(a joint stock company incorporated in the People’s Republic of China with limited liability)
Stock Code: 1812
2026
INTERIM REPORTI Important Notice Table of Contents and Definitions
The board of directors (the “Board”) the directors (the “Directors”) and the senior management (the “Senior Management”) of the
Company hereby warrant the truthfulness accuracy and completeness of the contents of the interim report guarantee that there are
no false representations misleading statements or material omissions contained in this interim report and are jointly and severally
responsible for the liabilities of the Company.Jiang Yanshan head of the Company Zhu Yanli head in charge of accounting and Zhang Bo head of the accounting department
(Accounting Officer) declare that they warrant the truthfulness accuracy and completeness of the financial report in the interim
report.All Directors have attended the board meeting to review this interim report. This interim report has been reviewed by the Audit
Committee of the Company.The Company is exposed to various risk factors such as macro-economic fluctuation adjustment of state policy and competition in
the industry. Investor should be aware of investment risks. For further details please refer to the risk exposures of the Company and
the measures to be taken to address them as set out in Management Discussion and Analysis.The Company does not propose distribution of cash dividends or bonus shares and there will be no increase of share capital from
reserves.SHANDONG CHENMING PAPER HOLDINGS LIMITED 1
INTERIM REPORT 2026I Important Notice Table of Contents and Definitions
Table of Contents
I Important Notice Table of Contents and Definitions 1
II Company Profile and Key Financial Indicators 5
III Management Discussion and Analysis 9
IV Corporate Governance Environment and Society 33
V Material Matters 38
VI Changes in Share Capital and Shareholders 60
VII Bonds 68
VIII Financial Report 69
2 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026I Important Notice Table of Contents and Definitions
Documents Available for Inspection
(I) The financial statements signed and sealed by the head of the Company the head in charge of accounting and the head of
the accounting department;
(II) the interim report signed by the legal representative;
(III) the original copies of all of the documents and announcements of the Company disclosed on the designated website as
approved by the China Securities Regulatory Commission during the reporting period;
(IV) the interim report disclosed on The Stock Exchange of Hong Kong Limited; and
(V) other relevant information.SHANDONG CHENMING PAPER HOLDINGS LIMITED 3
INTERIM REPORT 2026I Important Notice Table of Contents and Definitions
Definitions
Item Definition
Company Group Chenming Group means Shandong Chenming Paper Holdings Limited and its subsidiaries
Chenming Paper or Chenming
Paper Company
Parent Company or Shouguang means Shandong Chenming Paper Holdings Limited
Headquarters
Chenming Holdings means Chenming Holdings Company Limited
Shenzhen Stock Exchange means Shenzhen Stock Exchange
Hong Kong Stock Exchange means The Stock Exchange of Hong Kong Limited
CSRC means China Securities Regulatory Commission
Shandong CSRC means Shandong branch of China Securities Regulatory Commission
Zhanjiang Chenming means Zhanjiang Chenming Pulp & Paper Co. Ltd.Jiangxi Chenming means Jiangxi Chenming Paper Co. Ltd.Huanggang Chenming means Huanggang Chenming Pulp & Paper Co. Ltd.Chenming (HK) means Chenming (HK) Limited
Jilin Chenming means Jilin Chenming Paper Co. Ltd.Shouguang Meilun means Shouguang Meilun Paper Co. Ltd.Shouguang Art Paper means Shouguang Chenming Art Paper Co. Ltd.Zhanjiang Chenming Paper means Zhanjiang Chenming Paper Co. Ltd.Jiangxi Port means Jiangxi Chenming Port Co. Ltd.Yujing Hotel means Shandong Yujing Grand Hotel Co. Ltd.Weifang Xingchen means Weifang Xingchen Trading Co. Ltd.reporting period means the period from 1 January 2026 to 30 June 2026
beginning of the year or the period means 1 January 2026
end of the interim period or means 30 June 2026
the period
4 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026II Company Profile and Key Financial Indicators
I. Company profile
Stock abbreviation ST晨鳴 Stock code 000488
ST晨鳴B 200488
Stock exchanges on which the shares are listed Shenzhen Stock Exchange
Stock abbreviation Chenming Paper Stock code 01812
Stock exchanges on which the shares are listed The Stock Exchange of Hong Kong Limited
Previous stock abbreviation (if any) N/A
Name in Chinese of the Company 山東晨鳴紙業集團股份有限公司
Short name in Chinese of the Company 晨鳴紙業
Name in English of the Company (if any) SHANDONG CHENMING PAPER HOLDINGS LIMITED
Short name in English of the Company (if any) SCPH
Legal representative of the Company Jiang Yanshan
II. Contact persons and contact methods
Secretary to the Board Representative for Security Affairs Hong Kong Company Secretary
Name Yuan Xikun Chen Lin Chu Hon Leung
Correspondence No. 2199 Nongsheng East Road No. 2199 Nongsheng East Road Shouguang 22nd Floor World Wide House
Address Shouguang City Shandong Province City Shandong Province Central Hong Kong
Telephone 0536-5135888 0536-5135888 00852-21629600
Facsimile 0536-5135688 0536-5135688 00852-25010028
Email address cmir@chenming.com.cn cmir@chenming.com.cn liamchu@li-partners.com
III. Other information
1. Contact methods of the Company
Whether the registered address office address postal code website email and others of the Company changed during
the reporting period
□ Applicable □ Not applicable
Registered address of the Company No. 595 Shengcheng Road Shouguang City Shandong
Province
Postal code of the registered address of the Company 262700
Office address of the Company No. 2199 Nongsheng East Road Shouguang City
Shandong Province
Postal code of the office address of the Company 262705
Website of the Company http://www.chenmingpaper.com
Email address of the Company cmir@chenming.com.cn
Date of enquiry on the designated websites for interim 13 April 2026 14 April 2026
announcements (if any)
Index for the designated websites for interim http://www.hkex.com.hk http://www.cinifo.com.cn
announcements (if any)
2. Information disclosure and places for inspection
Whether the information disclosure and places for inspection changed during the reporting period
□ Applicable □ Not applicable
There was no change of the websites of the stock exchanges and the names and websites of the media where the
Company discloses its interim report and places for inspection of the Company’s interim report during the reporting
period. Please refer to the 2025 annual report for details.SHANDONG CHENMING PAPER HOLDINGS LIMITED 5
INTERIM REPORT 2026II Company Profile and Key Financial Indicators
III. Other information (Cont'd)
3. Other relevant information
Whether other relevant information changed during the reporting period
□ Applicable □ Not applicable
During the reporting period the Company changed its investor hotline number and facsimile number. After the change
the investor hotline is 0536-5135888 and the facsimile number is 0536-5135688.For details please refer to the relevant announcement disclosed by the Company on CNINFO on 14 April 2026
(Announcement No.: 2026-026) and the announcement disclosed by the Company on the website of Hong Kong Stock
Exchange on 13 April 2026.IV. Major accounting data and financial indicators
Retrospective adjustment to or restatement of the accounting data for prior years by the Company
□ Yes □ No
Increase/decrease
for the reporting
The period as compared
corresponding to the corresponding
The reporting period of period of
period the prior year the prior year
Revenue (RMB) 6865428943.30 2106630952.30 225.90%
Net profit attributable to shareholders of the Company (RMB) -786475084.18 -3857953190.56 79.61%
Net profit after extraordinary gains or losses attributable to
shareholders of the Company (RMB) -1089477041.98 -3645363615.81 70.11%
Net cash flows from operating activities (RMB) 322382985.88 785303274.19 -58.95%
Basic earnings per share (RMB per share) -0.27 -1.31 79.39%
Diluted earnings per share (RMB per share) -0.27 -1.31 79.39%
Decrease of 97.26
Weighted average return on net assets -150.65% -53.39% percentage points
Increase/decrease
as at the end of the
reporting period as
As at the end of As at the end of compared to the
the reporting period the prior year end of the prior year
Total assets (RMB) 50966173507.30 50620148908.13 0.68%
Net assets attributable to shareholders of the Company (RMB) 155805696.62 903835592.13 -82.76%
6 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026II Company Profile and Key Financial Indicators
V. Differences in accounting data under domestic and overseas accounting standards
1. Differences between the net profit and net assets disclosed in accordance with international accounting
standards and China accounting standards in the financial report
□ Applicable □ Not applicable
There was no difference between the net profit and net assets disclosed in accordance with international accounting
standards and China accounting standards in the financial report during the reporting period.
2. Differences between the net profit and net assets disclosed in accordance with overseas accounting
standards and China accounting standards in the financial report
□ Applicable □ Not applicable
There was no difference between the net profit and net assets disclosed in accordance with overseas accounting
standards and China accounting standards in the financial report during the reporting period.VI. Items and amounts of extraordinary gains or losses
□ Applicable □ Not applicable
Unit: RMB
Item Amount Description
Profit or loss from disposal of non-current assets (including write-off of
provision for assets impairment) 185582492.52
Government grants (except for the government grants closely related to
the normal operation of the Company granted in accordance with an
established standard and having an ongoing effect on the Company’s
profit or loss in compliance with national policies and regulations)
accounted for in profit or loss for the current period 26343895.53
Except for effective hedging business conducted in the ordinary course of
business of the Company gain or loss arising from the change in fair value
of financial assets and financial liabilities held by a non-financial company
as well as gain or loss arising from disposal of its financial assets and
financial liabilities 63077575.79
Reversal of provision for impairment of receivables individually tested for
impairment 1031050.29
Profit or loss from debt restructuring 819000.00
Profit or loss from changes in the fair value of consumable biological assets
subsequently measured at fair value 15704467.20
Other non-operating income and expenses other than the above items -5921952.74
Less: Effect of income tax -21154252.74
Effect of minority interests (after tax) 4788823.53
Total 303001957.80
SHANDONG CHENMING PAPER HOLDINGS LIMITED 7
INTERIM REPORT 2026II Company Profile and Key Financial Indicators
VI. Items and amounts of extraordinary gains or losses (Cont'd)
Details of other gain or loss items that fall within the definition of extraordinary gain or loss:
□ Applicable □ Not applicable
The Company did not have details of other gain or loss items that fall within the definition of extraordinary gain or loss.Explanation on 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
Item Amount involved (RMB) Reason
Other income 27079933.75 Government grants related to assets that are closely related to the
Company’s normal operations are subsequently amortised to other
income which has a continuing effect on the Company’s profit or loss
and is therefore accounted for as recurring profit or loss.
8 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026III Management Discussion and Analysis
I. Principal activities of the Company during the reporting period
1. Industry Overview
The Company operates within the paper and paper products industry. As a large pulp and paper manufacturer in China
featuring a complete industrial chain leading scale and a high degree of pulp and paper integration the Company
operates multiple production bases across Shandong Guangdong Hubei Jiangxi Jilin and other regions. It offers a
diverse range of machine-made paper products with core products including cultural paper coated paper and white
cardboard. The Company ranks at the forefront of the industry in terms of production capacity product quality technical
equipment and brand influence.The paper industry is a crucial foundational sector of the national economy and is essential for sustaining daily
livelihoods. It is distinctly characterised as a technology-capital-resource intensive industry. Its product applications
penetrate all aspects of social and economic activities. They are deeply integrated into the defence and military industry
(special functional materials) cultural communication (publishing and printing) industrial and agricultural production
(supporting materials) modern logistics (packaging products) and other key areas of the national economy and are
closely related to everyday consumer spending. As a typical cyclical industry the prosperity of the paper industry is
closely tied to the broader economic trend. The consumption level of paper and paperboard has become one of the
important indicators to measure a country’s level of modernisation and civilised development and is widely recognised
by the international community as a “social and economic barometer”.During the reporting period new production capacity in the domestic paper industry continued to be put into operation
driving a continuous expansion in overall market supply. With varying demand across downstream application
segments the industry as a whole remained in a phase of bottoming out amidst cyclical volatility and adjustments.Against this backdrop phasing out obsolete and inefficient production capacity deepening the green and low-
carbon upgrade of the industry and promoting the industrial structure towards quality improvement and efficiency
enhancement remained the core development directions for the transformation and upgrading of the paper industry. In
terms of supply the successive commissioning of new production capacity in regions such as South China and Jiangxi
drove a continuous rise in market supply in the first half of the year sustaining the overcapacity pressure across the
cultural paper and white cardboard markets. In terms of demand influenced by policies such as the implementation of
education burden-relief policies and strict controls over the total number of supplementary teaching materials coupled
with the ongoing substitution of traditional art books and promotional flyers by digital reading and online advertising
the overall demand for cultural paper and coated paper remained weak putting product prices under pressure. Despite
being in the traditional low-demand season for white cardboard the continuous advancement of the “paper-over-plastic”
policy and the EU plastic ban offset the impact of sluggish domestic demand to a certain extent. In terms of cost wood
pulp as the core raw material served as the dominant cost driver for the industry. According to SCI wood pulp supply
was generally ample in the first half of 2026 and pulp inventories at eight major domestic ports remained at a high level
of over 2.30 million tonnes for an extended period. Such ample market supply pushed the overall price benchmark
of pulp into a sustained downtrend. In particular average prices for softwood pulp declined year on year dragged
down by weak demand for cultural paper while hardwood pulp prices rose slightly supported by inelastic demand for
blending and substitution in paper production. In the second quarter prices for both types of pulp moved downward in
tandem. In terms of policy high-standard industry policies continued to be introduced throughout the reporting period
with regulatory constraints becoming increasingly stringent. With the paper industry listed in the national carbon market
expansion plan tightening carbon emission control policies raised the carbon-related operating costs for small energy-
intensive paper enterprises compelling the accelerated elimination of inefficient and obsolete capacity. The 50% VAT
rebate policy for the comprehensive utilisation of waste paper which came into effect in July 2026 further tightened
regulatory oversight over the industry’s waste paper recycling and reuse operations. Cost pressures intensified for small
and medium-sized paper enterprises without proper recycling qualifications or compliant operating practices while
the cost competitiveness of compliant industry leaders was further enhanced. At the same time the implementation
of the new Ecological and Environmental Code in August 2026 comprehensively raised the emission control standards
for pollutants such as wastewater solid waste waste gas and odour across the industry. Small paper manufacturers
lacking supporting environmental protection facilities or failing to meet environmental standards would be forced out of
the market at an accelerated rate. The implementation of these series of industrial policies continued to drive industry
resources towards leading enterprises with an integrated pulp and paper layout balanced multi-category production
capacity and a comprehensive environmental compliance system. According to official data from the National Bureau
of Statistics from January to June 2026 China’s paper and paper products industry generated revenue of RMB689.79
billion representing a year-on-year increase of 5.5%. Operating costs amounted to RMB607.73 billion representing a
year-on-year increase of 5.2% while total profits amounted to RMB19.61 billion representing a year-on-year increase
of 27.5%.SHANDONG CHENMING PAPER HOLDINGS LIMITED 9
INTERIM REPORT 2026III Management Discussion and Analysis
I. Principal activities of the Company during the reporting period (Cont'd)
1. Industry Overview (Cont'd)
Looking ahead to the second half of 2026 and beyond the paper industry is expected to embark on a positive
development trajectory characterised by a gradual recovery from the cyclical bottom and continuous optimization of the
industry landscape. Industry growth is transitioning from extensive capacity expansion to a high-quality development
model focusing on green transition high-end positioning and integrated industrial chains with structural growth
opportunities becoming increasingly prominent across the industry. As China’s green manufacturing system continues
to improve the paper industry is optimising and iterating its product structure towards higher value-added and premium
offerings accelerating the development of new quality productive forces. Meanwhile with the deepening advancement
of digital and intelligent transformation across the industry the digital and intelligent capabilities of the entire industrial
chain continue to upgrade and technology-empowered innovation will continue to consolidate the core drivers for
cost reduction quality improvement and efficiency enhancement across the industry. At the same time supported
by a macro environment of a continuously improving domestic consumption loop and a steady recovery in domestic
demand the profitability benchmark of the paper industry is expected to rise steadily.Going forward the Company will closely align with the “One-Two-Five” development strategy. Leveraging the
competitive advantage of its fully integrated industry chain the Company will deepen its presence in its principal
activities of pulp production and papermaking enhance refined cost management strengthen end-to-end cost
reduction and efficiency enhancement as well as all-round new product development accurately capture structural
growth opportunities in the industry uphold a prudent operational approach and continuously drive the Company
towards high-quality and sustainable development.
