晨鸣纸业(01812) - 2025 - 中期财报

Section I Important Notes, Table of Contents and Definitions Important Notes The Board of Directors, Supervisory Committee, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report, which includes a plan not to distribute dividends or bonus shares - The company's Board of Directors, Supervisory Committee, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report content[4] - Company head Hu Changqing, chief accountant Dong Lianming, and head of accounting department Zhang Bo declare that the financial report is true, accurate, and complete[4] - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital[6] Table of Contents The report's table of contents clearly outlines eight main chapters, providing comprehensive information from important notes to financial statements - The report contains eight main chapters, covering company overview, financials, management analysis, governance, significant matters, shareholder information, and bond information[7] List of Reference Documents The list of reference documents includes five categories, such as signed financial statements and regulatory filings, ensuring comprehensive and traceable information disclosure - Reference documents include signed and sealed financial statements, the semi-annual report text signed by the legal representative, original drafts of documents disclosed on the CSRC-designated website, the semi-annual report text disclosed on HKEX, and other relevant materials[8] Definitions This section defines key terms like "Company" and "Chenming Group," along with the reporting period, to facilitate accurate understanding of the report - "Company," "the Company," and "Chenming Group" all refer to Shandong Chenming Paper Holdings Limited and its subsidiaries[9] - The reporting period is from January 1, 2025, to June 30, 2025[9] Section II Company Profile and Key Financial Indicators I. Company Profile The company's shares are listed on the Shenzhen Stock Exchange (A and B shares) and HKEX (H shares), with Shandong Chenming Paper Holdings Limited as its full name Company Stock Information | Stock Abbreviation | Stock Code | Listing Exchange | | :--- | :--- | :--- | | ST Chenming | 000488 | Shenzhen Stock Exchange | | ST Chenming B | 200488 | Shenzhen Stock Exchange | | Chenming Paper | 01812 | The Stock Exchange of Hong Kong Limited | - The company's Chinese name is Shandong Chenming Paper Holdings Limited, and its legal representative is Hu Changqing[10] II. Contact Persons and Information This section provides detailed contact information for the Board Secretary, Securities Affairs Representatives, and Hong Kong Company Secretary for stakeholder communication - Contact information for Board Secretary Yuan Xikun, Securities Affairs Representatives Zhang Chuanyong and Chen Lin, and Hong Kong Company Secretary Zhu Hanliang is provided[11] III. Other Information The company's contact information, disclosure, and document storage locations remained unchanged during the reporting period, as detailed in the 2024 annual report - The company's registered address, office address, website, and email address remained unchanged during the reporting period[12] - Information disclosure and document storage locations remained unchanged during the reporting period[13] IV. Key Accounting Data and Financial Indicators The company's H1 2025 key financial indicators show a significant decline in operating revenue to RMB 2.107 billion and a net loss attributable to shareholders of RMB 3.858 billion, with reduced EPS and net assets Key Accounting Data and Financial Indicators for H1 2025 | Indicator | Current Reporting Period (RMB) | Prior Year Period (RMB) | Change from Prior Year Period | | :--- | :--- | :--- | :--- | | Operating Revenue | 2,106,630,952.30 | 13,884,731,519.04 | -84.83% | | Net Profit Attributable to Shareholders of Listed Company | -3,857,953,190.56 | 28,646,205.42 | -13,567.59% | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Gains and Losses) | -3,645,363,615.81 | -270,865,043.51 | -1,245.82% | | Net Cash Flow from Operating Activities | 785,303,274.19 | 1,992,499,393.07 | -60.59% | | Basic Earnings Per Share (RMB/share) | -1.31 | 0.01 | -13,200.00% | | Diluted Earnings Per Share (RMB/share) | -1.31 | 0.01 | -13,200.00% | | Weighted Average Return on Net Assets | -53.39% | 0.17% | Decreased by 53.56 percentage points | | Indicator | End of Current Reporting Period (RMB) | End of Prior Year (RMB) | Change from End of Prior Year | | :--- | :--- | :--- | :--- | | Total Assets | 54,698,875,991.74 | 63,509,295,142.08 | -13.87% | | Net Assets Attributable to Shareholders of Listed Company | 5,318,763,216.33 | 9,156,104,358.91 | -41.91% | V. Differences in Accounting Data under Domestic and Overseas Accounting Standards The company reported no differences in net profit or net assets between international/overseas accounting standards and Chinese accounting standards during the period - The company's financial reports disclosed under International Accounting Standards and Chinese Accounting Standards show no differences in net profit and net assets during the reporting period[16] - The company's financial reports disclosed under overseas accounting standards and Chinese Accounting Standards show no differences in net profit and net assets during the reporting period[17] VI. Non-Recurring Gains and Losses and Amounts Total non-recurring losses amounted to RMB -212.59 million, primarily from asset disposals, fair value changes, and debt restructuring, with some recurring government subsidies Non-Recurring Gains and Losses and Amounts | Item | Amount (RMB) | | :--- | :--- | | Gains or losses from disposal of non-current assets | -97,049,878.76 | | Government grants recognized in current profit or loss | 25,503,367.73 | | Gains or losses from changes in fair value of financial assets and liabilities and disposal of financial assets | 8,439,571.88 | | Reversal of impairment provisions for accounts receivable subject to separate impairment testing | 13,201,496.76 | | Gains or losses from debt restructuring | -37,171,293.24 | | Gains or losses from changes in fair value of consumable biological assets | -129,059,190.34 | | Other non-operating income and expenses | -18,188,031.78 | | Less: Income tax impact | 2,948,680.16 | | Less: Impact on minority interests (after tax) | -24,683,063.16 | | Total | -212,589,574.75 | - Government grants related to assets and closely linked to the company's normal operations (RMB 24,301,996.32) are classified as recurring gains and losses due to their continuous impact on the company's profit or loss[20] Section III Management Discussion and Analysis I. Principal Businesses During the Reporting Period The company, a leading pulp and paper producer, experienced significant declines in production and profitability due to facility shutdowns but is actively implementing