Core Viewpoint - The company, Mudanjiang Hengfeng Paper Co., Ltd., is planning to acquire 100% equity of Sichuan Jinfeng Paper Co., Ltd. through a share issuance, with a transaction price of 268.0562 million yuan, aiming to enhance its market position and operational efficiency in the paper industry [11][17]. Group 1: Transaction Overview - The transaction involves issuing shares to acquire 100% equity of Jinfeng Paper, which specializes in high-grade cigarette paper and related products [11][17]. - The transaction price is set at 26,805.62 million yuan, reflecting the strategic intent to consolidate operations within the industry [11][12]. - The acquisition is expected to strengthen the company's production capacity and market reach, particularly in the southwestern region of China [17][19]. Group 2: Financial Impact - Post-transaction, the company's total assets are projected to increase from 347,261.82 million yuan to 391,872.96 million yuan, representing a 12.85% growth [18]. - The company's liabilities are expected to rise from 82,291.47 million yuan to 100,926.75 million yuan, indicating a 22.65% increase [18]. - The net profit attributable to shareholders is anticipated to decline from 11,581.97 million yuan to 9,205.61 million yuan, primarily due to increased depreciation and amortization from asset revaluation [19]. Group 3: Strategic Rationale - The acquisition is aimed at achieving operational synergies, enhancing technical capabilities, and improving customer service levels [17][19]. - The transaction will allow the company to leverage Jinfeng Paper's resources and market position, thereby optimizing its product structure and regional distribution [17][19]. - The integration is expected to bolster the company's competitive edge and resilience against operational risks in the paper industry [17][19].

Group 1: Transaction Purpose and Integration Management - The transaction aims to enhance the operational efficiency of the listed company by acquiring Sichuan Jinfeng Paper Co., Ltd., which will become a wholly-owned subsidiary, allowing for better resource allocation and maximization of operational benefits [2][12] - The listed company plans to integrate business, assets, finance, personnel, and institutions with the target company post-acquisition to improve overall performance [2][12] - The acquisition is expected to help the listed company align with international tobacco development trends and increase its market share in international business [2][12] Group 2: Financial Impact and Profitability - The acquisition will lead to a decrease in the listed company's net profit and earnings per share due to significant depreciation and amortization of the target company's long-term assets [2][12] - The projected net profit for the listed company is expected to decline from 136.16 million yuan to 92.06 million yuan post-transaction, with earnings per share dropping from 0.46 yuan to 0.28 yuan [11][12] - The long-term asset appreciation and subsequent depreciation will impact the listed company's financial performance, but the effects are expected to diminish by 2026 as the target company improves its profitability [12][23] Group 3: Market Position and Competitive Advantage - The target company holds a special production license for cigarette paper, which is crucial for the listed company's product offerings and market positioning [2][12] - The acquisition will allow the listed company to enhance its production capacity and address existing capacity constraints, with a current utilization rate of 95.12% [15][16] - The geographical advantage of the target company, located in Chengdu, will reduce operational costs and improve logistics efficiency for the listed company, particularly for international markets [16][12] Group 4: Corporate Governance and Investor Protection - The listed company has established a robust corporate governance structure and will continue to enhance it post-acquisition to protect investor interests [19][20] - Measures will be implemented to ensure fair pricing and transparency in the transaction, including hiring independent financial and legal advisors [17][20] - The company has committed to strict information disclosure obligations and will provide updates on the transaction's progress to safeguard investor rights [17][20]

Core Viewpoint - The document discusses the review and response to the inquiry regarding the asset acquisition and related transactions of Mudanjiang Hengfeng Paper Industry Co., Ltd, focusing on the historical evolution of the target company and the implications of its financial restructuring [1][2]. Historical Evolution of the Target Company - The target company underwent bankruptcy restructuring in 2012, involving the merger of Jin Feng Paper and its subsidiaries, with new shareholders introduced during the restructuring [1]. - The restructuring plan was completed in 2016, but some overdue bank loans were not claimed during the process [1]. - In 2024, Jin Feng Paper acquired 100% equity of Henghua Thermal Power through a share transfer and subsequently merged with its subsidiaries [1][2]. - The company also underwent a spin-off, transferring unrelated assets and historical losses to Shengyuan Paper [1][2]. Financial Data and Debt Management - The overdue bank loans are still within the statute of limitations, and creditors retain the right to claim under the restructuring plan [2]. - The financial data before and after the mergers and spin-offs, including the allocation of assets and liabilities, is crucial for understanding the company's financial health [2][3]. Debt-to-Equity Swap - The debt-to-equity swap by Zhujing Paper was necessary due to Jin Feng Paper's negative net assets and inability to repay debts [5]. - The swap is expected to enhance Jin Feng Paper's business prospects, with the company showing signs of recovery post-restructuring [5][6]. Valuation and Assessment - The asset valuation was conducted using the asset-based approach, resulting in a significant increase in asset value, particularly in fixed assets and land use rights [9][12]. - The assessment indicated a net asset increase of 19,603.72 million yuan, with a valuation increase rate of 272.20% [9][12]. - The valuation process considered various factors, including construction costs, market conditions, and the economic lifespan of the assets [12][19]. Legal and Compliance Considerations - The document emphasizes the need for independent financial advisors, lawyers, and accountants to verify the compliance and accuracy of the financial assessments and restructuring processes [3][9]. - The legal implications of the debt allocation during the spin-off and the potential risks associated with pre-spin-off debts are highlighted [4][5].

