Crazy Collection Of Over 1.2 Billion Funds! Specialty Paper Giant Undergoes A Major Transformation Of Selling Land And Machines, With A Sharp Drop Of 68%. What Should It Do?

Minfeng Special Paper Co., Ltd. issued two major announcements on the evening of September 29th, announcing a series of significant changes involving the company's core assets. These measures are not simple financial operations, but a deep strategic adjustment of "selling land" and "selling equipment" in parallel, aimed at thoroughly revitalizing existing assets, optimizing industrial structure, and significantly increasing the company's cash flow.

Disposal of core assets, signing a huge expropriation compensation agreement
Minfeng Special Paper announced that the equipment and supporting spare parts that are no longer used in the Nanhu factory area will be publicly listed for sale. The scope of asset sales includes 10 original paper mills, namely No.5, No.6, No.8, No.9, No.12, No.18, No.19, No.20, No.21, and No.22, as well as equipment from the original No.7 coating plant, machine repair plant, thermal power plant, water supply plant, printing plant, and public sector.
The reason for the sale is that the Nanhu factory area has been completely shut down. The sale aims to revitalize the company's assets, improve asset operation efficiency and liquidity. The transaction method will be publicly listed for sale through Jiaxing Property Rights Company. According to the evaluation conducted by Jiaxing Truth Real Estate Asset Appraisal Co., Ltd. (using the cost method, with a benchmark date of June 30, 2025), the assessed value is nearly RMB 175 million (including value-added tax). The initial listing price shall not be lower than this evaluation value.
The original book value of these assets is about 1.28 billion yuan, but the unaudited net book value is only 164 million yuan. The assessed value (175 million yuan) has increased by approximately 38.89 million yuan compared to the net value (136 million yuan) excluding installation fees, with a growth rate of 28.65%.
At the same time, the company also announced that it has signed a "Framework Agreement on Compensation for House Expropriation on State owned Land" with the Nanhu District People's Government of Jiaxing City and Jiaxing Industrial Development Group Co., Ltd. (the indirect controlling shareholder of the company). The scope of expropriation includes Minfeng (Phase II), Robert Pryke Building, Minfeng Union Building, 1923, Minfeng Auditorium, and Minfeng Factory Water Pump Station plot, where the company and its controlling shareholder Minfeng Group's properties are located. The total compensation amount that the company will receive is approximately RMB 1.08 billion. (Among them, 8.8793 million yuan is collected on behalf of other companies and needs to be transferred.)
Once Minfeng Special Paper finally completes the disposal of these two assets, it will bring the company a huge cash flow of over 1.25 billion yuan, which is undoubtedly a "blood changing" rebirth for a traditional manufacturing enterprise.
1. The decline in performance is not a "critical illness", but a "surgery"
According to the semi annual financial report of Minfeng Special Paper, Minfeng Special Paper achieved a revenue of 601 million yuan in the first half of 2025, a significant year-on-year decrease of 23.21%; The net profit attributable to shareholders of the listed company was only 15.0737 million yuan, a sharp decrease of 68.88% year-on-year. At the same time, the total assets of the company are 3.023 billion yuan, the net assets attributable to the parent company are 1.509 billion yuan, and the asset liability ratio remains at a healthy level of 50.06%. On the surface, the "double decline" in revenue and profit seems to indicate a worsening of market competition. But the company clearly stated that this is not a "market disease", but a "strategic surgery".

The core reason lies in the company's proactive strategic reduction and capacity contraction. In the second half of 2024, the company voluntarily stopped the operation of two paper machines, PM20 and PM22. These two paper machines have been completely shut down in the first half of the year, directly leading to a year-on-year decrease in production and sales, which is the main reason for the significant decline in revenue and profit.
In addition, in the first quarter of 2024, there were significant non recurring gains (value-added tax deduction of 11.0435 million yuan) as a high base, and the increase in financial expenses (decrease in interest income) further lowered the profit for this period. The sale of a large number of discontinued devices (including the discontinued PM20, PM22, etc.) is a thorough implementation of the "strategic subtraction". The company is bidding farewell to the old era and old production capacity, and concentrating resources on the core business of high value-added specialty paper.
2. Cash is king: reserve "ammunition" for future transformation
Through asset sales and property expropriation, Minfeng Special Paper will receive a huge amount of funds. This transaction will effectively activate a large amount of existing assets in the Nanhu factory area, significantly increase the company's revenue, and have a positive impact on the company's financial condition and operating results. On the basis of maintaining a healthy asset liability ratio of 50.06%, the injection of huge amounts of cash will unprecedentedly strengthen its asset liquidity and risk resistance ability. At the same time, this funding will become a solid foundation for the company's next industrial upgrading, technological transformation, or finding new growth points. The company not only undertakes the social responsibility of urban renewal in Jiaxing, but also creates enormous space for its own industrial upgrading and long-term development.
The "slimming" and "rebirth" of veteran specialty paper giants

This series of actions by Minfeng Special Paper is a 'cage for birds' exchange. It not only dealt with a large amount of idle assets in the shutdown factory area, quickly retrieved funds, but also took advantage of the opportunity of urban renewal to complete the replacement of huge assets, achieving a double harvest of economic and social benefits.
The company is decisively "divesting from the past", exchanging labor pains for new life, completely liberating resources from inefficient and outdated production capacity, laying a solid foundation for focusing on the main business of specialty paper and achieving high-quality development. This is a typical case of an old industrial giant's strategic downsizing, power accumulation, and pursuit of rebirth in the changing times.