measures to restore operations and improve performance - The company is a modern large-scale enterprise group primarily engaged in pulping and papermaking, implementing an integrated pulp and paper strategy, and is the first domestic enterprise to achieve a balance between pulp and paper production capacity[24] - During the reporting period, some production lines at the company's Zhanjiang, Jilin, and Shouguang production bases were shut down for maintenance, leading to a year-on-year decline in production and sales, with operating revenue of RMB 2.107 billion and a net loss attributable to shareholders of RMB 3.858 billion[25] - The company is actively taking measures to improve operations, including equipment overhaul and upgrade, full-process cost control, and strengthening communication with financial institutions (including the approval of a RMB 2.31 billion syndicated loan) to gradually restore profitability and promote resumption of production[25][31] 1. Industry Overview The paper industry faced overcapacity and weak demand in H1 2025, leading to price drops and a 21.4% profit decline, but long-term outlook suggests recovery driven by "dual carbon" and anti-overcompetition policies - In the first half of 2025, the paper industry saw new production capacity come online and weakened end-user demand, leading to a structural imbalance between supply and demand, with significant price drops for machine-made paper products such as cultural paper and white board paper[22] Key Financial Data for National Paper and Paper Products Industry (Jan-Jun 2025) | Indicator | Amount (RMB 100 million) | Year-on-Year Change | | :--- | :--- | :--- | | Operating Revenue | 6,812.1 | -2.3% | | Operating Cost | 6,017.3 | -2.1% | | Total Profit | 175.7 | -21.4% | - In the medium to long term, driven by the "dual carbon" strategy and "anti-involution" policies, outdated production capacity in the paper industry will accelerate its exit, market concentration will increase, and demand-side improvement is expected, leading to a gradual recovery in overall operating performance[23] 2. Company Business Overview As an integrated pulp and paper group with diverse products, the company saw significant revenue and profit declines due to production line shutdowns and asset impairments, now focusing on recovery - The company is the domestic paper industry's most diverse and comprehensive enterprise in terms of product categories, covering over 200 varieties across 7 series, including cultural paper, coated paper, white board paper, copy paper, industrial paper, specialty paper, and household paper[24] - During the reporting period, the company achieved operating revenue of RMB 2.107 billion and a net loss attributable to shareholders of RMB 3.858 billion, primarily due to the shutdown of some production bases for maintenance and asset impairment[25] - The company is gradually restoring profitability and promoting the resumption of production through measures such as equipment overhaul and upgrade, full-process cost control, and strengthening communication with financial institutions (including the approval of a RMB 2.31 billion syndicated loan)[25][31] 3. Main Products and Their Uses The company prioritizes R&D, offering a wide range of machine-made paper products for publishing, packaging, office, and hygiene, continuously optimizing its product portfolio and brand value - The company highly values technological research and development, possessing national-level innovation platforms such as a National Enterprise Technology Center and a Post-doctoral Research Workstation, focusing on green papermaking technology[26] Company's Main Machine-Made Paper Product Series and Uses | Category | Main Brands and Varieties | Application Scope | | :--- | :--- | :--- | | Cultural Paper Series | Biyuntian, Yunjing, Yunbao, Yunjin, etc. offset paper, lightweight paper | Printing books, textbooks, magazines, notebooks, test papers, etc. | | Coated Paper Series | Xuesha, Xueying, Xuetu, etc. single and double-sided coated paper | High-end albums, pictures, magazines, cigarette labels, handbags, gift packaging, etc. | | White Board Paper Series | Liya, Lipin, Baiyang, etc. series white board, food board | High-end gift boxes, cosmetic boxes, hang tags, milk cartons, disposable paper cups, etc. | | Copy Paper Series | Jinmingyang, Jinchenming, Boya, etc. copy paper | Printing and copying, business documents, training materials, writing, etc. | | Industrial Paper Series | High-grade yellow anti-sticking base paper, coated base paper | Production of release paper, self-adhesive face paper or composite paper for playing cards | | Specialty Paper Series | Thermal paper, glassine paper | High-end self-adhesive base paper for electronics, medicine, food, detergents, supermarket labels, etc. | | Household Paper Series | Toilet paper, facial tissue, handkerchief paper, napkins, hand towels | Daily hygiene products, restaurants, hotels, guesthouses, office buildings, and household use | II. Liquidity, Financial Resources, and Capital Structure Analysis Disclosed under HKEX Listing Rules As of June 30, 2025, the company's liquidity ratios were low, with a high debt-to-asset ratio of 85.93% and significantly reduced cash, but a syndicated loan for resuming production has been approved Liquidity and Financial Resources Indicators as of June 30, 2025 | Indicator | Value | | :--- | :--- | | Current Ratio | 23.72% | | Quick Ratio | 17.34% | | Debt-to-Asset Ratio | 85.93% | | Total Bank Borrowings | RMB 29.103 billion | | Cash and Cash Equivalents | RMB 954 million | - The company's funding sources primarily include cash inflows from operating activities and borrowings from financial institutions, but liquidity and solvency are constrained due to the shutdown of some production bases for maintenance[31] - As of the report disclosure date, a RMB 2.31 billion syndicated loan specifically for resuming production has been approved, and the company will proceed with resumption based on funding and market conditions[31] III. Core Competitiveness Analysis With over 60 years of development, the company boasts seven core competencies, including integrated pulp-paper operations, scale, diverse products, advanced technology, and strong R&D, supporting its industry leadership - The company possesses an integrated pulp and paper advantage, largely achieving self-sufficiency in wood pulp, ensuring stable raw material supply and cost advantages[35] - The company has a scale advantage, with large production bases in major markets and supporting international logistics centers, enhancing efficiency and stabilizing costs[36] - The company offers the most diverse and comprehensive product range, covering cultural paper, white board paper, etc., and enhances product quality and brand value through technological R&D[37] - The company's industrial layout