Core Viewpoint - The report outlines the independent financial advisory opinion regarding Mudanjiang Hengfeng Paper Co., Ltd.'s issuance of shares to acquire assets and related transactions, emphasizing the legality, compliance, and fairness of the transaction for all shareholders [1][2][3]. Summary by Sections Independent Financial Advisor Declaration - The independent financial advisor, Zhongyin International Securities Co., Ltd., confirms no conflict of interest with the transaction parties and asserts the independence of its opinions [1][2]. - The advisor has conducted due diligence and is responsible for the accuracy and completeness of the report [2][3]. Transaction Overview - The transaction involves the issuance of shares to acquire 100% equity of Sichuan Jinfeng Paper Co., Ltd. for a total price of 268.0562 million yuan [8][10]. - Jinfeng Paper specializes in high-grade cigarette paper and related products, aligning with Hengfeng Paper's core business [12][13]. Financial Impact - The transaction is expected to enhance Hengfeng Paper's production capacity and market presence, particularly in the southwestern region of China, which is crucial for tobacco production [16][17]. - Post-transaction, the total assets of Hengfeng Paper are projected to increase by 12.85%, and total liabilities by 22.65%, indicating a significant impact on the company's financial structure [14][15]. Shareholding Structure - After the transaction, the shareholding structure will change, with Jinfeng Paper and its controlling party holding 9.81% of Hengfeng Paper's shares, while Hengfeng Group's shareholding will decrease from 29.93% to 27.00% [13][17]. Compliance and Approval - The transaction requires approval from relevant regulatory bodies, including the Shanghai Stock Exchange and the China Securities Regulatory Commission, before implementation [11][12]. - The company has adhered to all necessary disclosure obligations and has engaged qualified intermediaries to ensure fairness in the transaction [19][20]. Investor Protection Measures - Hengfeng Paper will implement measures to protect the rights of minority shareholders, including strict adherence to information disclosure requirements and the establishment of a robust governance structure [19][21]. - The company plans to enhance its profit distribution policy to ensure reasonable returns for investors [21][22].

Core Viewpoint - The legal opinion regarding the asset acquisition and related transactions of Mudanjiang Hengfeng Paper Co., Ltd. emphasizes the compliance with national industrial policies and legal regulations, as well as the operational independence of the target company during the management period [1][2][3]. Group 1: Management and Control - During the management period, the target company's shareholders' meetings and board operations were conducted independently, with the management committee not able to exercise the rights of the shareholders' meeting or board [6][9][11]. - The target company is controlled by Zhujiang Paper Industry and its actual controller Zhang Hua, with the listing company not holding any equity in the target company [11][12]. - The management committee, established under the entrusted management agreement, is a temporary internal body and cannot replace the board's authority [10][13]. Group 2: Regulatory Compliance - The target company has obtained a tobacco monopoly production enterprise license, with the latest renewal valid until May 2029, confirming its legal and effective status [15][21]. - The target company's main business activities align with national industrial policies, as it produces cigarette paper and other specialty papers, which are not classified as restricted or eliminated industries [21][22]. - The transaction complies with environmental protection laws, land management regulations, and antitrust laws, with no violations reported during the operational period [22][23]. Group 3: Financial and Operational Aspects - The target company has a history of financial difficulties, including overdue bank loans, but the restructuring plan allows for potential recovery and compliance with creditor claims [24][26]. - The transaction is expected to enhance the listing company's operational efficiency and market share in the international tobacco industry, addressing production capacity constraints [3][5]. - The listing company plans to integrate business, assets, and personnel post-transaction to maximize operational benefits [3][4].