The hottest spot is the goodwill of more than 3bil

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With a goodwill of more than 3 billion yuan, Shanying paper is "carrying" forward

recently, Shanying paper plans to raise 2.656 billion yuan for four projects, including the "comprehensive utilization project of papermaking waste resources of aituo environmental energy (Zhejiang) Co., Ltd.". In addition, with the current packaging paper market tending to be saturated, Shanying paper also newly invested and built the "Central China Shanying 2.2 million ton high-grade packaging paper project phase I" and "Haiyan paper production line phase III"

China business daily learned that the above-mentioned raised investment projects are the extension supporting projects of Shanying paper's large-scale extended mergers and acquisitions and new projects. However, the company's extensive M & A has the phenomenon of high premium acquisition, accompanied by the risk of goodwill impairment. According to the feedback of the CSRC, the book balance of goodwill of Shanying paper was 3.253 billion at the end of the latest period, with a large amount

Shanying paper did not make a positive response to the above problems. However, an executive of a listed paper company once said that the paper price has risen against the trend since the second half of 2016 and has continued to this day. At the same time, Shanying paper will not have the problem of interest division. Leading enterprises such as Shanying paper have become the direct beneficiaries of this round of price rise, which also makes many domestic enterprises choose to expand production capacity. Under the market saturation, especially under the background of the expansion of the packaging paper industry, the market competition in the industry is becoming increasingly fierce

the road of expansion

Shanying paper industry is mainly engaged in the production and sales of base paper, cardboard and cartons, packaging and foreign waste paper trade business. Its main products are base paper, paper products and recycled fibers. It was listed on the Shanghai Stock Exchange in December, 2001

since 2016, with the continuous increase of national environmental protection efforts, the number of small and medium-sized enterprises in the paper industry that have stopped production or limited production due to environmental protection problems has increased, thereby releasing some market share. For some companies, this is also a good opportunity to expand and seize the market

in this context, Shanying paper officially started its expansion in 2017

in October 2017, Shanying paper acquired 100% equity of Nordic paper, helping the company enter the field of special paper segmentation, adding new types of paper such as oil proof paper and special kraft paper, and improving the product structure. In January, 2018, it acquired Liansheng paper, further expanding the domestic regional layout

on November 18, 2018, Shanying paper announced that it would issue a total of 2.3 billion convertible bonds on November 21, 2018. The raised funds will be used for the cogeneration project of yangjiachang Industrial Park in Gongan County and the high-end packaging paperboard project with an annual output of 2.2 million tons (phase III)

according to the financial report data, from 2016 to 2018, the operating revenue of Shanying paper was 12.135 billion, 17.47 billion and 24.367 billion respectively, and the net profit was 353 million, 2.015 billion and 3.204 billion respectively. From 2016 to 2018, the operating revenue doubled from 12.135 billion to 24.367 billion; The net profit climbed from 353million to 3.204 billion, an increase of 9 times

at the same time, it is noted that between 2017 and 2018, Shanying paper successively acquired 100% equity of Nordic paper, Liansheng paper and Phoenix Paper for 2billion, 1.9 billion and 238million, with a total increase of goodwill of 3.318 billion. As of March 31, 2019, the book value of the company's goodwill was 3.253 billion, accounting for 8.32% of the total assets

in this regard, united credit rating Co., Ltd. said that Shanying paper has a large scale of goodwill. If the operating performance of the acquired enterprise fails to meet expectations, the company will face a certain risk of goodwill impairment

however, in 2018, the revenue and net profit of Liansheng paper were 3.24 billion and 400 million respectively, and the revenue and net profit of Nordic paper were 2.305 billion and 245 million respectively. The revenue of these two subsidiaries accounted for 22.75% of the total consolidated revenue

the market is weak

however, the good times are not long. According to the financial report of Shanying paper in the first quarter of 2019, the company achieved an operating revenue of 5.216 billion, a year-on-year decrease of 3.74%; The net profit attributable to shareholders of listed companies was 458million, a year-on-year decrease of 24.33%; The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was 345million, a year-on-year decrease of 29.54%

in this regard, Shanying paper said that the overall prosperity of the paper industry has generally declined, and the prices of some products have decreased year-on-year. Jinan experimental machine factory Jinan new era Gold Testing Instrument Co., Ltd. welcomes you to maintain a high price fluctuation of raw materials, and the sales cost of products has increased rapidly compared with the same period, resulting in a reduction in the total profit of the current period

at the same time, it is noted that the book balance of Shanying paper's inventory in the last three years and the first period (from 2016 to March 2019) were 1.7 billion, 2.35 billion, 2.49 billion and 2.72 billion respectively, of which the book balance of inventory goods at the end of the first quarter of 2019 was 1.23 billion, a larger increase than 780 million at the end of 2018

the financial report shows that Shanying paper achieved a base paper output of 1151100 tons and a sales volume of 1020900 tons in the first quarter of 2019, a decrease of 4.34% over the same period. Affected by the market situation and the company's sales strategy, the sales volume and revenue of base paper declined slightly on a year-on-year basis

