chemicals Group Ltd. 0.82 0.66 5.25% 6.28% 14.7% 3.8% 0.0% 12.1%

Stella Chemifa Corp. 0.76 0.57 5.25% 1.73% 9.8% NA * 0.0% 9.8%

Zhejiang Yongtai Technology Co., Ltd(0.30) *(0.29) * 5.25% 1.73% 4.3%* 6.3% 0.0% 4.3%

Median 0.87 0.70 5.25% 1.73% 12.2% 3.9% 0.0% 10.2%

Mean 1.00 0.79 5.25% 3.05% 12.5% 4.9% 0.5% 10.4%

Chemspec International Limited 0.63 0.62 5.25% 2.85% 10.3% 5.8% 0.0% 10.2%

Numbers in grey boxes are excluded from range

1. Debt amount based on most recent public filing as of March 17, 2010.

2. Preferred stock amount as stated in most recent public filing as of March 17, 2010.

3. Equity market value based on closing price (converted to USD) on March 17, 2010 and on reported fully-diluted common shares and common share equivalents (excludes options) as of the latest publicly available data.

4. Total capitalization equal to equity market value + debt outstanding + preferred stock.

5. 5-year weekly Betas regressed against the MSCI world index.

6. Unlevered Beta = Levered Beta/(1 + ((1 – Tax Rate) * (Debt/Equity Market Value)) + (Preferred Stock/Equity Market Value)).

7. Based on review of studies measuring the historical returns between stocks and bonds, theoretical models such as supply side and demand side models and other materials.

8. Morningstar, 2010 Ibbotson Stocks, Bonds, Bills, and Inflation Valuation Yearbook, pages 90-96.

9. Cost of Equity = Risk Free Rate of Return + (Levered Beta * Equity Risk Premium) + Size Premium. Risk Free Rate of Return as of March 17, 2010, based on 20-year U.S. Treasury bond yield.

10. Based on selected company weighted average interest rate per most recent public filings. 11. Based on selected company weighted average preferred dividend per most recent public filings.

12. Weighted Average Cost of Capital (WACC) = (Cost of Debt * (1 – Tax Rate) * Debt to Total Capitalization) + (Cost of Equity * Equity Market Value to Total Capitalization) + (Cost of Preferred * Preferred Stock to Total Capitalization). See next page for tax rate assumption. NA refers to not available.

Sources: Capital IQ, Bloomberg, and public filings.

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Additional Financial Analyses

Weighted Average Cost of Capital Calculation (cont.)

Market Assumptions Capital Structure Assumptions Cost of Equity for Computed WACC Cost of Equity based on Subject Company Observed Beta Risk Free Rate of Return1 4.11% Debt to Equity Market Value5 19.2% Selected Unlevered Beta 6 0.79 Observed Levered Beta 9 0.63 Equity Risk Premium2 5.25% Debt to Total Capitalization5 16.1% Computed Levered Beta 7 0.92 Unlevered Beta 10 0.62 Size Premium3 3.65% Preferred Stock to Total Capitalization5 0.0% Cost of Equity8 12.6% Levered Beta 11 0.72

Tax Rate4 15.00% Equity Market Value to Total Capitalization5 83.9% Cost of Equity12 11.5% Cost of Debt5 5.8% Cost of Preferred Stock5 0.0% Computed Weighted Average Cost of Capital based on Average Comparable Companies Beta13 11.4%

Weighted Average Cost of Capital based on Subject Company Observed Beta14 10.5%

Check Selected Company Decile with MM and Trans Approaches Selected Weighted Average Cost of Capital Range 10.5%—- 11.5%

1. Risk Free Rate of Return as of March 17, 2011 based on 20 year U.S. Treasury bond yield.

2. Based on a review of studies measuring the historical returns between stocks and bonds, theoretical models such as supply side anddemand side models and other materials.

