2019 Interim Report Summary of Shandong Chenming Paper Holdings Limited Stock code: 000488 200488 Stock abbreviation: Chenming Paper Chenming B Announcement No.: 2019-088 2019 Interim Report Summary of
Shandong Chenming Paper Holdings Limited
I. IMPORTANT NOTICE
This interim report summary is extracted from the text of the interim report. For the full understanding of the operating results, financial position and plan for further development, investors should carefully read the text of the interim report published on the media as designated by the CSRC.
Non-standardauditor’s opinion
□ Applicable√ Not applicable
Plans for profit distribution on ordinary shares or conversion of capital reserves into share capital proposed to the Board during the reporting period
□ Applicable√ Not applicable
The Company does not propose distribution of cash dividends or bonus shares, and there will be no increase of share capital from reserves.
Plans for profit distribution on preference shares for the reporting period approved by the Board
□ Applicable√ Not applicable
II. BASIC INFORMATION ABOUT THE COMPANY
1. Company profile
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|Stock abbreviation|晨鸣纸业|Stock code|000488|
||晨鸣B||200488|
||晨鸣优01||140003|
||晨鸣优02||140004|
||晨鸣优03||140005|
|Stock exchanges on which the shares arelisted|Shenzhen Stock Exchange|||
|Stock abbreviation|晨鸣纸业|Stock code|01812|
|Stock exchanges on which the shares arelisted|The Stock Exchange of Hong Kong Limited|||
|Legal name in Chinese of the Company|山东晨鸣纸业集团股份有限公司|||
|Legal short name in Chinese of theCompany|晨鸣纸业|||
|Legal name in English of the Company (ifany)|SHANDONG CHENMING PAPER HOLDINGS LIMITED|||
|Legal short name in English of theCompany (if any)|SCPH|||
|Legal representative of the Company|Chen Hongguo|||

2019 Interim Report Summary of Shandong Chenming Paper Holdings Limited 2. Major accounting data and financial indicators
Retrospective adjustment to or restatement of the accounting data for prior years by the Company
□ Yes√ No
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||The reportingperiod|Thecorrespondingperiod of the prioryear|Increase/decrease for thereporting period as comparedto the corresponding periodof the prior year|
|Revenue (RMB)|13,348,648,113.70|15,551,334,039.89|-14.16%|
|Net profit attributable to shareholders of theCompany (RMB)|509,795,572.29|1,784,631,025.31|-71.43%|
|Net profit after extraordinary gains or lossesattributable to shareholders of the Company(RMB)|303,144,996.21|1,537,896,765.44|-80.29%|
|Net cash flows from operating activities(RMB)|2,699,770,891.69|4,745,037,920.91|-43.10%|
|Basic earnings per share (RMB per share)|0.013|0.36|-96.39%|
|Diluted earnings per share (RMB per share)|0.013|0.36|-96.39%|
|Rate of return on net assets on weightedaverage basis|0.21%|5.77%|-5.56%|
||As at the end ofthe reportingperiod|As at the end ofthe prior year|Increase/decrease as at theend of the reporting periodas compared to the end ofthe prior year|
|Total assets (RMB)|106,558,750,961.42|105,318,734,827.82|1.18%|
|Net assets attributable to shareholders of theCompany (RMB)|24,468,978,032.01|25,048,731,454.79|-2.31%|

Data specification for basic earnings per share, diluted earnings per share, and rate of return on weighted average net assets:
Net profit attributable to shareholders of the Company does not exclude the effect of interest of perpetual bonds and the dividends of preference shares paid and declared to be paid. When calculating financial indicators such as earnings per share and the rate of return on net assets on weighted average basis, the interest for perpetual bonds from 1 January 2019 to 30 June 2019 of RMB96,202,739.73 and the dividend on preference shares paid and declared to be paid in 2019 of RMB377,169,767.52 are deducted.
3. Total number of shareholders and shareholdings
Unit: share
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|Total number ofshareholders of ordinaryshares as at the end of thereporting period|130,823, of which 110,298 wereholders of A shares, 20,157 wereholders of B shares and 368 wereholders of H shares||||Total number of shareholders ofpreference shares with restoredvoting right as at the end of thereporting period, if any (see Note8)|||||0||
|Shareholdings of shareholders interested in more than 5% of the shares of the Company or Top 10 shareholders||||||||||||
|Name of shareholders||Nature ofshareholders|Percentage ofshareholding|Number ofordinaryshares heldat the endof thereportingperiod||Changes(increase ordecrease)duringtheReporti|Number ofrestrictedordinarysharesheld|Numberofnon-restrictordinarysharesheld|Share pledged orlocked-up|||
||||||||||Statusofshares||Number|

