Core Viewpoint - The demand for waste paper pulp is surging due to the rapid growth of e-commerce and logistics in China, driven by a stable domestic economy and supportive government policies promoting recycling and circular economy initiatives [1][12][21]. Industry Overview - Waste paper pulp, also known as recycled pulp, is produced from waste paper and cardboard through various processing techniques. The production methods include dry and wet processes, with dry methods being more cost-effective [3][7]. - The production of waste paper pulp in China is projected to increase from 54.44 million tons in 2018 to 63.18 million tons by 2024, reflecting a compound annual growth rate (CAGR) of 2.5% [1][12]. Market Dynamics - The "ban on waste" policy has led to a complete halt in imported waste paper, exacerbating the shortage of virgin pulp and prompting companies to ramp up waste paper pulp production to meet market demands [1][12]. - The waste paper recovery volume in China is expected to reach 69.71 million tons by 2024, with a recovery rate of 51.1% and a utilization rate of 51.6% [10]. Government Policies - The Chinese government has implemented various policies to support the recycling industry, including the "14th Five-Year Plan" which emphasizes the establishment of a comprehensive recycling system for waste materials [5][6]. - Recent policies encourage the deep processing of recycled resources, including waste paper, to enhance the recycling industry's efficiency and output [5][6]. Competitive Landscape - The waste paper pulp industry features a diverse competitive landscape, with both large enterprises and small to medium-sized companies. Major players include Shanying International, Sun Paper, and Chenming Paper [16][17]. - The industry is expected to undergo consolidation, driven by policy and capital influences, leading to increased market concentration [16]. Future Trends - The waste paper pulp industry is anticipated to maintain steady growth, supported by increasing consumer demand for eco-friendly products and ongoing government initiatives [21]. - Future production will focus on green and intelligent manufacturing, with investments in environmental technologies and automation to enhance efficiency and reduce emissions [22][23]. - The collaboration across the waste paper recycling supply chain is expected to strengthen, improving the overall recovery and utilization rates of waste paper [24].

Market Overview - US stock indices rebounded, influenced positively by Trump's market support, leading to a 0.68% rise in Hong Kong stocks [1] - San Francisco Fed President Daly indicated that the timing for interest rate cuts is approaching, with expectations for two 25 basis point cuts this year [1] - Goldman Sachs predicts three consecutive 25 basis point cuts starting in September, with a potential 50 basis point cut if unemployment rises further [1] Domestic Market Sentiment - A-share new account openings in July reached 1.96 million, a 71% year-on-year increase, indicating rising domestic confidence [2] - The stock of Upwind New Materials surged 20% after resuming trading, reigniting market enthusiasm [2] - The steel sector saw a significant rise, with Maanshan Iron & Steel's stock increasing over 15% due to improved loss forecasts and supportive policies [2] Industry Trends - The paper industry is experiencing a price increase, with major companies like Nine Dragons Paper and Lee & Man Paper announcing price hikes [2] - The eleventh batch of centralized drug procurement in China saw a record 45 companies applying for the same drug, intensifying competition in the generic drug market [3] - Investment is shifting towards innovative drugs, with companies like Junshi Biosciences seeing stock increases of nearly 34% due to promising clinical trials [3] Financial Support for Key Industries - A joint guideline from the central bank and seven departments aims to support financing for key manufacturing sectors, including integrated circuits and medical equipment [4] - AI-related companies like Longi Green Energy and Lenovo's server business are seeing stock increases due to new orders and market interest [4] Gaming Industry Performance - The domestic gaming market is projected to reach RMB 168 billion in sales by the first half of 2025, a 14.08% year-on-year increase [4] - Heartbeat Games anticipates a revenue increase of approximately 37% for the first half of 2025, driven by strong performance from self-developed games [4] Individual Company Highlights - Tencent's mobile game "Valorant: Source Action" is set to launch on August 19, with projected annual revenue exceeding RMB 6 billion [5] - Oriental Selection's stock surged nearly 17% ahead of its upcoming financial report, reflecting strong market performance [6] - The Macau gaming sector is experiencing a positive trend, with Morgan Stanley raising its revenue growth forecast for the year from 5% to 10% [6] Technological Advancements - Apple's breakthrough in brain-computer interface (BCI) technology allows users to control devices through thought, indicating a significant market opportunity [7] - The Chinese BCI market is expected to exceed RMB 3.8 billion by 2025, with a CAGR of approximately 20% [7] Investment Opportunities - Kelun-Bio has become a top holding in a major fund, indicating strong market confidence in its innovative drug pipeline [8] - The company has established multiple technology platforms and is expected to accelerate commercialization in 2025 [8]