2. Business overview of the Company
The Company is a large modern conglomerate principally engaged in pulp production and paper making and committed
itself to implementing a pulp and paper integration strategy. The Company has production bases in Shandong
Guangdong Hubei Jiangxi Jilin and other places and is the first domestic paper making enterprise that achieves
a balance between pulp production and paper making capacity. Its machine-made paper products cover more than
200 types including culture paper coated paper white cardboard copy paper industrial paper special paper and
household paper. It is the enterprise with the largest variety of products and the most complete products in the domestic
paper industry. During the reporting period the machine-made paper business was the major source of revenue and
profit of the Company.During the reporting period the Company proactively adapted to market changes and strengthened refined
management. Through a series of measures including formulating clear strategic operational objectives streamlining
its organisational structure improving management systems as well as coordinating and optimising logistics and
transportation advancing process technology upgrades improving independent equipment maintenance capabilities
and expanding diversified sales channels the Company achieved a balance between production and sales further
reduced costs and enhanced efficiency and significantly narrowed its overall operating losses. At the same time
relying on the full resumption of operation and production across various production bases the Company achieved
a substantial year-on-year increase in production and sales volumes and a significant year-on-year decrease in
suspension losses. In addition the Company actively negotiated with creditors for further interest rate reductions
resulting in a marked decrease in finance expenses. Coupled with the divestiture of all assets related to the financial
leasing business in the fourth quarter of the prior year which contributed to a significant year-on-year decrease in
credit impairment losses and asset impairment losses for the reporting period the Company recorded revenue of
RMB6865 million and net profit attributable to shareholders of the Company of a loss of RMB786 million from January
to June 2026. Looking ahead the Company will steadfastly implement the “One-Two-Five” strategic developmentplan and remain committed to its goal of “building a top-tier management team and delivering outstanding businessperformance”. With a focus on “cost reduction and efficiency enhancement product innovation and complianceprevention” the Company will strengthen team building deepen management reform and innovation optimise the
industrial ecosystem chain restructure the production management system step up efforts to dispose of non-core
assets cultivate brand credibility and go all out to achieve high-quality and sustainable development of the Company.
10 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026III Management Discussion and Analysis
I. Principal activities of the Company during the reporting period (Cont'd)
3. Major products and their application
Major brands of machine-made paper products of the Company and their applications are set out below:
Major manufacturing
Category Major brands and types companies Range of application
Culture paper series 1. “BIYUNTIAN” “CLOUDY MIRROR” “CLOUDY Shouguang Headquarters Printing publications textbooks magazinesLEOPARD” and “YUNJIN” all-wood pulp offset Shouguang Meilun covers illustrations notebooks test papers
paper and electrostatic base paper Zhanjiang Chenming teaching materials reference books etc.
2. “CLOUDY LION” and “CLOUDY CRANE” original Jiangxi Chenming
white offset paper Jilin Chenming
3. “CLOUDY PINE” and “GREEN PINE” light weight
paper
4. Blueprint paper colour offset paper pure texture
paper non-fluorescent offset paper PE offset paper
5. Beige and high white book paper
6. Light weight coated paper
Coated paper series 1. “SNOW SHARK” and “EAGLE” one-sided coated Shouguang Headquarters Double-sided coated paper is suitable for
paper Shouguang Meilun high quality printing such as high-grade
2. “SNOW SHARK” “EAGLE” and “RABBIT” double- picture albums picture magazines and so
sided coated paper on promotional materials such as interior
3. “EAGLE” and “RABBIT” matte coated paper pages of high-end books wall calendars
posters and so on and suitable for high-
speed sheet printing and high-speed rotary
printing;
One-sided coated paper is suitable for
upscale tobacco package paper adhesive
sticker shopping bags slipcases
envelopes gift wrapping and so on and
suitable for large format printing and
commercial printing.SHANDONG CHENMING PAPER HOLDINGS LIMITED 11
INTERIM REPORT 2026III Management Discussion and Analysis
I. Principal activities of the Company during the reporting period (Cont'd)
3. Major products and their application (Cont'd)
Major manufacturing
Category Major brands and types companies Range of application
White cardboard series 1. White cardboard of “LIYA” series white cardboard Shouguang Headquarters High-end gift boxes cosmetics boxes tags
and ivory cardboard of “LIPIN” and “POPLAR” Jiangxi Chenming shopping bags publicity pamphlets high-
series high bulk cardboard and ivory cardboard of Zhanjiang Chenming end postcards; cigarette package printing
“LIZZY” and “BAIYU” series and super high bulk of medium and high quality; milk package
cardboard of “LIYING” and “BAIYU” series beverage package disposable paper cups
2. Food package board of “LIYA” and “LIZZY” series milk tea cups and noodle bowls.
3. Coated cattle card and LIYA book card
4. Playcard paper board
5. Chenming cigarette cardboard
Copy paper series “GOLDEN MINGYANG” and “GOLDEN CHENMING” Shouguang Headquarters Printing and copying business documents
copy paper “BOYA” and “BIYUNTIAN” copy paper Shouguang Meilun training materials and writing.“MINGYANG” “LUCKY CLOUDS” “BOYANG” and Zhanjiang Chenming
“SHANYIN” copy paper and “GONGHAO” and
“TIANJIAN” copy paper
Industrial paper series High-grade yellow anti-sticking base paper ordinary Shouguang Headquarters Anti-stick base paper is mainly used for
yellow/white anti-sticking base paper and PE paper Jiangxi Chenming producing the paper base of stripping paper
Zhanjiang Chenming or anti-sticking base paper;
Cast coated base paper is suitable for
producing adhesive paper or playcard
compound paper after coating.Special paper series Thermal paper and glassine paper Shouguang Art Paper High-grade adhesive backing paper for
electronics medicine food washing
supplies supermarket labels double-sided
tapes etc.Household paper series Toilet paper facial tissue pocket tissue napkin paper Shouguang Meilun Daily toilet supplies; used in restaurants and
towels and “XINGZHILIAN” other catering industries and used in public
toilets in hotels guesthouses and office
buildings and also suitable for home and
other environment.
12 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026III Management Discussion and Analysis
II. Analysis of liquidity financial resources and capital structure disclosed in accordance with the
listing rules of Hong Kong Stock Exchange
As at 30 June 2026 the Group’s current ratio was 18.43%. The quick ratio was 8.70%. The gearing ratio (i.e. total liabilities
divided by total assets) was 96.09%.There was no significant seasonal trend for capital requirements of the Group.The Group’s sources of capital primarily came from cash inflow generated from operating activities and borrowings from
financial institutions.As at 30 June 2026 the total bank borrowings of the Group were RMB28920 million (as at the end of the prior year: the total
bank borrowings of the Group was RMB28512 million). As at 30 June 2026 the Group had monetary funds of RMB187 million
(as at the end of the prior year: RMB210 million) in total (For the breakdown of monetary funds please refer to VIII. VII. 1 Note
on Monetary Funds in this report).In order to strengthen financial management the Group had established a comprehensive and rigorous system of internal
control for cash and liquidity management. The Group was in a strong position in terms of both liquidity and solvency. As at 30
June 2026 the Group had 8946 employees. The total staff remuneration for the first half of 2026 amounted to RMB486.9419
million (The Group had 8992 employees in 2025. The total staff remuneration for 2025 amounted to RMB864.9744 million).There will be no major investment project of the Company during the second half of 2026.The Company’s existing bank deposits were primarily used for production and operation engineering projects and investment
in technology research and developments.For details of the assets with restricted ownership of the Group as at 30 June 2026 please refer to VIII. VII. 24. Assets with
Restricted Ownerships or Right to Use in this report.SHANDONG CHENMING PAPER HOLDINGS LIMITED 13
INTERIM REPORT 2026III Management Discussion and Analysis
III. Analysis of Core Competitiveness
After innovation and development for more than 60 years the Company has created a strong brand influence and cultivated
a solid comprehensive competitiveness. It promotes product upgrades enhances R&D strength and improves core
competitiveness by creating competitive advantages in an industry chain featured with pulp and paper integration. The details
of the core competitiveness of the Company are as follows:
1. Advantages of pulp and paper integration
The Company has unwaveringly implemented a pulp and paper integration strategy. At present its major production
bases located in Shouguang Zhanjiang and Huanggang are equipped with chemical pulp production lines. It is the
first modern large-scale paper making company that basically realises wood pulp self-sufficiency in China. A complete
supply chain not only creates cost advantage for the Company but also safeguards the safety stability and quality of
upstream raw materials and renders strong support for the Company to maintain its long-term competitiveness.
2. Scale advantages
The paper industry is a typical capital-intensive and technology-intensive industry that follows the laws of economies of
scale. The Company’s large-scale production bases can be found in the major markets in Southern Central Northern
and Northeast China where reasonable production scale creates the marginal cost advantage. Meanwhile by leveraging
the scale advantages the Company has built an international logistics centre and railway dedicated lines and docks
and constructed a comprehensive logistics service platform covering container shipping bonded warehousing transfer
and storage at stations and terminals realising the improvement of logistics efficiency and the stability of logistics costs.
3. Product advantages
The Company is an enterprise that offers the widest and the most complete product range in the paper industry in
China. The product series include culture paper white cardboard coated paper copy paper household paper thermal
paper etc. The Company has attached great importance to technology research and development. By introducing the
most advanced pulping and paper making technology and equipment in the world it persists in technological innovation
and work process optimisation so as to help improve product quality and structure upgrade continuously improve the
brand value of Chenming and enhance brand benefits.
4. Industry layout advantages
Closely centring on the pulp and paper integration strategy the Company has integrated resources and established
its production bases in the core target market to promote the coordinated development of all regions. Currently the
Company adopts the market-oriented approach and has production bases in Shandong Guangdong Hubei Jiangxi
Jilin and other places. With all products sold at close distances the Company substantially reduces transportation costs
while improving service efficiency achieving a “win-win” between the Company and its users.
5. Advantages in technical equipment
The Company highly values the introduction and upgrades of technical equipment actively pushes equipment and
technology upgrade forward and has built pulping and paper making production lines with industry-leading scale as
well as advanced process and equipment capabilities. The Company’s major production equipment has been imported
from internationally renowned manufacturers including Metso and Valmet of Finland Voith of Germany Andritz of
Austria etc. and reached the advanced international level thus ensuring production efficiency and product quality.
14 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026III Management Discussion and Analysis
III. Analysis of Core Competitiveness (Cont'd)
6. Advantages in research and innovation
The Company has scientific research institutions including a post-doctoral working station a collaborative innovation
centre for cleaner production and refinery of light industry bio-based products and the Shandong Pulp and Paper
Making Engineering Lab. At the same time the Company actively carries out in-depth industry-university-research
cooperation with prestigious domestic universities and research institutes continuously improves technical innovation
capabilities and scientific research and development levels and develops a series of new products with high technology
contents and high added value as well as proprietary technologies. As at the end of the reporting period the Company
had obtained more than 500 national patents including 46 invention patents 7 national new products 16 scientific
and technological progress awards above the provincial level 5 national scientific and technological projects and 76
provincial-level technological innovation projects. The Company took the lead in obtaining the ISO9001 quality system
certification the ISO14001 environmental protection system certification and the FSC-COC international forest system
certification among domestic peers.