"in fact, the domestic paper market has indeed declined since the fourth quarter of 2018, mainly due to the recent simultaneous release of production capacity and weak market demand." The above-mentioned executives said that it was mainly due to the policy of banning the entry of foreign garbage, which led to a shortage of raw materials and rising prices

it is found that except Shanying paper, the profits of listed companies such as Bohui paper, Chenming Paper and Taiyang paper have declined significantly. Sun paper released its financial report for the first quarter of 2019, which showed that the company's net profit was 380million, a year-on-year decrease of 38.34%. The main reason is that the overall prosperity of the paper industry generally declined during the period, the prices of some products decreased year-on-year, the prices of large quantities of raw materials required by the company's production remained high and volatile, and the sales cost of products increased rapidly year-on-year, resulting in a decrease in the total profit of the current period

competition "Red Sea"

by the end of 2018, Shanying paper had a total of 9 paper making bases at home and abroad, of which 4 domestic bases were located in Ma'anshan, Anhui, Haiyan, Jiaxing, Zhejiang, Jingzhou Public Security Bureau, Hubei (still under construction) and Zhangzhou, Fujian. By the end of March 2019, Shanying paper had consolidated more than 90 subsidiaries

this time, Shanying paper plans to raise 2.656 billion yuan for four projects, including "comprehensive utilization project of papermaking waste resources of aituo environmental protection and energy (Zhejiang) Co., Ltd.", "comprehensive utilization project of solid waste in yangjiachang Industrial Park of Gongan County", "comprehensive utilization and power generation project of Shanying International Holding Co., Ltd.", as well as supplementary working capital and repayment of bank loans, in order to consolidate the company's market position and enhance its profitability

in fact, more and more enterprises begin to upgrade from regional competition to competition in industrial layout planning. For example, Nine Dragons Paper has established papermaking bases in Dongguan, Taicang, Chongqing, Tianjin, Quanzhou, Shenyang, Tangshan and Leshan, and has established papermaking bases in Vietnam; In June, 2018, ndpaper, a wholly-owned subsidiary of Nine Dragons Paper, reached an agreement with catalyst Corporation of Canada. Ndpaper purchased two pulp and paper mills of catalyst Corporation of Canada in the United States - Rumford plant in Maine and Biron plant in Wisconsin for $175million

in addition, in the middle of 2016, two Voith packaging paper production lines in Zoucheng base of sun paper were put into operation successively, with a total capacity of nearly 900000 tons. In 2017, sun paper set up two more packaging paper production lines in Zoucheng base, with a total capacity of 900000 tons. When the two paper machines are all put into production, the total packaging paper production capacity of sun paper will reach 1.8 million tons, becoming the largest packaging paper manufacturer in Shandong Province

due to the scale economy of the paper industry, the capacity of domestic paper projects under construction and to be built is very large, and the overall capacity has an impact on the supply-demand relationship of the paper industry. At present, the demand of the packaging paper industry is weak, the sales of enterprises are declining, and nine dragons launched low-cost products at the end of June this year, which makes the market competition more intense

"under the super combination of" offline first "and" online first "formed by the market economy, it is not supply-oriented, but demand-oriented, and consumption is demand-oriented." People related to the next step in the paper industry said that even the packaging industry and the automobile core consumer goods industry have declined to varying degrees since 2019, and the competition in the paper industry will continue

with the imminent reshuffle of the packaging paper industry, the market is like a "Red Sea", and whether Shanying paper can succeed in the future will be full of variables

in this regard, the above executives said that the development prospect of high-end packaging paper in the next few years is promising, but the rapid expansion of production capacity of enterprises in the industry, coupled with the competitive advantages of the original foreign leading enterprises, will inevitably have a certain impact on the profitability of the industry

According to the announcement of Shanying paper industry, it mainly relies on waste paper fiber as raw material, and relies on domestic and foreign renewable fiber sales network and supporting logistics channels for production. Against the background of tightening the waste paper import policy, the company is still able to effectively guarantee the supply of raw materials, and has become one of the first batch of key enterprises to obtain the waste paper import quota under the new policy

at present, waste paper and pulp are the main raw materials of the paper industry. With the increasingly mature development of the industry and the expansion of production capacity, the competition of raw material channels will become the focus of the packaging and paper industry

in June 2018, the State Council issued the opinions of the CPC Central Committee and the State Council on Comprehensively Strengthening Ecological Environmental Protection and firmly fighting the battle against pollution (hereinafter referred to as the "opinions"), which focused on comprehensively banning the entry of foreign garbage and striving to basically achieve zero import of solid waste by the end of 2020. The import quota of waste paper has been continuously tightened

"the import volume of domestic waste paper this year has decreased significantly compared with the same period last year, making enterprises increase the purchase of domestic waste paper to replace imports. The rising demand for domestic waste has led to the rising purchase price. At the same time, the quality of domestic waste recycling has been poor for many times, and in order to ensure the quality of products, it is necessary to add some wood pulp in production, which increases the cost of raw materials." The above-mentioned executives said that the cost rose significantly in the first quarter of this year, and the gross profit margin and net profit of many listed paper enterprises fell in the first quarter

united credit also reminds that Shanying paper's raw material is waste paper. Affected by the policy, the supply of foreign waste paper is tightening, and the price difference between domestic and foreign waste paper is large. The company's domestic waste paper purchase is vulnerable to market price fluctuations, which is not conducive to the company's production cost control

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