The leading paper company, shandong chenming paper, has exploded.

Due to the sluggish papermaking business, the company is facing overdue debts of up to 2.394 billion yuan, and currently, 65 frozen accounts at banks have been reached. As a result, approximately 71.7% of production capacity has been forced to stop or limit production.

At the opening today, the AH shares of shandong chenming paper collectively plummeted. The company's A-share stocks opened with a stop loss, currently reported at 3.37 yuan/share, with a total market value of 9.964 billion yuan; the Hong Kong shares fell by 28%, reported at 1.21 Hong Kong dollars/share, with a total market value of 3.578 billion Hong Kong dollars.

Overdue debts, principal and interest, amount to 1.82 billion yuan.

On the evening of November 19, shandong chenming paper suddenly issued an announcement, disclosing the situation of part of the company's overdue debts and some bank accounts being frozen.

According to the announcement, as of November 18, shandong chenming paper and its subsidiaries have accumulated overdue debt principal and interest totaling 1.82 billion yuan, accounting for 10.91% of the company’s most recent audited net assets. The company provides joint liability guarantees for financing related to subsidiaries, corresponding to an overdue amount of 0.574 billion yuan, which accounts for approximately 3.44% of the company's most recent audited net assets.

At the same time, the number of frozen bank accounts for shandong chenming paper and its subsidiaries has reached 65, with a total frozen amount of 64.837 million yuan, accounting for 0.39% of the company’s most recent audited net assets. Among them, due to overdue commercial bills and debt disputes, the court has seized and frozen 51 bank accounts.

Total liabilities exceed 55 billion yuan.

In the first three quarters, losses exceeded 0.7 billion yuan.

In recent years, influenced by various factors such as industry supply and costs, shandong chenming paper’s performance has experienced significant fluctuations.

In 2022, shandong chenming paper achieved revenue of 32.004 billion yuan, a year-on-year decrease of 3.08%, with a net income attributable to the parent of 0.189 billion yuan, a significant decline of 90.84% year-on-year.

In 2023, shandong chenming paper's revenue fell below 30 billion yuan, recording a loss of 1.281 billion yuan for the full year, marking the first loss since its listing in 2000.

This year, shandong chenming paper's performance is once again under pressure. In the first three quarters of 2024, the company's revenue was 19.825 billion yuan, a slight increase of 0.52% year-on-year; the net loss was 0.71 billion yuan, a narrowing year-on-year.

Currently, shandong chenming paper still faces significant debt repayment pressure. As of the end of September this year, shandong chenming paper's debt-to-asset ratio reached 73.51%, with cash funds amounting to 10.053 billion yuan, short-term loans nearly 30 billion yuan, and total liabilities exceeding 55 billion yuan.

Analysis indicates that the pressure on shandong chenming paper's performance is not only affected by changes in industry supply but also related to the company's earlier aggressive expansion that led to overcapacity. During the expansion period of shandong chenming paper, the company frequently invested to expand production capacity.

Over 70% of production capacity has been suspended.

Shandong chenming paper announced that since the third quarter, prices of its main products, especially white cardboard, have continued to decline, resulting in severe operating losses for the company. Additionally, some financial institutions have reduced the company's loan scale, leading to tight working capital. To reduce losses, shandong chenming paper has implemented production limits and suspensions at some production bases since November.

Currently, one white cardboard production line, one cultural paper production line, and one copper plate paper production line at shandong chenming paper's shouguang base, as well as temporary suspensions at the jiangxi base and jilin base, have resulted in the shutdown of production capacity of 7.03 million tons, accounting for 71.7% of total capacity, impacting monthly pulp and paper production by approximately 0.58 million tons and paper sales by approximately 0.35 million tons.

On the evening of November 8, Chen Hongguo, who had worked at shandong chenming paper for 37 years, announced his resignation as chairman. His wife, Li Xueqin, also resigned as the company's deputy general manager. Taking over as the new chairman is the veteran figure Hu Changqing, who immediately proposed the slogan "New Chenming, New Start."

Regarding the current overdue debts, shandong chenming paper stated in its announcement that the company is currently exploring multiple ways to expand financing channels, working hard to raise funds for debt repayment, and actively communicating with creditors to negotiate extensions and adjust repayment plans. At the same time, the company will take effective measures to ensure production operation and continue to strengthen the disposal of non-core assets to improve the company's operating conditions.