ST Chenming Announces Full Resumption Of Production At Five Major Production Bases, With Overall Capacity Restored To 100%

On the evening of March 13, ST Chenming (000488) announced that as of the date of the announcement, the company's five major production bases located in Shouguang, Zhanjiang, Huanggang, Jiangxi, and Jilin had fully resumed production, and overall capacity had returned to 100%. Recently, the company's stock price also saw a significant rebound, hitting the daily limit multiple times during this period.

Looking back on the development in recent years, ST Chenming is in business difficulties. Financial data show that since 2023, the company's profits have continued to be under pressure, with a cumulative loss of 6.008 billion yuan in net profit attributable to the parent company from the first quarter to the third quarter of 2025. As of the end of the third quarter of 2025, the company's assets totaled 52.855 billion yuan, liabilities reached 47.511 billion yuan, and shareholders' equity was only 5.344 billion yuan, and the pressure to resolve debt was greater.

According to ST Chenming's 2025 performance forecast, it is expected that the net profit loss for the whole year last year will be 8.2 billion yuan to 8.8 billion yuan, compared with a loss of 7.411 billion yuan in the same period last year; It is expected to deduct a loss of 7.55 billion yuan to 8.15 billion yuan after deducting non-net profit, compared with a loss of 7.202 billion yuan in the same period last year.

Affected by multiple factors such as the downturn in the industry, fluctuations in raw material prices and its own business adjustments, some of the company's production bases have been suspended in stages or insufficient capacity utilization, which has further exacerbated the tight operating cash flow situation.

ST Chenming said that in 2025, the Huanggang base will be in normal production, the Shouguang, Jiangxi and Jilin bases will basically stop production from the first to the third quarter, and the Zhanjiang base will stop production throughout the year. At the same time, affected by the shutdown, the company made impairment provisions for some assets, which further affected the current profit. In order to focus on the development of the main business of pulp and paper, the company divested all assets related to the financial leasing business in the fourth quarter, and the company no longer engaged in any financial leasing business. According to the requirements of accounting standards, the credit of leasing customers was tested for impairment during the reporting period, and bad debt provisions were made for some financial leasing businesses.

In addition, ST Chenming also said that in 2025, with the strong support of party committees, governments and financial institutions at all levels, the company will actively take a number of measures to improve operational efficiency and management level around the whole process of cost reduction and efficiency increase and all-round new product development. First, steadily promote the full resumption of work and production, and the operation rate and capacity utilization rate of the resumed production line equipment have increased significantly compared with previous years; second, optimize the procurement process, strengthen process management, and significantly reduce raw material procurement and logistics costs; The third is to strengthen communication with financial institutions, implement the extension of interest rate cuts, and significantly reduce financial expenses year-on-year.

The full resumption of production at the five major production bases is regarded as an important signal for the company to gradually get rid of its business difficulties. ST Chenming said that this full resumption of work can effectively improve the company's operating cash flow and gradually restore its own hematopoietic function. In the next step, the company will strengthen the whole process of cost reduction and efficiency increase and all-round new product development, continuously improve the company's profitability and market competitiveness, effectively resolve the company's debt risks, and promote the company's sustained, stable and healthy development.

According to the data, ST Chenming is a modern large-scale enterprise group mainly engaged in pulp and papermaking, and its machine-made paper products cover more than 200 varieties in 7 series, including cultural paper, coated paper, white cardboard, copy paper, industrial paper, special paper, and household paper. The five production bases also cover the production of core products such as cultural paper and packaging paper.

The positive changes on the production side are also reflected in the capital market. Recently, ST Chenming's stock price has ushered in a rapid rise. According to the market data, since the low point in early February this year, the company's stock price has risen by about 30%, during which it has gained many daily limits, closing at 2.76 yuan per share as of March 13, with a total market value of 8.12 billion yuan.

From the industry level, the paper industry as a whole will show a pattern of weak profitability and loose supply and demand since 2025. In terms of raw materials, pulp prices are in a "V" shape, and after a short-term rise in 2025, they will fall back to the bottom of the shock, and on March 13, the main price of pulp on the Shanghai Futures Exchange was about 5280 yuan/ton, and the overall fluctuation was not large recently, which alleviated the cost pressure of paper companies to a certain extent.

From the perspective of industry supply and demand, the output of the paper industry will continue to grow in 2025, but the overall price of finished paper will show a downward trend, and the loose supply pattern is more obvious. Since 2026, with the increase in policy boost consumption expectations, industry demand is expected to recover slowly, and sales are expected to increase slightly, but affected by the release of new production capacity, the pattern of loose supply is difficult to fundamentally change, and paper prices are still under pressure.

Institutional analysis believes that in 2026, the price of pulp, the main raw material, will fluctuate at the bottom, the energy price center will be generally flat, and the pattern of high dependence on China's wood pulp imports is difficult to reverse, and changes in overseas demand and supply chain may still disturb pulp prices. For enterprises in the industry, cost reduction and efficiency increase, product upgrading and debt control have become the key to breakthrough.