7. Advantages in environmental governance capacity
The Company has actively upheld the concept of “lucid waters and lush mountains are invaluable assets” adhered to
the development idea of “placing green development and environmental protection as its priority” always regarded
environmental protection as the “life project” clung to the green development model of clean production and resource
recycling and earnestly shouldered the corporate responsibility for environmental protection. In recent years the
Company and its subsidiaries have invested more than RMB8 billion in total in environmental protection and have
constructed the pollution treatment facilities including the alkali recovery system reclaimed water treatment system
reclaimed water reuse system white water recovery system and black liquor comprehensive utilisation system. The
Company adopts the world’s most advanced “ultrafiltration membrane + reverse osmosis membrane” technology
to complete the reclaimed water recycling membrane treatment project which is the largest reclaimed water reuse
project in the domestic paper industry. The reclaimed water recycle rate attains the industry-leading level. Meanwhile
in response to the “dual carbon” policy the Company actively introduces photovoltaic power generation and biomass
power generation continuously optimises the energy structure and improves the level of low-carbon production.SHANDONG CHENMING PAPER HOLDINGS LIMITED 15
INTERIM REPORT 2026III Management Discussion and Analysis
IV. Analysis of principal operations
Overview
Whether it is the same as the disclosure in the principal activities of the Company during the reporting period
□ Yes □ No
Please see “I. Principal activities of the Company during the Reporting Period” for relevant information.Year-on-year changes in major financial information
Unit: RMB
The corresponding
The reporting period of the Increase/decrease
period prior year year on year Reason for the change
Revenue 6865428943.30 2106630952.30 225.90% Mainly due to a year-on-year increase in revenue
as a result of the resumption of full operation and
production at the production bases during the
reporting period with an increase in sales of machine-
made paper.Operating costs 7359303725.50 3727203720.24 97.45% Mainly due to a year-on-year increase in costs
as a result of the resumption of full operation and
production at the production bases during the
reporting period with an increase in sales of machine-
made paper.Taxes and surcharges 97169987.01 61186804.84 58.81% Mainly due to a year-on-year increase in land use tax
during the reporting period.Research and 122589398.49 36567185.69 235.24% Mainly due to an increase in research and
development expense development investments as a result of the
resumption of full operation and production at the
production bases during the reporting period.Finance expenses 560793820.91 804665740.25 -30.31% Mainly due to a year-on-year decrease in finance
expenses during the reporting period.Other income 64874425.35 22794816.03 184.60% Mainly due to a year-on-year increase in other income
resulting from loss on debt restructuring during the
corresponding period of the prior year.Investment income 246703873.46 -430669782.44 157.28% Mainly due to a year-on-year increase in investment
income from investees and investment income on
equity disposal recognised during the reporting
period.Gain on change in fair 6305627.24 -129487561.79 104.87% Mainly due to a year-on-year increase in gain on
value change in fair value of forestry assets during the
reporting period.Credit impairment loss 41637485.75 -506322424.22 -108.22% Mainly due to a year-on-year decrease in bad debt
provisions for receivables during the reporting period
resulting from the thorough divestiture of the financial
leasing business as at the end of the prior year.
16 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026III Management Discussion and Analysis
IV. Analysis of principal operations (Cont'd)
Year-on-year changes in major financial information (Cont'd)
The corresponding
The reporting period of the Increase/decrease
period prior year year on year Reason for the change
Loss on impairment of -16686173.24 -240561409.32 -93.06% Mainly due to the impairment provision for idle
assets equipment during the operational halts during the
corresponding period of the prior year.Non-operating expenses 8095432.54 26198489.55 -69.10% Mainly due to a year-on-year decrease in litigation
costs during the reporting period.Income tax expenses -315925611.60 3603600.91 -8866.94% Mainly due to deferred income tax assets arising
from the reversal of previously recognised deductible
losses by some companies during the corresponding
period of the prior year as well as from deductible
temporary differences.Net cash flows from 322382985.88 785303274.19 -58.95% Mainly due to an increase in expenditure on
operating activities purchasing raw materials as a result of the resumption
of full operation and production of the Company
during the reporting period.Net cash flows from 456639440.07 -493454488.13 192.54% Mainly due to receipt of the proceeds from the sale
investing activities of the equity interest and debts of a subsidiary during
the reporting period and the repurchase of a portion
of equity interest in a subsidiary from a minority
shareholder during the corresponding period of the
prior year.Net cash flows from -807983214.91 -379851423.55 -112.71% Mainly due to reduction of debt size by repaying
financing activities maturing debts during the reporting period.Significant change in structure or source of profit of the Company during the reporting period
□ Applicable □ Not applicable
There was no significant change in structure or source of profit of the Company during the reporting period.SHANDONG CHENMING PAPER HOLDINGS LIMITED 17
INTERIM REPORT 2026III Management Discussion and Analysis
IV. Analysis of principal operations (Cont'd)
Components of revenue
Unit: RMB
The corresponding period Increase/
The reporting period of the prior year decrease
Item Amount % of revenue Amount % of revenue year on year
Total revenue 6865428943.30 100% 2106630952.30 100% 225.90%
By industry
Machine-made paper 5638065819.61 82.12% 1121420145.71 53.23% 402.76%
Chemical pulp 1000397697.29 14.57% 740160267.96 35.13% 35.16%
Electricity and steam 120613397.81 1.76% 98222594.99 4.66% 22.80%
Hotel and property rentals 72028058.26 1.05% 73374807.43 3.48% -1.84%
Construction materials 0.00% 2779445.82 0.13% -100.00%
Chemicals 0.00% 104714.25 0.02% -100.00%
Others 34323970.33 0.50% 70568976.14 3.35% -51.36%
By product
Coated paper 1519273006.05 22.13% 322730071.72 15.32% 370.76%
Duplex press paper 1454999572.63 21.19% 213202847.01 10.12% 582.45%
Electrostatic paper 1070659637.13 15.59% 74335729.94 3.53% 1340.30%
White cardboard 527795400.23 7.69% 260654282.46 12.37% 102.49%
Anti-sticking raw paper 359212509.71 5.23% 179939410.52 8.54% 99.63%
Thermal paper 239654153.72 3.49% 1821269.70 0.09% 13058.63%
Other machine-made paper 466471540.14 6.80% 68736534.36 3.26% 578.64%
Chemical pulp 1000397697.29 14.57% 740160267.96 35.13% 35.16%
Electricity and steam 120613397.81 1.76% 98222594.99 4.66% 22.80%
Hotel and property rentals 72028058.26 1.05% 73374807.43 3.48% -1.84%
Construction materials 0.00% 2779445.82 0.13% -100.00%
Chemicals 0.00% 104714.25 0.02% -100.00%
Others 34323970.33 0.50% 70568976.14 3.35% -51.36%
By geographical segment
Mainland China 5649548582.66 82.29% 2075083434.21 98.50% 172.26%
Other countries and regions 1215880360.64 17.71% 31547518.09 1.50% 3754.12%
Industries products or regions accounting for over 10% of revenue or operating profit of the Company
□ Applicable □ Not applicable
18 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026III Management Discussion and Analysis
IV. Analysis of principal operations (Cont'd)
Components of revenue (Cont'd)
Unit: RMB
Increase/ Increase/
Increase/ decrease of decrease of
decrease of operating costs gross profit
revenue as as compared margin as
compared to the to the compared to the
corresponding corresponding corresponding
Gross profit period of the period of the period of the
Item Revenue Operating costs margin prior year prior year prior year
By industry
Machine-made paper 5638065819.61 6173048462.99 -9.49% 402.76% 133.56% 126.19%
Chemical pulp 1000397697.29 932122259.06 6.82% 35.16% 25.65% 7.05%
By product
Coated paper 1519273006.05 1510180598.38 0.60% 370.76% 354.13% 3.64%
Duplex press paper 1454999572.63 1613179070.15 -10.87% 582.45% 550.30% 5.48%
Electrostatic paper 1070659637.13 1125810074.11 -5.15% 1340.30% 712.14% 81.33%
White cardboard 527795400.23 593832859.68 -12.51% 102.49% 104.67% -1.20%
Chemical pulp 1000397697.29 932122259.06 6.82% 35.16% 25.65% 7.05%
By geographical segment
Mainland China 5649548582.66 6150979487.04 -8.88% 172.26% 69.07% 66.45%
Other countries and regions 1215880360.64 1208324238.46 0.62% 3754.12% 1257.74% 182.72%
Under the circumstances that the statistics specification for the Company’s principal operations data experienced adjustment
in the reporting period the principal activity data upon adjustment of the statistics specification as at the end of the reporting
period in the latest year
□ Applicable □ Not applicable
SHANDONG CHENMING PAPER HOLDINGS LIMITED 19
INTERIM REPORT 2026III Management Discussion and Analysis
V. Analysis of non-principal operations
□ Applicable □ Not applicable
Unit: RMB
As a percentage
Amount of total profit Reason Sustainable or not
Other income 64874425.35 -5.25% Receipt of government grants related Including RMB51 million the
to daily business activities and profit annual amortisation amount of
or loss from debt restructuring. government grants received in
prior periods and sustainable in
nature.Investment income 246703873.46 -19.98% Recognition of external investment No
income and dividends as well as
income from equity disposal and
derecognition of financial assets
during the reporting period.Credit impairment loss 41637485.75 -3.37% Bad debt provisions for receivables No
Loss on impairment of assets -16686173.24 1.35% Bad debt provisions for non-current No
assets
20 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026III Management Discussion and Analysis
VI. Analysis of assets and liabilities
1. Material changes of asset items
Unit: RMB
As at the end of the reporting period As at the end of the prior year
As a As a
percentage of percentage of Percentage
Amount total assets Amount total assets change Description
Bills receivable 1225918850.92 2.41% 793939333.83 1.57% 0.84% Mainly due to an increase in
payments on outstanding bills
as a result of the resumption of
full operation and production at
the production bases during the
reporting period.Accounts receivable 867034650.86 1.70% 742744136.20 1.47% 0.23% Mainly due to an increase in
receivables from customers as at
the end of the reporting period.Prepayments 505693902.62 0.99% 281930888.07 0.56% 0.43% Mainly due to an increase in
advance payments to suppliers
resulting from the resumption of
full operation and production at
the production bases during the
reporting period.Inventories 3867248020.61 7.59% 3316198760.70 6.55% 1.04% Mainly due to an increase in
inventories of goods as at the end
of the reporting period.Deferred income tax 2359137415.22 4.63% 2032088838.62 4.01% 0.62% Mainly due to an increase in
assets deferred income tax assets as a
result of some subsidiaries making
losses during the reporting period.Accounts payable 10059603145.13 19.74% 8608727052.92 17.01% 2.73% Mainly due to an increase in
payments to suppliers for goods as
at the end of the reporting period.Contract liabilities 501500772.85 0.98% 296299701.36 0.59% 0.39% Mainly due to an increase in
advance payments from customers
as at the end of the reporting
period.Other payables 3895222465.04 7.64% 4772023040.44 9.43% -1.79% Mainly due to a decrease in
accounts payable as at the end of
the reporting period.Non-current liabilities 2152781290.16 4.22% 2313171903.83 4.57% -0.35% Mainly due to a decrease in long-
due within one year term liabilities reclassified to due
within one year as at the end of the
reporting period.Long-term borrowings 6240589747.20 12.24% 5576510739.72 11.02% 1.22% Mainly due to extensions of long-
term borrowings as at the end of
the reporting period.Long-term payables 1871465556.33 3.67% 1685368809.50 3.33% 0.34% Mainly due to extensions of overdue
equipment leasing borrowings as at
the end of the reporting period.SHANDONG CHENMING PAPER HOLDINGS LIMITED 21
INTERIM REPORT 2026III Management Discussion and Analysis
VI. Analysis of assets and liabilities (Cont'd)
2. Major assets overseas
□ Applicable □ Not applicable
3. Assets and liabilities measured at fair value
□ Applicable □ Not applicable
Unit: RMB
Profit or loss Cumulative
from change in fair value Impairment Amount Amount
fair value during change charged provided during acquired during disposed of
Item Opening balance the period to equity the period the period during the period Other changes Closing balance
Financial assets
1. Held-for-trading financial
assets (excluding derivative
financial assets) 38791121.74 -9398839.96 -166453639.67 -1121171.90 28271109.88
2. Other non-current financial
assets 327934626.32 – 14100780.55 630389.55 327304236.77
3. Consumable biological
assets measured at fair
value 1063081495.03 15704467.20 -227858332.42 6648120.75 4877359.31 1146353.61 1079410370.06
Total 1429807243.09 6305627.24 -380211191.54 6648120.75 5507748.86 25181.71 1434985716.71
Whether there were any material changes on the measurement attributes of major assets of the Company during the
reporting period
□ Yes □ No
22 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026III Management Discussion and Analysis
VI. Analysis of assets and liabilities (Cont'd)
4. Restriction on asset rights as at the end of the reporting period
Unit: RMB
As at the end of the period As at the beginning of the period
Type of Type of
Item Book balance Book value restriction Restriction Book balance Book value restriction Restriction
Fixed assets 39540922512.68 20237217488.05 Mortgage As collateral for bank 39673397581.16 21032970345.50 Mortgage As collateral for bank
borrowings and long-term borrowings and long-term
payables payables
Investment properties 6897297786.90 5264061227.98 Mortgage As collateral for bank 6897297786.90 5357575638.82 Mortgage As collateral for bank
borrowings borrowings
Intangible assets 1822125821.08 1279681854.88 Mortgage As collateral for bank 1842713402.08 1308852997.82 Mortgage As collateral for bank
borrowings and long-term borrowings and long-term
payables payables
Long-term equity 1574291359.16 1568954478.69 Freeze Pledge and freeze of 1584342692.88 1578247974.28 Freeze Pledge and freeze of
investments guarantee for debts guarantee for debts
Inventories 902652115.08 900473074.35 Mortgage and As collateral for contract 764268342.37 741627115.10 Mortgage and As collateral for contract
seizure performance and seizure seizure performance and seizure
by court due to being sued for by court due to being sued for
arrears arrears
Monetary funds 74678181.03 74678181.03 Pledge and As deposits for bank 63728850.28 63728850.28 Pledge and As deposits for bank
freeze acceptance bills letter freeze acceptance bills letter
of credit and loans of credit and loans
deposit reserves or frozen deposit reserves or frozen
accounts and frozen by accounts and frozen by
litigation etc. litigation etc.Total 50811967775.93 29325066304.98 50825748655.67 30083002921.80
SHANDONG CHENMING PAPER HOLDINGS LIMITED 23
INTERIM REPORT 2026III Management Discussion and Analysis
VII. Analysis of investments
1. Overview
□ Applicable □ Not applicable
Investments during
the corresponding period
Investments during the reporting period (RMB) of prior year (RMB) Change
98000000.00646248442.80-84.84%
2. Material equity investments acquired during the reporting period
□ Applicable □ Not applicable
Unit: RMB
Progress as Profit or loss
at the date from Date of Disclosure
Name of Principal Form of Investment Source of Period of Product of balance Estimated investment for Involvement disclosure Index
investee activities investment amount Shareholding fund Partner(s) Investment type sheet return the period in lawsuit if any if any
Huanggang Pulp Capital 98000000.00 8.93% Self-owned Ningbo Long-term Production Completed N/A 8212024.59 No N/A N/A
Chenming production increase funds Kaichen
Paper and sales Huamei
Technology Equity
Co. Ltd. Investment
Fund
Partnership
(Limited
Partnership)
Total – – 98000000.00 – – – – – – 8212024.59 – – –
3. Material non-equity investments during the reporting period
□ Applicable □ Not applicable
24 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026III Management Discussion and Analysis
VII. Analysis of investments (Cont'd)
4. Financial asset investment
(1) Security investments
□ Applicable □ Not applicable
Unit: RMB
Profit or loss Book value
Book value at from change Cumulative fair Amount Amount Profit or loss as at the
Initial Accounting the beginning in fair value value change acquired disposed of during the end of the
Abbreviation of investment measurement of the reporting during the charged during the during the reporting reporting Accounting Source of
Type of security Stock code stock name cost model period period to equity period period period period item fund
Domestic and 09668 China Bohai Bank 195684817.15 Measured at 38791121.74 -9398839.96 -166453639.67 – – -1121171.90 28271109.88 Held-for-trading Self-owned
foreign shares fair value financial assets funds
Total 195684817.15 – 38791121.74 -9398839.96 -166453639.67 – – -1121171.90 28271109.88 – –
Disclosure date of announcement in relation to the consideration and approval of securities investments by the Board 20 June 2020
Disclosure date of announcement in relation to the consideration and approval of securities investments by the N/A
shareholders’ general meeting (if any)
(2) Derivative investments
□ Applicable □ Not applicable
The Company did not have any derivative investments during the reporting period.
