The self rescue combination fist of Chenming Paper Industry has achieved a transition from "pause" to "restart". Has the critical moment of life and death passed?
On September 15, 2025, Shandong Chenming Paper Industry Group Co., Ltd. (hereinafter referred to as "Chenming Paper") had in-depth exchanges with investors on the company's recent business situation. In this event, the company's senior management provided detailed answers to market highly concerned questions regarding resumption of work and production, financial status, government support, asset disposal, and future development strategies.
According to the conference information, with strong support from local governments and financial institutions, Chenming Paper Industry is making every effort to promote resumption of work and production. Its core production base has made significant progress, and the company is actively resolving the current challenges through a combination of "endogenous hematopoiesis" and "external blood transfusion".
Core focus: The resumption of work and production process is smooth, and the Shouguang base has achieved significant results
Regarding the issue of resumption of work and production that investors are most concerned about, Chenming Paper Industry revealed that among its five major production bases, Shouguang Base has entered the stage of comprehensive resumption of work and production, while Huanggang Base and Jiangxi Base Plant 2 maintain normal production. However, the first factory in Jiangxi base, Jilin base, and Zhanjiang base are still undergoing shutdown maintenance, and the company is striving to resume production as soon as possible.
Among them, the resumption of work in Shouguang Base, as the core, has made particularly outstanding progress and has become the "main engine" for the company to resume operations. Since the end of August, Shouguang Base has adopted a refined management plan of "one factory, one policy", achieving coordinated resumption of work across the entire industry chain from upstream chemical pulp to downstream paper products. On September 4th, Meilun Chemical Pulp Factory successfully produced qualified chemical pulp, providing raw material guarantee for downstream paper production. Subsequently, key production lines such as electrostatic paper, double adhesive paper, household paper, and a high-end copperplate paper production line with an annual output of 800000 tons were successfully put into operation.
This marks the reactivation of the company's strategic advantage of "pulp paper integration". At present, the production lines in Shouguang production base are operating stably, and the capacity release continues to increase. Next, Shouguang production base will deepen its advantages in the entire industry chain, focus on high-end paper product research and development and upgrading green environmental protection technology, seize market opportunities through product innovation, optimize sales models, achieve production and sales balance, and promote sustainable operation of the enterprise.
Funding and Support: Government's' Combination Fist 'Precise Relief, Liquidity Issues Relieved
Faced with the financial pressure required for resuming work and production, Chenming Paper has received strong support from local governments and financial institutions. According to the company's introduction, Weifang Xingchen Economic and Trade Co., Ltd., a special assistance company established by the municipal and county government platforms, has fully invested its 1 billion yuan capital. At the same time, a consortium loan of 2.31 billion yuan composed of multiple banks has been approved, and the first loan has been disbursed, providing key financial support for the gradual start-up of production lines.
In addition, local governments have established specialized teams to develop a comprehensive relief plan from promoting resumption of work and production, establishing provincial debt committees, coordinating syndicated loans, and assisting in asset disposal. Especially with the establishment of the provincial debt commission, the company's credit base has been effectively stabilized. Various financial institutions have promised to maintain stable stock credit, not withdraw or suppress loans, and provide substantial support such as extension and interest rate cuts, greatly alleviating the company's short-term debt pressure.
Internal Self Help: Focus on Main Business and Debt Resolution, Take Multiple Measures to Seek New Life
While receiving external support, Chenming Paper is also actively carrying out internal self rescue. The company is addressing its debt issue through four key measures:
Reduce financial costs: Under the promotion of the Bond Commission, we have reached extension and interest rate reduction agreements with the vast majority of financial institutions, expected to reduce financial expenses by about 700 million yuan, and are currently in similar negotiations with non-financial institutions.
Revitalize non core assets: Establish an asset management center to accelerate the disposal of property assets located in core cities such as Shanghai, Jinan, and Shenzhen, and replenish liquidity with reclaimed funds.
Strengthen accounts receivable collection: increase collection efforts and improve cash flow conditions.
Resume business and generate revenue: Relying on the net cash flow generated by resuming work and production, continuously reduce the overall debt scale.
The reason for the implementation of ST (Other Risk Warning) in the company is mainly due to the shutdown of some bases and the issuance of non-standard opinions in audit reports. The company also stated that it will promptly apply for "de listing" after the relevant risk factors are eliminated.
