SHANDONG CHENMING PAPER HOLDINGS LIMITED Interim Report 2024
SHANDONG CHENMING PAPER HOLDINGS LIMITED
Interim Report 2024
August 2024
I Important Notice, Table of Contents and Definitions
The board of directors (the “Board”), the supervisory committee (the “Supervisory Committee”) and the directors (the “Directors”),
supervisors (the “Supervisors”) and senior management (the “Senior Management”) of the Company hereby warrant the truthfulness,
accuracy and completeness of the contents of the interim report, guarantee that there are no false representations, misleading
statements or material omissions contained in this interim report, and are jointly and severally responsible for the liabilities of the
Company.
Chen Hongguo, head of the Company, Dong Lianming, head in charge of accounting and Zhang Bo, head of the accounting
department (Accounting Officer), declare that they warrant the truthfulness, accuracy and completeness of the financial report in the
interim report.
All Directors have attended the board meeting to review this report.
The Company is exposed to various risk factors such as macro-economic fluctuation, adjustment of state policy and competition in
the industry. Investor should be aware of investment risks. For further details, please refer to the risk exposures of the Company and
the measures to be taken to address them as set out in Management Discussion and Analysis.
The Company does not propose distribution of cash dividends or bonus shares, and there will be no increase of share capital from
reserves.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 1
INTERIM REPORT 2024
I Important Notice, Table of Contents and Definitions
Table of Contents
I Important Notice, Table of Contents and Definitions 1
II Company Profile and Key Financial Indicators 5
III Management Discussion and Analysis 9
IV Corporate Governance 26
V Environmental and Social Responsibility 29
VI Material Matters 40
VII Changes in Share Capital and Shareholders 54
VIII Preference Shares 62
IX Bonds 63
X Financial Report 64
2 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
I Important Notice, Table of Contents and Definitions
Documents Available for Inspection
(I) The financial statements signed and sealed by the head of the Company, the head in charge of accounting and the head of
the accounting department;
(II) the interim report signed by the legal representative;
(III) the original copies of all of the documents and announcements of the Company disclosed on the designated website as
approved by the China Securities Regulatory Commission during the reporting period;
(IV) the interim report disclosed on The Stock Exchange of Hong Kong Limited; and
(V) other relevant information.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 3
INTERIM REPORT 2024
I Important Notice, Table of Contents and Definitions
Definitions
Item Definition
Company, Group, Chenming Group, means Shandong Chenming Paper Holdings Limited and its subsidiaries
Chenming Paper or Chenming
Paper Company
Parent Company or Shouguang means Shandong Chenming Paper Holdings Limited
Headquarters
Chenming Holdings means Chenming Holdings Company Limited
Shenzhen Stock Exchange means Shenzhen Stock Exchange
Stock Exchange means The Stock Exchange of Hong Kong Limited
CSRC means China Securities Regulatory Commission
Shandong CSRC means Shandong branch of China Securities Regulatory Commission
Zhanjiang Chenming means Zhanjiang Chenming Pulp & Paper Co., Ltd.
Jiangxi Chenming means Jiangxi Chenming Paper Co., Ltd.
Huanggang Chenming means Huanggang Chenming Pulp & Paper Co., Ltd.
Chenming (HK) means Chenming (HK) Limited
Jilin Chenming means Jilin Chenming Paper Co., Ltd.
Shouguang Meilun means Shouguang Meilun Paper Co., Ltd.
Chenming Investment means Shandong Chenming Investment Limited
Chenming Leasing means Shandong Chenming Financial Leasing Co., Ltd. and its subsidiaries
Yujing Hotel means Shandong Yujing Grand Hotel Co., Ltd.
Shanghai Chenming Sales means Shanghai Chenming Pulp & Paper Sales Co., Ltd.
reporting period means the period from 1 January 2024 to 30 June 2024
the beginning of the year means 1 January 2024
or the period
the end of the interim period means 30 June 2024
or the period
4 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
II Company Profile and Key Financial Indicators
I. Company profile
Stock abbreviation Stock code 000488
B 200488
Stock exchanges on which the shares are listed Shenzhen Stock Exchange
Stock abbreviation Chenming Paper Stock code 01812
Stock exchanges on which the shares are listed The Stock Exchange of Hong Kong Limited
Stock abbreviation before any changes None
Name in Chinese of the Company
Short name in Chinese of the Company
Name in English of the Company SHANDONG CHENMING PAPER HOLDINGS LIMITED
Short name in English of the Company SCPH
Legal representative of the Company Chen Hongguo
II. Contact persons and contact methods
Secretary to the Board Representatives for Security Affairs Hong Kong Company Secretary
Name Yuan Xikun Zhang Chuangyong Chen Lin Chu Hon Leung
Email address chenmmingpaper@163.com friend537@163.com ZQCL0536@163.com liamchu@li-partners.com
Correspondence No. 2199 Nongsheng East Road, No. 2199 Nongsheng East Road, 22nd Floor, World Wide House,
Address Shouguang City, Shandong Province Shouguang City, Shandong Province Central, Hong Kong
Telephone 0536-2158008 0536-2158008 00852-21629600
Facsimile 0536-2158977 0536-2158977 00852-25010028
III. Other information
1. Contact methods of the Company
Whether the registered address, office address, postal code, website, email and others of the Company changed during
the reporting period
Applicable √ Not applicable
There was no change of the registered address, office address, postal code, website, email and others of the Company
during the reporting period. Please refer to the 2023 annual report for details.
2. Information disclosure and places for inspection
Whether the information disclosure and places for inspection changed during the reporting period
Applicable √ Not applicable
There was no change of the websites of the stock exchanges and the names and websites of the media where the
Company discloses its interim report, and places for inspection of the Company’s interim report during the reporting
period. Please refer to the 2023 annual report for details.
3. Other relevant information
Whether other relevant information changed during the reporting period
Applicable √ Not applicable
SHANDONG CHENMING PAPER HOLDINGS LIMITED 5
INTERIM REPORT 2024
II Company Profile and Key Financial Indicators
IV. Major accounting data and financial indicators
Retrospective adjustment to or restatement of the accounting data for prior years by the Company
Yes √ No
Increase/decrease
for the reporting
period as compared
The corresponding to the corresponding
period of period of
The reporting period the prior year the prior year
Revenue (RMB) 13,884,731,519.04 12,564,962,781.31 10.50%
Net profit attributable to shareholders of the Company (RMB) 28,646,205.42 -688,080,164.10 104.16%
Net profit after extraordinary gains or losses attributable to
shareholders of the Company (RMB) -270,865,043.51 -811,839,217.49 66.64%
Net cash flows from operating activities (RMB) 1,992,499,393.07 1,783,087,747.59 11.74%
Basic earnings per share (RMB per share) 0.01 -0.25 104.00%
Diluted earnings per share (RMB per share) 0.01 -0.25 104.00%
Increase by 4.32
Rate of return on weighted average net assets 0.17% -4.15% percentage points
Increase/decrease as
at the end of the
reporting period as
As at the end of As at the end of compared to the
the reporting period the prior year end of the prior year
Total assets (RMB) 77,501,281,219.73 79,487,052,953.58 -2.50%
Net assets attributable to shareholders of the Company (RMB) 16,628,929,026.08 16,692,175,196.53 -0.38%
6 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
II Company Profile and Key Financial Indicators
V. Differences in accounting data under domestic and overseas accounting standards
1. Differences between the net profit and net assets disclosed in accordance with international accounting
standards and China accounting standards in the financial report
Applicable √ Not applicable
There was no difference between the net profit and net assets disclosed in accordance with international accounting
standards and China accounting standards in the financial report during the reporting period.
2. Differences between the net profit and net assets disclosed in accordance with overseas accounting
standards and China accounting standards in the financial report
Applicable √ Not applicable
There was no difference between the net profit and net assets disclosed in accordance with overseas accounting
standards and China accounting standards in the financial report during the reporting period.
VI. Items and amounts of extraordinary gains or losses
√ Applicable Not applicable
Unit: RMB
Item Amount Description
Profit or loss from disposal of non-current assets (including write-off of provision
for assets impairment) 235,133,918.55
Government grants (except for the government grants closely related to the
normal operation of the Company, granted in accordance with an established
standard and having an ongoing effect on the Company’s profit or loss in
compliance with national policies and regulations) accounted for in profit or
loss for the current period 35,234,521.15
Except for effective hedging business conducted in the ordinary course of
business of the Company, gain or loss arising from the change in fair value of
financial assets and financial liabilities held by a non-financial company, as
well as gain or loss arising from disposal of its financial assets and financial
liabilities -19,293,314.75
Reversal of provision for impairment of receivables individually tested for
impairment 26,150,527.36
Profit or loss from debt restructuring 3,502,149.44
Profit or loss from changes in the fair value of consumable biological assets
subsequently measured at fair value 5,184,193.11
Other non-operating income and expenses other than the above items 1,981,541.21
Less: Effect of income tax -13,171,226.69
Effect of minority interests (after tax) 1,553,513.83
Total 299,511,248.93
SHANDONG CHENMING PAPER HOLDINGS LIMITED 7
INTERIM REPORT 2024
II Company Profile and Key Financial Indicators
Details of other gain or loss items that fall within the definition of extraordinary gain or loss:
Applicable √ Not applicable
The Company did not have details of other gain or loss items that fall within the definition of extraordinary gain or loss.
Explanation on the extraordinary gain or loss items as illustrated in the Explanatory Announcement on Information Disclosure
for Companies Offering Their Securities to the Public No.1 – Extraordinary Gains or Losses defined as its recurring gain or loss
items
√ Applicable Not applicable
Item Amount involved (RMB) Reason
Other income 29,066,863.89 Government grants related to assets that are closely related to the
Company’s normal operations are subsequently amortised to other income,
which has a continuing effect on the Company’s profit or loss and is
therefore accounted for as recurring profit or loss.
8 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
III Management Discussion and Analysis
I. Principal activities of the Company during the reporting period
1. Industry Situation
The paper making industry is an important industry closely related to the national economic development and social
culture building. As an important pillar industry, paper making industry has high correlation with other industries, various
fields such as publishing, printing, packaging, chemicals and the military industry. Hence, the paper making industry
is highly sensitive to macroeconomic changes. Characterised as being technology-intensive, capital-intensive and
resource-intensive, it is the macroeconomic “barometer”, as well as one of the important indicators of the modernisation
and civilisation level of a country. Driven by a moderate economic recovery, there were signs of bottoming out in PPI of
the paper making industry. From July 2023 to May 2024, PPI of the paper making industry maintained positive growth.
It is expecting to gradually turn positive. The profitability of enterprises within the industry is expected to rebound. It is
expected that the industry will continue its recovery trend in the second half of the year.
As a typical pro-cyclical industry, the paper making industry has a positive correlation with the macroeconomic trend,
and is more sensitive to macroeconomic changes. According to the data of the National Bureau of Statistics, the growth
of value-added industrial output of China’s paper making industry exceeded 10% during the first five months of the year.
Total profit of paper making and paper-made products amounted to RMB18,670 million, up by 147.3% year on year.
From the perspective of industry layout, the market concentration of China’s paper making industry is relatively low. The
proportion of CR10 in China’s paper making industry of approximately 45% in 2022, compared with 90% for the CR10
in the United States, means much scope for improvement. From the perspective of China’s new production capacity, it
is primarily contributed by leading enterprises. Relevant products tend to develop towards customised, green and light-
weighted products, and industry upgrade is still in progress.
2. Business overview of the Company
The machine-made paper business is the major source of revenue and profit of the Company. There was no significant
change in the principal activity and the business models such as procurement, production, marketing, and research and
development.
During the reporting period, the Company actively optimised its product mix, adopted flexible sales strategies and
enhanced asset management efficiency. As the sentiment in the industry bottomed out, the results of the Company
entered a recovery phase, and its profitability improved quarter by quarter. Based on its accounting records, the
Company realised revenue of RMB13,885 million and net profit of RMB26 million from January to June, reflecting a
better development trend. At present, the Company has production bases in Shandong, Guangdong, Hubei, Jiangxi,
Jilin and other places, with annual pulp and paper production capacity of 11 million tonnes. It is the first domestic
paper making enterprise that achieves a balance between pulp production and paper making capacity in general.
Looking forward, the Company will further implement its “pulp and paper integration strategy”, enhance asset allocation
efficiency, strengthen cost management, optimise its product mix, and consolidate and expand sales markets, striving
to improve corporate management levels and operation quality.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 9
INTERIM REPORT 2024
III Management Discussion and Analysis
I. Principal activities of the Company during the reporting period (Cont’d)
3. Major products and their application
The Company attaches great importance to technology research and development and brand benefits. The Company
has research institutions such as a national enterprise technology centre, a post-doctoral working station, a collaborative
innovation centre for cleaner production and refinery of light industry bio-based products, the Shandong Pulp and
Paper Making Engineering Lab. It has introduced internationally advanced pulp and paper production technologies and
equipment for the production of machine-made paper products covering more than 200 types in seven series, including
culture paper, coated paper, white cardboard, copy paper, industrial paper, special paper, and household paper. It is the
enterprise with the largest variety of products and the most complete products in the domestic paper making industry.
During the reporting period, the Company successfully passed the audit of China Environmental United Certification
Center, and was awarded the certificate of “China Environmental Labeling (Type I) Product Certification”.
Major brands of machine-made paper products of the Company and their applications are set out below:
Major
manufacturing
Category Major brands and types companies Range of application
Culture paper series 1. “BIYUNTIAN”, “CLOUDY MIRROR”, “CLOUDY Shouguang Printing publications, textbooks, magazines,
LEOPARD” and “YUNJIN” all-wood pulp offset Headquarters covers, illustrations, notebooks, test papers,
paper and electrostatic base paper Shouguang Meilun teaching materials, reference books, etc.
2. “CLOUDY LION” and “CLOUDY CRANE” original Zhanjiang Chenming
white offset paper Jiangxi Chenming
3. “CLOUDY PINE” and “GREEN PINE” light weight Jilin Chenming
paper
4. Blueprint paper, colour offset paper, pure texture
paper, non-fluorescent offset paper, PE offset paper
5. Beige and high white book paper
6. Light weight coated paper
Coated paper series 1. “SNOW SHARK” and “EAGLE” one-sided coated Shouguang Double-sided coated paper is suitable for
paper Headquarters high quality printing, such as high-grade
2. “SNOW SHARK”, “EAGLE” and “RABBIT” double- Shouguang Meilun picture albums, picture, magazines and so
sided coated paper on, promotional materials such as interior
3. “EAGLE” and “RABBIT” matte coated paper pages of high-end books, wall calendars,
posters and so on, and suitable for suitable
for high-speed sheet printing and high-speed
rotary printing;
One-sided coated paper is suitable for
upscale tobacco package paper, adhesive
sticker, shopping bags, slipcases, envelopes,
gift wrapping and so on, and suitable for large
format printing and commercial printing.
10 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
III Management Discussion and Analysis
I. Principal activities of the Company during the reporting period (Cont’d)
3. Major products and their application (Cont’d)
Major
manufacturing
Category Major brands and types companies Range of application
White cardboard 1. White cardboard of “LIYA” series, white cardboard Shouguang High-end gift boxes, cosmetics boxes, tags,
series and ivory cardboard of “LIPIN” and “POPLAR” Headquarters shopping bags, publicity pamphlets, high-
series, high bulk cardboard and ivory cardboard of Jiangxi Chenming end postcards; cigarette package printing
“LIZZY” and “BAIYU” series, and super high bulk Zhanjiang Chenming of medium and high quality; milk package,
cardboard of “LIYING” and “BAIYU” series beverage package, disposable paper cups,
2. Food package board of “LIYA” and “LIZZY” series milk tea cups, and noodle bowls.
3. Coated cattle card and LIYA book card
4. Playcard paper board
5. Chenming cigarette cardboard
Copy paper series “GOLDEN MINGYANG” and “GOLDEN CHENMING” Shouguang Printing and copying business documents,
copy paper, “BOYA” and “BIYUNTIAN” copy paper, Headquarters training materials, and writing.
“MINGYANG”, “LUCKY CLOUDS”, “BOYANG” and Shouguang Meilun
“SHANYIN” copy paper, and “GONGHAO” and Zhanjiang Chenming
“TIANJIAN” copy paper
Industrial paper High-grade yellow anti-sticking base paper, ordinary Shouguang Anti-stick base paper is mainly used for
series yellow/white anti-sticking base paper and PE paper Headquarters producing the paper base of stripping paper
Jiangxi Chenming or anti-sticking base paper;
Zhanjiang Chenming Cast coated base paper is suitable for
producing adhesive paper or playcard
compound paper after coating.
Special paper series Thermal paper and glassine paper Shouguang Art Paper High-grade adhesive backing paper for
electronics, medicine, food, washing supplies,
supermarket labels, double-sided tapes, etc.
Household paper Toilet paper, facial tissue, pocket tissue, napkin, paper Shouguang Meilun Daily toilet supplies; used in restaurants and
series towels and “XINGZHILIAN” other catering industries, and used in public
toilets in hotels, guesthouses, and office
buildings, and also suitable for home and
other environment.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 11
INTERIM REPORT 2024
III Management Discussion and Analysis
II. Analysis of liquidity, financial resources and capital structure disclosed in accordance with the
listing rules of Hong Kong Stock Exchange
As at 30 June 2024, the Group’s current ratio was 56.88%. The quick ratio was 48.07%. The gearing ratio (i.e. total liabilities
divided by total assets) was 73.30%.
There was no significant seasonal trend for capital requirements of the Group.
The Group’s sources of capital primarily came from cash inflow generated from operating activities, and borrowings from
financial institutions.
As at 30 June 2024, the total bank borrowings of the Group were RMB36,305 million (as at the end of the prior year: the total
bank borrowings of the Group was RMB39,430 million). As at 30 June 2024, the Group had monetary funds of RMB11,386
million (as at the end of the prior year: RMB12,125 million) in total (For the breakdown of monetary funds, please refer to X. VII.
1 Note on Monetary Funds in this report).
To strengthen its financial management, the Group established and optimised its strict internal control system on cash and
capital management. The liquidity and repayment ability of the Group were in a good condition. As at 30 June 2024, the Group
had 9,963 employees. The total staff remuneration for the first half of 2024 amounted to RMB561.2925 million (The Group had
10,604 employees in 2023. The total staff remuneration for 2023 amounted to RMB1,108.0430 million).
There was no major investment project of the Company during the second half of 2024.
The Company’s existing bank deposits were primarily used for production and operation, construction projects and
investment in technology research and developments.
For details of the assets with restricted ownership of the Group as at 30 June 2024, please refer to X. VII. 24. Details of assets
with restricted ownership or right to use in this report.
III. Analysis of Core Competitiveness
After innovation and development for more than 60 years, the Company has created a strong brand influence and cultivated
a solid comprehensive competitiveness. It promotes product upgrades, enhances R&D strength and improves core
competitiveness by creating competitive advantages in an industry chain featured with pulp and paper integration. The
core competitiveness of the Company did not underwent major changes during the reporting period. The details of the core
competitiveness of the Company are as follows:
1. Advantages of pulp and paper integration
The Company has unwaveringly implemented a pulp and paper integration strategy. At present, its major production
bases located in Shouguang, Zhanjiang, and Huanggang are equipped with chemical pulp production lines, with total
production capacity of wood pulp reaching 4.30 million tonnes. It is the first modern large-scale paper making company
that basically realises wood pulp self-sufficiency in China. A complete supply chain not only creates cost advantage
for the Company, but also safeguards the safety, stability and quality of upstream raw materials, and renders strong
support for the Company to maintain its long-term competitiveness.
12 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
III Management Discussion and Analysis
III. Analysis of Core Competitiveness (Cont’d)
2. Scale advantages
The paper making industry is a typical capital-intensive and technology-intensive industry that follows the laws of
economies of scale. The Company is a leading player in the paper making industry in China. Its large-scale production
bases can be found in the major markets in Southern, Central, Northern, and Northeast China, with annual pulp and
paper production capacity reaching 11 million tonnes, where reasonable production scale creates the marginal cost
advantage. Meanwhile, by leveraging the scale advantages, the Company has built an international logistics centre
and railway dedicated lines and docks, and constructed a comprehensive logistics service platform covering container
shipping, bonded warehousing, transfer and storage at stations and terminals, realising the improvement of logistics
efficiency and the stability of logistics costs.
3. Product advantages
The Company is an enterprise that offers the widest and the most complete product range in the paper making
industry in China. The product series include culture paper, white cardboard, coated paper, copy paper, household
paper, thermal paper, etc., with each major product ranking among the best in terms of market share. The Company
has attached great importance to technology research and development. By introducing the most advanced pulping
and paper making technology and equipment in the world, it persists in technological innovation and work process
optimisation, so as to help improve product quality and structure upgrade, continuously improve the brand value of
Chenming, and enhance brand benefits.
4. Industry layout advantages
Closely centring on the pulp and paper integration strategy, the Company has integrated resources and established
its production bases in the core target market to promote the coordinated development of all regions. Currently, the
Company adopts the market-oriented approach and has production bases in Shandong, Guangdong, Hubei, Jiangxi,
Jilin and other places. With all products sold at close distances, the Company substantially reduces transportation costs
while improving service efficiency, achieving a “win-win” between the Company and its users.
5. Advantages in technical equipment
The Company highly values the introduction and upgrades of technical equipment, actively push equipment and
technology upgrade forward and boasts the largest and most advanced pulping and paper making production line in the
world. The Company’s major production equipment has been imported from internationally renowned manufacturers,
including Metso and Valmet of Finland, Voith of Germany, Andritz of Austria, etc. and reached the advanced international
level, thus ensuring production efficiency and product quality.
6. Advantages in research and innovation
The Company has scientific research institutions including a national enterprise technology centre, a post-doctoral
working station, and a collaborative innovation centre for cleaner production and refinery of light industry bio-based
products. At the same time, the Company actively carries out in-depth industry-university-research cooperation with
prestigious domestic universities and research institutes, continuously improves technical innovation capabilities and
scientific research and development levels, and develops a series of new products with high technology contents
and high added value as well as proprietary technologies. The Company and its subsidiaries Zhanjiang Chenming,
Shouguang Meilun, Jiangxi Chenming, Jilin Chenming and Huanggang Chenming are high and new technology
enterprises. As at the end of the reporting period, the Company had obtained 460 national patents, including 42
invention patent authorisation, 7 national new products, 16 scientific and technological progress awards above the
provincial level, 5 national scientific and technological projects and 73 Shandong provincial technological innovation
projects. The Company took the lead in obtaining the ISO9001 quality system certification, the ISO14001 environmental
protection system certification and the FSC-COC international forest system certification among domestic peers.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 13
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III Management Discussion and Analysis
III. Analysis of Core Competitiveness (Cont’d)
7. Team management advantages
The Company possesses a complete and reasonable talent structure consisting of experienced personnel, including
high-end talents specialising in production, technology, sales, finance, laws, etc. In the course of business operations,
the stable core team has developed a corporate culture that ties in with the Company’s development, summarised
management experience with industry characteristics, and formed a team advantage integrating management and
culture, allowing it to accurately grasp the industry development trend. At the same time, the Company has paid
attention to the construction of a talent reserve and cultivation mechanism. With advanced business concepts and
enormous development space, the Company has attracted an array of high-calibre professionals and improved the level
of human capital construction, providing solid guarantee for the Company’s long-term sustainable development.
8. Advantages in environmental governance capacity
The Company has actively upheld the concept of “lucid waters and lush mountains are invaluable assets”, adhered to
the development idea of “placing green development and environmental protection as its priority”, always regarded
environmental protection as the “life project”, clung to the green development model of clean production and resource
recycling, and earnestly shouldered the corporate responsibility for environmental protection. In recent years, the
Company and its subsidiaries have invested more than RMB8 billion in total in environmental protection, and have
constructed the pollution treatment facilities including the alkali recovery system, reclaimed water treatment system,
reclaimed water reuse system, white water recovery system and black liquor comprehensive utilisation system. The
environmental protection indicators rank high in China and in the world. At present, the Company adopts the world’s
most advanced “ultrafiltration membrane + reverse osmosis membrane” technology to complete the reclaimed water
recycling membrane treatment project, which is the largest reclaimed water reuse project in the domestic paper industry.
The reclaimed water recycle rate attains the industry-leading level. The reclaimed water quality meets drinking water
standards, which can save hundreds of thousands cubic metres of fresh water every day. Meanwhile, in response to the
“dual carbon” policy, the Company actively introduces photovoltaic power generation and biomass power generation,
continuously optimises the energy structure and improves the level of low-carbon production.
14 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
III Management Discussion and Analysis
IV. Analysis of principal operations
Overview
Please see “I. Principal activities of the Company during the Reporting Period” for relevant information
Year-on-year changes in major financial information
Unit: RMB
Increase/
The corresponding decrease
The reporting period period of the prior year year on year Reason for the change
Other income 159,945,128.64 108,155,697.19 47.88% Mainly due to the additional valued-added tax
credit policy enjoyed by the Company as an
advanced manufacturing enterprise during the
reporting period.
Investment income 181,332,096.11 -42,756,726.88 524.10% Mainly due to a year-on-year increase of gains
on subsidiary disposal during the reporting
period.
Gains on changes in fair value -2,221,596.44 -19,815,797.83 88.79% Mainly due to the fluctuation in shares of China
Bohai Bank during the reporting period.
Credit impairment loss -124,386,619.66 -43,081,750.88 188.72% Mainly due to a year-on-year increase of
provision for bad debts of accounts receivable
during the reporting period.
Loss on impairment of assets -3,041,427.75 -43,314,485.76 -92.98% Mainly due to a year-on-year decrease of
provision for impairment of finished products
during the reporting period.
Gains on asset disposal 19,222,812.60 11,759,266.91 63.47% Mainly due to a year-on-year increase of gains
on fixed asset disposal during the reporting
period.
Income tax expenses -96,400,954.34 -211,491,182.14 54.42% Mainly due to a year-on-year increase of the
total profit realised by the Company during the
reporting period.
Net cash flows from operating 1,992,499,393.07 1,783,087,747.59 11.74% Mainly due to a year-on-year increase of sales
activities volume during the reporting period.
Net cash flows from investing 571,305,188.14 46,500,863.35 1,128.59% Mainly due to the receipt of consideration for
activities disposal of equity interest in subsidiaries during
the reporting period.
Net cash flows from financing -2,547,689,483.86 -2,088,182,807.81 -22.01% Mainly due to the reduction in debt size as
activities a result of repayment of debt due during the
reporting period.
Significant change in structure or source of profit of the Company during the reporting period
Applicable √ Not applicable
There was no significant change in structure or source of profit of the Company during the reporting period.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 15
INTERIM REPORT 2024
III Management Discussion and Analysis
IV. Analysis of principal operations (Cont’d)
Components of revenue
Unit: RMB
The corresponding
period of the Increase/
The reporting period prior year decrease
Item Amount % of revenue Amount % of revenue year on year
Total revenue 13,884,731,519.04 100% 12,564,962,781.31 100% 10.50%
By industry
Machine-made paper 12,429,565,296.10 89.52% 11,300,765,054.86 89.94% 9.99%
Chemical pulp 676,203,401.45 4.87% 240,438,232.65 1.91% 181.24%
Electricity and steam 123,938,936.52 0.89% 120,561,393.77 0.96% 2.80%
Property rentals 93,524,660.28 0.67% 109,744,705.55 0.87% -14.78%
Construction materials 87,284,048.72 0.63% 106,371,211.95 0.85% -17.94%
Chemicals 54,442,131.87 0.39% 60,607,594.98 0.48% -10.17%
Others 419,773,044.10 3.03% 626,474,587.55 4.99% -32.99%
By product
Duplex press paper 3,710,036,202.61 26.72% 3,668,277,002.07 29.19% 1.14%
White cardboard 2,926,439,060.82 21.08% 2,540,842,151.66 20.22% 15.18%
Coated paper 2,407,591,953.96 17.34% 1,808,743,574.23 14.40% 33.11%
Electrostatic paper 2,038,760,449.85 14.68% 1,910,330,360.89 15.20% 6.72%
Anti-sticking raw paper 569,577,140.37 4.10% 572,047,556.98 4.55% -0.43%
Thermal paper 259,624,961.63 1.87% 262,227,271.15 2.09% -0.99%
Other machine-made paper 517,535,526.86 3.73% 538,297,137.88 4.28% -3.86%
Chemical pulp 676,203,401.45 4.87% 240,438,232.65 1.91% 181.24%
Electricity and steam 123,938,936.52 0.89% 120,561,393.77 0.96% 2.80%
Property rentals 93,524,660.28 0.67% 109,744,705.55 0.87% -14.78%
Construction materials 87,284,048.72 0.63% 106,371,211.95 0.85% -17.94%
Chemicals 54,442,131.87 0.39% 60,607,594.98 0.48% -10.17%
Others 419,773,044.10 3.03% 626,474,587.55 4.99% -32.99%
By geographical segment
Mainland China 11,052,530,679.12 79.60% 9,191,090,980.52 73.15% 20.25%
Other countries and regions 2,832,200,839.92 20.40% 3,373,871,800.79 26.85% -16.05%
Industries, products or regions accounting for over 10% of revenue or operating profit of the Company
√ Applicable Not applicable
16 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
III Management Discussion and Analysis
IV. Analysis of principal operations (Cont’d)
Components of revenue (Cont’d)
Unit: RMB
Increase/ Increase/
Increase/ decrease of decrease of
decrease of operating gross profit
revenue as costs as margin as
compared to the compared to the compared to the
corresponding corresponding corresponding
Gross profit period of the period of period of
Item Revenue Operating costs margin prior year the prior year the prior year
By industry
Machine-made paper 12,429,565,296.10 11,003,034,856.86 11.48% 9.99% 5.92% 3.41%
By product
Duplex press paper 3,710,036,202.61 3,228,388,604.27 12.98% 1.14% -0.39% 1.34%
White cardboard 2,926,439,060.82 3,059,791,466.52 -4.56% 15.18% 16.91% -1.56%
Coated paper 2,407,591,953.96 1,898,246,495.80 21.16% 33.11% 16.96% 10.89%
Electrostatic paper 2,038,760,449.85 1,609,617,857.89 21.05% 6.72% -1.18% 6.32%
By geographical segment
Mainland China 11,052,530,679.12 9,497,486,181.34 14.07% 20.25% 13.29% 5.28%
Other countries and regions 2,832,200,839.92 2,688,019,527.66 5.09% -16.05% -13.67% -2.63%
Under the circumstances that the statistics specification for the Company’s principal operations data experienced adjustment
in the reporting period, the principal activity data upon adjustment of the statistics specification as at the end of the reporting
period in the latest year
Applicable √ Not applicable
SHANDONG CHENMING PAPER HOLDINGS LIMITED 17
INTERIM REPORT 2024
III Management Discussion and Analysis
V. Analysis of non-principal operations
√ Applicable Not applicable
Unit: RMB
As a percentage
Amount of total profit Reason Is it sustainable?
Other income 159,945,128.64 -228.36% Receipt of government grants Including RMB53 million which was
related to daily business activitiesthe annual amortisation amount of
government grants received in prior
periods, which was sustainable.
Investment income 181,332,096.11 -258.89% Recognition of external investment No
income and dividends, as well as
income from equity disposal and
derecognition of financial assets
during the reporting period
Gain or loss arising from the change -2,221,596.44 3.17% Fluctuations of fair values of the No
in fair value shares of China Bohai Bank as well
as forestry assets
Credit impairment loss -124,386,619.66 177.59% Bad debt provisions for receivables No
Gain on asset disposal 19,222,812.60 -27.44% Gain arising from disposal of non- No
current assets
VI. Analysis of assets and liabilities
1. Material changes of asset items
Unit: RMB
As at the end of the reporting period As at the end of the prior year
As a As a
percentage of percentage of Percentage
Amount total assets Amount total assets change Description
Monetary funds 11,386,010,001.55 14.69% 12,124,832,831.30 15.25% -0.56% Mainly due to a decrease in guarantee
deposits maintained by the Company
as at the end of the reporting period.
Inventories 4,261,634,676.93 5.50% 4,958,178,000.36 6.24% -0.74% Mainly due to a decrease in inventories
of the Company as at the end of the
reporting period.
Fixed assets 32,030,248,108.24 41.33% 33,186,248,169.56 41.75% -0.42% Mainly due to the effect of the disposal
of equity interest in Yujing Hotel and
Tuoan Plastic, the subsidiaries, by the
Company during the reporting period,
as well as ordinary amortisation.
Construction in 1,099,279,935.62 1.42% 859,617,965.16 1.08% 0.34% Mainly due to an increase in investment
progress in technology upgrade projects during
the reporting period.
Short-term 30,264,463,843.14 39.05% 33,475,479,021.62 42.11% -3.06% Mainly due to a decrease in short-term
borrowings debt size as at the end of the reporting
period.
Bills payable 5,562,384,579.39 7.18% 4,618,986,463.95 5.81% 1.37% Mainly due to an increase of payment
for goods with bills by the Company
during the reporting period.
Other receivables 3,257,911,098.58 4.20% 2,414,752,127.19 3.04% 1.16% Mainly due to an increase in external
open credit as at the end of the
reporting period.
Long-term payables 2,279,402,749.15 2.94% 2,541,095,217.66 3.20% -0.26% Mainly due to the repayment of part of
the equipment financing lease payment
by the Company during the reporting
period.
18 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
III Management Discussion and Analysis
VI. Analysis of assets and liabilities (Cont’d)
2. Major assets overseas
Applicable √ Not applicable
3. Assets and liabilities measured at fair value
√ Applicable Not applicable
Unit: RMB
Profit or loss Cumulative fair Impairment Amount Amount
from change value change provided acquired disposed
in fair value charged during during of during Other Closing
Item Opening balance during the period to equity the period the period the period changes balance
Financial assets
1. Held-for-trading financial assets
(excluding derivative financial assets) 46,294,291.71 -7,405,789.55 -157,122,291.08 308,917.72 39,197,419.88
2. Other non-current financial assets 781,561,040.57 59,269,016.38 1,483,295.37 780,077,745.20
3. Consumable biological assets
measured at fair value 1,483,978,089.61 5,184,193.11 41,944,998.14 10,975,007.45 16,961,127.99 1,483,176,162.18
Total 2,311,833,421.89 -2,221,596.44 -55,908,276.56 10,975,007.45 18,444,423.36 308,917.72 2,302,451,327.26
Whether there were any material changes on the measurement attributes of major assets of the Company during the
reporting period
Yes √ No
4. Restriction on asset rights as at the end of the reporting period
Unit: RMB
As at the end of the period As at the beginning of the period
Type of Type of
Item Book balance Book value restriction Restriction Book balance Book value restriction Restriction
Monetary funds 10,583,179,917.00 10,583,179,917.00 Pledged A s d e p o s i t s f o r b a n k 11,360,599,088.69 11,360,599,088.69 Pledged As deposits for bank
acceptance bills, letter of acceptance bills, letter of
credit, letter of guarantee, credit, letter of guarantee,
loans, deposit reserves and loans, deposit reserves and
interest receivable interest receivable
Fixed assets 9,383,901,424.59 6,097,926,811.05 Charged As collateral for bank 9,411,111,670.62 6,303,095,864.20 Charged As collateral for bank
borrowings and long-term borrowings and long-term
payables payables
Investment properties 6,114,818,654.81 5,075,202,994.63 Charged As collateral for bank 5,941,741,699.60 5,004,776,921.76 Charged As collateral for bank
borrowings borrowings
Intangible assets 849,460,775.99 645,269,711.95 Charged As collateral for bank 865,105,844.99 665,784,045.39 Charged As collateral for bank
borrowings and long-term borrowings and long-term
payables payables
Accounts receivable 84,955,640.31 84,502,139.21 Pledged As collateral for borrowings 403,349,324.55 398,710,807.32 Pledged As collateral for borrowings
Accounts receivable 20,000.00 20,000.00 Pledged As collateral for obtaining 90,551,168.01 90,551,168.01 Pledged As collateral for obtaining
financing letters of credit letters of credit
Total 27,016,336,412.70 22,486,101,573.84 28,072,458,796.46 23,823,517,895.37
SHANDONG CHENMING PAPER HOLDINGS LIMITED 19
INTERIM REPORT 2024
III Management Discussion and Analysis
VII. Analysis of investments
1. Overview
√ Applicable Not applicable
Investments during the
corresponding period of
Investments during the reporting period (RMB) prior year (RMB) Change
18,000,000.00 5,400,000.00 233.33%
2. Material equity investments acquired during the reporting period
√ Applicable Not applicable
Unit: RMB
Progress
as at the Profit or loss
date of from Date of
Form of Investment Source Period of Product balance Estimated investment Involvement disclosure, Disclosure
Name of investee Principal activities investment amount Shareholding of fund Partner(s) investment type sheet return for the period in lawsuit if any index, if any
Shouguang S a l e o f p a p e r Capital 18,000,000.00 100% Self-owned Subsidiary Long-term Trading Completed N/A 2,968,937.54 No N/A N/A
Chenming Import products and paper increase funds
and Export Trade production raw
Co., Ltd. materials
Total 18,000,000.00 N/A 2,968,937.54
3. Material non-equity investments during the reporting period
Applicable √ Not applicable
20 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
III Management Discussion and Analysis
VII. Analysis of investments (Cont’d)
4. Financial asset investment
(1) Security investments
√ Applicable Not applicable
Unit: RMB
Profit or loss Accumulated Acquisition Disposal Book value
Accounting Book value at the from changes in changes in fair amount amount Profit or loss as at the end of
Stock Abbreviation of Initial measurement beginning of the fair value in the value included during during the during the the reporting Classification Source
Type of security code stock name investment cost model reporting period current period in equity the period period reporting period period in account of fund
Domestic 09668 China Bohai Bank 195,684,817.15 Measured at fair value 46,294,291.71 -7,405,789.55 -157,122,291.08 0.00 0.00 -7,096,871.83 39,197,419.88 Held-for-trading Self-owned
and foreign financial assets funds
shares
Total 195,684,817.15 46,294,291.71 -7,405,789.55 -157,122,291.08 0.00 0.00 -7,096,871.83 39,197,419.88
Disclosure date of announcement in relation to the consideration and 20 June 2020
approval of securities investments by the Board
Disclosure date of announcement in relation to the consideration and N/A
approval of securities investments by the
shareholders’ general meeting (if any)
(2) Derivative investments
Applicable √ Not applicable
The Company did not have any derivative investments during the reporting period.
5. Use of proceeds
Applicable √ Not applicable
The Company did not use any proceeds during the reporting period.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 21
INTERIM REPORT 2024
III Management Discussion and Analysis
VIII. Disposal of material assets and equity interest
1. Disposal of material assets
Applicable √ Not applicable
2. Disposal of material equity interest
√ Applicable Not applicable
Carried out
Net profit on schedule
contribution to Net profit or
the Company from contribution to Pricing Relevant not, if not,
the beginning of the Company on basis Related equity title the reasons
Equity Transaction the period up to Effect of equity disposal of disposal party Relationship fully and measures
interest Disposal consideration the disposal date disposal on as a percentage of equity transaction with transferred taken by the Disclosure Disclosure
Counterparty(ies) disposed of date (RMB’0,000) (RMB’0,000) the Company of total net profit interest or not counterparty(ies) or not Company Date index
Shouguang Chenming Shandong 31 March 16,299.28 -517.17 The disposal of 839.04% Assessed Yes A subsid ary of Yes Yes 23 March http://www.cninfo.com.cn
Guangyuan Real Property Yuj ng 2024 equity i terest i value a company 2024
Company Lim ted Grand Yuj ng Hotel and i vested
Hotel Co., Tuoan Plastic, by Directors
Ltd. the subsidiaries, and members
did not affect of the Senior
the normal Management of
operation of the the Company
Company, and
the disposal of
equity interest
replenished the
l quid ty.
Kunshan Dupen Electronics Kunshan 29 February 14,373.00 -265.33 120.21% Assessed No N/A Yes Yes N/A N/A
Technology Co., Ltd. Tuoan 2024 value
Plastic
Products
Co., Ltd.
IX. Analysis of major subsidiaries and investees
√ Applicable Not applicable
Major subsidiary and investees accounting for over 10% of the net profit of the Company
Unit: RMB
Type of
Name of company company Principal activities Registered capital Total assets Net assets Revenue Operating profit Net profit
Zhanjiang Chenming Pulp & Subsidiary Production and sale 6,913,572,423.00 24,372,968,723.19 8,615,753,892.14 6,278,830,552.25 -21,395,564.13 10,510,454.71
Paper Co., Ltd. of duplex press paper,
electrostatic paper and
white cardboard etc.
Shouguang Meilun Paper Co., Ltd. Subsidiary Production and sale of 4,801,045,519.00 16,441,594,138.29 8,338,012,784.20 4,684,096,701.75 29,489,563.03 40,515,254.62
coated paper, culture
paper, household paper
and chemical pulp
Huanggang Chenming Pulp & Subsidiary Production and sale of 3,350,000,000.00 8,035,223,901.08 3,356,605,015.66 2,709,134,386.20 62,285,942.49 57,107,544.38
Paper Co., Ltd. chemical pulp
22 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
III Management Discussion and Analysis
IX. Analysis of major subsidiaries and investees (Cont’d)
Acquisition and disposal of subsidiaries during the reporting period
√ Applicable Not applicable
Methods to acquire and
dispose of subsidiaries Impact on overall production and
Name of company during the reporting period operation and results
Shandong Yujing Grand Hotel Co., Ltd. Disposal Net profit increased by RMB221 million.
Kunshan Tuoan Plastic Products Co., Ltd. Disposal Net profit increased by RMB32 million.
Guangzhou Chenming Commercial Factoring Co., Ltd. Deregistration Net profit decreased by RMB5,300.
Particulars of major subsidiaries and investees
1. During the reporting period, the price of white paper board declined significantly due to an increase in supply and
insufficient demand, and profit margins of Zhanjiang Chenming were squeezed.
2. During the reporting period, the production and sales volume of cultural paper and coated paper, the major products of
Meilun Paper, increased year on year. The unit production cost decreased year on year while profit increased year on
year.
3. During the reporting period, the price and sales volume of chemical pulp, the major product of Huanggang Chenming,
increased, and its profitability increased year on year.
The Company enjoys the advantages of pulp and paper integration, large scale, comprehensive products, reasonable
industrial layout, and advanced technical equipment. With the gradual rise in the selling prices of machine-made paper and
the continuous optimisation of the cost side, the Company’s profitability will further improve.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 23
INTERIM REPORT 2024
III Management Discussion and Analysis
X. Structured entities controlled by the Company
Applicable √ Not applicable
XI. Risk factors of the Company and the measures to be taken
1. Macroeconomic and policy risk
Paper making industry is a basic raw materials industry, thus is being supported by national industry policies. Over
the years, relevant competent departments issued a series of relevant policies and regulations, including the Policy
on the Development of Papermaking Industry, aiming to improve industry structure, enhance product technology
standard, energy saving and emission reduction, as well as eliminate outdated production capacity. With the continuous
economic development, the policies on the papermaking industry may further adjust in the future. In addition, the fiscal
and financial policies, bank interest rate, import and export policy and other policies may be adjusted in the future.
All the above industrial policies and related policy adjustments will have an impact on the Company’s operation and
development.
In response to the above risks, the Company will pay close attention to the national industrial policy, and focus on
its principal activities of pulp production and paper making. The Company will strive to its innovation-driven strategy,
comprehensively optimise industrial structure and regional layout, and establish coordinated and efficient industry
system, to respond to the risks arising from industrial policy adjustments. At the same time, the Company will
continuously improve its lean management, reduce liability size, optimise its capital structure, enhance cost control,
put greater efforts in disposal of non-major assets and improve asset quality, so as to cope with the risks arising from
adjustments of other macroeconomic policies such as fiscal and financial policies.
2. Environmental protection risk
Establishing a green paper industry is the strategic direction of industry development. In recent years, environmental
protection requirements have become increasingly stringent. Relevant authorities have successively issued the White
Paper on Sustainable Development of Papermaking Industry in China, the Guiding Opinions on Accelerating the
Establishment and Improvement of a Green, Low-Carbon and Cyclical Economic System, the Opinions on Accelerating
the High-Quality Development of the Manufacturing Services Industry, the “14th Five-Year Plan” and Medium and Long-
term High-quality Development Outline of the Papermaking Industry, the Norm of Energy Consumption Per Unit Product
of Pulp and Paper (GB31825-2024) and other policies, which advocate cyclical, low-carbon, green economy to achieve
high quality development of the industry. Such higher national environmental protection standards further increase the
investment in pollution control by enterprises in the industry and increase the operating costs of the Company in the
short term.
In response to the aforesaid risks, the Company actively implements the national “double carbon” policy. The Company
adheres to the development idea of “placing green development and environmental protection as its priority”. The
Company widely adopts new technologies for energy saving and emission reduction, conducts clean production, and
strives to achieve its waste emission target. At present, the Company adopts the world’s most advanced “ultrafiltration
membrane+reverse osmosis membrane” technology to complete the reclaimed water recycling membrane treatment
project. The reclaimed water recycle rate reaches more than 75%. The reclaimed water quality meets drinking water
standards, which can save fresh water of hundreds of thousands of cubic meters of per day. At the same time, the
Company actively explores the comprehensive utilisation of innovative resources and industrial recycling development
models, and built a circular economy ecological chain of “resources-products-renewable resources”.
24 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
III Management Discussion and Analysis
XI. Risk factors of the Company and the measures to be taken (Cont’d)
3. Risk of price fluctuation of raw materials
The major raw materials of the papermaking industry are wood pulp and wood chips. China’s wood resources are
relatively limited, and the dependence on wood pulp and wood chips is high, which makes the development of the
papermaking industry subject to fluctuations in the international price of wood pulp and wood chips. If the price of raw
materials fluctuates sharply, it will bring uncertainty to the control of production costs of papermaking enterprises, which
will affect the operating performance of enterprises.
In response to the aforesaid risks, the Company adheres to the strategic layout of the whole pulp and paper integrated
industry chain, and has wood pulp production lines in Shouguang, Zhanjiang, Huanggang and other production bases,
ensuring the stability of upstream raw materials. At the same time, the Company has established a more comprehensive
supply chain management mechanism, enhanced the strategic cooperation with quality suppliers, practiced source
procurement, closely followed the price trends of the raw materials market, and improved its market research and
judgment ability, in order to minimise the impact of fluctuations in raw material prices on the Company.
4. Risk of intensifying market competition
Although the papermaking industry has accelerated the elimination of outdated production capacity after several rounds
of environmental protection policies, the industry structure has been optimised with a further improved concentration.
However, there remains the phenomena of a large number of enterprises, structural and staged overcapacity of some
products, a large number of mid – and low-end products, and product homogeneity. During the reporting period,
affected by factors such as supply shocks and weak demand, the price of white cardboard remained at a low level with
intensifying market competition.
In response to the aforesaid risks, the Company continues to promote technological innovation, and continuously
improves its production equipment, processing design and process levels, implement lean production, improve product
quality, and create brand benefits. At the same time, being market-oriented, the Company produces marketable
products to meet the diverse needs, and establishes a differentiated and customised product mix so as to increase the
added value of products. The Company further enhances cost control, improves production capacity utilisation rate,
reduces unit costs, thereby realising cost reduction and efficiency improvement, and improving its corporate profitability.
5. Risk of the financial leasing business
The Company may suffer from loss if the lessees of its financial leasing business cannot make full rental payment on
time due to any reason and there are abuses on equipment or any other short-term behaviour. Although the risk of such
rental being unrecoverable is minimal, the Company will also make bad debt provision as required under its accounting
policy. If such amounts cannot be recovered on time, the Company may be exposed to risk of bad debts.
To this end, Chenming Leasing has comprehensive risk prevention and control measures for the financial leasing
business, with strong risk resistance and low risk of default. At present, the Company focuses on the development of
its principal activities, i.e. pulp production and paper making, and continues to reduce the size of the financial leasing
business. As at the end of the reporting period, the balance of financial leases of Chenming Leasing decreased to
RMB4,936 million with the overall risks under control.
XII. Implementation of the “Quality and Return Enhancement” action plan
Whether the Company has disclosed its “Quality and Return Enhancement” action plan?
Yes √ No
SHANDONG CHENMING PAPER HOLDINGS LIMITED 25
INTERIM REPORT 2024
IV Corporate Governance
I. Annual general meeting and extraordinary general meeting convened during the reporting
period
1. General meetings during the reporting period
Attendance
rate of
Meeting Type of meeting investors Convening date Disclosure date Resolutions of meeting
2023 annual general meeting Annual general meeting 19.50% 14 May 2024 15 May 2024 http://www.cninfo.com.cn
(announcement no.: 2024-033)
14 May 2024 http://www.hkex.com.hk
2. Extraordinary general meeting requested by holders of preference shares with voting rights restored
Applicable √ Not applicable
II. Changes of Directors, Supervisors and Senior Management of the Company
Applicable √ Not applicable
There was no change of Directors, Supervisors and Senior Management of the Company during the reporting period. Please
see the 2023 annual report for details.
III. Profit distribution and conversion of capital reserves into share capital during the reporting
period
Applicable √ Not applicable
The Company does not propose distribution of cash dividends and bonus shares, and increase of share capital from reserves
for the interim period.
IV. Implementation of the equity incentive plan, employee shareholding plan or other employee
incentive measure of the Company
√ Applicable Not applicable
1. Equity incentive
1. On 30 March 2020, the Company convened the ninth extraordinary meeting of the ninth session of the Board, at
which the Company considered and approved the Resolution in Relation to the 2020 Restricted Share Incentive
Scheme of Shandong Chenming Paper Holdings Limited (Draft) and Its Summary and other resolutions. On the
same date, the fourth extraordinary meeting of the ninth session of the Supervisory Committee of the Company
considered and approved the above resolutions and verified the list of proposed participants of the incentive
scheme.
26 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
IV Corporate Governance
IV. Implementation of the equity incentive plan, employee shareholding plan or other employee
incentive measure of the Company (Cont’d)
1. Equity incentive (Cont’d)
2. On 3 April 2020, the Company announced the list of participants through the Company’s internal website for a
period from 3 April 2020 to 12 April 2020. During the period, the Supervisory Committee of the Company and
relevant departments did not receive any objection against the proposed participants. The Supervisory Committee
verified the list of participants under the grant of the incentive scheme.
3. On 15 May 2020, the Company convened the 2020 second extraordinary general meeting, the 2020 first class
meeting for holders of domestic-listed shares and the 2020 first class meeting for holders of overseas-listed
shares, at which the Company considered and approved the Resolution in Relation to the 2020 Restricted Share
Incentive Scheme of Shandong Chenming Paper Holdings Limited (Draft) and Its Summary and other resolutions.
On 16 May 2020, the Company disclosed the Self-Examination Report for the Trading of Shares of the Company
by Insiders and Participants of the 2020 Restricted A Share Incentive Scheme.
4. On 29 May 2020, the Company convened the tenth extraordinary meeting of ninth session of the Board and the
fifth extraordinary meeting of the ninth session of the Supervisory Committee, at which the Company considered
and approved the Resolution on the Matters Relating to Adjustments to the 2020 Restricted A Share Incentive
Scheme of the Company and the Resolution in Relation to the Grant of Restricted Shares to the Participants,
approving the issue of 79,600,000 restricted A shares to 111 participants at the price of RMB2.85 per share on 29
May 2020.
5. On 15 July 2020, the 79,600,000 restricted A shares granted to the participants were listed.
6. On 18 July 2022, the Company convened the second extraordinary meeting of the tenth session of the Board
and the first extraordinary meeting of the tenth session of the Supervisory Committee, at which the Company
considered and approved the Resolution on the Fulfilment of the Unlocking Conditions of the Restricted Shares
Granted under the 2020 Restricted A Share Incentive Scheme during the First Unlocking Period and the Resolution
on the Adjustment to the Repurchase Price of the 2020 Restricted A Share Incentive Scheme and Repurchase and
Cancellation of Certain Restricted Shares.
96 participants fulfilled the unlocking conditions for the first unlocking period under the 2020 Restricted A Share
Incentive Scheme with 29,948,000 restricted shares being eligible for unlocking. 15 participants had resigned,
had changed duty, and had removed from office, which failed to comply with the unlocking conditions. The
total number of restricted shares that have been granted to and held by the participants and have not yet been
unlocked is 4,466,000, with a repurchase price of RMB2.5184172 per share (excluding the bank loan interest rate
for the same term). On 27 July 2022, 29,948,000 restricted A shares that were unlocked were listed for trading.
On 18 October 2022, the Company completed the procedures for the repurchase and cancellation of 4,466,000
restricted A shares with the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited.
7. On 17 July 2023, the Company convened the ninth extraordinary meeting of the tenth session of the Board and
the fifth extraordinary meeting of the tenth session of the Supervisory Committee, at which the Resolution on the
Failure Fulfilment of the Unlocking Conditions for the Second Unlocking Period under the 2020 Restricted A Share
Incentive Scheme and Repurchase and Cancellation of Certain Restricted Shares was considered and approved.
The results for 2022 of the Company failed to pass the performance appraisal targets at company level set for
the second unlocking period. Meanwhile, 5 participants lost their incentive qualification due to their resignation.
The Board of the Company repurchased and cancelled 22,929,000 restricted A shares which had been granted
to participants but not yet unlocked for the second unlocking period at a repurchase price of RMB2.5184172 per
share (excluding the bank loan interest rate for the same term). On 20 November 2023, the Company completed
the repurchase and cancellation procedures of the 22,929,000 restricted A shares at the Shenzhen Branch of
China Securities Depository and Clearing Corporation Limited.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 27
INTERIM REPORT 2024
IV Corporate Governance
IV. Implementation of the equity incentive plan, employee shareholding plan or other employee
incentive measure of the Company (Cont’d)
2. Implementation of the employee shareholding plan
Applicable √ Not applicable
3. Other employee incentive measure
Applicable √ Not applicable
V. Disclosures as required by the Hong Kong Listing Rules issued by the Stock Exchange of
Hong Kong Limited
(I) Compliance with the Code on Corporate Governance
The Company maintained high standards of corporate governance practices through various internal controls. The
Board reviews the corporate governance practices of the Company from time to time to enhance the corporate
governance standards of the Company. The Company had fully complied with all the principles and code provisions
of the Code on Corporate Governance as set out in Appendix C1 to the Hong Kong Listing Rules during the reporting
period.
(II) Securities transactions by Directors
The Directors of the Company confirmed that the Company had adopted the Model Code for Securities Transactions
by Directors of Listed Companies as set out in Appendix C3 to the Hong Kong Listing Rules. Having made adequate
enquiries with all Directors and Supervisors of the Company, the Company was not aware of any information that
reasonably suggested that the Directors and Supervisors had not complied with the requirements as stipulated in this
code during the reporting period.
28 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
V Environmental and Social Responsibility
I. Major environmental protection matters
Are the Company and its subsidiaries classified as key pollutant discharging unit as specified by environmental protection
authority
√ Yes No
Environmental protection related policies and industry standards
1. The Company, during its own production and operation process, strictly bides by relevant environmental protection laws
and regulations as follows:
The Environmental Protection Law of the People’s Republic of China, the Law on the Prevention and Control of Air
Pollution of the People’s Republic of China, the Law on the Prevention and Control of Water Pollution of the People’s
Republic of China, the Law on the Prevention and Control of Environmental Pollution by Solid Waste of the People’s
Republic of China, the Law on Noise Pollution Prevention and Control of the People’s Republic of China, Measures for
the Administration of Pollutant Discharge Permits, Regulations on Groundwater Management, and the Measures for the
Emergency Administration of Environmental Contingencies.
2. The Company strictly implements national, industry and local standards for pollutant discharge as follows:
Exhaust gas: Integrated Emission Standard of Air Pollutants (GB 16297-1996), Emission Standard of Air Pollutants for
Thermal Power Plants (GB 13223-2011), Emission Standard for Odor Pollutants (GB 14554-93), Emission Standard of Air
Pollutants for Boilers (DB44/765-2019), Emission Standard of Air Pollutants for Thermal Power Plants (DB37/664-2019),
Regional and Integrated Emission Standard of Air Pollutants (DB37/2376-2019), Emission Standard of Air Pollutants
for Building Materials Industry (DB37/2373-2018), Emission standards of pollutants for inorganic chemical industry (GB
31573-2015) and GB 18484-2020 (GB 18484-2020).