5. Use of proceeds
□ Applicable □ Not applicable
The Company did not use any proceeds during the reporting period.SHANDONG CHENMING PAPER HOLDINGS LIMITED 25
INTERIM REPORT 2026III Management Discussion and Analysis
VIII. Disposal of material assets and equity interest
1. Disposal of material assets
□ Applicable □ Not applicable
2. Disposal of material equity interest
□ Applicable □ Not applicable
Net profit
contribution to
the Company Net profit Carried out
from the contribution to on schedule
beginning of the the Company or not if not
period up to the on equity Pricing Relevant the reasons
Transaction equity interest disposal as a basis of Related party Relationship equity title fully and measures
Equity interest Disposal consideration disposal date Effect of disposal percentage of disposal of transaction with transferred taken by the Disclosure Disclosure
Counterparty(ies) disposed of date (RMB’0000) (RMB’0000) on the Company total net profit equity interest or not counterparty(ies) or not Company date index
Sho uguang Cultural Sh andong Yujing 2026.6.30 11716.00 -737.59 Fac ilitating the Company -23.55% As set’s No N/A Yes Yes 12 June 2026 http://www.hkex.com.hk
Tourism Investment Grand Hotel to integrate resources appraised 13 June 2026 http://www.cninfo.com.cn
and Development Co. Ltd. optimising its asset value (Announcement No.: 2026-033)
Group Co. Ltd. structure concentrating
its strengths focusing
on core business and
improving quality and
efficiency.
26 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026III Management Discussion and Analysis
IX. Analysis of major subsidiaries and investees
□ Applicable □ Not applicable
Major subsidiaries and investees accounting for over 10% of the net profit of the Company
Unit: RMB
Type of
Name of company company Principal activities Registered capital Total assets Net assets Revenue Operating profit Net profit
Zhanjiang Chenming Pulp & Subsidiary Production and sale 6913572423.00 19496509675.33 5086515985.64 712391415.90 -497004484.46 -395032412.14
Paper Co. Ltd. of duplex press paper
electrostatic paper
white cardboard etc.Shouguang Meilun Paper Co. Ltd. Subsidiary Production and sale of 4801045519.00 16564776042.57 6227437714.37 3721141504.87 -518946926.67 -406700591.19
coated paper culture
paper household paper
and chemical pulp
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable □ Not applicable
Methods to acquire and
dispose of subsidiaries during Impact on overall production and
Name of company the reporting period operations and results
Shandong Yujing Grand Hotel Co. Ltd. Disposal Net profit increased by RMB216 million
Chenming Paper Japan Co. Ltd. Deregistration Net profit increased by RMB10800
Particulars of major subsidiaries and investees
During the reporting period all production bases resumed operation and production in full with a significant year-on-year
increase of sales volumes while losses due to production stoppages fell substantially year on year thereby significantly
reducing net losses of Zhanjiang Chenming and Shouguang Meilun year on year. Moving forward the Company will continue
to implement measures to reduce costs and improve efficiency further optimise its product mix enhance product quality
and step up efforts to develop overseas markets thereby achieving a balance between production and sales and further
improving corporate profitability.SHANDONG CHENMING PAPER HOLDINGS LIMITED 27
INTERIM REPORT 2026III Management Discussion and Analysis
X. Structured entities controlled by the Company
□ Applicable □ Not applicable
XI. Risk factors of the Company and the measures to be taken
1. Macroeconomic policy risk
As a crucial basic raw materials industry within the national economy the paper industry’s development is closely tied
to national macroeconomic policies. In recent years relevant competent authorities have issued a series of policies and
regulations including the Policy on the Development of the Paper Industry aiming to improve the industrial structure
elevate product technology promote energy conservation and emission reduction and phase out outdated capacity.These have provided strong policy support for the industry’s high-quality development. As China continues to transform
and upgrade its economic structure and deepens the implementation of strategies such as the “dual-carbon” goals and
environmental governance future policies of the paper industry may undergo further adjustments. For instance stricter
requirements regarding environmental standards raw material supplies and capacity controls could be introduced
potentially impacting the Company’s production and operations as well as technological upgrades. Furthermore shifts
in macroeconomic policies such as fiscal and financial policies bank interest rates and import/export regulations will
also affect the Company’s operations and development.In response to the aforesaid risks the Company will strengthen its policy analysis and closely monitor dynamic shifts
in national industrial fiscal and financial policies. It will remain anchored to its core direction of developing its principal
business of pulp production and papermaking adhere to an innovation-driven strategy and align with policy directives
to optimise its industrial structure and regional footprint. By building a highly collaborative and efficient industrial
system it aims to address the risks associated with industrial policy adjustments. Meanwhile the Company will continue
to strengthen lean management control costs and expenses broaden financing channels optimise its capital structure
and improve overall operational quality to counter any risks arising from macroeconomic policy adjustments including
those in fiscal and financial domains.
2. Environmental risk
The transition towards green and low-carbon practices has become the core strategic direction for high-quality
development in the paper industry. In recent years the government has continuously intensified environmental
governance leading to increasingly stringent environmental requirements. Relevant competent authorities successively
issued a series of policy documents including the Guiding Opinions on Accelerating the Establishment and Improvement
of a Green Low-Carbon and Circular Economic System and the Opinions on Accelerating the High-Quality Development
of Manufacturing Service Industry to guide the green transformation of the industry. The Ecological and Environmental
Code of the People's Republic of China adopted on 12 March 2026 at the Fourth Session of the 14th National People's
Congress and effective from 15 August 2026 establishes six fundamental principles namely prevention first systematic
governance ecological priority green development public participation and liability for damage and coordinates
governance over pollution prevention and control ecological protection and green and low-carbon development
providing a legal basis for the green transformation of energy-intensive and high-emission industries. As national
environmental standards rise companies in the industry further increase their investments in pollution control which
may raise the operating costs in the short term.In response to the aforesaid risks the Company firmly implements the national “dual carbon” policy and adheres
to the development philosophy of “placing green development and environmental protection as its priority”. The
Company integrates environmental requirements throughout its entire production and operational processes widely
adopting new technologies for energy conservation and emission reduction to ensure clean production and compliant
waste discharge. At present the Company adopts advanced “ultrafiltration membrane + reverse osmosis membrane”
technology in the world and has completed a reclaimed water recycling membrane treatment project. The reclaimed
water recycle rate exceeds 75% with the treated water quality meeting drinking water standards. Meanwhile the
Company actively explores innovative models for comprehensive resource utilisation and circular industrial development
by building a circular economy ecosystem of “resource – product – renewable resource”. It continuously refines its
internal environmental management system and strengthens full-process environmental monitoring and dynamic control
to prevent compliance risks.
28 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026III Management Discussion and Analysis
XI. Risk factors of the Company and the measures to be taken (Cont'd)
3. Risk of price fluctuation of raw materials
The major raw materials of the paper industry are wood pulp and wood chips. Given China’s relative shortage of wood
resources the industry relies heavily on imported wood pulp and wood chips making its development susceptible
to fluctuations in international prices of wood pulp and wood chips. If the price of raw materials fluctuates sharply in
the future it will bring uncertainty to the control of production costs of papermaking enterprises which will affect the
business performance of these enterprises.In response to the aforesaid risks the Company remains committed to its strategic layout of a fully integrated pulp
and paper industrial chain. By operating its own wood pulp production lines at its production bases in Shouguang
Zhanjiang Huanggang and other regions the Company ensures the stability and autonomy of its upstream raw material
supply thereby reducing reliance on external procurement. Meanwhile the Company has established a robust supply
chain management mechanism comprehensively advancing the digitalised standardised and refined construction of
its procurement processes boosting procurement transparency and operational efficiency. It has implemented refined
category-based management and control over procurement lots systematically improved its supplier database and
strengthened the competitive mechanism among suppliers to secure optimal pricing thereby effectively enhancing the
quality of supplies and cost control while minimising the impact of fluctuations in raw material prices on its production
and operations.
4. Risk of intensified market competition
Although the paper industry has seen an accelerated phase-out of outdated production capacity after several rounds of
environmental policy enforcement this has continuously optimised the overall industry landscape and further improved
market concentration. However there remains the phenomenon of a large number of enterprises within the industry
structural and cyclical overcapacity for certain products a predominance of mid-to-low-end products and product
homogeneity. During the reporting period the cultural paper market shrank due to market conditions with selling
prices dropping to historical lows and the intensified competition in the industry also posed potential pressure on the
Company’s profit margins.In response to the aforesaid risks the Company focuses on technological innovation and product upgrading as its core
drivers continuously improve its production equipment processing design and manufacturing techniques and deepen
its lean production management system to comprehensively enhance product quality stability and generate brand value.Meanwhile the Company remains market-oriented accurately identifying changes in downstream consumer demand
to optimise its product portfolio. By manufacturing highly marketable products that meet diverse customer needs
the Company strives to develop a product structure characterised by high quality precision specialty differentiation
and personalisation to increase product added value and profitability. In addition the Company leverages market
competition to drive team performance strengthen the professional capabilities of its sales workforce and expand its
diversified sales channels comprehensively enhancing its risk resilience to hedge against market competition volatility.SHANDONG CHENMING PAPER HOLDINGS LIMITED 29
INTERIM REPORT 2026III Management Discussion and Analysis
XI. Risk factors of the Company and the measures to be taken (Cont'd)
5. Capital risk
The paper industry is capital-intensive. In recent years the industry has seen concentrated capacity expansion
insufficient downstream demand and prominent supply-demand imbalances. This has caused a continuous decline
in the prices of major paper products especially white cardboard resulting in lower profitability for paper enterprises.Against this backdrop enterprises with high debt levels face increased operational pressure during industry downturns.If they encounter situations such as loan delays by financial institutions or the withdrawal of strategic investors it could
trigger temporary liquidity shortages. This in turn may lead to risks such as debt defaults frozen accounts litigations
and other issues that could impact the Company’s operations.In response to the aforementioned risks the Company focuses on its principal responsibilities and operations
comprehensively deepens reforms and innovation in internal management and vigorously advances measures to reduce
costs and enhance efficiency throughout the entire process thereby steadily improving the profitability of its principal
activities. Meanwhile it has adopted a range of measures to broaden its financing channels proactively engaged with
creditors maintained regular communication and actively negotiated and implemented optimised repayment plans
including loan extensions interest rate reductions and extended interest settlement cycles to effectively reduce financial
costs and alleviate the Company’s debt repayment pressures and operational burdens. In addition the Company has
stepped up its efforts to dispose of non-core and underperforming assets continuously optimising its asset structure
increasing cash inflows and enhancing its risk resilience to ensure the Company’s operations are sustainable and
stable.XII. Development and implementation of a market value management system and a valuation
enhancement plan
Whether the Company has developed a market value management system
□ Yes □ No
To effectively strengthen market value management as a listed company further standardise market value management
practices fully safeguard the legitimate rights and interests of the Company investors and other stakeholders and response
to the encouragement under the Guidelines No. 10 for the Regulation of Listed Companies — Market Value Management
for listed companies to establish a market value management system the Company has formulated the Market Value
Management System of Shandong Chenming Paper Holdings Limited in accordance with the Company Law of the People’s
Republic of China the Securities Law of the People’s Republic of China the Rules Governing the Listing of Stocks on
Shenzhen Stock Exchange and other relevant laws and regulations which was considered and approved at the twelfth
meeting of the tenth session of the Board held on 31 March 2025.For details please refer to the Market Value Management System of Shandong Chenming Paper Holdings Limited disclosed
on CNINFO on 1 April 2025 and the overseas regulatory announcement disclosed on the website of Hong Kong Stock
Exchange on 31 March 2025.Whether the Company has disclosed a valuation enhancement plan
□ Yes □ No
To enhance the Company’s investment value and shareholder returns promote a reasonable reflection of the Company’s
intrinsic value in investment value boost investor confidence safeguard the interests of all shareholders and facilitate high-
quality development of the Company the Valuation Enhancement Plan of Shandong Chenming Paper Holdings Limited was
considered and approved at the twelfth meeting of the tenth session of the Board held by the Company on 31 March 2025.The specific measures under the Valuation Enhancement Plan are as follows:
30 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026III Management Discussion and Analysis
XII. Development and implementation of a market value management system and a valuation
enhancement plan (Cont'd)
(i) Financial optimisation
1. Debt restructuring: The Company will take the initiative to communicate with its creditors for extension of loan
terms and reduction of interest rates so as to alleviating the pressure on loan repayment in the short term.Provincial debt committees were established to agree on no loan cancellations or delays and further negotiate
new credit facilities in the form of a syndicated loan specifically for resumption of operation and production
and interest rate reductions and extensions of debts to ensure sufficient liquidity for operations and production
resumption of the Company.