Group 1 - The Hong Kong paper industry sector has seen a rise, with notable increases in stock prices for several companies [1] - Morning Paper Holdings (晨鸣纸业) experienced a stock price increase of over 8% [1] - Lee & Man Paper Manufacturing (理文造纸) saw its stock rise by more than 7% [1] - Nine Dragons Paper (玖龙纸业) reported a stock price increase of over 5% [1]

Core Viewpoint - The company confirmed that the production base in Shandong Shouguang is set to resume operations following the approval of a syndicated loan specifically for the purpose of restarting production [1] Group 1 - The company has completed the approval process for the syndicated loan aimed at facilitating the resumption of operations [1] - The company is currently working on fulfilling the conditions for loan disbursement and signing the loan agreement [1] - Once the loan funds are secured, the company will be able to push forward with the resumption of operations at the Shouguang base [1]

Core Viewpoint - The paper industry is experiencing a significant shift with the introduction of the first "anti-involution" initiative, aimed at promoting high-quality development and addressing structural overcapacity issues in the sector [1][6]. Group 1: Anti-Involution Initiative - The Guangdong Paper Industry Association has issued the first "anti-involution" initiative in the domestic paper industry, emphasizing the need to resist low-price competition and maintain market order [1][6]. - The initiative encourages companies to set prices based on actual costs, reasonable profits, and market demand, aiming to protect the overall value of the industry [1][6]. Group 2: Market Conditions - Despite steady growth in consumption for certain paper types like corrugated paper and household paper, overall capacity expansion has outpaced demand growth, leading to low utilization rates, with some types below 55% [4]. - The industry is facing a prolonged supply-demand imbalance, characterized by declining operating rates and slow inventory reduction, indicating a typical cyclical bottom phase [6][9]. Group 3: Price Adjustments - Several paper companies, including Nine Dragons Paper and Jiangxi Lee & Man Paper, have announced price increases due to rising costs, marking the fourth round of price hikes in July alone [7]. - The overall paper industry has been under significant pricing pressure, with major paper types experiencing price declines since 2021, reflecting weak market demand and overcapacity [7][9]. Group 4: Institutional Focus - Institutions are focusing on companies like Sun Paper, which has integrated pulp and paper production, and others in the sector that are expected to benefit from the "anti-involution" initiative and potential market restructuring [10][13]. - Analysts suggest monitoring companies that are diversifying product lines and those with integrated operations, as the industry may see improvements in profitability due to reduced competition and optimized capacity [10][13].

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年7月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 山東晨鳴紙業集團股份有限公司 呈交日期: 2025年7月31日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | A | | 於香港聯交所上市 (註1) | | 否 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 000488 | 說明 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | 法定/註冊股本 | | | 上月底結存 | | | 1,706,765,684 | RMB | | 1 RMB | | 1,706,765,684 | | 增加 / 減少 (-) | | | | | | RMB | | | | 本月底結存 | | | 1,706,765,684 | RMB | | 1 RMB | | 1,706,765,684 | | 2. 股份分類 | 普通股 | 股份類別 | ...

