Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited SHANDONG CHENMING PAPER HOLDINGSLIMITED* 2017 First Quarterly Report
April 2017
Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited I Important Notice
The board of directors (the “Board”), the supervisory committee (the “Supervisory Committee”), the directors (the “Director”), supervisors (the “Supervisors”) and senior management (the “Senior Management”) of the Company hereby warrant that the contents of this quarterly report are true, accurate and complete, and there are no false representations, misleading statements or material omissions, and are jointly and severally responsible for the liabilities of the Company.
All Directors were present at the Board meeting to consider and approve this quarterly report.
Chen Hongguo, the head of the Company, Hu Jinbao, the head in charge of accounting, and Dong Lianming, the head of the accounting department (Accounting Officer), declare that they warrant the truthfulness, accuracy and completeness of the financial statements in this quarterly report.
Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited II. General Information of the Company
I. Major financial data and change of shareholders
Retrospective adjustment to or restatement of the accounting data for prior years by the Company due to change of accounting policies and correction of accounting errors
□ Yes √ No
|||||
|-|-|-|-|
||The reporting period|Correspondingperiod of prior year|Increase/decreasecompared to thecorrespondingperiod of the prioryear|
|Revenue (RMB)|6,274,273,821.63|4,951,931,256.74|26.70%|
|Net profit attributable toshareholders of theCompany (RMB)|702,517,923.91|402,131,344.77|74.70%|
|Net profit afterextraordinary gains orlosses attributable toshareholders of theCompany (RMB)|615,479,547.22|292,898,560.63|110.13%|
|Net cash flows fromoperating activities (RMB)|-1,799,933,755.66|-3,936,890,898.29|54.28%|
|Basic earnings per share(RMB per share)|0.29|0.18|61.11%|
|Diluted earnings per share(RMB per share)|0.29|0.18|61.11%|
|Rate of return on net assetson weighted average basis|3.67%|2.48%|1.19%|
||As at the end of thereporting period|As at the end of theprior year|Increase/decrease asat the end of thereporting periodcompared to the endof the prior year|
|Total assets (RMB)|87,326,409,059.32|82,285,354,532.14|6.13%|
|Net assets attributable toshareholders of theCompany (RMB)|22,859,726,677.28|22,218,808,367.43|2.88%|

Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited Items and amounts of extraordinary gains or losses
√ Applicable □ Not applicable
Unit: RMB
||||
|-|-|-|
|Item|Amounts for theperiod from thebeginning of theyear to the end ofthe reportingperiod|Note|
|Profit or loss from disposal of non-currentassets (including write-off of provision forassets impairment)|-921,000.44||
|Government grants (except for thegovernment grants closely related to thenormal operation of the Company andgranted constantly at a fixed amount orquantity in accordance with a certainstandard based on state policies)accounted for in profit or loss for the currentperiod|87,957,895.90||
|Gain or loss on external entrusted loans|11,530,398.32||
|Non-operating income and expenses otherthan the above items|9,992,594.47||
|Less: Effect of income tax|21,284,700.25||
|Effect of minority interest (after tax)|236,811.31||
|Total|87,038,376.69|—|

 Notes for theCompany’s extraordinary gain or loss items as defined in the Explanatory Announcement on Information Disclosure for Companies Offering Their Securities to the Public No.1 - Extraordinary Gains or Losses and 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
Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited No extraordinary gain or loss items as defined or illustrated in the Explanatory Announcement on Information Disclosure for Companies Offering Their Securities to the Public No.1 - Extraordinary Gains or Losses were defined by the Company as its recurring gain or loss items during the reporting period.
II. Total number of shareholders and the shareholding of the top ten shareholders as at the end of the reporting period
1. Total number of shareholders of ordinary shares and shareholders of preference shares with restored voting rights and the shareholding of the top ten shareholders
Unit: share
||||||||||
|-|-|-|-|-|-|-|-|-|
|Total number of shareholders ofordinary shares as at the endof the reporting period||98,828, of which 77,692 wereholders of A shares, 20,709were holders of B shares and427 were holders of H shares||Total number of shareholders ofpreference shares with restoredvoting right as at the end of thereporting period (if any)|||0||
|Shareholding of top 10 shareholders|||||||||
|Name of shareholders|Nature ofshareholders||Percentage ofshareholding|Number ofshares held|Number ofrestrictedshares held|Share pledged orlocked-up|||
|||||||Status ofshares||Number|
|SHOUGUANG CHENMINGHOLDINGS COMPANYLIMITED|State-owned legalperson||15.13%|293,003,657|0|Pledged||201,562,000|
|HKSCC NOMINEESLIMITED|Overseas legalperson||12.97%|251,110,750|0||||
|CHENMING HOLDINGS(HONG KONG) LIMITED|Overseas legalperson||9.90%|191,712,571|0||||
|CENTRAL HUIJIN ASSETMANAGEMENT LTD.|State-owned legalperson||2.07%|40,137,900|0||||
|ANBANG ASSETMANAGEMENT - CHINAMERCHANTS BANK -ANBANG ASSETMANAGEMENT - CHINAMERCHANTS BANK -ANBANG ASSETMANAGEMENT -WIN-WIN NO. 3COLLECTIVE ASSETMANAGEMENTPRODUCT|Others||1.52%|29,403,560|0||||
|BBH A/C VANGUARDEMERGING MARKETSSTOCK INDEX FUND|Overseas legalperson||0.44%|8,608,238|0||||
|NATIONAL SOCIALSECURITY FUND 406|Others||0.42%|8,136,000|0||||
|HUATAI SECURITIES CO.,LTD.|Domesticnon-state-ownedlegal person||0.40%|7,836,321|0||||
|JIN Xing|Domestic natureperson||0.40%|7,808,300|0||||
|NATIONAL SOCIALSECURITY FUND 403|Others||0.36%|6,935,600|0||||

Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited
||||||
|-|-|-|-|-|
|Shareholding of the top ten shareholders of non-restricted shares|||||
|Name of shareholders||Number ofnon-restrictedshares held|Class of shares||
||||Class of shares|Number|
|SHOUGUANG CHENMING HOLDINGS COMPANYLIMITED||293,003,657|RMB ordinaryshares|293,003,657|
|HKSCC NOMINEES LIMITED||251,110,750|Overseas listedforeign shares|251,110,750|
|CHENMING HOLDINGS (HONG KONG) LIMITED||191,712,571|Domestic listedforeign shares|91,712,571|
||||Overseas listedforeign shares|100,000,000|
|CENTRAL HUIJIN ASSET MANAGEMENT LTD.||40,137,900|RMB ordinaryshares|40,137,900|
|ANBANG ASSET MANAGEMENT - CHINA MERCHANTSBANK - ANBANG ASSET MANAGEMENT - CHINAMERCHANTS BANK - ANBANG ASSETMANAGEMENT - WIN-WIN NO. 3 COLLECTIVEASSET MANAGEMENT PRODUCT||29,403,560|RMB ordinaryshares|29,403,560|
|BBH A/C VANGUARD EMERGING MARKETS STOCKINDEX FUND||8,608,238|Domestic listedforeign shares|8,608,238|
|NATIONAL SOCIAL SECURITY FUND 406||8,136,000|RMB ordinaryshares|8,136,000|
|HUATAI SECURITIES CO., LTD.||7,836,321|RMB ordinaryshares|7,836,321|
|JIN Xing||7,808,300|Domestic listedforeign shares|7,808,300|
|NATIONAL SOCIAL SECURITY FUND 403||6,935,600|RMB ordinaryshares|6,935,600|
|Connected relationship orconnected partyrelationship among theabove 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. Hence they are persons acting inconcert under Administration of Disclosure of Information on the Change ofShareholding in Listed Companies Procedures. Save for the above, it is not aware thatany other shareholders of tradable shares are persons acting in concert and it is also notaware that any other shareholders of tradable shares are connected with each other.||||

 Whether an agreed repurchase transaction was entered into during the reporting period by the top 10 ordinary shareholders and top 10 shareholders of non-restricted shares of the Company
□ Yes √ No
The top 10 ordinary shareholders and top 10 shareholders of non-restricted ordinary shares of the Company did not enter into any agreed repurchase transaction during the reporting period.
Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited 2. Total number of shareholders of preference shares and shareholding of the top ten shareholders of preference shares
√ Applicable □ No applicable
Unit: share
||||||||||
|-|-|-|-|-|-|-|-|-|
|Total number of shareholders ofpreference shares as at theend of the reporting period|||7||||||
|Shareholding of the top ten shareholders of preference shares|||||||||
|Name of shareholders||Nature ofshareholders||Percentage ofshareholding|Number ofshares held|Number ofrestrictedshares held|Share pledged orlocked-up||
||||||||Status ofshares|Number|
|BEIJING YIBENZHONGXINGINVESTMENTMANAGEMENT CO.,LTD.||Domesticnon-state-ownedlegal person||27.78%|12,500,000|0|Pledged|12,500,000|
|BANK OFCOMMUNICATIONSINTERNATIONAL TRUSTCO., LTD. - HUILINO.167 SINGLECAPITAL TRUST||Others||22.44%|10,100,000|0|||
|BANK OFCOMMUNICATIONSINTERNATIONAL TRUSTCO., LTD. - HUILINO.136 SINGLECAPITAL TRUST||Others||14.22%|6,400,000|0|||
|QILU BANK CO., LTD. -QILU BANK QUANXINWEALTHMANAGEMENTPRODUCT SERIES||Others||13.33%|6,000,000|0|||
|HENGFENG BANK CO.,LTD.||Domesticnon-state-ownedlegal person||11.11%|5,000,000|0|||
|SHANGHAI STATE-OWNEDASSETS OPERATIONCO., LTD.||State-owned legalperson||6.67%|3,000,000|0|||
|NCF - MINSHENG BANK -CHINA FORTUNEINTERNATIONAL TRUST— CHINA FORTUNETRUST‧MIN XIN NO.11 SINGLE CAPITALTRUST||Others||4.44%|2,000,000|0|||
|Connected relationship orconnected partyrelationship among theabove shareholders|The aforesaid holders of preference shares, “BANK OF COMMUNICATIONSINTERNATIONAL TRUST CO., LTD. - HUILI NO.167 SINGLE CAPITAL TRUST” and“BANK OF COMMUNICATIONS INTERNATIONAL TRUST CO., LTD. -HUILI NO.136 SINGLE CAPITAL TRUST”, are persons acting in concert. Save for theabove, it is not aware whether there is any connected relationship between the above holdersof preference shares nor are they persons acting in concert.||||||||

Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited III Material matters
I. Details and reasons for changes of major financial data
and financial indicators during the reporting period
√ Applicable □ No applicable
(I) Analysis of the assets and liabilities of the Company
Unit: RMB
||||||
|-|-|-|-|-|
|Item|31 March 2017|31 December 2016|Change|Reasonforchange|
|Billsreceivable|2,039,793,921.81|1,590,460,875.23|28.25%|(1)|
|Othercurrentassets|8,782,506,684.11|6,616,744,831.28|32.73%|(2)|
|Constructionin progress|4,995,338,316.31|4,115,194,870.23|21.39%|(3)|
|Bills payable|637,415,703.08|515,301,703.08|23.70%|(4)|
|Interestpayable|99,708,753.71|30,731,253.71|224.45%|(5)|
|Othercurrentliabilities|8,093,126,466.00|6,602,863,069.45|22.57%|(6)|

 Explanation of the reasons leading to the major changes:
(1) Bills receivable increased by28.25% as compared to the beginning of the year mainly due to increases in bills pledged by the Company for the issuance of letters of guarantee and bills.
(2) Other current assets increased by32.73% as compared to the beginning of the year mainly due to an increase in receivables under financial lease due within one year.
(3) Construction in progress increased by21.39% as compared to the beginning of the year mainly due to the increased investment in the forestry pulp integration project of Huanggang Chenming and the chemical pulp project of Shouguang Meilun.
(4) Bills payable increased by23.70% as compared to the beginning of the
year mainly due to an increase in payments by bills.
Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited (5) Interest payable increased by224.45% as compared to the beginning of the year mainly due to an increase in the outstanding interests payable of corporate bonds and medium-term notes.
(6) Other current liabilities increased by22.57% as compared to the beginning of the year mainly due to the new issue of super& short-term commercial paper.
(II) Reasons for significant year on year changes of income statement
items during the reporting period
Unit: RMB
||||||
|-|-|-|-|-|
|Item|January - March 2017|January - March 2016|Change|Reasonforchange|
|Salesrevenue|6,274,273,821.63|4,951,931,256.74|26.70%|(1)|
|Taxes andsurcharges|54,684,663.59|35,522,816.60|53.94%|(2)|
|Selling anddistributionexpenses|304,176,522.86|254,937,855.85|19.31%|(3)|
|General andadministratiexpenses|ve413,588,829.04|327,367,757.71|26.34%|(4)|
|Loss onimpairmentof assets|23,825,034.05|-3,695,206.04|744.76%|(5)|

 Explanation of the reasons leading to the major changes:
(1) Sales revenue increased by26.70% as compared to the corresponding period of last year mainly due to an increase in the sales of machine-made paper with higher selling prices.
(2) Taxes and surcharges increased by53.94% as compared to the corresponding period of last year mainly due to the reclassification of taxes in general and administrative expenses.
(3) Selling and distribution expenses increased by19.31% as compared to the
corresponding period of last year mainly due to an increase in the sales
of machine-made paper with higher sales revenue.
Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited (4) General and administrative expenses increased by26.34% as compared to the corresponding period of last year mainly due to a year-on-year increase inR&D expenses.
(5) Loss on impairment of assets increased by744.76% as compared to the corresponding period of last year mainly due to a year-on-year increase in the provision for loss on bad debts made by the Sales Company.
(III) Analysis of cash flows during the reporting period
Unit: RMB
||||||
|-|-|-|-|-|
|Item|January - March 2017|January - March 2016|Change|Reasonforchange|
|Net cashflows fromoperatingactivities|-1,799,933,755.66|-3,936,890,898.29|54.28%|(1)|
|Net cashflows frominvestmentactivities|147,890,412.84|-447,467,552.31|133.05%|(2)|
|Net cashflows fromfinancingactivities|2,013,126,167.07|4,315,067,987.52|-53.35%|(3)|

 Explanation of the reasons leading to the major changes:
(1) Net cash flows from operating activities increased by54.28% as compared to the corresponding period of last year mainly due to an increase in sales revenue resulting from the recovery of the paper market and a decrease in net investment under financial lease.
(2) Net cash flows from investing activities increased by133.05% as compared to the corresponding period of last year mainly due to the recovery of external entrusted loans amounting of RMB500 million. (3) Net cash flows from financial activities decreased by53.35% as compared to the corresponding period of last year mainly due to the repayment of short-term commercial paper due and others by the
Company.
Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited II. Progress in respect to material matters and analysis of the related effects and solutions
√ Applicable □ No applicable
1. Statutory demand
The Company published Indicative Announcements on CNINFO on 26 October 2016, 9 November 2016 and 22 November 2016 respectively
(announcement number: 2016-140, 2016-144 and 2016-151) in relation to Statutory Demand and the injunction order against applicant to petition for winding-up against the Company applied to the court by the Company. The Court of First Instance in the High Court of Hong Kong Special Administrative Region completed the hearing held from 21 February 2017 to 23 February 2017 and would set a date to hand down its judgment. The Company will make timely disclosure of the relevant information pursuant to the progress of the above matter.
2. Report on Details of Change in Shareholding
Based on the knowledge in the current capital market situation and the confidence in the future stable development of the Company, Chenming Holdings (Hong Kong) Limited, the person acting in concert of Shouguang Chenming Holdings Company Limited (the controlling shareholder of the Company), acquired 24,467,500 H shares of the Company (accounting for approximately6.95% of the issued H shares of the Company) and 69,191,648 B shares (accounting for approximately14.69% of the issued B shares of the Company) through the trading system during the period from 13 January 2016 to 9 March 2017. The H shares and B shares held by Chenming Holdings (Hong Kong) Limited increased by 93,659,148 shares, accounting for approximately4.84% of the total issued shares of the Company. Upon the completion of the change in shareholding, Chenming Holdings and its persons acting in concert held 484,106,228 shares of the Company, accounting for25.00% of the total share capital of the Company.
Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited
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|-|-|-|
|Material matter|Date of disclosure|Search index of the ad-hoc report disclosure website|
|Statutory demand|25 February 2017|http://www.cninfo.com.cn, announcement number: 2017-015|
|Report on details ofchange in shareholding|15 March 2017|http://www.cninfo.com.cn, announcement number:2017-024|