is rational, with production bases rooted in core target markets, enabling close-range sales and reducing transportation costs[38] - The company's technical equipment is advanced, having introduced production lines from internationally renowned manufacturers, ensuring production efficiency and product quality[39] - The company has strong scientific research and innovation capabilities, owning national-level scientific research institutions and multiple patents, and is a high-tech enterprise[40] - The company leads in environmental governance, having invested over RMB 8 billion in pollution control facilities, achieving industry-leading wastewater reuse rates, and actively introducing photovoltaic and biomass power generation[41] IV. Analysis of Principal Business Principal business revenue declined by 84.83% due to production shutdowns, leading to a significant net loss, with machine-made paper revenue share decreasing while chemical pulp revenue grew Year-on-Year Changes in Key Financial Data | Indicator | Current Reporting Period (RMB) | Prior Year Period (RMB) | Year-on-Year Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 2,106,630,952.30 | 13,884,731,519.04 | -84.83% | Shutdown of some production bases, reduced sales of machine-made paper | | Operating Cost | 3,727,203,720.24 | 12,185,505,709.00 | -69.41% | Shutdown of some production bases, reduced sales of machine-made paper | | R&D Expenses | 36,567,185.69 | 611,914,096.41 | -94.02% | Shutdown of some production bases, reduced R&D investment | | Investment Income | -430,669,782.44 | 181,332,096.11 | -337.50% | Reduced investment income from associates and gains from equity disposal | | Fair Value Change Gains | -129,487,561.79 | -2,221,596.44 | -5,728.58% | Increased fair value loss on forest assets | | Credit Impairment Losses | -506,322,424.22 | -124,386,619.66 | 307.06% | Increased provision for bad debts on accounts receivable | | Asset Impairment Losses | -240,561,409.32 | -3,041,427.75 | 7,809.49% | Increased provision for impairment of equipment | Operating Revenue Composition (by Industry, Product, Region) | Item | Current Reporting Period Amount (RMB) | Proportion of Operating Revenue | Prior Year Period Amount (RMB) | Proportion of Operating Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | By Industry | | | | | | | Machine-made Paper | 1,121,420,145.71 | 53.23% | 12,429,565,296.10 | 89.52% | -90.98% | | Chemical Pulp | 740,160,267.96 | 35.13% | 676,203,401.45 | 4.87% | 9.46% | | By Product | | | | | | | Coated Paper | 322,730,071.72 | 15.32% | 2,407,591,953.96 | 17.34% | -86.60% | | White Board Paper | 260,654,282.46 | 12.37% | 2,926,439,060.82 | 21.08% | -91.09% | | Offset Paper | 213,202,847.01 | 10.12% | 3,710,036,202.61 | 26.72% | -94.25% | | Chemical Pulp | 740,160,267.96 | 35.13% | 676,203,401.45 | 4.87% | 9.46% | | By Region | | | | | | | Mainland China | 2,075,083,434.21 | 98.50% | 11,052,530,679.12 | 79.60% | -81.23% | | Other Countries and Regions | 31,547,518.09 | 1.50% | 2,832,200,839.92 | 20.40% | -98.89% | - The gross profit margin for machine-made paper business was -135.68%, a year-on-year decrease of 147.16 percentage points, while chemical pulp gross profit margin was -0.23%, a year-on-year decrease of 17.53 percentage points[48] V. Analysis of Non-Principal Businesses Non-principal businesses significantly impacted total profit negatively, with investment income, fair value changes, and impairment losses being substantial and mostly non-recurring, except for some government subsidies Non-Principal Business Items and Their Impact on Total Profit | Item | Amount (RMB) | Proportion of Total Profit | Explanation of Cause | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Other Income | 22,794,816.03 | -0.55% | Government grants and debt restructuring gains | Partially sustainable | | Investment Income | -430,669,782.44 | 10.30% | Investment income from external investments and gains/losses from disposal of equity and financial assets | No | | Fair Value Change Gains/Losses | -129,487,561.79 | 3.10% | Fair value fluctuations of Bohai Bank shares and forest assets | No | | Credit Impairment Losses | -506,322,424.22 | 12.11% | Provision for bad debts on accounts receivable | No | | Asset Impairment Losses | -240,561,409.32 | 5.75% | Provision for impairment of non-current assets | No | | Non-Operating Expenses | 26,198,489.55 | -0.63% | Expenses not directly related to daily operations | No | VI. Analysis of Assets and Liabilities The company's asset and liability structure saw significant changes, including reduced cash and increased payables, indicating liquidity stress and debt restructuring, with many assets restricted as collateral or due to litigation Significant Changes in Asset Composition | Item | Period-End Amount (RMB) | Proportion of Total Assets | Prior Year-End Amount (RMB) | Proportion of Total Assets | Change in Proportion | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 953,661,496.60 | 1.74% | 5,909,879,812.18 | 9.31% | -7.57% | Decrease in outstanding deposits at period-end | | Notes Payable | 107,370,000.00 | 0.20% | 1,423,918,112.99 | 2.24% | -2.04% | Reclassification of overdue notes to accounts payable and short-term borrowings | | Accounts Payable | 8,426,902,071.31 | 15.41% | 7,708,967,406.47 | 12.14% | 3.27% | Reclassification of overdue commercial notes to accounts payable | | Other Payables | 3,560,628,293.65 | 6.51% | 2,896,409,953.94 | 4.56% | 1.95% | Increase in intercompany payables and accrued expenses at period-end | | Non-Current Liabilities Due Within One Year | 2,534,511,114.58 | 4.63% | 1,577,936,964.14 | 2.48% | 2.15% | Increase in long-term liabilities reclassified as due within one year at period-end | | Long-Term Payables | 2,544,988,247.10 | 4.65% | 774,965,008.29 | 1.22% | 3.43% | Reclassification of some equipment finance lease extensions to long-term payables | - As of the end of the reporting period, multiple assets of the company are restricted, including fixed assets, investment properties, and intangible assets serving as collateral, and long-term equity investments, cash, and inventory frozen or seized due to outstanding debts or lawsuits[57] 1. Significant Changes in Asset Composition At period-end, cash decreased by 7.57% due to reduced deposits, while payables and current portion of non-current liabilities increased due to reclassification of overdue notes and extended financing leases Significant Changes in Asset Composition | Item | Period-End Amount (RMB) | Proportion of Total Assets | Prior Year-End Amount (RMB) | Proportion of Total Assets | Change in Proportion | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 953,661,496.60 | 1.74% | 5,909,879,812.18 | 9.31% | -7.57% | Decrease in outstanding deposits at period-end | | Accounts Receivable | 930,731,502.52 | 1.70% | 1,384,290,313.70 | 2.18% | -0.48% | Decrease