2019 Interim Report Summary of Shandong Chenming Paper Holdings Limited
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|CHENMING HOLDINGSCOMPANY LIMITED|State-owned legalperson|15.33%||445,396,128|1250000||0|445,396,128|Pledged||333,499,836|
|HKSCC NOMINEESLIMITED|Overseaslegalperson|12.84%||373,067,625|-220250||0|373,067,625||||
|CHENMING HOLDINGS(HONG KONG) LIMITED|Overseaslegalperson|12.54%||364,131,563|0||0|364,131,563||||
|CENTRAL HUIJIN ASSETMANAGEMENT LTD.|State-owned legalperson|2.07%||60,206,850|0||0|60,206,850||||
|AGRICULTURAL BANKOF CHINA LIMITED -CHINA CSI 500 ETF|Others|0.55%||15,982,750|1,816,300||0|15,982,750||||
|VANGUARDEMERGING MARKETSSTOCK INDEX FUND|Overseaslegalperson|0.44%||12,912,357|0||0|12,912,357||||
|VANGUARD TOTALINTERNATIONAL STOCKINDEX FUND|Overseaslegalperson|0.39%||11,351,620|354,212||0|11,351,620||||
|Chen Hongguo|Domesticnatureperson|0.38%||11,080,044|935,600||0|2,770,011||||
|Chen Suiqiang|Domesticnatureperson|0.37%||10,800,200|899,050||0|10,800,200||||
|Jin Xing|Domesticnatureperson|0.37%||10,610,329|-1,114,421||0|10,610,329||||
|Related party relationship oracting in concert among theabove shareholders|A shareholder, Chenming Holdings (Hong Kong) Limited, which is an overseas legal person,is a wholly-owned subsidiary of a shareholder, Shouguang Chenming Holdings CompanyLimited, which is a state-owned legal person. A shareholder, Chen Hongguo, is the legalrepresentative, chairman and general manager of Chenming Holdings Company Limited.Save for the above, it is not aware that any other shareholders of tradable shares are personsacting in concert and is also not aware that any other shareholders of tradable shares areconnected with each other.|||||||||||
|Shareholdings of the top ten shareholders of non-restricted ordinary shares||||||||||||
|Name of shareholders|||Number of non-restrictedordinary shares held as atthe end of the reportingperiod|||Class of shares||||||
|||||||Class of shares||||Number||
|CHENMING HOLDINGS COMPANYLIMITED|||445,396,128|||RMB ordinary shares||||445,396,128||
|HKSCC NOMINEES LIMITED|||373,067,625|||Overseas listedforeign shares||||373,067,625||
|CHENMING HOLDINGS (HONG KONG)LIMITED|||364,131,563|||Domestic listed foreignshares||||210,717,563||
|||||||Overseas listedforeign shares||||153,414,000||
|CENTRAL HUIJIN ASSETMANAGEMENT LTD.|||60,206,850|||RMB ordinary shares||||60,206,850||
|Agricultural Bank of China Limited -CSI500 Index Open-ended Fund|||15,982,750|||RMB ordinary shares||||15,982,750||
|VANGUARD EMERGING MARKETSSTOCK INDEX FUND|||12,912,357|||Domestic listed foreignshares||||12,912,357||