III. Undertakings made by parties involved in undertakings including theCompany’s beneficial controllers shareholders, related parties, bidders and the Company subsisting during the reporting period
√ Applicable□ No applicable
||||||||
|-|-|-|-|-|-|-|
|Undertaking|Partyinvolved inundertaking|Type ofundertaking|Details of undertaking|Undertakingdate|Term|Particularson theperformance|
|Undertaking onshareholdingstructurereformation|||||||
|Undertaking made inoffering documentsor shareholdingalternationdocuments|||||||
|Undertaking madeduring assetreconstruction|||||||
|Undertaking made oninitial publicoffering orrefinancing|ShouguangChenmingHoldingsCo., Ltd.|Non-competitiveundertaking|(1) Shouguang Chenming Holdings Co., Ltd. (“ShouguangChenming Holdings”) shall not engage, whether solely, jointly,or by representing itself or any other persons or companies,and shall not procure its associates (as defined in The ListingRules of Hong Kong Stock Exchange) to engage, in anybusiness which competes with the business of the Companyand its subsidiaries (“Chenming Group” or “we”) directly orindirectly, in any country and region which our business exists(or any part of the world if in any form of electronicsbusiness), or in any business that directly or indirectlycompetes with Chenming Group’s business which we operatefrom time to time (including but not limited to any business inthe form of sole proprietorship, joint ventures or acquisitions,or holding interests directly or indirectly in such enterprises,or by any other means); (2) in the event that ShouguangChenming Holdings is required by its business to, whethersolely, jointly, or by representing itself or any other persons orcompanies, engage in business which directly or indirectlycompetes against the business of Chenming Group, or obtainany business opportunity which directly or indirectly competesagainst the business of Chenming Group, it shall endeavour toprocure that Chenming Group shall have priority to obtain theright to operate such business or to obtain such businessopportunity; (3) if Shouguang Chenming Holdings is in breachof the abovementioned undertakings, it shall indemnify theCompany for any loss caused by such breach and the Companyshall have the right to acquire all businesses of ShouguangChenming Holdings, which directly or indirectly compete withthe businesses of our Group, at market price or cost price(whichever price is lower); (4) Shouguang Chenming Holdingsshall not make use of its position as thecshoanrterohlollidnegr (as defined in The Listing Rules of Hong KongStock Exchange) of our Company to jeopardise the legalinterests of Chenming Group and its shareholders with otherpersons or companies or on their behalf.|22 May 2008|During theperiod whenChenmingHoldingswas themajorshareholderof theCompany|Implementingas normal|

Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited
||||||||
|-|-|-|-|-|-|-|
|Undertaking|Partyinvolved inundertaking|Type ofundertaking|Details of undertaking|Undertakingdate|Term|Particularson theperformance|
||ShouguangChenmingHoldingsCo., Ltd.|Defectiveproperties|(1) According to the plan on defective properties of theCompany, Shouguang Chenming Holdings Co., Ltd.(“Shouguang Chenming Holdings”) has guaranteed andundertaken that: according to the application of the Company,for defective property(ies) owned by the Company and itsholding subsidiary company which situated in theadministrative area of Shouguang city, Shouguang ChenmingHoldings will purchase it (them) and have it(them) beingtransferred to itself pursuant to the law in accordance with theresult of the related asset valuation if the Company decides totransfer and dispose of it(them) and there is no othertransferee; (2) before the Company transfers and disposes ofthe defective properties pursuant to the law, if the Companysuffers any economic losses due to the defects of the title(including but not limited to damages, penalties and relocationcosts), Shouguang Chenming Holdings will bear sucheconomic losses; (3) during the regulatory process taken to thedefective properties of buildings and land of subsidiaries ofthe Company situated outside the local areas (outside theadministrative area of Shouguang city), the economic lossessuch as penalties or relocation costs imposed by competentadministrative authorities to be borne by the subsidiariesarising from defects of insufficient title documents shall bepaid pursuant to the law by Shouguang Chenming Holdingsafter verification.|16 January2008|During theperiod whenChenmingHoldingswas themajorshareholderof theCompany|Implementingas normal|
||ShandongChenmingPaperHoldingsLimited|Specific remedialmeasures in thenon-public issueof preferenceshares|Taking into consideration the dilution of the current return ofshareholders of ordinary shares due to the issue of preferenceshares, in order to maintain compliance with the Opinions ofthe General Office of the State Council on FurtherStrengthening the Protection of Legitimate Rights andInterests of Small and Medium Investors in Capital Market,protect the interests of shareholders of ordinary shares andmake up for the potential loss of current return due to the issueof preference shares, the Company has undertaken to adoptvarious measures to ensure the effective use of proceeds,prevent the dilution of the current return and enhance futureprofitability.|25 March2016|9999-12-31|Implementingas normal|
|Equity incentiveundertaking|||||||
|Other undertakingsmade to minorityshareholders of theCompany|||||||
|Does the undertakingperformed timely?|Yes||||||