Core Viewpoint - Chenming Paper Industry is facing a severe financial crisis, with a projected net loss of 3.5 to 4 billion yuan in the first half of 2025, marking a more than 120-fold decline in profit year-on-year, setting a record for single-period losses in China's paper industry [1] Group 1: Financial Performance - The company's main production bases are under maintenance, leading to a significant drop in production and sales, which has severely impacted revenue and profit [1] - The company has faced 364 lawsuits since January 23, 2025, due to overdue debts and contract disputes, with a total amount involved of approximately 458.27 million yuan, accounting for 40.11% of the latest audited net assets [1] - As of the end of Q1 2025, the total liabilities reached 47.74 billion yuan, with current liabilities making up 85.59% (40.86 billion yuan), and short-term loans amounting to 23.64 billion yuan, while cash reserves are only 2.28 billion yuan, most of which are restricted [1] Group 2: Strategic Missteps - The company aggressively expanded production capacity by 7 million tons from 2019 to 2022, with 75% concentrated in oversupplied areas, leading to a gross margin drop to -12.91% for its white card paper business when industry operating rates fell below 70% in 2024 [2] - The financing leasing business has accumulated 8.899 billion yuan in receivables with a bad debt rate of 51.7%, resulting in a loss of 1.468 billion yuan [2] - The company's asset-liability ratio has consistently exceeded 70%, reaching 79.79% in 2024, significantly higher than the industry average, with family management reducing risk awareness [2] Group 3: Rescue Efforts - The company is struggling to restart production, with only 23% overall operating rate, while shifting focus to high-margin specialty paper production and aiming to reduce energy consumption by 15% [3] - A provincial debt committee has been established to coordinate debt restructuring, with 42 billion yuan in loans extended, but new loans of 2.31 billion yuan are stalled due to bank approval issues [3] - The company is dissolving its financial company and exiting the financing leasing business, focusing on core operations of pulp and paper integration as a survival strategy [3] Group 4: Future Paths - There is a potential for industry recovery, with a 5% increase in cultural paper prices driven by the back-to-school season, but the oversupply issue remains unresolved [4] - The company faces a countdown to delisting, as negative audit opinions on internal controls could trigger delisting procedures if not rectified in the 2025 financial report [4] - Strategic restructuring options include introducing state-owned enterprise investors, local government assistance, and debt-to-equity swaps, with the possibility of bankruptcy reorganization if necessary [4] Group 5: Industry Insights - The collapse of Chenming Paper highlights the challenges of traditional industrial transformation, where misinterpreting industry concentration as a signal for scale competition led to "scale diseconomies" [5] - The failure of the "financial support manufacturing" model is evident, as the financing leasing business resulted in significant impairments during economic downturns [6] - In cyclical industries, cash reserves are more valuable than profit scale, and neglecting cash flow during prosperous times can lead to liquidity crises in downturns [6]

Core Viewpoint - The recent surge in Hong Kong paper stocks is driven by a combination of falling raw material prices, improved demand, and low valuation levels, indicating a potential recovery in the paper industry [3][11]. Group 1: Market Performance - From June 20 to July 14, paper stocks in Hong Kong experienced a significant increase, with an average rise of approximately 15%, outperforming the Hang Seng Index [1][4]. - Notable companies such as Sunshine Paper and Nine Dragons Paper saw monthly gains of 19% and nearly 12%, respectively [1][3]. - The paper sector recorded a cumulative increase of 13.73% during this period, with a trading volume of 2.520 billion shares and a total transaction value exceeding 5.6 billion HKD [4][5]. Group 2: Cost and Pricing Dynamics - The decline in international wood pulp prices, with European softwood pulp prices dropping about 15% since the beginning of the year, has positively impacted paper companies' profit margins [3][10]. - Major companies have raised their factory prices for cultural paper by 300-500 HKD per ton since June, reflecting a strong demand recovery and low inventory levels in downstream sectors [3][10]. - The combination of lower costs and successful price increases is expected to enhance profit expectations for paper companies in the upcoming quarters [10][11]. Group 3: Demand Signals - Seasonal demand for educational materials during the summer is expected to boost printing needs, while packaging paper benefits from recovering orders in consumer electronics and home appliances [11]. - Export performance has been strong, with a 34% year-on-year increase in corrugated paper exports from January to May, particularly to emerging markets in Southeast Asia and the Middle East [11]. Group 4: Valuation and Market Sentiment - The paper sector in Hong Kong is currently undervalued, with dynamic P/E ratios for companies like Nine Dragons Paper and Lee & Man Paper below their five-year averages [11]. - Recent inflows from southbound funds into leading paper companies indicate a shift in market sentiment towards optimism regarding the sector's recovery [11].