in customer receivables at period-end | | Long-Term Equity Investments | 3,621,265,404.11 | 6.62% | 3,971,035,411.54 | 6.25% | 0.37% | Decrease in investment income from associates recognized during the period | | Other Non-Current Financial Assets | 344,266,989.06 | 0.63% | 751,030,454.68 | 1.18% | -0.55% | Weifang Chenchuang Equity Investment Fund Partnership (Limited Partnership) included in consolidation scope | | Notes Payable | 107,370,000.00 | 0.20% | 1,423,918,112.99 | 2.24% | -2.04% | Overdue notes reclassified to accounts payable and short-term borrowings at period-end | | Accounts Payable | 8,426,902,071.31 | 15.41% | 7,708,967,406.47 | 12.14% | 3.27% | Overdue commercial notes reclassified to accounts payable at period-end | | Other Payables | 3,560,628,293.65 | 6.51% | 2,896,409,953.94 | 4.56% | 1.95% | Increase in intercompany payables and accrued expenses compared to beginning of year | | Non-Current Liabilities Due Within One Year | 2,534,511,114.58 | 4.63% | 1,577,936,964.14 | 2.48% | 2.15% | Increase in long-term liabilities reclassified as due within one year at period-end | | Other Current Liabilities | 844,340,067.04 | 1.54% | 2,680,562,600.58 | 4.22% | -2.68% | Reclassification of some equipment finance lease extensions to long-term payables at period-end | | Long-Term Payables | 2,544,988,247.10 | 4.65% | 774,965,008.29 | 1.22% | 3.43% | Reclassification of some equipment finance lease extensions to long-term payables at period-end | 2. Major Overseas Assets The company had no major overseas assets during the reporting period - The company had no major overseas assets during the reporting period[54] 3. Assets and Liabilities Measured at Fair Value As of period-end, total assets measured at fair value were RMB 1.48 billion, primarily financial and biological assets, with fair value changes resulting in a RMB -129.49 million loss Assets and Liabilities Measured at Fair Value | Item | Beginning Balance (RMB) | Fair Value Change Gains/Losses for the Period (RMB) | Period-End Balance (RMB) | | :--- | :--- | :--- | :--- | | Financial Assets Held for Trading | 37,259,325.70 | -428,371.45 | 36,692,409.73 | | Other Non-Current Financial Assets | 751,030,454.68 | 0 | 344,266,989.06 | | Consumable Biological Assets Measured at Fair Value | 1,256,379,773.85 | -129,059,190.34 | 1,098,778,602.31 | | Total Above | 2,044,669,554.23 | -129,487,561.79 | 1,479,738,001.10 | - There were no significant changes in the measurement attributes of the company's major assets during the reporting period[55] 4. Asset Restrictions as of the End of the Reporting Period As of period-end, RMB 45.70 billion in assets (book value RMB 28.78 billion) were restricted, primarily as collateral for loans or frozen due to litigation Asset Restrictions as of the End of the Reporting Period | Item | Book Balance (RMB) | Book Value (RMB) | Type of Restriction | Restriction Details | | :--- | :--- | :--- | :--- | :--- | | Fixed Assets | 34,753,954,012.60 | 19,712,891,634.14 | Pledge | As collateral for bank borrowings and long-term payables | | Investment Properties | 6,556,109,499.47 | 5,195,027,744.73 | Pledge | As collateral for bank borrowings | | Intangible Assets | 1,842,713,402.08 | 1,328,582,983.12 | Pledge | As collateral for bank borrowings and long-term payables | | Long-Term Equity Investments | 1,653,602,939.71 | 1,649,407,876.62 | Freeze | Frozen due to lawsuits for outstanding debts | | Cash and Cash Equivalents | 875,404,665.38 | 875,404,665.38 | Pledge, Freeze | As guarantee deposits for acceptance bills, letters of credit, loan guarantees, reserve deposits, or frozen accounts due to lawsuits, etc. | | Inventory | 20,028,521.46 | 14,865,436.95 | Court Seizure | Seized due to lawsuits for outstanding debts | | Total | 45,701,813,040.70 | 28,776,180,340.94 | | | VII. Investment Analysis The company's total investment in the period was RMB 646.25 million, mainly in subsidiary M&A and capital increases, resulting in a net loss of RMB -97.33 million, with no major non-equity or derivative investments Significant Equity Investments Acquired During the Reporting Period | Name of Investee Company | Investment Method | Investment Amount (RMB) | Profit/Loss for the Period (RMB) | | :--- | :--- | :--- | :--- | | Weifang Chenchuang Equity Investment Fund Partnership (Limited Partnership) | Acquisition | 512,000,000.00 | 626.63 | | Shandong Chenming Paper Products Sales Co. Ltd. | Capital Increase | 98,500,000.00 | -30,348,394.39 | | Shouguang Chenming Art Paper Co. Ltd. | Acquisition | 35,748,442.80 | -66,979,940.94 | | Total | | 646,248,442.80 | -97,327,708.70 | Financial Asset Investments (Securities Investments) | Security Type | Security Abbreviation | Beginning Book Value (RMB) | Fair Value Change Gains/Losses for the Period (RMB) | Period-End Book Value (RMB) | | :--- | :--- | :--- | :--- | :--- | | Domestic and Overseas Stocks | Bohai Bank | 37,259,325.70 | -428,371.45 | 36,692,409.73 | - The company had no derivative investments or use of raised funds during the reporting period[64][65] 1. Overall Situation This section provides an overview of the company's investment activities during the reporting period, primarily focusing on equity investments, with details in subsequent subsections - The company had investment activities during the reporting period, with specific details to be disclosed in subsequent sections[58][61] 2. Significant Equity Investments Acquired During the Reporting Period The company made three significant equity investments totaling RMB 646.25 million, primarily through M&A and capital increases in subsidiaries, resulting in a combined loss of RMB -97.33 million Significant Equity Investments Acquired During the Reporting Period | Name of Investee Company | Investment Method | Investment Amount (RMB) | Shareholding Percentage | Profit/Loss for the Period (RMB) | Involved in Litigation | | :--- | :--- | :--- | :--- | :--- | :--- | | Weifang Chenchuang Equity Investment Fund Partnership (Limited Partnership) | Acquisition | 512,000,000.00 | 99.67% | 626.63 | No | | Shandong Chenming Paper Products Sales Co. Ltd. | Capital Increase | 98,500,000.00 | 100.00% | -30,348,394.39 | No | | Shouguang Chenming Art Paper Co. Ltd. | Acquisition | 35,748,442.80 | 100.00% | -66,979,940.94 | No | | Total | | 646,248,442.80 | | -97,327,708.70 | | 3. Significant Non-Equity Investments in Progress During the Reporting Period The company had no significant non-equity investments in progress during the reporting period - The company had no significant non-equity investments in progress during the reporting period[61] 4. Financial Asset Investments The company's financial asset investments primarily consist of Bohai Bank shares, with a period-end book value of RMB 36.69 million and a fair value change loss of RMB -0.43 million Securities Investment Information | Security Type | Security Abbreviation | Initial Investment Cost (RMB) | Beginning Book Value (RMB) | Fair Value Change Gains/Losses for the Period (RMB) | Period-End Book Value (RMB) | | :--- | :--- | :--- | :--- | :--- | :--- | | Domestic and Overseas Stocks | Bohai Bank | 195,684,817.15 | 37,259,325.70 | -428,371.45 | 36,692,409.73 | - The company had no derivative investments during the reporting period[64] 5. Use of Raised Funds The company did not use any raised funds during the reporting period - The company had no use of raised funds during the reporting period[65] VIII. Significant Asset and Equity Disposals The company sold 22 Fado Apartment properties for RMB 85.92 million, resulting in a net loss of RMB -65.14 million, aiming to optimize asset structure and focus on core business Significant Asset Disposal Information | Counterparty | Assets Sold | Transaction Price (RMB ten thousand yuan) | Net Profit Contributed by Asset from Beginning of Period to Disposal Date (RMB ten thousand yuan) | Impact of Disposal on Company | Proportion of Net Profit to Total Net Profit | | :--- | :--- | :--- | :--- | :--- | :--- | | Zhejiang Aikesheng Real Estate Co. Ltd. | 22 Fado Apartment properties | 8,591.60 | -6,514.33 | Conducive to the company integrating resources, optimizing asset structure, concentrating advantages, focusing on core business, and improving quality and efficiency. | 1.56% | - The company had no significant equity disposals during the reporting period[67] IX. Analysis of Major Controlled and Invested Companies Major subsidiaries Zhanjiang Chenming Pulp & Paper and Shouguang Meilun Paper reported significant net losses of RMB -844.27 million and RMB -677.43 million, respectively, while new acquisitions had minor profit impacts Major Subsidiaries and Associates with Net Profit Impact Exceeding 10% | Company Name | Company Type | Main Business | Registered Capital (RMB) | Net Profit (RMB) | | :--- | :--- | :--- | :--- | :--- | | Zhanjiang Chenming Pulp & Paper Co. Ltd. | Subsidiary | Production and sales of offset paper, electrostatic paper, white board paper, etc. | 6,913,572,423.00 | -844,270,649.67 | | Shouguang Meilun Paper Co. Ltd. | Subsidiary | Production and sales of coated paper, cultural paper, household paper, chemical pulp | 4,801,045,519.00 | -677,427,573.67 | Acquisition and Disposal of Subsidiaries During the Reporting Period | Company Name | Method of Acquisition and Disposal of Subsidiaries During the Reporting Period | Impact on Overall Production, Operations, and Performance | | :--- | :--- | :--- | | Chenming International Trade Co. Ltd. | Newly established | None | | Shouguang Weiyuan Logistics Co. Ltd. | Transfer | Increased net profit by RMB 0.1664 million | | Weifang Chenchuang Equity Investment Fund Partnership (Limited Partnership) | Acquisition | Increased net profit by RMB 0.0006 million | X. Structured Entities Controlled by the Company The company did not control any structured entities during the reporting period - The company had no structured entities under its control during the reporting period[71] XI. Risks Faced by the Company and Countermeasures The company faces risks from macroeconomic policies, environmental regulations, raw material prices, market competition, and liquidity, addressing them through strategic adjustments, debt restructuring, and asset disposal - The company faces risks from macroeconomic policy adjustments and will closely monitor policy changes, focus on its core business, drive innovation, optimize industrial structure and regional layout, strengthen lean management, and broaden financing channels[72] - Increasing environmental policy pressure poses a risk of rising operating costs; the company will deeply implement the "dual carbon" strategy, adopt new energy-saving and emission-reduction technologies, complete wastewater reuse membrane treatment projects, and promote circular economy development[73] - To mitigate raw material price fluctuation risks, the company will adhere to its integrated pulp and paper strategy to ensure raw material stability and improve supply chain management and market judgment capabilities[74] - Facing intensified market competition, the company will continuously advance technological innovation, enhance product quality, and develop a high-end, specialized, differentiated product structure to increase added value[75] - Due to prominent funding risks, the company will fully activate and dispose of existing assets, increase the disposal of non-core assets, strengthen communication with financial institutions to advance debt restructuring, and raise working capital through multiple channels to resume production[76] - Financing lease business carries the risk of bad debts from lessees failing to pay rent on time; the company is reducing business scale, making provisions for overdue principal, and mitigating risks through litigation, guarantor recovery, and debt restructuring[77] XII. Implementation of Market Value Management System and Valuation Enhancement Plan The company has implemented a Market Value Management System and Valuation Enhancement Plan, focusing on financial and business optimization, market development, and strategic partnerships to boost shareholder value - The company has formulated and disclosed the "Shandong Chenming Paper Holdings Limited Market Value Management System" to standardize market value management practices and protect the legitimate rights and interests of the company and investors[79] - The company has approved the "Shandong Chenming Paper Holdings Limited Valuation Enhancement Plan," which includes four main aspects: financial optimization, business optimization, market and brand building, and strategic investment and cooperation[81][83][84][85] - Financial optimization measures include debt restructuring (extending debt terms, lowering interest rates, syndicated loans), asset disposal (activating non-core assets, intensifying debt collection), and cost control (optimizing production processes, reducing procurement and energy costs)[84] - Business optimization measures include capacity recovery and adjustment (accelerating production resumption at production bases, adjusting product structure) and technological innovation and R&D (increasing investment in green paper products and specialty paper R&D)[84] - Market and brand building measures include market expansion, brand building, investor relations management, and optimization of information disclosure[87] - Strategic investment and cooperation measures include introducing strategic investors and industry integration and cooperation[87] XIII. Implementation of the "Dual Improvement in Quality and Returns" Action Plan The company did not disclose any "Dual Improvement in Quality and Returns" action plan announcements during the reporting period - The company did not disclose any "Dual Improvement in Quality