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个股公告正文

晨 鸣B:2016年年度报告摘要(英文版)

日期:2017-02-18附件下载

                                                 2016 Annual Report Summary of Shandong Chenming Paper Holdings Limited




Stock code: 000488, 200488             Stock abbreviation: Chenming Paper, Chenming B                    Announcement No.: 2016-008




 2016 Annual Report Summary of Shandong Chenming Paper
                     Holdings Limited

I.    IMPORTANT NOTICE

This annual report summary is extracted from the text of the annual report. For the full understanding of the operating results,
financial position and plan for further development, investors should carefully read the text of the annual report published on media
as designated by the CSRC and the website of The Stock Exchange of Hong Kong Limited.
Non-standard auditor’s opinion
□ Applicable √ Not applicable
Plans for profit distribution on ordinary shares or conversion of capital reserves into share capital proposed to the Board during the
reporting period
√ Applicable □ Not applicable
Conversion of capital reserves into share capital
□ Yes √ No
The proposed profit distribution plan for ordinary shares of the Company was considered and passed by the Board: Based on the total
ordinary share capital of 1,936,405,467 shares as at the end of 2016, a cash dividend of RMB6 (tax inclusive) per ten shares or
RMB1,161,843,280.20 will be distributed to ordinary shareholders. No bonus shares (tax inclusive) will be issued and the share
capital will not increase with the funds transferred from the reserves.
Plans for profit distribution on preference shares for the reporting period approved by the Board
√Applicable □ Not applicable
In accordance with the Prospectus of Non-public Issuance of Preference Shares, shareholders of preference shares may jointly
participate in the distribution of the 50% retained earnings realised for the year of issuance with ordinary shareholders. The basis for
the distribution is calculated as follows: (the number of months for the period from the next month after the month of issuance to the
end of the reporting period/12) × the retained earnings realised for the year × 50%, and the basis for the distribution is
9/12×19.11×50%=RMB717 million. Based on the 387,263,339 simulated shares converted from the preference shares as at the end
of 2016 on a conversion ratio of 1 share valued at RMB5.81, a cash dividend of RMB3.08 (tax inclusive) per ten shares or a variable
cash dividend amounting to RMB119,277,108.41 will be distributed to holders of preference shares.


II. BASIC INFORMATION ABOUT THE COMPANY

1.    Company profile

Stock abbreviation             晨鳴紙業 and 晨鳴 B                  Stock Code                            000488、200488
Stock exchanges on which
                               Shenzhen Stock Exchange
the shares are listed
Stock abbreviation             Chenming Paper                       Stock Code                            01812
Stock exchanges on which
                               The Stock Exchange of Hong Kong Limited
the shares are listed
 Contact persons and contact          Secretary to the Board         Securities Affairs Representative       Hong Kong Company
           methods                                                                                                 Secretary
Name                           Xiao Peng                            Yuan Xikun                           Poon Shiu Cheong
                               No. 2199 Nongsheng East Road,        No. 2199 Nongsheng East Road, 22nd Floor, World Wide House,
Office address                 Shouguang City, Shandong             Shouguang City, Shandong      Central, Hong Kong
                               Province                             Province
Telephone                      (86)-0536-2158977                    (86)-0536-2158977                    (852)-2501 0088
Facsimile                      (86)-0536-2158008                    (86)-0536-2158008                    (852)-2501 0028
Email address                  chenmmingpaper@163.com               chenmmingpaper@163.com               kentpoon_1009@yahoo.com.hk




                                                                                                                                      1
                                                 2016 Annual Report Summary of Shandong Chenming Paper Holdings Limited