2. Asset disposal: The Company will make every effort to revitalise and dispose of its existing assets. The Company
will strengthen the disposal of non-core assets establish an asset management centre adjust and optimise
internal management divide asset disposal management areas by region and assign responsibilities to individuals
to improve the efficiency of asset disposal. The Company will also step up efforts to recover outstanding debts
and pursue debtors with realisable assets through negotiation or legal means. For accounts receivable that are
difficult to recover the Company will resort to judicial channels to resolve the issues and striving to improve its
liquidity.
3. Cost control: The Company will strengthen internal management streamline production processes and reduce
costs in raw material procurement energy consumption and labour. For example the Company will secure
favourable procurement prices via long-term and stable cooperation with suppliers and adopts advanced
production equipment and technology to boost productivity and lower per-unit production costs.(ii) Business optimisation
1. Productivity recovery and adjustment: The Company will accelerate the resumption of production at Shouguang
Zhanjiang Jilin and other key production bases striving to achieve resumption of work and production as soon as
possible to improve operating cash flow. The Company will adjust its product mix according to changes in market
demand by reducing excess production capacity and increasing production focus on high-value-added products
such as special paper to improve profitability.
2. Technological innovation and R&D: The Company will increase investment in the R&D of green paper products and
special paper production technologies to develop new products with strong market competitiveness. Leveraging
its advantages of “pulp and paper integration” the Company will develop pulp and paper products with greater
environmental benefits and high performance so as to meet the market demand for green and environmentally
friendly paper products and enhance added value and market competitiveness of products.SHANDONG CHENMING PAPER HOLDINGS LIMITED 31
INTERIM REPORT 2026III Management Discussion and Analysis
XII. Development and implementation of a market value management system and a valuation
enhancement plan (Cont'd)
(iii) Market and brand development
1. Market expansion: The Company will strengthen market research to gain deeper insights into domestic and
international market demands while expanding into emerging markets. Leveraging its advantages in scale and
product quality the Company will intensify promotional efforts in global markets to increase export share and
enhance its international market influence.
2. Brand building: The Company will build a good corporate brand image by improving product quality enhancing
after-sales service and participating in public welfare initiatives. The Company will actively promote its green and
sustainable philosophy as well as technological innovation achievements to enhance its brand awareness and
reputation thereby increasing consumer recognition and loyalty toward its products.
3. Investor relations management: The Company will regularly disclose updates on information including operational
performance and development strategies while strengthening communication and engagement with investors.Through investor roadshows industry seminars and other events the Company will showcase its growth potential
and investment value to bolster investor confidence and attract more long-term investors.
4. Information disclosure optimisation: The Company will ensure the timeliness accuracy and completeness of
information disclosure by releasing operational data key project progress strategic plans and other information
on a regular basis to meet investor needs to know. Through periodic reports interim announcements investor
briefings and other channels the Company will demonstrate its core competitiveness and growth prospects to the
market.(iv) Strategic investment and cooperation
1. Strategic investor introduction: The Company will actively engage with domestic and international strategic
investors to introduce capital technology and management expertise and optimise its shareholding structure
and corporate governance. The introduction of strategic investors will provide additional resource support for the
Company thereby facilitating business development and valuation enhancement of the Company.
2. Industry consolidation and collaboration: The Company will pay attention to high-quality enterprises within
the industry and pursue mergers acquisitions and restructuring as and when appropriate to achieve resource
integration and scale expansion thereby strengthening its competitive position in the industry. The Company will
also enhance collaboration with upstream and downstream partners to establish long-term stable relationships
jointly navigate market changes and realise mutual benefits.In conclusion the Company firmly upholds an investor-centric philosophy diligently implements its valuation
enhancement plan and remains committed to long-term sustainable healthy and high-quality development. By
reinforcing accountability the Company effectively safeguards the interests of its investors.XIII. Implementation of the “Quality and Return Enhancement” action plan
Whether the Company has disclosed its “Quality and Return Enhancement” action plan
□ Yes □ No
32 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026IV Corporate Governance Environment and Society
I. Changes of Directors and Senior Management of the Company
□ Applicable □ Not applicable
There was no change of Directors and Senior Management of the Company during the reporting period. Please see the 2025
annual report for details.II. Profit distribution and conversion of capital reserves into share capital during the reporting
period
□ Applicable □ Not applicable
The Company does not propose distribution of cash dividends and bonus shares and increase of share capital from reserves
for the interim period.III. Implementation of the equity incentive plan employee shareholding plan or other employee
incentive measure of the Company
□ Applicable □ Not applicable
1. Equity incentive
In order to further improve the corporate governance structure of the Company promote the establishment and
improvement of long-term incentive and restraint mechanisms fully mobilise the enthusiasm responsibility and mission
of the directors core technology and business key personnel and bond the interests of Shareholders the Company
and individual operators together effectively making all parties to attend to the long-term development of the Company
and work together for it; at the same time in order to further promote the long-term behaviour of decision-makers and
operators promote the sustainable and steady development of the Company and maximise the value of the Company
and shareholders the 2020 Restricted A Share Incentive Scheme was formulated on the premise of fully protecting the
interests of Shareholders and on the principle of income equivalent to contribution and in compliance with the relevant
requirements under the laws and regulations such as the Company Law and the Securities Law regulatory documents
and the Articles of Association combined with the existing management systems of the Company including the
remuneration mechanism and performance appraisal system.The validity period of the Incentive Scheme shall commence on the date on which the registration of the grant of the
restricted shares is completed and end on the date on which all the restricted shares granted to the participants are
unlocked or repurchased and cancelled which shall not exceed 60 months. On 14 July 2020 the Company completed
the registration of the restricted shares granted under the Scheme with the Shenzhen Branch of China Securities
Depository and Clearing Corporation Limited. The lock-up periods of the restricted shares granted under the Incentive
Scheme shall be 24 months 36 months and 48 months from the date of registration of the restricted shares under the
grant. The Incentive Scheme lapsed from 14 July 2025.In November 2024 pursuant to the 2020 Restricted A Share Incentive Scheme (Draft) the Company made payments
to all participants for the repurchase of restricted shares not yet unlocked for the third unlocking period under the 2020
Restricted A Share Incentive Scheme and handled the share repurchase and cancellation procedures in accordance
with the procedures. As at the end of the reporting period the procedures for the share repurchase transfer and
cancellation of the 6900000 restricted A shares held by 2 participants (both of whom have resigned) with the Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited were still not completed as they were subject
to judicial freeze. Save as disclosed above during the reporting period no other participants held any options or awards
under the scheme.
2. Implementation of the employee shareholding plan
□ Applicable □ Not applicable
3. Other employee incentive measure
□ Applicable □ Not applicable
SHANDONG CHENMING PAPER HOLDINGS LIMITED 33
INTERIM REPORT 2026IV Corporate Governance Environment and Society
IV. Disclosure of environmental information
Whether the listed company and its major subsidiaries are included in the list of enterprises subject to mandatory
environmental information disclosure
□ Yes □ No
Number of enterprises included in the list of enterprises subject to mandatory environmental information disclosure (entities) 7
No. Name of enterprise Index for mandatory disclosure reports on environmental information
1 Shandong Chenming Paper Mandatory Corporate Environmental Information Disclosure System (Shandong)
Holdings Limited http://221.214.62.226:8090/EnvironmentDisclosure/enterpriseRoster/
openEnterpriseDetails comDetailFrom=0&id=913700006135889860
2 Shouguang Meilun Paper Mandatory Corporate Environmental Information Disclosure System (Shandong)
Co. Ltd. http://221.214.62.226:8090/EnvironmentDisclosure/enterpriseRoster/
openEnterpriseDetails comDetailFrom=0&id=91370783690649340B
3 Shouguang Chenming Art Mandatory Corporate Environmental Information Disclosure System (Shandong)
Paper Co. Ltd. http://221.214.62.226:8090/EnvironmentDisclosure/enterpriseRoster/
openEnterpriseDetails comDetailFrom=0&id=91370783798676770K
4 Zhanjiang Chenming Pulp & Mandatory Corporate Environmental Information Disclosure System (Guangdong)
Paper Co. Ltd. https://gdee.gd.gov.cn/gdeepub/front/dal/report/listentName=%E6%B9%9B%
E6%B1%9F%E6%99%A8%E9%B8%A3%E6%B5%86%E7%BA%B8%E6%
9C%89%E9%99%90%E5%85%AC%E5%8F%B8&reportType=&areaCode=
&entType=&reportDateStartStr=&reportDateEndStr
5 Huanggang Chenming Pulp & Paper Mandatory Corporate Environmental Information Disclosure System (Hubei)
Co. Ltd. http://219.140.164.18:8007/hbyfpl/frontal/index.html#/home/enterpriseInfo
XTXH=253187a7-d2e3-4875-94f8-ef5aa50914a7&XH=1677749944758009244672
6 Jiangxi Chenming Paper Co. Ltd. Mandatory Corporate Environmental Information Disclosure System (Jiangxi)
http://qyhjxxyfpl.sthjt.jiangxi.gov.cn:15004/pilouxiangqing
id=90205301bb6147c9ae47291303f803fe
7 Jilin Chenming Paper Co. Ltd. Mandatory Corporate Environmental Information Disclosure System (Jilin)
http://36.135.7.198:9015/index#menu_2091
34 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026IV Corporate Governance Environment and Society
V. Social responsibility
An enterprise is not merely a market entity with independent legal personality but also a core carrier of responsibilities for
bearing people’s livelihoods and safeguarding social stability. Looking back on the arduous journey of resuming operation and
production across various production bases the Company has developed a deeper understanding of its social responsibility
mission as an industrial enterprise. During the reporting period the Company firmly anchored its overall development
under Party-building guidance. In alignment with the overall deployment of the Company’s Party committee and the newmanagement team it reshaped the corporate culture of Chenming in the new area consolidated the enterprise spirit of “self-revolution adaptive innovation and revitalisation” drove the full resumption of production across its five major production
bases implemented a refined cost reduction and efficiency enhancement system deepened internal organisational structure
reforms stabilised its operational fundamentals and consistently maintained a positive operational trajectory. The Companystrictly adhered to its core corporate culture of “virtue and dedication benevolence and inclusivity unity and innovationsymbiosis and mutual success” comprehensively balancing the legitimate rights and interests of stakeholders including
shareholders creditors employees customers and suppliers. Grounded in a path of sustainable development driven by a
low-carbon circular economy and green manufacturing the Company fulfilled its responsibilities as a listed company through
practical industrial operations striving to create a mutually beneficial landscape of enterprise development employee well-
being shared partner growth and broader social progress.
