HENGFENG PAPER(SH:600356) Zheng Quan Zhi Xing·2025-08-29 15:12Core Viewpoint - The response report from Mudanjiang Hengfeng Paper Co., Ltd. addresses the inquiries from the Shanghai Stock Exchange regarding the issuance of shares for asset acquisition and related transactions, detailing the purpose and management of the transaction, as well as the financial implications and operational integration plans. Group 1: Transaction Purpose and Management - The transaction aims to enhance operational efficiency by integrating the target company's production capabilities with Hengfeng Paper's existing operations, addressing capacity constraints and maximizing operational benefits [2][4]. - The management structure during the entrusted operation includes a joint management committee to oversee significant decisions, with profit-sharing based on the target company's audited net profit [2][4]. - The target company has a specialized production license for cigarette paper, which is expected to align with Hengfeng Paper's strategic goals in the tobacco industry [2][4]. Group 2: Financial Implications - The acquisition is projected to lead to a decrease in Hengfeng Paper's net profit and earnings per share due to increased depreciation and amortization from the target company's long-term assets [2][4]. - The financial data referenced in the report pertains to consolidated financial statements for the years 2022, 2023, and 2024, indicating a thorough financial analysis of the transaction's impact [1][2]. Group 3: Operational Integration Plans - Post-acquisition, Hengfeng Paper plans to integrate business operations, assets, and personnel with the target company to enhance overall efficiency and market competitiveness [2][4]. - The operational model will shift to a commissioned processing approach, where Hengfeng Paper will handle product development and sales, while the target company will focus on production management [6][7]. - The collaboration is expected to leverage the target company's geographical advantages for logistics and distribution, significantly reducing transportation costs for Hengfeng Paper's products [11][12]. Group 4: Industry Context - The special paper industry is experiencing steady growth, with global consumption projected to reach 29.5 million tons by 2028, indicating a favorable market environment for Hengfeng Paper's expansion [25][26]. - The tobacco industry is evolving towards higher-end and environmentally friendly products, creating opportunities for Hengfeng Paper to enhance its market share and product offerings [25][26]. - The competitive landscape is characterized by a concentration of market share among leading firms, necessitating strategic partnerships and regional expansions to meet growing demand [25][26].