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On September 18, Cailian Press reported (Reporter: Huang Lu) that with the hefty acquisition of Chengtong Kaisheng, Yueyang Forest & Paper (600963.SH) was able to quickly enter the ecological landscaping industry. However, due to the violation of information disclosure regulations in the private placement fundraising process, the controlling shareholder of Yueyang Forest & Paper received a warning letter.

Tonight, Yueyang Forest & Paper announced that its controlling shareholder, China Paper Investment Co., Ltd. (referred to as "China Paper"), received a warning letter from the Hunan Securities Regulatory Bureau on September 14.

The announcement shows that during the non-public issuance of shares by the company to purchase Chengtong Kaisheng's assets, China Paper, as the company's direct controlling shareholder, requested Chengtong Kaisheng's original shareholders to issue a commitment letter for subsequent capital increase. Later, they negotiated to adjust the capital increase object to another company, but China Paper failed to disclose this matter to the company.

The above actions violate relevant regulations. The Hunan Securities Regulatory Bureau has decided to issue a warning letter to China Paper as an administrative regulatory measure and record it in the integrity file of the securities and futures market.

Yueyang Forest & Paper is involved in the research and development, production, and sales of cultural paper, packaging paper, and industrial paper, with a papermaking capacity of 1 million tons/year. In addition to the papermaking business, in 2017, Yueyang Forest & Paper acquired 100% equity of Chengtong Kaisheng and, relying on its own forest resources, expanded into the ecological landscaping business (landscaping engineering). Among them, Chengtong Kaisheng is the main operating entity of the company's municipal landscaping business.

In 2015, Yueyang Forest & Paper chose to transform into the landscaping industry, and the acquisition of Chengtong Kaisheng can be regarded as the first stop of the company's transformation attempt. In 2017, Yueyang Forest & Paper raised 2.291 billion yuan through private placement fundraising and completed the acquisition of Chengtong Kaisheng. However, the results were not ideal. In the 2023 annual report, Yueyang Forest & Paper stated that the market for the ecological landscaping industry was still sluggish, and the company made provision for impairment of goodwill for Chengtong Kaisheng due to the overall downward trend in the industry.

Based on the latest financial report for this year, yueyang forest & paper achieved a revenue of 3.574 billion yuan in the first half of the year, a decrease of 23.91% compared to the same period last year, with a net loss of 0.049 billion yuan. Chengtong Kaisheng's net profit for the first half of this year was a loss of 17.0275 million yuan, compared to a profit of 29.1864 million yuan in the same period last year. Yueyang forest & paper revealed that Chengtong Kaisheng's net profit turned from profit to loss, mainly due to the impact of the industry downturn, and the gross margin of newly undertaken projects has decreased compared to previous years.