IV. Estimate of the operating results for January - June 2017
Warning of projection on cumulative net profit for the period from the beginning of the year to the end of the next reporting period to be at a loss or expected to have material changes as compared to the corresponding period of prior year and its explanation
□ Applicable √ No applicable
Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited V. Security investments
□ Applicable √ No applicable
The Company did not have any security investments during the reporting period. VI. Derivatives investments
□ Applicable √ No applicable
The Company did not have any derivative investments during the
reporting period.
VII. Registration report on reception of research investigations, communications and interviews during the reporting period
□ Applicable √ No applicable
The Company did not have any reception of research investigations, communications and interviews during the reporting period.
VIII. External guarantees against the rules and regulations
□ Applicable √ No applicable
There was no external guarantee provided by the Company which was against the rules and regulations during the reporting period.
IX. Appropriation of funds of the Company by the controlling shareholder and its related parties for non-operating purposes
□ Applicable √ No applicable
There was no appropriation of funds of the Company by the controlling shareholder and its related parties for non-operating purposes during the reporting period.
Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited IV Financial Statements
I. Financial Statements
1. Consolidated Balance Sheet
Prepared by: Shandong Chenming
Paper Holdings Limited 31 March 2017 Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening|
|CURRENT ASSETS:||balance|
|Monetary funds|11,237,874,153.33|10,109,930,319.49|
|Bills receivable|2,039,793,921.81|1,590,460,875.23|
|Accounts receivable|3,793,252,083.80|3,974,065,104.15|
|Prepayments|1,714,499,302.44|1,511,362,674.64|
|Other receivables|1,414,122,977.66|1,614,214,645.48|
|Inventories|5,414,248,491.58|4,862,668,746.90|
|Non-current assets due within one year|5,217,101,389.99|5,487,376,588.22|
|Other current assets|8,782,506,684.11|6,616,744,831.28|
|Total current assets|39,613,399,004.72|35,766,823,785.39|
|NON-CURRENT ASSETS:|||
|Available-for-sale financial assets|1,945,000,000.00|1,945,000,000.00|
|Long-term receivables|9,517,153,410.79|8,844,262,173.65|
|Long-term equity investments|61,649,491.84|67,251,992.88|
|Investment properties|12,520,419.79|14,258,675.83|
|Fixed assets|28,508,557,953.20|28,811,555,365.39|
|Construction in progress|4,995,338,316.31|4,115,194,870.23|
|Construction materials|18,148,301.22|18,847,584.79|
|Intangible assets|1,529,626,223.84|1,540,959,330.74|
|Goodwill|20,283,787.17|20,283,787.17|
|Long-term prepaid expenses|155,956,500.81|157,772,100.69|
|Deferred income tax assets|510,319,913.71|497,457,826.70|
|Other non-current assets|438,455,735.92|485,687,038.68|
|Total non-current assets|47,713,010,054.60|46,518,530,746.75|
|Total assets|87,326,409,059.32|82,285,354,532.14|
|CURRENT LIABILITIES:|||
|Short-term borrowings|28,137,792,231.04|27,875,506,988.53|
|Bills payable|637,415,703.08|515,301,703.08|
|Accounts payable|3,822,069,466.08|3,724,266,382.06|
|Advance receipts|292,171,502.54|377,135,566.33|
|Staff remuneration payables|190,947,525.66|159,968,262.82|

Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited
||||
|-|-|-|
|Item|Closing balance|Opening|
|Taxes payable|324,373,998.85|ba2la3n6c,9e2 7,459.78|
|Interest payable|99,708,753.71|30,731,253.71|
|Other payables|992,718,654.91|948,919,195.80|
|Non-current liabilities due within oneyear|7,174,385,186.92|6,237,021,557.17|
|Other current liabilities|8,093,126,466.00|6,602,863,069.45|
|Total current liabilities|49,764,709,488.79|46,708,641,438.73|
|NON-CURRENT LIABILITIES:|||
|Long-term borrowings|7,086,447,664.56|6,935,598,781.23|
|Bonds payable|1,000,000,000.00||
|Long-term payables|4,152,550,721.60|3,951,368,854.00|
|Special payables|681,039,716.66|681,039,716.66|
|Deferred income|1,438,870,837.27|1,443,846,526.33|
|Total non-current liabilities|14,358,908,940.09|13,011,853,878.22|
|TOTAL LIABILITIES|64,123,618,428.88|59,720,495,316.95|
|OWNERS’ EQUITY:|||
|Share capital|1,936,405,467.00|1,936,405,467.00|
|Other equity instruments|7,060,300,000.00|7,060,300,000.00|
|Including: Preference shares|4,477,500,000.00|4,477,500,000.00|
|Perpetual bonds|2,582,800,000.00|2,582,800,000.00|
|Capital reserves|6,149,257,784.90|6,149,257,784.90|
|Other comprehensive income|-768,745,385.95|-805,245,771.89|
|Surplus reserves|1,132,116,106.40|1,132,116,106.40|
|Retained profit|7,350,392,704.93|6,745,974,781.02|
|Total equity attributable to equity holdersof the company|22,859,726,677.28|22,218,808,367.43|
|Minority interest|343,063,953.16|346,050,847.76|
|Total owners’ equity|23,202,790,630.44|22,564,859,215.19|
|TOTAL LIABILITIES AND OWNERS’EQUITY|87,326,409,059.32|82,285,354,532.14|