and Returns" action plan announcements during the reporting period[87] Section IV Corporate Governance, Environment, and Society I. Changes in Directors, Supervisors, and Senior Management There were no changes in the company's directors, supervisors, or senior management during the reporting period, as detailed in the 2024 annual report - There were no changes in the company's directors, supervisors, and senior management during the reporting period[88] II. Profit Distribution and Capital Reserve Conversion to Share Capital During the Reporting Period The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for the half-year period - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for the half-year period[89] III. Implementation of Share Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures The 2020 A-share restricted stock incentive plan granted 79.6 million shares at RMB 2.85/share, but most were repurchased due to unmet performance targets and resignations, with 6.9 million shares still pending cancellation due to judicial freeze - On May 29, 2020, the company granted 79.6 million A-share restricted shares to 111 incentive recipients at an exercise price of RMB 2.85 per share[94] - The incentive plan has a maximum validity period until July 14, 2025, with restricted periods released in three phases: 24 months, 36 months, and 48 months[96][99] - Due to unmet performance conditions for 2022 and 2023 and the resignation of some incentive recipients, the company has repurchased and cancelled most of the restricted shares[106][107] - As of the end of the reporting period, 6.9 million A-share restricted shares held by 2 resigned incentive recipients have not completed repurchase and cancellation procedures due to judicial freeze[109][110] - During the reporting period, the company did not grant any new awards, nor did it have any employee stock ownership plans or other employee incentive measures[110][111] 1. Share Incentives The 2020 A-share restricted stock incentive plan granted 79.6 million shares at RMB 2.85/share to 111 individuals, but most were repurchased due to unmet performance targets, with 6.9 million shares still judicially frozen - The 2020 A-share restricted stock incentive plan aims to improve the company's governance structure and incentivize directors, core technical, and business personnel[92] - The plan involves 111 incentive recipients, granting 79.6 million A-share restricted shares at an exercise price of RMB 2.85 per share[93][94] - The incentive plan has a maximum validity period until July 14, 2025, with restricted periods released in three phases: 24 months, 36 months, and 48 months[96][99] - Due to unmet performance conditions for 2022 and 2023 and the resignation of some incentive recipients, the conditions for the second and third restricted periods were not met, and the company has repurchased and cancelled most of the restricted shares[106][107] - As of the end of the reporting period, 6.9 million A-share restricted shares held by 2 resigned incentive recipients have not completed repurchase and cancellation procedures due to judicial freeze[109][110] 2. Implementation of Employee Stock Ownership Plans The company had no employee stock ownership plans in place during the reporting period - The company had no employee stock ownership plans during the reporting period[111] 3. Other Employee Incentive Measures The company had no other employee incentive measures during the reporting period - The company had no other employee incentive measures during the reporting period[111] IV. Environmental Information Disclosure The company and its seven major subsidiaries are listed as legally required environmental information disclosers, publishing reports on respective provincial platforms, demonstrating environmental commitment and transparency - The company and its 7 major subsidiaries are included in the list of enterprises required to disclose environmental information by law[112] - The environmental information disclosure reports of each enterprise can be found on the respective provincial enterprise environmental information disclosure systems[112] V. Social Responsibility The company upholds its mission of "creating value and contributing to society" by safeguarding stakeholder rights, promoting green development, optimizing governance, ensuring employee welfare, and implementing stringent environmental protection measures - The company continuously optimizes its corporate governance structure, strictly discloses information, communicates with investors through multiple channels, and actively negotiates debt repayment plans with creditors to protect the rights and interests of shareholders and creditors[114] - The company complies with labor laws, strengthens humanistic care, focuses on employee empowerment, fully implements safety production responsibility systems, and conducts layered and categorized specialized training programs to protect employee rights and interests[115] - Adhering to the core values of "integrity-based, win-win sharing," the company focuses on customers to improve product quality and services, and protects the rights and interests of customers and suppliers by improving procurement bidding systems and fostering strategic partnerships[116] - The company practices the philosophy that "lucid waters and lush mountains are invaluable assets," strictly enforces environmental regulations, promotes clean production, strengthens "three wastes" treatment, equips advanced pollution control facilities, and integrates ecological design concepts into product processes to protect the ecological environment[117] VI. Disclosures under HKEX Listing Rules The company generally complied with HKEX Corporate Governance Code, except for delayed board and supervisory committee re-election, and no non-compliance with the Model Code for Securities Transactions by Directors was noted - During the reporting period, the company complied with the principles and code provisions of the Corporate Governance Code contained in Appendix C1 of the Hong Kong Listing Rules, but the Board of Directors and Supervisory Committee were delayed due to incomplete re-election work, failing to fully comply with code provision B.2.2 regarding the rotation of directors[118] - After full consultation with all directors of the company, the company is not aware of any information that reasonably indicates that any director failed to comply with the standards stipulated in Appendix C3 of the Hong Kong Listing Rules, "Model Code for Securities Transactions by Directors of Listed Issuers," during the reporting period[119] Section V Significant Matters I. Commitments Fulfilled and Overdue Unfulfilled by Controlling Shareholder, Shareholders, Related Parties, Acquirers, and the Company No commitments by the controlling shareholder, related parties, or the company were