[I. Estimated Performance for the Current Period](index=1&type=section&id=%E4%B8%80%E3%80%81%E6%9C%AC%E6%9C%9F%E4%B8%9A%E7%BB%A9%E9%A2%84%E8%AE%A1%E6%83%85%E5%86%B5) The company anticipates a significant loss for the first half of 2025, with net profit attributable to shareholders expected to be a loss of 3.5 billion to 4 billion yuan, a substantial turnaround from profit in the prior year, and non-recurring adjusted net loss also significantly widens [(I) Period Covered by Performance Forecast](index=1&type=section&id=(%E4%B8%80)%20%E4%B8%9A%E7%BB%A9%E9%A2%84%E5%91%8A%E6%9C%9F%E9%97%B4) - The performance forecast covers the period from January 1, 2025, to June 30, 2025[3](index=3&type=chunk) [(II) Performance Forecast Details](index=1&type=section&id=(%E4%BA%8C)%20%E4%B8%9A%E7%BB%A9%E9%A2%84%E5%91%8A%E6%83%85%E5%86%B5) Key Financial Indicators | Item | Current Period (Jan-Jun 2025) (million yuan) | Prior Period (Jan-Jun 2024) (million yuan) | | :--- | :--- | :--- | | Net Profit Attributable to Shareholders | Loss: 3,500 – 4,000 | Profit: 28.65 | | Net Profit After Non-Recurring Items | Loss: 3,270 – 3,770 | Loss: 270.87 | | Basic Earnings Per Share (yuan/share) | Loss: 1.19 – 1.36 | Profit: 0.01 | - The company expects a negative net profit for the first half of 2025, with net profit attributable to parent company shareholders projected to be a loss of **3.5 billion to 4 billion yuan**, a significant turnaround from a **profit of 28.65 million yuan** in the prior year, marking a substantial year-over-year shift from profit to a massive loss[3](index=3&type=chunk) - Net profit after non-recurring items is expected to be a loss of **3.27 billion to 3.77 billion yuan**, significantly wider than the **loss of 270.87 million yuan** in the prior year[3](index=3&type=chunk) [II. Communication with Accounting Firm](index=1&type=section&id=%E4%BA%8C%E3%80%81%E4%B8%8E%E4%BC%9A%E8%AE%A1%E5%B8%88%E4%BA%8B%E5%8A%A1%E6%89%80%E6%B2%9F%E9%80%9A%E6%83%85%E5%86%B5) The company has held preliminary discussions with its annual audit accounting firm regarding this performance forecast, with no disagreements on the data, though it is emphasized that the figures are preliminary and unaudited - The performance forecast data represents preliminary estimates by the company's finance department and has not been audited by an accounting firm[4](index=4&type=chunk) - The company has conducted preliminary communication with its annual audit accounting firm, and there are no disagreements regarding the performance forecast[4](index=4&type=chunk) [III. Explanation of Performance Changes](index=1&type=section&id=%E4%B8%89%E3%80%81%E4%B8%9A%E7%BB%A9%E5%8F%98%E5%8A%A8%E5%8E%9F%E5%9B%A0%E8%AF%B4%E6%98%8E) The significant loss is primarily due to a substantial decline in production and sales volumes caused by maintenance shutdowns at major production bases during the reporting period, impacting revenue and profit, alongside provisions for asset impairment and bad debts; the company is actively implementing measures to improve operations, including equipment upgrades, cost control, cash flow management, and negotiating loan extensions and interest reductions with financial institutions, with plans to gradually resume production with government and financial support - Major production bases underwent shutdown for maintenance, leading to a significant year-over-year decline in production and sales volumes, severely impacting revenue and profit[5](index=5&type=chunk) - Due to the shutdowns, the company made provisions for impairment on certain assets and bad debts on accounts receivable[5](index=5&type=chunk) - During the shutdown period, the company utilized the time for equipment inspection, overhaul, and upgrade to enhance equipment integrity and operational efficiency[5](index=5&type=chunk) - For production lines that have resumed operations, the company implemented full-process control, including raw material procurement, cost reduction, quality improvement, and strengthened cash flow and expense management to restore profitability[5](index=5&type=chunk) - The company actively communicated with financial institutions to implement loan extensions and interest rate reductions to alleviate operational burdens[5](index=5&type=chunk) - With the support of government and financial institutions, the company will raise working capital through multiple channels and gradually advance the resumption of production at various bases based on funding and market conditions to achieve continuous and stable operations[5](index=5&type=chunk) [IV. Other Relevant Information](index=1&type=section&id=%E5%9B%9B%E3%80%81%E5%85%B6%E4%BB%96%E7%9B%B8%E5%85%B3%E8%AF%B4%E6%98%8E) The financial data in this performance forecast are predictive in nature, with final specific figures to be based on the 2025 semi-annual report, and the company advises investors to be aware of investment risks - The financial data disclosed herein are all forecast figures, with the final specific data to be detailed in the 2025 semi-annual report[6](index=6&type=chunk) - The company reminds investors to be aware of investment risks[6](index=6&type=chunk)

Core Viewpoint - The Hong Kong paper industry stocks experienced a volatile increase, with notable gains in several companies [1] Group 1: Company Performance - Chenming Paper (01812.HK) rose over 4% [1] - Sun Paper (02002.HK) increased by more than 3% [1] - Nine Dragons Paper (02689.HK) and Lee & Man Paper (02314.HK) both saw gains exceeding 2.5% [1]