2.    Major operations or products during the reporting period

      (I) Principal operations of the Company during the Reporting Period
      The Company is a large and integrated modern conglomerate principally engaged in pulp production, paper making, finance and
forestry businesses while also involved in mining, energy, logistics, construction materials, hotel operation and others. It is also the
only listed company with A shares, B shares, H shares and preference shares in issue and the first company in the paper making
industry having a finance company and a financial leasing company integrated with its industrial activities in China. The
machine-made paper business and the financial leasing business are main sources of revenue and profit of the Company. During the
reporting period, there was no significant change in the principal operations of the Company.
      1. Machine-made paper business
      The Company is a leading player in the paper making industry in China. It has established production bases in Shandong,
Guangdong, Hubei, Jiangxi and Jilin with annual pulp and paper production capacity of over 8,500,000 tonnes. It has the largest pulp
paper production base in the world and dozens of pulp and paper production lines of international advanced standards. The product
mix of the Company has gradually diversified into five major paper types, namely printing paper, packaging paper, office paper,
industrial paper and household paper, as well as the nine major product series which focus on high and middle end products,
including high-end cultural paper, coated paper, white paper board, newsprint paper, light weight coated paper, copy paper, industrial
paper, special paper and household paper.
      The Company has scientific research institutions including the national enterprise technology centre, the post-doctoral working
station as well as state certified CNAS pulp and paper testing centre and has obtained over 150 national patents including 9 patents
for invention, with 7 products selected as national new products and 29 products filling the gap in China. The Company has obtained
21 Science and Technology Progress Awards above the provincial level and undertaken five national science and technology projects
and 26 provincial technological innovation projects. The brand “Chenming” is recognised as a well-known brand name in China.
      2. Financial leasing business
      Since the establishment of the Financial Leasing Company, it, relying on strong capital strength and talent advantages of the
Company while giving full play to the advantages of internationalisation and market-oriented operation mechanisms, has been
actively seeking the organic combination between industrial capital and financial capital. Externally, it provides financing and
value-added service solutions to large state-owned enterprises, listed companies, government financing platforms, quality private
enterprises, new and high-tech enterprises, schools and hospitals. Internally, it adapts to the trend of diversification of demands in the
financial market and the development of integrated financial services within the Company to provide services for the upstream and
downstream sectors of the industry chain of the paper making industry. The leasing business of the Financial Leasing Company is
mainly conducted on a leaseback basis. Recently, the Financial Leasing Company has become a new source of profit growth of the
Company with sound momentum for future growth.
      (II) General information of the industries where the Company operated in during the reporting period
      1. Paper making industry
      The growth of the paper making industry tends to be closely correlated to the macroeconomic growth. While there are
adjustments of economic growth in China, the growth of the paper making industry is also subject to pressure for adjustments.
However, in the light of the easing downward pressure on the national economy, improving income levels of residents and the
stabilising economy as a whole, it is expected the per capita consumption of paper and paper board will continue to increase. Besides,
under the current market conditions, as the enterprises step up efforts to eliminate obsolete production capacity and restructure their
businesses, it is expected the competition in the paper making industry will be further standardised.
      In 2016, China’s economy grew at a slow yet stable pace with favourable momentum. The supply-side reform achieved initial
results. There were more drivers for economic growth. Against the backdrop of the stable macroeconomic operation, the paper making
industry where the Company operated was affected by factors including the supply-side structural reform, national environmental
protection governance, elimination of overcapacity and increase in market demand, favouring the accelerated price increases in the
paper making industry. In particular, in the second half year, there was a general increase in prices in the paper making industry in
China due to the increased cost of, among other things, wood pulp, waste paper, logistics and coal. In the medium to long run, as the
supply-side reform in China further advances, the elimination of much more obsolete production capacity in the paper making
industry will accelerate, and the elimination of the production capacity of small and medium-sized enterprises will also accelerate
due to the strengthened environmental governance, thus favouring industry concentration. There are obvious signs for industry
recovery with a boom to be prolonged.
      The Company enjoyed obvious economies of scale in the paper making industry. The output and sales revenue of the Company
had been ranking high in the industry for many years, and its comprehensive economic benefits had ranked first among the peers in
the industry in China for many years in a row. Its comprehensive strength had ranked among the top ten paper manufacturers in the
world. Therefore, the Company enjoyed significant economies of scale in the industry and was relatively favourably positioned for its
future development. In addition, as the first listed company with A shares, B shares, H shares and preference shares in issue in China,
the Company had gained access to the capital market, thus providing effective support for the future project investments of the
Company. The overall listing of the machine-made paper business of the Company also made the management of the Company more
regulated and the operations more transparent, thus laying a solid foundation for the sustainable development of the Company.
      2. Financial leasing industry
      The Guiding Opinions on Accelerating the Development of Financial Leasing Industry and the Guiding Opinions on Promoting
the Sound Development of Financial Leasing Industry were issued by the State Council in 2015. As the first national policy on
promoting the financial leasing industry in China, the above opinions had paved the way for the development of the financial leasing
industry in the future.
      Under the new normal of the economic development, the financial leasing industry in China entered its golden years. According



