Core Viewpoint - The acquisition of 100% equity in Sichuan Jinfeng Paper Industry by Hengfeng Paper Industry is seen as a crucial step to strengthen industry chain integration and accelerate the implementation of internationalization strategies [2][3]. Group 1: Acquisition Details - Hengfeng Paper Industry has announced plans to acquire Sichuan Jinfeng Paper Industry, which has a strong presence in the cigarette paper sector and holds a rare tobacco production license [2]. - The acquisition aims to address Hengfeng's capacity constraints and enhance its production capabilities, as existing facilities lack expansion space [2][5]. - The deal is expected to help Hengfeng Paper Industry overcome production bottlenecks and achieve significant scale growth [2][5]. Group 2: Industry Context - The acquisition aligns with national policies promoting mergers and acquisitions in the paper industry, particularly through structural reforms to eliminate outdated capacity [3][4]. - The "14th Five-Year Plan" for the paper industry emphasizes optimizing enterprise structures and encouraging mergers to enhance operational management [2][3]. Group 3: Strategic Benefits - The merger is anticipated to create synergies through resource complementarity, with Hengfeng's strong R&D capabilities and brand influence combined with Jinfeng's production capacity and geographic advantages [4][5]. - The strategic layout of having "one south and one north" production base will reduce transportation costs and enhance supply chain resilience, catering to regional production needs in the tobacco industry [6]. - The acquisition is expected to provide Hengfeng with a competitive edge in expanding into international markets, particularly in Europe and emerging markets [6]. Group 4: Financial Performance - Hengfeng Paper Industry reported a revenue of 1.353 billion yuan for the first half of 2025, a year-on-year increase of 12.78%, with net profit reaching 94.937 million yuan, up 69.06% [6]. - The company's performance is attributed to ongoing improvements in management efficiency, supply chain optimization, and cost control measures [6].