1. Protecting the rights and interests of shareholder and creditors
During the reporting period the Company strictly complied with the laws and regulations including the Company Law
of the People’s Republic of China the Securities Law of the People’s Republic of China and the Code of Corporate
Governance for Listed Companies. It placed great emphasis on investor relations management treated all shareholders
equally and effectively safeguarded the legitimate rights and interests of minority investors including their rights to
information participation and voting. To facilitate efficient access to public information the Company maintained
regular investor communications via an investor hotline the EasyIR platform of the Shenzhen Stock Exchange an
email and results briefings while publishing announcements disclosed on the Shenzhen Stock Exchange and the Hong
Kong Stock Exchange in the investor relations section of its official website. During the reporting period the Company
responded to over 200 investor inquiries on the Interactive Easy platform of the Shenzhen Stock Exchange hostedthe 2025 Online Results Briefing actively participated in the “2026 Online Collective Reception Day for Investors ofListed Companies in Shandong” conducted on-site and telephone surveys with institutional investors and maintained
a dedicated investor hotline to address market concerns in a timely manner. Furthermore the Company convened
general meetings through both on-site and online voting fully ensuring the exercise of voting rights by all shareholders
particularly minority shareholders and proactively disclosed the voting results of minority investors under each
resolution considered at the meetings thereby protecting the rights and interests of minority shareholders.Regarding the protection of creditor rights and interests the Company actively engaged in negotiations and
communications with its creditors in light of its actual operations. In response to certain overdue debts the Company
engaged in amicable negotiations with creditors on debt repayment solutions such as loan extensions interest rate
reductions and optimised instalment repayment plans. At the same time the Company spared no effort to advance
the full resumption of production across various production bases accelerated the disposal of non-core assets and
continued to strengthen operating cash flows so as to ensure timely fulfilment of debt obligations and effectively protect
the legitimate rights and interests of creditors.SHANDONG CHENMING PAPER HOLDINGS LIMITED 35
INTERIM REPORT 2026IV Corporate Governance Environment and Society
V. Social responsibility (Cont'd)
2. Protecting the rights and interests of employees
During the reporting period The Company consistently upheld a people-oriented core development philosophy
continuously deepening its efforts in talent development humanistic care and occupational safety to effectivelysafeguard the legitimate rights and interests of employees. Guided by the core mission of “empowering the organisationand activating individuals” the Company adhered to a strategy of “promoting the capable reassigning the average andstepping down the underperforming” and implemented a flexible talent mechanism governing promotions demotions
and lateral transfers. It advanced flat organisational structure reforms to comprehensively improve human capital
efficiency and reduce labour costs. Concurrently the Company incorporated the advancement of organisational change
the resolution of frontline issues and the cultivation of successors into its core performance appraisal for cadres striving
to build a high-calibre executive team and a robust talent pipeline aligned in vision resilient under pressure and adept
at delivering results. Meanwhile the Company continuously optimised its compensation and incentive mechanisms.Leveraging internal learning and knowledge-sharing platforms it conducted regular on-the-job training labour
competitions and skills contests comprehensively enhancing employees’ professional skills and overall competencies
and providing a high-quality platform for employee growth and career development. In addition the Company organised
diverse employee activities on a regular basis such as basketball tournaments calligraphy and painting exhibitions
and themed Party-building events to enrich employees’ leisure lives. It also conducted visits and delivered targeted
assistance to employees in difficulty effectively enhancing all employees’ sense of gain happiness and belonging.Regarding occupational safety the Company strictly enforced the safety and environmental responsibility system along
with the “three musts and three responsibilities” operational requirements. It performed regular hazard inspections and
special supervisions and reinforced all employees’ safety awareness and practical skills through safety knowledge
competitions and hands-on operational training thereby fortifying the safety defence line to ensure the physical safety
and overall well-being of its employees.
3. Protecting the rights and interests of suppliers and customers
During the reporting period the Company focused on dual protection of the rights and interests of both suppliers and
customers continuously optimising the industrial and supply chain ecosystem to build a stable and mutually beneficial
industrial cooperation structure.Regarding supplier cooperation and supply chain management the Company adhered to the principles of fairness
justice openness and transparency. It established an online bidding procurement platform and applied a dynamic
bidding extension mechanism to over 95% of procurement lots effectively preventing human intervention to ensure
a transparent open fair and impartial procurement process. At the same time the Company continuously refined itssupply chain management policy framework revising policies including the Standards for Woodchip Acceptance 《( 木片收購驗收標準》) and End-to-end Management Measures for the Procurement of Materials for Processing 《( 來料加工料件採購全流程管理辦法》). It also advanced systemised management for the entire raw material sampling and testing
process enhancing supply chain stability. Furthermore the Company dynamically optimised its supplier resource pool
and convened a large-scale supplier symposium in Beijing to deepen communication as well as improve supply quality
and cost control levels.In terms of the protection of customer rights and interests the Company adhered to a market – and performance-
oriented approach. It continuously optimised its domestic and international market presence actively expanded into
emerging and overseas markets increased the proportion of direct sales to reduce reliance on intermediary channels
and improved payment settlement models to further enhance sales management standards and collection quality.In addition guided by customer demand the Company actively developed new products tailored to market needs
continuously refined product quality and enhanced its customer complaint handling mechanisms to continuously
enhance service quality improve customer satisfaction and continuously strengthen the market influence of its brand.
36 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026IV Corporate Governance Environment and Society
V. Social responsibility (Cont'd)
4. Protecting the environment and sustainable development
During the reporting period The Company actively responded to the national “Dual Carbon” strategy strictly complied
with ecological and environmental protection laws regulations and local policy requirements fully integrated safety
environmental protection and green development concepts across its operational value chain and effectively
fulfilled its social responsibility for environmental protection. Continuously improving its environmental governance
system the Company was equipped with advanced pollution control facilities including alkali recovery intermediate
wastewater treatment reclaimed water reuse and comprehensive black liquor utilisation. It deepened its efforts in
cleaner production energy conservation emission reduction and comprehensive treatment of “three waste” optimised
production processes implemented cost reduction and efficiency enhancement initiatives for wastewater treatment
across subsidiaries performed regular environmental inspections and standardised the operation and maintenance of
pollution control and online monitoring equipment to ensure compliant discharge of all pollutants and steadily advance
low-carbon green development. Meanwhile the Company continued to improve its safety and environmental protection
responsibility framework to ensure the fulfilment of safety and environmental protection responsibilities at all levels.It held a signing ceremony for the 2026 safety and environmental protection responsibility statements establishing
a comprehensive top-to-bottom safety and environmental protection responsibility system through cascading
agreements. The Company refined its environmental protection management rules optimised its monthly performance
evaluation mechanisms incorporated safety and environmental protection into annual debriefings of subsidiaries and
reinforced closed-loop rectification and accountability supervision. These measures demonstrated its commitment to
environmental protection and achieved a win-win synergy between corporate growth and ecological preservation.VI. Disclosures as required by the Hong Kong Listing Rules issued by the Stock Exchange of
Hong Kong Limited
(i) Compliance with the Corporate Governance Code
The Company maintained high standards of corporate governance through various internal controls. The Board reviewed
the corporate governance practices of the Company from time to time to enhance the corporate governance standards
of the Company. The Company complied with all the principles and code provisions of the Corporate Governance Code
as set out in Appendix C1 to the Hong Kong Listing Rules during the reporting period.(ii) Securities transactions by Directors
The Directors of the Company confirmed that the Company had adopted the Model Code for Securities Transactions
by Directors of Listed Companies as set out in Appendix C3 to the Hong Kong Listing Rules. Having made adequate
enquiries with all Directors of the Company the Company was not aware of any information that reasonably suggested
that the Directors had not complied with the requirements as stipulated in this code during the reporting period.SHANDONG CHENMING PAPER HOLDINGS LIMITED 37
INTERIM REPORT 2026V Material Matters
I. Undertakings made by parties involved in undertakings including the Company’s beneficial
controllers shareholders related parties bidders and the Company fulfilled during the
reporting period and not yet fulfilled within the prescribed time period as at the end of the
reporting period
□ Applicable □ Not applicable
During the reporting period there were no such undertakings in respect of the Company as those made by parties involved in
undertakings including the Company’s beneficial controllers shareholders related parties bidders and the Company fulfilled
during the reporting period and not yet fulfilled within the prescribed time period as at the end of the reporting period.II. Appropriation of funds of the Company by the controlling shareholder and other related
parties for non-operating purposes
□ Applicable □ Not applicable
There was no appropriation of funds of the Company by the controlling shareholder and other related parties for non-operating
purposes during the reporting period.III. External guarantees against the rules and regulations
□ Applicable □ Not applicable
There was no external guarantee provided by the Company which was against the rules and regulations during the reporting
period.IV. Engagement or dismissal of accounting firms
Has the interim financial report been audited
□ Yes □ No
The interim report of the Company is unaudited.V. Opinions of the Board regarding the “modified auditor’s report” for the reporting period issued
by the accountants
□ Applicable □ Not applicable
38 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026V Material Matters
VI. Opinions of the Board regarding the “modified auditor’s report” for the prior year
□ Applicable □ Not applicable
Grant Thornton (Special General Partnership) issued an unqualified audit report with an emphasis of matter paragraph on the
2025 financial report of the Company. The Board of the Company had provided a special statement on the relevant matters.
For details please refer to the Special Statement of the Board of Directors on Matters Related to the 2025 Annual Audit
Report disclosed on CNINFO on 31 March 2026 and the overseas regulatory announcement disclosed on the website of Hong
Kong Stock Exchange on 30 March 2026 by the Company.The Board of the Company attached great importance to the emphasis of matter in the unqualified audit report continuously
standardised debt performance and management properly handled litigation cases mitigated debt risks and effectively
reinforce the baseline of operational risk control. During the reporting period the Company established a dedicated
performance ledger for creditors with loan extensions interest rate reductions and settlement agreements specifying
repayment arrangements securing funding sources and setting up an early-warning mechanism for maturity to strictly fulfilits debt performance obligations. Meanwhile adhering to the principle of “tailored strategies for individual accounts (一戶一策)” the Company engaged on a one-on-one basis with non-settled financial institutions and creditors and formulated
differentiated negotiation proposals in light of its actual operations and capital position. Consensus had been reached
through negotiation with certain entities and the resolution of debt matters was progressing in an orderly manner. In terms
of operational management the Company fully implemented its operational plan for refined cost reduction and efficiency
enhancement covering the entire operational chain including production sales procurement raw materials finance and
logistics by subdividing management and control indicators enforcing positional responsibilities and continuously enhancing
the profitability of its principal operations and operating cash flow levels thereby consolidating its debt performance
capabilities. In terms of financing the Company actively engaged with various financial resources compliantly advancing
the substitution of high-interest debt and the replacement of short-term debt with medium-to-long-term debt continuously
extending debt maturities reducing overall financing costs and optimising its asset-liability structure to relieve concentrated
debt repayment pressure. In addition the Company established a dynamic end-to-end ledger management system for
litigation cases enabling closed-loop control through case-by-case tracking time-limited disposal and case closure upon
settlement while continuously improving its internal risk control system. For outstanding litigation cases the Company
implemented a classified resolution mechanism by advancing settlements through ongoing cooperation and settlement
optimisation for disputes with business partners while actively negotiating settlement plans with non-business-related
creditors thereby effectively reducing potential litigation losses. During the reporting period a number of litigation cases were
successfully closed. Going forward the Company will continuously optimise its debt structure strengthen refined cash flow
management and control normalise the implementation of risk control mechanisms properly handle litigations and spare no
effort in resolving outstanding risks.VII. Matters related to bankruptcy and reorganisation
□ Applicable □ Not applicable
There was no matter related to bankruptcy and reorganisation during the reporting period.SHANDONG CHENMING PAPER HOLDINGS LIMITED 39
INTERIM REPORT 2026V Material Matters
VIII. Litigation
Material litigation and arbitration
□ Applicable □ Not applicable
Other litigations
□ Applicable □ Not applicable
Whether
General information on Amount involved provisions Enforcement
the litigation (arbitration) (RMB’0000) are made Progress Trial results and impact of judgment Disclosure date Disclosure index
Summary of matters subject 4650.00 No The cases were under second- The cases had no significant The second- 31 March 2026 13 http://www.cninfo.com.cn
to litigation (arbitration) instance trial. impact on the operations instance June 2026 and (Announcement No.: 2026-
in which the Company and financial position of the judgement is 30 March 2026 022 and 2026-035) and
and its majority-owned Company. pending. and 12 June http://www.hkex.com.hk
subsidiaries are the 2026
plaintiffs
Summary of matters subject 396081.00 Provision of The amount involved in The cases were properly The judgment is
to litigation (arbitration) RMB5.935 ongoing cases was resolved through being enforced.in which the Company million RMB3097.096 million; the communication and
and its majority-owned amount involved in resolved negotiation an active
subsidiaries are the cases was RMB863.714 defence and reaching
defendants million. settlements with creditors.IX. Punishment and rectification
□ Applicable □ Not applicable
Type of inspection
Name Type Reason and punishment Conclusion (if any) Date of disclosure Disclosure index
Shandong Chenming Others From 2019 to 2024 the Company Administrative regulatory Shandong CSRC imposed 5 June 2026 6 June http://www.hkex.com.hk
Paper Holdings Limited borrowed funds from five related measure imposed by administrative regulatory 2026 http://www.cninfo.com.cn
Li Weixian Director and senior parties including Shanghai the China Securities measure by issuing a (Announcement No.: 2026-
management Shijie Industrial Co. Ltd. (上 Regulatory Commission warning letter which 031)
Dong Lianming Senior management 海仕芥實業有限公司). The shall be recorded in
Yuan Xikun Senior management Company failed to perform the the integrity archives
Chen Hongguo Others corresponding consideration database of the securities
Li Xingchun Li Feng procedures and failed to make and futures market.and Chen Gang timely disclosure nor did it
disclose the same in the relevant
periodic reports.