                                                                                                                                        2
                                                 2016 Annual Report Summary of Shandong Chenming Paper Holdings Limited


to the estimate of the China Leasing Alliance, there were over 7,000 headquarters enterprises engaging in financial leasing in China,
representing a year-on-year increase of approximately 2,500, as at the end of the year. The outstanding financial leasing contracts
amounted to RMB5.33 trillion, representing a year-on-year increase of 20%. According to the Research Report on Business
Prospects Survey of and Investment Strategies in the China Financial Leasing Industry 2016-2021 issued by ASKCI Consulting Co.,
Ltd., the financial leasing industry will grow at a compound annual growth rate of over 20% in the future and it is expected that the
output of the industry will amount to RMB20.79 trillion by 2021. The business prospects of the financial leasing industry in China
are promising.

3.    Major accounting data and financial indicators

(1)   Major accounting data and financial indicators for the last three years

Retrospective adjustment to or restatement of the accounting data for prior years by the Company due to change of accounting
policies and correction of accounting errors
□ Yes √ No
                                                                                                                        Unit: RMB
                                                                                         Increase/decrease for
                                               2016                     2015             the year as compared            2014
                                                                                          to the prior year (%)
Revenue                                    22,907,118,241.84       20,241,906,131.81                    13.17%     19,101,677,077.69
Net profit attributable to
                                            2,063,986,822.25         1,021,224,678.04                  102.11%        505,204,384.73
shareholders of the Company
Net profit after extraordinary gains
or losses attributable to                   1,611,533,699.22           719,891,359.63                  123.86%        130,445,644.83
shareholders of the Company
Net cash flows from operating
                                            2,153,049,269.84        -9,721,363,524.30                  122.15%        985,399,735.85
activities
Basic earnings per share (RMB per
                                                         0.99                     0.50                  98.00%                    0.26
share)
Diluted earnings per share (RMB
                                                         0.99                     0.50                  98.00%                    0.26
per share)
Rate of return on net assets on
                                                       9.59%                    6.73%                    2.86%                  3.62%
weighted average basis
                                                                                   Increase/decrease as at
                                                                                     the end of the year
                                       As at the end of 2016 As at the end of 2015                         As at the end of 2014
                                                                                   compared to the end of
                                                                                      the prior year (%)
 Total assets                             82,285,354,532.14     77,961,699,547.59                    5.55%   56,822,026,545.21
 Net assets attributable to
                                            22,218,808,367.43       16,871,494,584.82                    31.69%     13,917,343,301.15
 shareholders of the Company
Explanation: Net profit attributable to shareholders of the Company does not exclude the effect of interest payment deferred and
accumulated to subsequent periods for perpetual bonds under other equity instruments. When calculating financial indicators such as
earnings per share and rate of return on net assets on weighted average basis, the interests for perpetual bonds from the value date up
to 1 January 2016 (amounted to RMB153,140,000.00) are deducted. For details, please refer to the full text of the annual report.

(2) Key accounting data by quarter

                                                                                                                           Unit: RMB
                                                1Q                      2Q                       3Q                      4Q
Revenue                                    4,951,931,256.74         5,654,427,476.28        5,965,699,811.33        6,335,059,697.49
Net profit attributable to
                                             402,131,344.77           537,033,525.83          614,998,648.94          509,823,302.71
shareholders of the Company
Net profit after extraordinary gains
or losses attributable to                    292,898,560.63           448,912,523.19          522,725,460.32          346,997,155.08
shareholders of the Company
Net cash flows from operating
                                          -3,936,890,898.29         1,239,381,045.25         -422,581,643.26        5,273,140,766.14
activities
Whether the above indicators or their aggregated amounts have any material difference with the respective amounts as disclosed in
the quarterly report or interim report



                                                                                                                                         3
                                                   2016 Annual Report Summary of Shandong Chenming Paper Holdings Limited


□ Yes √ No

4.    Share capital and shareholders

(1) Number of holders of ordinary shares and preference shares with restored voting right and Top 10
shareholders