Wastewater: Integrated Wastewater Discharge Standard (GB 8978-1996), Wastewater Quality Standards for Discharge
to Municipal Sewers (GB/T 31962-2015), Discharge Standard of Water Pollutants for the Pulp and Paper Industry (GB
3544-2008) and Discharge Limits of Water Pollutants (DB44/26-2001), and the wastewater influent standard of local
wastewater treatment plants.
Noise: Emission Standard for Industrial Enterprises Noise at Boundary (GB 12348-2008).
Environmental protection administrative licensing
The dates of issue and validity of pollutant discharge permits are as follows:
Shandong Chenming Paper Holdings Limited: Issued on 2 March 2023 and valid up to 1 March 2028.
Shouguang Meilun Paper Co., Ltd.: Issued on 2 March 2023 and valid up to 1 March 2028.
Zhanjiang Chenming Pulp & Paper Co., Ltd.: Issued on 30 May 2022 and valid up to 29 May 2027.
Jiangxi Chenming Paper Co., Ltd.: Issued on 11 June 2020 and valid up to 27 June 2025.
Huanggang Chenming Pulp & Paper Co., Ltd.: Issued on 12 June 2024 and valid up to 11 June 2029.
Jilin Chenming Paper Co., Ltd.: Issued on 10 December 2021 and valid up to 9 December 2026.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 29
INTERIM REPORT 2024
V Environmental and Social Responsibility
I. Major environmental protection matters (Cont’d)
Industry emission standards and the status of pollutant emissions involved in production and operation
activities
Category
of major Name of major Pollutant
pollutants pollutants Number of Emission emission Approved
Name of company and specific and specific emission Distribution of concentration/ standards total Excessive
or subsidiary pollutants pollutants Way of emission outlets emission outlets intensity implemented Total emissions emissions emissions
Shandong Chenming Exhaust gas SO2 Organised 2 Chenming Industrial Power plant no. 1: 35mg/m3 Power plant no. 1: 160.32t/year No
Paper Holdings emission Park 9.66mg/m3 10.65t
Limited Power plant no. 2: Power plant no. 2:
10.5mg/m3 11.43t
NOx Organised 2 Chenming Industrial Power plant no. 1: 50mg/m3 Power plant no. 1: 233.91t/year No
emission Park 40.6mg/m3 43.2t
Power plant no. 2: Power plant no. 2:
38.3mg/m3 40.23t
Particulates Organised 2 Chenming Industrial Power plant no. 1: 5mg/m3 Power plant no. 1: 23.39t/year No
emission Park 0.658mg/m3 0.703t
Power plant no. 2: Power plant no. 2:
0.544mg/m3 0.561t
Wastewater COD Indirect 2 Chenming Industrial Sewage outlet no. 1: 300mg/L Sewage outlet no. 1: 6,510.74t/year No
emission Park 147mg/L 737t
Sewage outlet no. 2: Sewage outlet no. 2:
204mg/L 1161t
Ammonia Indirect 2 Chenming Industrial Sewage outlet no. 1: 30mg/L Sewage outlet no. 1: 650.7t/year No
nitrogen emission Park 4.93mg/L 25.72t
Sewage outlet no. 2: Sewage outlet no. 2:
0.526mg/L 2.892t
Total nitrogen Indirect 2 Chenming Industrial Sewage outlet no. 1: 70mg/L Sewage outlet no. 1: 1,519.1t/year No
emission Park 19.5 mg/L 98.86t
Sewage outlet no. 2: Sewage outlet no. 2:
15.4 mg/L 87.6t
Shouguang Meilun Exhaust gas SO2 Organised 4 Chenming Industrial Power plant no. 1: 35mg/m3 Power plant no. 1: 342.89t/year No
Paper Co., Ltd. emission Park 18.7mg/m3 (self-owned 12.63t
Power plant no. 2: power plant), Power plant no. 2:
14.5mg/m3 50mg/m3 10.78t
Alkali recovery: (chemical Alkali recovery: 47.68t
7.91mg/m3 pulp mill) Lime kiln: 2.49t
Lime kiln:
3.2mg/m3
NOx Organised 4 Chenming Industrial Power plant no. 1: 50mg/m3 Power plant no. 1: 1,202.75t/year No
emission Park 38.2mg/m3 (self-owned 25.11t
Power plant no. 2: power plant), Power plant no. 2:
37.5mg/m3 100mg/m3 27.78t
Alkali recovery: (chemical Alkali recovery:
79.6mg/m3 pulp mill) 402.83t
Lime kiln: Lime kiln:
14.1mg/m3 11.8t
Particulates Organised 4 Chenming Industrial Power plant no. 1: 5mg/m3 Power plant no. 1: 121.979t/year No
emission Park 0.281mg/m3 (self-owned 0.182t
Power plant no. 2: power plant), Power plant no. 2:
0.435mg/m3 10mg/m3 0.321t
Alkali recovery: (chemical Alkali recovery:
2.06mg/m3 pulp mill) 11.422t
Lime kiln: Lime kiln:
1.09mg/m3 0.756t
30 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
V Environmental and Social Responsibility
I. Major environmental protection matters (Cont’d)
Industry emission standards and the status of pollutant emissions involved in production and operation
activities (Cont’d)
Category
of major Name of major Pollutant
pollutants pollutants Number of Emission emission Approved
Name of company and specific and specific emission Distribution of concentration/ standards total Excessive
or subsidiary pollutants pollutants Way of emission outlets emission outlets intensity implemented Total emissions emissions emissions
Jiangxi Chenming Exhaust gas SO2 Organised 1 Thermal power plant 240T/h furnace: 200mg/m3 21.02t 806t/year No
Paper Co., Ltd. emission 18.56mg/m3
NOx Organised 1 Thermal power plant 240T/h furnace: 200mg/m3 38.60t 806t/year No
emission 35.36mg/m3
Particulates Organised 1 Thermal power plant 240T/h furnace: 30mg/m3 3.55t 135t/year No
emission 2.99mg/m3
Wastewater COD Direct emission 1 Total wastewater 31.31mg/L 90mg/L 72.35t 1,260t/year No
discharge
Ammonia Direct emission 1 Total wastewater 1.04mg/L 8mg/L 2.22t 112t/year No
nitrogen discharge
Total nitrogen Direct emission 1 Total wastewater 3.05mg/L 12mg/L 6.31t / No
discharge
Jilin Chenming Paper Exhaust gas SO2 Organised 3 (2 in use, Within factory area 4.06mg/m3 100mg/m3 1.27t 97t/year No
Co., Ltd. emission 1 spare)
NOx Organised 3 (2 in use, Within factory area 39.41mg/m3 100mg/m3 11.70t 213t/year No
emission 1 spare)
Particulates Organised 3 (2 in use, Within factory area 8.70mg/m3 30mg/m3 2.63t 51.66t/year No
emission 1 spare)
Wastewater COD Indirect emission 1 Total wastewater 132.35mg/L 120mg/L 346.03t 6,000t/year No
discharge
Ammonia Indirect emission 1 Total wastewater 1.65mg/L 45mg/L 4.34t 500t/year No
nitrogen discharge
Total nitrogen Indirect emission 1 Total wastewater 6.02mg/L 50mg/L 15.65t / No
discharge
Zhanjiang Chenming Exhaust gas SO2 Organised 6 Within factory area Power plant no. 1: Power plant: 87t 620t/year No
Pulp & Paper emission 2.5mg/m3 35mg/m3
Co., Ltd. Power plant no. 2: Lime kiln:
3.3mg/m3 200mg/m3
Power plant no. 3: Alkali furnace:
2.3mg/m3 200mg/m3
Power plant no. 4:
0.8mg/m3
Lime kiln:
20.4mg/m3
Alkali furnace:
23.9mg/m3
SHANDONG CHENMING PAPER HOLDINGS LIMITED 31
INTERIM REPORT 2024
V Environmental and Social Responsibility
I. Major environmental protection matters (Cont’d)
Industry emission standards and the status of pollutant emissions involved in production and operation
activities (Cont’d)
Category
of major Name of major Pollutant
pollutants pollutants Number of Emission emission Approved
Name of company and specific and specific emission Distribution of concentration/ standards total Excessive
or subsidiary pollutants pollutants Way of emission outlets emission outlets intensity implemented Total emissions emissions emissions
NOx Organised 6 Within factory area Power plant no. 1: Power plant: 208.32t 1,800t/year No
emission 20.3mg/m3 50mg/m3
Power plant no. 2: Lime kiln:
25.2mg/m3 200mg/m3
Power plant no. 3: Alkali furnace:
19.6mg/m3 200mg/m3
Power plant no. 4:
10.2mg/m3
Lime kiln:
126.4mg/m3
Alkali furnace:
82.8mg/m3
Particulates Organised 6 Within factory area Power plant no. 1: Power plant: 24.58t 195.06t/year No
emission 2.7mg/m3 10mg/m3
Power plant no. 2: Lime kiln:
3.9mg/m3 30mg/m3
Power plant no. 3: Alkali furnace:
2.4mg/m3 30mg/m3
Power plant no. 4:
0.8mg/m3
Lime kiln:
16.5mg/m3
Alkali furnace:
8.1mg/m3
Wastewater COD Direct emission 1 Wastewater discharge 35mg/L 90mg/L 488t 1,943t/year No
Ammonia Direct emission 1 Wastewater discharge 0.89mg/L 8mg/L 13t 43.9t/year No
nitrogen
Total nitrogen Direct emission 1 Wastewater discharge 2.18mg/L 12mg/L 31.256t 320.4t/year No
Huanggang Chenming Exhaust gas SO2 Organised 1 Lime kiln chimney 23.264mg/m3 80mg/m3 8.747t 142.872t/year No
Pulp & Paper emission
Co., Ltd.
SO2 Organised 1 Alkali furnace chimney 29.065mg/m3 200mg/m3 68.174t 328.417t/year No
emission
NOX Organised 1 Lime kiln chimney 102.261mg/m3 180mg/m3 37.022t 181.887t/year No
emission
NOX Organised 1 Alkali furnace chimney 141.435 mg/m3 200mg/m3 298.203t 950.829t/year No
emission
Particulates Organised 1 Lime kiln chimney 14.76 mg/m3 200mg/m3 5.243t 45.311t/year No
emission
Particulates Organised 1 Alkali furnace chimney 15.165mg/m3 30mg/m3 28.066t 83.759t/year No
emission
Wastewater COD Indirect emission 1 Total wastewater 25.69 mg/L 150mg/L 121.859t 398.911t/year No
discharge
Ammonia Indirect emission 1 Total wastewater 1.269 mg/L 14mg/L 6.014t 39.891t/year No
nitrogen discharge
Total nitrogen Indirect emission 1 Total wastewater 3.917mg/L 29mg/L 18.318t / No
discharge
32 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
V Environmental and Social Responsibility
I. Major environmental protection matters (Cont’d)
Treatment of pollutants
1. Shandong Chenming Paper Holdings Limited
Its own power plant uses the exhaust gas treatment process of limestone-gypsum desulfurisation+SNCR selective non-
catalytic reduction denitration+electric and bag composite dust removal+wet type electric dust removal. In the first
half of 2024, the environmental protection exhaust gas treatment facilities operated well, and were overhauled in time
according to the overhaul plan. The daily average exhaust gas indicator did not exceed the standard, and the exhaust
gas was discharged up to the standard after treatment.
Its sewage treatment plant uses the traditional activated sludge wastewater treatment process+membrane treatment
and recycle process, and the wastewater which is treated up to the standard is partially discharged into the sewage
treatment plant of Shouguang Zhongye Water Co., Ltd., and partially reused in production lines. In the first half of 2024,
the wastewater treatment facilities operated well, and were overhauled in time according to the overhaul plan. The daily
average wastewater indicator did not exceed the standard, and the wastewater was discharged up to the standard after
treatment.
2. Shouguang Meilun Paper Co., Ltd.
Its own power plant uses the exhaust gas treatment process of limestone-gypsum desulfurisation + SNCR selective non-
catalytic reduction denitration + electric and bag composite dust removal + wet type electric dust removal. The chemical
pulp alkali recovery furnace uses the exhaust gas treatment process of PSCR denitration + electrostatic dust removal
+ wet electrostatic dust removal, and the chemical pulp lime kiln uses the exhaust gas treatment process of ozone
denitration + electrostatic dust removal + wet type electric dust removal. In the first half of 2024, the environmental
protection exhaust gas treatment facilities operated well, and were overhauled in time according to the overhaul plan.
The daily average exhaust gas indicator did not exceed the standard, and the exhaust gas was discharged up to the
standard after treatment.
3. Jiangxi Chenming Paper Co., Ltd.
Its own power plant uses the exhaust gas treatment process of ammonia desulfurisation + SNCR catalytic reduction
denitrification+ electric and bag composite dust removal + 90-metre desulfurisation and denitrification tower. The
aerobic section of the sewage treatment plant is equipped with a negative pressure exhaust device to recover and treat
the exhaust gas from anaerobic and aerobic sections, and uses the process of alkali spraying + biofiltration + water
washing. In the first half of 2024, the environmental protection exhaust gas treatment facilities operated well, and were
overhauled in time according to the overhaul plan. The daily average exhaust gas indicator did not exceed the standard,
and the exhaust gas was discharged up to the standard after treatment.
Industrial wastewater is collected by a catchment well with large particles removed by grids and fibres in the wastewater
recovered by inclined mesh, and then flow into the settling tank for preliminary settling and cooling in free-flowing.
When the water temperature reaches 38°C, the water is pumped into a high-concentration primary settling tank and
a low-concentration primary settling tank. After the pre-acidification treatment, organic matter which can be easily
decomposed from the polymer decomposed through a hydrolysis acidification tank. In the biochemical process, the
biogas produced is recovered for power generation, and the biochemical water enters into the anaerobic section, and
gets into aeration and other aerobic systems with cooled low-concentration water. A stable COD value is achieved
through the aerobic system. In order to better treat the water, the aerobic water enters into the in-depth treatment
system, and is treated up to the standard through the processes such as Fenton treatment, settling tank treatment,
inclined plate settling, and flocculation settling. In the process of wastewater treatment, the suspended matter in the
water body is removed from the sludge produced which is treated by the processes such as plate and frame filtering
and belt machine desliming, which meets the requirements of Table II of GB3544. A reclaimed water recycling device is
in place to recycle some water which meets the requirements.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 33
INTERIM REPORT 2024
V Environmental and Social Responsibility
I. Major environmental protection matters (Cont’d)
Treatment of pollutants (Cont’d)
4. Jilin Chenming Paper Co., Ltd.
Its own power plant uses low-temperature combustion, staged combustion and SCR denitrification outside the furnace,
and uses bag filter for flue gas dust removal, and uses wet desulfurisation process of limestone inside the furnace +
limestone-gypsum outside the furnace, and the discharge is up to the standard.
The sewage station uses the treatment process of anaerobic (IC reactor)+aerobic (jet aeration)+in-depth treatment (Fenton
advanced oxidation), and the discharge is up to the standard.
5. Zhanjiang Chenming Pulp and Paper Co., Ltd.
The thermal power plant of Zhangjiang Chenming Pulp and Paper Co., Ltd. has three circulating fluidised bed boilers
of 280t/h and one circulating fluidised bed boiler of 400t/h. In particular, the three boilers of 280t/h are equipped with
SNGR denitrification and external wet (cement-plaster) desulphurisation system. The boiler of 400t/h is equipped with
SNCR+SCR in combination denitrification, external wet desulphurisation and wet electrostatic dust removal system.
The company has constructed wastewater treatment station in two phases. Among which, the capacity of phase I
wastewater treatment station is 86,000 m3/d (applies “primary settling tower + conditioning tower + selective aeration
tank + Fenton oxidation tank + clarifier” treatment), while that of phase II wastewater treatment station is 30,000 m3/
d (applies “first-class sedimentation pre-treatment + second-class biological treatment + third-class Fenton oxidation
deep treatment”).
6. Huanggang Chenming Pulp & Paper Co., Ltd.
The alkali furnace uses polymer denitration outside the furnace + electrostatic dust removal and alkaline melt from the
process able to absorb sulphur dioxide. The discharge is up to the standard. The lime kiln uses limestone to fix sulphur
and five electrostatic precipitators to remove dust. The discharge is up to the standard.
The sewage treatment uses physical settling + aerobic biochemical treatment + Fenton in-depth treatment process. The
discharge is up to the standard.
34 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
V Environmental and Social Responsibility
I. Major environmental protection matters (Cont’d)
Emergency plan for emergency environmental incidents
The Company has strictly implemented emergency regulations for emergency environmental incidents, and formulated various
emergency plans for emergency environmental incidents according to the technical requirements in the “Technical Guidelines
for Emergency Environmental Pollution Accidents”. The plans are reviewed by and filed with the Environmental Protection
Bureau, and regular emergency training and emergency drills are conducted. Emergency measures in relation to dangerous
chemicals are formulated in accordance with the environmental protection requirements. At the same time, necessary
emergency supplies are provided with regular inspections and updates.
Investment in environmental governance and protection and payment of environmental protection tax
The Company has always adhered to the concept of “green development, ecological Chenming”, and clung to the
development model of “clean production” and resource recycling. A green ecology is incorporated in the whole process of
production and operation. The Company has invested more than RMB8 billion in total to construct the pollution treatment
facilities including the alkali recovery system, reclaimed water treatment system, reclaimed water reuse system, white water
recovery system and black liquor comprehensive utilisation system. The environmental protection indicators rank high in China.
During the reporting period, the Company paid environmental protection tax according to law. The Company’s environmental
protection tax mainly results from atmospheric pollutants. According to the Environmental Protection Tax Law of People’s
Republic of China and its implementation rules, the pollutants shall be calculated according to the automatic monitoring data
of pollutants if automatic pollutant monitoring equipment which complies with national provisions and monitoring standards
is installed and used. Taxable atmospheric pollutants are determined according to the pollution equivalent quantity converted
from the amount of pollutant discharge. The taxable atmospheric pollutants discharged from each outlet, or where there is no
outlet, are to be ranked in decreasing order of pollution equivalent quantity, and environmental taxes are to be levied on the
top three pollutants. In the first half of 2024, the Company paid environmental protection tax amounting to RMB7.2513 million.
Environmental self-monitoring programme
The Company has strictly complied with self-monitoring laws and regulations, and conducted self-monitoring in accordance
with the environmental protection requirements to establish and perfect the corporate environmental management ledgers
and materials. At present, self-monitoring is a combination of manual monitoring and automatic monitoring. At the same time,
qualified units are engaged to conduct regular monitoring. Automatically monitored items include: total wastewater discharge
(COD, ammonia nitrogen, flow rate, total phosphorus, total nitrogen and pH); power plant, alkali recovery boilers and lime kiln
exhaust emissions (sulphur dioxide, nitrogen oxide and particulates). Manually monitored items include: daily monitoring of
COD, ammonia nitrogen, SS, chroma, pH, total phosphorus and total nitrogen indicators. Sewage and other monitoring items,
unorganised exhaust emission, solid waste, and noise at the plant boundary, are monitored on a monthly or quarterly basis by
qualified units engaged in accordance with the local environmental protection requirements in relation to each subsidiary.
The self-monitoring data and environmental monitoring programmes for pollutants discharge of various subsidiaries are
published on the national key pollution source information disclosure website and the provincial key pollution source
information disclosure websites.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 35
INTERIM REPORT 2024
V Environmental and Social Responsibility
I. Major environmental protection matters (Cont’d)
Administrative penalties for environmental problems during the reporting period
Impact on the production Corrective
Name of company or and operation of the measures of the
subsidiary Reasons for penalty Violations Penalty results listed company company
Jiangxi Chenming Violation of the requirement The general industrial An administrative penalty Jiangxi Chenming The general
of paragraph 1 of Article solid waste and of RMB800,000 was had completed the industrial solid
37 of the Law on the sludge treating entity imposed on Jiangxi rectification and paid the waste and sludge
Prevention and Control of commissioned by Jiangxi Chenming by Nanchang penalty on time. There treating entity was
Environmental Pollution by Chenming did not have Ecological Environment was no material adverse promptly replaced.
Solid Waste of the People’s the eligibility and technical Bureau. impact on the listed An entity with
Republic of China “Where capabilities for treatment. company. qualifications and
an entity that produces It was alleged that Jiangxi technical strengths
industrial solid wastes Chenming failed to fulfil its for treating general
commissions another verification obligation in industrial solid
person to transport, utilise, breach of the requirement waste and sludge
or treat the industrial to commission another was selected
solid wastes, it shall person to transport, for cooperation.
verify the eligibility and utilise, or treat the Specialised
technical capabilities of the industrial solid wastes. personnel were
commissioned party, sign regularly assigned to
a written contract as legally verify the treatment
required, and stipulate the on site.
requirements for pollution
prevention and control in
the contract”.
Other environmental information to be disclosed
The relevant environmental protection information of the pollutant discharge permit information and the pollutant discharge
permit requirements is announced on the national sewage discharge permit management information platform.
36 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
V Environmental and Social Responsibility
I. Major environmental protection matters (Cont’d)
Measures taken to reduce its carbon emissions during the reporting period and their effectiveness
√ Applicable Not applicable
1. The Group strengthened energy management, and compared and analysed the consumption of coal, electricity, on a
daily basis with strict control.
2. The Group implemented the conversion of old and new energy sources, eliminated high energy-consuming equipment,
replaced high-efficiency inverter and energy-saving motors, and reduced energy consumption.
3. According to the zero position of the air cover of the paper machine dryer, the Group reduced the frequency of the fan
appropriately to improve the drying efficiency by raising the zero position and save electricity consumption.
4. For moisture content of screening unit and squeezing unit of paper machine, the Group reduced out of the press
moisture and the amount of steam used of drying unit by adjusting the lip plate flow rate, retention rate and line pressure
and other measures.
5. The Group strengthened daily energy-saving management by developing a system for temperature of air conditioning
and switching on and off of various power supplies, with tracking and inspection.
6. The Group vigorously developed clean energy and energy recycling projects to reduce carbon emissions.
7. The Group carried out energy saving and emission reduction at different factories, so that the amount of clean water
was under strict control, the amount of water produced by membrane treatment was increased and the amount of
wastewater recycled was increased.
Other environmental protection related information
Other environmental protection related information is announced on the Company’s website.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 37
INTERIM REPORT 2024
V Environmental and Social Responsibility
II. Social responsibility
Chenming Paper takes “Creating Value, Contributing to Society” as its corporate mission. During the reporting period, the
Company focused on the development of its principal activities, i.e. pulp production and paper making. It continuously
strengthened its supply chain management, improved its product quality, and enhanced its customer service levels, striving
to create economic value. At the same time, the Company placed equal importance on social value and economic value. It
continued to regulate its corporate governance practices, valued the investor relations management, protected the rights of
its employees, and strengthened its responsibilities for safety and environmental protection. The Company effectively fulfilled
its social responsibilities to stakeholders such as shareholders, employees, customers and suppliers, aiming to become
a company that created effective value for society and realised its corporate vision of “Building a Superior and Stronger
Enterprise, and Crafting a Century-Long Chenming”.
1. Compliance operation to build strong foundation for governance
During the reporting period, the Company consistently implemented the reform of the independent director system
of listed companies. Eight corporate governance systems including The Measures for Administration of Independent
Directors, the Articles of Association, the Procedural Rules of the Board Meeting and the Procedural Rules of the
General Meeting were amended to further improve independent Directors’ ability to perform their duties and fully
utilising the role of independent Directors. The Company valued the investor relations management. The communication
and exchange with investors were strengthened through various channels. On 7 April 2024, the Company held the 2023
annual results briefing and replied more than 40 questions from investors on the Shenzhen Stock Exchange Interactive
Yi platform. The Company ensured that its investor hotline was accessible. The announcements published in Shenzhen
and Hong Kong were available under the investor relations column of the Company’s official website to enable
convenient access for investors. During the reporting period, the Company held 3 Board meetings and 2 meetings of the
Supervisory Committee. All Directors and Supervisors of the Company were present at each meeting where resolutions
were passed with the procedure for consideration and approval of resolutions being legal and compliant. The 2023
annual general meeting of the Company was held on-site and online to ensure shareholders’ rights to know, participate
in, and vote on the material matters of the Company. Some Directors attended the general meeting in person, and
visited the Company’s factories before the meeting to understand the operations of the Company, thus safeguarding the
interests of the Company’s shareholders, especially the small and medium-sized shareholders, in a practical manner.
2. Care for employees to empower talent development
The Company adheres to the employment philosophy of “Cultivating Talents, Retaining Talents, and Making Good Use
of Talents”. Being people-oriented, it protects employees’ occupational health and safety while attaches importance
to employees’ career development planning, in order to gather up employees’ love and dedication for work to help the
high quality development of the Company. During the reporting period, the Company took the 23rd “safety production
month” as an opportunity to launch a series of safety education activities to thoroughly implement the safety production
policy of “safety first, prevention-oriented and comprehensive management”, and enhance the safety awareness
of all employees, thus safeguarding the health and safety of employees. The Company attached great importance
to employee training. It set up a diversified and customised training platform. Categorised specialized training was
launched according to the training needs of each department and the requirements of the positions to strengthen
the specificity and efficiency of training, and to cultivate high quality talents. A sound performance appraisal and
compensation management system was established to provide competitive compensation and benefits, and create a
clear path for promotion, so that employees can share the fruits of the development of the Company. The trade union
committee fully played a role as a bridge in an effort to build a harmonious labour relationship and realise growing
together with employees by giving out birthday cakes to employees, organising cultural and sports activities such as
table tennis, basketball and badminton, and organising quarterly employee seminars addressing employees’ difficulties.
38 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
V Environmental and Social Responsibility
II. Social responsibility (Cont’d)
3. Sincerity towards customers to promote win-win cooperation
During the reporting period, the Company adhered to the core values of “Integrity, Win-Win and Sharing” to proactively
establish win-win strategic partnerships with customers and suppliers. For the protection of customers’ rights, the
Company adhered to the marketing philosophy of “Integrity, Mutual Benefit and Better Future for All”. It was customer-
centred and market demand-oriented, and constantly strengthened technological innovation and improved product
quality to meet customer demand and create benefits of branding. Meanwhile, it regulated the after-sales management
of products, formulated the “Customer Complaint Handling Regulations”, optimised the customer complaint handling
process, and continuously improved customer service satisfaction. For the protection of suppliers’ rights, the Company
constantly optimised the supply chain management, and had systems of the Company such as the Subsidiary Regional
Procurement Management Measures and the Tender Management System in place. It strived to create a fair and just
competition environment for suppliers, and strengthen strategic cooperation with high quality suppliers to ensure the
quality of raw materials and their stable supply, thus realising cost reduction and efficiency increase, mutual benefit and
win-win cooperation.
4. Green development to protect the ecological environment
The Company adheres to the concepts of “lucid waters and lush mountains are invaluable assets”, and “green
development, eco-friendly Chenming”. It steadfastly follows the high quality development path of giving priority to the
ecology and adopting a green and low-carbon policy, and strives to promote economic and ecological development
together to realise a “win-win” situation in terms of economic benefits and environmental benefits. During the reporting
period, the Company actively promoted clean production, vigorously promoted the treatment of “three wastes”,
and vigorously implemented energy saving and emission reduction. It had advanced pollution treatment facilities
including the alkali recovery system, reclaimed water treatment system, reclaimed water reuse system, and black
liquor comprehensive utilisation system to ensure that all indicators met the requirements of the national environmental
protection standards. Meanwhile, the Company attached importance to technology research and development, and
actively developed green products. It successfully passed the audit of China Environmental United Certification Center
and was awarded the certificate of “China Environmental Labeling (Type I) Product Certification”. The Type I certified
products covered the offset printing paper series and the coated paper series. The Company practically took the main
social responsibility of protecting the ecological environment.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 39
INTERIM REPORT 2024
VI Material Matters
I. Undertakings made by parties involved in undertakings including the Company’s beneficial
controllers, shareholders, related parties, bidders and the Company fulfilled during the
reporting period and not yet fulfilled within the prescribed time period as at the end of the
reporting period
Applicable √ Not applicable
During the reporting period, there were no such undertakings in respect of the Company as those made by parties involved in
undertakings including the Company’s beneficial controllers, shareholders, related parties, bidders and the Company fulfilled
during the reporting period and not yet fulfilled within the prescribed time period as at the end of the reporting period.
II. Appropriation of funds of the Company by the controlling shareholder and other related
parties for non-operating purposes
Applicable √ Not applicable
There was no appropriation of funds of the Company by the controlling shareholder and other related parties for non-operating
purposes during the reporting period.
III. External guarantees against the rules and regulations
Applicable √ Not applicable
There was no external guarantee provided by the Company which was against the rules and regulations during the reporting
period.
IV. Engagement or dismissal of accounting firms
Has the interim financial report been audited?
Yes √ No
The interim report of the Company is unaudited.
V. Opinions of the Board and the Supervisory Committee regarding the “modified auditor’s
report” for the reporting period issued by the accountants
Applicable √ Not applicable
VI. Opinions of the Board regarding the “modified auditor’s report” for the prior year
Applicable √ Not applicable
VII. Matters related to bankruptcy and reorganisation
Applicable √ Not applicable
There was no matter related to bankruptcy and reorganisation during the reporting period.
40 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
VI Material Matters
VIII. Litigation
Material litigation and arbitration
√ Applicable Not applicable
General information Whether
on the litigation provisions Enforcement Date of
(arbitration) Amount involved are made Progress Trial results and impact of judgment disclosure Disclosure index
Statutory demand and HK$389,112,432.44 No On 10 August 2023, the Court of First Instance On 23 April 2024, the Company N/A 26 April 2024 http://www.cninfo.com.cn
winding-up petition handed down its judgment on the application received the judgment made (Announcement no.
made by the Company for the dismissal or by the Hong Kong Court of 2024-031)
adjournment of the winding-up petition and Appeal ruling to dismiss the 25 April 2024 http://www.hkex.com.hk
ruled that the winding-up petition was stayed. appeal made by HKK2.
On 31 October 2023, Arjowiggins HKK2 Limited
(“HKK2”) appealed against the judgment of the
Hong Kong Court of First Instance on staying
the winding-up petition. On 21 March 2024, The
Hong Kong Court of Appeal heard the appeal
made by HKK2.
Other litigations
√ Applicable Not applicable
Amount Whether
General information on the involved provisions Date of Disclosure
litigation (arbitration) (RMB’0,000) are made Progress Trial results and impact Enforcement of judgment disclosure index
Summary of matters not 68,306.47 No Judgment was made. For resolved litigations, the Enforcement of the judgment was N/A N/A
subject to disclosure as court ordered relevant defendant in progress.
material litigation (arbitration) and guarantor to settle outstanding
in which Chenming Leasing loans to the Company, in line with
is the plaintiff the request of the Company and
would not have any significant
impact on the operations and
financial position of the Company.
Summary of matters not 130.00 No Judgment was made. The case was closed, having Enforcement of the judgment was N/A N/A
subject to disclosure as no significant impact on the executed.
material litigation (arbitration) operations and financial position
in which Chenming Leasing of the Company.
is the defendant
Summary of matters not 44,863.62 No The amount involved in ongoing The cases had no significant The amount involved in the N/A N/A
subject to disclosure as cases was RMB48.7686 million; the impact on the operations and resolved and executed cases was
material litigation (arbitration) amount involved in resolved cases financial position of the Company. RMB121,300, and other cases
in which the Company and was RMB399.8676 million. are in the progress of execution.
other subsidiaries of the
Company are the plaintiff
Summary of matters not 27,717.65 No The amount involved in ongoing The cases had no significant All the resolved cases were N/A N/A
subject to disclosure as cases was RMB257.6573 million; the impact on the operations and executed.
material litigation (arbitration) amount involved in resolved cases financial position of the Company.
in which the Company and was RMB19.5192 million.
other subsidiaries of the
Company are the defendant
SHANDONG CHENMING PAPER HOLDINGS LIMITED 41
INTERIM REPORT 2024
VI Material Matters
IX. Punishment and rectification
Applicable √ Not applicable
During the reporting period, there was no punishment and rectification against the Company
X. Credibility of the Company, its controlling shareholders and beneficial controllers
Applicable √ Not applicable
XI. Significant related party transactions
1. Related party transactions associated with day-to-day operation
√ Applicable Not applicable
Pricing Amount of Percentage
Types of Subject basis of Related related as the Amount of Whether Settlement Market price
Relationship the related matter of the the related party party amount transactions exceeding of related of available
Related with the party related party party transaction transactions of similar approved approved party similar Disclosure
party Company transactions transactions transaction price (RMB’0,000) transactions (RMB’0,000) cap transactions transaction date Disclosure index
Weifang Port Joint venture Labour Port Market price Market price 5,619.11 12.40% 11,000.00 No Bank N/A 29 March http://www.cninfo.com.cn
Wood Chip services miscellaneous acceptance 2024
Wharf Co., Ltd. fees and telegraphic
transfer
Total 5,619.11 11,000.00
Particulars on refund of bulk sale Nil
Estimated total amount for day-to-day related party transactions to be conducted during the period Nil
(by types of transactions) and their actual implementing during the reporting period (if any)
Reasons for large differences between transaction price and market reference price (if applicable) N/A
2. Related party transaction in connection with purchase or sale of assets or equity interest
√ Applicable Not applicable
In order to further focus on the development of its principal business of pulp production and paper making, divest the
non-principal business, continuously optimise its asset structure, improve its asset quality, increase its cash inflow and
enhance its profitability, the Company transferred its 90.05% equity interest in Yujing Hotel and the debts of Yujing
Hotel payable to the Company amounting to RMB193.5072 million to Shouguang Chenming Guangyuan Real Property
Company Limited, a related party, for a consideration of RMB356.50 million. The consideration was determined based
on the Asset Valuation Report (Tian Hao Zi Ping Bao Zi [2024] J No. 0004), with 31 December 2023 as its benchmark
date, prepared by Tinho International Real Estate Land Assets Appraisal Group Co. Ltd.. Upon completion of the
transaction, the Company ceased to have any equity interest in Yujing Hotel.
42 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
VI Material Matters
XI. Significant related party transactions (Cont’d)
2. Related party transaction in connection with purchase or sale of assets or equity interest (Cont’d)
Book value Assess
Types of of the value of the Settlement Gains or
the related Subject matter of Pricing basis of transferred transferred Transfer of related losses on
Relationship with the party the related party the related party asset asset price party transaction Disclosure
Related party Company transactions transactions transaction (RMB’0,000) (RMB’0,000) (RMB0’000) transaction (RMB0,000) date Disclosure index
Shouguang Subsidiary of a company Equity Transfer of 90.05% Assess value -4,054.23 18,071.76 16,299.28 Cash and 20,353.51 23 March http://www.cninfo.com.cn
Chenming invested by Directors transfer equity interest in notes 2024
Guangyuan and Senior Management Yujing Hotel to
Real Property of the Company Guangyuan Real
Company Property from
Limited Shandong Chenming
Reason for a greater difference between the transfer price and the book value The main reason was the property and land appraisal appreciation of Yujing Hotel.
or the assessed value (if any)
Effect on the operating results and financial position of the Company The disposal of Yujing Hotel, a subsidiary, did not affect the normal operations of the Company and the proceeds from the equity
disposal replenished the liquidity.
The performance of the performance targets during the reporting period if any Nil
performance targets were involved in the relevant transaction
3. Related party transaction connected to joint external investment
Applicable √ Not applicable
There was no related party transaction of the Company connected to joint external investment during the reporting
period.
4. Related creditors’ rights and debts transactions
√ Applicable Not applicable
Was there any non-operating related creditors’ rights and debts transaction
√ Yes No
Creditor’s rights receivable from any related party
Was there Amount Amount
any non- increased recovered Interest for
Relationship operating Opening during the during the the current Closing
with the capital balance current period current period period balance
Related party Company Reason occupation (RMB’0,000) (RMB’0,000) (RMB’0,000) Interest rate (RMB’0,000) (RMB’0,000)
Shouguang Meite Environmental Joint venture Financial support No 1,042.72 6.00% 31.63 1,074.35
Technology Co., Ltd.
Weifang Port Wood Chip Wharf Joint venture Financial support No 7,555.47 3,500.00 3,500.00 6.00% 191.10 7,746.57
Co., Ltd.
Wuhan Chenming Hanyang Associate Financial support No 22,725.27 4.75% 539.07 23,264.34
Paper Holdings Co., Ltd.
Effect of related creditors’ rights The above creditors’ rights did not affect the ordinary operation of the Company. Moreover, they catered to the needs for development of
on the operating results and existing businesses of the above entities.
financial position of the Company
SHANDONG CHENMING PAPER HOLDINGS LIMITED 43
INTERIM REPORT 2024
VI Material Matters
XI. Significant related party transactions (Cont’d)
4. Related creditors’ rights and debts transactions (Cont’d)
Debts payable to any related party
Amount
increased Amount repaid
Relationship Opening during the during the Interest for the Closing
with the balance current period current period current period balance
Related party Company Reason (RMB’0,000) (RMB’0,000) (RMB’0,000) Interest rate (RMB’0,000) (RMB’0,000)
Chenming Holdings Company Limited Controlling Financial support 13,561.29 15,475.00 17,410.00 Market interest rate 174.98 11,801.27
shareholder
Guangdong Nanyue Bank Co., Ltd. Associate Borrowing 206,906.00 218,598.00 206,906.00 Market interest rate 2,460.56 218,598.00
Effect of related debts on the operating Financial support was provided by Chenming Holdings without requiring any pledge or guarantee, which was a testament to its support
results and financial position of the and confidence in the future development of the Company, and helped the Company promote project construction and satisfy its needs
Company for working capital.
5. Deals with related financial companies
Applicable √ Not applicable
There were no deposits, loans, credits, or other financial services between the Company, its related financial companies
and the related parties.
6. Deals between financial companies controlled by the company and related parties
Applicable √ Not applicable
There were no deposits, loans, credits, or other financial services between the financial companies controlled by the
Company and the related parties.
7. Other significant related party transactions
Applicable √ Not applicable
There was no other significant related party transaction of the Company during the reporting period.
44 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
VI Material Matters
XII. Material contracts and implementation
1. Custody, contracting and leasing
(1) Custody
Applicable √ Not applicable
There was no custody of the Company during the reporting period.
(2) Contracting
√ Applicable Not applicable
In April 2023, Jiangxi Chenming, a subsidiary, acquired equity interest in Jiangxi Port, which was included in the
scope of consolidation. The principal activities of Jiangxi Chenming Port is goods loading and transportation at
wharf. In order to revitalise Jiangxi Port and enhance economic benefits to the Company, Jiangxi Chenming has
contracted the businesses of Jiangxi Port to Jiangxi Yirong Investment Co., Ltd. for 5 years, and receives fixed
contracting fees of RMB4.00 million per year on quarterly basis.
A project which generates profit or loss for the Company representing more than 10% of the Company’s total
profit during the reporting period
Applicable √ Not applicable
The Company do not have any contracting project during the reporting period that generated profit or loss for the
Company representing more than 10% of the Company’s total profit during the reporting period.
(3) Leasing
√ Applicable Not applicable
Leasing description:
As a lessee
The Company has simplified the treatment of short-term leases and leases of low-value assets by not recognising
right-of-use assets and lease liabilities. The charges to expense for short-term leases, low-value assets and
variable lease payments not included in the measurement of lease liabilities during the current period are as
follows:
Unit: RMB
Item First half of 2024
Low-value leases 3,235,879.40
Total 3,235,879.40
SHANDONG CHENMING PAPER HOLDINGS LIMITED 45
INTERIM REPORT 2024
VI Material Matters
XII. Material contracts and implementation (Cont’d)
1. Custody, contracting and leasing (Cont’d)
(3) Leasing (Cont’d)
As a lessor
Where an operating lease is formed:
According to paragraph 58 of the new lease standard, the lessor shall disclose in the notes the following
information related to operating leases:
Lease income, and make separate disclosure of income related to variable lease payments not included in
lease receipts;
Unit: RMB
Item First half of 2024
Lease income 88,182,141.14
The amount of undiscounted lease receipts to be received in each of the five consecutive fiscal years after
the balance sheet date and the total amount of undiscounted lease receipts to be received in the remaining
years.
Unit: RMB
Year 30 June 2024
Within 1 year after the balance sheet date 174,536,416.38
1 to 2 years after the balance sheet date 165,465,795.09
2 to 3 years after the balance sheet date 167,667,038.24
3 to 4 years after the balance sheet date 161,101,058.01
4 to 5 years after the balance sheet date 162,012,344.71
More than 5 years after the balance sheet date 163,111,818.84
Total 993,894,471.27
Items that bring profit or loss of more than 10% of the total profit of the Company during the reporting
period
Applicable √ Not applicable
The Company did not have any leasing project that brought profit or loss to the Company amounting to
more than 10% of the total profit of the Company during the reporting period.
46 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
VI Material Matters
XII. Material contracts and implementation (Cont’d)
2. Significant guarantees
√ Applicable Not applicable
(1) Guarantees
During the reporting period, the Company provided guarantee to subsidiaries and the guarantee amount incurred
was RMB7,426.6000 million. As at 30 June 2024, the balance of the external guarantee provided by the Company
(including the guarantee to its subsidiaries by the Company and the guarantee provided to subsidiaries by
subsidiaries) amounted to RMB12,752.4198 million, representing 76.69% of the equity attributable to shareholders
of the Company as at the end of June 2024.
Unit: RMB’0,000
External guarantees of the Company and its subsidiaries (excluding guarantees to subsidiaries)
Date of the
related
announcement Guarantee
disclosing to related
the guarantee Amount of Guarantee Guarantee Type of Counter- Fulfilled parties
Name of obligee amount guarantee date provided guarantee Collateral guarantee Term or not or not
Weifang Port Wood 24 July 2017 17,500.00 20 December 8,500.00 General Credit Nil 10 years No Yes
Chip Wharf Co., Ltd. 2017 guarantee guarantee
Zhanjiang Runbao 28 March 2024 16,000.00 25 April 2024 16,000.00 Pledge 34.64% Equity transfer 2 years No No
Trading Co., Ltd. equity payment of
interest RMB160
in Wuhan million
Chenming
Zhanjiang Dingjin 7 December 13,558.19 7 December 13,558.19 Mortgage Properties Remaining 3 years No No
Trading Co., Ltd. 2022 2022 equity transfer
payment of
RMB136
million
Shanghai Shuilan Trading 7 December 45,700.00 7 December 45,000.00 Pledge 100% equity 80% equity 3 years No No
Co., Ltd. 2022 2022 interest in interest in
Shanghai Taixing Port
Chongmin held by
Shanghai
Huahao
Total external guarantees approved during the reporting period (A1) 16,000.00 Total actual external guarantees during the reporting period (A2) 16,000.00
Total external guarantees approved at the end of the reporting period (A3) 92,758.19 Balance of total actual guarantees at the end of the reporting period (A4) 83,058.19
SHANDONG CHENMING PAPER HOLDINGS LIMITED 47
INTERIM REPORT 2024
VI Material Matters
XII. Material contracts and implementation (Cont’d)
2. Significant guarantees (Cont’d)
(1) Guarantees (Cont’d)
Guarantees to subsidiaries from the Company
Date of the
related
announcement Guarantee
disclosing to related
the guarantee Amount of Guarantee Guarantee Type of Counter- Fulfilled parties
Name of obligee amount guarantee date provided guarantee Collateral guarantee Term or not or not
Zhanjiang Chenming 30 March 2022 31,384.03 17 June 2022 31,384.03 General Nil Nil 3 years No No
Pulp & Paper Co., Ltd. guarantee
Zhanjiang Chenming 30 March 2023 349,840.93 2 June 2023 349,840.93 General Nil Nil 3 years No No
Pulp & Paper Co., Ltd. guarantee
Zhanjiang Chenming 28 March 2024 1,070,000.00 15 May 2024 117,464.60 General Nil Nil 1 year No No
Pulp & Paper Co., Ltd. guarantee
Shouguang Meilun 30 March 2023 69,130.27 12 July 2023 69,130.27 General Nil Nil 1 year No No
Paper Co., Ltd. guarantee
Shouguang Meilun 28 March 2024 500,000.00 27 May 2024 101,919.51 General Nil Nil 1 year No No
Paper Co., Ltd. guarantee
Jiangxi Chenming 30 March 2022 5,760.00 31 March 2023 5,760.00 General Nil Nil 1.5 years No No
Paper Co., Ltd. guarantee
Jiangxi Chenming 30 March 2023 59,336.21 27 June 2023 59,336.21 General Nil Nil 1.25 years No No
Paper Co., Ltd. guarantee
Jiangxi Chenming 28 March 2024 430,000.00 31 May 2024 74,000.00 General Nil Nil 1 year No No
Paper Co., Ltd. guarantee
Huanggang Chenming 30 March 2023 33,500.00 12 July 2023 33,500.00 General Nil Nil 1 year No No
Pulp & Paper Co., Ltd. guarantee
Huanggang Chenming 28 March 2024 350,000.00 20 May 2024 9,000.00 General Nil Nil 1 year No No
Pulp & Paper Co., Ltd. guarantee
Huanggang Chenming 28 March 2024 470,000.00 General Nil Nil 1 year No No
Paper Technology guarantee
Co., Ltd.
Chenming (HK) Limited 30 March 2023 3,441.73 4 January 3,441.73 General Nil Nil 1 year No No
2024 guarantee
Chenming (HK) Limited 28 March 2024 200,000.00 17 June 1,415.00 General Nil Nil 1 year No No
2024 guarantee
Zhanjiang Chenming 28 March 2024 30,000.00 General Nil Nil 1 year No No
Arboriculture guarantee
Development Co., Ltd.
Jilin Chenming Paper 30 March 2023 30,000.00 15 December 20,000.00 General Nil Nil 1 year No No
Co., Ltd. 2023 guarantee
Jilin Chenming Paper 24 December 50,000.00 29 December 31,114.55 General Nil Nil 1 year No No
Co., Ltd. 2023 2023 guarantee
Jilin Chenming Paper 28 March 2024 130,000.00 19 June 2024 1,600.00 General Nil Nil 1 year No No
Co., Ltd. guarantee
Shouguang Chenming 28 March 2024 20,000.00 General Nil Nil 1 year No No
Art Paper Co., Ltd. guarantee
Chenming (Singapore) 28 March 2024 50,000.00 General Nil Nil 1 year No No
Co., Ltd. guarantee
48 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
VI Material Matters
XII. Material contracts and implementation (Cont’d)
2. Significant guarantees (Cont’d)
(1) Guarantees (Cont’d)
Guarantees to subsidiaries from the Company
Date of the
related
announcement Guarantee
disclosing to related
the guarantee Amount of Guarantee Guarantee Type of Counter- Fulfilled parties
Name of obligee amount guarantee date provided guarantee Collateral guarantee Term or not or not
Shandong Chenming 30 March 2023 159,277.01 14 August 159,277.01 General Nil Nil 1 year No No
Paper Sales Co., Ltd. 2023 guarantee
Shandong Chenming 28 March 2024 350,000.00 23 May 2024 42,000.00 General Nil Nil 1 year No No
Paper Sales Co., Ltd. guarantee
Shanghai Chenming 30 March 2022 950.00 13 February 950.00 General Nil Nil 3 years No No
Pulp & Paper Sales 2023 guarantee
Co., Ltd.
Shanghai Chenming 30 March 2023 450.00 21 November 450.00 General Nil Nil 1 year No No
Pulp & Paper Sales 2023 guarantee
Co., Ltd.
Shanghai Chenming 28 March 2024 100,000.00 4 June 2024 5,400.00 General Nil Nil 1 year No No
Pulp & Paper Sales guarantee
Co., Ltd.
Shanghai Chenming 19 June 2024 -10,000.00 General Nil Nil 1 year No No
Pulp & Paper Sales guarantee
Co., Ltd.
Shanghai Heruiming 19 June 2024 10,000.00 General Nil Nil 1 year No No
Property Management guarantee
Co., Ltd.
Huanggang Chenming 30 March 2023 4,000.00 31 August 4,000.00 General Nil Nil 1 year No No
Pulp & Fiber Trading 2023 guarantee
Co., Ltd.
Huanggang Chenming 28 March 2024 30,000.00 General Nil Nil 1 year No No
Pulp & Fiber Trading guarantee
Co., Ltd.
Shouguang Chenming 30 March 2023 14,999.96 21 December 14,999.96 General Nil Nil 1 year No No
Import and Export 2023 guarantee
Trade Co., Ltd.
Shouguang Chenming 28 March 2024 100,000.00 General Nil Nil 1 year No No
Import and Export guarantee
Trade Co., Ltd.
Hainan Chenming 30 March 2023 47,240.00 29 November 47,240.00 General Nil Nil 1 year No No
Technology Co., Ltd. 2023 guarantee
Hainan Chenming 28 March 2024 120,000.00 21 May 2024 8,960.00 General Nil Nil 1 year No No
Technology Co., Ltd. guarantee
SHANDONG CHENMING PAPER HOLDINGS LIMITED 49
INTERIM REPORT 2024
VI Material Matters
XII. Material contracts and implementation (Cont’d)
2. Significant guarantees (Cont’d)
(1) Guarantees (Cont’d)
Guarantees to subsidiaries from the Company
Date of the
related
announcement Guarantee
disclosing to related
the guarantee Amount of Guarantee Guarantee Type of Counter- Fulfilled parties
Name of obligee amount guarantee date provided guarantee Collateral guarantee Term or not or not
Chenming (Overseas) 28 March 2024 30,000.00 General Nil Nil 1 year No No
Co., Ltd. guarantee
Nanchang Chenming 28 March 2024 10,000.00 General Nil Nil 1 year No No
Arboriculture guarantee
Development
Co., Ltd.
Shouguang Chenming 28 March 2024 5,000.00 General Nil Nil 1 year No No
Papermaking Machine guarantee
Co., Ltd.
Shouguang Hongxiang 28 March 2024 5,000.00 General Nil Nil 1 year No No
Printing and Packaging guarantee
Co., Ltd.
Shouguang Hongyi 28 March 2024 5,000.00 General Nil Nil 1 year No No
Decorative Packaging guarantee
Co., Ltd.
Shouguang Chenming 28 March 2024 5,000.00 General Nil Nil 1 year No No
Modern Logistic guarantee
Co., Ltd.
Foshan Chenming 28 March 2024 50,000.00 General Nil Nil 1 year No No
Import and Export guarantee
Trade Co., Ltd.
Shanghai Hongtai 28 March 2024 10,000.00 General Nil Nil 1 year No No
Property Management guarantee
Co., Ltd.
Total amount of guarantee provided for subsidiaries approved 4,070,000.00 Total amount of guarantee provided for subsidiaries 742,660.00
during the reporting period (B1) during the reporting period (B2)
Total amount of guarantee provided for subsidiaries approved 4,929,310.13 Total balance of guarantee provided for subsidiaries 1,192,183.79
as at the end of the reporting period (B3) as at the end of the reporting period (B4)
50 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
VI Material Matters
XII. Material contracts and implementation (Cont’d)
2. Significant guarantees (Cont’d)
(1) Guarantees (Cont’d)
Guarantees between subsidiaries
Date of
the related
announcement Guarantee
disclosing to related
the guarantee Amount of Guarantee Guarantee Type of Counter- Fulfilled parties
Name of obligee amount guarantee date provided guarantee Collateral guarantee Term or not or not
Shouguang Meilun 28 March 2024 60,000.00 General Nil Nil 1 year No No
Paper Co., Ltd. guarantee
Huanggang Chenming 28 March 2024 20,000.00 General Nil Nil 1 year No No
Pulp & Paper Co., Ltd. guarantee
Shouguang Meilun Paper 28 March 2024 20,000.00 General Nil Nil 1 year No No
Co., Ltd. guarantee
Zhanjiang Chenming Pulp 28 March 2024 30,000.00 General Nil Nil 1 year No No
& Paper Co., Ltd. guarantee
Total amount of guarantee provided for subsidiaries approved 130,000.00 Total amount of guarantee provided for subsidiaries during 0.00
during the reporting period (C1) the reporting period (C2)
Total amount of guarantee provided for subsidiaries approved 130,000.00 Total balance of guarantee provided for subsidiaries as at 0.00
as at the end of the reporting period (C3) the end of the reporting period (C4)
Total amount of guarantee provided (i.e. sum of the above three guarantee amount)
Total amount of guarantee approved during the reporting 4,216,000.00 Total amount of guarantee during the reporting period 758,660.00
period (A1+B1+C1) (A2+B2+C2)
Total amount of guarantee approved as at the end of the 5,152,068.32 Total balance of guarantee as at the end of the reporting 1,275,241.98
reporting period (A3+B3+C3) period (A4+B4+C4)
The percentage of total amount of guarantee provided (i.e. A4+B4+C4) to the net assets of the Company 76.69%
Of which:
Balance of guarantee provided for shareholders, beneficial controllers and its related parties (D) 0.00
Balance of guarantee directly or indirectly provided for obligors with gearing ratio over 70% (E) 461,613.17
Total amount of guarantee provided in excess of 50% of net assets (F) 443,795.53
Sum of the above three amount of guarantee (D+E+F) 905,408.71
For the unexpired guarantee contract, the guarantee liability has occurred during the reporting period or there is evidence showing that it is possible to Nil
bear joint liability for repayment (if any)
Providing external guarantees in violation of prescribed procedures (if any) Nil
3. Entrusted wealth management
Applicable √ Not applicable
4. Other material contracts
Applicable √ Not applicable
The Company did not have any other material contracts during the reporting period.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 51
INTERIM REPORT 2024
VI Material Matters
XIII. Other matters of significance
√ Applicable Not applicable
1. Information disclosure index for 2024 Interim Report
Announcement Publication website and
no. Subject matter Date of publication index
2024-001 Announcement on Pledge and Continued Pledge of 19 January 2024 http://www.cninfo.com.cn
Shares of Shareholder
2024-002 Announcement on Pledge of Shares of Shareholder 26 January 2024 http://www.cninfo.com.cn
2024-003 2023 Annual Results Forecast 31 January 2024 http://www.cninfo.com.cn
2024-004 Announcement on Pledge of Shares of Shareholder 8 February 2024 http://www.cninfo.com.cn
2024-005 Announcement on Adjustment to Amount of 22 February 2024 http://www.cninfo.com.cn
Guarantee Between Subsidiaries
2024-006 Announcement on Release of Pledge of Shares of 13 March 2024 http://www.cninfo.com.cn
Shareholder
2024-007 Announcement on Resolution of the Fourteenth 23 March 2024 http://www.cninfo.com.cn
Extraordinary Meeting of the Tenth Session of the
Board of Directors
2024-008 Announcement on Equity Transfer of Subsidiary 23 March 2024 http://www.cninfo.com.cn
and Related Party Transaction
2024-009 Announcement on Resolutions of the Eighth 29 March 2024 http://www.cninfo.com.cn
Meeting of the Ten Session of the Board of
Directors
2024-010 Announcement on Resolutions of the Eighth 29 March 2024 http://www.cninfo.com.cn
Meeting of the Ten Session of the Supervisory
Committee
2024-011 Notice of 2023 Annual General Meeting 29 March 2024 http://www.cninfo.com.cn
2024-012 Special Statement on Securities Investment in 2023 29 March 2024 http://www.cninfo.com.cn
2024-013 Announcement on Re-appointment of Auditor for 29 March 2024 http://www.cninfo.com.cn
2024
2024-014 Announcement on Development of Equipment 29 March 2024 http://www.cninfo.com.cn
Financing Business
2024-015 Announcement on Carrying out Factoring Business 29 March 2024 http://www.cninfo.com.cn
of Accounts Receivable
2024-016 Announcement on Expected Provision of 29 March 2024 http://www.cninfo.com.cn
Guarantees to Subsidiaries for 2024
2024-017 Announcement on Proposed Non-distribution of 29 March 2024 http://www.cninfo.com.cn
Profit for 2023
2024-018 Announcement on Amendment to Related 29 March 2024 http://www.cninfo.com.cn
Governance Systems of the Company
2024-019 Announcement on Receipt of Financial Support 29 March 2024 http://www.cninfo.com.cn
and Related Party Transaction
2024-020 Announcement on Estimated Day-to-day Related 29 March 2024 http://www.cninfo.com.cn
Party Transactions for 2024
52 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
VI Material Matters
XIII. Other matters of significance (Cont’d)
1. Information disclosure index for 2024 Interim Report (Cont’d)
Announcement Publication website and
no. Subject matter Date of publication index
2024-021 Announcement on Appointment of Securities 29 March 2024 http://www.cninfo.com.cn
Affairs Representatives
2024-022 Announcement on Provision of External Guarantee 29 March 2024 http://www.cninfo.com.cn
2024-023 Announcement on Proposed Issue of Corporate 29 March 2024 http://www.cninfo.com.cn
Bonds Overseas and Provision of Guarantee
2024-024 2023 Annual Report Summary 29 March 2024 http://www.cninfo.com.cn
2024-025 Announcement on Reduction of Registered Capital 29 March 2024 http://www.cninfo.com.cn
of Wholly-owned Subsidiary
2024-026 Announcement on the 2023 Annual Online 29 March 2024 http://www.cninfo.com.cn
Performance Briefing
2024-027 2024 First Quarterly Results Forecast 9 April 2024 http://www.cninfo.com.cn
2024-028 Announcement on Pledge of Shares of Shareholder 13 April 2024 http://www.cninfo.com.cn
2024-029 2024 First Quarterly Report 16 April 2024 http://www.cninfo.com.cn
2024-030 Announcement on Release of Pledge of Shares of 20 April 2024 http://www.cninfo.com.cn
Shareholder
2024-031 Announcement on Progress of Litigation 26 April 2024 http://www.cninfo.com.cn
2024-032 Announcement on Pledge of Shares of Shareholder 15 May 2024 http://www.cninfo.com.cn
2024-033 Results of the 2023 Annual General Meeting 15 May 2024 http://www.cninfo.com.cn
2024-034 Announcement on Adjustment to Amount of 20 June 2024 http://www.cninfo.com.cn
Guarantee Between Subsidiaries
XIV. Matters of significant of subsidiaries of the Company
Applicable √ Not applicable
SHANDONG CHENMING PAPER HOLDINGS LIMITED 53
INTERIM REPORT 2024
VII Changes in Share Capital and Shareholders
I. Changes in shares
1. Changes in shares
Unit: share
Opening balance Change during the reporting period (+/-) Closing balance
Shares
converted from
Amount Percentage New issue Bonus issue reserves Others Subtotal Amount Percentage
I. Restricted shares 36,578,587 1.24% 2,709,225 2,709,225 39,287,812 1.33%
1. Shares held by other domestic
investors 36,578,587 1.24% 2,709,225 2,709,225 39,287,812 1.33%
Including: Shares held by domestic
natural persons 36,578,587 1.24% 2,709,225 2,709,225 39,287,812 1.33%
II. Non-restricted shares 2,920,234,613 98.76% -2,709,225 -2,709,225 2,917,525,388 98.67%
1. RMB ordinary shares 1,685,544,097 57.00% -2,709,225 -2,709,225 1,682,834,872 56.91%
2. Domestic listed foreign shares 706,385,266 23.89% 706,385,266 23.89%
3. Overseas listed foreign shares 528,305,250 17.87% 528,305,250 17.87%
III. Total number of shares 2,956,813,200 100.00% 2,956,813,200 100.00%
The reasons for such changes
√ Applicable Not applicable
The Shenzhen Branch of China Securities Depository and Clearing Corporation Limited recalculated the statutory
quota of transferable shares for the Directors, Supervisors and Senior Management of the Company this year at 25%
on the first trading day of this year based on the shares of the Company registered under the names of its Directors,
Supervisors and Senior Management on the last trading day of the previous year, resulting in an increase of 2,709,225
RMB ordinary shares altogether in the locked-up shares of the Senior Management.