2019 Interim Report Summary of Shandong Chenming Paper Holdings Limited
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|VANGUARD TOTAL INTERNATIONALSTOCK INDEX FUND||11,351,620|Domestic listed foreignshares|11,351,620|
|Chen Suiqiang||10,800,200|RMB ordinary shares|10,800,200|
|Jin Xing||10,610,329|Domestic listed foreignshares|10,610,329|
|LSV EMERGING MARKETS EQUITYFUND, L.P.||9,154,200|Domestic listed foreignshares|9,154,200|
|Related party relationship or actingin concert among the top tenordinary shareholders ofnon-restricted ordinary shares, andbetween the top ten shareholders ofnon-restricted ordinary shares andthe top ten ordinary shareholders|A shareholder, Chenming Holdings (Hong Kong) Limited, which is an overseas legalperson, is a wholly-owned subsidiary of a shareholder, Shouguang Chenming HoldingsCompany Limited, which is a state-owned legal person. Save for the above, it is notaware that any other shareholders of tradable shares are persons acting in concert. It isalso not aware that any other shareholders of tradable shares are related to each other.||||
|Securities margin trading of top 10ordinary shareholders|Chenming Holdings Company Limited held 445,396,128 RMB ordinary shares, ofwhich 402,196,128 shares were held through ordinary account and 43,200,000 shareswere held through credit guarantee security account.||||

4. Change of controlling shareholders or beneficial controllers
The 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 owner during the reporting period
□ Applicable√ Not Applicable
There was no change of beneficial owner of the Company during the reporting period.
5. Total number of holders of preference shares and the shareholdings of top ten holders of preference shares
√ Applicable□ Not Applicable
Unit: share
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|Total number of shareholders of preference shares as at the endof the reporting period|||7|||||
|Holders holdings more than 5% of the preference shares of the Company or top ten holders of preference shares||||||||
|Name of shareholders|Nature ofshareholders|Preferenceshareholding||Number ofpreferenceshares heldat the end ofthe reportingperiod|Changes(increaseordecrease)during thereportingperiod|Share pledged orlocked-up||
|||||||Statusofshares|Number|
|BEIJING YIBEN ZHONGXINGINVESTMENT MANAGEMENTCO., LTD.|Domesticnon-state-owned legalperson|27.78%||12,500,000|0|Pledged|12,500,000|
|BANK OF COMMUNICATIONSINTERNATIONAL TRUST CO.,LTD. - HUILI NO.167 SINGLECAPITAL TRUST|Others|22.44%||10,100,000|0|||
|BANK OF COMMUNICATIONSMINTERNATIONAL TRUST CO.,LTD. - HUILI NO.136 SINGLECAPITAL TRUST|Others|14.22%||6,400,000|0|||
|QILU BANK CO., LTD. - QILUBANK QUANXIN WEALTHMANAGEMENT PRODUCT|Others|13.33%||6,000,000|0|||

2019 Interim Report Summary of Shandong Chenming Paper Holdings Limited
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|SERIES|||||
|HENGFENG BANK CO., LTD.|Domesticnon-state-owned legalperson|11.11%|5,000,000|0|
|SHANGHAI STATE-OWNEDASSETS OPERATION CO., LTD.|State-ownedlegal person|6.67%|3,000,000|0|
|NCF - MINSHENG BANK –CHINA FORTUNEINTERNATIONAL TRUST –CHINA FORTUNE TRUST‧MINXIN NO. 11 SINGLE CAPITALTRUST|Others|4.44%|2,000,000|0|
|Related party relationship or actingin concert among the top ten holdersof preference shares, and betweenthe top ten holders of preferenceshares and thetop ten holders of ordinary shares|The aforesaid holders of preference shares, “BANK OF COMMUNICATIONSINTERNATIONAL TRUST CO., LTD. – UILI NO.167 SINGLE CAPITALTRUST” and “BANK OF COMMUNICATIONS INTERNATIONAL TRUSTCO., LTD. - HUILI NO.136 SINGLE CAPITAL TRUST”, are persons acting inconcert. Save for the above, it is not aware that whether the remaining holdersof preference shares are persons acting in concert. It is also not aware that thetop ten holders of preference shares and the top ten holders of ordinary sharesare related to each other.||||