                                                                                                                               Unit: share
                                                                                                              Total number of
                   106,915, of                               95,521, of which
Total number                           Total number of                           Total number of              shareholders of
                   which 84,582                              73,559 were
of shareholders                        shareholders of                           shareholders of              preference shares
                   were holders of A                         holders of A
of ordinary                            ordinary shares as                        preference shares            with restored
                   shares, 21,862                            shares, 21,497
shares as at the                       at the end of the                         with restored              0 voting right as at        0
                   were holders of B                         were holders of B
end of the                             month prior to the                        voting right as at           the end of the
                   shares and 471                            shares and 465
reporting                              publication date of                       the end of the               month prior to the
                   were holders of                           were holders of H
period                                 this annual report                        reporting period             disclosure date of
                   H shares                                  shares
                                                                                                              the annual report
                                                  Shareholdings of Top 10 shareholders
                                                                Percentage                                           Share pledged or
                                                                                                   Number of             locked-up
                                                                    of           Number of
        Name of shareholders             Nature of shareholders                                 restricted shares
                                                                shareholdi       shares held                      Status of
                                                                                                       held                    Number
                                                                    ng                                             shares
SHOUGUANG CHENMING       State-owned legal
                                                                     15.13%      293,003,657                  0 Pledged      201,562,000
HOLDINGS COMPANY LIMITED person
HKSCC NOMINEES LIMITED                  Overseas legal person        12.97%      251,155,350                  0
CHENMING HOLDINGS (HONG
                        Overseas legal person                         8.94%      173,093,400                  0
KONG) LIMITED
                                        Domestic
CENTRAL HUIJIN ASSET
                                        non-state-owned legal         2.07%       40,137,900                  0
MANAGEMENT LTD.
                                        person
ANBANG ASSET
MANAGEMENT - CHINA
MERCHANTS BANK - ANBANG
ASSET MANAGEMENT - CHINA
MERCHANTS BANK - ANBANG Others                                        1.52%       29,403,560                  0
ASSET MANAGEMENT -
WIN-WIN NO. 3 COLLECTIVE
ASSET MANAGEMENT
PRODUCT
                            Domestic
HUATAI SECURITIES CO., LTD. non-state-owned legal                     0.71%       13,839,967                  0
                            person
BBH A/C VANGUARD
EMERGING MARKETS STOCK                  Overseas legal person         0.44%         8,608,238                 0
INDEX FUND
                                        Domestic nature
JIN Xing                                                              0.40%         7,761,763                 0
                                        person
                                        Domestic nature
CHEN Hongguo                                                          0.33%         6,434,527                 0
                                        person
LSV EMERGING MARKETS
                                        Overseas legal person         0.32%         6,102,800                 0
EQUITY FUND, L.P.
                                    A shareholder, Chenming Holdings (Hong Kong) Limited, which is an overseas legal person,
                                    is a wholly-owned subsidiary of a shareholder, Shouguang Chenming Holdings Company
Connected relationship or connected Limited, which is a state-owned legal person. Hence, they are persons acting in concert under
party relationship among the above Administration of Disclosure of Information on the Change of Shareholdings in Listed
shareholders                        Companies Procedures. Save for the above, it is not aware that any other shareholders of
                                    tradable shares are persons acting in concert and is also not aware that any other shareholders
                                    of tradable shares are connected with each other.




                                                                                                                                            4
                                                2016 Annual Report Summary of Shandong Chenming Paper Holdings Limited



(2) Total number of holders of preference shares and Top 10 holders of preference shares