Approval of changes in shareholding
Applicable √ Not applicable
Transfer of shares arising from changes in shareholding
Applicable √ Not applicable
Progress of share repurchase
Applicable √ Not applicable
Progress of decrease in the holding of repurchased shares by way of bidding
Applicable √ Not applicable
54 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
VII Changes in Share Capital and Shareholders
I. Changes in shares (Cont’d)
1. Changes in shares (Cont’d)
The effects of changes in shareholding on financial indicators such as basic earnings per share, diluted earnings
per share and net assets per share attributable to ordinary shareholders of the Company for the latest year and the
latest period
Applicable √ Not applicable
Other information considered necessary by the Company or required by the securities regulatory authorities to be
disclosed
Applicable √ Not applicable
2. Changes in restricted shares
√ Applicable Not applicable
Unit: share
Restricted Restricted
Restricted shares shares Restricted
shares at the released increased shares at the
Name of beginning of during the during the end of the Date of release
shareholder the period period period period Reason for restriction from restriction
Chen Hongguo 17,310,033 1,500,000 18,810,033 Restricted shares of the In accordance with the Share
participants of the Share Incentive Scheme (Draft)
Incentive Scheme; locked- and relevant requirements
up shares of Directors, for shares held by Directors,
Supervisors and Senior Supervisors and Senior
Management Management
Hu Changqing 1,532,143 187,500 1,719,643 Restricted shares of the In accordance with the Share
participants of the Share Incentive Scheme (Draft)
Incentive Scheme; locked- and relevant requirements
up shares of Directors, for shares held by Directors,
Supervisors and Senior Supervisors and Senior
Management Management
Li Xingchun 2,250,000 375,000 2,625,000 Restricted shares of the In accordance with the Share
participants of the Share Incentive Scheme (Draft)
Incentive Scheme; locked- and relevant requirements
up shares of Directors, for shares held by Directors,
Supervisors and Senior Supervisors and Senior
Management Management
Li Feng 1,579,520 112,500 1,692,020 Restricted shares of the In accordance with the Share
participants of the Share Incentive Scheme (Draft)
Incentive Scheme; locked- and relevant requirements
up shares of Directors, for shares held by Directors,
Supervisors and Senior Supervisors and Senior
Management Management
Li Weixian 603,600 117,975 721,575 Restricted shares of the In accordance with the Share
participants of the Share Incentive Scheme (Draft)
Incentive Scheme; locked- and relevant requirements
up shares of Directors, for shares held by Directors,
Supervisors and Senior Supervisors and Senior
Management Management
SHANDONG CHENMING PAPER HOLDINGS LIMITED 55
INTERIM REPORT 2024
VII Changes in Share Capital and Shareholders
I. Changes in shares (Cont’d)
2. Changes in restricted shares (Cont’d)
Restricted Restricted
Restricted shares shares Restricted
shares at the released increased shares at the
Name of beginning of during the during the end of the Date of release
shareholder the period period period period Reason for restriction from restriction
Li Xueqin 1,995,991 225,000 2,220,991 Restricted shares of the In accordance with the Share
participants of the Share Incentive Scheme (Draft)
Incentive Scheme; locked- and relevant requirements
up shares of Directors, for shares held by Directors,
Supervisors and Senior Supervisors and Senior
Management Management
Li Zhenzhong 859,800 150,000 1,009,800 Restricted shares of the In accordance with the Share
participants of the Share Incentive Scheme (Draft)
Incentive Scheme; locked- and relevant requirements
up shares of Directors, for shares held by Directors,
Supervisors and Senior Supervisors and Senior
Management Management
Li Mingtang 300,000 37,500 337,500 Restricted shares of the In accordance with the Share
participants of the Share Incentive Scheme (Draft)
Incentive Scheme; locked- and relevant requirements
up shares of Directors, for shares held by Directors,
Supervisors and Senior Supervisors and Senior
Management Management
Dong Lianming 300,000 37,500 337,500 Restricted shares of the In accordance with the Share
participants of the Share Incentive Scheme (Draft)
Incentive Scheme; locked- and relevant requirements
up shares of Directors, for shares held by Directors,
Supervisors and Senior Supervisors and Senior
Management Management
Yuan Xikun 168,525 33,750 134,775 Restricted shares of the 2 January 2024
participants of the Share
Incentive Scheme; locked-
up shares of Directors,
Supervisors and Senior
Management
Total 26,899,612 33,750 2,742,975 29,608,837
II. Issuance and listing of securities
Applicable √ Not applicable
56 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
VII Changes in Share Capital and Shareholders
III. Total number of shareholders and shareholdings
Unit: share
Total number of ordinary 138,850, of which 118,008 were Total number of holders of 0
shareholders as at the end holders of A shares, 20,519 preference shares with
of the reporting period were holders of B shares and restored voting right as at
323 were holders of H shares the end of the reporting period
Shareholdings of ordinary shareholders interested in more than 5% or top ten ordinary shareholders (excluding the shares lent under refinancing business)
Number of Changes Number of
ordinary (increase or restricted Number of
shares held decrease) ordinary non-restricted Share pledged, marked
at the end of during the shares held ordinary or locked-up
Percentage of the reporting reporting Status of shares held Status of
Name of shareholder Nature of shareholder shareholding period period shares Number shares Number
CHENMING HOLDINGS COMPANY LIMITED State-owned legal person 15.47% 457,322,919 0 0 457,322,919 Pledged 288,778,200
HKSCC NOMINEES LIMITED Overseas legal person 12.63% 373,430,775 -30,500 0 373,430,775
CHENMING HOLDINGS (HONG KONG) Overseas legal person 12.32% 364,131,563 0 0 364,131,563
LIMITED (Note 1)
Chen Hongguo Domestic natural person 0.85% 25,080,044 0 18,810,033 6,270,011
SHANDONG SUN HOLDINGS GROUP CO., LTD. Domestic non-state-owned 0.84% 24,827,117 -160,000 0 24,827,117
legal person
CHINA MERCHANTS SECURITIES (HK) Overseas legal person 0.72% 21,186,095 213,837 0 21,186,095
CO., LIMITED
VANGUARD TOTAL INTERNATIONAL Overseas legal person 0.50% 14,771,945 0 0 14,771,945
STOCK INDEX FUND
VANGUARD EMERGING MARKETS Overseas legal person 0.49% 14,535,446 -316,700 0 14,535,446
STOCK INDEX FUND
HONG KONG SECURITIES CLEARING Overseas legal person 0.42% 12,305,222 1,053,442 0 12,305,222
COMPANY LIMITED
Xu Hekun Domestic natural person 0.23% 6,789,900 550,100 0 6,789,900
Strategic investors or general legal persons who become the top ten Nil
shareholders due to the placement of new shares
Related party relationship or acting in concert among the above shareholders A shareholder, Chenming Holdings (Hong Kong) Limited, which is an overseas legal person, is a
wholly-owned subsidiary of a shareholder, Chenming Holdings Company Limited, which is a state-
owned legal person; A shareholder, Chen Hongguo, is the legal representative and chairman of
Chenming Holdings Company Limited. Save for the above, it is not aware that any other shareholders
of tradable shares are persons acting in concert. It is also not aware that any other shareholders of
tradable shares are related to each other.
Explanation of the aforementioned shareholders’ entrusted/entrusted voting rights and waiver of Nil
voting rights
Special explanation for designated repurchase accounts among the top ten shareholders Nil
SHANDONG CHENMING PAPER HOLDINGS LIMITED 57
INTERIM REPORT 2024
VII Changes in Share Capital and Shareholders
III. Total number of shareholders and shareholdings (Cont’d)
Shareholdings of top ten non-restricted ordinary shareholders (excluding the shares lent under refinancing business and
the locked-up shares of the Senior Management)
Number of non-
restricted shares
held as at the end
of the reporting Class of shares
Name of shareholder Class of shares period Number Class of shares Number
CHENMING HOLDINGS COMPANY LIMITED 457,322,919 RMB ordinary shares 457,322,919
HKSCC NOMINEES LIMITED 373,430,775 Overseas listed foreign shares 373,430,775
CHENMING HOLDINGS (HONG KONG) 364,131,563 Domestic listed foreign shares 210,717,563
LIMITED (Note 1) Overseas listed foreign shares 153,414,000
SHANDONG SUN HOLDINGS GROUP CO., LTD. 24,827,117 RMB ordinary shares 24,827,117
CHINA MERCHANTS SECURITIES (HK) 21,186,095 Domestic listed foreign shares 21,186,095
CO., LIMITED
VANGUARD TOTAL INTERNATIONAL 14,771,945 Domestic listed foreign shares 14,771,945
STOCK INDEX FUND
VANGUARD EMERGING MARKETS STOCK 14,535,446 Domestic listed foreign shares 14,535,446
INDEX FUND
HONG KONG SECURITIES CLEARING 12,305,222 RMB ordinary shares 12,305,222
COMPANY LIMITED
Xu Hekun 6,789,900 Domestic listed foreign shares 6,789,900
Chen Hongguo 6,270,011 RMB ordinary shares 6,270,011
Related party relationship or acting in concert A shareholder, Chenming Holdings (Hong Kong) Limited, which is an
among the top ten non-restricted ordinary overseas legal person, is a wholly-owned subsidiary of a shareholder,
shareholders, and between the top ten non- Chenming Holdings Company Limited, which is a state-owned legal person.
restricted ordinary shareholders and the top ten A shareholder, Chen Hongguo, is the legal representative and chairman
ordinary shareholders of Chenming Holdings Company Limited. Save for the above, it is not
aware that any other shareholders of tradable shares are persons acting in
concert. It is also not aware that any other shareholders of tradable shares
are related to each other.
Securities margin trading of top 10 ordinary Chenming Holdings Company Limited held 457,322,919 RMB ordinary
shareholders shares, of which 326,322,919 shares were held through ordinary account
and 131,000,000 shares were held through credit guarantee security
account;
Shandong Sun Holdings Group Co., Ltd. held 24,827,117 RMB ordinary
shares, of which no share was held through ordinary account and
24,827,117 shares were held through credit guarantee security account.
Note 1: In order to meet its own capital needs, Chenming Holdings (Hong Kong) Limited conducted share financing business with overseas
institutions, entrusting 210,717,563 B shares and 153,414,000 H shares of the Company held by it to the custody brokerage designated by
overseas institutions. The aforesaid shares were subject to the risk of not to be recovered, which may lead to a reduction in the Company’s
shareholding, but does not affect Chenming Holdings’ position as the largest shareholder, and does not affect the Company’s control. For
details, please refer to the announcement disclosed by the Company on CNINFO on 18 July 2023 (announcement no.: 2023-058) and the
insider information disclosed by the Company on the website of Hong Kong Stock Exchange on 18 July 2023.
58 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
VII Changes in Share Capital and Shareholders
III. Total number of shareholders and shareholdings (Cont’d)
Share lending by shareholders interested in more than 5%, top 10 shareholders and top 10 shareholders of
non-restricted shares under refinancing business
Applicable √ Not applicable
Changes of top 10 shareholders and top 10 shareholders of non-restricted shares due to lending/returning of
shares under refinancing business as compared to prior period
Applicable √ Not applicable
Whether an agreed repurchase transaction was entered into during the reporting period by the top 10
ordinary shareholders and top 10 non-restricted ordinary shareholders of the Company
Yes √ No
The top 10 ordinary shareholders and top 10 non-restricted ordinary shareholders of the Company did not enter into any
agreed repurchase transaction during the reporting period.
IV. Changes in shareholding of Directors, Supervisors and Senior Management
Applicable √ Not applicable
There was no change in the shareholding of the Directors, Supervisors and Senior Management of the Company during the
reporting period. Please see the 2023 annual report for details.
V. Change of controlling shareholders or beneficial controllers
Change of controlling shareholders during the reporting period
Applicable √ Not applicable
There was no change of controlling shareholders of the Company during the reporting period.
Change of beneficial controllers during the reporting period
Applicable √ Not applicable
There was no change of beneficial controllers of the Company during the reporting period.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 59
INTERIM REPORT 2024
VII Changes in Share Capital and Shareholders
VI. Securities interests held by Directors, Supervisors and chief executives disclosed in
accordance with the Listing Rules of Hong Kong Stock Exchange
As at 30 June 2024, the interests and short positions held by each of the Directors, Supervisors and chief executives of the
Company in the shares, underlying shares and debentures of the Company or its associated corporations (within the meaning
of Part XV of the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong) (the “SFO”)) as recorded in the
register required to be kept under section 352 of the SFO, are set out as follows:
Company
Number of shares (A
shares) held as at the As a percentage of the
end of the reporting total share capital of
Name Position period (shares) the Company
Directors
Chen Hongguo (Note 2) Chairman 25,080,044 0.85%
Hu Changqing Executive Director and vice chairman 2,292,857 0.08%
Li Xingchun Executive Director and vice chairman 3,500,000 0.12%
Li Feng Executive Director and deputy 2,256,027 0.08%
general manager
Li Weixian Executive Director and general 962,100 0.03%
manager
Han Tingde Non-executive Director – –
Li Chuanxuan Non-executive Director – –
Li Zhihui Independent non-executive Director – –
Sun Jianfei Independent non-executive Director – –
Yin Meiqun Independent non-executive Director – –
Yang Biao Independent non-executive Director – –
Supervisors
Li Kang Chairman of the Supervisory 149,300 0.01%
Committee
Pan Ailing Supervisor – –
Zhang Hong Supervisor – –
Sang Ailing Supervisor – –
Qiu Lanju Supervisor – –
Associated corporation(s)
Number
of shares Number of
held at the shares held
beginning of at the end of
the reporting Change the reporting
period during the period
Name Position Name of associated corporation(s) (shares) period (+/-) (shares)
Chen Shouguang Henglian Enterprise
Hongguo Director Investment Co. Ltd. (Note 3) 231,000,000 – 231,000,000
Note 2: Save for the 25,080,044 A shares held personally, Chen Hongguo is deemed to be interested in the 2,961,322 A shares held by his spouse, Li
Xueqin.
Note 3: Chen Hongguo and his spouse, Li Xueqin, collectively hold 76.79% equity interests in Shouguang Henglian Enterprise Investment Co.
Ltd., (hereinafter referred to as “Shouguang Henglian”). As a result, Shouguang Henglian is deemed to be controlled by Chen Hongguo.
Accordingly, the 231,000,000 shares in Chenming Holdings (approximately 18.65% of the total share capital of Chenming Holdings) held by
Shouguang Henglian are also deemed to be held by Chen Hongguo.
60 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
VII Changes in Share Capital and Shareholders
VI. Securities interests held by Directors, Supervisors and chief executives disclosed in
accordance with the Listing Rules of Hong Kong Stock Exchange (Cont’d)
Save as disclosed above, as at 30 June 2024, none of the Directors, Supervisors or chief executives of the Company had
any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated
corporations which were required to be filed in the register of the Company required to be maintained pursuant to section 352
of the SFO or which were required to be notified to the Company and the Hong Kong Stock Exchange pursuant to the Model
Code for Securities Transactions by Directors of Listed Issuers as contained in Appendix C3 to the Listing Rules of Hong Kong
Stock Exchange.
As at 30 June 2024, none of the Directors, Supervisors or chief executives or their respective spouses or children under the
age of 18 held or exercised any rights to subscribe for the share capital or debentures of the Company or its associated
corporations.
VII. Interests and short position of substantial shareholders in shares and underlying shares
disclosed in accordance with the Listing Rules of Hong Kong Stock Exchange
As at 30 June 2024, the following shareholders (other than the Directors, Supervisors or chief executives of the Company) had
interests or short positions in the Company’s shares and underlying shares as shown in the share register maintained by the
Company in accordance with Section 336 of the SFO:
Approximate shareholding
as a percentage of
Number of shares Total share
Name held (shares) capital (%) Class of shares (%)
Chenming Holdings Company Limited 457,322,919 A shares (L) 15.47 26.56
Chenming Holdings (Hong Kong) Limited 210,717,563 B shares (L) 7.13 29.83
Chenming Holdings (Hong Kong) Limited 153,414,000 H shares (L) 5.19 29.04
(L) – Long position (S) – Short position (P) – Lending pool
Save as disclosed above, as at 30 June 2024, no other person had interests or short positions in the Company’s shares and
underlying shares as recorded in the register maintained under section 336 of the SFO.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 61
INTERIM REPORT 2024
VIII Preference Shares
Applicable √ Not applicable
The Company had no preference shares during the reporting period.
62 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
IX Bonds
Applicable √ Not applicable
SHANDONG CHENMING PAPER HOLDINGS LIMITED 63
INTERIM REPORT 2024
X Financial Report
I. Auditors’ Report
Is the interim report audited
Yes No
The interim financial report is unaudited.
II. Financial Statements
The unit in the notes to the financial statements is: RMB
1. Consolidated Balance Sheet
Prepared by: Shandong Chenming Paper Holdings Limited
30 June 2024
Unit: RMB
Item Closing balance Opening balance
CURRENT ASSETS:
Monetary funds 11,386,010,001.55 12,124,832,831.30
Financial assets held for trading 39,197,419.88 46,294,291.71
Bills receivable 674,962,254.15 411,600,000.00
Accounts receivable 2,967,220,987.04 2,528,507,059.83
Accounts receivable financing 22,065,605.03 215,884,249.97
Prepayments 947,491,125.52 825,135,156.21
Other receivables 2,076,983,663.17 2,224,904,557.88
Including: Interest receivable – –
Dividend receivable 22,659,149.81 –
Inventories 4,261,634,676.93 4,958,178,000.36
Including: Data resources – –
Non-current assets due within one year 3,990,527,056.67 4,161,725,935.75
Other current assets 1,148,814,363.92 1,068,826,944.78
Total current assets 27,514,907,153.86 28,565,889,027.79
NON-CURRENT ASSETS:
Long-term receivables 557,470,810.47 339,293,533.35
Long-term equity investments 4,649,654,565.49 4,685,199,385.73
Other non-current financial assets 780,077,745.20 781,561,040.57
Investment property 5,945,948,712.41 6,049,242,696.36
Fixed assets 32,030,248,108.24 33,186,248,169.56
Construction in progress 1,099,279,935.62 859,617,965.16
Bearer biological assets 17,962,753.60 17,684,687.36
Right-of-use assets 162,392,245.57 167,815,311.50
Intangible assets 1,954,534,646.07 2,002,360,891.85
Including: Data resources – –
Goodwill 8,273,638.42 35,220,543.80
Long-term prepaid expenses 38,127,162.73 39,979,161.49
Deferred income tax assets 1,814,848,473.90 1,689,857,881.49
Other non-current assets 927,555,268.15 1,067,082,657.57
Total non-current assets 49,986,374,065.87 50,921,163,925.79
Total assets 77,501,281,219.73 79,487,052,953.58
64 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
II. Financial Statements (Cont’d)
1. Consolidated Balance Sheet (Cont’d)
Item Closing balance Opening balance
CURRENT LIABILITIES:
Short-term borrowings 30,264,463,843.14 33,475,479,021.62
Bills payable 5,562,384,579.39 4,618,986,463.95
Accounts payable 4,077,198,162.78 3,902,620,870.20
Receipts in advance 14,398,554.70 16,242,921.65
Contract liabilities 1,517,098,339.47 1,443,680,155.62
Employee benefits payable 45,123,764.43 74,337,158.44
Taxes payable 117,268,252.12 99,709,707.56
Other payables 3,257,911,098.58 2,414,752,127.19
Including: Interest payable – –
Dividend payable 123,000,000.00 –
Non-current liabilities due within one year 3,446,557,991.71 3,631,937,677.82
Other current liabilities 70,000,000.00 100,000,000.00
Total current liabilities 48,372,404,586.32 49,777,746,104.05
NON-CURRENT LIABILITIES:
Long-term borrowings 4,824,800,796.90 4,681,014,489.64
Lease liabilities 40,363,786.09 41,987,022.85
Long-term payables 2,279,402,749.15 2,541,095,217.66
Deferred income 1,287,765,254.49 1,337,864,114.70
Deferred income tax liabilities 5,309,034.50 9,490,159.05
Total non-current liabilities 8,437,641,621.13 8,611,451,003.90
Total liabilities 56,810,046,207.45 58,389,197,107.95
OWNERS’ EQUITY:
Share capital 2,956,813,200.00 2,956,813,200.00
Capital reserves 5,250,308,143.66 5,328,790,899.61
Less: Treasury shares 63,432,450.00 63,432,450.00
Other comprehensive income -880,417,248.35 -864,881,489.08
Special reserves 25,448,968.92 23,322,829.57
Surplus reserves 1,212,009,109.97 1,212,009,109.97
General risk provisions 79,383,656.75 79,370,294.91
Retained profit 8,048,815,645.13 8,020,182,801.55
Total equity attributable to owners of the Company 16,628,929,026.08 16,692,175,196.53
Minority interest 4,062,305,986.20 4,405,680,649.10
Total owners’ equity 20,691,235,012.28 21,097,855,845.63
Total liabilities and owners’ equity 77,501,281,219.73 79,487,052,953.58
Legal Representative: Financial controller: Head of the financial department:
Chen Hongguo Dong Lianming Zhang Bo
SHANDONG CHENMING PAPER HOLDINGS LIMITED 65
INTERIM REPORT 2024
X Financial Report
II. Financial Statements (Cont’d)
2. Balance sheet of the Company
Unit: RMB
Item Closing balance Opening balance
CURRENT ASSETS:
Monetary funds 3,742,119,283.91 4,421,608,897.40
Bills receivable 1,321,153,335.77 3,024,868,267.23
Accounts receivable 596,472,975.92 28,216,771.01
Prepayments 796,610,369.65 476,746,114.74
Other receivables 8,434,729,619.19 9,237,241,240.86
Including: Interest receivable – –
Dividend receivable – –
Inventories 458,644,458.00 554,028,121.69
Including: Data resources – –
Non-current assets due within one year 11,999,841.81 3,428,684.19
Other current assets 60,160,557.12 62,834,527.02
Total current assets 15,421,890,441.37 17,808,972,624.14
NON-CURRENT ASSETS: – –
Long-term receivables – 12,485,720.05
Long-term equity investments 18,350,419,572.99 18,298,999,830.51
Other non-current financial assets 120,978,728.82 122,462,024.19
Fixed assets 3,309,104,120.55 3,415,454,701.17
Construction in progress 68,141,078.94 38,707,761.30
Intangible assets 469,179,017.08 476,297,197.96
Including: Data resources – –
Deferred income tax assets 595,834,951.98 571,194,789.79
Other non-current assets 12,692,260.70 12,692,260.70
Total non-current assets 22,926,349,731.06 22,948,294,285.67
Total assets 38,348,240,172.43 40,757,266,909.81
CURRENT LIABILITIES: – –
Short-term borrowings 10,214,591,919.09 13,172,491,176.11
Bills payable 7,054,959,474.13 6,699,118,643.16
Accounts payable 1,767,901,706.21 1,817,323,321.03
Contract liabilities 447,913,981.07 1,454,807,158.83
Employee benefits payable 24,946,017.66 38,778,024.93
Taxes payable 11,430,805.78 9,022,105.28
Other payables 698,141,854.70 1,412,965,873.90
Including: Interest payable – –
Dividend payable – –
Non-current liabilities due within one year 1,619,986,231.69 734,311,029.42
Total current liabilities 21,839,871,990.33 25,338,817,332.66
66 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
II. Financial Statements (Cont’d)
2. Balance sheet of the Company (Cont’d)
Item Closing balance Opening balance
NON-CURRENT LIABILITIES: – –
Long-term borrowings 879,554,888.89 1,795,000,000.00
Long-term payables 3,274,187,773.93 1,281,983,636.99
Deferred income 30,670,590.28 31,530,836.20
Total non-current liabilities 4,184,413,253.10 3,108,514,473.19
Total liabilities 26,024,285,243.43 28,447,331,805.85
OWNERS’ EQUITY: – –
Share capital 2,956,813,200.00 2,956,813,200.00
Capital reserves 5,073,338,869.19 5,073,338,869.19
Less: Treasury shares 63,432,450.00 63,432,450.00
Special reserves 6,008,954.43 4,612,641.99
Surplus reserves 1,199,819,528.06 1,199,819,528.06
Retained profit 3,151,406,827.32 3,138,783,314.72
Total owners’ equity 12,323,954,929.00 12,309,935,103.96
Total liabilities and owners’ equity 38,348,240,172.43 40,757,266,909.81
SHANDONG CHENMING PAPER HOLDINGS LIMITED 67
INTERIM REPORT 2024
X Financial Report
II. Financial Statements (Cont’d)
3. Consolidated Income Statement
Unit: RMB
Item First half of 2024 First half of 2023
I. Total revenue 13,884,731,519.04 12,564,962,781.31
Including: Revenue 13,884,731,519.04 12,564,962,781.31
II. Total operating costs 14,187,361,954.59 13,439,844,164.10
Including: Operating costs 12,185,505,709.00 11,496,731,662.58
Taxes and surcharges 116,747,402.65 105,817,810.49
Sales and distribution expenses 99,303,831.21 106,666,717.54
General and administrative expenses 317,435,416.15 328,296,224.86
Research and development expense 611,914,096.41 552,804,828.58
Finance expenses 856,455,499.17 849,526,920.05
Including: Interest expenses 854,610,967.90 856,872,614.18
Interest income 104,024,655.22 94,532,686.92
Add: Other income 159,945,128.64 108,155,697.19
Investment income (“-” denotes loss) 181,332,096.11 -42,756,726.88
Including: Investment income from associates and joint
ventures -38,682,172.19 23,934,269.81
Gains on derecognition of financial assets
measured at amortised cost -23,412,008.23 -67,175,214.10
Gain on change in fair value (“-” denotes loss) -2,221,596.44 -19,815,797.83
Credit impairment loss (“-” denotes loss) -124,386,619.66 -43,081,750.88
Loss on impairment of assets
(“-” denotes loss) -3,041,427.75 -43,314,485.76
Gain on disposal of assets (“-” denotes loss) 19,222,812.60 11,759,266.91
III. Operating profit (“-” denotes loss) -71,780,042.05 -903,935,180.04
Add: Non-operating income 2,751,486.93 940,805.30
Less: Non-operating expenses 1,013,551.00 3,138,190.06
IV. Total profit (“-” denotes total loss) -70,042,106.12 -906,132,564.80
Less: Income tax expenses -96,400,954.34 -211,491,182.14
V. Net profit (“-” denotes net loss) 26,358,848.22 -694,641,382.66
(i) Classification according to the continuity of operation
1. Net profit from continuing operations (“-” denotes
net loss) 26,358,848.22 -694,641,382.66
2. Net profit from discontinued operations (“-”
denotes net loss) – –
(ii) Classification according to ownership
1. Net profit attributable to shareholders of the
Company (“-” denotes net loss) 28,646,205.42 -688,080,164.10
2. Profit or loss of minority interest (“-” denotes net
loss) -2,287,357.20 -6,561,218.56
VI. Net other comprehensive income after tax -15,535,759.27 -85,733,908.54
Net other comprehensive income after tax attributable to
owners of the Company -15,535,759.27 -85,733,908.54
(i) Other comprehensive income that cannot be reclassified
to profit and loss – –
(ii) Other comprehensive income that will be reclassified to
profit and loss -15,535,759.27 -85,733,908.54
1. Exchange differences arising from translation
of financial statements denominated in foreign
currencies -19,208,272.66 -88,339,013.66
2. Other comprehensive income that may be
reclassified to profit and loss under the equity
method 3,672,513.39 2,605,105.12
Other comprehensive income, net of tax attributable to
minority interest – –
68 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
II. Financial Statements (Cont’d)
3. Consolidated Income Statement (Cont’d)
Item First half of 2024 First half of 2023
VII. Total comprehensive income 10,823,088.95 -780,375,291.20
Total comprehensive income attributable to owners of the
Company 13,110,446.15 -773,814,072.64
Total comprehensive income attributable to minority interest -2,287,357.20 -6,561,218.56
VIII. Earnings per share:
(i) Basic earnings per share 0.01 -0.25
(ii) Diluted earnings per share 0.01 -0.25
Legal Representative: Financial controller: Head of the financial department:
Chen Hongguo Dong Lianming Zhang Bo
SHANDONG CHENMING PAPER HOLDINGS LIMITED 69
INTERIM REPORT 2024
X Financial Report
II. Financial Statements (Cont’d)
4. Income statement of the Company
Unit: RMB
Item First half of 2024 First half of 2023
I. Revenue 4,405,643,431.81 3,904,584,964.10
Less: Operating costs 4,045,995,379.91 3,746,877,337.08
Taxes and surcharges 24,633,366.92 19,988,361.19
Sales and distribution expenses 4,006,101.04 4,148,207.41
General and administrative expenses 87,291,113.29 51,547,136.68
Research and development expense 125,852,983.90 117,941,892.00
Finance expenses 122,304,383.31 125,869,235.74
Including: Interest expenses 215,154,909.24 245,995,158.97
Interest income 151,576,285.23 212,850,374.32
Add: Other income 29,945,854.40 13,833,015.46
Investment income (“-” denotes loss) -54,484,706.48 55,178,952.64
Including: Investment income from associates and joint
ventures -36,830,257.52 -2,829,947.39
Gains on derecognition of financial assets measured at
amortised cost (“-” denotes loss) -10,845,725.80 -22,621,312.74
Gain on change in fair value (“-” denotes loss)
Credit impairment loss (“-” denotes loss) -1,228,938.13 -6,264,582.46
Loss on impairment of assets (“-” denotes loss) -673,567.00
Gain on disposal of assets (“-” denotes loss) 18,393,499.78 9,745,045.43
II. Operating profit (“-” denotes loss) -12,487,753.99 -89,294,774.93
Add: Non-operating income 1,065,964.61 451,184.77
Less: Non-operating expenses 594,860.21 1,912,008.53
III. Total profit (“-” denotes total loss) -12,016,649.59 -90,755,598.69
Less: Income tax expenses -24,640,162.19 -41,697,391.77
IV. Net profit (“-” denotes net loss) 12,623,512.60 -49,058,206.92
(i) Net profit from continuing operations
(“-” denotes net loss) 12,623,512.60 -49,058,206.92
(ii) Net profit from discontinued operations
(“-” denotes net loss) – –
V. Total comprehensive income 12,623,512.60 -49,058,206.92
70 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
II. Financial Statements (Cont’d)
5. Consolidated cash flow statement
Unit: RMB
Item First half of 2024 First half of 2023
I. Cash flows from operating activities:
Cash received from sales of goods and rendering of services 14,231,647,331.45 12,654,981,362.62
Tax rebates received 8,107,525.70 109,519,774.17
Cash received relating to other operating activities 150,658,134.92 880,312,282.56
Subtotal of cash inflows from operating activities 14,390,412,992.07 13,644,813,419.35
Cash paid for goods and services 10,553,832,290.81 9,962,778,364.17
Cash paid to and for employees 657,515,276.65 667,506,780.80
Payments of taxes and surcharges 242,371,386.74 428,775,626.59
Cash paid relating to other operating activities 944,194,644.80 802,664,900.20
Subtotal of cash outflows from operating activities 12,397,913,599.00 11,861,725,671.76
Net cash flows from operating activities 1,992,499,393.07 1,783,087,747.59
II. Cash flows from investing activities:
Cash received from investments 1,483,295.37 6,376,301.89
Cash received from investment income 1,298,463.59 1,730,212.77
Net cash received from disposal of fixed assets, intangible
assets and other long-term assets 14,657,469.09 147,784,119.60
Net cash received from disposal of subsidiaries and other
business units 610,107,490.67 –
Subtotal of cash inflows from investing activities 627,546,718.72 155,890,634.26
Cash paid for purchase of fixed assets, intangible assets and
other long-term assets 56,241,530.58 104,455,019.88
Net cash paid for acquisition of subsidiaries and other
business units – 4,934,751.03
Subtotal of cash outflows from investing activities 56,241,530.58 109,389,770.91
Net cash flows from investing activities 571,305,188.14 46,500,863.35
SHANDONG CHENMING PAPER HOLDINGS LIMITED 71
INTERIM REPORT 2024
X Financial Report
II. Financial Statements (Cont’d)
5. Consolidated cash flow statement (Cont’d)
Item First half of 2024 First half of 2023
III. Cash flows from financing activities:
Cash received from borrowings 15,651,271,993.47 17,765,551,073.77
Cash received relating to other financing activities 1,852,785,703.00 1,128,264,589.15
Subtotal of cash inflows from financing activities 17,504,057,696.47 18,893,815,662.92
Cash repayments of amounts borrowed 17,359,068,511.55 18,186,471,433.20
Cash paid for dividend and profit distribution or interest
payment 905,617,475.65 853,357,265.46
Including: Dividend and profit paid by subsidiaries to minority
shareholders – 9,419,178.08
Cash paid relating to other financing activities 1,787,061,193.13 1,942,169,772.07
Subtotal of cash outflows from financing activities 20,051,747,180.33 20,981,998,470.73
Net cash flows from financing activities -2,547,689,483.86 -2,088,182,807.81
IV. Effect of foreign exchange rate changes on cash and cash
equivalents 22,481,244.59 -58,096,458.38
V. Net increase in cash and cash equivalents 38,596,341.94 -316,690,655.25
Add: Balance of cash and cash equivalents as at the
beginning of the period 764,233,742.61 2,159,460,149.51
VI. Balance of cash and cash equivalents as at the end of the
period 802,830,084.55 1,842,769,494.26
72 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
II. Financial Statements (Cont’d)
6. Cash flow statement of the Company
Unit: RMB
Item First half of 2024 First half of 2023
I. Cash flows from operating activities:
Cash received from sales of goods and rendering of services 4,389,348,030.24 3,929,585,126.95
Tax rebates received – 10,186,261.55
Cash received relating to other operating activities 159,626,585.94 244,461,863.48
Subtotal of cash inflows from operating activities 4,548,974,616.18 4,184,233,251.98
Cash paid for goods and services 3,833,931,092.64 3,646,421,670.77
Cash paid to and for employees 152,875,362.26 159,974,284.62
Payments of taxes and surcharges 23,260,283.18 23,767,270.65
Cash paid relating to other operating activities 185,450,974.46 222,463,991.65
Subtotal of cash outflows from operating activities 4,195,517,712.54 4,052,627,217.69
Net cash flows from operating activities 353,456,903.64 131,606,034.29
II. Cash flows from investing activities:
Cash received from investments 488,776,095.37 6,376,301.89
Cash received from investment income 110,698,463.59 81,730,212.77
Net cash received from disposal of fixed assets, intangible
assets and other long-term assets 14,521,469.09 40,443,619.60
Subtotal of cash inflows from investing activities 613,996,028.05 128,550,134.26
Cash paid for purchase of fixed assets, intangible assets
and other long-term assets 5,342,093.92 19,406,565.34
Subtotal of cash outflows from investing activities 5,342,093.92 19,406,565.34
Net cash flows from investing activities 608,653,934.13 109,143,568.92
SHANDONG CHENMING PAPER HOLDINGS LIMITED 73
INTERIM REPORT 2024
X Financial Report
II. Financial Statements (Cont’d)
6. Cash flow statement of the Company (Cont’d)
Item First half of 2024 First half of 2023
III. Cash flows from financing activities:
Cash received from borrowings 10,107,406,194.25 10,014,688,564.21
Cash received relating to other financing activities 757,331,971.66 1,362,715,891.06
Subtotal of cash inflows from financing activities 10,864,738,165.91 11,377,404,455.27
Cash repayments of amounts borrowed 11,078,908,500.08 10,389,789,485.97
Cash paid for dividend and profit distribution or interest
payment 207,045,676.09 242,860,355.63
Cash paid relating to other financing activities 464,307,395.90 438,804,497.05
Subtotal of cash outflows from financing activities 11,750,261,572.07 11,071,454,338.65
Net cash flows from financing activities -885,523,406.16 305,950,116.62
IV. Effect of foreign exchange rate changes on cash and cash
equivalents 1,254,926.56 -3,138,503.82
V. Net increase in cash and cash equivalents 77,842,358.17 543,561,216.01
Add: Balance of cash and cash equivalents as at the
beginning of the period 350,786,839.40 233,971,948.99
VI. Balance of cash and cash equivalents as at the end of the
period 428,629,197.57 777,533,165.00
74 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
II. Financial Statements (Cont’d)
7. Consolidated statement of changes in owners’ equity
Amount for the period
Unit: RMB
First half of 2024
Equity attributable to owners of the Company
Other equity instruments Other
X Financial Report
Preference Perpetual Capital Less: comprehensive Special Surplus General risk Minority Total
Item Share capital shares bonds Others reserves Treasury shares income reserves reserves provisions Retained profit Others Subtotal interest owners’ equity
I. Balance as at the end of the prior year 2,956,813,200.00 – – – 5,328,790,899.61 63,432,450.00 -864,881,489.08 23,322,829.57 1,212,009,109.97 79,370,294.91 8,020,182,801.55 – 16,692,175,196.53 4,405,680,649.10 21,097,855,845.63
II. Balance as at the beginning of the year 2,956,813,200.00 – – – 5,328,790,899.61 63,432,450.00 -864,881,489.08 23,322,829.57 1,212,009,109.97 79,370,294.91 8,020,182,801.55 – 16,692,175,196.53 4,405,680,649.10 21,097,855,845.63
III. Changes in the period (“-” denotes decrease) – – – – -78,482,755.95 – -15,535,759.27 2,126,139.35 – 13,361.84 28,632,843.58 – -63,246,170.45 -343,374,662.90 -406,620,833.35
(i) Total comprehensive income – – – – – – -15,535,759.27 – – – 28,646,205.42 – 13,110,446.15 -2,287,357.20 10,823,088.95
(ii) Capital paid in and reduced by owners – – – – -78,482,755.95 – – – – – – – -78,482,755.95 -290,042,380.45 -368,525,136.40
1. Ordinary shares paid by owners – – – – – – – – – – – – – -290,042,380.45 -290,042,380.45
2. Others – – – – -78,482,755.95 – – – – – – – -78,482,755.95 – -78,482,755.95
(III) Profit distribution – – – – – – – – – 13,361.84 -13,361.84 – – -123,000,000.00 -123,000,000.00
1. Transfer to general risk provisions – – – – – – – – – 13,361.84 -13,361.84 – – – –
2. Distribution to owners (or shareholders) – – – – – – – – – – – – – -123,000,000.00 -123,000,000.00
(IV) Transfer within owners’ equity – – – – – – – – – – – – – 71,955,074.75 71,955,074.75
1. Others – – – – – – – – – – – – – 71,955,074.75 71,955,074.75
(V) Special reserves – – – – – – – 2,126,139.35 – – – – 2,126,139.35 – 2,126,139.35
1. Withdrawn in the period – – – – – – – 5,053,378.02 – – – – 5,053,378.02 – 5,053,378.02
2. Used in the period – – – – – – – -2,927,238.67 – – – – -2,927,238.67 – -2,927,238.67
IV. Balance as at the end of the period 2,956,813,200.00 – – – 5,250,308,143.66 63,432,450.00 -880,417,248.35 25,448,968.92 1,212,009,109.97 79,383,656.75 8,048,815,645.13 – 16,628,929,026.08 4,062,305,986.20 20,691,235,012.28
INTERIM REPORT 2024
SHANDONG CHENMING PAPER HOLDINGS LIMITED
75
76
II. Financial Statements (Cont’d)
7. Consolidated statement of changes in owners’ equity (Cont’d)
Amounts for the prior year
Unit: RMB
First half of 2023
Equity attributable to owners of the Company
INTERIM REPORT 2024
Other equity instruments Other
X Financial Report
Preference Perpetual Capital Less: comprehensive Special Surplus General risk Retained Minority Total
Item Share capital shares bonds Others reserves Treasury shares income reserves reserves provisions profit Others Subtotal interest owners’ equity
I. Balance as at the end of the prior year 2,979,742,200.00 – 996,000,000.00 – 5,361,200,522.29 128,780,100.00 -821,940,694.57 15,791,710.95 1,212,009,109.97 79,900,268.71 9,390,642,477.57 – 19,084,565,494.92 4,643,688,325.69 23,728,253,820.61
II. Balance as at the beginning of the year 2,979,742,200.00 – 996,000,000.00 – 5,361,200,522.29 128,780,100.00 -821,940,694.57 15,791,710.95 1,212,009,109.97 79,900,268.71 9,390,642,477.57 – 19,084,565,494.92 4,643,688,325.69 23,728,253,820.61
III. Changes in the period (“-” denotes decrease) – – – – -27,467,521.92 – -85,733,908.54 4,123,023.54 – – -688,080,164.10 – -797,158,571.02 -15,980,396.64 -813,138,967.66
SHANDONG CHENMING PAPER HOLDINGS LIMITED
(i) Total comprehensive income – – – – – – -85,733,908.54 – – – -688,080,164.10 – -773,814,072.64 -6,561,218.56 -780,375,291.20
(ii) Capital paid in and reduced by owners – – – – -27,467,521.92 – – – – – – – -27,467,521.92 – -27,467,521.92
1. Amount of share-based payments
recognised in owners’ equity – – – – -27,467,521.92 – – – – – – – -27,467,521.92 – -27,467,521.92
(iii) Profit distribution – – – – – – – – – – – – – -9,419,178.08 -9,419,178.08
1. Distribution to shareholders (or owners) – – – – – – – – – – – – – -9,419,178.08 -9,419,178.08
(iv) Special reserves – – – – – – – 4,123,023.54 – – – – 4,123,023.54 – 4,123,023.54
1. Withdrawn in the period – – – – – – – 13,373,517.00 – – – – 13,373,517.00 – 13,373,517.00
2. Used in the period (denotes in “-”) – – – – – – – -9,250,493.46 – – – – -9,250,493.46 – -9,250,493.46
IV. Balance as at the end of the period 2,979,742,200.00 – 996,000,000.00 – 5,333,733,000.37 128,780,100.00 -907,674,603.11 19,914,734.49 1,212,009,109.97 79,900,268.71 8,702,562,313.47 – 18,287,406,923.90 4,627,707,929.05 22,915,114,852.95
II. Financial Statements (Cont’d)
8. Statement of changes in owners’ equity of the Company
Amount for the period
Unit: RMB
First half of 2024
Other equity instruments Other
Preference Perpetual Less: comprehensive Special Surplus Retained Total
X Financial Report
Item Share capital shares bonds Others Capital reserves Treasury shares income reserves reserves profit Others owners’ equity
I. Balance as at the end of the prior year 2,956,813,200.00 – – – 5,073,338,869.19 63,432,450.00 – 4,612,641.99 1,199,819,528.06 3,138,783,314.72 – 12,309,935,103.96
II. Balance as at the beginning of the year 2,956,813,200.00 – – – 5,073,338,869.19 63,432,450.00 – 4,612,641.99 1,199,819,528.06 3,138,783,314.72 – 12,309,935,103.96
III. Changes in the period (“-” denotes decrease) – – – – – – – 1,396,312.44 – 12,623,512.60 – 14,019,825.04
(i) Total comprehensive income – – – – – – – – – 12,623,512.60 – 12,623,512.60
(ii) Special reserves – – – – – – – 1,396,312.44 – – – 1,396,312.44
1. Withdrawn in the period – – – – – – – 1,396,312.44 – – – 1,396,312.44
IV. Balance as at the end of the period 2,956,813,200.00 – – – 5,073,338,869.19 63,432,450.00 – 6,008,954.43 1,199,819,528.06 3,151,406,827.32 – 12,323,954,929.00
INTERIM REPORT 2024
SHANDONG CHENMING PAPER HOLDINGS LIMITED
77
78
II. Financial Statements (Cont’d)
8. Statement of changes in owners’ equity of the Company (Cont’d)
Amounts for the prior year
Unit: RMB
First half of 2023
Other equity instruments Other
INTERIM REPORT 2024
Preference Perpetual Less: comprehensive Special Surplus Retained Total
X Financial Report
Item Share capital shares bonds Others Capital reserves Treasury shares income reserves reserves profit Others owners’ equity
I. Balance as at the end of the prior year 2,979,742,200.00 – 996,000,000.00 – 5,147,225,041.11 128,780,100.00 – 2,066,138.15 1,199,819,528.06 3,121,934,271.16 – 13,318,007,078.48
II. Balance as at the beginning of the year 2,979,742,200.00 – 996,000,000.00 – 5,147,225,041.11 128,780,100.00 – 2,066,138.15 1,199,819,528.06 3,121,934,271.16 – 13,318,007,078.48
III. Changes in the period (“-” denotes decrease) – – – – -27,467,521.92 – – 1,261,601.44 – -65,980,906.92 – -92,186,827.40
(i) Total comprehensive income – – – – – – – – – -65,980,906.92 – -65,980,906.92
SHANDONG CHENMING PAPER HOLDINGS LIMITED
(ii) Capital paid in and reduced by owners – – – – -27,467,521.92 – – – – – – -27,467,521.92
1. Amount of share-based payments
recognised in owners’ equity – – – – -27,467,521.92 – – – – – – -27,467,521.92
(iv) Special reserves – – – – – – – 1,261,601.44 – – – 1,261,601.44
1. Withdrawn in the period – – – – – – – 1,284,902.41 – – – 1,284,902.41
2. Used in the period – – – – – – – -23,300.97 – – – -23,300.97
IV. Balance as at the end of the period 2,979,742,200.00 – 996,000,000.00 – 5,119,757,519.19 128,780,100.00 – 3,327,739.59 1,199,819,528.06 3,055,953,364.24 – 13,225,820,251.08
X Financial Report
III. Company overview
The predecessor of Shandong Chenming Paper Holdings Limited (hereinafter referred to as the “Company”, a joint-stock
company incorporated in Shouguang City, Shandong Province) was Shandong Shouguang Paper Mill Corporation, which was
changed as a joint stock company with limited liability through offering to specific investors in May 1993. In December 1996,
with approval by Lu Gai Zi [1996] No. 270 issued by the People’s Government of Shandong Province and Zheng Wei [1996]
No. 59 of the Securities Committee of the State Council, the Company was changed as a joint stock company with limited
liability established by share offer. The Company’s headquarters is located at No. 2199 Nongsheng East Road, Shouguang
City, Shandong Province.
In May 1997, with approval by Zheng Wei Fa [1997] No. 26 issued by the Securities Committee of the State Council, the
Company issued 115,000,000 domestic listed foreign shares (B shares) under public offering, which were listed and traded on
Shenzhen Stock Exchange from 26 May 1997.
In September 2000, with approval by Zheng Jian Gong Si Zi [2000] No. 151 issued by the China Securities Regulatory
Commission, the Company issued additional 70,000,000 RMB ordinary shares (A shares), which were listed and traded on
Shenzhen Stock Exchange from 20 November 2000.
In June 2008, with approval by the Stock Exchange of Hong Kong Limited, the Company issued 355,700,000 H shares.
At the same time, 35,570,000 H shares were allocated to the National Council for Social Security Fund by our relevant
state-owned shareholder and converted into overseas listed foreign shares (H shares) for the purpose of reducing the number
of state-owned shares. The additionally issued H shares were listed and traded on Hong Kong Stock Exchange on 18 June
2008.
As at 30 June 2024, the total share capital of the Company was 2,956,813,200 shares. For details, please refer to Note VII. 39.
Principal business activities: the Company is principally engaged in, among other things, processing and sale of paper
products (including machine-made paper and paper board), paper making raw materials, machinery and chemicals; generation
and sale of electric power and thermal power; forestry, saplings growing, processing and sale of timber and construction
materials; manufacturing, processing and sale of wood products; and hotel service, and equipment financial and operating
leasing, investment properties and property service etc.
The financial statements and notes thereto were approved at the tenth meeting of the tenth session of the board of directors
of the Company (the “Board”) on 14 August 2024.
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IV. Basis of Preparation of the Financial Statements
1. Basis of preparation
These financial statements are prepared in accordance with the accounting standards for business enterprises, the
application guidelines thereof, interpretations and other related rules (collectively referred to as “ASBEs”) promulgated
by the Ministry of Finance. In addition, the Company also discloses relevant financial information in accordance with
the “Preparation Rules for Information Disclosure by Companies Offering Securities to the Public No. 15 – General
Provisions on Financial Reports” (revised in 2023) of the CSRC.
The financial statements are presented on a going concern.
The Company’s financial statements have been prepared on an accrual basis. Except for certain financial instruments,
the financial statements are prepared under the historical cost convention. In the event that impairment of assets
occurs, a provision for impairment is made accordingly in accordance with the relevant regulations.
2. Going concern
No facts or circumstances comprise a material uncertainty about the Company’s going concern basis within 12 months
since the end of the reporting period.
V. Significant Accounting Policies and Accounting Estimates
Specific accounting policies and accounting estimates are indicated as follows:
The Company and its subsidiaries are principally engaged in machine-made paper, electricity and steam, construction
materials, paper making chemical products, processing of moulds, hotel management and other operations. The Company
and its subsidiaries formulated certain specific accounting policies and accounting estimates for the transactions and matters
such as revenue recognition, determination of performance progress and R&D expenses based on their actual production and
operation characteristics pursuant to the requirements under the relevant ASBEs. For details, please refer to this Note V. 30
“Revenue”. For the critical accounting judgments and estimates made by the management, please refer to Note V. 40 “Changes
in significant accounting policies and accounting estimates”.
1. Statement of compliance with the Accounting Standards for Business Enterprises
These financial statements have been prepared in conformity with the ASBEs, which truly and fully reflect the financial
position of the consolidated entity and the Company as at 30 June 2024 and relevant information such as the operating
results and cash flows of the consolidated entity and the Company for the first half of 2024.
2. Accounting period
The accounting period of the Company is from 1 January to 31 December of each calendar year.
3. Operating cycle
The operating cycle of the Company lasts for 12 months.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
4. Functional currency
The functional currency of the Company and its domestic subsidiaries is Renminbi (“RMB”). Overseas subsidiaries of the
Company recognise U.S. dollar (“USD” or “US$”), Japanese yen (“JPY”), Euro (“EUR”) and South Korean Won (“KRW”)
as their respective functional currency according to the general economic environment in which these subsidiaries
operate. The Company prepares the financial statements in RMB.
5. Determination method and selection basis of importance standards
Item Importance standards
Significant accounts receivable with single provision for bad Overdue accounts receivable and the amount of a single
debt reserves receivable exceeds 0.5% of total assets
Write-off of significant accounts receivable during the The amount of a single write-off exceeds 0.5% of net
period assets
Significant prepayments aged more than one year Aged more than one year and the single amount exceeds
0.5% of total assets
Significant receipts in advance aged more than one year Aged more than one year and the single amount exceeds
0.5% of total assets
Significant other payables aged more than one year Aged more than one year and the single amount exceeds
0.5% of total assets
Significant accounts payable aged more than one year Aged more than one year and the single amount exceeds
0.5% of total assets
Bad debt provisions with significant amounts reversed or Individually identified or classified into the third stage, the
recovered during the current period amount transferred or recovered exceeds 0.5% of total
assets
Significant construction in progress Projects with budgets exceeding 0.5% of total assets
Significant non-wholly owned subsidiaries The total assets of the subsidiary exceed 10% of the
Company on a consolidated basis and the revenue or
pre-tax profit exceeds 10%
Significant investment activities Investment amount exceeds 0.5% of total assets
Significant joint ventures and associates The joint venture or associate operates normally with an
accounting amount exceeding 0.5% of total assets
Significant debt restructuring The restructuring amount exceeds 0.5% of total assets
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
6. Accounting treatment of business combinations under common control and not under common control
(1) Business combination under common control
For the business combination involving entities under common control, the assets and liabilities of the party being
merged that are obtained in the business combination by the absorbing party shall be measured at the carrying
amounts as recorded by the ultimate controlling party in the consolidated financial statements at the combination
date. The difference between the carrying amount of the consideration paid for the combination and the carrying
amount of the net assets obtained in the combination is charged to the capital reserve. If the capital reserve is not
sufficient to absorb the difference, any excess shall be adjusted against retained earnings.
Business combinations involving entities under common control and achieved in stages
The assets and liabilities of the party being merged that are obtained at the combination by the absorbing party
shall be measured at the carrying value as recorded by the ultimate controlling party in the consolidated financial
statements at combination date. The difference between the sum of the carrying value from original shareholding
portion and the new investment cost incurred at combination date and the carrying value of net assets obtained
at combination date shall be adjusted to capital reserve, if the balance of capital reserve is not sufficient to absorb
the differences, any excess is adjusted to retained earnings. The long-term investment prior to the absorbing party
obtaining the control of the party being merged, the recognised profit or loss, comprehensive income and other
change of owners’ equity at the closer date of the acquisition date and combination date under common control
shall separately offset the opening balance of retained earnings and profit or loss during comparative statements.
(2) Business combination not under common control
For business combinations involving entities not under common control, the cost for each combination is
measured at the aggregate fair value at acquisition date, of assets given, liabilities incurred or assumed, and
equity securities issued by the acquirer in exchange for control of the acquiree. At acquisition date, the acquired
assets, liabilities or contingent liabilities of acquiree are measured at their fair value.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
6. Accounting treatment of business combinations under common control and not under common control
(Cont’d)
(2) Business combination not under common control (Cont’d)
Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net
assets, the difference is recognised as goodwill, and subsequently measured on the basis of its cost minus
accumulative impairment provision; Where the cost of combination is less than the acquirer’s interest in the fair
value of the acquiree’s identifiable net assets, the difference is recognised in profit or loss for the current period
after reassessment.