40 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026V Material Matters
IX. Punishment and rectification (Cont'd)
Rectification
□ Applicable □ Not applicable
The Company received the Decision on Issuing a Warning Letter against Shandong Chenming Paper Holdings Limited and
Relevant Responsible Personnel ([2026] No. 26) issued by the Shandong CSRC on 5 June 2026. Upon receipt of the letter
regarding the decision of imposing administrative regulatory measure the Company and relevant responsible personnel
attached great importance thereto and proactively implemented rectification measure. Written reports on rectification were
delivered to Shandong CSRC within the stipulated timeframe and the rectification was completed. The rectification measures
taken are as follows: Firstly the Company completed specific inspection. Upon completion of financial review the Company
confirmed that the transactions associated with the borrowings from the five related parties in questions were settled in full
and the cooperation was terminated in 2024. Subsequently the Company did not engage in any financial or operational
dealings with these entities and the relevant issues were completely resolved. Secondly the Company continued to optimise
its full-process management system for related parties and conducted comprehensive adjustment review and dynamic
update on the related party list. Entities including Shanghai Shijie Industrial Co. Ltd. were included in the register of related
parties for centralised management. The Company conducted a thorough inspection of various related party relationships
of directors and senior management so as to prevent non-compliance at source. Thirdly the Company strengthened
the foundation of its related party transaction system. The Related Party Transaction Management System stipulates the
authorisation for decision-making on related party transactions requirements on abstaining from voting by related party and
matters exempted from consideration at general meetings which prevents management deficiencies in fund transfers between
related parties at the system level and re-occurrence of similar risk events. Fourthly the Company optimised the full-process
management of information disclosure narrowed down scope of duties for different positions implemented strict multi-
position cross review and conducted review at different levels so as to ensure that disclosure procedures in respect of major
events and related party transactions were immediately performed in accordance with regulation and corporate information
disclosure quality was continuously enhanced. Fifthly the Company conducted special training sessions on compliance. The
Company arranged special training sessions on compliance for directors senior management and operational personnel from
the financial department and the securities investment department aiming to familiarise participants with the Securities Law of
the People’s Republic of China the Administrative Measures for Information Disclosure by Listed Companies and the relevant
stock exchange regulatory rules continuously enhance all employees’ awareness of compliance performance and cultivate a
corporate culture of compliance.The Company and relevant responsible persons will take this regulatory warning as a valuable lesson enhance their
awareness of compliance strictly abide by all laws and regulations on securities regulation and make compliant governance
and standardised operations a top priority in its business management. The Company will establish a regular self-inspection
mechanism for internal control periodically identify management loopholes continuously improve its internal control and
information disclosure systems perform its information disclosure obligations with due diligence comprehensively enhance
corporate compliance and governance standards resolutely prevent the recurrence of similar non-compliance issues and
effectively safeguard the legitimate rights and interests of the Company and all shareholders.X. Credibility of the Company its controlling shareholders and beneficial controllers
□ Applicable □ Not applicable
According to information disclosed on the China Enforcement Information Online during the reporting period the Company
Zhanjiang Chenming Jilin Chenming Jilin Chenming Pulp & Fiber Trading Co. Ltd. and Shouguang Chenming Import and
Export Trade Co. Ltd. were listed as dishonest persons subject to enforcement for failing to fulfil obligations as determined
by effective legal documents issued by the court violations of the asset reporting system or other methods of evading
enforcement. Neither the Company’s controlling shareholder nor its actual controller is listed as a dishonest person subject to
enforcement.SHANDONG CHENMING PAPER HOLDINGS LIMITED 41
INTERIM REPORT 2026V Material Matters
XI. Significant related party transactions
1. Related party transactions associated with day-to-day operation
□ Applicable □ Not applicable
Subject Pricing Amount of Percentage
Types of matter of basis of Related related as the Amount of Whether Market price
the related the related the related party party amount transactions exceeding Settlement of of available
Relationship with party party party transaction transactions of similar approved approved related party similar Disclosure
Related party the Company transactions transactions transaction price (RMB’0000) transactions (RMB’0000) cap transactions transaction Date Disclosure index
Weifang Port Area Joint venture Labour Port Market price Market price 872.94 3.42% 5000.00 No Bank acceptance N/A 30 March http://www.hkex.com.hk
Wood Chip Port services miscellaneous and telegraphic 2026 and http://www.cninfo.com.cn
Co. Ltd fees transfer 31 March
2026
Century Sunshine An entity in which the Goods Sale of steam Market price Market price 1225.84 9.01% 6000.00 No Bank acceptance N/A 30 March http://www.hkex.com.hk
(Shouguang) former chairman and telegraphic 2026 and http://www.cninfo.com.cn
Specialty Paper of the Company’s transfer 31 March
Co. Ltd controlling 2026
shareholder served
as a director within
the past twelve
months
Total – – 2098.78 – 11000.00 – – – – –
Particulars on refund of bulk sale Nil
Estimated total amount for day-to-day related party transactions to be conducted during the period (by types of transactions) Nil
and their actual implementing during the reporting period (if any)
Reasons for large differences between transaction price and market reference price (if applicable) N/A
2. Related party transaction in connection with purchase or sale of assets or equity interest
□ Applicable □ Not applicable
There was no related party transaction of the Company in connection with purchase or sale of assets or equity interest
during the reporting period.
3. Related party transaction connected to joint external investment
□ Applicable □ Not applicable
There was no related party transaction of the Company connected to joint external investment during the reporting
period.
42 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026V Material Matters
XI. Significant related party transactions (Cont'd)
4. Related creditors’ rights and debts transactions
□ Applicable □ Not applicable
Was there any non-operating related creditors’ rights and debts transaction
□ Yes □ No
Creditor’s rights receivable from any related party
Was there Amount Amount
any non- increased recovered Interest for
Relationship operating Opening during the during the the current Closing
with the capital balance current period current period period balance
Related party Company Reason occupation (RMB’0000) (RMB’0000) (RMB’0000) Interest rate (RMB’0000) (RMB’0000)
Shouguang Meite Environmental Joint venture Financial support No 1169.76 0.00 0.00 6.00% 31.46 1201.21
Technology Co. Ltd.Weifang Port Area Wood Chip Joint venture Financial support No 8323.02 0.00 0.00 6.00% 190.05 8513.07
Port Co. Ltd
Wuhan Chenming Hanyang An associate Financial support No 16168.19 0.00 1733.27 4.75% 321.86 14756.78
Paper Holdings Co. Ltd.Effect of related creditors’ The above creditors’ rights did not affect the ordinary operation of the Company. Moreover they catered to the needs for development of existing
rights on the operating results businesses of the above entities as well as lowered the finance costs.and financial position of the
Company
Debts payable to any related party
Amount Amount
increased repaid
during the during the Interest for
Opening current current the current Closing
Relationship with balance period period period balance
Related party the Company Reason (RMB’0000) (RMB’0000) (RMB’0000) Interest rate (RMB’0000) (RMB’0000)
Chenming Holdings Company Limited Controlling Financial support 3587.07 0.00 100.00 Market interest rate 34.50 3521.57
shareholder
Guangdong Nanyue Bank Co. Ltd. An associate Borrowings 75979.00 0.00 95.00 Market interest rate 1707.39 75884.00
Effect of related debts on the Financial support was provided by Chenming Holdings without requiring any pledge or guarantee which was a testament to its
operating results and financial support for the future development of the Company and helped the Company promote project construction and satisfy its needs for
position of the Company working capital.SHANDONG CHENMING PAPER HOLDINGS LIMITED 43
INTERIM REPORT 2026V Material Matters
XI. Significant related party transactions (Cont'd)
5. Deals with related financial companies
□ Applicable □ Not applicable
There were no deposits loans credits or other financial services between the Company its related financial companies
and the related parties.
6. Deals between financial companies controlled by the company and related parties
□ Applicable □ Not applicable
There were no deposits loans credits or other financial services between the financial companies controlled by the
Company and the related parties.
7. Other significant related party transactions
□ Applicable □ Not applicable
There was no other significant related party transaction of the Company during the reporting period.XII. Material contracts and implementation
1. Custody contracting and leasing
(1) Custody
□ Applicable □ Not applicable
There was no custody of the Company during the reporting period.
(2) Contracting
□ Applicable □ Not applicable
In April 2023 Jiangxi Chenming a subsidiary acquired equity interest in Jiangxi Port which was included in the
scope of consolidation. The principal activities of Jiangxi Port is goods loading and transportation at wharf. In
order to revitalise Jiangxi Port and enhance economic benefits to the Company Jiangxi Chenming has contracted
the businesses of Jiangxi Port to Jiangxi Yirong Investment Co. Ltd. for 5 years and receives fixed contracting
fees of RMB4.00 million per year on quarterly basis.A project which generates profit or loss for the Company representing more than 10% of the Company’s total
profit during the reporting period
□ Applicable □ Not applicable
The Company did not have any contracting project that brought profit or loss to the Company amounting to more
than 10% of the total profit of the Company during the reporting period.
44 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026V Material Matters
XII. Material contracts and implementation (Cont'd)
1. Custody contracting and leasing (Cont'd)
(3) Leasing
□ Applicable □ Not applicable
Leasing description:
As a lessee
The Company has simplified the treatment of short-term leases and leases of low-value assets by not recognising
right-of-use assets and lease liabilities. The charges to expense for short-term leases low-value assets and
variable lease payments not included in the measurement of lease liabilities during the current period are as
follows:
Unit: RMB
Item First half of 2026
Low-value leases 2484827.10
Total 2484827.10
As a lessor
Where an operating lease is formed:
According to paragraph 58 of the new lease standard the lessor shall disclose in the notes the following
information related to operating leases:
* Lease income and make separate disclosure of income related to variable lease payments not included in
lease receipts
Unit: RMB
Item First half of 2026
Lease income 54931977.28
* The amount of undiscounted lease receipts to be received in each of the five consecutive fiscal years after
the balance sheet date and the total amount of undiscounted lease receipts to be received in the remaining
years
Unit: RMB
Year 30 June 2026
Within 1 year after the balance sheet date 110380072.40
1 to 2 years after the balance sheet date 146522137.40
2 to 3 years after the balance sheet date 149680797.83
3 to 4 years after the balance sheet date 153972798.55
4 to 5 years after the balance sheet date 151579152.78
More than 5 years after the balance sheet date 152358893.66
Total 864493852.62
SHANDONG CHENMING PAPER HOLDINGS LIMITED 45
INTERIM REPORT 2026V Material Matters
XII. Material contracts and implementation (Cont'd)
1. Custody contracting and leasing (Cont'd)
(3) Leasing (Cont'd)
A project which generates profit or loss for the Company representing more than 10% of the Company’s total
profit during the reporting period
□ Applicable □ Not applicable
The Company did not have any leasing project that brought profit or loss to the Company amounting to more than
10% of the total profit of the Company during the reporting period.
2. Significant guarantees
□ Applicable □ Not applicable
(1) Guarantees
During the reporting period the Company provided guarantee to subsidiaries and the guarantee amount
incurred was RMB2669.6910 million. As at 30 June 2026 the balance of the external guarantee provided
by the Company (including the guarantee to its subsidiaries by the Company and the guarantee provided to
subsidiaries by subsidiaries) amounted to RMB21432.9203 million representing 13756.19% of the equity
attributable to shareholders of the Company as at the end of June 2026 of which overdue guarantees amounted
to RMB3748.9371 million.Unit: RMB’0000
External guarantees of the Company and its subsidiaries (excluding guarantees to subsidiaries)
Date of
the related
announcement Guarantee
disclosing Counter- to related
the guarantee Amount of Guarantee Guarantee Type of Collateral guarantee Fulfilled parties
Name of obligee amount guarantee date provided guarantee if any if any Term or not or not
Weifang Port Area Wood 24 July 2017 17500.00 20 December 7739.50 General guarantee Credit guarantee Nil 10 years No Yes
Chip Port Co. Ltd 2017
Zhanjiang Runbao 28 March 2024 16000.00 25 April 2024 16000.00 Pledge 34.64% equity Equity transfer 2 years No No
Trading Co. Ltd. interest payment of
in Wuhan RMB160 million
Chenming
Zhanjiang Dingjin 7 December 13558.19 7 December 13558.19 Mortgage Properties Remaining 3 years No No
Trading Co. Ltd. 2022 2022 equity transfer
payment of
RMB136 million
