China’s largest papermaking company, Chenming Paper Industry, recently released its annual report for 2024 and first-quarter financial report for 2025. The data indicates that the company is in financial distress with a deteriorating financial condition, sparking wide market concern. Meanwhile, all papermaking companies in China are facing performance pressures, raising fears that the industry as a whole may be entering a harsh winter.
Chenming Paper Industry Group Co., Ltd. (referred to as “Chenming Paper Industry”) has successively released its 2024 annual report and 2025 first-quarter financial report. The data shows that in the first quarter of 2025, Chenming Paper Industry achieved operating income of only 797 million yuan, a significant year-on-year decrease of 88.2%; the net profit attributable to the parent company’s shareholders amounted to a staggering loss of 1.45 billion yuan, a sharp decline of 2594.4% year-on-year; after deducting non-recurring gains and losses, the net profit attributable to the parent company’s shareholders increased from 226 million yuan in the same period last year to a further expansion to 1.46 billion yuan.
At the same time, the 2024 annual performance report issued by Chenming Paper Industry is also worrisome. The report shows that due to factors such as production restrictions and shutdowns for maintenance, the company’s net profit attributable to the parent company in 2024 was a loss of 7.411 billion yuan, showing a significant decline from the previous year.
The significant decline in performance was explained by Chenming Paper Industry in the report as the result of the recent concentrated release of added papermaking capacity in the industry, leading to a severe imbalance between supply and demand, particularly causing a sharp drop in the price of one of its main products, white cardboard paper, which severely eroded the company’s profit-making ability, ultimately resulting in a shift from profits to losses.
To reduce losses, Chenming Paper Industry has been implementing production restrictions and shutdowns at some production bases since November 2024, along with carrying out machinery maintenance. However, due to the prolonged shutdown and maintenance lasting over three months, the company has been unable to resume production on a large scale, leading to its A-shares and B-shares being placed under other risk warnings by the Shenzhen Stock Exchange.
Adding to the company’s woes, Chenming Paper Industry is also facing financial difficulties with some debts overdue and bank accounts frozen, further highlighting the significant financial pressure it currently faces.
As a leading company in China’s papermaking industry, Chenming Paper Industry is the only papermaking enterprise in China with fully matched pulp and paper production capacity. It is also the first papermaking company in China simultaneously listed on the A-share, B-share, and H-share markets, with its product line covering cultural paper, white cardboard paper, copperplate paper, copy paper, household paper, thermal paper, and various other categories. Looking back at its development, after becoming a leader in the industry, Chenming Paper Industry has made several attempts towards diversified development, venturing into finance, financial leasing, real estate, and the chemical industry.
However, these expansions outside of its core business have brought heavy burdens to the company. By the end of 2018, Chenming Paper Industry’s interest-bearing debt balance once reached as high as 60.2 billion yuan. In 2019, the company began to adjust its strategy, announcing a return to its core papermaking business and plans to divest non-core operations.
It is worth noting that since 2022, Chenming Paper Industry’s operating income and net profit have begun to decline continuously, with significant losses appearing for the first time since its listing in 2023, reaching a high loss of 1.281 billion yuan. Coupled with the losses in 2024, the company’s cumulative losses over the past two years have reached 8.692 billion yuan.
In fact, not only is Chenming Paper Industry facing challenges, but the entire Chinese papermaking industry is in a slump.
Epoch Times journalists have analyzed the 2024 annual performance reports recently released by several Chinese papermaking companies, with results showing that the industry as a whole is exhibiting weak growth.
As the sole central enterprise in China’s papermaking industry, China Paper Industry Investment Corporation owns three listed companies, Yueyang Lin Paper, Guanhao High-Tech, and Meiliyun. Among them, Meiliyun also suffered in 2024, with a net loss of 548 million yuan.
The performance of other listed paper companies is similarly pessimistic. Zhongshun Soft Paper Co. recorded a net profit of 77.1816 million yuan in 2024, a substantial year-on-year decrease of 76.80%; Jingxing Paper Industry’s net profit was 71.26 million yuan, a 22.2% decline; Hengfeng Paper Industry’s net profit was 116 million yuan, a 14.94% decrease; Yibin Paper Industry reported a net loss of 128 million yuan.
Furthermore, Shan Ying International incurred a loss of 451 million yuan, a sudden decline of 388.46% year-on-year; Bohui Paper Industry’s net profit was 175 million yuan, a 3.3% decrease; Qingshan Paper Industry’s net profit was 84.7516 million yuan, down 30.48%; Heng An International’s net profit was 2.299 billion yuan, a 17.93% drop; Huatai Co., Ltd.’s net profit was only 36.1619 million yuan, a significant decrease of 84.81%.
The above data demonstrates that the Chinese papermaking industry is facing unprecedented challenges. Factors such as overcapacity, fluctuating raw material prices, intensified market competition, and pressure from environmental policies have combined to put significant pressure on the profitability of the entire industry.