Business combinations involving entities not under common control and achieved in stages
The combination cost is the sum of consideration paid at acquisition date and fair value of the acquiree’s equity
investment held prior to acquisition date. The cost of equity of the acquiree held prior to acquisition date shall be
remeasured at the fair value at acquisition date, and the difference between the fair value and carrying amount
shall be recognised as investment income or loss for the current period. Other comprehensive income and
changes of other owners’ equity related with acquiree’s equity held prior to acquisition date shall be transferred
to investment profit or loss for current period at acquisition date, except for the other comprehensive income
incurred by the changes of net assets or net liabilities due to the remeasurement of defined benefit plans and
the other comprehensive income related to investments in non-trading equity instruments that were previously
designated as at fair value through other comprehensive income.
(3) Transaction fees attribution during business combination
The audit, legal, valuation advisory and other intermediary fees and other relevant administrative expenses arising
from business combinations are recognised in profit or loss when incurred. Transaction costs of equity or debt
securities issued as the considerations of business combination are included in the initial recognition amounts.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
7. Judgment criteria for control and preparation of consolidated financial statements
(1) Judgment criteria for control
The scope of consolidation of the consolidated financial statements is determined on the basis of control. The
term “control” refers to the fact that the Company has power over the investee and is entitled to variable returns
from its involvement with the investee and the ability to use its power over the investee to affect the amount of
those returns. The Company will reassess when changes in relevant facts and circumstances result in changes in
the relevant elements involved in the definition of control.
When judging whether to include a structured entity into the scope of consolidation, the Company
comprehensively considers all facts and circumstances, including assessing the purpose and design of the
structured entity, identifying the types of variable returns, and assessing whether to control the structured entity
on the basis of whether it bears part or all of the return variability by participating in its related activities.
(2) Basis for preparation of the consolidated financial statements
The consolidated financial statements are prepared by the Company based on the financial statements of the
Company and its subsidiaries and other relevant information. In preparing the consolidated financial statements,
the accounting policies and accounting periods of the Company and its subsidiaries shall be consistent, and
intra-company significant transactions and balances are eliminated.
A subsidiary and its business acquired through a business combination involving entities under common control
during the reporting period shall be included in the scope of the consolidation of the Company from the date
of being controlled by the ultimate controlling party, and its operating results and cash flows from the date of
being controlled by the ultimate controlling party are included in the consolidated income statement and the
consolidated cash flow statement, respectively.
For a subsidiary and its business acquired through a business combination involving entities not under common
control during the reporting period, its income, expenses and profits are included in the consolidated income
statement, and cash flows are included in the consolidated cash flow statement from the acquisition date to the
end of the reporting period.
The shareholders’ equity of the subsidiaries that is not attributable to the Company is presented under
shareholders’ equity in the consolidated balance sheet as minority interest. The portion of net profit or loss of
subsidiaries for the period attributable to minority interest is presented in the consolidated income statement
under the “profit or loss of minority interest”. When the amount of loss attributable to the minority shareholders of
a subsidiary exceeds the minority shareholders’ portion of the opening balance of owners’ equity of the subsidiary,
the excess amount shall be allocated against minority interest.
(3) Acquisition of non-controlling interests in subsidiaries
The difference between the long-term equity investments costs acquired by the acquisition of non-controlling
interests and the share of the net assets from subsidiaries from the date of acquisition or the date of combination
based on the new shareholding ratio, as well as the difference between the proceeds from the partial disposal
of the equity investment without losing control over its subsidiary and the disposal of the long-term equity
investment corresponding to the share of the net assets of the subsidiaries from the date of acquisition or the date
of combination, is adjusted to the capital reserve. If the capital reserve is not sufficient, any excess is adjusted to
retained earnings.
(4) Accounting treatment for loss of control over subsidiaries
For the loss of control over a subsidiary due to disposal of a portion of the equity investment or other reasons,
the remaining equity is measured at fair value on the date when the control is lost. The difference arising from
the sum of consideration received for disposal of equity interest and the fair value of remaining equity interest
over the sum of the share of the carrying amount of net assets of the former subsidiary calculated continuously
from the purchase date based on the shareholding percentage before disposal and the goodwill is recognised as
investment income in the period when the control is lost.
Other comprehensive income related to equity investment in the former subsidiary shall be accounted for on the
same basis as the former subsidiary’s direct disposal of relevant assets or liabilities when the control is lost. Other
changes in owners’ equity related to the former subsidiary that are accounted for using the equity method shall be
transferred to current profit or loss at the time when the control is lost
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
8. Classification of joint arrangements and accounting treatment for joint operations
A joint arrangement refers to an arrangement of two or more parties have joint control. The joint arrangements of the
Company comprise joint operations and joint ventures.
(1) Joint operations
Joint operations refer to a joint arrangement during which the Company is entitled to relevant assets and
obligations of this arrangement.
The Company recognises the following items in relation to its interest in a joint operation and accounts for them in
accordance with the relevant ASBEs:
A. the assets held solely by it and assets held jointly according to its share;
B. the liabilities assumed solely by it and liabilities assumed jointly according to its share;
C. the revenue from sale of output from joint operations;
D. the revenue from sale of output from joint operations according to its share;
E. the fees solely incurred by it and fees incurred from joint operations according to its share.
(2) Joint ventures
Joint ventures refer to a joint arrangement during which the Company only is entitled to net assets of this
arrangement.
The Company accounts for its investments in joint ventures in accordance with the requirements relating to
accounting treatment using equity method for long-term equity investments.
9. Standards for recognising cash and cash equivalents
Cash refers to cash on hand and deposits readily available for payment purpose. Cash equivalents refer to short – term
and highly liquid investments held by the Company which are readily convertible into known amount of cash and which
are subject to insignificant risk of value change.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
10. Foreign currency operations and translation of statements denominated in foreign currency
(1) Foreign currency operations
The foreign currency operations of the Company are translated into the functional currency at the prevailing spot
exchange rate on the date of exchange.
On the balance sheet date, foreign currency monetary items shall be translated at the spot exchange rate on
the balance sheet date. The exchange difference arising from the difference between the spot exchange rate
on the balance sheet date and the spot exchange rate upon initial recognition or the last balance sheet date will
be recognised in profit or loss for the period. The foreign currency non-monetary items measured at historical
cost shall still be measured by the functional currency translated at the spot exchange rate on the date of the
transaction. Foreign currency non-monetary items measured at fair value are translated at the spot exchange
rate on the date of determination of the fair value. The difference between the amounts of the functional currency
before and after the translation will be recognised in profit or loss or other comprehensive income for the period
based on the nature of the non-monetary items.
(2) Translation of financial statements denominated in foreign currency
When translating the financial statements denominated in foreign currency of overseas subsidiaries, assets and
liabilities on the balance sheet are translated at the spot exchange rate prevailing at the balance sheet date;
owner’s equity items except for “retained profit” are translated at the spot exchange rates at the dates on which
such items arose.
Income and expenses items in the income statement are translated at the prevailing spot exchange rate on the
transaction date.
All items in the cash flow statements shall be translated at the prevailing spot exchange rate on the date that
the cash flow transaction occurred. Effects arising from changes of exchange rate on cash shall be presented
separately as the “effect of foreign exchange rate changes on cash and cash equivalents” item in the cash flow
statements.
The differences arising from translation of financial statements shall be included in the “other comprehensive
income” item in owners’ equity in the balance sheet.
On disposal of foreign operations and loss of control, exchange differences arising from the translation of financial
statements denominated in foreign currencies related to the disposed foreign operations which has been included
in shareholders’ equity in the balance sheet, shall be transferred to profit or loss in whole or in proportionate share
in the period in which the disposal took place.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
11. Financial instruments
A financial instrument is a contract that gives rise to a financial asset of one party and a financial liability or equity
instrument of another party.
(1) Recognition and derecognition of financial instruments
Financial asset or financial liability will be recognised when the Company became one of the parties under a
financial instrument contract.
Financial asset that satisfied any of the following criteria shall be derecognised:
the contract right to receive the cash flows of the financial asset has terminated;
the financial asset has been transferred and meets the derecognition criteria for the transfer of financial
asset as described below.
A financial liability (or a part thereof) is derecognised only when the present obligation is discharged in full or in
part. If an agreement is entered between the Company (debtor) and a creditor to replace the existing financial
liabilities with new financial liabilities, and the contractual terms of the new financial liabilities are substantially
different from those of the existing financial liabilities, the existing financial liabilities shall be derecognised and the
new financial liabilities shall be recognised.
Conventionally traded financial assets shall be recognised and derecognised at the trading date.
(2) Classification and measurement of financial assets
The Company classifies the financial assets according to the business model for managing the financial assets
and characteristics of the contractual cash flows as follows: financial assets measured at amortised cost, financial
assets measured at fair value through other comprehensive income, and financial assets measured at fair value
through profit or loss.
Financial assets are measured at fair value upon initial recognition. For financial assets measured at fair value
through profit or loss, relevant transaction costs are directly recognised in profit or loss for the current period.
For other categories of financial assets, relevant transaction costs are included in the amount initially recognised.
Accounts receivable arising from sales of goods or rendering services, without significant financing component,
are initially recognised based on the transaction price expected to be entitled by the Company.
Financial assets measured at amortised cost
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated
at fair value through profit or loss:
The Company’s business model for managing such financial assets is to collect contractual cash flows;
The contractual terms of the financial asset stipulate that cash flows generated on specific dates are solely
payments of principal and interest on the principal amount outstanding.
Subsequent to initial recognition, such financial assets are measured at amortised cost using the effective interest
method. A gain or loss on a financial asset that is measured at amortised cost and is not part of a hedging
relationship shall be recognised in profit or loss for the current period when the financial asset is derecognised,
amortised using the effective interest method or with impairment recognised.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
11. Financial instruments (Cont’d)
(2) Classification and measurement of financial assets (Cont’d)
Financial assets measured at fair value through other comprehensive income
A financial asset is classified as measured at fair value through other comprehensive income if it meets both of the
following conditions and is not designated at fair value through profit or loss:
The Company’s business model for managing such financial assets is achieved both by collecting collect
contractual cash flows and selling such financial assets;
The contractual terms of the financial asset stipulate that cash flows generated on specific dates are solely
payments of principal and interest on the principal amount outstanding.
Subsequent to initial recognition, such financial assets are subsequently measured at fair value. Interest calculated
using the effective interest method, impairment losses or gains and foreign exchange gains and losses are
recognised in profit or loss for the current period, and other gains or losses are recognised in other comprehensive
income. On derecognition, the cumulative gain or loss previously recognised in other comprehensive income is
reclassified from other comprehensive income to profit or loss.
Financial assets measured at fair value through profit or loss
The Company classifies the financial assets other than those measured at amortised cost and measured at fair
value through other comprehensive income as financial assets measured at fair value through profit or loss. Upon
initial recognition, the Company irrevocably designates certain financial assets that are required to be measured
at amortised cost or at fair value through other comprehensive income as financial assets measured at fair value
through profit or loss in order to eliminate or significantly reduce accounting mismatch.
Upon initial recognition, such financial assets are measured at fair value. Except for those held for hedging
purposes, gains or losses (including interests and dividend income) arising from such financial assets are
recognised in the profit or loss for the current period.
The business model for managing financial assets refers to how the Company manages its financial assets in
order to generate cash flows. That is, the Company’s business model determines whether cash flows will result
from collecting contractual cash flows, selling financial assets or both. The Company determines the business
model for managing financial assets on the basis of objective facts and specific business objectives for managing
financial assets determined by key management personnel.
The Company assesses the characteristics of the contractual cash flows of financial assets to determine whether
the contractual cash flows generated by the relevant financial assets on a specific date are solely payments of
principal and interest on the principal amount outstanding. The principal refers to the fair value of the financial
assets at the initial recognition. Interest includes consideration for the time value of money, for the credit risk
associated with the principal amount outstanding during a particular period of time and for other basic lending
risks, costs and profits. In addition, the Company evaluates the contractual terms that may result in a change in
the time distribution or amount of contractual cash flows from a financial asset to determine whether it meets the
requirements of the above contractual cash flow characteristics.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
11. Financial instruments (Cont’d)
(2) Classification and measurement of financial assets (Cont’d)
Financial assets measured at fair value through profit or loss (Cont’d)
All affected financial assets are reclassified on the first day of the first reporting period following the change in
the business model where the Company changes its business model for managing financial assets; otherwise,
financial assets shall not be reclassified after initial recognition.
Financial assets are measured at fair value upon initial recognition. For financial assets measured at fair value
through profit or loss, relevant transaction costs are directly recognised in profit or loss for the current period.
For other categories of financial assets, relevant transaction costs are included in the amount initially recognised.
Accounts receivable arising from sales of goods or rendering services, without significant financing component,
are initially recognised based on the transaction price expected to be entitled by the Company.
(3) Classification and measurement of financial liabilities
At initial recognition, financial liabilities of the Company are classified as financial liabilities measured at fair value
through profit or loss and financial liabilities measured at amortised cost. For financial liabilities not classified
as measured at fair value through profit or loss, relevant transaction costs are included in the amount initially
recognised.
Financial liabilities measured at fair value through profit or loss
Financial liabilities measured at fair value through profit or loss comprise held-for-trading financial liabilities and
financial liabilities designated at fair value through profit or loss upon initial recognition. Such financial liabilities
are subsequently measured at fair value, and the gains or losses from the change in fair value and the dividend or
interest expenses related to the financial liabilities are included in the profit or loss of the current period.
Financial liabilities measured at amortised cost
Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method,
and the gains or losses arising from derecognition or amortisation are recognised in profit or loss for the current
period.
Classification between financial liabilities and equity instruments
A financial liability is a liability if:
it has a contractual obligation to pay in cash or other financial assets to other parties.
it has a contractual obligation to exchange financial assets or financial liabilities under potential adverse
condition with other parties.
it is a non-derivative instrument contract which will or may be settled with the entity’s own equity
instruments, and the entity will deliver a variable number of its own equity instruments according to such
contract.
it is a derivative instrument contract which will or may be settled with the entity’s own equity instruments,
except for a derivative instrument contract that exchanges a fixed amount of cash or other financial asset
with a fixed number of its own equity instruments.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
11. Financial instruments (Cont’d)
(3) Classification and measurement of financial liabilities (Cont’d)
Classification between financial liabilities and equity instruments (Cont’d)
Equity instruments are any contract that evidences a residual interest in the assets of an entity after deducting all
of its liabilities.
If the Company cannot unconditionally avoid the performance of a contractual obligation by paying cash or
delivering other financial assets, the contractual obligation meets the definition of financial liabilities.
Where a financial instrument must or may be settled with the Company’s own equity instruments, the Company’s
own equity instruments used to settle such instrument should be considered as to whether it is as a substitute
for cash or other financial assets or for the purpose of enabling the holder of the instrument to be entitled to the
remaining interest in the assets of the issuer after deducting all of its liabilities. For the former, it is a financial
liability of the Company; for the latter, it is the Company’s own equity instruments.
(4) Fair value of financial instruments
The methods for determining the fair value of the financial assets or financial liabilities are set out in Note V. 12.
(5) Impairment of financial assets
The Company makes provision for impairment based on expected credit losses (ECLs) on the following items:
Financial assets measured at amortised cost;
Receivables and investment in debt instruments measured at fair value through other comprehensive income;
Contract assets as defined in the Accounting Standards for Business Enterprises No. 14 – Revenue;
Lease receivables;
Financial guarantee contracts (except those measured at fair value through profit or loss or formed by continuing
involvement of transferred financial assets or the transfer does not qualify for derecognition).
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
11. Financial instruments (Cont’d)
(5) Impairment of financial assets (Cont’d)
Measurement of ECLs
ECLs are the weighted average of credit losses of financial instruments weighted by the risk of default. Credit
losses refer to the difference between all contractual cash flows receivable according to the contract and
discounted according to the original effective interest rate and all cash flows expected to be received, i.e. the
present value of all cash shortages.
The Company takes into account reasonable and well-founded information such as past events, current conditions
and forecasts of future economic conditions, and calculates the probability-weighted amount of the present value
of the difference between the cash flows receivable from the contract and the cash flows expected to be received
weighted by the risk of default.
The Company measures ECLs of financial instruments at different stages. If the credit risk of the financial
instrument did not increase significantly upon initial recognition, it is at the first stage, and the Company makes
provision for impairment based on the ECLs within the next 12 months; if the credit risk of a financial instrument
increased significantly upon initial recognition but has not yet incurred credit impairment, it is at the second stage,
and the Company makes provision for impairment based on the lifetime ECLs of the instrument; if the financial
instrument incurred credit impairment upon initial recognition, it is at the third stage, and the Company makes
provision for impairment based on the lifetime ECLs of the instrument.
For financial instruments with low credit risk on the balance sheet date, the Company assumes that the credit
risk did not increase significantly upon initial recognition, and makes provision for impairment based on the ECLs
within the next 12 months.
Lifetime ECLs represent the ECLs resulting from all possible default events over the expected life of a financial
instrument. The 12-month ECLs are the ECLs resulting from possible default events on a financial instrument
within 12 months (or a shorter period if the expected life of the financial instrument is less than 12 months) after
the balance sheet date, and is a portion of lifetime ECLs.
The maximum period to be considered when estimating ECLs is the maximum contractual period over which the
Company is exposed to credit risk, including renewal options.
For the financial instruments at the first and second stages and with low credit risks, the Company calculates
the interest income based on the book balance and the effective interest rate before deducting the impairment
provisions. For financial instruments at the third stage, interest income is calculated based on the amortised cost
after deducting impairment provisions made from the book balance and the effective interest rate.
For receivables such as bills receivable, accounts receivable, accounts receivable financing, other receivables
and contract assets, if the credit risk characteristics of a customer are significantly different from other customers
in the portfolio, or the credit risk characteristics of such customer change significantly, the Company will make a
separate provision for bad debts for such receivables. In addition to the receivables for which bad debt provisions
are made individually, the Company divides the receivables into portfolios based on credit risk characteristics and
calculates bad debt provisions on a combined basis.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
11. Financial instruments (Cont’d)
(5) Impairment of financial assets (Cont’d)
Bills receivable and accounts receivable
For bills receivable and accounts receivable, regardless of whether there is a significant financing component, the
Company always makes provision for impairment at an amount equal to lifetime ECLs.
When the Company is unable to assess the information of ECLs for an individual financial asset at a reasonable
cost, it classifies bills receivable and accounts receivable into portfolios based on the credit risk characteristics,
and calculates the ECLs on a portfolio basis. The basis for determining the portfolios is as follows:
A. Bills receivable
Bills receivable portfolio 1: Bank acceptance bills
Bills receivable portfolio 2: Commercial acceptance bills
B. Accounts receivable
Accounts receivable portfolio 1: Due from related party customers
Accounts receivable portfolio 2: Due from non-related party customers
Accounts receivable portfolio 3: Factoring receivables
For bills receivable classified as a portfolio, the Company refers to the historical credit loss experience, combined
with the current situation and the forecast of future economic conditions, to calculate the ECLs based on default
risk exposure and lifetime ECL rate.
For accounts receivable classified as a portfolio, the Company refers to the historical credit loss experience,
combined with the current situation and the forecast of future economic conditions, to prepare a comparison table
of the ageing/overdue days of accounts receivable and the lifetime ECL rate to calculate the ECLs. The aging of
accounts receivable is calculated from the date of recognition.
Other receivables
The Company classifies other receivables into portfolios based on credit risk characteristics, and calculates the
ECLs on a portfolio basis. The basis for determining the portfolios is as follows:
Other receivables portfolio 1: Amount due from government authorities
Other receivables portfolio 1: Amount due from related parties
Other receivables portfolio 3: Other receivables
For other receivables classified as a portfolio, the Company calculates the ECLs based on default risk exposure
and the ECL rate over the next 12 months or the entire lifetime. For other receivables grouped by aging, the aging
is calculated from the date of recognition.
92 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
11. Financial instruments (Cont’d)
(5) Impairment of financial assets (Cont’d)
Long-term receivables
The Company’s long-term receivables include finance lease receivables and deposits receivable.
The Company classifies the finance lease receivables and deposits receivable into portfolios based on the credit
risk characteristics, and calculates the ECLs on a portfolio basis. The basis for determining the portfolios is as
follows:
A. Finance lease receivables
Finance lease receivables portfolio 1: Receivables not past due
Finance lease receivables portfolio 2: Overdue receivables
B. Other long-term receivables
Other long-term receivables portfolio 1: Deposits receivable
Other long-term receivables portfolio 2: Other receivables
For accounts receivable financing and deposits receivable, the Company refers to the historical credit loss
experience, combined with the current situation and the forecast of future economic conditions, and calculates
the ECLs based on default risk exposure and lifetime ECL rate.
Except for those of finance lease receivables and deposits receivable, the ECLs of other receivables and long –
term receivables classified as a portfolio are measured based on default risk exposure and ECL rate over the next
12 months or the entire lifetime.
Debt investments and other debt investments
For debt investments and other debt investments, the Company measures the ECLs based on the nature of the
investment, the types of counterparty and risk exposure, and default risk exposure and ECL rate within the next
12 months or the entire lifetime.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 93
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
11. Financial instruments (Cont’d)
(5) Impairment of financial assets (Cont’d)
Assessment of significant increase in credit risk
In assessing whether the credit risk of a financial instrument has increased significantly upon initial recognition, the
Company compares the risk of default of the financial instrument at the balance sheet date with that at the date
of initial recognition to determine the relative change in risk of default within the expected lifetime of the financial
instrument.
In determining whether the credit risk has increased significantly upon initial recognition, the Company considers
reasonable and well-founded information, including forward-looking information, which can be obtained without
unnecessary extra costs or efforts. Information considered by the Company includes:
The debtor’s failure to make payments of principal and interest on their contractually due dates;
An actual or expected significant deterioration in a financial instrument’s external or internal credit rating (if any);
An actual or expected significant deterioration in the operating results of the debtor;
Existing or expected changes in the technological, market, economic or legal environment that have a significant
adverse effect on the debtor’s ability to meet its obligation to the Company.
Depending on the nature of the financial instruments, the Company assesses whether there has been a significant
increase in credit risk on either an individual basis or a collective basis. When the assessment is performed on a
collective basis, the financial instruments are grouped based on their common credit risk characteristics, such as
past due information and credit risk ratings.
The Company determines that the credit risk on a financial asset has increased significantly if it is more than 30
days past due.
Credit-impaired financial assets
At balance sheet date, the Company assesses whether financial assets measured at amortised cost and debt
investments measured at fair value through other comprehensive income are credit-impaired. A financial asset is
credit-impaired when one or more events that have an adverse effect on the estimated future cash flows of the
financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable
events:
Significant financial difficulty of the issuer or debtor;
A breach of contract by the debtor, such as a default or delinquency in interest or principal payments;
For economic or contractual reasons relating to the debtor’s financial difficulty, the Company having granted to
the debtor a concession that would not otherwise consider;
It becoming probable that the debtor will enter bankruptcy or other financial reorganisation;
The disappearance of an active market for that financial asset because of financial difficulties of the issuer or
debtor.
94 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
11. Financial instruments (Cont’d)
(5) Impairment of financial assets (Cont’d)
Presentation of provisions for ECLs
ECLs are remeasured at each balance sheet date to reflect changes in the financial instrument’s credit risk upon
initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss in profit or loss for
the current period. For financial assets measured at amortised cost, the provisions of impairment is deducted
from the carrying amount of the financial assets presented in the balance sheet; for debt investments at fair value
through other comprehensive income, the Company makes provisions of impairment in other comprehensive
income without reducing the carrying amount of the financial asset.
Write-offs
The book balance of a financial asset is directly written off to the extent that there is no realistic prospect of
recovery of the contractual cash flows of the financial asset (either partially or in full). Such write-off constitutes
derecognition of such financial asset. This is generally the case when the Company determines that the debtor
does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject
to the write-off. However, financial assets that are written off could still be subject to enforcement activities in
order to comply with the Company’s procedures for recovery of amounts due.
If a write-off of financial assets is subsequently recovered, the recovery is credited to profit or loss in the period in
which the recovery occurs.
(6) Transfer of financial assets
Transfer of financial assets refers to the transfer or delivery of financial assets to another party other than the
issuer of such financial assets (the transferee).
If the Company transfers substantially all the risks and rewards of ownership of the financial asset to the
transferee, the financial asset shall be derecognised. If the Company retains substantially all the risks and rewards
of ownership of a financial asset, the financial asset shall not be derecognised.
If the Company neither transfers nor retains substantially all the risks and rewards of ownership of the financial
asset, it accounts for the transaction as follows: if the Company does not retain control, it derecognises the
financial asset and recognises any resulting assets or liabilities; if the control over the financial asset is not waived,
the relevant financial asset is recognised according to the extent of its continuing involvement in the transferred
financial asset and the relevant liability is recognised accordingly.
(7) Offset of financial assets and financial liabilities
If the Company owns the legitimate rights of offsetting the recognised financial assets and financial liabilities,
which are enforceable currently, and the Company plans to realise the financial assets or to clear off the financial
liabilities on a net amount basis or simultaneously, the net amount of financial assets and financial liabilities shall
be presented in the balance sheet upon offsetting. Otherwise, financial assets and financial liabilities are presented
separately in the balance sheet without offsetting.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 95
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
12. Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
The Company measures the relevant asset and liability at fair value, based on the presumption that the orderly
transaction to sell the asset or transfer the liability takes place either in the principal market for the relevant asset or
liability, or in the absence of a principal market, in the most advantageous market for relevant the asset or liability. The
principal or the most advantageous market must be a trading market accessible by the Company at the measurement
date. The Company adopts the presumption that market participants would use when pricing the asset or liability in their
best economic interest.
If there exists an active market for a financial asset or financial liability, the Company uses the quotation on the active
market as its fair value. If the market for a financial instrument is inactive, the Company uses valuation technique to
recognise its fair value.
Fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic
benefits by using the asset in its best use or by selling it to another market participant that would use the asset in its
best use.
The Company adopts valuation techniques that are appropriate in the current circumstance and for which sufficient data
and other information are available, prioritises the use of relevant observable inputs and uses unobservable inputs only
under the circumstances where such relevant observable inputs cannot be obtained or practicably obtained.
Assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the
fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole. Level 1:
based on quoted prices (unadjusted) in active markets for identical assets or liabilities obtainable at the measurement
date. Level 2: observable inputs for the relevant asset or liability, either directly or indirectly, except for Level 1 input.
Level 3: unobservable inputs for the relevant assets or liability.
At each balance sheet date, the Company reassesses assets and liabilities measured at fair value that are recognised
in the financial statements on a recurring basis to determine whether transfers have occurred between fair value
measurement hierarchy levels.
13. Inventories
(1) Classification of inventories
Inventories of the Company mainly include raw materials, work in progress, goods in stock, development products
and consumable biological assets, etc.
(2) Pricing of inventories dispatched
Inventories of the Company are measured at their actual cost when obtained. Cost of raw materials, goods in
stock and others will be calculated with weighted average method when being dispatched.
Consumable biological assets refer to biological assets held-for-sale which include growing timber. Consumable
biological assets without a stock are stated at historical cost at initial recognition, and subsequently measured
at fair value when there is a stock. Changes in fair values shall be recognised as profit or loss in the current
period. The cost of self-planting, self-cultivating consumable biological assets is the necessary expenses
directly attributable to such assets prior to canopy closure, including borrowing costs eligible for capitalisation.
Subsequent expenses such as maintenance cost incurred after canopy closure shall be included in profit or loss
for the current period.
The cost of consumable biological assets shall, at the time of harvest or disposal, be carried forward at carrying
amount using the stock volume proportion method.
96 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
13. Inventories (Cont’d)
(3) Recognition of and provision for inventory impairment
At the balance sheet date, inventories are measured at the lower of cost and net realisable value. If the net
realisable value is below the cost of inventories, a provision for inventory impairment is made.
Net realisable value refers to the amount of the estimated price of inventories less the estimated cost incurred
upon completion, estimated sales expenses and taxes and levies. The realisable value of inventories shall be
determined on the basis of definite evidence, purpose of holding the inventories and effect of after-balance –
sheet-date events.
The Company usually makes provisions for inventory impairment on the basis of individual inventory items;
however, for inventories with large quantities and lower unit prices, these inventories are accrued impairment
according to inventory categories.
At the balance sheet date, in case the factors causing inventory impairment no longer exists, the original provision
for inventory impairment shall be reversed.
(4) Inventory stock taking system
The Company implements permanent inventory system as its inventory stock taking system.
(5) Amortisation of low-value consumables and packaging materials
The low-value consumables of the Company are amortised when issued for use.
Packaging materials for turnover are amortised when issued for use.
14. Long-term equity investments
Long-term equity investments include the equity investments in subsidiaries, joint ventures and associates. Associates
of the Company are those investees that the Company imposes significant influence over.
(1) Determination of initial investment cost
Long-term equity investments acquired through business combinations: for a long-term equity investment
acquired through a business combination involving enterprises under common control, the investment cost shall
be the absorbing party’s share of the carrying amount of the owners’ equity under the consolidated financial
statements of the ultimate controlling party on the date of combination. For a long-term equity investment
acquired through a business combination involving enterprises not under common control, the investment cost of
the long-term equity investment shall be the cost of combination.
Long-term equity investments acquired through other means: for a long-term equity investment acquired by cash
payment, the initial investment cost shall be the purchase cost actually paid; for a long-term equity investment
acquired by issuing equity securities, the initial investment cost shall be the fair value of equity securities issued.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
14. Long-term equity investments (Cont’d)
(2) Subsequent measurement and method for profit or loss recognition
Investments in subsidiaries shall be accounted for using the cost method. Except for the investments which meet
the conditions of holding for sale, investments in associates and joint ventures shall be accounted for using the
equity method.
For a long-term equity investment accounted for using the cost method, the cash dividends or profits declared by
the investees for distribution shall be recognised as investment gains and included in profit or loss for the current
period, except the case of receiving the actual consideration paid for the investment or the declared but not yet
distributed cash dividends or profits which is included in the consideration.
For a long-term equity investment accounted for using the equity method, where the initial investment cost
exceeds the investor’s interest in the fair value of the investee’s identifiable net assets at the acquisition date, no
adjustment shall be made to the investment cost of the long-term equity investment. Where the initial investment
cost is less than the investor’s interest in the fair value of the investee’s identifiable net assets at the acquisition
date, adjustment shall be made to the carrying amount of the long-term equity investment, and the difference shall
be charged to profit or loss for the current period.
Under the equity method, investment gain and other comprehensive income shall be recognised based on the
Company’s share of the net profits or losses and other comprehensive income made by the investee, respectively.
Meanwhile, the carrying amount of long-term equity investment shall be adjusted. The carrying amount of
long-term equity investment shall be reduced based on the Group’s share of profit or cash dividend distributed
by the investee. In respect of the other movement of net profit or loss, other comprehensive income and profit
distribution of investee, the carrying amount of long-term equity investment shall be adjusted and included in
the capital reserves (other capital reserves). The Group shall recognise its share of the investee’s net profits or
losses based on the fair values of the investee’s individual separately identifiable assets at the time of acquisition,
after making appropriate adjustments thereto according to the accounting policies and accounting periods of the
Company.
For additional equity investment made in order to obtain significant influence or common control over investee
without resulted in control, the initial investment cost under the equity method shall be the aggregate of fair value
of previously held equity investment and additional investment cost on the date of transfer. For investments
in non-trading equity instruments that were previously classified as at fair value through other comprehensive
income, the cumulative fair value changes associated with them that were previously included in other
comprehensive income are transferred to retained earnings upon the change to the equity method of accounting.
In the event of loss of common control or significant influence over investee due to partial disposal of equity
investment, the remaining equity interest after disposal shall be accounted for according to the Accounting
Standard for Business Enterprises No. 22 – Recognition and measurement of Financial Instruments. The difference
between its fair value and carrying amount shall be included in profit or loss for the current period. In respect
of other comprehensive income recognised under previous equity investment using equity method, it shall be
accounted for in accordance with the same accounting treatment for direct disposal of relevant asset or liability by
investee at the time when equity method was ceased to be used. Movement of other owners’ equity related to the
previous equity investment shall be transferred to profit or loss for the current period.
In the event of loss of control over investee due to partial disposal of equity investment, the remaining equity
interest which can apply common control or impose significant influence over the investee after disposal shall be
accounted for using equity method. Such remaining equity interest shall be treated as accounting for using equity
method since it is obtained and adjustment was made accordingly. For the remaining equity interest which cannot
apply common control or impose significant influence over the investee after disposal, it shall be accounted for
using the Accounting Standard for Business Enterprises No. 22 – Recognition and measurement of Financial
Instruments. The difference between its fair value and carrying amount as at the date of losing control shall be
included in profit or loss for the current period.
98 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
14. Long-term equity investments (Cont’d)
(2) Subsequent measurement and method for profit or loss recognition (Cont’d)
If the shareholding ratio of the Company is reduced due to the capital increase of other investors, and as a result,
the Company loses the control of but still can apply common control or impose significant influence over the
investee, the net asset increase due to the capital increase of the investee attributable to the Company shall be
recognised according to the new shareholding ratio, and the difference with the original carrying amount of the
long-term equity investment corresponding to the shareholding ratio reduction part that should be carried forward
shall be recorded in the profit or loss for the current period; and then it shall be adjusted according to the new
shareholding ratio as if equity method is used for accounting when acquiring the investment.
In respect of the transactions between the Company and its associates and joint ventures, the share of unrealised
gain or loss arising from internal transactions shall be eliminated by the portion attributable to the Company.
Investment gain or loss shall be recognised accordingly. However, any unrealised loss arising from internal
transactions between the Company and an investee is not eliminated to the extent that the loss is impairment loss
of the transferred assets.
(3) Basis for determining the common control and significant influence on the investee
Common control is the contractually agreed sharing of control over an arrangement, which relevant activities of
such arrangement must be decided by unanimously agreement from parties who share control. When determining
if there is any common control, it should first be identified if the arrangement is controlled by all the participants
or the group consisting of the participants, and then determined if the decision on the arranged activity can be
made only with the unanimous consent of the participants sharing the control. If all the participants or a group
of participants can only decide the relevant activities of certain arrangement through concerted action, it can
be considered that all the participants or a group of participants share common control on the arrangement. If
there are two or more participant groups that can collectively control certain arrangement, it does not constitute
common control. When determining if there is any common control, the relevant protection rights will not be taken
into account.
Significant influence is the power of the investor to participate in the financial and operating policy decisions of
an investee, but to fail to control or joint control the formulation of such policies together with other parties. When
determining if there is any significant influence on the investee, the influence of the voting shares of the investee
held by the investor directly and indirectly and the potential voting rights held by the investor and other parties
which are exercisable in the current period and converted to the equity of the investee, including the warrants,
stock options and convertible bonds that are issued by the investee and can be converted in the current period,
shall be taken into account.
When the Company holds directly or indirectly through the subsidiary 20% (inclusive) to 50% of the voting shares
of the investee, it is generally considered to have significant influence on the investee, unless there is concrete
evidence to prove that it cannot participate in the production and operation decision-making of the investee and
cannot pose significant influence in this situation. When the Company owns less than 20% of the voting shares
of the investee, it is generally considered that it has not significantly influenced on the investee, unless there
is concrete evidence to prove that it can participate in the production and operation decision – making of the
investee and can impose significant influence in this situation.
(4) Impairment test method and impairment provision
For the method for making impairment provision for the investment in subsidiaries, associates and joint ventures,
please refer to Note V. 23.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
15. Investment property
Investment property refers to real estate held to earn rentals or for capital appreciation, or both. The investment property
of the Company includes leased land use rights, land use rights held for sale after appreciation, and leased buildings.
The investment property of the Company is measured initially at cost upon acquisition, and subject to depreciation or
amortisation in the relevant periods according to the relevant provisions on fixed assets or intangible assets.
For the method for making impairment provision for the investment property adopted cost method for subsequent
measurement, please refer to Note V. 23.
When an investment property is sold, transferred, retired or damaged, the amount of proceeds on disposal of the
property net of the carrying amount and related tax and surcharges is recognised in profit or loss for the current period.
16. Fixed assets
(1) Conditions for recognition
Fixed assets represent the tangible assets held by the Company using in the production of goods, rendering of
services and for operation and administrative purposes with useful life over one year.
Fixed assets are recognised when it is probable that the related economic benefits will flow to the Company and
the costs can be reliably measured.
The Company’s fixed assets are initially measured at the actual cost at the time of acquisition.
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is probable
that the associated economic benefits will flow to the Company and the related cost can be reliably measured.
The cost of routine repairs of fixed assets that do not qualify as capitalised subsequent expenditure is charged to
current profit or loss or included in the cost of the related assets in accordance with the beneficiary object when
incurred. The carrying amount of the replaced part is derecognised.
(2) Depreciation method
The Company adopts the straight-line method for depreciation. Provision for depreciation will be started when the
fixed asset reaches its expected usable state, and stopped when the fixed asset is derecognised or classified as a
non-current asset held for sale. Without regard to the depreciation provision, the Company determines the annual
depreciation rate by category, estimated useful lives and estimated residual value of the fixed assets as below:
Year of Estimated residual Annual depreciation
Category depreciation value rate
Housing and building structure 20-40 5-10 2.25-4.75
Machinery and equipment 8-20 5-10 4.50-11.88
Transportation equipment 5-8 5-10 11.25-19.00
Electronic equipment and others 5 5-10 18.00-19.00
Where, for the fixed assets for which impairment provision is made, to determine the depreciation rate, the
accumulated amount of the fixed asset impairment provision that has been made shall be deducted.
100 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
16. Fixed assets (Cont’d)
(3) The impairment test method and impairment provision method of the fixed assets are set out in Note V. 23.
(4) The Company will review the useful lives, estimated net residual value and depreciation method of the fixed assets
at the end of each year.
When there is any difference between the useful lives estimate and the originally estimated value, the useful
lives of the fixed asset shall be adjusted. When there is any difference between the estimated net residual value
estimate and the originally estimated value, the estimated net residual value shall be adjusted.
(5) Disposal of fixed assets
A fixed asset is derecognised on disposal or when it is expected that there shall be no economic benefit arising
from using or after disposal. Where the fixed assets are sold, transferred, retired or damaged, the income received
after disposal after deducting the carrying amount and related taxes are recognised in profit or loss for the current
period.
The Company regards the fixed assets that have been replaced due to technological transformation or elimination
of outdated production capacity and have no subsequent plan for use, but have not reached the retirement
standard, as idle fixed assets. The depreciation method for idle fixed assets remains unchanged from before it
was idle.
17. Construction in progress
Construction in progress of the Company is recognised based on the actual construction cost, including all necessary
expenditures incurred for construction projects, capitalised borrowing costs for the construction in progress before it
has reached the working condition for its intended use, and other related expenses during the construction period.
A construction in progress is reclassified to fixed assets when it has reached the working condition for its intended use.
For technological transformation or new machine-made paper projects, the projects will be put into trial operation for a
period of time (usually three months) upon completion of construction. After the internal acceptance is completed during
the trial operation period, the construction in progress will be transferred to fixed assets.
The method for impairment provision of construction in progress is set out in Note V. 23.
18. Materials for project
The materials for project of the Group refer to various materials prepared for construction in progress, including
construction materials, equipment not yet installed and tools for production.
The purchased materials for project are measured at cost, and the planning materials for project are transferred to
construction in progress. After the completion of the project, the remaining materials for project are transferred to
inventory.
The method for impairment provision of materials for project is set out in Note V. 23.
The closing balance of materials for project is presented as “construction in progress” item in the balance sheet.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
19. Borrowing costs
(1) Recognition principle for the capitalisation of the borrowing costs
The borrowing costs incurred by the Company directly attributable to the acquisition, construction or production
of a qualifying asset will be capitalised and included in the cost of relevant asset. Other borrowing costs will be
recognised as expenses when incurred according to the incurred amount, and included in the profit or loss for the
current period. When the borrowing costs meet all the following conditions, capitalisation shall be started:
The capital expenditure has been incurred, which includes the expenditure incurred by paying cash,
transferring non-cash assets or undertaking interest-bearing liabilities for acquiring, constructing or
producing the qualifying assets;
the borrowing costs have been incurred; and
the acquisition, construction or production activity necessary for the asset to be ready for its intended use
or sale has been started.
(2) Capitalisation period of borrowing costs
When a qualifying asset acquired, constructed or produced by the Company is ready for its intended use or sale,
the capitalisation of the borrowing costs shall discontinue. The borrowing costs incurred after a qualifying asset
is ready for its intended use or sale shall be recognised as expenses when incurred according to the incurred
amount, and included in the profit or loss for the current period.
Capitalisation of borrowing costs shall be suspended during periods in which the acquisition, construction or
production of a qualifying asset is interrupted abnormally, when the interruption is for a continuous period of more
than 3 months. The capitalisation of the borrowing costs shall be continued in the normal interruption period.
(3) Calculation methods for capitalisation rate and capitalised amount of the borrowing costs
Where funds are borrowed for a specific purpose, the amount of interest to be capitalised shall be the actual
interest expense incurred on that borrowing for the period less any bank interest earned from depositing the
borrowed funds before being used into banks or any investment income on the temporary investment of those
funds. Where funds are borrowed for general purpose, the Company shall determine the amount of interest
to be capitalised on such borrowings by applying a capitalisation rate to the weighted average of the excess
amounts of cumulative expenditures on the asset over and above the amounts of specific-purpose borrowings.
The capitalisation rate shall be the weighted average of the interest rates applicable to the general-purpose
borrowings.
During the capitalisation period, exchange differences on a specific purpose borrowing denominated in foreign
currency shall be capitalised. Exchange differences related to general-purpose borrowings denominated in foreign
currency shall be included in profit or loss for the current period.
102 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
20. Biological assets
(1) Standards for recognising biological assets
Bearer biological assets refer to biological assets held for the purpose of producing agricultural products,
providing labour services or renting. The Company’s bearer biological assets are mainly tea trees. Bearer
biological assets are initially measured at cost. The cost of a planted or propagated bearer biological asset
includes the expenses directly attributable to the asset and necessarily incurred before the asset is ready for its
intended production and operation, including the borrowing costs that are eligible for capitalisation.
The management, protection and feeding costs of a biological asset subsequent to crown closure or after the
asset is ready for its intended production and operation are expensed and recognised in profit or loss as incurred.
According to experience, the tea trees grown by the Company generally take 7 years to reach the crown closure
stage.
Depreciation of bearer biological assets is calculated using the straight-line method over the estimated useful life
of each biological asset less its residual value as follows:
Estimated residual Annual depreciation
Type of bearer biological assets Useful life (year) value rate
Tea tree 20 5%
The Company reviews the useful life and estimated net residual value of a bearer biological asset and the
depreciation method applied at least at each financial year-end. A change in the useful life or estimated net
residual value of a fixed asset or the depreciation method used shall be accounted for as a change in accounting
estimate.
The difference between the disposal income of the sale, loss, death or damage of a bearer biological asset, net of
its carrying amount and related taxes, is recognised in profit or loss for the current period.
The method for impairment provision of bearer biological assets is set out in Note V. 23.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
21. Intangible assets
The intangible assets of the Company include land use rights, software, patents and certificates of third party right.
The intangible asset is initially measured at cost, and its useful life is determined upon acquisition. If the useful life is
finite, the intangible asset will be amortised over the estimated useful life using the amortisation method that can reflect
the estimated realisation of the economic benefits related to the asset, starting from the time when it is available for use.
If it is unable to reliably determine the estimated realisation, straight-line method shall be adopted for amortisation. The
intangible assets with uncertain useful life will not be amortised.
The amortisation methods for the intangible assets with finite useful life are as follows:
The basis for determining Method of
Type Useful life useful life amortisation Remark
Land use rights 50-70 Years of certificate Straight-line method
Software 5-10 Estimated years for Straight-line method
software replacement
Patents 5-20 Useful life of purchase Straight-line method
Certificates of third party right 3 Useful life of purchase Straight-line method
The Company reviews the useful life and amortisation method of the intangible assets with finite useful life at the end of
each year. If it is different from the previous estimates, the original estimates will be adjusted, and will be treated as a
change in accounting estimate.
If it is estimated on the balance sheet date that certain intangible asset can no longer bring future economic benefit to
the company, the carrying amount of the intangible asset will be entirely transferred into the profit or loss for the current
period.
The impairment method for the intangible assets is set out in Note V. 23.
22. R&D expenses
The R&D expenses of the Company are expenses directly related to the R&D activities of the Company, including the
wages R&D staff, direct investment costs, depreciation expenses and long-term prepaid expenses, design expenses,
equipment testing expenses, amortisation expenses of intangible assets, and outsourced R&D expenses, and other
expenses. Among them, the wages of R&D staff are included in R&D expenses based on working hours of related
projects. Equipment, production lines, and sites shared between R&D activities and other production and operation
activities are included in R&D expenses according to the proportion of working hours and the proportion of area.
The Company divides the expenses on internal R&D projects into expenses in the research phase and expenses in the
development phase. All R&D expenses of the Company are included in the current profits and losses when incurred.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
23. Asset impairment
Impairment of long-term equity investments in subsidiaries, associates and joint ventures, asset impairment on
investment property, fixed assets, construction in progress, bearer biological assets measured at cost, right-of –
use assets, intangible assets, goodwill and others (excluding inventories, deferred tax assets and financial assets)
subsequently measured at cost is determined as follows:
The Company determines if there is any indication of asset impairment as at the balance sheet date. If there is any
evidence indicating that an asset may be impaired, recoverable amount shall be estimated for impairment test. Goodwill
arising from business combinations, intangible assets with an indefinite useful life and intangible assets not ready for
use will be tested for impairment annually, regardless of whether there is any indication of impairment.
The recoverable amount of an asset is the higher of its fair value less costs of disposal and the present value of the
future cash flows expected to be derived from the asset. The Company estimates the recoverable amount of an
individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the Company shall
determine the recoverable amount of the asset group to which the asset belongs. The determination of an asset group
is based on whether major cash inflows generated by the asset group are independent of the cash inflows from other
assets or asset groups.
When the recoverable amount of an asset or an asset group is less than its carrying amount, the carrying amount is
reduced to its recoverable amount. The reduction amount is charged to profit or loss and an impairment provision is
made accordingly.
For the purpose of impairment test of goodwill, the carrying amount of goodwill acquired in a business combination is
allocated to the relevant asset groups on a reasonable basis from the acquisition date; where it is difficult to allocate
to the related asset groups, it is allocated to the combination of related asset groups. The related asset groups or
combination of asset groups are those which can benefit from the synergies of the business combination and are not
larger than the reportable segments identified by the Company.
In the impairment test, if there is any indication that an asset group or a combination of asset groups related to goodwill
may be impaired, the Company first tests the asset group or set of asset groups excluding goodwill for impairment,
calculates the recoverable amount and recognises the corresponding impairment loss. An impairment test is then carried
out on the asset group or combination of asset groups containing goodwill by comparing its carrying amount with its
recoverable amount. If the recoverable amount is lower than the carrying amount, an impairment loss is recognised for
goodwill.
An impairment loss recognised shall not be reversed in a subsequent period.
24. Long-term prepaid expenses
The long-term prepaid expenses incurred by the Company shall be recognised based on the actual cost, and evenly
amortised over the estimated benefit period. For the long-term prepaid expense that cannot benefit the subsequent
accounting periods, its value after amortisation shall be entirely included in the profit or loss for the current period.
25. Contract liabilities
A contract liability represents the Company’s obligation to transfer goods to a customer for which the Company has
received consideration (or an amount of consideration is due) from the customer. If the customer has already paid
the contract consideration before the Company transfers goods to the customer or the Company has obtained the
unconditional collection right, the Company will recognise such amount received or receivable as contract liabilities
at earlier of the actual payment by the customer or the amount payable becoming due. Contract assets and contract
liabilities under the same contract are presented on a net basis, and contract assets and contract liabilities under
different contracts are not offset.
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26. Employee benefits
(1) Scope of employee benefits
Employee benefits are all forms of considerations or compensation given by an entity in exchange for services
rendered by employees or for the termination of employment. Employee benefits include short-term staff
remuneration, post-employment benefits, termination benefits and other long-term employee benefits. Employee
benefits include benefits provided to employees’ spouses, children, other dependants, survivors of the deceased
employees or other beneficiaries.
Employee benefits are presented as “employee benefits payable” and “long-term employee benefits payable” in
the balance sheet, respectively, according to liquidity.
(2) Short-term staff remuneration
Employee wages or salaries actually incurred, bonuses, and social insurance contributions such as medical
insurance, work injury insurance, maternity insurance, and housing fund, contributed at the applicable benchmarks
and rates, are recognised as a liability as the employees provide services, with a corresponding charge to profit or
loss or included in the cost of assets where appropriate.
(3) Post-employment benefits
Post-employment benefit plans include defined contribution plans and defined benefit plans. A defined
contribution plan is a post-employment benefit plan under which the Company pays fixed contributions
into a separate fund and the Company has no further obligations for payment. A defined benefit plan is a
post-employment benefit plan other than a defined contribution plan.
Defined contribution plans
Defined contribution plans include basic pension insurance, unemployment insurance and enterprise annuity plan (if
any).
During the accounting period in which an employee provides service, the amount payable calculated according to
the defined contribution plan is recognised as a liability and included in the profit or loss for the current period or
the cost of relevant assets.
Defined benefit plans
For defined benefit plans, the actuarial valuation is carried out by an independent actuary on the annual balance
sheet date, and the cost of providing benefits is determined by the expected cumulative benefit unit method. The
cost of staff remuneration arising from the Company’s defined benefit plans includes the following components:
Service cost, including current service cost, past service cost, and settlement gain or loss. In particular,
the current service cost refers to the increase in the present value of obligations of defined benefit plans
arising from the service provided by staff in the current period; the past service cost refers to the increase or
decrease in the present value of obligations of defined benefit plans related to the service of the staff in the
previous period arising from the revision of defined benefit plans.
Net interest on net liabilities or net assets of defined benefit plans, including interest income from the assets
under the plans, interest expense arising from the obligations of defined benefit plans, and interest affected
by asset caps.
Changes arising from the remeasurement of net liabilities or net assets of defined benefit plans.
Unless other accounting standards require or allow costs of staff welfare to be included in costs of assets,
the Company will include the above items and in the current profit and loss; and include item in other
comprehensive income which will not be transferred back to profit or loss in subsequent accounting periods.
When the original defined benefit plan is terminated, all the part originally included in other comprehensive income
shall be transferred to retained profit within the scope of equity.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
26. Employee benefits (Cont’d)
(4) Termination benefits
When the Company provides termination benefits to employees, employee benefits liabilities arising from
termination benefits are recognised in profit or loss for the current period at the earlier of the following dates: when
the Company cannot revoke unilaterally compensation for dismissal due to the cancellation of labour relationship
plans and employee redundant proposals; the Company recognises cost and expenses related to payment of
compensation for dismissal and restructuring.
For the early retirement plans, economic compensations before the actual retirement date were classified as
termination benefits. During the period from the date of cease of render of services to the actual retirement
date, relevant wages and contribution to social insurance for the employees proposed to be paid are recognised
in profit or loss on a one-off basis. Economic compensation after the official retirement date, such as normal
pension, is accounted for as post-employment benefits.
(5) Other long-term benefits
Other long-term employee benefits provided by the Group to employees that meet the conditions for defined
contribution plans are accounted for in accordance with the relevant provisions relating to defined contribution
plans as stated above. If the conditions for defined benefit plans are met, the benefits shall accounted for in
accordance with the relevant provisions relating to defined benefit plans, but the “changes arising from the
remeasurement of net liabilities or net assets of defined benefit plans” in the relevant employee benefits shall be
included in the current profit and loss or the relevant costs of assets.
27. Provisions
Obligations pertinent to the contingencies which satisfy the following conditions are recognised by the Company as
provisions:
(1) the obligation is a current obligation borne by the Company;
(2) it is likely that an outflow of economic benefits from the Company will be resulted from the performance of the
obligation;
(3) the amount of the obligation can be reliably measured.
The provisions shall be initially measured based on the best estimate for the expenditure required for the performance
of the current obligation, after taking into account relevant risks, uncertainties, time value of money and other
factors pertinent to the contingencies. If the time value of money has significant influence, the best estimates shall
be determined after discounting the relevant future cash outflow. The Company reviews the carrying amount of the
provisions on the balance sheet date and adjust the carrying amount to reflect the current best estimates.
If all or some expenses incurred for settlement of recognised provisions are expected to be borne by the third party,
the compensation amount shall, on a recoverable basis, be recognised as asset separately, and compensation amount
recognised shall not be more than the carrying amount of provisions.
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28. Share-based payments and equity instruments
(1) Category of share-based payment
The Company’s share-based payment is either equity-settled or cash-settled.
(2) Determination of fair value of equity instruments
For the existence of an active market for options and other equity instruments granted by the Company, the fair
value is determined at the quoted price in the active market. For options and other equity instruments with no
active market, option pricing model shall be used to estimate the fair value of the equity instruments. The following
factors shall be taken into account using option pricing models: A. the exercise price of the option; B. the validity
period of the option; C. the current market price of the share; D. the expected volatility of the share price; E.
predicted dividend of the share; and F. risk-free rate of the option within the validity period.
(3) Recognition of vesting of equity instruments based on the best estimate
On each balance sheet date within the vesting period, the estimated number of equity instruments expected to
vest is revised based on the best estimate made by the Company according to the latest available subsequent
information as to changes in the number of employees with exercisable rights. On the vesting date, the final
estimated number of equity instruments expected to vest should equal the actual number of equity instruments
expected to vest.
(4) Accounting treatment of implementation, modification and termination of share-based payment
Equity-settled share-based payment shall be measured at the fair value of the equity instruments granted to
employees. For those may immediately vest after the grant, the fair value of equity instrument at the grant date
shall be included in the relevant costs or expenses, and the capital reserve shall be increased accordingly.
If the right may not be exercised until the vesting period comes to an end or until the specified performance
conditions are met, on each balance sheet date within the vesting period, the services obtained in the current
period shall, based on the best estimate of the number of vested equity instruments, be included in the relevant
costs or expenses and the capital reserve at the fair value of the equity instrument at the grant date. After the
vesting period, relevant costs or expenses and total shareholders’ equity which have been recognised will not be
adjusted.
Cash-settled share-based payment shall be measured in accordance with the fair value of liability calculated
and recognised based on the shares or other equity instruments undertaken by the Company. For those may
immediately vest after the grant, the fair value of the liability undertaken by the Company shall, on the date of the
grant, be included in the relevant costs or expenses, and the liabilities shall be increased accordingly. If the right
may not be exercised until the vesting period comes to an end or until the specified performance conditions are
met, on each balance sheet date within the vesting period, the services obtained in the current period shall, based
on the best estimate of the information about the exercisable right, be included in the relevant costs or expenses
and the corresponding liabilities at the fair value of the liability undertaken by the Company. For each of the
balance sheet date and settlement date before the settlement of the relevant liabilities, fair value of the liabilities
shall be remeasured and the changes will be included in the profit or loss for the current period.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
28. Share-based payments and equity instruments (Cont’d)
(4) Accounting treatment of implementation, modification and termination of share-based payment (Cont’d)
When there are changes in Company’s share-based payment plans, if the modification increases the fair value of
the equity instruments granted, corresponding recognition of service increase in accordance with the increase in
the fair value of the equity instruments; if the modification increases the number of equity instruments granted,
the increase in fair value of the equity instruments is recognised as a corresponding increase in service achieved.
An increase in the fair value of equity instruments refers to the difference between the fair values of the modified
date. If the modification reduces the total fair value of shares paid or not conductive to the use of other employees
share-based payment plans to modify the terms and conditions of service, it will continue to be accounted for in
the accounting treatment, as if the change had not occurred, unless the Company cancelled some or all of the
equity instruments granted.
During the vesting period, if the cancelled equity instruments (except for failure to meet the conditions of the
non-market vesting conditions) granted by the Company to cancel the equity instruments granted amount
treated as accelerated vesting of the remaining period should be recognised immediately in profit or loss, while
recognising capital reserves. If employees or other parties can choose to meet non-vesting conditions but they are
not met in the vesting period, the Company will treat them as cancelled equity instruments granted.
(5) Restricted shares
If the Company grants the restricted shares to incentive participants under an equity incentive plan, the incentive
participants shall subscribe for the shares first. If the unlocking conditions stipulated in the equity incentive plan
cannot be fulfilled subsequently, the Company repurchase the shares at the predetermined price. If the registration
and other capital increase procedures for the restricted shares issued to employees are completed in accordance
with relevant regulations, the Company recognises share capital and capital reserve (or capital premium) based on
the subscription money received from the employees on the grant date; and recognises treasury shares and other
payables for repurchase obligation.
