Shandong Chenming Paper (000488.SZ): The total outstanding debt and interest amount to 18.20 billion yuan, with severe operational losses leading to the shutdown of more than 70% of production capacity.

Shandong Chenming Paper (000488.SZ) announced that in recent years, the paper industry has seen a concentration of new production capacity, leading to a significant imbalance in supply and demand. This has caused a sharp decline in the prices of the company's main paper products, especially white cardboard, resulting in a decrease in profitability and even losses. Additionally, some financial institutions have reduced their loan sizes, causing the company to face temporary liquidity constraints. As a result, the company and some subsidiaries have experienced difficulties in repaying debts, leading to lawsuits from creditors and asset freezes by the court. As of November 18, 2024, the total overdue debt and interest of the company and its subsidiaries amount to 1.82 billion RMB, accounting for 10.91% of the company's latest audited net assets. The company has provided joint guarantee guarantees for the financing of related subsidiaries, with an overdue amount of 574 million RMB, representing 3.44% of the latest audited net assets. Since the third quarter, the prices of the company's main products, especially white cardboard, have continued to decline, resulting in severe operating losses. Some financial institutions have further reduced the company's loan sizes, leading to liquidity shortages. To reduce losses, the company has limited production and even stopped production at some production bases since November. As of the disclosure date of this announcement, production lines at the Shouguang base, Zhanjiang base, Jiangxi base, and Jilin base have been temporarily shut down, with a total production capacity of 7.03 million tons, accounting for 71.7% of the total capacity. This will affect monthly pulp and paper production by approximately 580,000 tons and paper sales by approximately 350,000 tons. The company is actively seeking to raise funds and resume production as soon as possible.