√ Applicable □ Not applicable
                                                                                                                          Unit: share
Total number of shareholders of                            Total number of shareholders of preference
preference shares as at the end                          7 shares as at the end of the month prior to the                           7
of the reporting period                                    publication date of this annual report
                                      Shareholdings of top ten holders of preference shares
                                                                                                                Share pledged or
                                                                                              Number of            locked-up
                                           Nature of       Percentage of     Number of
         Name of shareholders                                                                 preference
                                          shareholders     shareholding      shares held                      Status of
                                                                                              shares held                  Number
                                                                                                               shares
BEIJING YIBEN ZHONGXING    Domestic
INVESTMENT MANAGEMENT CO., non-state-owned                        27.78%       12,500,000        12,500,000 Pledged       12,500,000
LTD.                       legal person
BANK OF COMMUNICATIONS
INTERNATIONAL TRUST CO., LTD.
                              Others                              22.44%       10,100,000        10,100,000
- HUILI NO.167 SINGLE CAPITAL
TRUST
BANK OF COMMUNICATIONS
INTERNATIONAL TRUST CO., LTD.
                              Others                              14.22%        6,400,000         6,400,000
- HUILI NO.136 SINGLE CAPITAL
TRUST
QILU BANK CO., LTD. - QILU
BANK QUANXIN WEALTH        Others                                 13.33%        6,000,000         6,000,000
MANAGEMENT PRODUCT SERIES
                                       Domestic
HENGFENG BANK CO., LTD.                non-state-owned            11.11%        5,000,000         5,000,000
                                       legal person
SHANGHAI STATE-OWNED                   State-owned
                                                                   6.67%        3,000,000         3,000,000
ASSETS OPERATION CO., LTD.             legal person
NCF - MINSHENG BANK - CHINA
FORTUNE INTERNATIONAL
TRUST – CHINA FORTUNE                 Others                      4.44%        2,000,000         2,000,000
TRUSTMIN XIN NO. 11 SINGLE
CAPITAL TRUST
                                       The aforesaid holders of preference shares, “BANK OF COMMUNICATIONS
                                       INTERNATIONAL TRUST CO., LTD. - HUILI NO.167 SINGLE CAPITAL TRUST”
Connected relationship or connected    and “BANK OF COMMUNICATIONS INTERNATIONAL TRUST CO., LTD. - HUILI
party relationship among the above     NO.136 SINGLE CAPITAL TRUST”, are persons acting in concert. Save for the above, it
shareholders                           is not aware that the remaining holders of preference shares are persons acting in concert,
                                       and it is also not aware whether there is any connected relationship between the above
                                       shareholders of preference shares and top ten holders of ordinary shares.




                                                                                                                                        5
                                                2016 Annual Report Summary of Shandong Chenming Paper Holdings Limited



(3) Diagram showing proprietary ownership and controlling relationships among the Company and its de
    facto controller



                              State-owned Assets Supervision and Administration Office of Shouguang City




                                       Shandong Shouguang Jinxin Investment Holdings Limited




                                          Shouguang Chenming Holdings Company Limited




                                                               Chenming Holdings (Hong Kong) Limited




                                            Shandong Chenming Paper Holdings Limited




5.   Corporate bonds

(1) Basic information on corporate bonds

                                                                                               Outstanding amount of
       Name of bond          Bond abbreviation      Bond code            Maturity date                                 Interest rate
                                                                                              the bonds (RMB’0,000)
2012 corporate bonds of
                               12 Chenming
Shandong Chenming Paper                               112144          26 December 2017                      380,000            5.65%
                                   Bond
Holdings Limited
2011 corporate bonds of
                               11 Chenming
Shandong Chenming Paper                               112031              6 July 2016                       200,000            5.95%
                                   Bond
Holdings Limited
                             1. The payment of interest on and redemption of 11 Chenming Bond were completed on 6 July 2016.
                             For details, please refer to the Announcement on Redemption, Dividend Payment and Delisting of “11
Interest payment of          Chenming Bond” for 2016 published by the Company on 30 June 2016.
corporate bonds during the   2. The interests of 12 Chenming Bond for the period from 26 December 2015 (the value date) to 25
reporting period             December 2016 started to pay on 26 December 2016. For details, please refer to the Announcement
                             on 2016 Dividend Payment in respect of “12 Chenming Bond” published by the Company on 19
                             December 2016.


(2) Latest credit rating and changes in rating of corporate bonds

     The credit rating of 11 Chenming Bond and 12 Chenming Bond as granted by China Chengxin Securities Valuation Company
Limited remained at AA+, and the rating for the Company was AA+ (stable outlook). The 2011 corporate bond rating report (2016)
and 2012 corporate bond rating report (2016) were published on CNINFO on 27 April 2016.