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29. Other financial instruments such as preference shares and perpetual bonds
(1) Classification of financial liabilities and equity instruments
Financial instruments issued by the Company are classified into financial assets, financial liabilities or equity
instruments on the basis of the substance of the contractual arrangements and the economic nature not only
its legal form, together with the definition of financial asset, financial liability and equity instruments on initial
recognition.
(2) Accounting treatment of other financial instruments such as preference shares and perpetual bonds
Financial instruments issued by the Company are initially recognised and measured in accordance with the
financial instrument standards; thereafter, interest or dividends are accrued on each balance sheet date and
accounted for in accordance with relevant specific ASBEs, i.e. to determine the accounting treatment for interest
expenditure or dividend distribution of the instrument based on the classification of the financial instrument issued.
For financial instruments classified as equity instruments, their interest expenses or dividend distributions are
treated as profit distribution of the Company, and their repurchases and cancellations are treated as changes in
equity; for financial instruments classified as financial liabilities, their interest expenses or dividend distribution are
in principle accounted for with reference to borrowing costs, and the gains or losses arising from their repurchases
or redemption are included in the profit or loss for the current period.
For the transaction costs such as fees and commissions incurred by the Company for issuing financial
instruments, if such financial instruments are classified as debt instruments and measured at amortised cost, they
are included in the initial measured amount of the instruments issued; if such financial instruments are classified
as equity instruments, they are deducted from equity.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
30. Revenue
(1) General principles
The Company recognises revenue when it satisfies a performance obligation in the contract, i.e. when the
customer obtains control of the relevant goods or services.
Where a contract has two or more performance obligations, the Company allocates the transaction price to each
performance obligation based on the percentage of respective unit price of goods or services guaranteed by
each performance obligation, and recognises as revenue based on the transaction price that is allocated to each
performance obligation.
If one of the following conditions is fulfilled, the Company performs its performance obligation within a certain
period; otherwise, it performs its performance obligation at a point of time:
when the customer simultaneously receives and consumes the benefits provided by the Company when the
Company performs its obligations under the contract;
when the customer is able to control the goods in progress in the course of performance by the Company
under the contract;
when the goods produced by the Company under the contract are irreplaceable and the Company has the
right to payment for performance completed to date during the whole contract term.
For performance obligations performed within a certain period, the Company recognises revenue by measuring
the progress towards complete of that performance obligation within that certain period. When the progress
of performance cannot be reasonably determined, if the costs incurred by the Company are expected to be
compensated, the revenue shall be recognised at the amount of costs incurred until the progress of performance
can be reasonably determined.
For performance obligation performed at a point of time, the Company recognises revenue at the point of time at
which the customer obtains control of relevant goods or services. To determine whether a customer has obtained
control of goods or services, the Company considers the following indications:
The Company has the current right to receive payment for the goods, which is when the customer has the
current payment obligations for the goods.
The Company has transferred the legal title of the goods to the customer, which is when the client
possesses the legal title of the goods.
The Company has transferred the physical possession of goods to the customer, which is when the
customer obtains physical possession of the goods.
The Company has transferred all of the substantial risks and rewards of ownership of the goods to the
customer, which is when the customer obtain all of the substantial risks and rewards of ownership of the
goods to the customer.
The customer has accepted the goods or services.
Other information indicates that the customer has obtained control of the goods.
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30. Revenue (Cont’d)
(2) Specific methods
The Company’s revenue mainly comes from the following types of business: sales of goods, provision of hotel and
property services, and provision of financial leasing and factoring services.
Sales of goods
The Company produces and sells machine-made paper and raw materials, electricity and steam, construction
materials, papermaking chemicals, plastic automobile accessories, moulds and other products.
In terms of domestic sales, revenue is recognised at a point in time when the control over the goods is transferred
after the Company has delivered the goods (other than electricity and steam) sold to the location as specified in
the contract and the customer has accepted the goods.
In terms of overseas sales, revenue is recognised on the day when the goods (other than electricity and steam)
sold are loaded on board and declared.
The sales of electricity and steam by the Company are performance obligations performed within a certain
period. For sales of electricity, the Company recognises revenue from sales of electricity based on the quantity of
electricity delivered to customers every month at a price agreed in the contract. For sales of steam, the Company
recognises revenue from sales of steam based on the amount of steam delivered to customers every month at a
price agreed in the contract.
The credit periods granted by the Company to customers in various industries are consistent with the practices of
various industries, therefore, there is no significant financing component.
The Company provides product quality assurance for the sales of products and recognises corresponding
provisions. The Company does not provide any additional services or additional quality assurance, so the product
quality assurance does not constitute a separate fulfilment obligation.
The Company’s cooperation model with distributors is outright sales, and the recognition of sales revenue under
the distribution model is consistent with the direct sales model.
Certain contracts between the Company and its customers contain arrangements on sales rebates which will give
rise to variable consideration. Where a contract contains variable consideration, the Company determines the best
estimates on the variable consideration based on expected values or the most probable amount, provided that
transaction prices including variable consideration shall not exceed the cumulative amount of recognised revenue
upon the removal of relevant uncertainties in connection with which a significant reversal is highly unlikely.
For sales of machine-made paper with sales return clauses, the revenue recognised is subject to the cumulative
amount of recognised revenue in connection with which a significant reversal is highly unlikely. The Company
recognises the liabilities according to the expected amount of refund, and recognises the carrying amount of the
goods returned at the time of transfer deducting the estimated cost of recovering the goods as an asset (including
the loss of the value of the returned goods).
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
30. Revenue (Cont’d)
(2) Specific methods (Cont’d)
Provision of hotel and property services
The Company provides hotel and property services to external parties. Since the customers obtain and consume
the economic benefits brought by the Company’s performance of the contract while the Company performs the
contract, the Company recognises revenue according to the progress of the contract performance. Since the
performance progress occurs evenly, the Company recognises revenue by amortising on a straight – line basis
over the service period.
Provision of financial leasing and factoring services
The Company recognises revenue from external financial leasing and factoring services according to the effective
interest rate.
For assets that have not experienced credit impairment, the Company determines its interest income based on
the amount of the book balance of the financial asset (i.e. without considering the impact of impairment) multiplied
by the effective interest rate.
There are two cases for financial assets with credit impairment:
For financial assets that are not credit-impaired when purchased or originated, but are credit-impaired in
subsequent periods, the Company shall, in the subsequent periods when impairment occurs, determine its
income based on the amount of the amortised cost of the financial asset (i.e. the book balance minus the accrued
impairment) multiplied by the effective interest rate (the effective interest rate determined at the time of initial
recognition, which does not change due to the occurrence of impairment).
For financial assets that are credit-impaired when purchased or originated, the Company shall, upon initial
recognition, determines its income based on the amount of the amortised cost of the financial asset multiplied
by the credit-adjusted effective interest rate (i.e. the interest rate at which the projected future cash flows after
impairment are discounted to the amortised cost at the time of purchase or origination).
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31. Contract costs
Contract costs are either the incremental costs of obtaining a contract with a customer or the costs to fulfil a contract
with a customer.
Incremental costs of obtaining a contract are those costs that the Company incurs to obtain a contract with a customer
that it would not have incurred if the contract had not been obtained e.g. sales commission. The Company recognises
the incremental costs of obtaining a contract with a customer as an asset if it expects to recover those costs. Other
costs of obtaining a contract, other than incremental costs that are expected to be recovered, are recognised in profit or
loss in the period in which they are incurred.
If the costs to fulfil a contract with a customer are not within the scope of inventories or other ASBEs, the Company
recognises an asset from the costs incurred to fulfil a contract only if those costs meet all of the following criteria:
the costs relate directly to an existing contract or to a specifically identifiable anticipated contract, including direct
labour, direct materials, allocations of overheads (or similar costs), costs that are explicitly chargeable to the
customer and other costs that are incurred only because the Company entered into the contract;
the costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy)
performance obligations in the future;
the costs are expected to be recovered.
Assets recognised for the incremental costs of obtaining a contract and assets recognised for the costs to fulfil a
contract (the “assets related to contract costs”) are amortised on a systematic basis that is consistent with the transfer
to the customer of the goods or services to which the assets relate and recognised in profit or loss for the current
period. If the amortisation period does not exceed one year, it shall be recognised in profit or loss for the current period.
The Company recognises an impairment loss in profit or loss to the extent that the carrying amount of an asset related
to contract costs exceeds:
remaining amount of consideration that the Company expects to receive in exchange for the goods or services to
which the asset relates;
the cost estimated to be happened for the transfer of related goods or services.
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32. Government grants
A government grant is recognised when the grant will be received and that the Company will comply with the conditions
attaching to the grant.
If a government grant is in the form of a monetary asset, it is measured at the amount received or receivable. If a
government grant is in the form of non-monetary asset, it is measured at fair value; if the fair value cannot be obtained in
a reliable way, it is measured at the nominal amount of RMB1.
Government grants obtained for acquisition or construction of long-term assets or other forms of long-term asset
formation are classified as government grants related to assets, while the remaining government grants are classified as
government grants related to revenue.
Regarding the government grant not clearly defined in the official documents and can form long-term assets, the part
of government grant which can be referred to the value of the assets is classified as government grant related to assets
and the remaining part is government grant related to revenue. For the government grant that is difficult to distinguish,
the entire government grant is classified as government grant related to revenue.
A government grant related to an asset shall be recognised as deferred income, and evenly amortised to profit or loss
over the useful life of the asset in a reasonable and systematic manner. For a government grant related to revenue, if
the grant is a compensation for related costs, expenses or losses incurred, the grant shall be recognised in profit or
loss for the current period or used to offset related costs; if the grant is a compensation for related costs, expenses or
losses to be incurred in subsequent periods, the grant shall be recognised as deferred income, and recognised in profit
or loss over the periods in which the related costs, expenses or losses are recognised, or used to offset related costs. A
government grant measured at nominal amount is directly included in profit or loss for the current period. The Company
adopts a consistent approach to the same or similar government grants.
A government grant related to daily activities is recognised in other gains or used to offset related costs relying on
the essence of economic business; otherwise, recognised in non-operating income or used to offset non-operating
expenses.
For the repayment of a government grant already recognised, if the carrying amount of relevant assets was written off
at initial recognition, the carrying amount of the assets shall be adjusted; if there is any related deferred income, the
repayment shall be offset against the carrying amount of the deferred income, and any excess shall be recognised in
profit or loss for the current period; otherwise, the repayment shall be recognised immediately in profit or loss for the
current period.
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33. Deferred income tax assets/deferred income tax liabilities
Income tax comprises current income tax expense and deferred income tax expense, which are included in profit or
loss for the current period as income tax expenses, except for deferred tax related to transactions or events that are
directly recognised in owners’ equity which are recognised in owners’ equity, and deferred tax arising from a business
combination, which is adjusted against the carrying amount of goodwill.
Temporary differences arising from the difference between the carrying amount of an asset or liability and its tax base
at the balance sheet date of the Company shall be recognised as deferred income tax using the balance sheet liability
method.
All the taxable temporary differences are recognised as deferred income tax liabilities except for those incurred in the
following transactions:
(1) The initial recognition of goodwill, and the initial recognition of an asset or liability in a transaction which is neither
a business combination nor affects accounting profit or taxable profit (or deductible loss) when the transaction
occurs (other than a single transaction that the initially recognised assets and liabilities result in an equal amount
of taxable temporary differences and deductible temporary differences);
(2) The taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, and
the Company is able to control the timing of the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.
The Company recognises a deferred income tax asset for the carry forward of deductible temporary differences,
deductible losses and tax credits to subsequent periods, to the extent that it is probable that future taxable profits
will be available against which the deductible temporary differences, deductible losses and tax credits can be utilised,
except for those incurred in the following transactions:
(1) The transaction is neither a business combination nor affects accounting profit or taxable profit (or deductible loss)
when the transaction occurs (other than a single transaction that the initially recognised assets and liabilities result
in an equal amount of taxable temporary differences and deductible temporary differences);
(2) The deductible temporary differences associated with investments in subsidiaries, associates and joint ventures,
the corresponding deferred income tax asset is recognised when both of the following conditions are satisfied: it is
probable that the temporary difference will reverse in the foreseeable future, and it is probable that taxable profits
will be available in the future, against which the temporary difference can be utilised.
At the balance sheet date, deferred income tax assets and deferred income tax liabilities are measured at the tax
rates that are expected to apply to the period when the asset is realised or the liability is settled, and their tax effect is
reflected accordingly.
At the balance sheet date, the Company reviews the carrying amount of a deferred income tax asset. If it is probable
that sufficient taxable profits will not be available in future periods to allow the benefit of the deferred tax asset to be
utilised, the carrying amount of the deferred tax asset is reduced. Any such reduction in amount is reversed when it
becomes probable that sufficient taxable profits will be available.
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33. Deferred income tax assets/deferred income tax liabilities (Cont’d)
At the balance sheet date, deferred income tax assets and deferred income tax liabilities are presented as the net
amount after offsetting when the following conditions are met at the same time:
(1) The tax payer within the Company has the legal right to settle current income tax assets and current income tax
liabilities on a net basis;
(2) Deferred income tax assets and deferred income tax liabilities are related to income taxes levied by the same tax
collection and administration authority on the same taxpayer within the Company.
34. Lease
(1) Identification of leases
On the beginning date of the contract, the Company (as a lessee or lessor) assesses whether the customer in
the contract has the right to obtain substantially all of the economic benefits from use of the identified asset
throughout the period of use and has the right to direct the use of the identified asset throughout the period of
use. If a contract conveys the right to control the use of an identified asset and multiple identified assets for a
period of time in exchange for consideration, the Company identifies such contract is, or contains, a lease.
(2) The Company as lessee
On the beginning date of the lease, the Company recognises right-of-use assets and lease liabilities for all leases,
except for short-term lease and low-value asset lease with simplified approach.
The accounting policy for right-of-use assets is set out in Note V. 35.
The lease liability is initially measured at the present value of the lease payments that are not paid at the beginning
date of the lease using the interest rate implicit in the lease. Where the interest rate implicit in the lease cannot be
determined, the incremental borrowing rate is used as the discount rate. Lease payments include fixed payments
and in-substance fixed payments, less any lease incentives receivable; variable lease payments that are based
on an index or a rate; the exercise price of a purchase option if the lessee is reasonably certain to exercise
that option; payments for terminating the lease, if the lease term reflects the lessee exercising that option of
terminating; and amounts expected to be payable by the lessee under residual value guarantees. Subsequently,
the interest expense on the lease liability for each period during the lease term is calculated using a constant
periodic rate of interest and is recognised in profit or loss for the current period. Variable lease payments not
included in the measurement of lease liabilities are recognised in profit or loss for the period in which they actually
arise.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
34. Lease (Cont’d)
(2) The Company as lessee (Cont’d)
Short-term lease
Short-term leases refer to leases with a lease term of less than 12 months from the commencement date, except
for those with a purchase option.
Lease payments on short-term leases are recognised in the cost of related assets or current profit or loss on a
straight-line basis over the lease term.
For short-term leases, the Company chooses to adopt the above simplified approach for the following types of
assets that meet the conditions of short-term lease according to the classification of leased assets.
Low-value equipment
Transportation vehicles
Low-value asset lease
A low-value asset lease is a lease that the value of a single leased asset is below RMB40,000 when it is a new
asset.
Lease payments on low-value asset leases are recognised on a straight-line basis over the lease term, and either
included in the cost of the related asset or charged to profit or loss for the current period.
For a low-value asset lease, the Company chooses the above simplified approach based on the specific
circumstances of each lease.
Lease modification
The Company accounts for a lease modification as a separate lease when the modification occurs and the
following conditions are met: the lease modification expands the scope of lease by adding the right to use
one or more of the leased assets; and the increase in consideration is equivalent to the separate price for the
expanded scope of lease adjusted for that contractual situation.
Where a lease modification is not accounted for as a separate lease, at the effective date of the lease modification,
the Company reallocates the consideration of the modified contract, redetermines the lease term and remeasures
the lease liability based on the present value of the lease payments after the modification and the revised discount
rate.
If a lease modification results in a reduction in the scope of the lease or a shortening of the lease term, the
Company reduces the carrying amount of the right-of-use asset accordingly and includes in the profit or loss for
the period the gain or loss associated with the partial or complete termination of the lease.
Where other lease modifications result in a remeasurement of the lease liability, the Company adjusts the carrying
amount of the right-of-use asset accordingly.
118 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
34. Lease (Cont’d)
(3) The Company as lessor
When the Company is a lessor, a lease is classified as a finance lease whenever the terms of the lease transfer
substantially all the risks and rewards of asset ownership to the lessee. All leases other than financial leases are
classified as operating leases.
Finance leases
Under finance leases, the Company accounts for finance lease receivables at the beginning of the lease term at
the net lease investment, which is the sum of the unsecured residual value and the present value of the lease
receipts outstanding at the commencement date of the lease, discounted at the interest rate implicit in the lease.
The Company as lessor calculates and recognises interest income for each period of the lease term based on
a fixed periodic interest rate. Variable lease payments acquired by the Company as lessor that are not included
in the net measurement of lease investments are included in profit or loss for the period when they are actually
incurred.
Derecognition and impairment of finance lease receivables are accounted for in accordance with the requirements
under the Accounting Standard for Business Enterprises No. 22 – Recognition and Measurement of Financial
Instruments and the Accounting Standards for Business Enterprises No. 23 – Transfer of Financial Assets.
Operating lease
Lease payments on short-term leases are recognised in the cost of related assets or current profit or loss on a
straight-line basis over the lease term. Lease payments under operating leases are recognised in profit or loss on
a straight-line basis over the lease term. Initial direct costs incurred in relation to operating leases are capitalised
and amortised over the lease term on the same basis as rental income and recognised in profit or loss for the
current period. The variable lease payments obtained in relation to operating leases that are not included in the
lease payments are recognised in profit or loss in the period in which they actually incurred.
Lease modification
The Company accounts for a modification in an operating lease as a new lease from the effective date of the
modification and the amount of lease receipts received in advance or receivable in respect of the lease prior to the
modification is treated as a receipt under the new lease.
The Company accounts for a modification in a finance lease as a separate lease when the change occurs and
the following conditions are met: the modification expands the scope of lease by adding the right to use one
or more of the leased assets; and the increase in consideration is equivalent to the separate price for the
expanded scope of lease adjusted for that contractual situation.
Where a finance lease is modified and not accounted for as a separate lease, the Company accounts for the
modified lease in the following circumstances: If the modification takes effect on the lease commencement
date, the lease will be classified as an operating lease, the Company will account for it as a new lease from the
effective date of the lease modification, and use the net lease investment before the effective date of the lease
modification; If the modification takes effect on the lease commencement date, the lease will be classified as a
finance lease, and the Company will conduct accounting treatment in accordance with the Accounting Standards
for Business Enterprises No. 22 – Recognition and Measurement of Financial Instruments on modifying or
renegotiating contracts.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
34. Lease (Cont’d)
(4) Sublease
When the Company is an intermediate lessor, the sublease is classified with reference to the right-of-use assets
arising from the head lease. If the head lease is a short-term lease for which the Company adopts a simplified
approach, then the Company classifies the sublease as an operating lease.
(5) Sale and leaseback
The lessee and the lessor shall assess and determine whether the transfer of assets in a sale and leaseback
transaction is a sale in accordance with the requirements of the Accounting Standard for Business Enterprises No.
14 – Revenue.
Where asset transfer under the sale and leaseback transactions is a sale, the lessee shall measure the right –
of-use assets created by the sale and leaseback based on the portion of carrying amount of the original assets
related to right of use obtained upon leaseback, and only recognise relevant profit or loss for the right transferred
to the lessor. The lessor shall account for the purchase of assets in accordance with other applicable ASBEs and
account for the lease of assets in accordance with this standard.
Where asset transfer under the sale and leaseback transactions is not a sale, the lessee shall continue to
recognise the transferred assets while recognising a financial liability equal to the transfer income and account
for such liability according to the Accounting Standard for Business Enterprises No. 22 – Recognition and
Measurement of Financial Instruments; or not to recognise the transferred assets but recognise a financial asset
equal to the transfer income and account for such asset according to the Accounting Standard for Business
Enterprises No. 22 – Recognition and Measurement of Financial Instruments.
35. Right-of-use assets
(1) Conditions for recognition of right-of-use assets
Right-of-use assets are defined as the right of underlying assets in the lease term for the Company as a lessee.
Right-of-use assets are initially measured at cost at the commencement date of the lease. The cost includes the
amount of the initial measurement of lease liability; lease payments made at or before the inception of the lease
less any lease incentives enjoyed; initial direct costs incurred by the Company as lessee; costs to be incurred in
dismantling and removing the underlying assets, restoring the site on which it is located or restoring the underlying
asset to the condition required by the terms and conditions of the lease incurred by the Company as lessee. As
a lessee, the Company recognises and measures the costs of dismantling and restoration in accordance with the
Accounting Standard for Business Enterprises No. 13 – Contingencies. Subsequently, the lease liability is adjusted
for any remeasurement of the lease liability.
(2) Depreciation method of right-of-use assets
The Company uses the straight-line method for depreciation. Where the Company, as a lessee, is reasonably
certain to obtain ownership of the leased asset at the end of the lease term, such asset is depreciated over the
remaining useful life of the leased asset. Where ownership of the lease assets during the lease term cannot be
reasonably determined, right-of-use assets are depreciated over the lease term or the remainder of useful lives of
the lease assets, whichever is shorter.
(3) For the methods of impairment test and impairment provision of right-of-use assets, please refer to Note V. 23.
120 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
36. Production safety expenses and maintenance costs
According to relevant provisions, the Company makes provisions for production safety expenses based on the revenue
of the power plant in the previous year and the prescribed percentages. The specific provisions are as follows: if
the revenue of the previous year did not exceed RMB10 million, provisions would be made at 3%; if the revenue of
the previous year exceeded RMB10 million but did not exceed RMB100 million, provisions would be made at 1.5%;
if the revenue of the previous year exceeded RMB100 million but did not exceed RMB1,000 million, provisions would
be made at 1%; if the revenue of the previous year exceeded RMB1,000 million but did not exceed RMB5,000
million, provisions would be made at 0.8%; if the revenue of the previous year exceeded RMB5,000 million but did
not exceed RMB10,000 million, provisions would be made at 0.6%; if the revenue of the previous year exceeded
RMB10,000 million, provisions would be made at 0.2%.
Provisions for production safety expenses are included in the cost of related products or profit or loss of the current
period and included in “special reserves” correspondingly.
When the provisions for production safety expenses and maintenance costs are utilised within the prescribed scope,
if such production safety expenses are applied and related to revenue expenditures, specific reserve is directly offset.
When fixed assets are incurred, they are included in the “construction in progress” item and transferred to fixed assets
when the status of the assets is ready for intended use. They are then offset against specific reserve based on the
amount included in fixed assets while corresponding amount is recognised in accumulated depreciation. Such fixed
assets are no longer depreciated in subsequent periods.
37. Repurchase of shares
Prior to cancellation or transfer of shares repurchased, the Company recognises all expenditures arising from share
repurchase as cost of treasury shares in the treasury share account. Considerations and transaction fee incurred from
the repurchase of shares shall lead to the elimination of owners’ equity and does not recognise profit or loss when
shares of the Company are repurchased, transferred or cancelled.
The difference between the actual amount received and the carrying amount of the treasury shares are recognised as
capital reserve when the treasury shares are transferred, if the capital reserve is not sufficient to be offset, the excess
amount shall be recognised to offset surplus reserve and retained profit. When the treasury shares are cancelled,
the capital shall be eliminated according to the number of shares and par value of cancelled shares, the difference
between the actual amount received and the carrying amount of the treasury shares are recognised as capital reserve,
if the capital reserve is not sufficient to be offset, the excess amount shall be recognised to offset surplus reserve and
retained profit.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
38. Debt restructuring
(1) The Company as the debtor
The debt is derecognised when the current obligation of the debt is discharged. Specifically, when the uncertainty
about the execution process and results of the debt restructuring agreement is eliminated, the gains and losses
related to the debt restructuring are recognised.
If debt restructuring is carried out by repaying debts with assets, the Company shall derecognise the relevant
assets and the debts paid off when they meet the conditions for derecognition, and the difference between the
book value of the debts paid off and the book value of the transferred assets shall be included in the current profit
and loss.
If the debt is converted into equity instruments for debt restructuring, the Company shall derecognise the debts
paid off when they meet the conditions for derecognition. When the Company initially recognises an equity
instrument, it is measured based on the fair value of the equity instrument. If the fair value of the equity instrument
cannot be measured reliably, it is measured based on the fair value of the debt paid off. The difference between
the book value of the debts paid off and the recognised amount of the equity instrument shall be included in the
current profit and loss.
When a debt restructuring involves the modification of other terms of a debt, the Company shall recognise and
measure the restructured debts in accordance with the Accounting Standards for Business Enterprises No. 22 –
Recognition and Measurement of Financial Instruments and the Accounting Standards for Business Enterprises
No. 37 – Presentation of Financial Instruments.
When a debt is settled by multiple assets or combination of various methods in a debt restructuring, the Company
shall recognise and measure the equity instruments and restructured debts in accordance with the aforementioned
methods, and the difference between the book value of the debts paid off and the sum of the book value of the
transferred assets and the recognised amount of the equity instruments and restructured debts shall be included
in the current profit and loss.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
38. Debt restructuring (Cont’d)
(2) The Company as the creditor
The debt receivable are derecognised when the contractual rights to receive the cash flows under the debt
receivable expire. Specifically, when the uncertainty about the execution process and results of the debt
restructuring agreement is eliminated, the gains and losses related to the debt restructuring are recognised.
If debt restructuring is carried out by repaying debts with assets, the Company shall initially recognise assets
other than the transferred financial assets at cost. In particular, the cost of inventories includes the fair value of the
debt receivable and any directly attributable expenditure, including taxes, transportation costs, handling costs,
insurance and other costs, for bringing the assets to the current position and condition; the cost of investment in
associates or joint ventures includes the fair value of the debt receivable and any directly attributable expenditure,
including taxes; the cost of investment property includes the fair value of the debt receivable and any directly
attributable expenditure, including taxes; the cost of fixed assets includes the fair value of the debt receivable
and any directly attributable expenditure, including taxes, transportation costs, handling costs, installation costs,
professional service fees and other costs, for bringing the assets to the status for intended use; the cost of
intangible assets includes the fair value of the debt receivable and any directly attributable expenditure, including
taxes, for bringing the assets to the status for intended use. The difference between the fair value and the book
value of the debt receivable is included in the current profit and loss.
When the debt restructuring causes the Company to convert the debt receivable to an equity investment of joint
ventures or associates, the Company shall measure the equity investment based on the sum of the fair value of
debt receivable, and any directly attributable taxes and other costs of the investment. The difference between the
fair value and the book value of the debt receivable is included in the current profit and loss.
When a debt restructuring involves the modification of other terms of a debt, the Company recognises and
measures the restructured debt receivable in accordance with the Accounting Standards for Business Enterprises
No. 22 – Recognition and Measurement of Financial Instruments.
When a debt is settled by multiple assets or combination of various methods in a debt restructuring, the Company
first recognises and measures the financial assets received and restructured debt receivable in accordance
with the Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of Financial
Instruments, and then allocates the net value, which is the fair value of the debt receivable deducted by the
recognised amount of financial assets received and restructured debt receivable, to the costs of non – financial
assets received based on their relative fair value. The difference between the fair value and the book value of the
debt receivable is included in the current profit and loss.
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
39. Critical accounting judgments and estimates
The Company gives continuous assessment on, among other things, the reasonable expectations of future events and
the critical accounting estimates and key assumptions adopted according to its historical experience and other factors.
The critical accounting estimates and key assumptions that are likely to lead to significant adjustment risks of the
carrying amount of assets and liabilities for the next financial year are listed as follows:
Classification of financial assets
Significant judgements involved in determining the classification of financial assets include the analysis of business
models and contractual cash flow characteristics.
Factors considered by the Company in determining the business model for a group of financial assets include how the
asset’s performance is evaluated and reported to key management personnel, how risks are assessed and managed
and how the relevant management personnel are compensated.
When the Company assesses whether the contractual cash flows of the financial assets are consistent with basic
lending arrangements, the main judgements are described as below: whether the principal amount may change over
the life of the financial asset (for example, if there are repayments of principal); whether the interest includes only
consideration for the time value of money, credit risk, other basic lending risks and a profit margin and cost. For
example, whether the amount repaid in advance reflects only the outstanding principal and interest thereon, as well as
reasonable compensation paid for early termination of the contract.
Measurement of the ECLs of accounts receivable
The Company calculates the ECLs of accounts receivable using the exposure to default risk and ECL rate of accounts
receivable, and determines the ECL rate based on default probability and default loss rate. When determining the ECL
rate, the Company adjusts its historical data by referring to information such as historical credit loss experience as well
as current situation and forward-looking information. When considering the forward-looking information, indicators used
by the Company include the risk of economic downturn, external market environment, technology environment and
changes in customers. The assumptions relating to the ECL calculation are monitored and reviewed by the Company on
a regularly basis.
Measurement of past due credit losses on finance lease receivables
The Company calculates the ECLs of accounts receivable using the exposure to default risk and ECL rate of accounts
receivable, and determines the ECL rate based on default probability and default loss rate. When determining the ECL
rate, the Company takes into account the current status and repayment ability of the counterparty while considering the
value of collateral, guarantees and other credit enhancement measures related to the lease receivables.
Deferred income tax assets
Deferred income tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit
will be available against which the losses can be utilised. Significant management judgement is required to determine
the amount of deferred income tax assets that can be recognised, based upon the likely timing and level of future
taxable profits together with future tax planning strategies.
124 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
39. Critical accounting judgments and estimates (Cont’d)
Impairment of goodwill
The Company assesses the impairment of goodwill at least annually, which requires estimates of the use value of asset
groups allocated with goodwill. When estimating the use value, the Company is required to estimate the future cash
flows from such asset groups while selecting the appropriate discount rate to calculate the present value of future cash
flows.
Impairment of inventories
On the balance sheet date, the Company determines the net realisable value of its inventories based on the estimated
selling prices of the inventories, less costs estimated to be incurred upon completion, estimated selling expenses and
related taxes. The realisable value of inventories shall be determined on the basis of definite evidence, purpose of
holding the inventories and effect of after-balance – sheet-date events. If the net realisable value is below the cost of
inventories, a provision for inventory impairment is made.
Impairment of fixed assets and long-term equity investments
The Company assesses the impairment of fixed assets and long-term equity investments at least annually. When any
event or change in circumstances indicates that the carrying amount may not be recoverable, the carrying amount of
such project is reviewed for impairment. If the carrying amount of an asset exceeds its recoverable amount, impairment
loss is recognised for the difference. The recoverable amount is determined as the higher of the asset’s fair value less
costs of disposal and the present value of the asset’s estimated future cash flows. A number of assumptions are made
in estimating the recoverable amount of assets, including future cash flows and discount rates relating to non-current
assets. If future events differ from these assumptions, the recoverable amount shall be revised, which may have an
impact on the operations or financial position of the Company.
40. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
There were no changes in the significant accounting policies of the Company during the year.
(2) Changes in significant accounting estimates
The Company did not have any change in significant accounting estimates during the year.
(3) Adjustments to relevant items at the beginning of the year in the financial statements arising from the first-time
adoption of new accounting standards in 2024
Applicable Not applicable
SHANDONG CHENMING PAPER HOLDINGS LIMITED 125
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VI. Taxation
1. Main tax types and tax rates
Tax type Tax base Tax rate
Value added tax (VAT) VAT payable (VAT payable is calculated 13/9/6
by multiplying taxable sales amount
by the applicable tax rate less current
deductible input VAT)
Property tax Rental income and property price 1.2/12
Urban maintenance and construction tax Actual turnover tax paid 7
Enterprise income tax (EIT) Taxable income 25
Disclosure of taxable entities subject to different EIT tax rates
Name of taxable entity EIT tax rate
Shandong Chenming Paper Holdings Limited 15
Shouguang Meilun Paper Co., Ltd. 15
Jilin Chenming Paper Co., Ltd. 15
Jiangxi Chenming Paper Co., Ltd. 15
Zhanjiang Chenming Pulp & Paper Co., Ltd. 15
Huanggang Chenming Pulp & Paper Co., Ltd. 15
Shouguang Xinyuan Coal Co., Ltd. 20
Shouguang Chenming Papermaking Machine Co., Ltd. 20
Shouguang Wei Yuan Logistics Company Limited 20
Shouguang Shun Da Customs Declaration Co., Ltd. 20
Zhanjiang Chenming Arboriculture Development Co., Ltd. Exempt from EIT
Nanchang Chenming Arboriculture Development Co., Ltd Exempt from EIT
Chenming Arboriculture Co., Ltd. Exempt from EIT
Yangjiang Chenming Arboriculture Development Co., Ltd. Exempt from EIT
2. Tax incentives
(1) Enterprise income tax
On 15 December 2021, the Company received a high and new technology enterprise certificate with a certification
number of GR202137005666. Pursuant to the requirements under the Law of the People’s Republic of China on
Enterprise Income Tax and the relevant policies, the Company is subject to a corporate income tax rate of 15% of
taxable income, and is entitled to the preferential treatment from 2021 to 2023.
Shouguang Meilun Paper Co., Ltd., a subsidiary of the Company, received a high and new technology enterprise
certificate with a certification number of GR202137005468 on 15 December 2021. Pursuant to the requirements
under the Law of the People’s Republic of China on Enterprise Income Tax and the relevant policies, Shouguang
Meilun is subject to an enterprise income tax rate of 15% of taxable income, and is entitled to the preferential
treatment from 2021 to 2023.
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VI. Taxation (Cont’d)
2. Tax incentives (Cont’d)
(1) Enterprise income tax (Cont’d)
Jilin Chenming Paper Co., Ltd., a subsidiary of the Company, received a high and new technology enterprise
certificate with a certification number of GR202222000414 on 29 November 2022. Pursuant to the requirements
under the Law of the People’s Republic of China on Enterprise Income Tax and the relevant policies, Jilin
Chenming is subject to an enterprise income tax rate of 15% of taxable income, and is entitled to the preferential
treatment from 2022 to 2024.
Jiangxi Chenming Paper Co., Ltd., a subsidiary of the Company, received a high and new technology enterprise
certificate with a certification number of GR202236000018 on 4 November 2022. Pursuant to the requirements
under the Law of the People’s Republic of China on Enterprise Income Tax and the relevant policies, Jiangxi
Chenming is subject to an enterprise income tax rate of 15% of taxable income, and is entitled to the preferential
treatment from 2022 to 2024.
Zhanjiang Chenming Pulp & Paper Co., Ltd., a subsidiary of the Company, received a high and new technology
enterprise certificate with a certification number of GR202144001212 on 20 December 2021. Pursuant to the
requirements under the Law of the People’s Republic of China on Enterprise Income Tax and the relevant policies,
Zhanjiang Chenming is subject to an enterprise income tax rate of 15% of taxable income, and is entitled to the
preferential treatment from 2021 to 2023.
Huanggang Chenming Pulp & Paper Co., Ltd., a subsidiary of the Company, received a high and new technology
enterprise certificate with a certification number of GR202342003128 on 5 December 2023. Pursuant to the
requirements under the Law of the People’s Republic of China on Enterprise Income Tax and the relevant policies,
Huanggang Chenming is subject to an enterprise income tax rate of 15% of taxable income, and is entitled to the
preferential treatment from 2023 to 2025.
Pursuant to the requirements of Rule 27(1) of Law of the People’s Republic of China on Enterprise Income Tax and
Rule 86(1) of regulations for the Implementation of Law of the People’s Republic of China on Enterprise Income
Tax, Zhanjiang Chenming Arboriculture Development Co., Ltd., Yangjiang Chenming Arboriculture Development
Co., Ltd., Nanchang Chenming Arboriculture Development Co., Ltd. and Chenming Arboriculture Co., Ltd., which
are the subsidiaries of the Company, have completed the filings for EIT reduction for exemption from EIT.
Shouguang Xinyuan Coal Co., Ltd., Shouguang Chenming Papermaking Machine Co., Ltd., Shouguang Wei
Yuan Logistics Company Limited and Shouguang Shun Da Customs Declaration Co, Ltd., which are subsidiaries
of the Company, are small and micro enterprises. Pursuant to the Announcement of the Ministry of Finance
and the State Administration of Taxation on Further Implementation of Preferential Income Tax Policies for
Small and Micro Enterprises (Cai Shui [2022] No. 13) and the Announcement of the Ministry of Finance and the
State Administration of Taxation on the Implementation of Preferential Income Tax Policies for Small and Micro
Enterprises and Individual Industrial and Commercial Business (Cai Shui [2023] No. 6), the annual taxable income
of a small low-profit enterprise that is less than RMB3 million shall be included in its taxable income at a reduced
rate of 25%, with the applicable enterprise income tax rate of 20%.
(2) Value-added Tax (“VAT”)
Pursuant to Rule 10 of the Interim Regulation of the People’s Republic of China on Value Added Tax, Zhanjiang
Chenming Arboriculture Development Co., Ltd., Yangjiang Chenming Arboriculture Development Co., Ltd.,
Nanchang Chenming Arboriculture Development Co., Ltd. and Chenming Arboriculture Co., Ltd., which are
subsidiaries of the Company, are exempt from VAT, and have completed the filings for VAT reduction for
exemption from VAT.
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VII. Notes to Items of the Consolidated Financial Statements
1. Monetary funds
Unit: RMB
Item Closing balance Opening balance
Treasury cash 4,129,836.09 3,674,805.36
Bank deposit 798,700,248.46 760,558,937.25
Other monetary funds 10,543,555,422.05 11,321,241,125.05
Interest accrued on deposits 39,624,494.95 39,357,963.64
Total 11,386,010,001.55 12,124,832,831.30
Of which: Total deposits in overseas banks 214,470,161.75 261,470,228.68
Other explanations:
Other monetary funds of RMB7,492,911,199.09 were the guarantee deposit for the application for acceptance bills
by the Company;
Other monetary funds of RMB2,598,772,139.21 were the guarantee deposit for the application for letter of credit
with the banks by the Company;
Other monetary funds of RMB408,529,872.18 were the guarantee deposit for the application for loans with the
banks by the Company;
Other monetary funds of RMB33,260,000.00 were the Company’s statutory reserve deposits with the People’s
Bank of China;
Other monetary funds of RMB10,082,211.57 were locked-up due to reasons such as litigations or being unused
for a long time, resulting in restriction on the use of that account’s balance.
2. Financial assets held for trading
Unit: RMB
Item Closing balance Opening balance
Financial assets measured at fair value through profit or loss 39,197,419.88 46,294,291.71
Of which: Investment in equity instruments 39,197,419.88 46,294,291.71
Total 39,197,419.88 46,294,291.71
Explanation: Financial assets held for trading were shares of China Bohai Bank subscribed by the Company.
128 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
3. Bills receivable
(1) Bills receivable by category
Unit: RMB
Item Closing balance Opening balance
Commercial acceptance bills 674,962,254.15 411,600,000.00
Total 674,962,254.15 411,600,000.00
(2) Disclosure by bad debt provision method
Unit: RMB
Closing balance Opening balance
Book balance Bad debts provision Book balance Bad debts provision
Provision Provision
Category Amount Percentage Amount percentage Carrying amount Amount Percentage Amount percentage Carrying amount
Bills receivable assessed
collectively for bad debt provision 674,962,254.15 100.00% 674,962,254.15 411,600,000.00 100.00% 411,600,000.00
Including:
Commercial acceptance bills 674,962,254.15 100.00% 674,962,254.15 411,600,000.00 100.00% 411,600,000.00
Total 674,962,254.15 100.00% 674,962,254.15 411,600,000.00 100.00% 411,600,000.00
Name of category being assessed collectively for bad debt provision: Commercial acceptance bills
Unit: RMB
Closing balance
Bad debts Provision
Name Book balance provision percentage
Commercial acceptance bills 674,962,254.15
Total 674,962,254.15
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VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
3. Bills receivable (Cont’d)
(3) Bills receivable endorsed or discounted by the Company but not yet due as at the balance sheet date
Unit: RMB
Amount Amount not yet
derecognised as derecognised as
at the end at the end
Item of the period of the period
Commercial acceptance bills 77,408,961.64
Total 77,408,961.64
4. Accounts receivable
(1) Disclosure by ageing
Unit: RMB
Closing book Opening book
Ageing balance balance
Within 1 year (including 1 year) 2,018,934,956.91 1,561,046,809.05
1 to 2 years 231,466,242.34 385,112,389.04
2 to 3 years 907,544,853.12 722,669,952.03
Over 3 years 407,392,203.57 408,747,914.19
Subtotal 3,565,338,255.94 3,077,577,064.31
Bad debts provision 598,117,268.90 549,070,004.48
Total 2,967,220,987.04 2,528,507,059.83
The basis used by the ageing analysis of the accounts receivable of the Company: the ageing of accounts
receivable is the length of time of the Company’s outstanding accounts receivable based on invoice date. The
closing balance is recognised one by one from the end of the period onwards until the amounts add up to the
balance. It is also broken up by intervals of within 1 year, 1-2 years, 2-3 years and over 3 years.
130 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
4. Accounts receivable (Cont’d)
(2) Disclosure by bad debt provision method
Unit: RMB
Closing balance Opening balance
Book balance Bad debts provision Book balance Bad debts provision
Provision Provision
Percentage percentage Percentage percentage
Category Amount (%) Amount (%) Carrying amount Amount (%) Amount (%) Carrying amount
Accounts receivable assessed
individually for bad debt provision 200,147,048.86 5.61 192,205,340.86 96.03 7,941,708.00 201,074,254.68 6.53 193,132,546.68 96.05 7,941,708.00
Accounts receivable assessed
collectively for bad debt provision 3,365,191,207.08 94.39 405,911,928.04 12.06 2,959,279,279.04 2,876,502,809.63 93.47 355,937,457.80 12.37 2,520,565,351.83
Including:
Due from related party customers 4,454,075.91 0.12 982,547.42 22.06 3,471,528.49 2,359.03 0.00 23.18 0.98 2,335.85
Due from non-related party
customers 2,028,298,177.39 56.89 84,942,867.56 4.19 1,943,355,309.83 1,545,540,409.94 50.22 81,008,019.20 5.24 1,464,532,390.74
Factoring receivables 1,332,438,953.78 37.37 319,986,513.06 24.02 1,012,452,440.72 1,330,960,040.66 43.25 274,929,415.42 20.66 1,056,030,625.24
Total 3,565,338,255.94 100.00 598,117,268.90 16.78 2,967,220,987.04 3,077,577,064.31 100.00 549,070,004.48 17.84 2,528,507,059.83
Items assessed individually for bad debt provision
Unit: RMB
Opening balance Closing balance
Provision
Bad debts Bad debts percentage
Name Book balance provision Book balance provision (%) Provision reason
Hengfeng Hongyuan Real Estate Holdings Co., Ltd. 45,493,811.40 45,493,811.40 45,493,811.40 45,493,811.40 100.00 Long outstanding
Foshan Shunde Xingchen Paper Co., Ltd. 26,697,528.70 26,697,528.70 26,697,528.70 26,697,528.70 100.00 Long outstanding
Wuhan Tianrui Paper Co., Ltd. 17,600,000.00 9,658,292.00 17,600,000.00 9,658,292.00 54.88 Long outstanding
Shandong Bisheng Printing Materials Co., Ltd. 14,813,369.27 14,813,369.27 14,813,369.27 14,813,369.27 100.00 Long outstanding
Zhengzhou Hongyang Paper Products Co., Ltd. 14,753,432.93 14,753,432.93 14,573,432.93 14,573,432.93 100.00 Long outstanding
Henan Yibang Technology Trading Co., Ltd. 13,396,601.22 13,396,601.22 13,396,601.22 13,396,601.22 100.00 Long outstanding
49 companies including Shandong Yiming New
Material Technology Corp Co., Ltd. 68,319,511.16 68,319,511.16 67,572,305.34 67,572,305.34 100.00 Long outstanding
Total 201,074,254.68 193,132,546.68 200,147,048.86 192,205,340.86 96.03
SHANDONG CHENMING PAPER HOLDINGS LIMITED 131
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
4. Accounts receivable (Cont’d)
(2) Disclosure by bad debt provision method (Cont’d)
Items assessed collectively for bad debt provision: Due from related party customers
Closing balance
Bad debts Provision
Name Book balance provision percentage (%)
Within 1 year 4,451,716.88 982,382.29 22.07
1 to 2 years 2,359.03 165.13 7.00
Total 4,454,075.91 982,547.42 22.06
Items assessed collectively for bad debt provision: Receivables from non-related party customer
Unit: RMB
Closing balance
Bad debts Provision
Name Book balance provision percentage (%)
Within 1 year 1,909,978,867.41 30,445,041.38 1.59
1 to 2 years 55,550,505.52 5,708,109.05 10.28
2 to 3 years 5,475,630.97 1,815,779.28 33.16
Over 3 years 57,293,173.49 46,973,937.85 81.99
Total 2,028,298,177.39 84,942,867.56 4.19
Items assessed collectively for bad debt provision: Factoring receivables
Unit: RMB
Closing balance
Bad debts Provision
Name Book balance provision percentage (%)
Within 1 year 104,504,372.62 5,514,174.58 5.28
1 to 2 years 175,913,377.79 32,121,647.90 18.26
2 to 3 years 902,069,222.15 212,199,833.59 23.52
Over 3 years 149,951,981.22 70,150,856.99 46.78
Total 1,332,438,953.78 319,986,513.06 24.02
132 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
4. Accounts receivable (Cont’d)
(3) Provision, recovery or reversal of bad debt provision for the period
Bad debt provision for the period:
Unit: RMB
Changes in the period
Recovery
Category Opening balance Provision or reversal Written-off Others Closing balance
Bad debts provision 549,070,004.48 52,619,258.38 2,605,396.98 -966,596.98 598,117,268.90
Total 549,070,004.48 52,619,258.38 2,605,396.98 -966,596.98 598,117,268.90
Explanation: “Others” was due to disposal of subsidiaries.
(4) Top five accounts receivable and contract assets based on closing balance of debtors
The total amount of top five accounts receivable and contract assets based on closing balance of debtors for
the period amounted to RMB1,126,885,955.42 in total, accounting for 31.61% of the total closing balance of
accounts receivable and contract assets. The closing balance of the corresponding bad debt provision amounted
to RMB270,139,608.82 in total.
Unit: RMB
As a percentage
of the closing
Closing balance balance of the Closing balance
of accounts total accounts of bad debt
Name of entity receivable receivable (%) provision
Customer 1 481,810,233.33 13.51 108,757,408.67
Customer 2 222,656,666.64 6.25 53,542,297.56
Customer 3 198,948,388.79 5.58 36,107,859.62
Customer 4 121,908,333.33 3.42 31,619,632.99
Customer 5 101,562,333.33 2.85 40,112,409.98
Total 1,126,885,955.42 31.61 270,139,608.82
SHANDONG CHENMING PAPER HOLDINGS LIMITED 133
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
5. Accounts receivable financing
(1) Accounts receivable financing by category
Unit: RMB
Item Closing balance Opening balance
Bank acceptance bills 22,065,605.03 215,884,249.97
Total 22,065,605.03 215,884,249.97
Explanation:
All the accounts receivable financing of the Company were bank acceptance bills. Since the terms of the bank
acceptance bills did not exceed one year, and both parties to the endorsement of the bills agreed to offset equal
amounts of accounts receivable and payable based on the face value of the bills, fair value equalled amortised
cost.
Certain subsidiaries of the Company discount and endorse part of the bank acceptance bills based on their daily
capital management needs. Therefore, the bank acceptance bills of the subsidiaries are classified as financial
assets measured at fair value through other comprehensive income.
The Company has no bank acceptance bill assessed individually for impairment provision. At the end of the
period, the Company believed that there is no significant credit risk in the bank acceptance bills held and no major
losses will be incurred due to default of banks.
(2) Disclosure by bad debt provision method
Unit: RMB
Closing balance Opening balance
Book balance Bad debts provision Book balance Bad debts provision
Provision Provision
Category Amount Percentage Amount percentage Carrying amount Amount Percentage Amount percentage Carrying amount
Items assessed collectively for
bad debt provision 22,065,605.03 22,065,605.03 215,884,249.97 215,884,249.97
Including:
Bank acceptance bills 22,065,605.03 22,065,605.03 215,884,249.97 215,884,249.97
Total 22,065,605.03 22,065,605.03 215,884,249.97 215,884,249.97
Name of category being assessed collectively for bad debt provision: Bank acceptance bills
Unit: RMB
Closing balance
Bad debts Provision
Name Book balance provision percentage
Bank acceptance bills 22,065,605.03
Total 22,065,605.03
134 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
5. Accounts receivable financing (Cont’d)
(3) Accounts receivable financing pledged by the Company as at the end of the period
Unit: RMB
Amount pledged
as at the end
Item of the period
Bank acceptance bills 20,000.00
Total 20,000.00
(4) Accounts receivable financing endorsed or discounted but not yet due as at the balance sheet date
Unit: RMB
Amount Amount not yet
derecognised as derecognised as
at the end at the end
Item of the period of the period
Bank acceptance bills 7,834,710,831.76
Total 7,834,710,831.76
6. Other receivables
Unit: RMB
Item Closing balance Opening balance
Dividend receivable 22,659,149.81
Other receivables 2,054,324,513.36 2,224,904,557.88
Total 2,076,983,663.17 2,224,904,557.88
(1) Dividends receivable
1) Classification of dividends receivable
Unit: RMB
Item (or investee) Closing balance Opening balance
Weifang Chenchuang Equity Investment Fund Partnership
(Limited Partnership) 22,659,149.81
Total 22,659,149.81
SHANDONG CHENMING PAPER HOLDINGS LIMITED 135
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
6. Other receivables (Cont’d)
(2) Other receivables
1) Classification of other receivables by nature
Unit: RMB
Closing book Opening book
Nature balance balance
Open credit 2,528,395,095.81 2,691,372,170.61
Reserve and borrowings 23,191,956.67 27,444,170.92
Guarantee deposit and deposit 15,279,813.49 12,578,821.54
Others 9,674,231.25 3,445,072.68
subtotal 2,576,541,097.22 2,734,840,235.75
Bad debt provision 522,216,583.86 509,935,677.87
Total 2,054,324,513.36 2,224,904,557.88
2) Disclosure by ageing
Unit: RMB
Closing book Opening book
Ageing balance balance
Within 1 year (including 1 year) 825,043,943.26 1,052,737,595.00
1 to 2 years 361,343,970.53 291,207,253.53
2 to 3 years 233,310,980.82 204,348,508.24
Over 3 years 1,156,842,202.61 1,186,546,878.98
subtotal 2,576,541,097.22 2,734,840,235.75
Bad debt provision 522,216,583.86 509,935,677.87
Total 2,054,324,513.36 2,224,904,557.88
The basis used by the ageing analysis: the ageing of other receivables is the length of time of the Company’s
outstanding other receivables based on invoice date. The closing balance is recognised one by one from the
end of the period onwards until the amounts add up to the balance. It is also broken up by intervals of within
1 year, 1-2 years, 2-3 years and over 3 years.
136 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
6. Other receivables (Cont’d)
(2) Other receivables (Cont’d)
3) Disclosure by bad debt provision method
Bad debt provision based on the general model of ECLs:
Unit: RMB
Stage 1 Stage 2 Stage 3
Lifetime ECLs Lifetime ECLs
ECLs for the (not credit- (credit-
Bad debts provision next 12 months impaired) impaired) Total
Balance as at 1 January 2024 87,540,266.28 422,395,411.59 509,935,677.87
Balance as at 1 January 2024 for
the period
– Transferred to stage 2
– Transferred to stage 3
– Reversed to stage 2
– Reversed to stage 1
Provision for the period 2,888,840.71 25,844,198.73 28,733,039.44
Reversal for the period 1,016,204.97 74,074.59 1,090,279.56
Transfer for the period
Write-off for the period
Other changes -1,635,900.55 -13,725,953.34 -15,361,853.89
Balance as at 30 June 2024 87,777,001.47 434,439,582.39 522,216,583.86
4) Provision, recovery or reversal of bad debt provision for the period
Bad debt provision for the period:
Unit: RMB
Changes in the period
Opening Recovery Transfer or
Category balance Provision or reversal write-off Others Closing balance
Other receivables 509,935,677.87 28,733,039.44 1,090,279.56 -15,361,853.89 522,216,583.86
Total 509,935,677.87 28,733,039.44 1,090,279.56 -15,361,853.89 522,216,583.86
Explanation of others: Others was the external transfer of subsidiary and transfer of debts.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 137
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
6. Other receivables (Cont’d)
(2) Other receivables (Cont’d)
5) Top five other receivables according to closing balance of debtors
The total amount of the Company’s top five other receivables based on closing balance of debtors for the
year was RMB1,720,808,887.00, which accounted for 66.79% of the closing balance of the total other
receivables. The closing balance of corresponding bad debt provision amounted to RMB250,907,576.27.
Unit: RMB
As a percentage
of the closing Closing balance
balance of total of bad debt
Name of entity Nature Closing balance Ageing other receivables provision
Customer 1 Consideration for debt transfer 472,854,783.56 3 to 4 years 18.35% 84,556,765.37
Customer 2 Consideration for debt transfer 453,002,316.85 4 to 5 years 17.58% 158,550,810.90
Customer 3 Consideration for debt transfer 390,000,000.00 Within 1 year 15.14% 7,800,000.00
Customer 4 Financial support 232,643,410.74 Within 1 year 9.03%
Customer 5 Consideration for debt transfer 172,308,375.85 Within 1 year 6.69%
Total 1,720,808,887.00 66.79% 250,907,576.27
138 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
7. Prepayments
(1) Prepayments by ageing
Unit: RMB
Closing balance Opening balance
Ageing Amount Percentage (%) Amount Percentage (%)
Within 1 year 901,296,304.14 95.12 790,687,918.61 95.83
1 to 2 years 46,194,821.38 4.88 34,447,237.60 4.17
Total 947,491,125.52 100.00 825,135,156.21 100.00
(2) Top five prepayments based on closing balance of prepaid parties
The total amount of top five prepayments based on closing balance of prepaid parties for the period amounted to
RMB295,215,506.98, accounting for 31.16% of the closing balance of the total prepayments.
Unit: RMB
As a percentage
of the closing
balance of the
Closing balance total prepayments
Name of entity of prepayments (%)
Customer 1 112,414,309.24 11.86
Customer 2 64,772,536.70 6.84
Customer 3 45,579,894.13 4.81
Customer 4 36,419,766.91 3.84
Customer 5 36,029,000.00 3.80
Total 295,215,506.98 31.16
SHANDONG CHENMING PAPER HOLDINGS LIMITED 139
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
8. Inventories
Whether the Company needs to comply with the disclosure requirements for real estate industries
No
(1) Categories of inventories
Unit: RMB
Closing balance Opening balance
Impairment Impairment
provision for provision for
inventories or inventories or
performance performance
Item Book balance costs Carrying amount Book balance costs Carrying amount
Raw materials 1,684,074,471.64 18,015,768.76 1,666,058,702.88 1,977,478,797.85 18,030,837.14 1,959,447,960.71
Work-in-process products 83,546,759.61 83,546,759.61 102,415,558.33 102,415,558.33
Goods in stock 1,031,894,480.01 3,041,427.75 1,028,853,052.26 1,413,366,440.57 1,030,048.86 1,412,336,391.71
Consumable biological assets 1,483,176,162.18 1,483,176,162.18 1,483,978,089.61 1,483,978,089.61
Total 4,282,691,873.44 21,057,196.51 4,261,634,676.93 4,977,238,886.36 19,060,886.00 4,958,178,000.36
Note: Consumable biological assets are forestry assets.