3. Morningstar, 2010 Ibbotson Stocks, Bonds, Bills, and Inflation Valuation Yearbook, pages 90-96.

4. Per Company management.

5. Capital structure assumptions are based on review of corresponding metrics of selected companies. The debt to equity market value ratio is calculated based on the selected debt to total capitalization ratio, which is the mean of observed debt to total capitalization ratio of the selected companies. Cost of debt based on the Company’s actual cost of debt per Company management. The Company does not have any preferred stock issued and outstanding as of March 17, 2011.

6. Based on review of selected companies’ unlevered betas.

7. Computed Levered Beta = Selected Unlevered Beta * (1 + ((Debt/Equity Market Value) * (1 – Tax Rate)) + (Preferred Stock/Equity Market Value)). Based on Market and Capital Structure Assumptions.

8. Cost of Equity = Risk Free Rate of Return + (Computed Levered Beta * Equity Risk Premium) + Size Premium. Based on Market Assumptions.

9. Observed Levered beta based on Subject Company’s actual levered beta, per Bloomberg as of March 17, 2011.

10. Unlevered Beta = Observed Levered Beta / (1 + ((Debt / Equity Market Value) * (1 – Tax Rate)) + (Preferred Stock / Equity Market Value)). Unlevered beta based on Subject Company’s Debt outstanding as of December 31, 2010; Preferred Stock outstanding as of December 31, 2011; and Equity Market Value as of March 17, 2011, based on reported fully-diluted shares as of December 31, 2010.

11. Levered Beta = Unlevered Beta * (1 + ((Debt / Equity Market Value) * (1—Tax Rate)) + (Preferred Stock / Equity Market Value)). Based on Market and Capital Structure Assumptions. 12. Cost of Equity = Risk Free Rate of Return + (Levered Beta * Equity Risk Premium) + Size Premium. Based on Market Assumptions.

13. Weighted Average Cost of Capital (WACC) = (Cost of Debt * (1 – Tax Rate) * Debt to Total Capitalization) + (Cost of Equity * Equity Market Value to Total Capitalization) + (Cost of Preferred Stock * Preferred Stock to Total Capitalization). Based on “Cost of Equity for Computed WACC” and Market and Capital Structure Assumptions.

14. Based on “Cost of Equity based on Subject Company Observed Beta” and Market and Capital Structure Assumptions.

Sources: Capital IQ, Bloomberg, and public filings.

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Additional Financial Analyses

Premiums Paid Analysis

Global Specialty Chemicals Change-of-Control M&A Transactions

Median Implied Premiums Paid by Year Median One-Month Implied Premiums Paid by Number of Transactions

(One Month Before Announcement in %) (From 2007 to YTD March 2011)

Only transactions with available premium data are considered.

The analysis includes transactions with negative transaction premiums

Includes transactions involving targets with more than $10 million implied enterprise value

Data provided by Capital IQ

80.0%

70.0% 67.6%

60.0%

50.0% 45.6%

40.0%

30.0% 24.7% 25.5% Historical Median:

28.6%

20.0% Chemspec: 24.6%

10.0%

0.0%

2007 2008 2009 2010-YTD 2011

Number of

Transactions: 6 7 8 4

10 Chemspec: 24.6%

4 3

3 3

< 0% 0-10% 10-20% 20-30% 30-40% 40-50% > 50%

Total transactions: 25

Global Majority Shareholder Purchasing Remaining Shares

Median Implied Premiums Paid by Year

(One Month Before Announcement in %)

30.0%

22.7% Chemspec: 24.

20.0% 17.6%

15.8%

Historical

13.2% 16.7%

10.0%

0.0%

2007 2008 2009 2010-YTD 2011

Number of

Transactions: 70 116 100 101

Median One-Month Implied Premiums Paid by Number of Transactions

(From 2007 to YTD March 2011)

90 Chemspec: 24.6%

80 74

60 55

50 48

40 33

30 28

< 0% 0-10% 10-20% 20-30% 30-40% 40-50% > 50%

Total transactions: 387

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Additional Financial Analyses

Premiums Paid Analysis (cont.)

