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On November 26, Cailianshe News (Reporter Luo Yichen) the paper industry continues to decline, central enterprise China Chengtong Holding Group Co., Ltd. (referred to as China Chengtong) is accelerating the integration of its papermaking businesses. Following the announcement of mcc meili cloud computing industry investment (000815.SZ) to cease papermaking operations, another listed company under China Chengtong, yueyang forest & paper (600963.SH), has also started to acquire related pulp enterprises and set its sights on old assets divested for many years.

On the evening of the 26th, yueyang forest & paper announced plans to acquire approximately 1.278 billion yuan in cash the 100% equity of Hunan Juntai New Materials Technology Co., Ltd. (referred to as the target company), with the trading partner being the controlling shareholder of the company, Taige Lin Paper Group Co., Ltd. (referred to as Taige Lin Paper), which is held by China Chengtong.

This transaction can be seen as China Chengtong's integration of its Hunan papermaking business. Tianyancha data shows that most of the enterprises under Taige Lin Paper have been deregistered, and among the 9 remaining enterprises, including yueyang forest & paper, there are a total of 6 papermaking upstream and downstream enterprises, with main operations including pulp, paperboard, papermaking equipment, and wood processing.

Regarding this acquisition, yueyang forest & paper stated that after the target company is injected into the company, effective synergy in the industry can enhance the diversity of the company's products, further improve the company's self-sufficiency in pulp, and help the company smooth out cyclical risks in the industry.

From the financial data disclosed in the announcement, the target company has remained profitable over the past two years. In 2023, its revenue and net income were 2.309 billion yuan and 0.314 billion yuan respectively; by this year, January to July, these figures reached 1.486 billion yuan and 0.265 billion yuan. Meanwhile, yueyang forest & paper's operation remains under pressure, with a loss of 0.238 billion yuan in 2023 and still unable to turn losses in the first three quarters of this year.

It is worth noting that this is not the first time yueyang forest & paper has planned to acquire the target company. As early as 2011, yueyang forest & paper had raised 0.964 billion yuan through rights issues to acquire 100% of the target company's equity, and subsequently carried out two rounds of capital increase. However, the target company's performance was poor thereafter. To mitigate the negative impact on the listed company's performance, yueyang forest & paper divested the target company through asset swaps in 2015, with a disposal price of 0.97 billion yuan.

It is reported that the target company, Juntaiketech, is one of China's largest producers of coniferous pulp, dissolving pulp, and lignin, with a designed pulp production capacity of 0.4 million tons/year. They can produce bleached and unbleached coniferous pulp, as well as bleached and unbleached broadleaf pulp. The designed production capacity of their dissolving pulp products is 0.3 million tons/year, capable of producing two types of dissolving pulp: coniferous and broadleaf. In 2023, the "Taige Junsong" pulp has become a deliverable brand on the Shanghai Futures Exchange, becoming the first domestically produced registered brand of pulp in the country, and also the only domestic brand among the 14 deliverable brands of pulp futures.