(2) Impairment provision for inventories and performance costs
Unit: RMB
Increase during the period Decrease during the period
Opening Reversal or
Item balance Provision Others written-off Others Closing balance
Raw materials 18,030,837.14 15,068.38 18,015,768.76
Goods in stock 1,030,048.86 3,041,427.75 1,030,048.86 3,041,427.75
Total 19,060,886.00 3,041,427.75 1,045,117.24 21,057,196.51
Basis for recognition of net realisable Reason for reversal or written-off of
value/residual consideration impairment provision for inventories/
Item with future cost performance costs during the period
Raw materials The cost of raw materials is higher than Written-off of impairment provision for
their net realisable value inventories due to sales of impaired spare
parts during the period
Goods in stock The cost of goods in stock is higher than Written-off of impairment provision for
their net realisable value inventories due to sales of impaired goods
in stock during the period
140 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
9. Non-current assets due within one year
Unit: RMB
Item Closing balance Opening balance
Long-term receivables due within one year 3,990,527,056.67 4,161,725,935.75
Total 3,990,527,056.67 4,161,725,935.75
Explanations: Long-term receivables due within one year amounting to RMB3,892,561,045.68 (amount for
the prior year: RMB4,054,545,080.32) were financial lease receivables;
Long-term receivables due within one year amounting to RMB97,966,010.99 (amount for the
prior year: RMB107,180,855.43) were deposits receivable.
1) Particulars of impairment provision
Unit: RMB
Stage 1 Stage 2 Stage 3
Lifetime ECLs
ECLs for the (not credit- Lifetime ECLs
Bad debts provision next 12 months impaired) (credit-impaired) Total
Balance as at 1 January 2024 1,067,619,552.90 1,067,619,552.90
Balance as at 1 January 2024
for the period
– Transferred to stage 2
– Transferred to stage 3
– Reversed to stage 2
– Reversed to stage 1
Provision for the period 55,740,138.52 55,740,138.52
Reversal for the period 25,674,797.18 25,674,797.18
Transfer for the period
Write-off for the period 41,314,296.74 41,314,296.74
Other changes -18,883,742.54 -18,883,742.54
Balance as at 30 June 2024 1,037,486,854.96 1,037,486,854.96
Explanation of other changes: Other changes are the decrease in the amount of bad debt provision for the transfer
of debt for the Shandong Leasing Xuchang Chenming Project.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 141
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
10. Other current assets
Unit: RMB
Item Closing balance Opening balance
Receivables under financial lease due within one year 494,989,361.76 400,411,532.31
Prepaid expenses 290,816,055.05 201,963,827.62
Factoring receivables due within one year 254,389,157.48 261,871,191.52
Input tax amount to be deducted 52,532,417.19 119,271,427.68
Prepaid tax 18,423,599.16 47,645,192.37
Other payments 37,663,773.28 37,663,773.28
Total 1,148,814,363.92 1,068,826,944.78
11. Long-term receivables
(1) Particulars of long-term receivables
Unit: RMB
Closing balance Opening balance Discount
Item Book balance Bad debts provision Carrying amount Book balance Bad debts provision Carrying amount rate range
Finance lease payments 5,443,874,214.18 1,038,902,375.27 4,404,971,838.91 5,329,611,463.14 1,070,429,664.01 4,259,181,799.13 4%-12%
Less: Unrealised financing income 144,584,049.03 144,584,049.03 66,941,274.36 66,941,274.36
Deposit for finance lease 304,882,741.47 304,882,741.47 329,246,696.64 329,246,696.64
Less: Unrealised financing income 17,272,664.21 17,272,664.21 20,467,752.31 20,467,752.31
Subtotal 5,586,900,242.41 1,038,902,375.27 4,547,997,867.14 5,571,449,133.11 1,070,429,664.01 4,501,019,469.10
Less: Long-term receivables due within
one year 5,028,013,911.63 1,037,486,854.96 3,990,527,056.67 5,229,345,488.65 1,067,619,552.90 4,161,725,935.75
Total 558,886,330.78 1,415,520.31 557,470,810.47 342,103,644.46 2,810,111.11 339,293,533.35
(2) Disclosure by bad debt provision method
Unit: RMB
Closing balance Opening balance
Book balance Bad debts provision Book balance Bad debts provision
Provision Provision
Percentage percentage Percentage percentage
Category Amount (%) Amount (%) Carrying amount Amount (%) Amount (%) Carrying amount
Items assessed collectively for bad
debt provision 558,886,330.78 100.00 1,415,520.31 0.25 557,470,810.47 342,103,644.46 100.00 2,810,111.11 0.82 339,293,533.35
Including:
Receivables not past due 369,242,264.51 66.07 1,415,520.31 0.38 367,826,744.20 140,505,555.56 41.07 2,810,111.11 2.00 137,695,444.45
Deposits receivable 189,644,066.27 33.93 189,644,066.27 201,598,088.90 58.93 201,598,088.90
Total 558,886,330.78 100.00 1,415,520.31 0.25 557,470,810.47 342,103,644.46 100.00 2,810,111.11 0.82 339,293,533.35
142 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
11. Long-term receivables (Cont’d)
(2) Disclosure by bad debt provision method (Cont’d)
Name of category being assessed collectively for bad debt provision: Receivables not past due
Unit: RMB
Closing balance
Bad debts Provision
Name Book balance provision percentage (%)
Maturity date within 1 year
Maturity date 1 to 2 years 149,595,206.83 1,415,520.31 0.95
Maturity date 2 to 3 years 79,361,873.50
Maturity date over 3 year 140,285,184.18
Total 369,242,264.51 1,415,520.31 0.38
Name of category being assessed collectively for bad debt provision: Deposits receivable
Unit: RMB
Closing balance
Bad debts Provision
Name Book balance provision percentage
Maturity date within 1 year
Maturity date 1 to 2 years 144,907,006.65
Maturity date 2 to 3 years 38,737,059.62
Maturity date over 3 year 6,000,000.00
Total 189,644,066.27
Provision for bad debts made on a general model of ECL:
Unit: RMB
Stage 1 Stage 2 Stage 3
Lifetime ECLs Lifetime ECLs
ECLs for the (not credit- (credit-
Bad debts provision next 12 months impaired) impaired) Total
Balance as at 1 January 2024 2,810,111.11 2,810,111.11
Balance as at 1 January 2024 for the
period
– Transferred to stage 2
– Transferred to stage 3
– Reversed to stage 2
– Reversed to stage 1
Provision for the period
Reversal for the period
Transfer for the period
Write-off for the period
Other changes -1,394,590.80 -1,394,590.80
Balance as at 30 June 2024 1,415,520.31 1,415,520.31
Other explanations: Other changes in the period was the amount of bad debt provision reclassified to non-current
assets due within one year.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 143
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
11. Long-term receivables (Cont’d)
(3) Provision, recovery or reversal of bad debt provision for the period
Unit: RMB
Changes in the period
Opening Recovery or Transfer or Closing
Category balance Provision reversal write-off Others balance
Bad debts provision 2,810,111.11 -1,394,590.80 1,415,520.31
Total 2,810,111.11 -1,394,590.80 1,415,520.31
Other explanations: Others in the period was the amount of bad debt provision reclassified to non-current assets
due within one year.
12. Long-term equity investments
Unit: RMB
Change for the period
Investment Distribution
Opening Opening gain or loss Adjustment Other of cash
balance balance of recognised of other change dividend Closing balance
(carrying impairment Additional Withdrawn under equity comprehensive in equity or profit Impairment Closing balance of impairment
Investee amount) provision contribution contribution method income interest declared provision Others (carrying amount) provision
I. Joint ventures
Shouguang Chenming
Huisen New-style
Construction Materials
Co., Ltd. 7,400,283.59 466,616.49 7,866,900.08
Weifang Port Wood Chip
Wharf Co., Ltd. 79,142,080.56 8,850,767.29 87,992,847.85
Shouguang Meite
Environmental
Technology Co., Ltd. 19,066,523.79 1,141,859.56 20,208,383.35
Shouguang Jintou
Industrial Investment
Partnership
(Limited Partnership) 2,344,570,247.55 -19,202,925.23 2,325,367,322.32
Weifang Xingxing United
Chemical Co., Ltd. 91,874,385.12 91,874,385.12
Subtotal 2,542,053,520.61 -8,743,681.89 2,533,309,838.72
144 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
12. Long-term equity investments (Cont’d)
Change for the period
Investment Distribution
Opening Opening gain or loss Adjustment Other of cash
balance balance of recognised of other change dividend Closing balance
(carrying impairment Additional Withdrawn under equity comprehensive in equity or profit Impairment Closing balance of impairment
Investee amount) provision contribution contribution method income interest declared provision Others (carrying amount) provision
II. Associates
Zhuhai Dechen New
Third Board Equity
Investment
Fund Company
(Limited Partnership) 27,263,804.36 -4,094.51 27,259,709.85
Ningbo Kaichen Huamei
Equity Investment Fund
Partnership
(Limited Partnership) 278,128,830.13 -45,877,685.10 232,251,145.03
Nanchang Tianchen
Port Co., Ltd. 58,147,506.39 3,213,081.57 61,360,587.96
Goldtrust Futures
Co., Ltd. 187,786,626.28 5,646,638.65 193,433,264.93
Xuchang Chenming
Paper Co., Ltd. 5,994,545.96 5,994,545.96
Chenming (Qingdao)
Asset Management
Co., Ltd. 8,377,144.65 -265,861.69 8,111,282.96
Wuhan Chenming
Hanyang Paper
Holdings Co., Ltd. 251,918,902.31 -3,070,493.34 248,848,408.97
Guangdong Nanyue
Bank Co., Ltd. 1,331,523,051.00 10,419,924.12 3,672,513.39 -535,161.44 1,345,080,327.07
Subtotal 2,143,145,865.12 5,994,545.96 -29,938,490.30 3,672,513.39 -535,161.44 2,116,344,726.77 5,994,545.96
Total 4,685,199,385.73 5,994,545.96 -38,682,172.19 3,672,513.39 -535,161.44 4,649,654,565.49 5,994,545.96
Explanation: Weifang Xingxing United Chemical Co., Ltd. was completely shut down due to demolition and relocation,
and each of the shareholders planned to withdraw their investments. The Company ceased to account for Weifang
Xingxing United Chemical Co., Ltd. using the equity method, and the carrying amount as at the end of the period was
basically in line with the expected recoverable amount.
Determination of net amount of recoverable amount measured at fair value after deducting disposal expenses
Applicable Not applicable
Determination of present value of recoverable amount based on expected cash flows
Applicable Not applicable
SHANDONG CHENMING PAPER HOLDINGS LIMITED 145
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VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
13. Other non-current financial assets
Unit: RMB
Item Closing balance Opening balance
Investment in debt instruments 659,099,016.38 659,099,016.38
Investment in equity instruments 120,978,728.82 122,462,024.19
Total 780,077,745.20 781,561,040.57
14. Investment property
(1) Investment property under the cost method
Applicable Not applicable
Unit: RMB
Housing and
Item building structure Total
I. Original carrying amount
1. Opening balance 7,142,921,213.87 7,142,921,213.87
2. Increase during the period
3. Decrease during the period 6,005,490.93 6,005,490.93
(1) Disposal 6,005,490.93 6,005,490.93
4. Closing balance 7,136,915,722.94 7,136,915,722.94
II. Accumulated depreciation and accumulated amortisation
1. Opening balance 1,093,678,517.51 1,093,678,517.51
2. Increase during the period 98,230,727.37 98,230,727.37
(1) Provision or amortisation 98,230,727.37 98,230,727.37
3. Decrease during the period 942,234.35 942,234.35
(1) Disposal 942,234.35 942,234.35
4. Closing balance 1,190,967,010.53 1,190,967,010.53
III. Impairment provision
IV. Carrying amount
1. Closing carrying amount 5,945,948,712.41 5,945,948,712.41
2. Opening carrying amount 6,049,242,696.36 6,049,242,696.36
146 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
14. Investment property (Cont’d)
(1) Investment property under the cost method (Cont’d)
Note: Investment properties under the Company primarily include:
Pujiang International Finance Plaza, located at No. 1098, Dongdaming Road, Hongkou District, Shanghai, is a long-term held office
property of Shanghai Hongtai Real Estate Co., Ltd., a subsidiary of the Company, and leasehold land mainly used for external rental
or office purposes;
Jinan Chenming Finance Building ( ), located in No. 7 Zone, Hanyu Financial Business Center, No. 7000, Jingshi
Road, Jinan Innovation Zone, is a long-term held office property of Shandong Chenming Investment Limited, a subsidiary of the
Company, and leasehold land mainly used for external rental or office purposes;
Fatum Apartment ( ), located at No. 463, Anbo Road, No. 22, Lane 467, Anbo Road, Yangpu District, Shanghai, is a
long-term held apartment property of Shanghai Heruiming Property Management Co., Ltd., a subsidiary of the Company, and
leasehold land mainly used for external rental purposes;
Guangzhou Zhengjia Plaza ( ), located at Room 3901-3926, No. 372, Huanshi East Road, Yuexiu District, Guangzhou,
is a long-term held office property of Guangzhou Chenming Property Management Co., Ltd., a subsidiary of the Company, and
leasehold land mainly used for external rental purposes;
Shenzhen Zhuoyue Baozhong Times Square ( ), located at Room 3201-3210, Building C, Zhuoyue Baozhong
Times Square (Phase 2), Xin’an Sub-district, Bao’an District, Shenzhen, is a long-term held office property of Guangzhou Chenming
Property Management Co., Ltd., a subsidiary of the Company, and leasehold land mainly used for external rental purposes.
Shanghai Xizang South Road shop, located at No. 518-528 Xizang South Road, Shanghai, is a long-term store held by Wuhan
Junheng Property Management Co. Ltd., a subsidiary, and leasehold land mainly for external rental purposes.
Determination of net amount of recoverable amount measured at fair value after deducting disposal expenses
Applicable Not applicable
Determination of present value of recoverable amount based on expected cash flows
Applicable Not applicable
(2) Investment property under the fair value method
Applicable Not applicable
15. Fixed assets
Unit: RMB
Item Closing balance Opening balance
Fixed assets 32,030,248,108.24 33,186,248,169.56
Total 32,030,248,108.24 33,186,248,169.56
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VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
15. Fixed assets (Cont’d)
(1) Particulars of fixed assets
Unit: RMB
Electronic
Housing and Machinery and Transportation equipment
Item building structure equipment equipment and others Total
I. Original carrying amount:
1. Opening balance 11,722,953,106.41 43,133,736,594.15 294,812,326.00 398,874,518.61 55,550,376,545.17
2. Increase during the period 14,898,024.10 63,006,764.77 15,391.42 3,650,702.64 81,570,882.93
(1) Acquisition 5,822,121.62 63,006,764.77 15,391.42 3,650,702.64 72,494,980.45
(2) Debt restructuring 9,075,902.48 9,075,902.48
3. Decrease during the period 232,951,355.76 80,766,052.43 6,155,991.15 133,382,484.79 453,255,884.13
(1) Disposal or retirement 232,951,355.76 80,766,052.43 6,155,991.15 133,382,484.79 453,255,884.13
4. Closing balance 11,504,899,774.75 43,115,977,306.49 288,671,726.27 269,142,736.46 55,178,691,543.97
II. Accumulated depreciation
1. Opening balance 2,624,265,582.21 19,050,501,794.09 222,005,103.33 263,312,432.67 22,160,084,912.30
2. Increase during the period 146,873,482.40 886,740,254.94 9,309,022.49 3,901,562.14 1,046,824,321.97
(1) Provision 146,873,482.40 886,740,254.94 9,309,022.49 3,901,562.14 1,046,824,321.97
3. Decrease during the period 73,439,297.48 67,585,194.44 5,478,653.88 116,006,116.05 262,509,261.85
(1) Disposal or retirement 73,439,297.48 67,585,194.44 5,478,653.88 116,006,116.05 262,509,261.85
4. Closing balance 2,697,699,767.13 19,869,656,854.59 225,835,471.94 151,207,878.76 22,944,399,972.42
III. Impairment provision
1. Opening balance 27,808,852.79 168,785,487.47 13,889.13 7,435,233.92 204,043,463.31
2. Increase during the period
3. Decrease during the period
4. Closing balance 27,808,852.79 168,785,487.47 13,889.13 7,435,233.92 204,043,463.31
IV. Carrying amount
1. Closing carrying amount 8,779,391,154.83 23,077,534,964.43 62,822,365.20 110,499,623.78 32,030,248,108.24
2. Opening carrying amount 9,070,878,671.41 23,914,449,312.59 72,793,333.54 128,126,852.02 33,186,248,169.56
148 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
15. Fixed assets (Cont’d)
(2) Particulars of temporarily idle fixed assets
Unit: RMB
Original
carrying Accumulated Impairment Carrying
Item amount depreciation provision amount Remark
Housing and building structure 72,585,434.37 26,237,134.48 3,093,008.64 43,255,291.25
Machinery and equipment 915,384,576.13 605,131,651.56 147,820,099.87 162,432,824.70
Electronic equipment and others 478,399.18 430,559.26 7,187.27 40,652.65
Total 988,448,409.68 631,799,345.30 150,920,295.78 205,728,768.60
(3) Particulars of fixed assets without obtaining property right certificates
Unit: RMB
Reason for not yet
obtaining property
Item Carrying amount right certificates
Housing and building structure
(Zhanjiang Chenming Pulp & Paper Co., Ltd.) 964,116,878.13 Under application
Housing and building structure
(Huanggang Chenming Pulp & Paper Co., Ltd.) 537,475,350.83 Under application
Housing and building structure (Shouguang Meilun Paper Co., Ltd.) 474,762,523.91 Under application
Housing and building structure (Jilin Chenming Paper Co., Ltd.) 357,832,450.57 Under application
Housing and building structure (Jiangxi Chenming Paper Co., Ltd.) 192,089,591.58 Under application
Housing and building structure
(Shandong Chenming Paper Holdings Limited) 133,131,559.85 Under application
Total 2,659,408,354.87
(4) Impairment test on fixed assets
Applicable Not applicable
16. Construction in progress
Unit: RMB
Item Closing balance Opening balance
Construction in progress 1,092,039,980.28 852,139,418.48
Materials for project 7,239,955.34 7,478,546.68
Total 1,099,279,935.62 859,617,965.16
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VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
16. Construction in progress (Cont’d)
(1) Particulars of construction in progress
Unit: RMB
Closing balance Opening balance
Book Impairment Carrying Book Impairment Carrying
Item balance provision amount balance provision amount
Relocation of Wuhan 4800
papermaking machine
project (Zhanjiang
Chenming) 569,740,174.02 569,740,174.02 533,417,722.83 533,417,722.83
Chemical pulp flue gas
denitrification technological
transformation project
(Huanggang Pulp & Paper) 290,050,326.03 290,050,326.03 156,604,031.76 156,604,031.76
Technological transformation
project 182,762,744.92 662,764.60 182,099,980.32 130,674,807.30 662,764.60 130,012,042.70
300,000 tonnes softwood
pulp project
(Shandong Chenming) 11,564,392.43 11,564,392.43 8,941,631.08 8,941,631.08
Others 59,723,779.24 21,138,671.76 38,585,107.48 44,302,661.87 21,138,671.76 23,163,990.11
Total 1,113,841,416.64 21,801,436.36 1,092,039,980.28 873,940,854.84 21,801,436.36 852,139,418.48
(2) Changes in material construction in progress projects for the period
Unit: RMB
Including:
Capitalised Capitalisation
Transfer to Other interest rate of the
fixed asset deductions Accumulated Accumulated amount interest
Opening Increase during during the during Closing investment Construction capitalised during amount during
Project name Budget balance the period period the period balance to budget progress interest the period the period Source of fund
Relocation of Wuhan
4800 papermaking
machine project
(Zhanjiang Self-owned funds
Chenming) 800,000,000.00 533,417,722.83 36,322,451.19 569,740,174.02 71.22% 71.00% and borrowings
300,000 tonnes
softwood
pulp project
(Shandong Self-owned funds
Chenming) 1,488,980,000.00 8,941,631.08 2,622,761.35 11,564,392.43 0.78% 0.70% and borrowings
Total 2,288,980,000.00 542,359,353.91 38,945,212.54 581,304,566.45
(3) Impairment provision for construction in progress
Applicable Not applicable
150 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
16. Construction in progress (Cont’d)
(4) Materials for project
Unit: RMB
Closing balance Opening balance
Book Impairment Carrying Book Impairment Carrying
Item balance provision amount balance provision amount
Special materials 7,239,955.34 7,239,955.34 7,478,546.68 7,478,546.68
Total 7,239,955.34 7,239,955.34 7,478,546.68 7,478,546.68
17. Bearer biological assets
(1) Bearer biological assets under the cost method
Applicable Not applicable
Unit: RMB
Item Tea tree Total
I. Original carrying amount
1. Opening balance 17,684,687.36 17,684,687.36
2. Increase during the period 278,066.24 278,066.24
(1) Cultivation 278,066.24 278,066.24
3. Decrease during the period
4. Closing balance 17,962,753.60 17,962,753.60
II. Accumulated depreciation
1. Opening balance
2. Increase during the period
3. Decrease during the period
4. Closing balance
III. Impairment provision
1. Opening balance
2. Increase during the period
3. Decrease during the period
4. Closing balance
IV. Carrying amount
1. Closing carrying amount 17,962,753.60 17,962,753.60
2. Opening carrying amount 17,684,687.36 17,684,687.36
(2) Impairment test on bearer biological assets under the cost method
Applicable Not applicable
(3) Bearer biological assets measured at fair value
Applicable Not applicable
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VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
18. Right-of-use assets
(1) Particulars of right-of-use assets
Unit: RMB
Housing
and building
Item Land use rights structure Total
I. Original carrying amount
1. Opening balance 198,089,207.01 5,521,837.26 203,611,044.27
2. Increase during the period
3. Decrease during the period 2,250,074.74 12,385.32 2,262,460.06
(1) Transfer 2,126,221.54 2,126,221.54
(2) Other decreases 123,853.20 12,385.32 136,238.52
4. Closing balance 195,839,132.27 5,509,451.94 201,348,584.21
II. Accumulated depreciation
1. Opening balance 34,470,758.27 1,324,974.50 35,795,732.77
2. Increase during the period 3,725,504.84 135,477.64 3,860,982.48
(1) Provision 3,725,504.84 135,477.64 3,860,982.48
3. Decrease during the period 700,376.61 700,376.61
(1) Disposal 700,376.61 700,376.61
4. Closing balance 37,495,886.50 1,460,452.14 38,956,338.64
III. Impairment provision
1. Opening balance
2. Increase during the period
3. Decrease during the period
4. Closing balance
IV. Carrying amount
1. Closing carrying amount 158,343,245.77 4,048,999.80 162,392,245.57
2. Opening carrying amount 163,618,448.74 4,196,862.76 167,815,311.50
Explanation: The reason for other decreases is that the original recognised amount of right-of-use assets was
tax included, and as the invoices for leasing have been received, the input tax amount offset the original carrying
amount of the right-of-use assets.
(2) Impairment test on right-of-use assets
Applicable Not applicable
152 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
19. Intangible assets
(1) Particulars of intangible assets
Unit: RMB
Certificates of
Item Land use rights Software Patents third party right Total
I. Original carrying amount
1. Opening balance 2,525,157,831.82 23,309,148.71 27,493,613.05 15,908,674.87 2,591,869,268.45
2. Increase during the period 20,708,694.00 20,708,694.00
(1) Increase due to debt
restructuring 20,708,694.00 20,708,694.00
3. Decrease during the period 63,881,675.77 1,020,714.08 64,902,389.85
(1) Disposal 63,881,675.77 1,020,714.08 64,902,389.85
4. Closing balance 2,481,984,850.05 22,288,434.63 27,493,613.05 15,908,674.87 2,547,675,572.60
II. Accumulated amortisation
1. Opening balance 549,448,621.95 22,999,984.34 1,151,095.44 15,908,674.87 589,508,376.60
2. Increase during the period 26,669,309.88 47,475.00 26,716,784.88
(1) Provision 26,669,309.88 47,475.00 26,716,784.88
3. Decrease during the period 22,072,347.46 1,011,887.49 23,084,234.95
(1) Disposal 22,072,347.46 1,011,887.49 23,084,234.95
4. Closing balance 554,045,584.37 21,988,096.85 1,198,570.44 15,908,674.87 593,140,926.53
III. Impairment provision
1. Opening balance
2. Increase during the period
3. Decrease during the period
4. Closing balance
IV. Carrying amount
1. Closing carrying amount 1,927,939,265.68 300,337.78 26,295,042.61 1,954,534,646.07
2. Opening carrying amount 1,975,709,209.87 309,164.37 26,342,517.61 2,002,360,891.85
Explanation: (1) For details of restricted ownership, please refer to note VII. 24.
(2) Impairment test on intangible assets
Applicable Not applicable
SHANDONG CHENMING PAPER HOLDINGS LIMITED 153
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VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
20. Goodwill
(1) Original carrying amount of goodwill
Unit: RMB
Increase during Decrease during
the period the period
Arising from
business
Name of investee or event generating goodwill Opening balance combinations Disposal Closing balance
Kunshan Tuoan Plastic Products Co., Ltd. 26,946,905.38 26,946,905.38
Jilin Chenming Paper Co., Ltd. 14,314,160.60 14,314,160.60
Jiangxi Chenming Port Co., Ltd. 8,273,638.42 8,273,638.42
Total 49,534,704.40 26,946,905.38 22,587,799.02
(2) Provision for impairment of goodwill
Unit: RMB
Increase during Decrease during
the period the period
Name of investee or event generating goodwill Opening balance Provision Disposal Closing balance
Jilin Chenming Paper Co., Ltd. 14,314,160.60 14,314,160.60
Total 14,314,160.60 14,314,160.60
(3) Relevant information on goodwill for asset group or combination of asset groups
Whether it is
Composition and basis of asset group or Operating segment consistent with
Name combination of asset groups and basis prior year
Jilin Chenming Paper Co., Ltd. The company as a whole is regarded as an asset group or Machine-made paper segment Yes
combination of asset groups
Jiangxi Chenming Port Co., Ltd. The company as a whole is regarded as an asset group or Other segment Yes
combination of asset groups
Other explanation: With the category of the principal activities as the basis for determining its reporting
segments, the Company regarded Jilin Chenming Paper Co., Ltd. and Jiangxi Chenming Port Co., Ltd. as an
asset group as a whole, respectively.
154 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
20. Goodwill (Cont’d)
(4) Specific determination of recoverable amount
Determination of net amount of recoverable amount measured at fair value after deducting disposal expenses
Applicable Not applicable
Determination of present value of recoverable amount based on expected cash flows
Applicable Not applicable
Unit: RMB
Basis of
determination of
Term of key parameter
Carrying Recoverable forecast Key parameter Key parameter for stabilisation
Item amount amount Impairment period for forecast period for stabilisation period period
Jiangxi Chenming Port Co., Ltd. -2,458,522.71 13,494,715.71 0.00 5 Discount rate of 6.23% Value added of zero Estimation
Total -2,458,522.71 13,494,715.71 0.00
21. Long-term prepaid expenses
Unit: RMB
Opening Increase during Amortisation Other
Item balance the period during the period deductions Closing balance
Woodland expenses 5,952,099.77 306,730.58 5,645,369.19
Others 34,027,061.72 1,357,483.45 187,784.73 32,481,793.54
Total 39,979,161.49 1,664,214.03 187,784.73 38,127,162.73
Other Explanation: Other deduction was due to the disposal of subsidiary.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 155
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VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
22. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets before offsetting
Unit: RMB
Closing balance Opening balance
Deductible Deferred Deductible Deferred
temporary income temporary income
Item difference tax assets difference tax assets
Deductible loss 7,733,097,173.05 1,257,426,863.67 7,008,265,437.96 1,138,659,379.33
Provision for impairment of assets 2,197,977,157.68 515,876,810.64 2,170,702,373.93 509,035,457.40
Deferred income 142,842,333.42 21,426,350.01 144,721,508.43 21,708,225.98
Outstanding payables 107,821,937.83 16,497,569.18 121,528,026.20 18,553,482.43
Unrealised profit arising from intra-group
transactions 14,483,521.60 3,620,880.40 7,605,345.40 1,901,336.35
Total 10,196,222,123.58 1,814,848,473.90 9,452,822,691.92 1,689,857,881.49
(2) Deferred income tax liabilities before offsetting
Unit: RMB
Closing balance Opening balance
Taxable temporary Deferred income Taxable temporary Deferred income
Item differences tax liabilities differences tax liabilities
Asset valuation increment from business
combinations involving entities not under
common control 21,236,138.00 5,309,034.50 37,960,636.20 9,490,159.05
Total 21,236,138.00 5,309,034.50 37,960,636.20 9,490,159.05
(3) The breakdown of unrecognised deferred income tax assets
Unit: RMB
Item Closing balance Opening balance
Deductible loss 600,327,728.14 721,381,744.55
Deductible temporary difference 51,626,100.24 53,265,395.05
Total 651,953,828.38 774,647,139.60
156 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
22. Deferred income tax assets/deferred income tax liabilities (Cont’d)
(4) Expiry of deductible loss of unrecognised deferred income tax assets falls in the years as follows
Unit: RMB
Year Closing balance Opening balance Remark
2024 158,265,081.51
2025 208,380,555.63 226,672,646.51
2026 73,280,337.38 61,481,717.71
2027 24,609,377.94 77,967,748.73
2028 140,072,946.12 196,994,550.09
2029 153,984,511.07
Total 600,327,728.14 721,381,744.55
23. Other non-current assets
Unit: RMB
Closing balance Opening balance
Book Impairment Book Impairment
Item balance provision Carrying amount balance provision Carrying amount
Payments for engineering and equipment 915,667,751.58 915,667,751.58 1,055,195,141.00 1,055,195,141.00
Others 11,887,516.57 11,887,516.57 11,887,516.57 11,887,516.57
Total 927,555,268.15 927,555,268.15 1,067,082,657.57 1,067,082,657.57
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VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
24. Assets with restricted ownerships or right to use
Unit: RMB
Closing balance Opening balance
Type of Type of
Item Book balance Carrying amount restriction Restriction Book balance Carrying amount restriction Restriction
Monetary funds 10,583,179,917.00 10,583,179,917.00 Pledged As deposits for acceptance 11,360,599,088.69 11,360,599,088.69 Pledged As deposits for acceptance bills and
bills and letters of credit, letters of credit, deposits for letter
deposits for letter of of guarantee, security deposits for
guarantee, security loans, deposit reserves, interest
deposits for loans, receivable, etc. (Note VII. 1)
deposit reserves, interest
receivable, etc. (Note VII. 1)
Fixed assets 9,383,901,424.59 6,097,926,811.05 Charged As collateral for bank 9,411,111,670.62 6,303,095,864.20 Charged As collateral for bank borrowings and
borrowings and long-term long-term payables (Note VII. 15)
payables (Note VII. 15)
Investment 6,114,818,654.81 5,075,202,994.63 Charged As collateral for bank 5,941,741,699.60 5,004,776,921.76 Charged As collateral for bank borrowings
properties borrowings (Note VII. 14) (Note VII. 14)
Intangible assets 849,460,775.99 645,269,711.95 Charged As collateral for bank 865,105,844.99 665,784,045.39 Charged As collateral for bank borrowings and
borrowings and long-term long-term payables (Note VII. 19)
payables (Note VII. 19)
Accounts receivable 84,955,640.31 84,502,139.21 Pledged As pledge for borrowings 403,349,324.55 398,710,807.32 Pledged As pledge for borrowings (Note VII. 4)
(Note VII. 4)
Accounts receivable 20,000.00 20,000.00 Pledged As pledge for obtaining letters 90,551,168.01 90,551,168.01 Pledged As pledge for obtaining letters of credit
financing of credit (Note VII. 5) (Note VII. 5)
Total 27,016,336,412.70 22,486,101,573.84 28,072,458,796.46 23,823,517,895.37
Other explanation:
As at 30 June 2024, housing, building structure and equipment with the carrying amount of RMB6,097,926,811.05
(31 December 2023: carrying amount of RMB6,303,095,864.20), investment properties with the carrying amount of
RMB5,075,202,994.63 (31 December 2023: carrying amount of RMB5,004,776,921.76) and intangible assets with the
carrying amount of RMB645,269,711.95 (31 December 2023: carrying amount of RMB665,784,045.39) were pledged as
collateral for long-term borrowings of RMB4,140,020,848.22 (31 December 2023: RMB4,262,800,469.08) and short-term
borrowings of RMB20,000,000.00 (31 December 2023: RMB85,000,000.00).
158 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
25. Short-term borrowings
(1) Classification of short-term borrowings
Unit: RMB
Item Closing balance Opening balance
Discounted borrowings 11,608,999,222.36 12,270,872,000.00
Credit borrowings 9,359,698,029.18 9,908,287,425.27
Guaranteed borrowings 8,882,107,193.62 9,785,629,371.41
Pledged borrowings 393,659,397.98 1,425,690,224.94
Mortgage borrowings 20,000,000.00 85,000,000.00
Total 30,264,463,843.14 33,475,479,021.62
Explanation of the classification of short-term borrowings:
For classification and amount of mortgage borrowings and mortgage assets, please see 1. Monetary funds
and 24. Assets with restricted ownerships or right to use in Note VII.
For classification and amount of pledged borrowings and mortgage assets, please see 1. Monetary funds
and 24. Assets with restricted ownerships or right to use in Note VII.
Overdue outstanding short-term borrowings: total outstanding short-term borrowings overdue as at the end
of the year amounted to RMB0.00.
Short-term borrowings included accrued interest of RMB25,209,675.76.
26. Bills payable
Unit: RMB
Category Closing balance Opening balance
Commercial acceptance bills 4,267,192,499.15 3,604,737,193.92
Bank acceptance bills 1,295,192,080.24 1,014,249,270.03
Total 5,562,384,579.39 4,618,986,463.95
Total outstanding bills payable due as at the end of the period amounted to RMB0.00.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 159
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X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
27. Accounts payable
(1) Particulars of accounts payable
Unit: RMB
Item Closing balance Opening balance
Payment for goods 3,398,430,307.19 3,329,807,929.61
Payment for engineering 193,203,879.71 222,541,200.98
Payment for equipment 170,057,669.66 107,663,951.56
Others 315,506,306.22 242,607,788.05
Total 4,077,198,162.78 3,902,620,870.20
(2) Disclosure by ageing
Unit: RMB
Ageing Closing balance Opening balance
Within 1 year (including 1 year) 3,625,253,454.21 3,361,203,746.72
1 to 2 years 187,319,359.25 267,905,274.76
2 to 3 years 26,049,232.73 30,677,976.15
Over 3 years 238,576,116.59 242,833,872.57
Total 4,077,198,162.78 3,902,620,870.20
The basis used by the ageing analysis of the accounts payable of the Company: the ageing of accounts payable
is the length of time of the Company’s outstanding accounts payable based on invoice date. The closing balance
is recognised one by one from the end of the period onwards until the amounts add up to the balance. It is also
broken up by intervals of within 1 year, 1-2 years, 2-3 years and over 3 years.
28. Other payables
Unit: RMB
Item Closing balance Opening balance
Other payables 3,134,911,098.58 2,414,752,127.19
Dividend payable 123,000,000.00
Total 3,257,911,098.58 2,414,752,127.19
160 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
28. Other payables (Cont’d)
(1) Dividend payable
Unit: RMB
Item Closing balance Opening balance
Dividend declared but not yet distributed to minority
shareholders by subsidiary 123,000,000.00
Total 123,000,000.00
(2) Other payables
1) Other payables by nature
Unit: RMB
Item Closing balance Opening balance
Open credit 1,800,239,769.12 1,090,141,993.83
Deposit 825,462,360.02 785,572,067.82
Accrued expenses 387,260,893.04 381,781,932.14
The obligation to repurchase shares under the share
incentive scheme 63,764,745.74 63,764,745.74
Others 58,183,330.66 93,491,387.66
Total 3,134,911,098.58 2,414,752,127.19
2) Significant other payables aged over 1 year
Unit: RMB
Reason for
outstanding or
Item Closing balance not transfer
MCC Fujian Investment Construction Co., Ltd. 570,000,000.00 Project deposits
29. Receipts in advance
(1) Particulars of receipts in advance
Unit: RMB
Item Closing balance Opening balance
Prepaid rents and property fees 14,398,554.70 16,242,921.65
Total 14,398,554.70 16,242,921.65
SHANDONG CHENMING PAPER HOLDINGS LIMITED 161
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X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
30. Contract liabilities
Unit: RMB
Item Closing balance Opening balance
Payment for goods in advance 1,517,098,339.47 1,443,680,155.62
Total 1,517,098,339.47 1,443,680,155.62
31. Staff remuneration payables
(1) Particulars of staff remuneration payables
Unit: RMB
Increase Decrease
Opening during during Closing
Item balance the period the period balance
I. Short-term remuneration 73,907,233.82 529,423,606.94 561,292,469.88 42,038,370.88
II. Retirement benefit plan-defined
contribution scheme 429,924.62 99,262,593.28 96,607,124.35 3,085,393.55
III. Termination benefits 125,413.81 125,413.81
Total 74,337,158.44 628,811,614.03 658,025,008.04 45,123,764.43
(2) Particulars of short-term remuneration
Unit: RMB
Decrease
Increase during during
Item Opening balance the period the period Closing balance
1. Salaries, bonuses, allowance and subsidies 54,425,637.71 425,802,119.58 458,852,591.65 21,375,165.64
2. Staff welfare 15,273,065.83 15,273,065.83
3. Social insurance premium 1,399,223.32 46,066,674.16 45,310,915.75 2,154,981.73
Including: Medical insurance premium 494,472.68 41,159,193.08 40,339,349.29 1,314,316.47
Maternity insurance premium 15,635.74 4,275,281.74 4,157,106.70 133,810.78
Work-related injury insurance premium 889,114.90 632,199.34 814,459.76 706,854.48
4. Housing provident funds 6,932,114.30 33,425,836.04 34,912,499.03 5,445,451.31
5. Union funds and workers’ education 7,813,758.78 8,010,810.96 3,540,075.58 12,284,494.16
6. Other short-term remuneration 3,336,499.71 845,100.37 3,403,322.04 778,278.04
Total 73,907,233.82 529,423,606.94 561,292,469.88 42,038,370.88
162 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
31. Staff remuneration payables (Cont’d)
(3) Defined contribution plan
Unit: RMB
Increase Decrease
Opening during during Closing
Item balance the period the period balance
1. Basic pension insurance premiums 415,282.27 95,010,017.51 92,753,288.64 2,672,011.14
2. Unemployment insurance premiums 14,642.35 4,252,575.77 3,853,835.71 413,382.41
Total 429,924.62 99,262,593.28 96,607,124.35 3,085,393.55
32. Tax payables
Unit: RMB
Item Closing balance Opening balance
Value added tax 45,997,159.91 40,076,417.59
Property tax 24,506,123.53 15,486,094.67
Stamp duty 13,952,948.04 10,875,401.17
Land use tax 11,754,662.06 11,149,858.80
Enterprise income tax 7,007,345.92 6,720,397.49
Environmental protection tax 3,199,355.75 3,698,248.00
Resource tax 3,000,000.00 3,000,000.00
Urban maintenance and construction tax 2,251,418.40 2,396,420.76
Land appreciation tax 2,024,028.20 2,059,693.25
Educational surcharges and others 1,889,242.09 2,062,463.52
Individual income tax 1,685,968.22 2,184,712.31
Total 117,268,252.12 99,709,707.56
33. Non-current liabilities due within one year
Unit: RMB
Item Closing balance Opening balance
Long-term payables due within one year 2,226,743,234.92 2,354,342,454.51
Long-term borrowings due within one year 1,216,122,189.54 1,273,902,656.06
Lease liabilities due within one year 3,692,567.25 3,692,567.25
Total 3,446,557,991.71 3,631,937,677.82
SHANDONG CHENMING PAPER HOLDINGS LIMITED 163
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X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
34. Other non-current liabilities
Unit: RMB
Item Closing balance Opening balance
Short-term financial leasing borrowings 70,000,000.00 100,000,000.00
Total 70,000,000.00 100,000,000.00
35. Long-term borrowings
(1) Types of long-term borrowings
Unit: RMB
Item Closing balance Opening balance
Mortgage borrowings 4,140,020,848.22 4,262,800,469.08
Guaranteed borrowings 1,074,338,325.07 857,571,273.74
Credit borrowings 826,563,813.15 834,545,402.88
Less: Long-term borrowings due within one year 1,216,122,189.54 1,273,902,656.06
Total 4,824,800,796.90 4,681,014,489.64
Explanation of the types of long-term borrowings:
For classification and amount of mortgage borrowings and mortgage assets, please see 1. Monetary funds
and 24. Assets with restricted ownerships or right to use in Note VII.
Long-term borrowings included accrued interest of RMB554,888.89.
36. Lease liabilities
Unit: RMB
Item Closing balance Opening balance
Lease payments payable 61,566,153.14 64,264,374.68
Less: Unrecognised financing expenses 17,509,799.80 18,584,784.58
Less: Lease liabilities due within one year 3,692,567.25 3,692,567.25
Total 40,363,786.09 41,987,022.85
164 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
37. Long-term payables
Unit: RMB
Item Closing balance Opening balance
Long-term payables 2,279,402,749.15 2,541,095,217.66
Total 2,279,402,749.15 2,541,095,217.66
(1) Long-term payables by nature
Unit: RMB
Item Closing balance Opening balance
Financial leasing borrowings 4,031,251,825.85 4,345,793,513.95
China Development Bank Special Fund 275,000,000.00 343,750,000.00
Contributions by other partners 199,894,158.22 199,894,158.22
Retention for the financial leasing operations 6,000,000.00
Less: Long-term payables due within one year 2,226,743,234.92 2,354,342,454.51
Total 2,279,402,749.15 2,541,095,217.66
Other explanations:
Contributions by other partners refer to the contributions made by other partners to Weifang Chenming Growth
Driver Replacement Equity Investment Fund Partnership (Limited Partnership) and Weifang Chendu Equity
Investment Partnership (Limited Partnership), the special structured entities of the Company, and such contributions
are reclassified as financial liabilities on a consolidation basis.
38. Deferred income
Unit: RMB
Increase during Decrease during
Item Opening balance the period the period Closing balance Reason
Government grants 1,337,864,114.70 3,270,000.00 53,368,860.21 1,287,765,254.49 Financial provision
Total 1,337,864,114.70 3,270,000.00 53,368,860.21 1,287,765,254.49
SHANDONG CHENMING PAPER HOLDINGS LIMITED 165
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X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
38. Deferred income (Cont’d)
Items in respect of government grants:
New grants Include in
Opening during the other income Other Closing Asset-related/
Liability item balance period for the period changes balance income-related
Funding for environmental protection 524,694,035.24 25,239,041.36 499,454,993.88 Asset-related
Huanggang forestry-pulp-paper project 445,968,305.25 12,513,108.90 433,455,196.35 Asset-related
Infrastructure and environmental protection
engineering 196,803,377.25 5,758,794.72 191,044,582.53 Asset-related
Financial subsidies for technological
transformation project 95,106,015.68 3,270,000.00 4,416,552.48 93,959,463.20 Asset-related
Zhanjiang forestry-pulp-paper project 42,617,331.35 2,047,316.46 40,570,014.89 Asset-related
Project fund for National Key Technology
Research and Development Program 793,725.00 82,350.00 711,375.00 Asset-related
Others 31,881,324.93 3,311,696.29 28,569,628.64 Asset-related
Total 1,337,864,114.70 3,270,000.00 53,368,860.21 1,287,765,254.49
39. Share capital
Unit: RMB
Increase/decrease during the year (+/-)
Shares
converted from
Opening balance New issue Bonus issue reserves Others Subtotal Closing balance
Total number of shares 2,956,813,200.00 2,956,813,200.00
40. Capital reserves
Unit: RMB
Increase during Decrease during
Item Opening balance the period the period Closing balance
Capital premium (share premium) 4,599,770,312.40 1,240,406.74 79,723,162.69 4,521,287,556.45
Other capital reserves 729,020,587.21 729,020,587.21
Total 5,328,790,899.61 1,240,406.74 79,723,162.69 5,250,308,143.66
166 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
40. Capital reserves (Cont’d)
Other explanations, including changes (increase or decrease) during the period and reasons for such changes:
The Company acquired partial equity interest in Shouguang Meilun Paper Co., Ltd., a subsidiary, from minority
shareholders, resulting in a decrease in capital reserves of RMB9,957,619.55; the Company contributed capital
to Shandong Yujing Grand Hotel Co., Ltd., resulting in a decrease in capital reserves of RMB67,989,974.96;
Guangdong Nanyue Bank Co., Ltd., an associate of the Company, purchased certain interests from minority
shareholders, resulting in decrease in capital reserves of RMB535,161.44.
41. Treasury shares
Unit: RMB
Increase during Decrease during
Item Opening balance the period the period Closing balance
Share incentive 63,432,450.00 63,432,450.00
Total 63,432,450.00 63,432,450.00
42. Other comprehensive income
Other comprehensive income attributable to the Company in the balance sheet is as follows:
Unit: RMB
Amount for the period
Less:
Transferred
from other
comprehensive
income in prior
Attributable to periods to
the parent retained
company earnings during
Item Opening balance after tax the period Closing balance
I. Other comprehensive income that cannot be reclassified to profit and loss
II. Other comprehensive income that will be reclassified to profit and loss -864,881,489.08 -15,535,759.27 -880,417,248.35
1. Other comprehensive income that may be reclassified to profit and loss
under the equity method -11,140,109.71 3,672,513.39 -7,467,596.32
2. Exchange differences arising from translation of financial statements
denominated in foreign currencies -853,741,379.37 -19,208,272.66 -872,949,652.03
Total other comprehensive income -864,881,489.08 -15,535,759.27 -880,417,248.35
SHANDONG CHENMING PAPER HOLDINGS LIMITED 167
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X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
42. Other comprehensive income (Cont’d)
Other comprehensive income attributable to the parent company in the income statement:
Unit: RMB
Amount for the period
Less:
Transferred
from other
comprehensive
income in prior Less:
Incurred periods to Attributable to Attributable to
before income profit or loss minority the parent
tax for during Less: Income shareholders company
Item the period the period tax expenses after tax after tax
I. Other comprehensive income that cannot be reclassified to profit and loss
II. Other comprehensive income that will be reclassified to profit and loss -15,535,759.27 -15,535,759.27
1. Other comprehensive income that may be reclassified to profit and loss
under the equity method 3,672,513.39 3,672,513.39
2. Exchange differences arising from translation of financial statements
denominated in foreign currencies -19,208,272.66 -19,208,272.66
Total other comprehensive income -15,535,759.27 -15,535,759.27
43. General risk provisions
Unit: RMB
Increase during Decrease during
Item Opening balance the period the period Closing balance
General risk provisions 79,370,294.91 13,361.84 79,383,656.75
Total 79,370,294.91 13,361.84 79,383,656.75
Explanation: The general risk provisions are accrued by the Company’s subsidiaries Shandong Chenming Group
Finance Co., Ltd. and Shandong Chenming Commercial Factoring Co., Ltd. based on 1% of the receivables.
Accordingly, the balance of the general risk provisions was adjusted based on the balance of the receivables.
44. Special reserves
Unit: RMB
Increase during Decrease during
Item Opening balance the period the period Closing balance
Production safety expenses 23,322,829.57 5,053,378.02 2,927,238.67 25,448,968.92
Total 23,322,829.57 5,053,378.02 2,927,238.67 25,448,968.92
168 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
45. Surplus reserves
Unit: RMB
Increase during Decrease during
Item Opening balance the period the period Closing balance
Statutory surplus reserves 1,212,009,109.97 1,212,009,109.97
Total 1,212,009,109.97 1,212,009,109.97
46. Retained profit
Unit: RMB
Item The period The prior period
Retained profit as at the end of the prior period before adjustment 8,020,182,801.55 9,390,642,477.57
Adjustment to opening balance of retained earnings (increase +, decrease -)
Opening balance of retained profit after adjustment 8,020,182,801.55 9,390,642,477.57
Add: Net profit for the period attributable to shareholders of the parent
company 28,646,205.42 -1,281,289,649.82
Less: Transfer of statutory surplus reserves
Transfer of discretionary surplus reserves
Transfer of general risk reserves 13,361.84 -529,973.80
Perpetual bonds interest payable 89,700,000.00
Retained profit as at the end of the period 8,048,815,645.13 8,020,182,801.55
47. Revenue and operating costs
Unit: RMB
Amount for the period Amount for the prior period
Item Revenue Costs Revenue Costs
Principal activities 13,762,711,500.16 12,089,871,177.87 12,420,935,712.78 11,377,205,194.89
Other activities 122,020,018.88 95,634,531.13 144,027,068.53 119,526,467.69
Total 13,884,731,519.04 12,185,505,709.00 12,564,962,781.31 11,496,731,662.58
SHANDONG CHENMING PAPER HOLDINGS LIMITED 169
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X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
47. Revenue and operating costs (Cont’d)
Breakdown of revenue and operating costs:
Unit: RMB
Machine-made paper Financial services Properties and rentals Others Total
Category of contract Revenue Operating costs Revenue Operating costs Revenue Operating costs Revenue Operating costs Revenue Operating costs
Type of business 13,481,661,035.71 11,924,438,705.06 146,357,054.10 731,119.28 96,646,679.91 105,057,448.14 160,066,749.32 155,278,436.52 13,884,731,519.04 12,185,505,709.00
Including:
Machine-made paper 12,429,565,296.10 11,003,034,856.86 12,429,565,296.10 11,003,034,856.86
Chemical pulp 676,203,401.45 559,225,217.42 676,203,401.45 559,225,217.42
Electricity and steam 123,938,936.52 150,426,816.88 123,938,936.52 150,426,816.88
Construction materials – – 87,284,048.72 88,181,069.93 87,284,048.72 88,181,069.93
Properties and rentals 93,524,660.28 94,794,899.59 – – 93,524,660.28 94,794,899.59
Paper chemicals 54,442,131.87 47,128,441.11 54,442,131.87 47,128,441.11
Others 197,511,269.77 164,623,372.79 146,357,054.10 731,119.28 3,122,019.63 10,262,548.55 72,782,700.60 67,097,366.59 419,773,044.10 242,714,407.21
By geographical area 13,481,661,035.71 11,924,438,705.06 146,357,054.10 731,119.28 96,646,679.91 105,057,448.14 160,066,749.32 155,278,436.52 13,884,731,519.04 12,185,505,709.00
Including:
Mainland China 10,649,460,195.79 9,236,419,177.40 146,357,054.10 731,119.28 96,646,679.91 105,057,448.14 160,066,749.32 155,278,436.52 11,052,530,679.12 9,497,486,181.34
Other countries and regions 2,832,200,839.92 2,688,019,527.66 2,832,200,839.92 2,688,019,527.66
By the timing of delivery 13,481,661,035.71 11,924,438,705.06 146,357,054.10 731,119.28 96,646,679.91 105,057,448.14 160,066,749.32 155,278,436.52 13,884,731,519.04 12,185,505,709.00
Including:
Goods (at a point in time) 13,355,608,712.96 11,768,812,209.08 159,251,216.13 155,278,436.52 13,514,859,929.09 11,924,090,645.60
Services (within a certain period) 126,052,322.75 155,626,495.98 146,357,054.10 731,119.28 96,646,679.91 105,057,448.14 815,533.19 – 369,871,589.95 261,415,063.40
By sales channel 13,481,661,035.71 11,924,438,705.06 146,357,054.10 731,119.28 96,646,679.91 105,057,448.14 160,066,749.32 155,278,436.52 13,884,731,519.04 12,185,505,709.00
Including:
Distribution 9,515,928,871.04 8,395,207,255.25 9,515,928,871.04 8,395,207,255.25
Direct sales 3,965,732,164.67 3,529,231,449.81 146,357,054.10 731,119.28 96,646,679.91 105,057,448.14 160,066,749.32 155,278,436.52 4,368,802,648.00 3,790,298,453.75
Total 13,481,661,035.71 11,924,438,705.06 146,357,054.10 731,119.28 96,646,679.91 105,057,448.14 160,066,749.32 155,278,436.52 13,884,731,519.04 12,185,505,709.00
170 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
47. Revenue and operating costs (Cont’d)
Information related to performance obligations:
Types of
Nature of goods that Whether the Company’s quality assurance
Time for fulfilment of the Company person is the commitments offered by the
performance Significant terms of undertakes primary person expected to be Company and
Item obligations payment to transfer in charge refunded to customers related obligations
Machine-made paper Domestic sales on the Domestic sales tend to Produces easily Yes None Guaranteed quality
day of delivery to the be provided on an distinguishable assurance, should
customer; foreign invoice basis; foreign there be objections
sales on the day of sales tend to be to product quality
customs clearance prepaid within 7 days of
arrival, the products
can be returned and
exchanged.
Other explanations: The Company’s performance obligations for sales of machine-made paper are generally less than
one year, and the Company takes advance payments or provides credit terms depending on the customer. When the
Company is the primary responsible party for a sale, it generally obtains the unconditional right to receive payment
when control of the merchandise is transferred to the customer either at the time of shipment or upon delivery to the
destination specified by the customer.
Information related to the transaction price allocated to residual performance obligations:
As at the end of the reporting period, the amount of revenue with signed contracts but unfulfilled or uncompleted
performance obligation was RMB1,517,098,339.47, in which RMB1,517,098,339.47 was expected to be recognised in
2024.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 171
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X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
48. Taxes and surcharges
Unit: RMB
Amount for Amount for
Item the period the prior period
Property tax 41,691,189.19 43,867,342.48
Stamp duty 27,045,444.39 20,624,364.19
Land use tax 23,596,390.50 17,689,934.66
Water resource tax 7,474,477.00 7,866,553.80
Environmental protection tax 6,753,382.64 6,474,664.23
Urban maintenance and construction tax 5,628,724.65 5,065,031.72
Educational surcharges and local education surcharge 4,107,340.96 3,832,275.95
Local water conservation funds 424,555.73 375,223.40
Vehicle and vessel tax 25,897.59 22,420.06
Total 116,747,402.65 105,817,810.49
49. General and administrative expenses
Unit: RMB
Amount for Amount for
Item the period the prior period
Wages and surcharges 107,661,916.80 118,217,373.00
Depreciation expenses 59,471,794.52 44,973,785.82
Hospitality expenses 47,703,471.67 44,140,876.01
Amortisation of intangible assets 25,046,414.18 23,286,773.73
Welfare expenses 23,910,644.65 31,454,087.17
Legal costs 10,840,988.90 6,650,909.23
Insurance premium 6,695,006.66 9,440,871.93
Repair fees 6,462,342.01 9,337,357.64
Intermediary service expenses 4,654,917.80 8,597,192.82
Others 24,987,918.96 32,196,997.51
Total 317,435,416.15 328,296,224.86
172 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
50. Sales and distribution expenses
Unit: RMB
Amount for Amount for
Item the period the prior period
Wages and surcharges 48,843,122.23 50,366,970.26
Hospitality expenses 21,071,398.70 23,235,804.11
Travel expenses 13,823,032.53 12,003,217.19
Rental expenses 3,428,387.22 3,238,179.10
Selling commissions 2,472,705.10 3,387,483.92
Depreciation expenses 1,480,291.62 2,820,127.76
Office expenses 1,175,994.99 1,137,272.19
Warehouse expenses 301,394.66 429,220.85
Others 6,707,504.16 10,048,442.16
Total 99,303,831.21 106,666,717.54
51. Research and development expense
Unit: RMB
Amount for Amount for
Item the period the prior period
Consumption of materials 414,455,113.32 366,319,485.67
Utilities 76,607,858.27 75,235,547.39
Wages and surcharges 63,586,172.66 66,209,728.31
Depreciation expenses 36,311,580.22 23,682,873.40
Insurance premium 13,601,674.17 13,868,772.48
Welfare expenses 3,372,176.58 3,443,387.62
Housing provident funds 2,265,763.36 2,384,161.81
Other expenses 1,713,757.83 1,660,871.90
Total 611,914,096.41 552,804,828.58
52. Finance expenses
Unit: RMB
Amount for Amount for
Item the period the prior period
Interest expenses 854,610,967.90 856,872,614.18
Interest income 104,024,655.22 94,532,686.92
Foreign exchange gains and losses -40,639,311.96 -34,863,785.35
Bank charges and others 146,508,498.45 122,050,778.14
Total 856,455,499.17 849,526,920.05
SHANDONG CHENMING PAPER HOLDINGS LIMITED 173
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
53. Other income
Unit: RMB
Amount for Amount for
Source of other income the period the prior period
Additional deduction of VAT 94,956,915.41
Government grants – amortised deferred income included in profit or loss 53,368,860.21 82,410,962.30
Government grants – directly included in profit or loss 10,932,524.83 25,744,734.89
Refund of handling fees for withholding and payment of individual income
tax 498,630.65
Gain on debt restructuring 188,197.54
Total 159,945,128.64 108,155,697.19
54. Gain on change in fair value
Unit: RMB
Amount for Amount for
Source of gain on change in fair value the period the prior period
Gain on change in fair value of consumable biological assets measured
at fair value 5,184,193.11 5,749,779.42
Financial assets held for trading -7,405,789.55 -25,565,577.25
Total -2,221,596.44 -19,815,797.83
55. Investment income
Unit: RMB
Amount for Amount for
Item the period the prior period
Investment gain on disposal of long-term equity investments 216,154,711.23
Investment income on holding other non-current financial assets 23,957,613.40 630,212.77
Gain on debt restructuring 3,313,951.90 -145,995.36
Income from long-term equity investments accounted for using
the equity method -38,682,172.19 23,934,269.81
Investment gain on derecognition of financial assets -23,412,008.23 -67,175,214.10
Total 181,332,096.11 -42,756,726.88
56. Credit impairment loss
Unit: RMB
Amount for Amount for
Item the period the prior period
Bad debt loss of accounts receivable -124,386,619.66 -43,081,750.88
Total -124,386,619.66 -43,081,750.88
174 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
57. Loss on impairment of assets
Unit: RMB
Amount for Amount for
Item the period the prior period
Loss on inventory impairment -3,041,427.75 -43,314,485.76
Total -3,041,427.75 -43,314,485.76
58. Non-operating income
Unit: RMB
Included in non-
Amount for Amount for recurring profit or
Item the period the prior period loss in the period
Fine income 1,900,470.03 323,305.00 1,900,470.03
Gain on damage and retirement of non-current
assets 395,610.51 433,184.77 395,610.51
Exempted debts 366,717.74 12,888.00 366,717.74
Others 88,688.65 171,427.53 88,688.65
Total 2,751,486.93 940,805.30 2,751,486.93
59. Non-operating expenses
Unit: RMB
Included in non-
Amount for Amount for recurring profit or
Item the period the prior period loss in the period
Loss on damage and retirement of non-current
assets 639,215.79 3,074,424.63 639,215.79
Donation 300,000.00 300,000.00
Others 74,335.21 63,765.43 74,335.21
Total 1,013,551.00 3,138,190.06 1,013,551.00
60. Asset disposal income
Unit: RMB
Amount for Amount for
Source of asset disposal income the period the prior period
Gain on disposal of fixed assets (“-” denotes loss) 19,222,812.60 11,759,266.91
Total 19,222,812.60 11,759,266.91
SHANDONG CHENMING PAPER HOLDINGS LIMITED 175
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
61. Income tax expenses
(1) Particulars of income tax expenses
Unit: RMB
Amount for Amount for
Item the period the prior period
Income tax expenses for the period 30,685,170.68 22,508,021.82
Deferred income tax expenses -127,086,125.02 -233,999,203.96
Total -96,400,954.34 -211,491,182.14
(2) Reconciliation between accounting profit and income tax expenses
Unit: RMB
Amount for
Item the period
Total profit -70,042,106.12
Income tax expenses calculated at statutory/applicable tax rates -10,506,315.92
Effect of different tax rates applicable to subsidiaries -46,483,903.78
Effect of adjustments for income tax for prior periods 11,537,775.39
Profit and loss of joint ventures and associates accounted for using the equity method -10,700,688.45
Effect of income not subject to tax -3,690,697.97
Effect of non-deductible costs, expenses and losses 10,819,433.00
Effect of utilisation of previously unrecognised deductible loss on deferred income
tax assets -27,072,452.40
Effect of current unrecognised deductible temporary difference or deductible loss
arising from deferred tax income assets 37,402,548.77
Tax effect of R&D fee deduction (listed with“-”) -57,706,652.98
Income tax expense -96,400,954.34
62. Other comprehensive income
Please refer to note VII. 42.