Industry Outlook and Strategic Adjustment: Optimizing Product Structure and Waiting for Economic Recovery
At the level of product strategy, in response to the market's concern about the production capacity of white cardboard, the company stated that it will not simply reduce production capacity, but will carry out structural optimization. For example, Shouguang Fourth Factory will shift its focus to producing high value-added products such as copperplate cards and food cards, while Zhanjiang Fourth Factory is committed to improving profitability through cost reduction and efficiency enhancement, demonstrating the company's continued emphasis on refined operations and product upgrades in the face of difficulties.
Looking ahead to the future of the paper industry, the company believes that although the industry is facing supply-demand contradictions in the short term due to concentrated new production capacity and weak demand, in the medium to long term, driven by the "dual carbon" strategy, the policy of phasing out outdated production capacity, and the recovery of domestic demand, the industry's prosperity is expected to improve. The increase in market concentration will benefit top companies like Chenming, who have confidence in the gradual recovery of the industry's overall business performance.
In depth analysis and outlook
The record of this investor relations activity clearly outlines the "survival and development" roadmap of Chenming Paper in the face of severe liquidity and operational difficulties. Its core can be summarized as the "three pronged" self rescue model: external strong blood transfusion, internal hematopoietic recovery, and future strategic hematopoietic recovery.
01
External blood transfusion is the cornerstone of survival
The strong support from local governments and financial institutions is the decisive factor for Chenming Paper to launch large-scale production resumption this time. This is not only financial assistance (1 billion capital+2.31 billion syndicated loans), but more importantly, by establishing a provincial debt commission, a "firewall" has been built, effectively avoiding the chain reaction and systemic collapse caused by individual creditors withdrawing and suppressing loans. This model of "government enterprise bank" linkage has provided valuable time window for Chenming's internal reform and production recovery, and is the prerequisite for all its self rescue actions to be carried out.
02
Internal hematopoiesis is the core of recovery
If external support is a 'blood transfusion', then resuming work and production is the restoration of 'hematopoietic' function. Chenming Paper's response strategy demonstrates its strong foundation as an industry leader:
Focusing on core assets: Prioritizing the restoration of Shouguang Base, which has the most advanced technology, the most complete industrial chain, and the strongest profitability, reflects the pragmatic strategy of "using good steel on the cutting edge". Once the "pulp paper integration" advantage of Shouguang Base is fully restored, it will be able to generate stable operating cash flow, which is fundamental for repaying debts and maintaining operations.
Multidimensional cost reduction and pressure increase: disposing of non core assets, clearing accounts receivable, negotiating interest rate cuts and extensions with creditors, this series of combinations directly targets the most core financial issues at present. Especially through debt restructuring, the 700 million yuan reduction in financial expenses has had an immediate effect, directly enhancing the company's profit margin and risk resistance.
03
Future strategy is the key to development
While dealing with short-term crises, Chenming Paper has not given up on long-term strategic thinking.
Optimize product structure instead of blindly shrinking. Faced with an oversupply of white cardboard market, the company has chosen not to shut down one size fits all, but to shift towards high value-added niche areas. This indicates that the management has a clear understanding of market trends and is attempting to reshape competitiveness through product differentiation and technological upgrades, rather than simply scaling back.
Seize the opportunity of industry integration. The company's judgment on the future of the industry is in line with the current macro policy orientation. Under the pressure of "dual carbon" and environmental protection, the accelerated clearance of small and medium-sized backward production capacity is an inevitable trend. As a leading enterprise with technological, scale, and industrial chain advantages, Chenming is expected to gain a larger market share and stronger pricing power in the process of increasing industry concentration once it overcomes this crisis.
Overall, Chenming Paper's crisis response strategy is clear, pragmatic, and interrelated. In the short term, we will rely on external support from the government and banks to stabilize our position. In the medium term, we will restore our own hematopoietic capacity through the resumption of production in core bases. In the long term, we will seek higher quality development through product structure optimization and industry integration.
However, the challenges remain severe. There is uncertainty about whether the resumption of work and production plan can be completed on time and with high quality, and whether the disposal of non core assets can be smoothly concluded at a reasonable price. The company's recovery is highly dependent on the recovery of the paper industry's prosperity. If terminal demand remains weak and product prices remain low, it will seriously affect the recovery speed of its operating cash flow, thereby dragging down the debt resolution process. In addition, despite receiving extended interest rate cuts, the massive debt stock remains the 'Damocles sword' hanging over the company, which will take several years to gradually digest through sustained profitability.
In summary, Chenming Paper Industry is on the right path of self rescue, and the most dangerous moment may have passed, but the road ahead is not smooth sailing. In the future, close attention should be paid to its resumption progress, cash flow status, asset disposal effectiveness, and overall supply and demand changes in the paper industry. These will be key indicators to determine whether it can ultimately overcome difficulties and achieve value return.