overdue or unfulfilled at the end of the reporting period - During the reporting period, there were no commitments by the company's actual controller, shareholders, related parties, acquirers, or the company that were fulfilled or overdue and unfulfilled as of the end of the reporting period[120] II. Non-Operating Funds Occupied by Controlling Shareholder and Other Related Parties There were no non-operating funds occupied by the controlling shareholder or other related parties during the reporting period - During the reporting period, there were no non-operating funds occupied by the controlling shareholder or other related parties of the listed company[121] III. Irregular External Guarantees The company had no irregular external guarantees during the reporting period - The company had no irregular external guarantees during the reporting period[122] IV. Appointment and Dismissal of Accounting Firms The company's semi-annual financial report was not audited - The company's semi-annual report was not audited[123] V. Board of Directors' and Supervisory Committee's Explanations on the Accounting Firm's "Non-Standard Audit Report" for the Current Period The Board of Directors and Supervisory Committee provided no explanations regarding a "non-standard audit report" for the current period - During the reporting period, there were no explanations from the Board of Directors or Supervisory Committee regarding the accounting firm's "non-standard audit report" for the current period[124] VI. Board of Directors' Explanations on the "Non-Standard Audit Report" for the Previous Year The Board addressed the 2024 qualified audit opinion by actively resuming production, securing syndicated loans, restructuring debt, and disposing of non-core assets to improve going concern - The Board of Directors has provided a special explanation regarding the qualified opinion audit report issued by Grant Thornton Certified Public Accountants on the company's 2024 annual financial report[125] - The company is actively promoting the resumption of production, the disbursement of syndicated loans, debt restructuring, the introduction of strategic investors, and asset disposal to improve its going concern ability[126] - As of the end of the reporting period, some production bases in Huanggang, Jiangxi, and Shouguang are operating normally, the RMB 2.31 billion syndicated loan has been approved, and idle and non-core assets totaling RMB 587.73 million have been disposed of[126] VII. Bankruptcy Reorganization Matters The company had no bankruptcy reorganization matters during the reporting period - The company had no bankruptcy reorganization matters during the reporting period[127] VIII. Litigation Matters The company was involved in multiple litigations, including the dismissal of a winding-up petition by Arjowiggins HKK2 Limited, and various other lawsuits as both plaintiff and defendant - The winding-up petition against the company by Arjowiggins HKK2 Limited was dismissed by the Hong Kong High Court of First Instance on June 20, 2025, and has been fully executed[128] Summary of Other Litigation Matters | Basic Information of Litigation (Arbitration) | Amount Involved (RMB ten thousand yuan) | Provision for Liabilities Formed | Outcome and Impact of Litigation (Arbitration) | | :--- | :--- | :--- | :--- | | Summary of Litigation (Arbitration) Matters where Chenming Leasing is Plaintiff | 46,432.83 | No | All adjudicated lawsuits recognized the defendants and guarantors' obligation to repay the company's debts, aligning with the company's claims, and will not have a significant impact on the company's operations and financial position. | | Summary of Litigation (Arbitration) Matters where the Company and its Other Subsidiaries are Plaintiffs | 43,406.09 | No | No significant impact on the company's operations and financial position. | | Summary of Litigation (Arbitration) Matters where the Company and its Other Subsidiaries are Defendants | 777,818.36 | Provision for liabilities of RMB 593.5 million | Litigation cases are being properly resolved through communication, negotiation, active defense, and reaching settlements with creditors. | IX. Penalties and Rectification The company had no penalties or rectification situations during the reporting period - The company had no penalties or rectification situations during the reporting period[130] X. Integrity Status of the Company, its Controlling Shareholder, and Actual Controller The company and Zhanjiang Chenming were listed as dishonest judgment debtors in two cases for failing to fulfill court-ordered obligations, while the controlling shareholder and actual controller were not - During the reporting period, the company and Zhanjiang Chenming were listed as dishonest judgment debtors in 2 cases for failing to fulfill obligations defined by effective legal documents of the court[131] - The company's controlling shareholder and actual controller are not dishonest judgment debtors[131] XI. Significant Related Party Transactions The company engaged in routine related-party transactions, including port fees, and had non-operating related-party receivables and payables, with controlling shareholder financial support impacting operations Related Party Transactions Related to Daily Operations | Related Party | Type of Related Party Transaction | Content of Related Party Transaction | Amount of Related Party Transaction (RMB ten thousand yuan) | Approved Transaction Limit (RMB ten thousand yuan) | Exceeded Approved Limit | | :--- | :--- | :--- | :--- | :--- | :--- | | Weifang Port Area Wood Chip Terminal Co. Ltd. | Labor Services | Port miscellaneous fees | 233.33 | 11,000.00 | No | Receivables from Related Parties | Item Name | Related Party | Period-End Balance (RMB ten thousand yuan) | Beginning Balance (RMB ten thousand yuan) | | :--- | :--- | :--- | :--- | | Shouguang Meite Environmental Protection Technology Co. Ltd. | Financial assistance | 1,137.78 | 1,106.33 | | Weifang Port Area Wood Chip Terminal Co. Ltd. | Financial assistance | 8,129.82 | 7,939.77 | | Wuhan Chenming Hanyang Paper Co. Ltd. | Financial assistance | 17,797.13 | 23,809.34 | Payables to Related Parties | Item Name | Related Party | Period-End Balance (RMB ten thousand yuan) | Beginning Balance (RMB ten thousand yuan) | | :--- | :--- | :--- | :--- | | Chenming Holdings Co. Ltd. | Financial assistance | 3,683.98 | 3,850.00 | | Guangdong Nanyue Bank Co. Ltd. | Borrowings | 75,829.00 | 85,789.00 | - During the reporting period, the company had no related party transactions involving asset or equity acquisition/disposal, no related party transactions involving joint external investments, no dealings with related financial companies, and no other significant related party transactions[133][134][136][137][138] XII. Significant Contracts and Their Performance The company had no custodianship, but