63. Items on statements of cash flow
(1) Cash relating to operating activities
Cash received relating to other operating activities
Unit: RMB
Amount for Amount for
Item the period the prior period
Interest income 98,034,655.22 96,517,182.23
Open credit and other income 37,948,513.99 128,779,296.53
Government grants 14,674,965.71 16,978,364.27
Net proceedings from the financial leasing business 638,037,439.53
Total 150,658,134.92 880,312,282.56
176 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
63. Items on statements of cash flow (Cont’d)
(1) Cash relating to operating activities (Cont’d)
Cash paid relating to other operating activities
Unit: RMB
Amount for Amount for
Item the period the prior period
Expenses and open credit 944,194,644.80 802,664,900.20
Total 944,194,644.80 802,664,900.20
(2) Cash relating to financing activities
Cash received relating to other financing activities
Unit: RMB
Amount for Amount for
Item the period the prior period
Equipment finance lease received 1,075,100,000.00 1,122,264,589.15
Deposit for finance lease 6,000,000.00
Net recovery of guarantee deposit 777,685,703.00
Total 1,852,785,703.00 1,128,264,589.15
SHANDONG CHENMING PAPER HOLDINGS LIMITED 177
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
63. Items on statements of cash flow (Cont’d)
(2) Cash relating to financing activities (Cont’d)
Cash paid relating to other financing activities
Unit: RMB
Amount for Amount for
Item the period the prior period
Repayment of equipment finance lease 1,379,961,193.13 1,376,861,062.23
Acquisition of non-controlling interests 300,000,000.00
Repayment of borrowings from China Development Bank funds 68,750,000.00 68,750,000.00
Current accounts 19,350,000.00
Payment of deposit for equipment finance lease 19,000,000.00 49,250,000.00
Repayment of bonds 350,000,000.00
Net expense of guarantee deposit 97,308,709.84
Total 1,787,061,193.13 1,942,169,772.07
Changes in liabilities arising from financing activities
Applicable Not applicable
Unit: RMB
Increase during the period Decrease during the period
Item Opening balance Cash changes Non-cash changes Cash changes Non-cash changes Closing balance
Short-term borrowings 33,475,479,021.62 14,019,854,718.40 101,648,246.53 16,828,518,143.41 504,000,000.00 30,264,463,843.14
Long-term borrowings 5,954,917,145.70 612,417,275.07 27,366,519.99 524,387,954.32 29,390,000.00 6,040,922,986.44
Long-term payables 4,895,437,672.17 1,075,100,000.00 167,914,684.43 1,483,163,328.15 149,143,044.38 4,506,145,984.07
Lease liabilities 45,679,590.10 881,727.48 1,272,376.61 1,232,587.63 44,056,353.34
Other payables (financing) 282,524,750.00 1,019,000,000.00 156,030,000.00 1,145,494,750.00
Long-term receivables
(deposit for financial leasing) 308,778,944.33 51,600,826.68 19,000,000.00 11,431,959.61 287,610,077.26
Other monetary funds
(net change of guarantee deposit) 11,321,241,125.05 777,685,703.00 10,543,555,422.05
Total 56,284,058,248.97 17,504,057,696.47 349,412,005.11 19,012,371,802.49 695,197,591.62 52,832,249,416.30
178 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
64. Supplementary information on cash flow statement
(1) Supplementary information on cash flow statement
Unit: RMB
Amount for Amount for
Supplementary information the period the prior period
1. Reconciliation of net profit as cash flows from operating activities:
Net profit 26,358,848.22 -694,641,382.66
Add: Provision for impairment of assets 127,428,047.41 86,396,236.64
Depreciation of fixed assets and investment property 1,145,055,049.34 1,128,930,791.82
Depreciation of right-of-use assets 3,860,982.48 3,572,130.01
Amortisation of intangible assets 26,716,784.88 26,601,501.33
Amortisation of long-term prepaid expenses 1,664,214.03 2,970,626.13
Loss on disposal of fixed assets, intangible assets and other -19,222,812.60 -11,759,266.91
long-term assets (“-” denotes gain)
Loss on retirement of fixed assets (“-” denotes gain) 243,605.28 2,641,239.86
Loss on changes in fair value (“-” denotes gain) 2,221,596.44 19,815,797.83
Finance expenses (“-” denotes gain) 854,610,967.90 856,872,614.18
Investment loss (“-” denotes gain) -181,332,096.11 42,756,726.88
Decrease in deferred income tax assets (“-” denotes -124,990,592.41 -226,570,060.35
increase)
Increase in deferred income tax liabilities (“-” denotes -4,181,124.55 5,466,650.50
decrease)
Decrease in inventories (“-” denotes increase) 694,547,012.92 35,683,655.24
Decrease in operating receivables (“-” denotes increase) -544,020,781.43 643,109,345.71
Increase in operating payables (“-” denotes decrease) -16,460,308.73 -138,758,858.62
Others
Net cash flows from operating activities 1,992,499,393.07 1,783,087,747.59
2. Major investing and financing activities not involving cash
settlements:
Capital converted from debts
Convertible corporate bonds due within one year
Fixed assets under finance leases
3. Net change in cash and cash equivalents:
Closing balance of cash 802,830,084.55 1,842,769,494.26
Less: Opening balance of cash 764,233,742.61 2,159,460,149.51
Add: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents 38,596,341.94 -316,690,655.25
SHANDONG CHENMING PAPER HOLDINGS LIMITED 179
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
64. Supplementary information on cash flow statement (Cont’d)
(2) Net cash from disposal of subsidiaries received in current period
Unit: RMB
Amount
Cash or cash equivalents received in the current period from disposal of subsidiaries during
the period 251,022,800.00
Including: Kunshan Tuoan Plastic Products Co., Ltd. 143,730,000.00
Shandong Yujing Grand Hotel Co., Ltd. 107,292,800.00
Less: Cash and cash equivalents held by the subsidiary on the date of
loss of control 20,915,309.33
Including: Kunshan Tuoan Plastic Products Co., Ltd. 20,091,053.42
Shandong Yujing Grand Hotel Co., Ltd. 824,255.91
Add: Cash or cash equivalents received in the current period from disposal
of subsidiaries during previous periods 380,000,000.00
Including: Wuhan Chenming Hanyang Paper Holdings Co., Ltd. 380,000,000.00
Net cash received from disposal of subsidiaries 610,107,490.67
(3) Cash and cash equivalents composition
Unit: RMB
Item Closing balance Opening balance
I. Cash 802,830,084.55 764,233,742.61
Including: Treasury cash 4,129,836.09 3,674,805.36
Bank deposit that can be used for payment at any time 798,700,248.46 760,558,937.25
II. Cash equivalents
III. Balance of cash and cash equivalent at end of period 802,830,084.55 764,233,742.61
(4) Monetary funds other than cash and cash equivalents
Unit: RMB
Amount for Amount for Reasons why it is not cash and
Item the period the prior period cash equivalents
Other monetary funds 10,543,555,422.05 11,321,241,125.05 See Note VII.1 for details
Interest accrued on deposits 39,624,494.95 39,357,963.64 See Note VII.1 for details
Total 10,583,179,917.00 11,360,599,088.69
65. Notes to items of statements of changes in owners’ equity
Explanation of the item name of “others” and the adjustment amount to the balance as at the end of the previous year:
Nil
180 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
66. Foreign currency items
(1) Foreign currency items
Unit: RMB
Closing foreign Closing balance
Item currency balance Exchange rate in RMB
Monetary funds
Including: USD 39,951,997.81 7.1268 284,729,897.99
EUR 1,570,740.11 7.6617 12,034,539.50
HKD 394,815.28 0.9127 360,340.01
GBP 1,777.90 9.0430 16,077.55
JPY 1,197.00 0.0447 53.55
Accounts receivable
Including: USD 8,726,610.89 7.1268 62,192,810.49
EUR 17,223.10 7.6617 131,958.23
JPY 146,734,998.00 0.0447 6,559,054.41
Other receivables
Including: USD 1,084,115.80 7.1268 7,726,276.48
EUR 80,841.81 7.6617 619,385.70
Accounts payable
Including: USD 18,990,945.76 7.1268 135,344,672.24
EUR 766,383.12 7.6617 5,871,797.55
Long-term borrowings
Including: EUR 4,492,120.00 7.6617 34,417,275.80
(2) Explanation on overseas operating entities (including major overseas operating entities), which shall disclose
their overseas principal places of business, functional currency and basis. Reasons shall be disclosed if there
is any change in the functional currency.
Applicable Not applicable
Principal place of Place of Functional
No. Name of subsidiary business incorporation currency
1 Chenming GmbH Hamburg, Germany Hamburg, Germany EUR
2 Chenming Paper Korea Co., Ltd. Seoul, Korea Seoul, Korea KRW
3 Chenming International Co., Ltd. Los Angeles, USA Los Angeles, USA USD
4 Chenming Paper Japan Co., Ltd. Tokyo, Japan Tokyo, Japan JPY
5 Chenming Paper United States Co., Ltd. Los Angeles, USA Los Angeles, USA USD
6 Chenming (Overseas) Limited Hong Kong, China Hong Kong, China USD
7 Chenming (Singapore) Limited Singapore Singapore USD
8 Chenming (HK) Limited Hong Kong, China Hong Kong, China USD
SHANDONG CHENMING PAPER HOLDINGS LIMITED 181
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X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
67. Leases
(1) The Company as a lessee
Simplified treatment of lease expenses for short-term leases or leases of low-value assets
Applicable Not applicable
Unit: RMB
Amount for
Item the period
Short-term lease 3,235,879.40
Total 3,235,879.40
(2) The Company as a lessor
Operating lease as a lessor
Applicable Not applicable
Unit: RMB
Including: income related to
variable lease payments
Item Lease income not included in lease receipts
Lease income 88,182,141.14
Total 88,182,141.14
Financial lease as a lessor
Applicable Not applicable
182 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
VII. Notes to Items of The Consolidated Financial Statements (Cont’d)
67. Leases (Cont’d)
(2) The Company as a lessor (Cont’d)
Undiscounted lease payments for each of the next five years
Unit: RMB
Annual undiscounted lease payments
Item Closing balance Opening balance
The first year 174,536,416.38 179,905,002.33
The second year 165,465,795.09 168,651,189.37
The third year 167,667,038.24 167,585,064.63
The fourth year 161,101,058.01 162,996,827.55
The fifth year 162,012,344.71 159,887,562.91
Five years later 163,111,818.84 165,396,559.34
Total undiscounted lease payments after five years 993,894,471.27 1,004,422,206.13
VIII. R&D Expenses
Unit: RMB
Amount for Amount for
Item the period the prior period
Consumption of materials 414,455,113.32 366,319,485.67
Utilities 76,607,858.27 75,235,547.39
Wages and surcharges 63,586,172.66 66,209,728.31
Depreciation expenses 36,311,580.22 23,682,873.40
Insurance premium 13,601,674.17 13,868,772.48
Welfare expenses 3,372,176.58 3,443,387.62
Housing provident funds 2,265,763.36 2,384,161.81
Other expenses 1,713,757.83 1,660,871.90
Total 611,914,096.41 552,804,828.58
Including: R&D expenses included in profit or loss 611,914,096.41 552,804,828.58
SHANDONG CHENMING PAPER HOLDINGS LIMITED 183
INTERIM REPORT 2024
IX. Change in Scope of Consolidation
184
1. Disposal of a subsidiary
Any transaction or event that results in the loss of control of any subsidiary during the period
Yes No
Unit: RMB
INTERIM REPORT 2024
Determination
X Financial Report
Carrying and key
amount of assumption
Difference remaining Fair value of of fair value of Relevant other
between shareholding remaining remaining comprehensive
consideration and as of the date shareholding shareholding income of former
Disposal Disposal Disposal The basis for share of net assets of Remaining of loss of as of the date of Gain or loss as of the date of subsidiary
SHANDONG CHENMING PAPER HOLDINGS LIMITED
consideration percentage method determining the relevant subsidiary shareholding as control as per loss of control in fair value of loss of control as transferred
at the date of at the date of at the date of Date of date of loss of as per consolidated of the date of consolidated as per consolidated remaining per consolidated to profit or loss
Name of subsidiary loss of control loss of control loss of control loss of control control financial statements loss of control financial statements financial statements shareholding financial statements or retained profit
Shandong Yujing Grand
Hotel Co., Ltd. 162,992,813.25 90.05% Transfer 2024-3-31 Loss of control 203,535,106.51
Kunshan Tuoan Plastic
Products Co., Ltd. 143,730,000.00 100.00% Transfer 2024-2-29 Loss of control 12,619,604.72
Any situation where investments in subsidiaries are disposed of step by step through multiple transactions and control is lost during the period
Yes No
2. Change in scope of consolidation due to other reasons
During the period, 1 subsidiary was deregistered, namely Guangzhou Chenming Commercial Factoring Co., Ltd.
X Financial Report
X. Interest in Other Entities
1. Interest in subsidiaries
(1) Constitution of the Group
Unit: RMB’0,000
Principle Shareholding
place of Place of Nature of Type of Issued debt Issued share
Name of subsidiary Register capital business incorporation business legal person Direct Indirect Acquisition securities capital
Shouguang Meilun Paper 480,104.55 Shouguang Shouguang Paper making For-profit corporation 68.28% Establishment 0 0
Co., Ltd.
Shouguang Meichen Energy 100.00 Shouguang Shouguang Electricity For-profit corporation 100% Establishment 0 0
Technology Co., Ltd.
Shouguang Chenming Art 2,000.00(USD) Shouguang Shouguang Paper making For-profit corporation 75% Establishment 0 0
Paper Co., Ltd.
Shandong Chenming Paper 10,000.00 Shouguang Shouguang Sales of paper For-profit corporation 100% Establishment 0 0
Sales Co., Ltd. product
Shanghai Chenming Pulp & 10,000.00 Shanghai Shanghai Paper product For-profit corporation 100% Establishment 0 0
Paper Sales Co., Ltd. trading
Shouguang Chenming Import 70,000.00 Shouguang Shouguang Trading For-profit corporation 35.71% 64.29% Establishment 0 0
and Export Trade Co., Ltd.
Jiangxi Chenming Supply Chain 200.00 Jiangxi Jiangxi Trading For-profit corporation 70% Establishment 0 0
Management Co., Ltd.
Zhanjiang Chenming Pulp & 691,357.24 Zhanjiang Zhanjiang Paper making For-profit corporation 80.28% Establishment 0 0
Paper Co., Ltd.
Zhanjiang Chenming 130,000.00 Zhanjiang Zhanjiang Arboriculture For-profit corporation 100% Establishment 0 0
Arboriculture Development
Co., Ltd.
Yangjiang Chenming 22,000.00 Yangjiang Yangjiang Arboriculture For-profit corporation 100% Establishment 0 0
Arboriculture Development
Co., Ltd.
Guangdong Huirui Investment 25,800.00 Zhanjiang Zhanjiang Investment For-profit corporation 100% Establishment 0 0
Co., Ltd.
Hubei Changjiang Chenming 200,100.00 Huanggang Huanggang Fund For-profit corporation 59.97% Establishment 0 0
Huanggang Equity Investment
Fund Partnership (Limited
Partnership)
Hainan Chenming Technology 20,000.00 Haikou Haikou Wholesale and For-profit corporation 100% Establishment 0 0
Co., Ltd. retail
Foshan Chenming Import and 20,000.00 Foshan Foshan Trading For-profit corporation 100% Establishment 0 0
Export Trade Co., Ltd.
Shanghai Heruiming Property 30,150.00 Shanghai Shanghai Business For-profit corporation 100% Merger and 0 0
Management Co., Ltd. services acquisition
Zhanjiang Chenming Port Co., Ltd. 10,000.00 Zhanjiang Zhanjiang Port services For-profit corporation 100% Establishment 0 0
Zhanjiang Meilun Pulp & 10,000.00 Zhanjiang Zhanjiang Paper making For-profit corporation 100% Establishment 0 0
Paper Co., Ltd.
Guangdong Chenming 1,000.00 Guangdong Guangdong Panels For-profit corporation 100% Establishment 0 0
Panels Co., Ltd.
Jiangxi Chenming Tea Co., Ltd. 1,000.00 Jiangxi Jiangxi Tea business For-profit corporation 100% Establishment 0 0
Jiangxi Chenming Paper Co., Ltd. 32,673.32(USD) Nanchang Nanchang Paper making For-profit corporation 100% Establishment 0 0
Jiangxi Chenming Logistics Co., Ltd 500.00 Nanchang Nanchang Logistics For-profit corporation 100% Establishment 0 0
Nanchang Shengheng Trading Co., 1,000.00 Nanchang Nanchang Trading For-profit corporation 100% Establishment 0 0
Ltd.
Nanchang Kunheng Trading Co., 1,000.00 Nanchang Nanchang Trading For-profit corporation 100% Establishment 0 0
Ltd.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 185
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X Financial Report
X. Interest in Other Entities (Cont’d)
1. Interest in subsidiaries (Cont’d)
(1) Constitution of the Group (Cont’d)
Principle Shareholding
place of Place of Nature of Type of Issued debt Issued share
Name of subsidiary Register capital business incorporation business legal person Direct Indirect Acquisition securities capital
Nanchang Chenming Arboriculture 1,000.00 Nanchang Nanchang Arboriculture For-profit corporation 100% Establishment 0 0
Development Co., Ltd.
Jiangxi Chenming Port Co., Ltd. 1,507.00 Jiangxi Jiangxi Cargo For-profit corporation 100% Merger and 0 0
transportation acquisition
Shandong Dingkun Asset 100,100.00 Shouguang Shouguang Business services For-profit corporation 100% Establishment 0 0
Management Partnership
(Limited Partnership)
Shouguang Kunhe Trading Co., Ltd. 1,000.00 Shouguang Shouguang Trading For-profit corporation 100% Establishment
Jilin Chenming Paper Co., Ltd. 150,000.00 Jilin Jilin Paper making For-profit corporation 100% Acquisition 0 0
Fuyu Chenming Paper Co., Ltd. 30,800.00 Fuyu Fuyu Paper making For-profit corporation 100% Establishment 0 0
Jilin Chenming New-style Wall 1,000.00 Jilin Jilin Wall materials For-profit corporation 100% Establishment 0 0
Materials Co., Ltd
Jilin Chenming Logistics Co., Ltd. 500.00 Jilin Jilin Logistics For-profit corporation 100% Establishment 0 0
Huanggang Chenming Pulp & Paper 335,000.00 Huanggang Huanggang Pulp production For-profit corporation 70.15% 29.85% Establishment 0 0
Co., Ltd.
Huanggang Chenming Paper 100,000.00 Huanggang Huanggang Paper making For-profit corporation 100% Establishment 0 0
Technology Co., Ltd.
Huanggang Chenming Port Service 5,000.00 Huanggang Huanggang Port services For-profit corporation 100% Establishment 0 0
Co., Ltd.
Huanggang Chenming Pulp & Fiber 5,000.00 Huanggang Huanggang Trading For-profit corporation 100% Establishment 0 0
Trading Co., Ltd.
Hubei Huanggang Chenming Equity 300.00 Huanggang Huanggang Capital market For-profit corporation 60% Establishment 0 0
Investment services
Fund Management Co., Ltd.
Shandong Chenming Group 500,000.00 Jinan Jinan Finance For-profit corporation 80% 20% Establishment 0 0
Finance Co., Ltd.
Shandong Chenming Financial 587,200.00 Jinan Jinan Finance leases For-profit corporation 100% Establishment 0 0
Leasing Co., Ltd.
Chenming (HK) Limited 9,990.00 (USD) Hong Kong Hong Kong Paper product For-profit corporation 100% Establishment 0 0
trading
Qingdao Chenming Nonghai 500,000.00 Qingdao Qingdao Finance leases For-profit corporation 100% Establishment 0 0
Financial Leasing Co., Ltd
Shanghai Chenming Financial 100,000.00 Shanghai Shanghai Finance leases For-profit corporation 100% Establishment 0 0
Leasing Co., Ltd.
Wuhan Junheng Property 39,600.00 Wuhan Wuhan Property For-profit corporation 100% Merger and 0 0
Management Co. Ltd. acquisition
Guangzhou Chenming Property 100,000.00 Guangzhou Guangzhou Property For-profit corporation 100% Establishment 0 0
Management Co., Ltd.
Shandong Chenming Investment 20,000.00 Jinan Jinan Investment For-profit corporation 100% Establishment 0 0
Limited
Shanxi Fuyin Industrial Trading Co., 36,000.00 Taiyuan Taiyuan Wholesale and For-profit corporation 100% Acquisition 0 0
Ltd. retail
186 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X Financial Report
X. Interest in Other Entities (Cont’d)
1. Interest in subsidiaries (Cont’d)
(1) Constitution of the Group (Cont’d)
Principle Shareholding
place of Place of Nature of Type of Issued debt Issued share
Name of subsidiary Register capital business incorporation business legal person Direct Indirect Acquisition securities capital
Chongmin Culture Development 20,000.00 Shanghai Shanghai Leasing and For-profit corporation 100% Acquisition 0 0
(Shanghai) Co., Ltd. business
services
Jinan Chenming Paper Sales Co., 10,000.00 Jinan Jinan Investment For-profit corporation 100% Establishment 0 0
Ltd. management/
Paper product
trading
Shandong Chenming Commercial 20,000.00 Jinan Jinan Business For-profit corporation 100% Establishment 0 0
Factoring Co., Ltd. factoring
Chenming GmbH 65.00 (USD) Germany Germany Paper product For-profit corporation 100% Establishment 0 0
trading
Chenming Paper Japan Co., Ltd. 150.00 (USD) Japan Japan Paper product For-profit corporation 100% Establishment 0 0
trading
Chenming International Co., Ltd. 100.00 (USD) The United The United Paper product For-profit corporation 100% Establishment 0 0
States States trading
Chenming Paper United States Co., 100.00 (USD) The United The United Paper product For-profit corporation 100% Establishment 0 0
Ltd. States States trading
Chenming Paper Korea Co., Ltd. 100.00 (USD) Korea Korea Paper product For-profit corporation 100% Establishment 0 0
trading
Chenming (Overseas) Limited 2,000.00 (USD) Hong Kong Hong Kong Paper product For-profit corporation 100% Establishment 0 0
trading
Chenming (Singapore) Limited 2,000.00 (USD) Singapore Singapore Paper product For-profit corporation 100% Establishment 0 0
trading
Meilun (BVI) Limited 5.00 (USD) Cayman Cayman Commerce For-profit corporation 100% Establishment 0 0
Shanghai Chenming Industry Co., 370,000.00 Shanghai Shanghai Property For-profit corporation 100% Establishment 0 0
Ltd. investment
and
management
Shanghai Chenyin Trading Co., Ltd. 41,000.00 Shanghai Shanghai Trading For-profit corporation 51% Establishment 0 0
Shanghai Hongtai Real Estate Co., 60,391.77 Shanghai Shanghai Real estate For-profit corporation 100% Merger and 0 0
Ltd. acquisition
Shanghai Hongtai Property 200.00 Shanghai Shanghai Property For-profit corporation 100% Merger and 0 0
Management Co., Ltd. acquisition
Shouguang Chenming Papermaking 200.00 Shouguang Shouguang Machinery For-profit corporation 100% Establishment 0 0
Machine Co., Ltd. manufacturing
Shouguang Hongxiang Printing and 80.00 Shouguang Shouguang Printing and For-profit corporation 100% Acquisition 0 0
Packaging Co., Ltd. packaging
Shouguang Chenming Modern 1,000.00 Shouguang Shouguang Transportation For-profit corporation 100% Establishment 0 0
Logistic Co., Ltd.
Shouguang Hongyi Decorative 200.00 Shouguang Shouguang Packaging For-profit corporation 100% Merger and 0 0
Packaging Co., Ltd. acquisition
SHANDONG CHENMING PAPER HOLDINGS LIMITED 187
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X Financial Report
X. Interest in Other Entities (Cont’d)
1. Interest in subsidiaries (Cont’d)
(1) Constitution of the Group (Cont’d)
Principle Shareholding
place of Place of Nature of Type of Issued debt Issued share
Name of subsidiary Register capital business incorporation business legal person Direct Indirect Acquisition securities capital
Shouguang Xinyuan Coal Co., Ltd. 300.00 Shouguang Shouguang Coal For-profit corporation 100% Merger and 0 0
acquisition
Shouguang Wei Yuan Logistics 393.00 Shouguang Shouguang Logistics For-profit corporation 100% Merger and 0 0
Company Limited acquisition
Shouguang City Run Sheng Wasted 2,380.00 Shouguang Shouguang Purchase and For-profit corporation 100% Merger and 0 0
Paper Recycle Co., Ltd. sale of waste acquisition
Shouguang Shun Da Customs 150.00 Shouguang Shouguang Customs For-profit corporation 100% Establishment 0 0
Declaration Co, Ltd. declaration
Huanggang Chenming Arboriculture 7,000.00 Huanggang Huanggang Arboriculture For-profit corporation 100% Establishment 0 0
Development Co., Ltd.
Chenming Arboriculture Co., Ltd. 10,000.00 Wuhan Wuhan Arboriculture For-profit corporation 100% Establishment 0 0
Hailaer Chenming Paper Co., Ltd. 1,600.00 Hailaer Hailaer Paper making For-profit corporation 75% Establishment 0 0
Weifang Chenming Growth Driver 100,000.00 Weifang Weifang Fund For-profit corporation 79% Establishment 0 0
Replacement
Equity Investment Fund
Partnership (Limited Partnership)
Weifang Chendu Equity Investment 32,000.00 Shouguang Shouguang Capital market For-profit corporation 79.69% Establishment 0 0
Partnership services
(Limited Partnership
Nanjing Chenming Culture 500.00 Nanjing Nanjing Marketing For-profit corporation 100% Establishment 0 0
Communication Co., Ltd.
(2) Major non-wholly owned subsidiaries
Unit: RMB
Gain or loss Dividend to
attributable to minority minority interest Closing balance
Name of subsidiary Minority interest interest during the period declared during the period of minority interest
Shouguang Meilun Paper Co., Ltd. 31.72% 14,034,956.42 123,000,000.00 1,803,983,499.88
Zhanjiang Chenming Pulp
& Paper Co., Ltd. 19.72% -1,288,359.90 1,579,422,644.51
188 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X. Interest in Other Entities (Cont’d)
1. Interest in subsidiaries (Cont’d)
(3) Key financial information of major non-wholly owned subsidiaries
Unit: RMB
Closing balance Opening balance
Non-current Non-current Non-current Non-current
Name of subsidiary Current assets assets Total assets Current liabilities liabilities Total liabilities Current assets assets Total assets Current liabilities liabilities Total liabilities
X Financial Report
Shouguang Meilun
Paper Co., Ltd. 6,586,281,476.07 9,855,312,662.22 16,441,594,138.29 6,998,813,648.60 1,104,767,705.49 8,103,581,354.09 5,534,633,307.08 10,096,140,872.04 15,630,774,179.12 6,282,312,497.46 888,031,988.48 7,170,344,485.94
Zhanjiang Chenming
Pulp & Paper
Co., Ltd. 12,089,985,789.76 12,282,982,933.43 24,372,968,723.19 13,847,904,342.71 1,574,758,664.42 15,422,663,007.13 12,562,782,806.69 13,116,686,959.25 25,679,469,765.94 14,866,141,937.07 1,876,669,919.47 16,742,811,856.54
Unit: RMB
Amount for the period Amount for the prior period
Total Total Cash flows
comprehensive Cash flows from comprehensive from operating
Name of subsidiary Revenue Net profit income operating activities Revenue Net profit income activities
Shouguang Meilun Paper Co., Ltd. 4,684,096,701.75 40,515,254.62 40,515,254.62 759,366,495.73 9,084,559,413.98 153,008,366.72 153,008,366.72 1,528,677,090.76
Zhanjiang Chenming Pulp & Paper Co., Ltd. 6,278,830,552.25 3,686,976.50 7,359,489.89 671,266,132.58 11,000,808,231.98 -541,888,245.61 -543,112,252.63 1,332,553,432.65
INTERIM REPORT 2024
SHANDONG CHENMING PAPER HOLDINGS LIMITED
189
X Financial Report
X. Interest in Other Entities (Cont’d)
2 Transaction changing shareholding in but not causing to loss of control over subsidiaries
(1) Changing in shareholding in subsidiaries
The Company previously held 64.87% equity interest in Shouguang Meilun Paper Co., Ltd. In 2024, the Company
and Dongxing Securities Investment Co., Ltd. and SWSC Innovation Investment Co., Ltd. entered into an equity
transfer agreement in relation to the transfer of an aggregate of 3.41% equity interest in Shouguang Meilun Paper
Co., Ltd to the Company. The equity transfer transaction did not result in the loss of control over Shouguang
Meilun Paper Co., Ltd. by the Company. As at 30 June 2024, the equity transfer agreement was completed, and
the total transaction consideration paid was RMB300 million. The transaction resulted in a decrease in minority
interest by RMB290.0424 million, and a decrease in capital reserves by RMB9,957,600.
(2) Effect of the transactions on minority interest and equity attributable to the owners of the parent company
Unit: RMB
Shouguang Meilun
Item Paper Co., Ltd.
Cost of acquisition/disposal consideration 300,000,000.00
– Cash 300,000,000.00
Total cost of acquisition/disposal consideration 300,000,000.00
Less: Share of net assets of the subsidiary calculated based on the
proportion of equity interest acquired/disposed of 290,042,380.45
Difference 9,957,619.55
Of which: Capital reserve adjustment 9,957,619.55
3 Interest in joint arrangements or associates
(1) Major joint ventures and associates
Accounting
method for
investment in
Principle place Place of Shareholding joint ventures
Name of joint venture and associate of business incorporation Nature of business Direct Indirect or associates
Shouguang Jintou Industrial Investment
Partnership (Limited Partnership) Shouguang Shouguang Investment 49.57% Equity method
Guangdong Nanyue Bank Co., Ltd. Guangdong Guangdong Bank 4.46% Equity method
The basis for holding less than 20% of the voting power of the investee but having significant influence, and the
basis for holding 20% or more of the voting power of the investee but not having significant influence:
The Company holds 4.46% equity interest in Guangdong Nanyue Bank Co., Ltd. but is the second largest
shareholder and is able to exercise significant influence over Guangdong Nanyue Bank Co., Ltd. by appointing
one director to the board of directors (out of a total of nine directors on the board of directors).
190 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X Financial Report
X. Interest in Other Entities (Cont’d)
3 Interest in joint arrangements or associates (Cont’d)
(2) Key financial information of major joint ventures
Unit: RMB
Closing balance/ Opening balance/
Shouguang Jintou Industrial Investment Partnership amount for amount for the
(Limited Partnership) the period prior period
Current assets 2,364,434,510.35 1,775,433,885.35
Of which: Cash and cash equivalents 1,897,392.08 1,047,090.41
Non-current assets 393,384,007.57 408,884,578.74
Total assets 2,757,818,517.92 2,184,318,464.09
Current liabilities 696,815,230.96 104,387,199.50
Non-current liabilities 6,080,489.65 5,805,542.05
Total liabilities 702,895,720.61 110,192,741.55
Minority interest
Equity interest attributable to shareholders of the
parent company 2,054,922,797.31 2,074,125,722.54
Share of net assets based on shareholding 1,018,612,901.09 1,028,131,675.91
Adjustments
– Others 1,306,754,421.23 1,316,438,571.64
Carrying amount of equity investment in joint ventures 2,325,367,322.32 2,344,570,247.55
Fair value of equity investment in joint ventures where publicly
quoted prices exist
Revenue 305,986,438.14
Finance expenses 1,809,456.02 1,620,207.86
Income tax expenses -616,895.19
Net profit -19,202,925.23 -1,620,207.86
Net profit from discontinued operations
Other comprehensive income
Total comprehensive income -19,202,925.23 -1,620,207.86
Dividends received from joint ventures during the year
SHANDONG CHENMING PAPER HOLDINGS LIMITED 191
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X Financial Report
X. Interest in Other Entities (Cont’d)
3 Interest in joint arrangements or associates (Cont’d)
(3) Key financial information of major associates
Unit: RMB
Closing balance/ Opening balance/
amount for amount for the
Guangdong Nanyue Bank Co., Ltd. the period prior period
Current assets 204,880,976,101.06 194,828,415,917.54
Non-current assets 115,126,420,036.44 111,581,185,310.11
Total assets 320,007,396,137.50 306,409,601,227.65
Current liabilities 262,494,142,140.38 250,233,916,389.30
Non-current liabilities 27,354,502,269.11 26,252,549,634.28
Total liabilities 289,848,644,409.49 276,486,466,023.58
Minority interest 68,358,275.97
Equity interest attributable to shareholders of the parent company 30,158,751,728.01 29,854,776,928.10
Share of net assets based on shareholding 1,345,080,327.07 1,331,523,051.00
Adjustments
Goodwill
Unrealised profit arising from intra-group transactions
Others
Carrying amount of equity investment in associates 1,345,080,327.07 1,331,523,051.00
Fair value of equity investment in associates where publicly quoted
prices exist
Revenue 1,263,828,453.62 2,739,283,882.64
Net profit 233,504,987.79 416,331,873.52
Net profit from discontinued operations
Other comprehensive income 82,343,349.45 -9,346,709.52
Total comprehensive income 315,848,337.24 406,985,164.00
Dividends received from associates during the year
192 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X Financial Report
X. Interest in Other Entities (Cont’d)
3 Interest in joint arrangements or associates (Cont’d)
(4) Summary financial information of non-major joint ventures and associates
Unit: RMB
Closing balance/ Opening balance/
amount for amount for the
the period prior period
Joint ventures:
Total carrying amount of investment 207,942,516.40 197,483,273.06
Total amount of the following items based on shareholding
– Net profit 10,459,243.34 5,160,237
– Other comprehensive income
– Total comprehensive income 10,459,243.34 5,160,237
Associates:
Total carrying amount of investment 771,264,399.70 811,622,814.12
Total amount of the following items based on shareholding
– Net profit -40,358,414.42 3,643,661.92
– Other comprehensive income
– Total comprehensive income -40,358,414.42 3,643,661.92
XI. Government Grants
1. Government grants recognised at the end of the reporting period at the amount receivable
Applicable Not applicable
Reasons for not receiving the estimated amount of government grants at the estimated time
Applicable Not applicable
SHANDONG CHENMING PAPER HOLDINGS LIMITED 193
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X Financial Report
XI. Government Grants (Cont’d)
2. Liabilities in respect of government grants
Applicable Not applicable
Unit: RMB
Include in
New grants non-operating Include in other
during the income for the income for Other changes Asset-related/
Subsidy item Accounting item Opening balance period period the period for the period Closing balance income-related
Funding for environmental protection Deferred income 524,694,035.24 25,239,041.36 499,454,993.88 Asset-related
Huanggang pulp-forestry-paper project Deferred income 445,968,305.25 12,513,108.90 433,455,196.35 Asset-related
Infrastructure and environmental
protection engineering transformation
project Deferred income 196,803,377.25 5,758,794.72 191,044,582.53 Asset-related
Financial subsidies for technical
transformation project Deferred income 95,106,015.68 3,270,000.00 4,416,552.48 93,959,463.20 Asset-related
Zhanjiang forestry-pulp-paper project Deferred income 42,617,331.35 2,047,316.46 40,570,014.89 Asset-related
Project fund for National Key
Technology
Research and Development Program Deferred income 793,725.00 82,350.00 711,375.00 Asset-related
Others Deferred income 31,881,324.93 3,311,696.29 28,569,628.64 Asset-related
Total 1,337,864,114.70 3,270,000.00 53,368,860.21 1,287,765,254.49
194 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X Financial Report
XI. Government Grants (Cont’d)
3. Government grants included in profit or loss for the period
Applicable Not applicable
Unit: RMB
Amount for Amount for
Subsidy item Accounting item the period the prior period
Funding for environmental protection Other income 25,239,041.36 26,594,207.20
Huanggang forestry-pulp-paper project Other income 12,513,108.90 12,513,108.90
Financial subsidies for technological
transformation project Other income 11,626,552.48 35,191,957.48
Sewage treatment and water conservation
transformation project Other income 5,758,794.72
Zhanjiang forestry-pulp-paper project Other income 2,047,316.46 2,047,316.46
Government rewards Other income 1,510,920.00 7,220,880.00
Subsidy for job expansion Other income 938,615.16 52,000.00
Afforestation subsidy
Other income 491,960.00 459,000.12
Incentive fund for smart manufacturing
regulatory Enterprises Other income 400,000.00 612,000.00
Job stabilisation subsidy Other income 288,435.21 9,500.00
Project fund for National Key Technology Research
and Development Program Other income 82,350.00 82,350.00
Unemployment Insurance Other income 46,500.00
Refund of tax Other income 30,124.00 2,877,613.59
Refund of tax service handling fees Other income 15,170.46
Railway subsidy Other income 800.00
Special subsidy for foreign trade Other income 10,833,800.00
Infrastructure and environmental protection
engineering Other income 5,758,794.72
Immediate VAT refund Other income 3,186,241.18
Others Other income 3,311,696.29 716,927.54
Total 64,301,385.04 108,155,697.19
SHANDONG CHENMING PAPER HOLDINGS LIMITED 195
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X Financial Report
XII. Risk Relating to Financial Instruments
Main financial instruments of the Group include monetary funds, bills receivable, accounts receivable, accounts receivable
financing, other receivables, non-current assets due within one year, financial assets held for trading, other current assets,
long-term receivables, other non-current financial assets, bills payable, accounts payable, other payables, short-term
borrowings, non-current liabilities due within one year, long-term borrowings, bonds payable, lease liabilities and long-term
payables. Details of financial instruments refer to related notes. The risks associated with these financial instruments and
the risk management policies adopted by the Company to mitigate these risks are described below. The management of the
Company manages and monitors these exposures to ensure that the above risks are controlled in a limited extent.
1. Various risks from financial instruments
The Company aims to seek the appropriate balance between the risks and benefits in order to mitigate the adverse
effects on the Company’s financial performance from financial risk. Based on such objectives, the Company’s risk
management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk
limits and devise corresponding internal control procedures, and to monitor risks faced by the Company. Such risk
management policies and internal control systems are reviewed regularly to adapt to changes in market conditions and
the Company’s activities. The internal audit department of the Company undertakes both regular and ad-hoc reviews of
risk management controls and procedures
Risks associated with the financial instrument of the Company mainly include credit risk, liquidity risk, market risk
(including exchange rate risk, interest rate risk and commodity price risk).
The board of directors is responsible to plan and establish the Company’s risk management structure, make risk
management policies and related guidelines, and supervise the implementation of risk management. The Company has
already made risk management risks to identify and analyse risks that the Company face. These policies mentioned
specific risks, covering market, credit risk and liquidity risk etc. The Company regularly assesses market environment
and the operation of the Company changes to determine if to make alteration to risk management policy and systems.
The Company’s risk management is implemented by Risk Management Committee according to the approval of the
board of directors. The Risk Management Committee works closely with other business department of the Company to
identify, evaluating and avoiding certain risks. The Company’s internal audit department will audit the risk management
control and procedures regularly and report the result to audit committee of the Company.
The Company spreads risks through diverse investment and business lines, and through making risk management
policy to reduce risks of single industry, specific area and counterpart.
(1) Credit risk
Credit risk refers to risk associated with the default of contract obligation of a transaction counterparty resulting in
financial losses to the Company.
The Company manages credit risk based category. Credit risks mainly arose from bank deposit, bills receivable,
accounts receivable, other receivables and long-term receivables etc.
The Company’s bank deposit mainly deposits in state-owned banks and other large and medium-sized listed
banks. The Company anticipated that the bank deposit does not have significant credit risk.
196 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X Financial Report
XII. Risk Relating to Financial Instruments (Cont’d)
1. Various risks from financial instruments (Cont’d)
(1) Credit risk (Cont’d)
For accounts receivables, other receivables and long-term receivables, the Company set related policies to control
exposure of credit risks. The Company evaluates client’s credit quality and set related credit period based on the
client’s financial status, credit records and other factors such as current market situation etc. The Company keeps
monitor the client’s credit record and for client with deteriorate credit records, the Company will ensure the credit
risk is under control in whole by means of written notice of payment collection, shorten or cancel credit period.
The Company’s debtor spread over different industry and area. The Company continued to assess the credit
evaluation to receivables and purchase credit guarantee insurance if necessary.
The biggest credit risk exposure of the Company is the carrying amount of each financial asset in the balance
sheet. The Company did not provide financial guarantee which resulted in credit risks.
The amount of top 5 accounts receivable of the Company accounted for 31.61% (2023: 36.65%) of the
Company’s total accounts receivables. The amount of top 5 other receivable of the Company accounted for
66.79% (2023: 70.32%) of the Company’s total other receivables.
(2) Liquidity risk
Liquidity risk refers to the risks that the Company will not be able to meet its obligations associated with its
financial liabilities that are settled by delivering cash or other financial assets.
To manage the liquidity risk, the Company monitors and maintains a level of cash and cash equivalents to finance
the Company’s operations and mitigate the effects of fluctuations in cash flows. The management of the Company
monitors the usage of bank borrowings and ensures compliance with the borrowing agreements. In the meantime,
the Company obtain commitments from major financial institutions to provide sufficient standby funds to meet
short-term and long-term funding needs.
Operating cash of the Company was generated from capital and bank and other borrowings. As at 30 June 2024,
the Company’s unused bank loan credit was RMB41,846.7437 million (31 December 2023: RMB44,131.5478
million). The closing balance of financial assets of the Company due within one year amounted to RMB24,099.4235
million, while the closing balance of financial liabilities due within one year amounted to RMB46,718.3898 million.
The financial assets due within one year was less than that of financial liabilities. To manage liquidity risk, in 2024,
the Company will focus on its major operations, actively divest or dispose non-principal assets, and put greater
efforts in recovery of financial lease payment. In addition to controlling its capital expenditures, the Company will
also strengthen internal control and further lower its costs. The Company will enhance market operations, boost
sales volume and enhance corporate efficiency.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 197
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X Financial Report
XII. Risk Relating to Financial Instruments (Cont’d)
1. Various risks from financial instruments (Cont’d)
(2) Liquidity risk (Cont’d)
As at the end of the period, the financial assets, financial liabilities and off balance sheet guarantee held by the
Company are analysed by their maturity date as below at their remaining undiscounted contractual cash flows (in
RMB’0,000):
Closing balance
Item Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total
Financial assets:
Monetary funds 1,134,638.55 1,134,638.55
Financial assets held for trading 3,919.74 3,919.74
Bills receivable 67,496.23 67,496.23
Accounts receivable 356,533.83 356,533.83
Accounts receivable financing 2,206.56 2,206.56
Other receivables 257,654.11 257,654.11
Long-term receivables 32,591.75 29,728.47 62,320.22
Other non-current financial assets 78,007.77 78,007.77
Other current assets 74,937.85 74,937.85
Non-current assets due within one year 512,555.48 512,555.48
Total financial assets 2,409,942.35 32,591.75 29,728.47 78,007.77 2,550,270.34
Financial liabilities:
Short-term borrowings 3,023,925.42 3,023,925.42
Bills payable 556,238.46 556,238.46
Accounts payable 407,719.82 407,719.82
Other payables 313,491.11 313,491.11
Non-current liabilities due within one year 363,464.18 363,464.18
Other current liabilities 7,000.00 7,000.00
Long-term borrowings 148,238.04 142,739.05 191,502.99 482,480.08
Lease liabilities 183.40 354.01 5,249.95 5,787.36
Long-term payables 174,236.65 61,580.10 235,816.75
Total financial liabilities and contingent liabilities 4,671,838.99 322,658.09 204,673.16 196,752.94 5,395,923.18
198 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X Financial Report
XII. Risk Relating to Financial Instruments (Cont’d)
1. Various risks from financial instruments (Cont’d)
(2) Liquidity risk (Cont’d)
As at the end of the prior year, the financial assets, financial liabilities and off-balance sheet guarantee held by the
Company are analysed by their maturity date as below at their remaining undiscounted contractual cash flows (in
RMB’0,000):
Balance as at the end of the prior year
Item Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total
Financial assets:9
Monetary funds 1,208,547.49 1,208,547.49
Financial assets held for trading 4,629.43 4,629.43
Bills receivable 41,160.00 41,160.00
Accounts receivable 307,757.71 307,757.71
Accounts receivable financing 21,588.42 21,588.42
Other receivables 273,484.02 273,484.02
Long-term receivables 29,478.61 6,700.00 36,178.61
Other non-current financial assets 78,156.10 78,156.10
Other current assets 69,994.65 69,994.65
Non-current assets due within one year 529,707.20 529,707.20
Total financial assets 2,456,868.92 29,478.61 6,700.00 78,156.10 2,571,203.63
Financial liabilities:
Short-term borrowings 3,344,774.24 3,344,774.24
Bills payable 461,898.65 461,898.65
Accounts payable 390,262.09 390,262.09
Other payables 241,475.21 241,475.21
Non-current liabilities due within one year 374,650.69 374,650.69
Other current liabilities 10,000.00 10,000.00
Long-term borrowings 84,962.58 115,780.76 267,358.11 468,101.45
Lease liabilities 453.22 354.01 5,249.95 6,057.18
Long-term payables 149,201.63 112,355.62 261,557.25
Total financial liabilities and contingent liabilities 4,823,060.88 234,617.43 228,490.39 272,608.06 5,558,776.76
The financial liabilities disclosed above are based on cash flows that are not discounted and may differ from the
carrying amount of the line items of the balance sheet.
Maximum guarantee amount for signed guarantee contracts does not represent the amount to be paid.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 199
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XII. Risk Relating to Financial Instruments (Cont’d)
1. Various risks from financial instruments (Cont’d)
(3) Market risk
Market risk includes interest rate risk and currency risk, refers to the risk that the fair value or future cash flow of a
financial instrument will be fluctuated due to the changes in market price.
Interest rate risk
Interest rate risk refers to the risk that the fair value or future cash flow of a financial instrument will be fluctuated
due to the floating rate. Interest rate risk arises from recognised interest-bearing financial instrument and
unrecognised financial instrument (e.g. loan commitments).
The Company’s interest rate risk arises from long-term interest-bearing liabilities including long-term borrowing
and bonds payable. Financial liabilities issued at floating rate expose the Company to cash flow interest rate
risk. Financial liabilities issued at fixed rate expose the Company to fair value interest rate risk. The Company
determines the relative proportions of its fixed rate and floating rate contracts depending on the prevailing market
conditions and to maintain an appropriate combination of financial instruments at fixed rate and floating rate
through regular reviews and monitors.
The Company continuously monitors the interest rate position of the Company. The Company did not enter
into any interest rate hedging arrangements. But the management is responsible to monitor the risks of interest
rate and consider to hedge significant interest risk if necessary. Increase in interest rates will increase the
cost of new borrowing and the interest expenses with respect to the Company’s outstanding floating rate
interest-bearing borrowings, and therefore could have a material adverse effect on the Company’s financial result.
The management will make adjustments with reference to the latest market conditions. These adjustments may
include enter into interest swap agreement to mitigate its exposure to the interest rate risk.
Interest bearing financial instrument held by the Company are as follows (in RMB’0,000):
Amount for Amount for
Item the period the prior period
Financial instrument with fixed interest rate
Financial liabilities
Of which: Short-term borrowings 3,023,925.42 3,344,774.24
Long-term borrowings 482,480.08 468,101.45
Long-term borrowings due within one year 121,612.22 127,390.27
Total 3,628,017.72 3,940,265.96
Financial instrument with float interest rate
Financial assets
Of which: Monetary funds 1,134,225.57 1,208,180.01
Total 1,134,225.57 1,208,180.01
200 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X Financial Report
XII. Risk Relating to Financial Instruments (Cont’d)
1. Various risks from financial instruments (Cont’d)
(3) Market risk (Cont’d)
Interest rate risk (Cont’d)
As at 30 June 2024, if the interest rates of borrowings at floating interest rates increase or decrease by 25 basis
points with all other factors remain unchanged, the Company’s net profit and shareholders’ equity will increase or
decrease by RMB3,464,300 (31 December 2023: RMB3,733,100). The bank’s interest settlement date is generally
the 20th of each month, according to the accounting period, so you need to consider the interest rate for the next
11 days, the balance of the current loan * the average borrowing rate for the year *25%/360 * 11 * 25%.
The financial instruments held by the Company at the reporting date expose the Company to fair value interest
rate risk. This sensitivity analysis as above has been determined assuming that the change in interest rates had
occurred at the reporting date and arisen from the recalculation of the above financial instrument issued at new
interest rates. The non-derivative tools issued at floating interest rate held by the Company at the reporting date
expose the Company to cash flow interest rate risk. The effect to the net profit and shareholder’s equity illustrated
in the sensitivity analysis as above is arisen from the effect to the annual estimate amount of interest expenses or
revenue at the floating interest rate. The analysis is performed on the same basis for prior year.
Exchange rate risk
Exchange risk refers to the risk that the fair value or future cash flows of a financial instrument will be fluctuated
due to the changes in foreign currency rates. Foreign currency risk arises on financial instruments that are
denominated in a currency other than the functional currency in which they are measured.
The principal business of the Company is situated within the PRC and is denominated in RMB. However, foreign
exchange risks still exist for the assets and liabilities in foreign currencies and future foreign currency transactions
as recognised by the Company (assets and liabilities in foreign currencies and foreign currency transactions are
mainly denominated in US dollar, Japanese yen, South Korean Won, Euro, Hong Kong dollar and British pound).
The following table details the financial assets and liabilities held by the Company which denominated in foreign
currencies and amounted to RMB as at 30 June 2024 are as follows (in RMB’0,000):
Item Liabilities denominated in foreign currency Assets denominated in foreign currency
Closing Closing balance Closing Closing balance
balance of the prior year balance of the prior year
USD 13,534.47 60,628.27 35,464.90 45,596.22
EUR 4,028.91 1,460.24 1,278.59 4,305.63
HKD 36.03 204.24
JPY 655.91 736.80
GBP 1.61 1.33
Total 17,563.38 62,088.51 37,437.04 50,844.22
The Group continuously monitors the size of the Group’s foreign currency transactions and foreign currency
assets and liabilities to minimise the foreign exchange risks it faces, and for this reason the Group may aim to
avoid foreign exchange risk by signing forward foreign exchange contracts or currency swap contracts.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 201
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X Financial Report
XII. Risk Relating to Financial Instruments (Cont’d)
1. Various risks from financial instruments (Cont’d)
(3) Market risk (Cont’d)
Exchange rate risk (Cont’d)
With other variables unchanged, the after-tax effect of the possible reasonable changes in the exchange rate of
foreign currency to RMB on the current profit and loss of the Company is as follows (in RMB’0,000):
Increase (decrease) in after-tax profits Amount for the period Amount for the prior period
Increase in exchange rate of USD 5% 1,096.52 5% -751.60
Decrease in exchange rate of USD -5% -1,096.52 -5% 751.60
Increase in exchange rate of Euro 5% -137.52 5% 142.27
Decrease in exchange rate of Euro -5% 137.52 -5% -142.27
Other price risks
Other price risks refer to the risk of fluctuations caused by changes in market prices other than exchange rate
risks and interest rate risks, whether arising from factors related to a single financial instrument or its issuer, or
from factors related to all similar financial instruments traded on the market. Other price risks can stem from
changes in commodity prices, stock market indexes, equity instrument prices, and other risk variables.
Listed equity instrument investments held by the Company classified as financial assets held for trading, other
non-current financial assets and other equity instrument investments are measured at fair value on the balance
sheet date. Therefore, the Company is subject to the risk of changes in the securities market.
The Company monitors closely the impact of price changes on the price risk of the Company’s investment in
equity securities. The Company has not taken any measures to avoid other price risks. However, the management
is responsible for monitoring other price risks, and will consider holding multiple equity securities portfolios to
reduce the price risk of equity securities investment when necessary.
With other variables unchanged, the after-tax effect of the change of -15.33% (prior year: -32.49%) in equity
securities investment prices on the Company’s current profit and loss and other comprehensive income is as
follows (unit: RMB’0,000):
Increase (decrease) in Increase (decrease) in other
after-tax profits comprehensive income
Balance for Balance for Balance for Balance for
Item the period the prior period the period the prior period
Due to the rise in the price of equity securities
investment
Due to the decline in the price of equity securities
investment -709.69 -2,427.46
202 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X Financial Report
XII. Risk Relating to Financial Instruments (Cont’d)
2. Capital management
The objective of the Company’s capital risk management is to safeguard the Company’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust its financing methods, adjust the number
of dividends paid to shareholders, return capital to shareholders, issue new shares or disposes assets to reduce its
liabilities.
The Company monitors capital on the basis of the gearing ratio. This ratio is calculated as net liabilities divided by total
capital. As at 30 June 2024, the Company’s gearing ratio is 73.30% (31 December 2023: 73.46%).
