2024-03-28-深交所-晨_鸣Ｂ_2023年年度报告（英文版）_357页_1mb

Summary of SHANDONG CHENMING PAPER HOLDINGS LIMITED Annual Report 2023

Core Content

SHANDONG CHENMING PAPER HOLDINGS LIMITED (stock code: 000488 and 01812) is a large modern conglomerate primarily engaged in pulp production and paper making. The Company is listed on the Shenzhen Stock Exchange and The Stock Exchange of Hong Kong Limited. The annual report covers the financial year from 1 January 2023 to 31 December 2023.

Main Financial Highlights

Key Financial Indicators (2023 vs 2022)

• Revenue (RMB): 26,608,570,228.20 vs 32,004,367,320.91 (-16.86%)
• Net profit attributable to shareholders (RMB): -1,281,289,649.82 vs 189,290,120.82 (-776.89%)
• Net profit after extraordinary gains or losses (RMB): -1,942,120,184.70 vs -361,459,377.16 (-437.30%)
• Net cash flows from operating activities (RMB): 4,389,949,308.82 vs 3,449,824,242.37 (+27.25%)
• Basic earnings per share (RMB/share): -0.45 vs 0.03 (-1,600.00%)
• Rate of return on weighted average net assets: -7.65% vs 0.55% (decrease by 8.2 percentage points)

Key Financial Indicators at Year-End

• Total assets (RMB): 79,487,052,953.58 vs 84,301,017,409.62 (-5.71%)
• Net assets attributable to shareholders (RMB): 16,692,175,196.53 vs 19,084,565,494.92 (-12.54%)

Main Viewpoints

Industry Situation

• The paper industry, a key basic raw material industry, has seen overall improved profitability in 2023 but the growth momentum was weakened due to weak downstream demand, raw material price fluctuations, and increased supply.
• The national output of machine-made paper and paperboard reached 144,055,300 tonnes in 2023, surpassing the 140 million tonnes mark and reaching a record high.
• Prices for cultural paper and white cardboard were mixed, with a slight rebound in white cardboard in the latter half of the year.
• Paper raw material and energy prices fluctuated downward in 2023, but due to a high price base and cost transmission delays, production costs remained high, leading to increased pressure on profitability.

Principal Activities

• The Company focuses on pulp production and paper making, with production bases in Shandong, Guangdong, Hubei, Jiangxi, Jilin, and other regions.
• It has an annual production capacity of 11 million tonnes, including 4.3 million tonnes of pulp production.
• The Company is committed to a "pulp-paper integration" strategy, aiming to establish a circular development model.

Product Portfolio

• The Company offers a wide range of products including cultural paper, coated paper, white cardboard, and others.
• Major brands include "CHENMING CLOUDY MIRROR", "CHENMING CLOUDLY LION", "CHENMING SNOW SHARK", "CHENMING EAGLE", and "CHENMING GONGHAO".
• It has developed over 200 types of machine-made paper products across seven series.
• The Company has received several awards, including being selected as a "Made in Shandong • Qilu Premium Products" and winning the "Shandong Province Technology Innovation Awards".

Strategic Developments

• The Company has relocated Wuhan Chenming and reduced its financial leasing business size by over RMB20 billion.
• It has introduced high-quality strategic investors to optimise its capital structure.
• The Company has reached strategic cooperation with major clients from Korea and Sweden, aiming to expand its overseas market presence.
• It has applied for 33 patents and obtained 42 authorised patents in 2023, supporting its long-term innovation and development.

Governance and Risk Management

• The Company has not distributed cash dividends or bonus shares and has not increased share capital from reserves.
• It has implemented measures to address various risk factors, including macro-economic fluctuation, state policies, and industry competition.
• The audit report for the year shows that the Company's ability to continue as a going concern is uncertain due to negative net profit.

Key Information

• The Company is led by Chen Hongguo as the legal representative.
• The registered address is No. 595 Shengcheng Road, Shouguang City, Shandong Province.
• The Company's website is http://www.chenmingpaper.com and its email is chenmmingpaper@163.com.
• The financial report was prepared by Grant Thornton (Special General Partnership).
• There were no differences between financial data under international and China accounting standards during the reporting period.
• The Company has not disclosed details of other extraordinary gain or loss items.

Conclusion

Despite facing challenges in 2023, including a significant loss and uncertain going concern status, the Company has maintained a solid foundation and shown improving development momentum. It continues to focus on its core pulp and paper operations, enhance asset efficiency, and explore overseas markets. Innovation remains a key driver, with the Company securing numerous patents and industry recognition. The Company is committed to improving its profitability and operational efficiency while addressing key risks in the industry.