a subsidiary outsourced port operations for RMB 4 million annually; it also engaged in various leases and provided significant guarantees to subsidiaries, with RMB 19.75 billion outstanding and RMB 1.98 billion overdue - The company had no custodianship during the reporting period[139][142] - Subsidiary Jiangxi Chenming outsourced Jiangxi Port's business to Jiangxi Yirong Investment Co. Ltd. for a 5-year contract period, with an annual fixed fee of RMB 4 million[140] Lease Expenses as Lessee | Item | H1 2025 (RMB) | | :--- | :--- | | Low-value leases | 2,220,927.78 | | Total | 2,220,927.78 | Operating Lease Income as Lessor | Item | H1 2025 (RMB) | | :--- | :--- | | Lease income | 60,638,854.58 | | Total | 60,638,854.58 | - During the reporting period, the company provided guarantees to subsidiaries totaling RMB 4.330 billion. As of June 30, 2025, the company's outstanding external guarantees amounted to RMB 19.755 billion, representing 371.42% of the equity attributable to parent company shareholders, with overdue guarantees totaling RMB 1.979 billion[149][158] - The company had no entrusted wealth management or other significant contracts during the reporting period[163][164] XIII. Explanations of Other Significant Matters The company faces severe challenges including RMB 3.82 billion in overdue debt, 332 frozen bank accounts, and production line shutdowns, with delayed board and supervisory committee re-elections - As of the end of the reporting period, the company's cumulative overdue debt amounted to RMB 3.821 billion, with 332 bank accounts cumulatively frozen, totaling RMB 39.3805 million in frozen funds, and some production lines remain shut down for maintenance[166] - The term of the company's Tenth Board of Directors and Supervisory Committee expired on June 15, 2025, and the re-election has been postponed due to incomplete charter revisions and re-election work[169] - This section provides an index of significant matters publicly disclosed by the company during the H1 2025 reporting period, including equity restructuring, litigation, performance forecasts, and risk warnings[170][171][172] XIV. Significant Matters of Company Subsidiaries Shandong Chenming Group Finance Co. Ltd.'s dissolution was approved, and the company decided to terminate the Huanggang Chenming Phase II project to preserve liquidity and protect shareholder interests - The dissolution of Shandong Chenming Group Finance Co. Ltd. has been approved by the National Financial Regulatory Administration, and relevant procedures will be handled as required[174] - The company has approved the termination of the Huanggang Chenming Phase II project to prevent further capital expenditures from impacting liquidity and to protect the interests of the company and all shareholders[175] Section VI Share Changes and Shareholder Information I. Share Changes The total number of shares remained unchanged, but restricted shares decreased by 5,562,842, and unrestricted shares increased by the same amount, mainly due to director/supervisor/senior management share reclassification and resignations Share Changes | Share Class | Number Before Change (shares) | Increase/Decrease in This Change (shares) | Number After Change (shares) | | :--- | :--- | :--- | :--- | | I. Restricted Shares | 30,941,154 | -5,562,842 | 25,378,312 | | II. Unrestricted Shares | 2,910,515,046 | 5,562,842 | 2,916,077,888 | | III. Total Shares | 2,941,456,200 | 0 | 2,941,456,200 | - Share changes were primarily due to the re-calculation of transferable quotas for restricted shares held by directors, supervisors, and senior management at 25%, and changes in restricted shares due to the resignation of some directors, supervisors, and senior management after 6 months[178] - Changes in restricted shares involve adjustments to restricted shares held by directors, supervisors, and senior management, as well as some restricted shares from equity incentives that have not completed repurchase and cancellation procedures due to judicial freeze[181][182] II. Securities Issuance and Listing The company had no securities issuance or listing activities during the reporting period - The company had no securities issuance or listing activities during the reporting period[183] III. Number of Shareholders and Shareholding As of period-end, the company had 117,668 common shareholders, with Chenming Holdings Co. Ltd. as the largest shareholder (15.50%), whose shares are pledged and frozen - As of the end of the reporting period, the total number of common shareholders was 117,668 (including 99,783 A-share holders, 17,568 B-share holders, and 317 H-share holders)[185] Shareholding of Shareholders Holding 5% or More or Top 10 Shareholders | Shareholder Name | Shareholder Nature | Shareholding Percentage | Number of Shares Held at Period-End (shares) | Pledged, Marked, or Frozen Status (shares) | | :--- | :--- | :--- | :--- | :--- | | Chenming Holdings Co. Ltd. | State-owned Legal Person | 15.50% | 455,781,319 | Pledged 386,811,546, Frozen 409,956,441 | | HKSCC NOMINEES LIMITED | Overseas Legal Person | 12.69% | 373,409,775 | Not applicable 0 | | Chenming Holdings (Hong Kong) Co. Ltd. | Overseas Legal Person | 12.38% | 364,131,563 | Not applicable 0 | | Chen Hongguo | Domestic Natural Person | 0.65% | 19,080,044 | Frozen 19,080,044 | - Chenming Holdings (Hong Kong) Co. Ltd. is a wholly-owned subsidiary of Chenming Holdings Co. Ltd[186] - 6,000,000 equity incentive restricted shares held by Mr. Chen Hongguo have not completed repurchase and cancellation procedures due to judicial freeze[186][188] IV. Shareholding Changes of Directors, Supervisors, and Senior Management There were no changes in the shareholdings of the company's directors, supervisors, and senior management during the reporting period - There were no changes in the shareholdings of the company's directors, supervisors, and senior management during the reporting period[190] V. Changes in Controlling Shareholder or Actual Controller There were no changes in the company's controlling shareholder or actual controller during the reporting period - The company's controlling shareholder did not change during the reporting period[191] - The company's actual controller did not change during the reporting period[192] VI. Preferred Shares The company had no preferred shares during the reporting period - The company had no preferred shares during the reporting period[193] VII. Securities Interests of Directors, Supervisors, and Chief Executive Disclosed under HKEX Listing Rules As of June 30, 2025, some directors and supervisors held A-shares, but no other registrable interests or short positions in the company's securities were held by directors, supervisors, or the chief executive Securities Interests of Directors, Supervisors, and Chief Executive | Name | Position | Number of A-Shares Held at Period-End (sha