                                                                                                                                       6
                                                 2016 Annual Report Summary of Shandong Chenming Paper Holdings Limited



(3) Major accounting data and financial indicators of the Company over the past two years as at the end
of the reporting period

                                                                                                                     Unit: RMB’0,000
                                                                                                       Year-on-year increase/decrease
                Item                            2016                             2015
                                                                                                               in percentage
Gearing ratio                                              72.58%                            77.86%                            -5.28%
Proportion of EBITDA to total
                                                           10.01%                             9.74%                             0.27%
debts
Interest coverage ratio                                       2.19                              1.05                         108.57%


III. Discussion and Analysis of Operations

1.   Operation during the reporting period

      In 2016, the Company aimed for “developing into an enterprise with hundreds of billions in value” by adhering to the main theme
of “achieving growth amid stability” and committed itself to “team building, management enhancement, outstanding business
performance and good results”. The Company stuck to its diversification strategy, accelerated transformation and upgrading, and
developed an industrial system that centred on pulp production, paper making and finance to achieve synergy among forestry, real
estate and mining so as to boost the management quality, core competitiveness and profitability. The past year was the best year for the
Company’s development so far. The overall strength of Company significantly increased while the Company enhanced its position in
the industry, delivering excellent performance.
      In 2016, the Company completed the production of machine-made paper of 4.36 million tonnes with sales of 4.52 million tonnes
and achieved revenue of RMB22.907 billion, a year-on-year increase of 13.17%. The Company recorded operating costs of
RMB15.787 billion, a year-on-year increase of 6.93%. Total profit and net profit attributable to equity holders of the Company were
RMB2,583 million and RMB2,064 million respectively, up by 83.18% and 102.11% from the prior year. The Company’s total assets
amounted to RMB82.285 billion. The financial segment experienced stable development across businesses with ever improving
management systems and effective risk preventions.
      (I) New era in corporate management
      The Company introduced a professional management consulting company to make changes focusing on the three aspects,
namely, organisation management and structural optimisation, remuneration system and performance appraisal. The Company placed
emphasis on “strengthening the headquarters and consolidating secondary companies” and adjusted the organisation structure of the
Group. The Company also achieved synergy among three segments, namely manufacturing, finance and supply chain trading, to
expand and develop into a diversified group integrating production, financing and trading.
      (II) New performance in marketing
      The Company attached great importance to its employees. Human resources were actively introduced at all levels. The appraisal
methodology was optimised to reward the diligent. The market-based sales work assignment toolkit was established and the product
lines were segmented. A company was set up for electrostatic paper products and the development of major customers was
strengthened. Management of receivables was strengthened and default in delivery was controlled strictly. Delivery and reduction in
inventories were implemented.
      (III) New progress in production and operation
      Primary management was steadily enhanced and production and operation continued to be highly effective in strict compliance
with the standard parameters and subject to the sheet break and review of operation efficiency. The Company watched the markets
closely to adjust its product mix by developing high value added products such as glassine paper, wine label paper, super high-bulk
white paper board and high weight duplex press paper. The Company gained efficiency through optimisation of the pulp structure,
substitution of domestically produced chemicals for overseas ones, and promotion of the application of new technologies such as
filler enhancers and novel retention agents.
      (IV) New development in the financial segment
      The Company successfully issued preference shares of RMB4.5 billion as the first Shandong-based listed company and the first
company in the industry to issue preference shares. The Company secured the special funds of RMB700 million from the National
Development and Reform Commission and China Development Bank at a return rate of 1.2% per annum to reduce its finance
expenses, which was a precedent in the paper making industry. The invoicing system of the Finance Company was approved to be
online to increase the business of the rediscounting channel of People’s Bank of China. The Finance Company developed all lines of
business.
      (V) New momentum gained from corporate development
      Progress of new projects accelerated: Zhanjiang Chenming’s liquid packaging paper project commenced operation smoothly in
October 2016. Haiming Mining’s magnesite mining project entered the peak time of shaft construction and equipment installation.
Huanggang Chenming’s forestry pulp integration project commenced the construction of pulp manufacturing facilities, piers and staff
quarters. Shouguang Chenming’s chemical pulp project made progress on schedule. The above projects played a very important role
in reinforcing the subsequent corporate development and facilitating the fulfilment of corporate strategic objectives.
      (VI) New benefits from procurement
      Procurement to reduce costs with benefits at source paid off. The Company cooperated with quality and major suppliers to



                                                                                                                                        7
                                                2016 Annual Report Summary of Shandong Chenming Paper Holdings Limited


reduce overall procurement costs. The measures such as overseas financing, adjusted and centralised payment procedures and
boosted sales volume of trading increased benefits by reducing the capital appropriated for inventories. The electronic commodity
exchange for pulp and paper was approved as a trading platform for the integrated pulp and paper supply chain system, which
became a new source of profit growth.