6. Corporate Bonds
Are there any corporate bonds offered to the public and listed on stock exchanges which do not become due as at the date of approval of interim report or overdue but not fully settled?
Yes
(1) Basic information on corporate bonds
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|Name of bond|Bondabbreviation|Bondcode|Issuedate|Maturitydate|Outstandingamount ofthe bonds(RMB’0,000)|Interestrate|Paymentmethod|
|The public issuanceof the corporatebonds of ShandongChenming PaperHoldings Limited toqualified investors in2017 (tranche I)|17ChenmingBond 01|112570|17August2017|21August2022|120,000|6.50%|Interest is paidannually. Theprincipalamount and thelast interestpayment will bepaid on thematurity date.|
|The public issuanceof the corporatebonds of ShandongChenming PaperHoldings Limited toqualified investors in2018 (tranche I)|18ChenmingBond 01|112641|29 March2018|02 April2023|90,000|7.28%|Interest is paidannually. Theprincipalamount and thelast interestpayment will bepaid on thematurity date.|
|Stock exchange on which corporatebonds are listed or transferred||Shenzhen Stock Exchange||||||
|Investor eligibility arrangement||Online subscription: Public investors with A share security account openedunder China Securities Depository and Clearing Co., Ltd. Offline subscription:Institutional investors with A share security account opened under ChinaSecurities Depository and Clearing Co., Ltd.||||||
|Interest payment of corporate bondsduring the reporting period||There was no interest payment during the reporting period.||||||
|Performance of relevant terms duringthe reporting period, for specialterms such as issuer or investor||Both 17 Chenming Bond 01 and 18 Chenming Bond 01 attach with options forthe issuer to adjust the coupon rate and for investors to resell. The issuer has theright to determine the adjustment to the coupon rate for the following 3 years at||||||

2019 Interim Report Summary of Shandong Chenming Paper Holdings Limited
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|option and interchangeable forcorporate bonds (if any)|the end of the second year and the adjustment to the coupon rate for thefollowing year as the end of the fourth year. After issuing the announcement onwhether the coupon rate of the relevant tranche of bonds will be adjusted andthe range of adjustment, the investors have the right to register for resellingduring the period as announced to resell all or part of the relevant tranche ofbonds held to the issuer at par value.|

(2) Financial indicators as at the end of the reporting period
Unit:RMB’0,000
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|Item|As at the end of thereporting period|As at the end of theprior year|Increase/decrease as at theend of the reporting period ascompared to the end of theprior year|
|Gearing ratio|76.25%|75.43%|0.82%|
|Current ratio|77.56%|78.10%|-0.54%|
|Quick ratio|70.30%|69.54%|0.76%|
|Item|The reporting period|The correspondingperiod of the prior year|Increase/decrease of thereporting period as comparedto corresponding period ofthe prior year|
|EBITDA interest coverageratio|1.64|2.70|-39.26%|
|Loans payment ratio|100.00%|100.00%|0.00%|
|Interest payment ratio|100.00%|100.00%|0.00%|

