Is it still the king to return? Chenming Paper resumed production across the board, and the amazing changes behind the integration of pulp and paper
After a period of dormancy and adjustment, the recent move of Chenming Paper, a giant in the domestic paper industry, has become the focus of attention of the capital market and the industry. On April 16, 2026, a number of well-known institutions, including Bank of Communications Schroders, HSBC Jinxin and Dacheng Fund, conducted field research on Chenming Paper. Through this in-depth dialogue, the outside world clearly saw the strong resilience and strategic determination shown by this veteran paper giant in the face of a complex and changeable market environment.
Full resumption of production: capacity utilization rate has risen steadily
For the capacity recovery issue that the market is most concerned about, Chenming Paper has given a clear timetable and roadmap. On March 13, 2026, with the official resumption of work of the fourth factory of Zhanjiang Base, it marked that Chenming's five major production bases in Shouguang, Zhanjiang, Huanggang, Jiangxi and Jilin have fully resumed production. This is not only a simple resumption of work, but also a signal of the company's business status fully recovering. At present, the company's total production capacity of about 5.8 million tons of machine-made paper has been fully developed, covering more than 200 varieties such as cultural paper, white cardboard, coated paper, and copy paper, and the sales of each base are good, and the market feedback is positive.
This comprehensive resumption of production is inseparable from the "pulp and paper integration" strategy that Chenming has been cultivating for many years. In the context of the continuous rise in commodity pulp prices due to geopolitics and supply fluctuations, Chenming's pulp production capacity of 4.3 million tons has become the company's widest moat.
At present, except for the 600,000 tons of pulp at the Huanggang base, the pulp of other bases has basically achieved self-sufficiency. Especially for broadleaf pulp, Chenming has completely gotten rid of its dependence on purchased pulp, and this wood pulp self-sufficiency rate of up to 87% allows the company to have more autonomy and bargaining space than its peers when dealing with fluctuations in raw material costs.
Cost reduction and efficiency increase: the "extreme challenge" from management to process
If pulp and paper integration is Chenming's "natural advantage", then the cost reduction and efficiency increase of the whole process is the second growth pole opened up by the company through "acquired efforts" under the leadership of the new leadership team. The company's management bluntly pointed out that since the resumption of work in September 2025, the cost per ton of paper has been reduced by about 300 yuan through a series of heavy attacks such as flattening the management structure, restructuring of the procurement model, fine-tuning of the production process and improvement of equipment maintenance efficiency.
Behind this achievement is the solid support of Chenming's "125" strategy. The strategy clarifies the two main lines of reducing costs and increasing efficiency in the whole process and developing new products in an all-round way, and tries to squeeze out profits in every link of production management through the "management innovation year".
For example, in response to the pressure of rising wood chip prices, the company has effectively offset the impact of rising costs by increasing the proportion of domestic procurement, fully tapping local resources in Huanggang, and combining technical means such as unit consumption control and chemical reduction. Chenming does not advocate seizing the market through price wars, but hopes to provide more competitive high-end and diversified products through technological innovation and cost control.
Financial slimming: systematically resolve debt risks
It is undeniable that high debt ratios and financial costs were once the sword of Damocles hanging over Chenming's head. But in this survey, the management showed an unprecedented determination to solve the problem. The company is adopting a "multi-pronged" approach to systematically resolve debt risks. Its core logic is very clear: the endogenous cash flow generated by the recovery of the main business operation is the "root", the rollover of interest rate cuts to alleviate short-term pressure is the "dry", and the introduction of strategic capital to optimize the debt structure is the "leaf".
In 2025, the company's financial expenses have decreased by 16.87% year-on-year, and this trend is expected to continue in 2026. More importantly, Chenming has completed the "scraping bones and treating poison" and divested all financial leasing and other financial businesses. This means that the credit risk factors that led to significant impairment in the past have been eliminated from the root. With the continuous disposal of non-main business assets and the withdrawal of funds, Chenming is redirecting all its ammunition to the main battlefield of pulp and paper, and the transparency and soundness of financial statements are improving significantly.
Future outlook: focus on the main business and hat removal expectations
In terms of technical equipment, Chenming still maintains a global leading position. Relying on scientific research institutions such as national enterprise technology centers and postdoctoral research workstations, the company has built a R&D system integrating scientific research, development and promotion. This profound technical accumulation enables the company to steadily gain market share in traditional advantageous fields such as white cardboard and cultural paper, and can also quickly cut into the new product track with high added value.
Regarding the "hat removal" issue that investors are concerned about, the company said that it is actively preparing application materials and will submit an application to the Shenzhen Stock Exchange as soon as possible to revoke other risk warnings. Judging from the current capacity utilization, cost control effectiveness and financial structure optimization, Chenming's most difficult moment may have passed.
Looking at the entire paper industry, although downstream demand is still in a period of weak recovery, enterprises like Chenming with ultimate cost control capabilities and a complete industrial chain closed loop can often gain more living space in the industry reshuffle. As emphasized in the survey, the company is standing at a new starting point, and by reconstructing the production management system and cultivating brand credibility, it will make every effort to win this key battle of high-quality development.