2.     Material change in principal activities during the reporting period

□ Yes √ No

3.     Products accounting for over 10% of revenue or profit from principal activities of the Company

√ Applicable □ Not applicable
                                                                                                                         Unit: RMB
                                                                                                                Increase/decrease
                                                                            Increase/decrease Increase/decrease
                                                                                                                  of gross profit
                                                                              of revenue as      of profits as
                                                                                                                    margin as
                                                           Gross profit      compared to the compared to the
     Product name       Revenue        Operating costs                                                           compared to the
                                                             margin           corresponding     corresponding
                                                                                                                  corresponding
                                                                               period of the     period of the
                                                                                                                period of the prior
                                                                                prior year        prior year
                                                                                                                       year
Duplex press
                    4,966,155,905.70 3,719,642,641.60              25.10%             11.34%             10.71%              0.43%
paper
Coated paper        4,428,162,301.09 3,287,988,564.78              25.75%              1.43%              0.91%              0.38%
White paper
                    2,815,701,912.71 2,127,180,790.00              24.45%             47.02%             45.33%              0.88%
board
Financial leasing   2,339,925,682.07    219,444,595.95             90.62%            115.69%             71.75%              2.40%


4.     Seasonal or cyclical operations requiring special attention

□ Yes √ No

5. Material difference of revenue, operating costs or net profit attributable to holders of ordinary shares
of the Company for the reporting period from the last reporting period

□ Applicable √ Not applicable

6.     Suspension in trading or delisting

□ Applicable √ Not applicable

7.     Events relating to the financial report

(1) Reason for changes in accounting policies, accounting estimates and accounting methods as compared
to the financial report for the prior year

√ Applicable □ Not applicable
①There was no change in accounting policies and accounting methods of the Company during the reporting period.
②The accounting estimates of Financial Leasing Company, a subsidiary of the Company, have changed during the reporting period.
From 1 November 2016 onwards, 5%-10% provision will be made for liabilities incurred in financial leasing operation of Financial
Leasing Company.

(2) Reason for retrospective restatement to correct major accounting errors during the reporting period

□ Applicable √ Not applicable
No retrospective restatement was made to correct major accounting errors during the reporting period.



                                                                                                                                      8
                                                 2016 Annual Report Summary of Shandong Chenming Paper Holdings Limited



(3) Reason for changes in scope of the consolidated financial statements as compared to the financial
report for the prior year

√ Applicable □ Not applicable

①Newly established subsidiaries
                                                                                                                 Registered
                                        Time of
              Name                                                      Scope of business                          capita    Shareholding
                                     incorporation
                                                                                                                (RMB’0,000)
Qingdao Chenming Nonghai                             Financial leasing, operating leasing, purchase of assets
                                       2016.07                                                                    500,000.00           100%
Financial Leasing Co., Ltd.                          for leasing, etc.
                                                     Road transportation of general cargo; transportation
                                                     for   containers;   road     transportation agency;
Jilin Chenming Logistics Co., Ltd.     2016.08                                                                        500.00           100%
                                                     consultation on cargo transportation; warehousing,
                                                     loading and unloading services, etc.
                                                     Road transportation of general cargo; transportation
Jiangxi Chenming Logistics Co.,                      for   containers;   road     transportation agency;
                                       2016.09                                                                        500.00           100%
Ltd.                                                 consultation on cargo transportation; warehousing,
                                                     loading and unloading services, etc.

②Disposal of subsidiaries
                                     Consideration of Shareholding
                                                                        Nature of
                                       disposal of    of disposal of                        Time of loss of
               Name                                                    disposal of                                    Basis for time
                                      equity interest equity interest                          control
                                                                      equity interest
                                      (RMB’0,000)         (%)
Shouguang    Chenming      Jiatai                                                                               Equity transfer agreement
                                               100.00          100.00     Transfer                    2016.12
Property Management Co., Ltd.                                                                                   and consideration received




                                                                               Shandong Chenming Paper Holdings Limited

                                                                                                                   17 February 2017




                                                                                                                                          9

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