 Major reason for more than30% in year-on-year change for the above accounting data and financial indicators:
√ Applicable□ Not Applicable
EBITDA interest coverage ratio recorded a decrease of39.26%, which was mainly due to the year-on-year decrease of profit during the reporting period.
III. Discussion and Analysis of Operations
1. Principal operations of the Company during the Reporting Period
Whether the Company needs to comply with the disclosure requirements of specific industries
No
(I) Principal activities of the Company during the reporting period
The Company is a large conglomerate principally engaged in pulp production and paper making with synergistic development in finance, mining, forestry, logistics and construction materials. The Company is the only listed company with A shares, B shares and H shares in China. It is among the top 100 listed companies in China and the top 10 star enterprises in China, and is rated as one of the 50 most competitive blue chip companies in China. It has been honoured over 200 titles above the provincial level including the China May 1st Labour Prize, the Top 10 Best Light Industry Enterprises in China, Outstanding Contribution Prize in Business Administration in China and the National Spiritual Civilisation Advanced Unit. Its key indicators in respect of business and economic efficiency have been in a leading position in the industry in China for over 20 consecutive years. The machine-made paper business is the principal activity and the major source of revenue and profit of the Company. During the reporting period, there was no significant change in the principal activity of the Company.
Recently, the Company has committed itself to implementing the “forestry, pulp and paper integration” strategy. It currently has three major pulp mills in Zhanjiang, Huanggang and Shouguang. It has the largest wood pulp production capacity in China with annual production capacity of more than 4.2 million tonnes. It is the first integrated pulp and paper enterprise in China to be able to produce wood pulp to meet its paper making demand and its pulp production capacity and paper production capacity complement each other perfectly. Leveraging the integrated forestry, pulp and paper project, the Company is the enterprise that offers the widest product range in the paper making industry, and its products include culture paper, white paper board, coated paper, household paper, electrostatic copy paper and thermal
paper, with each major product ranking among the best in China in terms of market share.
The Company has scientific research institutions including the national enterprise technology centre, the
postdoctoral working station as well as state certified CNAS pulp and paper testing centre and has obtained over 150
2019 Interim Report Summary of Shandong Chenming Paper Holdings Limited national patents including 17 patents for invention, with 7 products selected as national new products and 35 products filling the gap in China. The Company has obtained 21 Science and Technology Progress Awards above the provincial level and undertaken five national science and technology projects and 26 provincial technological innovation projects. The Company has obtained the ISO9001 quality certification, ISO14001 environmental protection certification and FSC-COC certification, leading among its industry peers.
(I I) Management situation for the reporting period
During the reporting period, although the general operation of the Company is in good condition, the Company experienced huge challenges as other paper making enterprises did in the complex and changing domestic and international economic situation. Affected by various factors such as economic downturn, reduced market demand, tight supply and rising prices of raw materials, the paper making industry experienced a decline in economic efficiency, increased difficulties in production and operation, and falling paper prices. Accordingly, the Company achieved net profit of only RMB38.22 million in the first quarter, representing a decrease of95.12% as compared to the corresponding period of prior year.
Since the second quarter, the market improved significantly. The prices of the major paper types had been on the rise, and the benefits of the paper price rise were obvious. The Shouguang Meilun 510,000 tonne high-ended cultural paper project, the Shouguang Headquarters cultural paper transformation project, the Shouguang Meilun 1,000,000 tonne chemical pulp project, the Huanggang Chenming chemical pulp project and others invested and constructed by the Company were successively put into operation with smooth operation in the second quarter, and gradually began to play their role. The profitability of the Company improved significantly in the second quarter with a quarter-on-quarter increase of1,157.95%.
In the first half of 2019, the Company completed the production of machine-made paper of 2.15 million tonnes with sales of 2.39 million tonnes and achieved revenue of RMB13,349 million, a year-on-year decrease of14.16%. The Company recorded operating costs of RMB9,754 million, a year-on-year decrease of4.93%. Total profit and net profit attributable to equity holders of the Company were RMB662 million and RMB510 million respectively, down by70.12% and71.43% from the prior year. TheCompany’s total assets amounted to RMB106,559 million.
At present, the four major pulp and paper projects of the Company have been completed and commenced operation. There is no major project expenditure in the future; and the financial leasing company continued to reduce its business scale, and finance expenses will be effectively controlled. In the second half year, as the four major pulp and paper projects will operate at full capacity and fully realised their benefits, the Company will achieve a balance between the pulp production capacity and paper production capacity. The advantages of its pulp and paper integration will be obvious with significantly higher gross profit margin, thereby effectively enhancing the overall profitability and risk aversion ability of the Company.
2. EVENTS RELATING TO THE FINANCIAL REPORT
(1) Reason for changes in accounting policies, accounting estimates and accounting methods as compared to the financial report for the prior year
□ Applicable√ Not applicable
There was no change in accounting policies, accounting estimates and accounting methods of the Company during the reporting period.
(2) Reason for retrospective restatement to correct major accounting errors during the reporting period□ Applicable√ Not applicable
No retrospective restatement was made to correct major accounting errors during the reporting period.
(3) Reason for changes in scope of the consolidated financial statements as compared to the financial report for the prior accounting period
√ Applicable□Not applicable
During the reporting period, the scope of consolidation increased and one new subsidiary was established, which was Shanghai Chenming Pulp& Paper Sales Co., Ltd.