 Legal Representative:
Financial controller: Head of the financial department: Chen Hongguo Hu Jinbao Dong Lianming
Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited 2. Balance sheet of the Company
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|CURRENT ASSETS:|||
|Monetary funds|9,080,325,324.29|7,934,163,265.76|
|Bills receivable|96,971,187.04|112,943,069.85|
|Accounts receivable|106,036,984.51|84,089,911.81|
|Prepayments|1,733,071,521.96|1,003,699,885.05|
|Other receivables|25,977,673,863.98|22,848,685,985.74|
|Inventories|795,030,855.17|663,006,714.42|
|Non-current assets due within one year|400,000,000.00|900,000,000.00|
|Total current assets|38,189,109,736.95|33,546,588,832.63|
|NON-CURRENT ASSETS:|||
|Available-for-sale financial assets|1,909,000,000.00|1,909,000,000.00|
|Long-term equity investments|16,361,092,975.36|14,558,097,658.49|
|Investment properties|12,520,419.79|14,258,675.83|
|Fixed assets|3,304,268,288.38|3,343,366,320.45|
|Construction in progress|53,731,588.22|52,757,799.47|
|Construction materials|71,973.35|71,973.35|
|Intangible assets|479,470,727.10|300,218,996.05|
|Deferred income tax assets|153,476,177.41|164,139,190.27|
|Other non-current assets|67,400,000.00|67,400,000.00|
|Total non-current assets|22,341,032,149.61|20,409,310,613.91|
|Total assets|60,530,141,886.56|53,955,899,446.54|
|CURRENT LIABILITIES:|||
|Short-term borrowings|8,360,607,909.03|8,203,392,554.58|
|Bills payable|3,517,000,000.00|3,057,000,000.00|
|Accounts payable|752,651,866.60|654,411,787.56|
|Advance receipts|2,346,430,617.24|537,139,483.60|
|Staff remuneration payables|68,146,707.90|58,599,576.37|
|Taxes payable|70,106,276.46|43,087,056.70|
|Interest payable|97,908,753.71|30,731,253.71|
|Other payables|5,801,019,616.43|3,689,371,275.46|
|Liabilities classified as held for sale|||
|Non-current liabilities due withinone year|5,651,774,522.95|5,648,861,310.04|
|Other current liabilities|8,093,126,466.00|6,602,863,069.45|
|Total current liabilities|34,758,772,736.32|28,525,457,367.47|

Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|NON-CURRENT LIABILITIES:|||
|Long-term borrowings|1,636,710,158.87|1,521,611,382.77|
|Long-term payables|3,206,360,618.09|3,005,178,750.49|
|Deferred income|54,909,070.55|56,572,797.75|
|Total non-current liabilities|4,897,979,847.51|4,583,362,931.01|
|TOTAL LIABILITIES|39,656,752,583.83|33,108,820,298.48|
|OWNERS’ EQUITY:|||
|Share capital|1,936,405,467.00|1,936,405,467.00|
|Other equity instruments|7,060,300,000.00|7,060,300,000.00|
|Including: Preference shares|4,477,500,000.00|4,477,500,000.00|
|Perpetual bonds|2,582,800,000.00|2,582,800,000.00|
|Capital reserves|5,938,960,168.19|5,938,960,168.19|
|Surplus reserves|1,119,926,524.49|1,119,926,524.49|
|Retained profit|4,817,797,143.05|4,791,486,988.38|
|Total owners’ equity|20,873,389,302.73|20,847,079,148.06|
|TOTAL LIABILITIES AND OWNERS’EQUITY|60,530,141,886.56|53,955,899,446.54|

Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited 3. Consolidated income statement
Unit: RMB
||||
|-|-|-|
|Item|Amounts for theperiod|Amounts forthe prior|
|I. Total revenue|6,274,273,821.63|4,95p1,e9r3io1d,2 56.|
|Including: Revenue|6,274,273,821.63|74,49 51,931,256.|
|II. Total operating costs|5,540,639,425.53|47,45 34,400,365.69|
|Including: Operating costs|4,271,432,799.39|3,427,558,022.0|
|Taxes and surcharges|54,684,663.59|8 35,522,816.6|
|Sales and distributionexpenses|304,176,522.86|0254,937,855.8|
|General and administrativeexpenses|413,588,829.04|5327,367,757.7|
|Finance expenses|472,931,576.60|14 92,709,119.4|
|Loss on impairment ofassets|23,825,034.05|9-3,695,206.0|
|Plus: Gain on change in fair value (“-”denotes loss)||4|
|Investment income(“-” denotes loss)|34,080,946.51|14,515,005.1|
|Including: Investment incomefrom associates andjoint ventures|-5,602,501.04|6-8,234,994.8|
|Foreign exchange gains (“-”)denotes loss)||4|
|III. Operating profit (“-” denotes loss)|767,715,342.61|432,045,896.2|
|Plus: Non-operating income|98,617,512.36|112 2,346,818.3|
|Including: Gain on disposal ofnon-current assets|188,603.36|2631,136.6|
|Less: Non-operating expenses|1,538,769.15|229 9,463.5|
|Including: Loss on disposal ofnon-current assets|1,109,603.80|3207,203.8|
|IV. Total profit (“-” denotes total loss)|864,794,085.82|554,009 3,251.0|
|Less: Income tax expenses|165,263,056.51|016 3,276,472.8|
|V. Net profit (“-” denotes net loss)|699,531,029.31|039 0,816,778.2|
|Net profit attributable to shareholdersof the Company|702,517,923.91|0402,131,344.7|
|Profit or loss of minority interest|-2,986,894.60|7- 11,314,566.5|
|VI. Net other comprehensive income aftertax|36,500,385.95|729,818,903.0|

Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited
||||
|-|-|-|
|Item|Amounts for theperiod|Amounts for theprior period|
|Net other comprehensive income aftertax attributable to shareholders ofthe Company|36,500,385.95|29,818,903.01|
|(I) Other comprehensive income thatwill not be reclassified to profit orloss in subsequent periods|||
|(II) Other comprehensive income thatwill be reclassified to profit orloss in subsequent periods|36,500,385.95|29,818,903.01|
|Exchange differences ontranslation of foreignoperations|36,500,385.95|29,818,903.01|
|Net other comprehensive incomeafter tax attributable tominority interest|||
|VII. Total comprehensive income|736,031,415.26|420,635,681.21|
|Total other comprehensive incomeattributable to shareholders of theCompany|739,018,309.86|431,950,247.78|
|Total comprehensive incomeattributable to minority interest|-2,986,894.60|-11,314,566.57|
|VIII.Earnings per share:|||
|(I) Basic earnings per share|0.29|0.18|
|(II) Diluted earnings per share|0.29|0.18|

 Legal Representative:
Financial controller: Head of the financial department: Chen Hongguo
Hu Jinbao Dong Lianming
Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited 4. Income statement of the Company
Unit: RMB
||||
|-|-|-|
|Item|Amounts for theperiod|Amounts for theprior period|
|I. Revenue|1,825,135,337.89|1,624,983,408.12|
|Less: Operating costs|1,346,106,037.13|1,334,992,670.50|
|Taxes and surcharges|22,146,157.86|3,499,786.77|
|Sales and distributionexpenses|61,708,995.39|57,086,536.90|
|General and administrativeexpenses|157,074,579.69|125,978,458.42|
|Finance expenses|133,730,116.49|273,560,487.30|
|Loss on impairment of assets|10,581,405.57|3,452,110.25|
|Plus: Gain on change in fair value(“-” denotes loss)|||
|Investment income(“-” denotes loss)|39,583,206.16|22,602,080.41|
|Including: Investment incomefrom associates andjoint ventures|-97,092.16|-147,919.59|
|II. Operating profit (“-” denotes loss)|133,371,251.92|-150,984,561.61|
|Plus: Non-operating income|1,715,004.61|10,230,665.29|
|Including: Gain on disposal ofnon-current assets|32,382.30||
|Less: Non-operating expenses|13,089.00|275.97|
|Including: Loss on disposal ofnon-current assets|13,089.00|275.97|
|III. Total profit (“-” denotes total loss)|135,073,167.53|-140,754,172.29|
|Less: Income tax expenses|10,663,012.86|-25,523,334.64|
|IV. Net profit (“-” denotes net loss)|124,410,154.67|-115,230,837.65|
|V. Net other comprehensive incomeafter tax|||
|(I) Other comprehensive incomethat will not be reclassified toprofit or loss in subsequentperiods|||
|(II) Other comprehensive incomethat will be reclassified to profitor loss in subsequent periods|||
|VI. Total comprehensive income|124,410,154.67|-115,230,837.65|

Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited 5. Consolidated cash flow statement
Unit: RMB
||||
|-|-|-|
|Item|Amounts for theperiod|Amounts for theprior period|
|I. Cash flows from operating activities:|||
|Cash received from sales of goodsand rendering of services|6,071,765,519.77|3,861,397,415.68|
|Tax rebates received|49,253.28|1,678,391.44|
|Cash received relating to otheroperating activities|344,275,340.11|247,252,260.95|
|Subtotal of cash inflows from operatingactivities|6,416,090,113.16|4,110,328,068.07|
|Cash paid for goods and services|4,284,027,734.66|2,329,851,383.64|
|Cash paid to and for employees|254,685,584.47|255,883,771.79|
|Payments of taxes and surcharges|349,632,991.79|259,042,511.99|
|Cash paid relating to other operatingactivities|3,327,677,557.90|5,202,441,298.94|
|Subtotal of cash outflows from operatingactivities|8,216,023,868.82|8,047,218,966.36|
|Net cash flows from operating activities|-1,799,933,755.66|-3,936,890,898.29|
|II. Cash flows from investmentactivities:|||
|Cash received from investmentincome|13,750,000.00|22,750,000.00|
|Net cash received from disposal offixed assets, intangible assets andother long-term assets||123,100.00|
|Cash received relating to otherinvestment activities|518,764,372.00|104,056,200.00|
|Subtotal of cash inflows from investmentactivities|532,514,372.00|126,929,300.00|
|Cash paid for purchase of fixedassets, intangible assets and otherlong-term assets|384,623,959.16|574,396,852.31|
|Subtotal of cash outflows frominvestment activities|384,623,959.16|574,396,852.31|
|Net cash flows from investment activities|147,890,412.84|-447,467,552.31|

Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited
||||
|-|-|-|
|Item|Amounts for theperiod|Amounts for theprior period|
|III. Cash flows from financing activities:|||
|Cash received from borrowings|13,559,751,515.69|11,127,284,771.56|
|Cash received from issurance ofbonds|997,000,000.00||
|Cash received relating to otherfinancing activities|5,011,942,828.52|5,937,250,000.00|
|Subtotal of cash inflows from financingactivities|19,568,694,344.21|17,064,534,771.56|
|Cash repayments on borrowing|12,943,894,864.13|8,407,337,300.81|
|Cash paid for dividend and profitdistribution or interest payment|468,301,155.59|403,109,470.56|
|Cash paid relating to other financingactivities|4,143,372,157.42|3,939,020,012.67|
|Subtotal of cash outflows from financingactivities|17,555,568,177.14|12,749,466,784.04|
|Net cash flows from financing activities|2,013,126,167.07|4,315,067,987.52|
|IV. Effect of foreign exchange ratechanges on cash and cashequivalents|-12,654,907.93|-13,417,584.13|
|V. Net increase in cash and cashequivalents|348,427,916.32|-82,708,047.21|
|Plus: Balance of cash and cashequivalents as at the beginning ofthe period|1,979,861,045.62|1,888,107,493.76|
|VI. Balance of cash and cash equivalentsas at the end of the period|2,328,288,961.94|1,805,399,446.55|

Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited 6. Cash flow statement of the Company
Unit: RMB
||||
|-|-|-|
|Item|Amounts for theperiod|Amounts for theprior period|
|I. Cash flows from operating activities:|||
|Cash received from sales of goodsand rendering of services|2,043,512,964.97|1,481,863,637.30|
|Cash received relating to otheroperating activities|2,307,363,848.50|34,061,752.46|
|Subtotal of cash inflows from operatingactivities|4,350,876,813.47|1,515,925,389.76|
|Cash paid for goods and services|1,596,601,181.89|1,360,752,845.89|
|Cash paid to and for employees|91,590,954.26|105,169,505.84|
|Payments of taxes and surcharges|93,278,359.86|47,215,367.24|
|Cash paid relating to other operatingactivities|14,107,297.75|2,288,082,633.71|
|Subtotal of cash outflows from operatingactivities|1,795,577,793.76|3,801,220,352.68|
|Net cash flows from operating activities|2,555,299,019.71|-2,285,294,962.92|
|II. Cash flows from investmentactivities:|||
|Cash received from investmentincome|13,750,000.00|22,750,000.00|
|Net cash received from disposal offixed assets, intangible assets andother long-term assets||3,100.00|
|Cash received relating to otherinvestment activities|500,000,000.00||
|Subtotal of cash inflows from investmentactivities|513,750,000.00|22,753,100.00|
|Cash paid for purchase of fixedassets, intangible assets and otherlong-term assets|246,066.75||
|Cash paid on investments|2,000,000,000.00||
|Subtotal of cash outflows frominvestment activities|2,000,246,066.75||
|Net cash flows from investment activities|-1,486,496,066.75|22,753,100.00|
|III. Cash flows from financing activities:|||
|Cash received from borrowings|2,805,500,000.00|3,992,000,000.00|
|Cash received relating to otherfinancing activities|4,495,241,096.00|5,737,250,000.00|
|Subtotal of cash inflows from financingactivities|7,300,741,096.00|9,729,250,000.00|

Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited
||||
|-|-|-|
|Item|Amounts for theperiod|Amounts for theprior period|
|Cash repayments on borrowing|3,585,574,810.02|3,364,731,090.73|
|Cash paid for dividend and profitdistribution or interest payment|374,131,591.29|83,696,736.94|
|Cash paid relating to other financingactivities|4,660,350,945.07|2,922,349,824.95|
|Subtotal of cash outflows from financingactivities|8,620,057,346.38|6,370,777,652.62|
|Net cash flows from financing activities|-1,319,316,250.38|3,358,472,347.38|
|IV. Effect of foreign exchange ratechanges on cash and cashequivalents|42,600.81|-11,576,258.45|
|V. Net increase in cash and cashequivalents|-250,470,696.61|1,084,354,226.01|
|Plus: Balance of cash and cashequivalents as at thebeginning of the period|582,578,426.62|49,438,736.95|
|VI. Balance of cash and cash equivalentsas at the end of the period|332,107,730.01|1,133,792,962.96|

 II.Auditors’ Report
Has the first quarterly report already been audited yet?
□ Yes √ No
The first quarterly report of the Company is unaudited.
SHANDONG CHENMING PAPER HOLDINGS LIMITED
Report for the First Quarter of 2017 of Shandong Chenming Paper Holdings Limited 27 April 2017