Global Take-Private Transactions

Median Implied Premiums Paid by Year

(One Month Before Announcement in %)

40.0% 36.7%

29.7% 28.8%

30.0%

Historical Median:

26.4%

20.0% Chemspec: 24.6%

20.0%

10.0%

0.0%

2007 2008 2009 2010-YTD 2011

Median One-Month Implied Premiums Paid by Number of Transactions

(From 2007 to YTD March 2011)

120 Chemspec: 24.6%

102

100

81 79

80 68

40 33

< 0% 0-10% 10-20% 20-30% 30-40% 40-50% > 50%

Total transactions: 489

Only transactions with available premium data are considered.

The analysis includes transactions with negative transaction premiums

Includes transactions involving targets with more than $10 million implied enterprise value

Data provided by Capital IQ

Global Management Buy-Out Transactions

Median Implied Premiums Paid by Year

(One Month Before Announcement in %)

60.0%

50.0% 45.8% 48.0%

44.1%

40.0%

Historical Median:

30.0% 32.7%

Chemspec: 24.6%

20.9%

20.0%

10.0%

0.0%

2007 2008 2009 2010-YTD 2011

Number of

Transactions: 39 25 17 20

Median One-Month Implied Premiums Paid by Number of Transactions

(From 2007 to YTD March 2011)

40 Chemspec: 24.6%

16 16

15 13 14

< 0% 0-10% 10-20% 20-30% 30-40% 40-50% > 50%

Total transactions: 101

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Additional Financial Analyses

Premiums Paid Analysis (cont.)

China & Hong Kong Change-of-Control M&A Transactions

Median Implied Premiums Paid by Year

(One Month Before Announcement in %)

26.0%

Chemspec: 24.6%

21.0%

16.0%

11.0% 9.9% Historical Median:

6.4% 10.8%

6.0% 3.5%

1.0%

2007 2008 2009 2010-YTD 2011

-4.0%

Number of

Transactions: 31 28 27 36

Median One-Month Implied Premiums Paid by Number of Transactions

(From 2007 to YTD March 2011)

Chemspec: 24.6%

20 18

10 10

10 8

< 0% 0-10% 10-20% 20-30% 30-40% 40-50% > 50%

Total transactions: 122

Only transactions with available premium data are considered.

The analysis includes transactions with negative transaction premiums

Includes transactions involving targets with more than $10 million implied enterprise value

Data provided by Capital IQ

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Disclaimer

This presentation, and any supplemental information (written or oral) or other documents provided in connection therewith (collectively, the “materials”), are provided solely for the information of the Special Committee of the Board of Directors (the “Committee”) of Chemspec International Limited (“Chemspec”, or the “Company”) by Houlihan Lokey in connection with the Committee’s consideration of a potential transaction (the “Transaction”) involving the Company. This presentation is incomplete without reference to, and should be considered in conjunction with, any supplemental information provided by and discussions with Houlihan Lokey in connection therewith. Any defined terms used herein shall have the meanings set forth herein, even if such defined terms have been given different meanings elsewhere in the materials.

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Disclaimer (cont.)

All budgets, projections, estimates, financial analyses, reports and other information with respect to operations (including estimates of potential cost savings and expenses) reflected in the materials have been prepared by management of the relevant party or are derived from such budgets, projections, estimates, financial analyses, reports and other information or from other sources, which involve numerous and significant subjective determinations made by management of the relevant party and/or which such management has reviewed and found reasonable. The budgets, projections and estimates contained in the materials may or may not be achieved and differences between projected results and those actually achieved may be material. Houlihan Lokey has relied upon representations made by management of the Company that such budgets, projections and estimates have been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of such management (or, with respect to information obtained from public sources, represent reasonable estimates), and Houlihan Lokey expresses no opinion with respect to such budgets, projections or estimates or the assumptions on which they are based. The scope of the financial analysis contained herein is based on discussions with the Company (including, without limitation, regarding the methodologies to be utilized), and Houlihan Lokey does not make any representation, express or implied, as to the sufficiency or adequacy of such financial analysis or the scope thereof for any particular purpose.

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