3. Financial assets
(1) By transfer method
Applicable Not applicable
Unit: RMB
Nature of financial Amount of financial Confirmation of
Transfer Method assets transferred assets transferred derecognition Basis for derecognition
Endorsement or discounting Bank acceptance bills 7,834,710,831.76 Derecognised Bank acceptance bills were derecognised as
such bills for endorsement or discounting
were accepted by banks with higher credit
rating, their credit risk and deferred payment
risk were low, the interest rate risk associated
with the bills was transferred to banks, and it
can be determined that the major risks and
rewards of the ownership of the bills were
transferred.
External transfer Debt receivable 31,119,840.10 Derecognised Where the Company transferred substantially
all of the risks and rewards related to the
ownership of the financial asset to the
transferee
Total 7,865,830,671.86
SHANDONG CHENMING PAPER HOLDINGS LIMITED 203
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X Financial Report
XII. Risk Relating to Financial Instruments (Cont’d)
3. Financial assets (Cont’d)
(2) Financial assets derecognised due to transfer
Applicable Not applicable
Unit: RMB
Method of financial Amount of financial Gains or losses associated
Item assets transfer assets derecognised with derecognition
Bank acceptance bills Endorsement or discounting 7,834,710,831.76 -57,402,168.13
Debt receivable External transfer 31,119,840.10 33,990,159.90
Total 7,865,830,671.86 -23,412,008.23
XIII. Fair Value Disclosure
1. Fair value of assets and liabilities measured at fair value as at the end of the period
Unit: RMB
Fair value as at the end of the period
Level 1 fair value Level 2 fair value Level 3 fair value
Item measurement measurement measurement Total
I. Continuous measurement of fair value
(i) Financial assets held for trading 39,197,419.88 39,197,419.88
1. Financial assets measured at fair value 39,197,419.88 39,197,419.88
through profit or loss
(1) Equity instrument investments 39,197,419.88 39,197,419.88
(ii) Accounts receivable financing 22,065,605.03 22,065,605.03
(iii) Other non-current financial assets 780,077,745.20 780,077,745.20
(iv) Biological assets 1,483,176,162.18 1,483,176,162.18
1. Consumable biological assets 1,483,176,162.18 1,483,176,162.18
Total assets continuously measured at fair value 39,197,419.88 2,285,319,512.41 2,324,516,932.29
II. Non-continuous measurement of fair value
(i) Assets held for sale
Total assets measured at fair value not on an ongoing
basis
Total liabilities measured at fair value not on an ongoing
basis
204 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
XIII. Fair Value Disclosure (Cont’d)
2. Basis for determining the market value of continuous and non-continuous level 1 fair value measurement
items
For financial assets traded in active markets, the Company determines their fair value using quoted prices in active
markets.
3. Qualitative and quantitative information on the valuation techniques used and important parameters for
continuous and non-continuous level 3 fair value measurement items
Unit: RMB
Fair value as at
the end of Valuation
Item the period techniques Unobservable inputs Range
Equity instrument investments:
Shandong Hongqiao Venture 78,170,000.00 Cost method
Capital Co., Ltd.
Weifang Chenchuang Equity 400,041,731.59 See explanation for
Investment Fund Partnership details
(Limited Partnership)
Jiaohui Chenming Zhuli 259,057,284.79 See explanation for
(Suzhou) Emerging details
Industry Development
Fund Partnership (Limited
Partnership)
Consumable biological assets:
Forestry 1,483,176,162.18 Roll back method of Unit price per tonne of RMB550
market price Eucalyptus wood
Unit price per tonne of RMB545
wet pine
Unit price per tonne of RMB620
fir wood
Note: For other non-current financial assets not traded in an active market, particularly the investment in Shandong Hongqiao Venture Capital
Co., Ltd., its fair value as at the end of the period was determined through appraisal, and particularly the investment in Weifang Chenchuang
Equity Investment Fund Partnership (Limited Partnership) and Jiaohui Chenming Zhuli (Suzhou) Emerging Industry Development Fund Partnership
(Limited Partnership), due to the withdrawal or entry of shareholders of the underlying companies during the period, the Company measured their
fair value as at the end of the period with reference to the transaction prices of changes in shareholders.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 205
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X Financial Report
XIV. Related Parties and Related Party Transactions
1. Parent company of the Company
Shareholding Voting right
Registered of the parent of the parent
Place of capital company in company in
Name of parent company incorporation Business nature (RMB’0,000) the Company the Company
Chenming Holdings Co., Ltd. Shouguang Investment in manufacture of 123,878.77 27.78% 27.78%
paper, electricity, steam, and
arboriculture
The ultimate controller of the Company is Shouguang State-owned Assets Supervision and Administration Office.
2. Subsidiaries of the Company
For details of the Company’s subsidiaries, please refer to Note IX. 1.
3. Joint ventures and associates of the Company
For details of material joint ventures and associates of the Company, please refer to Note IX. 2.
Balance of related party transaction between the Company and its joint ventures or associates during the period or prior
periods are as follows:
Name of joint ventures or associates Relation
Shouguang Chenming Huisen New-style A joint venture of the Company
Construction Materials Co., Ltd.
Weifang Port Wood Chip Wharf Co., Ltd. A joint venture of the Company
Shouguang Meite Environmental Technology Co., Ltd. A joint venture of the Company
Weifang Xingxing United Chemical Co., Ltd. A joint venture of the Company
Chenming (Qingdao) Asset Management Co., Ltd. An associate of the Company
Guangdong Nanyue Bank Co., Ltd. An associate of the Company
Wuhan Chenming Hanyang Paper Holdings Co., Ltd. An associate of the Company
Other explanation: The former name of Weifang Port Wood Chip Wharf Co., Ltd. was Weifang Sime Darby West Port
Co., Ltd.
206 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
XIV. Related Parties and Related Party Transactions (Cont’d)
4. Other related parties
Name of other related parties Relation
Shouguang Huixin Construction Materials Co., Ltd. A subsidiary of a company invested by the Directors
and Senior Management of the Company
Lide Technology Co., Ltd. An investee of the Company
Shouguang Chenming Guangyuan Real Property A subsidiary of a company invested by
Company Limited the Directors and Senior Management of
the Company
Shandong Yujing Grand Hotel Co., Ltd. A subsidiary of a company invested by
the Directors and Senior Management of
the Company
Chen Hongguo, Hu Changqing, Li Xingchun, Li Weixian, Li Feng, Li Key management personnel of the Company
Kang, Qiu Lanju, Sang Ailing, Li Xueqin, Li Zhenzhong,
Li Mingtang, Ge Guangming, Dong Lianming, Yuan Xikun, etc.
5. Related party transactions
(1) Purchase and sales of goods and rendering and receiving services
Table on purchase of goods/receiving of services
Unit: RMB
Whether the
Transaction transaction
Details of related Amount for facility facility is Amount for the
Related party party transaction the period approved exceeded prior period
Weifang Port Wood
Chip Wharf Co., Ltd. Port miscellaneous expenses 56,191,147.39 110,000,000.00 No 20,317,747.45
Shandong Yujing Grand Accommodation and food
Hotel Co., Ltd. expenses 691,058.37 N/A N/A
Shouguang Meite
Environmental Purchase of chemical
Technology Co., Ltd. materials 15,577,072.00 N/A N/A 45,798,569.04
Table on sales of goods/providing of services
Unit: RMB
Details of related Amount for Amount for
Related party party transaction the period the prior period
Shouguang Chenming Huisen New-style
Construction Materials Co., Ltd. Sales of electricity and steam 6,547,010.44 7,876,218.22
Shouguang Huixin Construction Materials
Co., Ltd. Sales of cement, coal, oil, etc. 60,485.79 55,815.97
Shandong Yujing Grand Hotel Co., Ltd. Sales of electricity and oil 26,143.93
Shouguang Meite Environmental Technology
Co., Ltd. Sales of electricity and water 2,153,097.10 4,292,299.10
(2) Related party leasing
The Company as lessor:
Unit: RMB
Lease income Lease income
recognised for recognised for
Name of lessee Type of leased asset the current period the previous period
Shouguang Meite Environmental
Technology Co., Ltd. Housing and building structure 733,944.95 733,944.95
Chenming (Qingdao) Asset Management
Co., Ltd. Housing and building structure 506,019.39 431,707.46
Lide Technology Co., Ltd. Housing and building structure 949,010.43 949,010.43
SHANDONG CHENMING PAPER HOLDINGS LIMITED 207
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X Financial Report
XIV. Related Parties and Related Party Transactions (Cont’d)
5. Related party transactions (Cont’d)
(3) Related party guarantee
The Company as guarantor
Unit: RMB
Whether
Commencement performance
Amount date of Expiry date of guarantee
Party being guaranteed under guarantee guarantee of guarantee is completed
Weifang Port Wood Chip Wharf Co., Ltd. 85,000,000.00 2017-12-20 2027-12-20 No
Shouguang Meilun Paper Co., Ltd. 91,760,456.12 2023-7-25 2024-7-25 No
Shouguang Meilun Paper Co., Ltd. 20,000,000.00 2023-8-25 2024-8-24 No
Shouguang Meilun Paper Co., Ltd. 10,000,000.00 2024-1-3 2025-1-2 No
Shouguang Meilun Paper Co., Ltd. 101,044,826.08 2024-5-27 2025-5-28 No
Shouguang Meilun Paper Co., Ltd. 45,727,471.68 2024-5-31 2025-5-31 No
Shouguang Meilun Paper Co., Ltd. 98,114,605.57 2024-6-4 2025-6-5 No
Shouguang Meilun Paper Co., Ltd. 178,130,000.00 2024-6-26 2025-6-25 No
Shouguang Meilun Paper Co., Ltd. 205,149,907.49 2024-1-10 2024-7-9 No
Shouguang Meilun Paper Co., Ltd. 35,479,479.53 2024-2-6 2024-8-5 No
Shouguang Meilun Paper Co., Ltd. 44,000,000.00 2024-2-27 2025-2-26 No
Shouguang Meilun Paper Co., Ltd. 190,445,746.04 2024-6-19 2024-12-16 No
Shouguang Meilun Paper Co., Ltd. 70,732,488.20 2024-6-24 2024-12-23 No
Shouguang Meilun Paper Co., Ltd. 20,000,000.00 2023-8-25 2024-8-23 No
Shouguang Meilun Paper Co., Ltd. 5,000,000.00 2024-3-7 2025-3-7 No
Shouguang Meilun Paper Co., Ltd. 50,000,000.00 2023-7-12 2024-7-12 No
Shouguang Meilun Paper Co., Ltd. 15,000,000.00 2024-1-3 2024-12-27 No
Shouguang Meilun Paper Co., Ltd. 90,000,000.00 2023-10-23 2024-10-23 No
Shouguang Meilun Paper Co., Ltd. 185,000,000.00 2024-6-13 2024-12-11 No
Shouguang Meilun Paper Co., Ltd. 100,000,000.00 2024-6-13 2024-12-11 No
Shouguang Meilun Paper Co., Ltd. 43,000,000.00 2023-12-19 2024-12-18 No
Shouguang Meilun Paper Co., Ltd. 10,000,000.00 2024-4-12 2024-12-11 No
Shouguang Meilun Paper Co., Ltd. 10,000,000.00 2024-4-12 2024-12-11 No
Shouguang Meilun Paper Co., Ltd. 50,000,000.00 2024-6-28 2025-6-27 No
Shouguang Meilun Paper Co., Ltd. 41,912,850.21 2024-4-12 2025-4-12 No
Shandong Chenming Paper Sales Co., Ltd. 296,829,334.44 2023-8-14 2024-8-14 No
Shandong Chenming Paper Sales Co., Ltd. 111,125,326.61 2023-9-18 2024-9-18 No
Shandong Chenming Paper Sales Co., Ltd. 54,723,975.97 2023-9-26 2024-9-26 No
Shandong Chenming Paper Sales Co., Ltd. 181,517,502.43 2023-10-7 2024-10-7 No
Shandong Chenming Paper Sales Co., Ltd. 198,262,078.03 2023-10-7 2024-10-7 No
Shandong Chenming Paper Sales Co., Ltd. 50,000,000.00 2023-10-18 2024-10-11 No
Shandong Chenming Paper Sales Co., Ltd. 40,000,000.00 2023-11-28 2024-11-28 No
Shandong Chenming Paper Sales Co., Ltd. 50,000,000.00 2024-1-4 2024-7-2 No
Shandong Chenming Paper Sales Co., Ltd. 150,000,000.00 2024-2-8 2025-2-12 No
Shandong Chenming Paper Sales Co., Ltd. 329,962,137.74 2024-4-1 2025-4-2 No
Shandong Chenming Paper Sales Co., Ltd. 130,349,733.69 2024-4-3 2025-4-7 No
Shandong Chenming Paper Sales Co., Ltd. 160,000,000.00 2024-5-23 2024-11-19 No
Shandong Chenming Paper Sales Co., Ltd. 260,000,000.00 2024-5-23 2024-11-19 No
Shanghai Chenming Pulp & Paper Sales Co., Ltd. 4,500,000.00 2023-11-21 2024-11-20 No
Shanghai Chenming Pulp & Paper Sales Co., Ltd. 8,000,000.00 2024-6-4 2025-5-30 No
Shanghai Chenming Pulp & Paper Sales Co., Ltd. 9,000,000.00 2024-6-6 2024-11-20 No
208 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
XIV. Related Parties and Related Party Transactions (Cont’d)
5. Related party transactions (Cont’d)
(3) Related party guarantee (Cont’d)
Whether
Commencement performance
Amount date of Expiry date of guarantee
Party being guaranteed under guarantee guarantee of guarantee is completed
Shanghai Chenming Pulp & Paper Sales Co., Ltd. 9,000,000.00 2024-6-14 2025-6-9 No
Shanghai Chenming Pulp & Paper Sales Co., Ltd. 8,000,000.00 2024-6-20 2025-5-28 No
Shanghai Chenming Pulp & Paper Sales Co., Ltd. 20,000,000.00 2024-6-21 2025-6-18 No
Chenming (HK) Limited 14,150,000.00 2024-6-17 2024-8-5 No
Chenming (HK) Limited 34,417,275.07 2024-1-4 2030-1-3 No
Jilin Chenming Paper Co., Ltd. 14,000,000.00 2024-3-11 2024-9-6 No
Jilin Chenming Paper Co., Ltd. 33,505,524.00 2024-1-19 2024-7-23 No
Jilin Chenming Paper Co., Ltd. 16,000,000.00 2024-6-19 2025-6-17 No
Jilin Chenming Paper Co., Ltd. 63,640,000.00 2024-4-16 2024-10-16 No
Jilin Chenming Paper Co., Ltd. 200,000,000.00 2024-1-19 2024-7-18 No
Jilin Chenming Paper Co., Ltd. 200,000,000.00 2023-12-15 2025-12-15 No
Huanggang Chenming Pulp & Paper Co., Ltd. 45,000,000.00 2023-8-10 2024-8-9 No
Huanggang Chenming Pulp & Paper Co., Ltd. 30,000,000.00 2023-7-18 2024-7-17 No
Huanggang Chenming Pulp & Paper Co., Ltd. 90,000,000.00 2024-5-20 2025-5-19 No
Huanggang Chenming Pulp & Paper Co., Ltd. 20,000,000.00 2024-4-28 2025-4-27 No
Huanggang Chenming Pulp & Paper Co., Ltd. 20,000,000.00 2023-8-18 2024-8-16 No
Huanggang Chenming Pulp & Paper Co., Ltd. 120,000,000.00 2023-7-12 2024-7-11 No
Huanggang Chenming Pulp & Paper Co., Ltd. 50,000,000.00 2023-9-28 2024-9-28 No
Huanggang Chenming Pulp & Paper Co., Ltd. 50,000,000.00 2023-10-13 2024-10-13 No
Huanggang Chenming Pulp & Fiber Trading
Co., Ltd. 10,000,000.00 2023-8-31 2024-8-30 No
Huanggang Chenming Pulp & Fiber Trading
Co., Ltd. 10,000,000.00 2023-9-26 2024-9-26 No
Huanggang Chenming Pulp & Fiber Trading
Co., Ltd. 10,000,000.00 2023-11-13 2024-11-13 No
Huanggang Chenming Pulp & Fiber Trading
Co., Ltd. 10,000,000.00 2023-11-24 2024-11-22 No
Shouguang Chenming Import and Export Trade
Co., Ltd. 149,999,600.00 2023-12-21 2024-6-19 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 200,000,000.00 2023-7-21 2024-7-20 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 60,000,000.00 2023-7-28 2024-7-27 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 100,000,000.00 2023-8-8 2024-8-7 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 100,000,000.00 2023-8-11 2024-8-10 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 3,900,000.00 2023-8-11 2024-8-10 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 67,000,000.00 2023-8-14 2024-8-13 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 59,000,000.00 2023-8-14 2024-8-13 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 100,000,000.00 2023-8-24 2024-8-23 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 100,000,000.00 2023-9-27 2024-9-26 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 78,000,000.00 2023-10-11 2024-10-11 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 113,000,000.00 2023-10-12 2024-10-12 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 85,500,000.00 2023-11-29 2024-11-21 No
SHANDONG CHENMING PAPER HOLDINGS LIMITED 209
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XIV. Related Parties and Related Party Transactions (Cont’d)
5. Related party transactions (Cont’d)
(3) Related party guarantee (Cont’d)
Whether
Commencement performance
Amount date of Expiry date of guarantee
Party being guaranteed under guarantee guarantee of guarantee is completed
Zhanjiang Chenming Pulp & Paper Co., Ltd. 6,000,000.00 2023-12-4 2024-11-26 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 100,000,000.00 2023-12-9 2024-12-8 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 100,000,000.00 2024-1-3 2025-1-2 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 67,000,000.00 2024-1-11 2024-7-10 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 65,000,000.00 2024-1-16 2024-7-15 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 200,000,000.00 2024-1-23 2024-7-22 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 37,000,000.00 2024-1-18 2024-7-16 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 48,000,000.00 2024-2-1 2024-7-26 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 6,000,000.00 2024-3-18 2024-9-11 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 38,000,000.00 2024-3-21 2025-3-20 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 205,000,000.00 2024-3-20 2025-3-20 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 10,500,000.00 2024-3-26 2025-3-26 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 31,000,000.00 2024-3-28 2025-3-27 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 30,000,000.00 2024-3-29 2025-3-27 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 100,000,000.00 2024-4-9 2024-9-6 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 50,290,000.00 2024-4-15 2024-10-15 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 75,200,000.00 2024-5-11 2024-11-11 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 23,500,000.00 2024-5-11 2024-11-11 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 50,290,000.00 2024-5-15 2024-11-15 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 209,000,000.00 2024-5-16 2024-11-11 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 25,000,000.00 2024-5-16 2025-5-15 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 50,000,000.00 2024-5-22 2024-11-21 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 81,200,000.00 2024-5-23 2024-11-26 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 60,000,000.00 2024-5-27 2025-5-26 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 45,000,000.00 2024-5-29 2025-5-28 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 63,000,000.00 2024-5-31 2025-5-29 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 40,000,000.00 2024-6-6 2025-6-5 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 38,372,000.00 2024-6-6 2025-6-3 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 47,784,000.00 2024-6-6 2025-6-3 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 40,000,000.00 2024-6-12 2024-12-11 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 48,000,000.00 2024-6-26 2025-6-25 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 62,000,000.00 2024-6-28 2025-6-26 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 70,540,260.41 2022-6-29 2025-6-29 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 61,000,000.00 2023-3-31 2026-3-30 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 120,000,000.00 2023-6-2 2026-6-2 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 68,993,057.40 2023-6-20 2026-6-20 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 250,000,000.00 2023-7-12 2026-7-12 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 100,000,000.00 2024-4-29 2025-10-29 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 182,326,261.08 2023-11-8 2028-11-8 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 85,000,000.00 2024-1-12 2024-7-12 No
210 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
XIV. Related Parties and Related Party Transactions (Cont’d)
5. Related party transactions (Cont’d)
(3) Related party guarantee (Cont’d)
Whether
Commencement performance
Amount date of Expiry date of guarantee
Party being guaranteed under guarantee guarantee of guarantee is completed
Zhanjiang Chenming Pulp & Paper Co., Ltd. 70,000,000.00 2024-2-7 2024-8-7 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 65,000,000.00 2024-3-28 2024-9-28 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 56,000,000.00 2024-4-11 2024-10-11 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 42,000,000.00 2024-4-12 2024-10-12 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 40,000,000.00 2024-5-13 2024-11-13 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 20,200,000.00 2024-5-14 2024-11-14 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 40,000,000.00 2024-5-14 2024-11-14 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 65,000,000.00 2024-6-24 2024-12-24 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 58,940,000.00 2024-6-27 2024-12-27 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 70,000,000.00 2024-6-27 2024-12-27 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 26,620,000.00 2024-6-28 2024-12-28 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 25,000,000.00 2024-6-28 2024-12-28 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 69,440,000.00 2024-6-28 2024-12-28 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 70,000,000.00 2022-6-17 2025-6-16 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 70,000,000.00 2022-6-17 2025-6-16 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 42,300,000.00 2022-10-25 2024-10-19 No
Zhanjiang Chenming Pulp & Paper Co., Ltd. 100,000,000.00 2023-12-26 2025-1-24 No
Hainan Chenming Technology Co., Ltd. 60,000,000.00 2024-4-11 2024-10-11 No
Hainan Chenming Technology Co., Ltd. 50,000,000.00 2024-5-30 2024-11-30 No
Hainan Chenming Technology Co., Ltd. 50,050,000.00 2023-11-29 2024-11-22 No
Hainan Chenming Technology Co., Ltd. 19,950,000.00 2023-12-1 2024-11-25 No
Hainan Chenming Technology Co., Ltd. 56,400,000.00 2024-1-2 2027-7-2 No
Hainan Chenming Technology Co., Ltd. 186,000,000.00 2024-3-27 2024-9-27 No
Hainan Chenming Technology Co., Ltd. 30,000,000.00 2024-2-2 2025-1-29 No
Hainan Chenming Technology Co., Ltd. 20,000,000.00 2024-2-5 2025-1-31 No
Hainan Chenming Technology Co., Ltd. 39,600,000.00 2024-5-21 2024-11-21 No
Hainan Chenming Technology Co., Ltd. 50,000,000.00 2024-4-10 2025-4-7 No
Jiangxi Chenming Paper Co., Ltd. 100,000,000.00 2023-7-5 2024-7-4 No
Jiangxi Chenming Paper Co., Ltd. 10,000,000.00 2023-9-5 2024-8-30 No
Jiangxi Chenming Paper Co., Ltd. 3,339,000.00 2023-12-25 2024-9-30 No
Jiangxi Chenming Paper Co., Ltd. 1,452,000.00 2024-1-29 2024-9-30 No
Jiangxi Chenming Paper Co., Ltd. 193,450,000.00 2024-2-23 2024-8-20 No
Jiangxi Chenming Paper Co., Ltd. 100,000,000.00 2024-3-13 2025-3-8 No
Jiangxi Chenming Paper Co., Ltd. 20,000,000.00 2024-3-22 2024-9-18 No
Jiangxi Chenming Paper Co., Ltd. 10,000,000.00 2024-1-4 2024-10-30 No
Jiangxi Chenming Paper Co., Ltd. 70,000,000.00 2024-4-25 2025-4-24 No
Jiangxi Chenming Paper Co., Ltd. 10,000,000.00 2024-6-7 2025-6-3 No
Jiangxi Chenming Paper Co., Ltd. 30,000,000.00 2024-6-11 2025-6-9 No
Jiangxi Chenming Paper Co., Ltd. 30,000,000.00 2024-6-17 2025-6-13 No
Jiangxi Chenming Paper Co., Ltd. 10,000,000.00 2024-6-18 2025-6-16 No
Jiangxi Chenming Paper Co., Ltd. 16,000,000.00 2024-6-21 2025-6-17 No
Jiangxi Chenming Paper Co., Ltd. 10,000,000.00 2024-6-24 2025-6-20 No
Jiangxi Chenming Paper Co., Ltd. 127,000,000.00 2024-6-20 2024-12-19 No
Jiangxi Chenming Paper Co., Ltd. 13,000,000.00 2024-6-26 2024-12-25 No
Jiangxi Chenming Paper Co., Ltd. 10,000,000.00 2024-5-31 2025-5-26 No
Jiangxi Chenming Paper Co., Ltd. 34,000,000.00 2024-6-20 2025-6-15 No
SHANDONG CHENMING PAPER HOLDINGS LIMITED 211
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X Financial Report
XIV. Related Parties and Related Party Transactions (Cont’d)
5. Related party transactions (Cont’d)
(3) Related party guarantee (Cont’d)
Whether
Commencement performance
Amount date of Expiry date of guarantee
Party being guaranteed under guarantee guarantee of guarantee is completed
Jiangxi Chenming Paper Co., Ltd. 4,600,000.00 2024-4-29 2025-4-29 No
Jiangxi Chenming Paper Co., Ltd. 30,000,000.00 2023-12-4 2025-6-3 No
Jiangxi Chenming Paper Co., Ltd. 10,000,000.00 2023-9-27 2024-9-20 No
Shanghai Chenming Pulp & Paper Sales Co., Ltd. 9,500,000.00 2023-2-13 2026-2-12 No
Jiangxi Chenming Paper Co., Ltd. 200,000,000.00 2024-5-31 2025-11-29 No
Jiangxi Chenming Paper Co., Ltd. 250,000,000.00 2024-6-13 2025-12-12 No
Jiangxi Chenming Paper Co., Ltd. 30,000,000.00 2023-9-8 2026-8-22 No
Jiangxi Chenming Paper Co., Ltd. 27,900,000.00 2023-3-31 2024-9-30 No
Jiangxi Chenming Paper Co., Ltd. 29,700,000.00 2023-5-9 2024-9-30 No
Jiangxi Chenming Paper Co., Ltd. 2,295,000.00 2023-6-27 2024-9-30 No
Jiangxi Chenming Paper Co., Ltd. 5,035,000.00 2023-8-7 2024-9-30 No
Jiangxi Chenming Paper Co., Ltd. 3,191,050.00 2023-9-15 2024-9-30 No
Total 12,006,837,947.79
(4) Related party lending and borrowing
Unit: RMB
Borrowing Commencement
Related party amount date Expiry date Description
Borrowing
Chenming Holdings Co., Ltd. 154,750,000.00 2024-4-11 2025-4-10 Controlling
shareholder
Guangdong Nanyue Bank Co., Ltd. 2,185,980,000.00 2024-1-1 2024-12-31 Associate
Borrowing
Weifang Port Wood Chip Wharf Co., Ltd. 35,000,000.00 2024-6-28 2025-6-27 Joint venture
(5) Related party asset transfer and debt restructuring
Unit: RMB
Amount for Amount for
Related party Details of related party transaction the period the prior period
Shouguang Chenming Transfer of 90.05% equity interest in Yujing 162,992,813.25 0.00
Guangyuan Real Property Hotel to Guangyuan Real Property from
Company Limited Shandong Chenming
Shouguang Chenming Transfer of the debts of Yujing Hotel to 193,507,186.75 0.00
Guangyuan Real Property Guangyuan Real Property from Shandong
Company Limited Chenming
212 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
X Financial Report
XIV. Related Parties and Related Party Transactions (Cont’d)
6. Related party accounts receivable and accounts payable
(1) Receivables
Unit: RMB
Closing balance Opening balance
Item Related party Book balance Bad debts provision Book balance Bad debts provision
Accounts receivable Shouguang Chenming Huisen 1,461,303.22 10,116.20
New-style Construction Materials
Co., Ltd.
Accounts receivable Chenming (Qingdao) Asset 2,359.03 165.13 2,359.03 23.18
Management Co., Ltd.
Accounts receivable Shandong Yujing Grand Hotel 2,990,413.66 972,266.09
Co., Ltd.
Other receivables Weifang Port Wood Chip Wharf 77,465,749.84 9,279,154.44 75,554,749.84 8,991,998.46
Co., Ltd.
Other receivables Shouguang Meite Environmental 10,801,455.38 2,151,596.53 10,427,200.00 2,102,653.38
Technology Co., Ltd.
Other receivables Wuhan Chenming Hanyang Paper 232,643,410.74 227,252,701.60
Holdings Co., Ltd.
Other receivables Chenming (Qingdao) Asset 81,000.00
Management Co., Ltd.
Other receivables Shouguang Chenming Guangyuan 172,308,375.85
Real Property Company Limited
Prepayments Shandong Yujing Grand Hotel Co., 106,953.14
Ltd.
(2) Payable
Unit: RMB
Closing book Opening book
Item Related party balance balance
Accounts payable Weifang Port Wood Chip Wharf Co., Ltd. 29,897,541.51 6,932,747.45
Accounts payable Shouguang Meite Environmental Technology Co., Ltd. 13,489,957.44 12,973,303.12
Accounts payable Weifang Xingxing United Chemical Co., Ltd. 26,905,494.34 26,905,494.34
Accounts payable Wuhan Chenming Hanyang Paper Holdings Co., Ltd. 14,376,757.63 14,334,304.63
Accounts payable Wuhan Chenming Qianneng Electric Power Co., Ltd. 4,859.22 72,483.77
Accounts payable Shandong Yujing Grand Hotel Co., Ltd. 3,107,683.37
Other payables Weifang Xingxing United Chemical Co., Ltd. 16,860,000.00 16,860,000.00
Other payables Chenming Holdings Co., Ltd. 118,012,703.34 135,612,917.24
Other payables Lide Technology Co., Ltd. 559,897.05 559,897.05
Other payables Chenming (Qingdao) Asset Management Co., Ltd. 115,583.42 115,583.42
Other payables Wuhan Chenming Hanyang Paper Holdings Co., Ltd. 365,200,000.00 305,000,000.00
SHANDONG CHENMING PAPER HOLDINGS LIMITED 213
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X Financial Report
XIV. Related Parties and Related Party Transactions (Cont’d)
6. Related party accounts receivable and accounts payable (Cont’d)
(3) Deposits with related parties
Unit: RMB
Closing book Opening book
Item Related party balance balance
Bank deposit Guangdong Nanyue Bank Co., Ltd. 20,415.23 7,189,314.62
Other monetary funds Guangdong Nanyue Bank Co., Ltd. 1,057,450,000.00 1,311,200,000.00
(4) Loans from related parties
Unit: RMB
Closing book Opening book
Item Related party balance balance
Short-term borrowings Guangdong Nanyue Bank Co., Ltd. 2,185,980,000.00 2,069,060,000.00
XV. Undertaking and contingency
1. Significant commitments
Unit: RMB
Capital commitments contracted for but not yet necessary to be Balance as at the
recognised on the balance sheet Closing balance end of the prior year
Commitments in relation to acquisition and
construction of long-term assets 301,225,074.72 288,776,312.58
2. Contingency
The Company has no other contingencies that should be disclosed.
XVI. Post-balance Sheet Event
There are no significant post-balance sheet events.
214 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X Financial Report
XVII.Other Material Matters
1. Segment information
(1) Basis for determination and accounting policies
According to the Company’s internal organisational structure, management requirements and internal reporting
system, the Company’s operating business is divided into 4 reporting segments. These report segments are
determined based on the financial information required by the company’s daily internal management. The
management of the Group regularly evaluates the operating results of these reporting segments to determine the
allocation of resources to them and evaluate their performance.
(1) Machine paper segment, which is responsible for production and sales of machine paper;
(2) Financial services segment, which provides financial services;
(3) Hotels and property rentals segment, which is responsible for hotel services and property rental;
(4) Other segments, which is responsible for the above segments otherwise.
The transfer prices of the transfer transactions between the Company’s segments are based on market prices.
Segment report information is disclosed in accordance with the accounting policies and measurement standards
adopted by each segment when reporting to management. These accounting policies and measurement basis are
consistent with the accounting policies and measurement basis used in preparing the financial statements.
(2) Financial Information of Reporting Segment
Unit: RMB
Item Machine-made paper Financial services Property and rentals Others Inter-segment offset Total
Revenue 13,742,039,658.85 197,468,294.38 105,844,153.54 639,029,301.66 799,649,889.39 13,884,731,519.04
Of which: Revenue from
external transactions 13,481,661,035.71 146,357,054.10 96,646,679.91 160,066,749.32 13,884,731,519.04
Revenue from inter-segment
transactions 260,378,623.14 51,111,240.28 9,197,473.63 478,962,552.34 799,649,889.39
Of which: Revenue from
principal activities 13,555,077,570.55 197,468,294.38 102,722,133.91 299,057,442.10 391,613,940.78 13,762,711,500.16
Operating costs 12,191,395,099.29 70,513,208.68 105,182,654.77 629,707,810.33 811,293,064.07 12,185,505,709.00
Of which: Costs of principal
activities 11,797,604,920.59 70,377,588.60 51,405,736.87 292,234,927.26 121,751,995.46 12,089,871,177.86
Operating expenses 90,578,013.33 6,328,139.21 2,397,678.67 99,303,831.21
Of which: Wages 46,380,498.49 1,631,650.31 830,973.43 48,843,122.23
Depreciation expenses 559,024.67 919,012.26 2,254.69 1,480,291.62
Office expenses 1,173,132.24 2,728.93 133.82 1,175,994.99
Travel expenses 13,603,124.89 – 219,907.64 13,823,032.53
Selling commissions 2,319,517.67 153,187.43 2,472,705.10
Rental expenses 3,372,915.52 – 55,471.70 3,428,387.22
Hospitality expenses 20,957,240.70 29,770.00 84,388.00 21,071,398.70
Warehouse expenses 219,860.17 – 81,534.49 301,394.66
Others 4,312,216.65 1,425,460.04 969,827.47 6,707,504.16
Operating profit/(loss) 38,220,171.96 29,331,645.10 -133,609,976.95 20,842,194.71 26,564,076.87 -71,780,042.05
Total assets 83,443,926,086.47 21,264,601,133.45 9,207,711,238.15 7,376,860,223.71 43,791,817,462.05 77,501,281,219.73
Total liabilities 61,722,970,828.65 3,858,321,675.59 4,894,655,332.89 2,157,498,738.00 15,823,400,367.68 56,810,046,207.45
Total cost of construction in
progress incurred for the
current period 239,900,561.80 239,900,561.80
Fixed assets purchased 66,028,316.59 3,115,957.85 199,070.00 3,151,636.01 72,494,980.45
Intangible assets purchased
Basis of accounting: The transfer prices among the Company’s segments were based on market prices.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 215
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X Financial Report
XVII. Other Material Matters (Cont’d)
2. Others
(1) Chenming Holdings (Hong Kong) Limited (hereinafter referred to as “Hong Kong Chenming Holdings”), a wholly-
owned subsidiary of Chenming Holdings Company Limited (hereinafter referred to as “ Chenming Holdings
S”), has commenced an equity financing business with three overseas organisations (hereinafter referred to as
“Lenders”) in order to meet its own funding needs. In order to satisfy its funding needs, Hong Kong Chenming
Holdings has commenced equity financing business with three overseas organisations (hereinafter referred to as
the “Lenders”). Hong Kong Chenming Holdings deposited 210.72 million B shares (representing 7.07% of the total
share capital of the Company) and 153.41 million H shares (representing 5.15% of the total share capital of the
Company) held by Hong Kong Chenming Holdings with custodian designated by the Lenders, who provided the
loan to Hong Kong Chenming Holdings.
After repaying the entire loan from one of the Lenders, Hong Kong Chenming Holdings requested for the return of
the shares, but the lender refused to co-operate in the return of the 110 million B shares and 95 million H shares
on the grounds that there had been a breach of contract of default during the life of the loan. Chenming Hong
Kong Holdings verified the custody of the shares with the other two lenders who have not yet fully repaid the
loans, and the lenders have not yet provided the required documentary proof of the safe custody of the shares.
After the Lender refused to return the Shares and failure in negotiation, Chenming Holdings is of the view that
there is a risk of improper infringement on the legitimate rights and interests of Hong Kong Chenming Holdings,
and it immediately sought help from the Chinese public security bureau and Hong Kong lawyers to collect
effective evidence. As of the date of this announcement, Chenming Holdings is under normal production and
operation, and is actively safeguarding its legitimate rights and interests through legal channels.
There is a risk that the shares involved may not be returned, which may result in a decrease in the percentage of
shareholding of Chenming Holdings in the Company, but will have no impact on the status of Chenming Holdings
as the largest shareholder and will have no impact on the control of the Company.
(2) On 14 June 2022, the Hong Kong Court of Final Appeal handed down its judgment in the case of H-share
liquidation filed by ArjowigginsHKK2Limited (“HKK2 Company”) in relation to the Company’s Joint Venture dispute
and the Company has paid the relevant amount of compensation.
On 25 October 2022, the Company instructed its legal adviser in Hong Kong to apply to the Court of First Instance
to seek the dismissal or adjournment of the winding-up petition filed by HKK2 against the Company On 25 July
2023, the Court of First Instance held a hearing on the said application.
On 10 August 2023, the Company received a judgment from the judge of the Court of First Instance, Mr. Justice
Harris, which ruled that the winding-up petition be stayed and the relevant arbitration hearing was held in May
2024, given that the Company’s arbitration petition filed in the Hong Kong International Arbitration Centre in June
2022 against the Joint Venture Contracts formed the basis of the Company’s cross claim against HKK2 in the
winding-up proceedings.
216 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X Financial Report
XVIII.Major Item Notes of the Parent Company’s Financial Statements
1. Accounts receivable
(1) Disclosure by ageing
Unit: RMB
Closing book Opening book
Ageing balance balance
Within 1 year (including 1 year) 586,716,474.76 18,345,187.32
1 to 2 years 11,500,000.00 11,500,000.00
2 to 3 years
Over 3 years 3,002,821.17 3,002,821.17
Subtotal 601,219,295.93 32,848,008.49
Less: Bad debt provision 4,746,320.01 4,631,237.48
Total 596,472,975.92 28,216,771.01
(2) Disclosure by bad debt provision method
Unit: RMB
Closing balance Opening balance
Book balance Bad debts provision Book balance Bad debts provision
Provision Provision
Percentage percentage Percentage percentage
Category Amount (%) Amount (%) Carrying amount Amount (%) Amount (%) Carrying amount
Accounts receivable assessed
individually for bad debt provision 4,422,600.00 0.74 4,422,600.00 100.00 –
Accounts receivable assessed
collectively for bad debt provision 596,796,695.93 99.26 323,720.01 0.05 596,472,975.92 32,848,008.49 100.00 4,631,237.48 14.10 28,216,771.01
Including:
Due from related party customers 544,930,926.26 90.64 544,930,926.26 10,453,076.75 31.82 10,453,076.75
Due from non-related party customers 51,865,769.67 8.63 323,720.01 0.62 51,542,049.66 22,394,931.74 68.18 4,631,237.48 20.68 17,763,694.26
Total 601,219,295.93 100.00 4,746,320.01 0.79 596,472,975.92 32,848,008.49 100.00 4,631,237.48 14.10 28,216,771.01
SHANDONG CHENMING PAPER HOLDINGS LIMITED 217
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XVIII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
1. Accounts receivable (Cont’d)
(2) Disclosure by bad debt provision method (Cont’d)
Items assessed collectively for bad debt provision: Due from related party customers
Unit: RMB
Closing balance
Bad debts Provision
Name Book balance provision percentage (%)
Within 1 year 534,930,926.26
1 to 2 years 10,000,000.00
Total 544,930,926.26
Items assessed collectively for bad debt provision: Receivables from non-related party customer
Unit: RMB
Closing balance
Bad debts Provision
Name Book balance provision percentage (%)
Within 1 year 50,285,548.50 243,498.84 0.48
1 to 2 years 1,500,000.00
2 to 3 years
Over 3 years 80,221.17 80,221.17 100.00
Total 51,865,769.67 323,720.01 0.62
218 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X Financial Report
XVIII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
1. Accounts receivable (Cont’d)
(3) Provision, recovery or reversal of bad debt provision for the period
Bad debt provision for the period:
Unit: RMB
Changes in the period
Opening Recovery Closing
Category balance Provision or reversal Write-off Others balance
Bad debt provision 4,631,237.48 115,082.53 4,746,320.01
Total 4,631,237.48 115,082.53 4,746,320.01
(4) Top five accounts receivable based on closing balance of debtors
The total amount of top five accounts receivable based on closing balance of debtors for the period amounted
to RMB576,767,929.02 in total, accounting for 95.93% of the total closing balance of accounts receivable. The
closing balance of the corresponding bad debt provision amounted to RMB157,570.79 in total.
Unit: RMB
Percentage to
total closing
Closing balance balance of Closing balance
of accounts accounts of bad debt
Name of entity receivable receivable provision
Customer I 532,786,324.64 88.62
Customer II 15,390,418.86 2.56 107,732.93
Customer III 12,144,601.62 2.02
Customer IV 9,326,889.80 1.55
Customer V 7,119,694.10 1.18 49,837.86
Total 576,767,929.02 95.93 157,570.79
SHANDONG CHENMING PAPER HOLDINGS LIMITED 219
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XVIII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
2. Other receivables
Unit: RMB
Item Closing balance Opening balance
Other receivables 8,434,729,619.19 9,237,241,240.86
Total 8,434,729,619.19 9,237,241,240.86
(1) Other receivables
1) Other receivables by nature
Unit: RMB
Closing book Opening book
Nature balance balance
Open credit 8,511,123,024.64 9,304,134,372.16
Reserve and borrowings 13,813,236.29 22,523,648.60
Guarantee deposit and deposit 740,000.00 740,000.00
Others 2,117,542.39 1,793,548.63
Subtotal 8,527,793,803.32 9,329,191,569.39
Bad debt provision 93,064,184.13 91,950,328.53
Total 8,434,729,619.19 9,237,241,240.86
2) Disclosure by ageing
Unit: RMB
Closing book Opening book
Ageing balance balance
Within 1 year (including 1 year) 8,396,377,054.37 9,165,796,778.41
1 to 2 years 15,192,309.74 76,289,024.67
2 to 3 years 35,152,531.61 7,386,768.10
2 to 3 years 81,071,907.60 79,718,998.21
Subtotal 8,527,793,803.32 9,329,191,569.39
Bad debt provision 93,064,184.13 91,950,328.53
Total 8,434,729,619.19 9,237,241,240.86
220 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X Financial Report
XVIII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
2. Other receivables (Cont’d)
(1) Other receivables (Cont’d)
3) Disclosure by bad debt provision method
Provision for bad debts made on a general model of ECL:
Unit: RMB
Stage 1 Stage 2 Stage 3
ECLs for the Lifetime ECLs Lifetime ECLs
Bad debts provision next 12 months (not credit-impaired) (credit-impaired) Total
Balance as at 1 January 2024 41,856,357.86 50,093,970.67 91,950,328.53
Balance as at 1 January 2024 for the period
– Transferred to stage 2
– Transferred to stage 3
– Reversed to stage 2
– Reversed to stage 1
Provision for the period 838,532.49 315,323.11 1,153,855.60
Reversal for the period 40,000.00 40,000.00
Transfer for the period
Write-off for the period
Other changes
Balance as at 30 June 2024 42,694,890.35 50,369,293.78 93,064,184.13
4) Provision, recovery or reversal of bad debt provision for the period
Bad debt provision for the period:
Unit: RMB
Changes in the period
Opening Recovery
Category balance Provision or reversal Transfer or Write-off Others Closing balance
Other receivables 91,950,328.53 1,153,855.60 40,000.00 93,064,184.13
Total 91,950,328.53 1,153,855.60 40,000.00 93,064,184.13
SHANDONG CHENMING PAPER HOLDINGS LIMITED 221
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XVIII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
2. Other receivables (Cont’d)
(1) Other receivables (Cont’d)
5) Top five accounts receivable based on closing balance of debtors
The total amount of top five other receivables based on closing balance of debtors for the period amounted
to RMB5,617,224,908.44 in total, accounting for 65.87% of the total closing balance of other receivables.
The closing balance of the corresponding bad debt provision amounted to RMB0.00 in total.
Unit: RMB
Percentage
to total closing Closing balance
balance of other of bad debt
Name of entity Nature Closing balance Ageing receivables (%) provision
Customer 1 Open credit 1,681,156,791.36 Within 1 year 19.71%
Customer 2 Open credit 1,324,500,000.00 Within 1 year 15.53%
Customer 3 Open credit 1,110,117,472.36 Within 1 year 13.02%
Customer 4 Open credit 1,041,000,000.00 Within 1 year 12.21%
Customer 5 Open credit 460,450,644.72 Within 1 year 5.40%
Total 5,617,224,908.44 65.87%
3. Long-term equity investments
Unit: RMB
Closing balance Opening balance
Impairment Impairment
Item Book balance provision Carrying amount Book balance provision Carrying amount
Investment in subsidiaries 17,986,937,687.22 17,986,937,687.22 17,898,687,687.22 17,898,687,687.22
Investment in associates and joint ventures 369,476,431.73 5,994,545.96 363,481,885.77 406,306,689.25 5,994,545.96 400,312,143.29
Total 18,356,414,118.95 5,994,545.96 18,350,419,572.99 18,304,994,376.47 5,994,545.96 18,298,999,830.51
222 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X Financial Report
XVIII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
3. Long-term equity investments (Cont’d)
(1) Investment in subsidiaries
Unit: RMB
Opening Change for the period Closing
Opening balance Closing balance of
balance of impairment Additional Withdrawn Impairment balance impairment
Investee (carrying amount) provision contribution contribution provision Others (carrying amount) provision
Chenming Paper Korea Co., Ltd. 6,143,400.00 6,143,400.00
Chenming GmbH 4,083,235.00 4,083,235.00
Hailaer Chenming Paper Co., Ltd. 12,000,000.00 12,000,000.00
Huanggang Chenming Pulp & Paper
Co., Ltd. 2,350,000,000.00 2,350,000,000.00
Huanggang Chenming Arboriculture
Development Co., Ltd. 70,000,000.00 70,000,000.00
Jinan Chenming Investment Management
Co., Ltd. 100,000,000.00 100,000,000.00
Shandong Yujing Grand Hotel Co., Ltd. 280,500,000.00 280,500,000.00
Zhanjiang Chenming Pulp & Paper Co., Ltd. 5,206,250,000.00 68,750,000.00 5,275,000,000.00
Shouguang Chenming Modern Logistic
Co., Ltd. 10,000,000.00 10,000,000.00
Shouguang Chenming Art Paper Co., Ltd. 113,616,063.80 113,616,063.80
Shouguang Meilun Paper Co., Ltd 4,649,441,979.31 300,000,000.00 4,949,441,979.31
Shouguang Shun Da Customs Declaration
Co, Ltd. 1,500,000.00 1,500,000.00
Shouguang Chenming Import and Export
Trade Co., Ltd. 250,000,000.00 250,000,000.00
Shouguang Chenming Papermaking
Machine Co., Ltd. 2,000,000.00 2,000,000.00
Shouguang Hongxiang Printing and
Packaging Co., Ltd. 3,730,000.00 3,730,000.00
Shandong Chenming Group
Finance Co., Ltd. 4,000,000,000.00 4,000,000,000.00
Chenming Arboriculture Co., Ltd. 45,000,000.00 45,000,000.00
Chenming Paper United States Co., Ltd. 6,407,800.00 6,407,800.00
Weifang Chenming Growth Driver
Replacement Equity Investment Fund
Partnership (Limited Partnership) 559,722,323.96 559,722,323.96
Weifang Chendu Equity Investment
Partnership (Limited Partnership) 228,292,885.15 228,292,885.15
Total 17,898,687,687.22 368,750,000.00 280,500,000.00 17,986,937,687.22
SHANDONG CHENMING PAPER HOLDINGS LIMITED 223
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XVIII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
3. Long-term equity investments (Cont’d)
(2) Investment in associates and joint ventures
Unit: RMB
Change for the period
Investment
Opening gain or loss Adjustment Other Closing Closing
Opening balance recognised of other change in Distribution of balance balance of
balance of impairment Additional Withdrawn under comprehensive equity cash dividend or Impairment (carrying impairment
Investee (carrying amount) provision contribution contribution equity method income interest profit declared provision Others amount) provision
I. Joint ventures
Shouguang Chenming Huisen
New-style Construction
Materials Co., Ltd. 7,400,283.59 466,616.49 7,866,900.08
Weifang Port Wood Chip Wharf
Co., Ltd. 79,142,080.56 8,850,767.29 87,992,847.85
Subtotal 86,542,364.15 9,317,383.78 95,859,747.93
II. Associates
Zhuhai Dechen New Third Board
Equity Investment Fund
Company (Limited Partnership) 27,263,804.36 -4,094.51 27,259,709.85
Ningbo Kaichen Huamei Equity
Investment Fund Partnership
(Limited Partnership) 278,128,830.13 -45,877,685.10 232,251,145.03
Chenming (Qingdao) Asset
Management Co., Ltd. 8,377,144.65 -265,861.69 8,111,282.96
Xuchang Chenming Paper
Co., Ltd. 5,994,545.96 5,994,545.96
Subtotal 313,769,779.14 5,994,545.96 -46,147,641.30 267,622,137.84 5,994,545.96
Total 400,312,143.29 5,994,545.96 -36,830,257.52 363,481,885.77 5,994,545.96
Determination of net amount of recoverable amount measured at fair value after deducting disposal expenses
Applicable Not applicable
Determination of present value of recoverable amount based on expected cash flows
Applicable Not applicable
224 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X Financial Report
XVIII.Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
4. Revenue and operating costs
Unit: RMB
Amount for the period Amount for the prior period
Item Revenue Costs Revenue Costs
Principal activities 2,708,082,195.91 2,557,283,330.60 2,588,800,023.67 2,692,576,337.91
Other activities 1,697,561,235.90 1,488,712,049.31 1,315,784,940.43 1,054,300,999.17
Total 4,405,643,431.81 4,045,995,379.91 3,904,584,964.10 3,746,877,337.08
Breakdown information of operating revenues and operating costs:
Unit: RMB
Machine-made paper Others Total
Category of contract Operating Revenue Operating Costs Operating Revenue Operating Costs Operating Revenue Operating Costs
Type of goods 2,708,082,195.91 2,557,283,330.60 1,697,561,235.90 1,488,712,049.31 4,405,643,431.81 4,045,995,379.91
Including:
Machine-made paper 2,368,279,496.79 2,232,200,488.11 2,368,279,496.79 2,232,200,488.11
Others 339,802,699.12 325,082,842.49 1,697,561,235.90 1,488,712,049.31 2,037,363,935.02 1,813,794,891.80
By geographical area 2,708,082,195.91 2,557,283,330.60 1,697,561,235.90 1,488,712,049.31 4,405,643,431.81 4,045,995,379.91
Including:
Mainland China 2,240,577,709.61 2,045,306,440.76 1,697,561,235.90 1,488,712,049.31 3,938,138,945.51 3,534,018,490.07
Other countries and regions 467,504,486.30 511,976,889.84 467,504,486.30 511,976,889.84
By the timing of delivery 2,708,082,195.91 2,557,283,330.60 1,697,561,235.90 1,488,712,049.31 4,405,643,431.81 4,045,995,379.91
Including:
Goods (at a point in time) 2,708,082,195.91 2,557,283,330.60 1,596,441,200.61 1,407,025,247.63 4,304,523,396.52 3,964,308,578.23
Services (within a certain
period) 101,120,035.29 81,686,801.68 101,120,035.29 81,686,801.68
By sales channels 2,708,082,195.91 2,557,283,330.60 1,697,561,235.90 1,488,712,049.31 4,405,643,431.81 4,045,995,379.91
Including:
Distribution 2,708,082,195.91 2,557,283,330.60 2,708,082,195.91 2,557,283,330.60
Direct sales 1,697,561,235.90 1,488,712,049.31 1,697,561,235.90 1,488,712,049.31
Total 2,708,082,195.91 2,557,283,330.60 1,697,561,235.90 1,488,712,049.31 4,405,643,431.81 4,045,995,379.91
SHANDONG CHENMING PAPER HOLDINGS LIMITED 225
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X Financial Report
XVIII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
4. Revenue and operating costs (Cont’d)
Information related to performance obligations:
Nature of goods Types of quality
Time for that the Company’s assurance
fulfilment of Significant Company Whether the person commitments offered by the
performance terms undertakes is the primary expected to be Company and
Item obligations of payment to transfer person in charge refunded to customers related obligations
Machine-made paper Domestic sales on the Domestic sales tend to Produces easily Yes None Guaranteed quality assurance, should there
day of delivery to the be provided on an distinguishable be objections to product quality within
customer; foreign invoice basis; foreign 7 days of arrival, the products can be
sales on the day of sales tend to be returned and exchanged.
customs clearance prepaid.
Other explanations: The Company’s performance obligations for sales of machine-made paper are generally less than
one year, and the Company takes advance payments or provides credit terms depending on the customer. When the
Company is the primary responsible party for a sale, it generally obtains the unconditional right to receive payment
when control of the merchandise is transferred to the customer either at the time of shipment or upon delivery to the
destination specified by the customer.
Information related to the transaction price allocated to residual performance obligations:
At the end of the reporting period, the amount of revenue with signed contracts but unfulfilled or uncompleted
performance obligation was RMB447,913,981.07, in which RMB447,913,981.07 was expected to be recognised in 2024.
5. Investment income
Unit: RMB
Amount for Amount for
Item the period the prior period
Income from long-term equity investments accounted for using the
cost method 109,400,000.00 80,000,000.00
Income from long-term equity investments accounted for using the
equity method -36,830,257.52 -2,829,947.39
Investment gain on disposal of long-term equity investments -117,507,186.75
Investment gain on holding other non-current financial assets 1,298,463.59 630,212.77
Investment gain on derecognition of financial assets -10,845,725.80 -22,621,312.74
Total -54,484,706.48 55,178,952.64
226 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X Financial Report
XIX. Supplementary information
1. Breakdown of extraordinary gains or losses for the current period
Applicable Not applicable
Unit: RMB
Item Amount Description
Profit or loss from disposal of non-current assets 235,133,918.55
Government grants (except for the government grants closely related to
the normal operation of the Company, granted in accordance with an
established standard and having an ongoing effect on the Company’s
profit or loss in compliance with national policies and regulations)
accounted for in profit or loss for the current period 35,234,521.15
Except for effective hedging business conducted in the ordinary course
of business of the Company, gain or loss arising from the change in fair
value of financial assets and financial liabilities held by a non-financial
company, as well as gain or loss arising from disposal of its financial
assets and financial liabilities -19,293,314.75
Reversal of provision for impairment of receivables individually tested for
impairment 26,150,527.36
Profit or loss from debt restructuring 3,502,149.44
Profit or loss from changes in the fair value of consumable biological assets
subsequently measured at fair value 5,184,193.11
Other non-operating income and expenses other than the above items 1,981,541.21
Net extraordinary gains or losses 287,893,536.07
Less: Effect of income tax -13,171,226.69
Less: Effect of minority interest (after tax) 1,553,513.83
Total 299,511,248.93
SHANDONG CHENMING PAPER HOLDINGS LIMITED 227
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XIX. Supplementary information (Cont’d)
1. Breakdown of extraordinary gains or losses for the current period (Cont’d)
Details of other gain or loss items that fall within the definition of extraordinary gain or loss:
Applicable Not applicable
The Company did not have details of other gain or loss items that fall within the definition of extraordinary gain or loss.
Explanation on the extraordinary gain or loss items as illustrated in the Explanatory Announcement on Information
Disclosure for Companies Offering Their Securities to the Public No.1 – Extraordinary Gains or Losses defined as its
recurring gain or loss items
Applicable Not applicable
Amount involved
Item (RMB) Reason
Other income 29,066,863.89 Government grants related to assets and closely related to the normal
operation of the Company as extraordinary gain or loss due to the
inclusion of their subsequent amortisation in other income and their
ongoing effect on the Company’s profit or loss.
2. Return on net assets and earnings per share
Rate of return Earnings per share
on net assets Basic Diluted
on weighted earnings per share earnings per share
Profit for the reporting period average basis (%) (RMB per share) (RMB per share)
Net profit attributable to ordinary shareholders of
the Company 0.17 0.01 0.01
Net profit after extraordinary gains or losses
attributable to ordinary shareholders of the
Company -1.63 -0.09 -0.09
3. Accounting data difference under accounting standard at home and abroad
(1) Differences of net profit and net assets disclosed in financial reports prepared under IAS and Chinese
accounting standards
Applicable Not applicable
(2) Differences of net profit and net assets disclosed in financial reports prepared under oversea and Chinese
accounting standards
Applicable Not applicable
The Board of Shandong Chenming Paper Holdings Limited
14 Aug 2024
228 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2024