Shanghai Shuilan 7 December 45700.00 21 June 2023 45000.00 Pledge 100% equity 80% equity 3 years No No
Trading Co. Ltd. 2022 interest in interest in
Shanghai Taixing Port
Chongmin held by
Shanghai
Huahao
Weifang Xingchen 25 April 2025 550000.00 29 August 221413.85 Joint and Kunhe’s Nil 6 years No No
Trading Co. Ltd. 2025 several liability properties
guarantee and land
+Mortgage
Weifang Xingchen 30 March 2026 231000.00 Joint and Nil Nil 5 years No No
Trading Co. Ltd. several liability
guarantee
Jilin Xingchen Paper 10 October 24000.00 7 November 18340.60 Joint and Jilin Chenming’s Nil 5 years No No
Co. Ltd. 2025 2025 several liability land and
guarantee properties
+Mortgage
Total external guarantees approved during 231000.00 Total actual external guarantees during the reporting period (A2) –
the reporting period (A1)
Total external guarantees approved as at 897758.19 Balance of total guarantees as at the end of the reporting period (A4) 322052.14
the end of the reporting period (A3)
46 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026V Material Matters
XII. Material contracts and implementation (Cont'd)
2. Significant guarantees (Cont'd)
(1) Guarantees (Cont'd)
Guarantees between the Company and its subsidiaries
Date of
the related
announcement
disclosing Counter- Guarantee to
the guarantee Amount of Guarantee Type of Collateral guarantee Fulfilled related parties
Name of obligee amount guarantee Guarantee date provided guarantee if any if any Term or not or not
Zhanjiang Chenming Pulp & 30 March 2016 27440.00 14 March 2016 27440.00 Joint and Nil Nil 12 years No No
Paper Co. Ltd. several liability
guarantee
Zhanjiang Chenming Pulp & 27 October 2017 94000.00 26 March 2018 94000.00 Joint and Nil Nil 11 years No No
Paper Co. Ltd. several liability
guarantee
Zhanjiang Chenming Pulp & 30 March 2022 24051.03 17 June 2022 24051.03 Joint and Nil Nil 5 years No No
Paper Co. Ltd. several
liability
guarantee
Zhanjiang Chenming Pulp & 30 March 2023 87927.23 2 June 2023 87927.23 Joint and Nil Nil 4 years No No
Paper Co. Ltd. several liability
guarantee
Zhanjiang Chenming Pulp & 28 March 2024 280263.55 23 May 2024 280263.55 Joint and Nil Nil 3 years No No
Paper Co. Ltd. several liability
guarantee
Zhanjiang Chenming Pulp & 31 March 2025 37839.00 30 July 2025 37839.00 Joint and Nil Nil 2 years No No
Paper Co. Ltd. several liability
guarantee
Zhanjiang Chenming Pulp & 30 March 2026 1000000.00 18 May 2026 39178.00 Joint and Nil Nil 1 year No No
Paper Co. Ltd. several liability
guarantee
Shouguang Meilun Paper Co. 28 March 2020 45191.50 9 September 2021 45191.50 Joint and Nil Nil 7 years No No
Ltd. several liability
guarantee
Shouguang Meilun Paper Co. 30 March 2022 42172.79 24 May 2022 42172.79 Joint and Nil Nil 7 years No No
Ltd. several liability
guarantee
Shouguang Meilun Paper Co. 30 March 2023 84474.66 9 June 2023 84474.66 Joint and Nil Nil 7 years No No
Ltd. several liability
guarantee
Shouguang Meilun Paper Co. 28 March 2024 20999.43 24 May 2024 20999.43 Joint and Nil Nil 4 years No No
Ltd. several liability
guarantee
SHANDONG CHENMING PAPER HOLDINGS LIMITED 47
INTERIM REPORT 2026V Material Matters
XII. Material contracts and implementation (Cont'd)
2. Significant guarantees (Cont'd)
(1) Guarantees (Cont'd)
Guarantees between the Company and its subsidiaries
Date of
the related
announcement
disclosing Counter- Guarantee to
the guarantee Amount of Guarantee Type of Collateral guarantee Fulfilled related parties
Name of obligee amount guarantee Guarantee date provided guarantee if any if any Term or not or not
Shouguang Meilun Paper Co. 31 March 2025 62516.28 12 November 2025 62516.28 Joint and Nil Nil 2 years No No
Ltd. several liability
guarantee
Shouguang Meilun Paper Co. 30 March 2026 460000.00 27 May 2026 47751.80 Joint and Nil Nil 2 years No No
Ltd. several liability
guarantee
Jiangxi Chenming Paper Co. 27 March 2018 10697.57 28 February 2022 10697.57 Joint and Nil Nil 10 years No No
Ltd. several liability
guarantee
Jiangxi Chenming Paper Co. 30 March 2022 7806.67 23 May 2023 7806.67 Joint and Nil Nil 5 years No No
Ltd. several liability
guarantee
Jiangxi Chenming Paper Co. 30 March 2023 8500.67 8 September 2023 8500.67 Joint and Nil Nil 4 years No No
Ltd. several liability
guarantee
Jiangxi Chenming Paper Co. 28 March 2024 16730.80 29 September 16730.80 Joint and Nil Nil 2 years No No
Ltd. 2024 several liability
guarantee
Jiangxi Chenming Paper Co. 31 March 2025 162281.89 11 September 162281.89 Joint and Nil Nil 1 year No No
Ltd. 2025 several liability
guarantee
Jiangxi Chenming Paper Co. 30 March 2026 280000.00 30 May 2026 5995.00 Joint and Nil Nil 1 year No No
Ltd. several liability
guarantee
Huanggang Chenming Pulp & 30 March 2016 73164.00 16 December 2019 73164.00 Joint and Nil Nil 12 years No No
Paper Co. Ltd. several liability
guarantee
Huanggang Chenming Pulp & 30 March 2022 20834.22 20 May 2022 20834.22 Joint and Nil Nil 5 years No No
Paper Co. Ltd. several liability
guarantee
Huanggang Chenming Pulp & 30 March 2023 41671.49 6 July 2023 41671.49 Joint and Nil Nil 4 years No No
Paper Co. Ltd. several liability
guarantee
48 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026V Material Matters
XII. Material contracts and implementation (Cont'd)
2. Significant guarantees (Cont'd)
(1) Guarantees (Cont'd)
Guarantees between the Company and its subsidiaries
Date of
the related
announcement
disclosing Counter- Guarantee to
the guarantee Amount of Guarantee Type of Collateral guarantee Fulfilled related parties
Name of obligee amount guarantee Guarantee date provided guarantee if any if any Term or not or not
Huanggang Chenming Pulp & 28 March 2024 27508.29 19 July 2024 27508.29 Joint and Nil Nil 3 years No No
Paper Co. Ltd. several liability
guarantee
Huanggang Chenming Pulp & 31 March 2025 3000.00 16 January 2026 3000.00 Joint and Nil Nil 2 years No No
Paper Co. Ltd. several liability
guarantee
Huanggang Chenming Pulp & 30 March 2026 250000.00 Joint and Nil Nil 1 year No No
Paper Co. Ltd. several
liability
guarantee
Huanggang Chenming Paper 30 March 2026 20000.00 Joint and Nil Nil 1 year No No
Technology Co. Ltd. several
liability
guarantee
Chenming (HK) Limited 30 March 2023 2791.26 4 January 2024 2791.26 Joint and Nil Nil 6 years No No
several liability
guarantee
Chenming (HK) Limited 31 March 2025 2928.18 21 August 2025 2928.18 Joint and Nil Nil 1 year No No
several liability
guarantee
Chenming (HK) Limited 30 March 2026 150000.00 Joint and Nil Nil 1 year No No
several
liability
guarantee
Zhanjiang Chenming 30 March 2023 4410.00 29 March 2024 4410.00 Joint and Nil Nil 4 years No No
Arboriculture Development several liability
Co. Ltd. guarantee
Zhanjiang Chenming 30 March 2026 10000.00 Joint and Nil Nil 1 year No No
Arboriculture Development several
Co. Ltd. liability
guarantee
Jilin Chenming Paper Co. Ltd. 30 March 2023 18387.60 15 December 2023 18387.60 Joint and Nil Nil 3 years No No
several liability
guarantee
SHANDONG CHENMING PAPER HOLDINGS LIMITED 49
INTERIM REPORT 2026V Material Matters
XII. Material contracts and implementation (Cont'd)
2. Significant guarantees (Cont'd)
(1) Guarantees (Cont'd)
Guarantees between the Company and its subsidiaries
Date of
the related
announcement
disclosing Counter- Guarantee to
the guarantee Amount of Guarantee Type of Collateral guarantee Fulfilled related parties
Name of obligee amount guarantee Guarantee date provided guarantee if any if any Term or not or not
Jilin Chenming Paper Co. Ltd. 28 March 2024 9099.81 29 September 9099.81 Joint and Nil Nil 2 years No No
2024 several liability
guarantee
Jilin Chenming Paper Co. Ltd. 31 March 2025 25950.00 6 November 2025 25950.00 Joint and Nil Nil 5 years No No
several liability
guarantee
Jilin Chenming Paper Co. Ltd. 30 March 2026 80000.00 15 June 2026 1500.00 Joint and Nil Nil 1 year No No
several liability
guarantee
Shouguang Chenming Art 30 March 2026 10000.00 Joint and Nil Nil 1 year No No
Paper Co. Ltd. several
liability
guarantee
Chenming (Singapore) Co. Ltd. 30 March 2026 30000.00 Joint and Nil Nil 1 year No No
several
liability
guarantee
Shandong Chenming Paper 30 March 2023 15000.00 8 February 2024 15000.00 Joint and Nil Nil 4 years No No
Sales Co. Ltd. several liability
guarantee
Shandong Chenming Paper 28 March 2024 45000.00 24 September 45000.00 Joint and Nil Nil 3 years No No
Sales Co. Ltd. 2024 several liability
guarantee
Shandong Chenming Paper 31 March 2025 50654.30 23 March 2026 50654.30 Joint and Nil Nil 2 years No No
Sales Co. Ltd. several liability
guarantee
Shandong Chenming Paper 30 March 2026 190000.00 24 June 2026 48986.00 Joint and Nil Nil 1 year No No
Sales Co. Ltd. several liability
guarantee
Shanghai Hongtai Real Estate 19 April 2023 198454.55 9 June 2023 198454.55 Joint and Nil Nil 15 years No No
Co. Ltd. several liability
guarantee
50 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026V Material Matters
XII. Material contracts and implementation (Cont'd)
2. Significant guarantees (Cont'd)
(1) Guarantees (Cont'd)
Guarantees between the Company and its subsidiaries
Date of
the related
announcement
disclosing Counter- Guarantee to
the guarantee Amount of Guarantee Type of Collateral guarantee Fulfilled related parties
Name of obligee amount guarantee Guarantee date provided guarantee if any if any Term or not or not
Shanghai Hongtai Real Estate 30 March 2026 260000.00 Joint and Nil Nil 1 year No No
Co. Ltd. several
liability
guarantee
Shanghai Chenming Pulp & 30 March 2022 875.00 13 February 2023 875.00 Joint and Nil Nil 5 years No No
Paper Sales Co. Ltd. several liability
guarantee
Shanghai Chenming Pulp & 28 March 2024 56772.00 4 June 2024 56772.00 Joint and Nil Nil 1 year No No
Paper Sales Co. Ltd. several liability
guarantee
Shanghai Chenming Pulp & 30 March 2026 70000.00 Joint and Nil Nil 1 year No No
Paper Sales Co. Ltd. several
liability
guarantee
Shanghai Heruiming Property 19 June 2024 7998.00 23 May 2024 7998.00 Joint and Nil Nil 3 years No No
Management Co. Ltd. several liability
guarantee
Shanghai Heruiming Property 30 March 2026 10000.00 Joint and Nil Nil 1 year No No
Management Co. Ltd. several
liability
guarantee
Jilin Chenming Pulp & Fiber 28 March 2024 1000.00 24 September 1000.00 Joint and Nil Nil 2 years No No
Trading Co. Ltd. 2024 several liability
guarantee
Jilin Chenming Pulp & Fiber 30 March 2026 5000.00 Joint and Nil Nil 1 year No No
Trading Co. Ltd. several
liability
guarantee
Shouguang Chenming Import 31 March 2025 12000.00 19 November 2025 12000.00 Joint and Nil Nil 2 years No No
and Export Trade Co. Ltd. several liability
guarantee
Shouguang Chenming Import 30 March 2026 100000.00 Joint and Nil Nil 1 year No No
and Export Trade Co. Ltd. several
liability
guarantee
SHANDONG CHENMING PAPER HOLDINGS LIMITED 51
INTERIM REPORT 2026V Material Matters
XII. Material contracts and implementation (Cont'd)
2. Significant guarantees (Cont'd)
(1) Guarantees (Cont'd)
Guarantees between the Company and its subsidiaries
Date of
the related
announcement
disclosing Counter- Guarantee to
the guarantee Amount of Guarantee Type of Collateral guarantee Fulfilled related parties
Name of obligee amount guarantee Guarantee date provided guarantee if any if any Term or not or not
Hainan Chenming Technology 28 March 2024 41440.00 2 July 2025 41440.00 Joint and Nil Nil 3 years No No
Co. Ltd. several liability
guarantee
Hainan Chenming Technology 31 March 2025 3960.00 9 June 2025 3960.00 Joint and Nil Nil 2 years No No
Co. Ltd. several liability
guarantee
Hainan Chenming Technology 30 March 2026 60000.00 Joint and Nil Nil 2 years No No
Co. Ltd. several
liability
guarantee
Shandong Chenming Paper 30 March 2026 200000.00 Joint and Nil Nil 1 year No No
Sales Co. Ltd. several liability
guarantee
Shandong Chenming Paper 30 March 2026 300000.00 Joint and Nil Nil 1 year No No
Co. Ltd. several liability
guarantee
Chenming (Overseas) Co. Ltd. 30 March 2026 50000.00 Joint and Nil Nil 1 year No No
several liability
guarantee
Nanchang Chenming 30 March 2026 3000.00 Joint and Nil Nil 1 year No No
Arboriculture Development several liability
Co. Ltd. guarantee
Jiangxi Chenming Logistics 30 March 2026 3000.00 Joint and Nil Nil 1 year No No
Co. Ltd. several liability
guarantee
Shouguang Chenming 30 March 2026 3000.00 Joint and Nil Nil 1 year No No
Papermaking Machine Co. several liability
Ltd. guarantee
Shouguang Hongxiang Printing 30 March 2026 3000.00 Joint and Nil Nil 1 year No No
and Packaging Co. Ltd. several liability
guarantee
Shouguang Hongyi Decorative 30 March 2026 3000.00 Joint and Nil Nil 1 year No No
Packaging Co. Ltd. several liability
guarantee
52 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026V Material Matters
XII. Material contracts and implementation (Cont'd)
2. Significant guarantees (Cont'd)
(1) Guarantees (Cont'd)
Guarantees between the Company and its subsidiaries
Date of
the related
announcement
disclosing Counter- Guarantee to
the guarantee Amount of Guarantee Type of Collateral guarantee Fulfilled related parties
Name of obligee amount guarantee Guarantee date provided guarantee if any if any Term or not or not
Shouguang Chenming Modern 30 March 2026 3000.00 Joint and Nil Nil 1 year No No
Logistic Co. Ltd. several liability
guarantee
Foshan Chenming Import and 30 March 2026 10000.00 Joint and Nil Nil 1 year No No
Export Trade Co. Ltd. several liability
guarantee
Shanghai Hongtai Property 30 March 2026 10000.00 Joint and Nil Nil 1 year No No
Management Co. Ltd. several liability
guarantee
Zhanjiang Chenming 30 March 2026 20000.00 Joint and Nil Nil 1 year No No
Technology Development Co. several liability
Ltd. guarantee
Shandong Chenming 30 March 2026 25000.00 Joint and Nil Nil 1 year No No
Investment Limited several liability
guarantee
Chenming International Trade 30 March 2026 100000.00 Joint and Nil Nil 1 year No No
Import and Export Co. several liability
Limited guarantee
Jilin Chenming Paper Co. Ltd. 30 March 2026 5000.00 Joint and Nil Nil 1 year No No
several liability
guarantee
Zhanjiang Chenming Paper 30 March 2026 30000.00 Joint and Nil Nil 1 year No No
Co. Ltd. several liability
guarantee
Jiangxi Chenming Paper Co. 30 March 2026 30000.00 Joint and Nil Nil 1 year No No
Ltd. several liability
guarantee
Total amount of guarantee provided for subsidiaries approved 3783000.00 Total amount of guarantee provided for subsidiaries 266969.10
during the reporting period (B1) during the reporting period (B2)
Total amount of guarantee provided for subsidiaries approved as 5458791.76 Total balance of guarantee provided for subsidiaries as at 1819202.56
at the end of the reporting period (B3) the end of the reporting period (B4)
SHANDONG CHENMING PAPER HOLDINGS LIMITED 53
INTERIM REPORT 2026V Material Matters
XII. Material contracts and implementation (Cont'd)
2. Significant guarantees (Cont'd)
(1) Guarantees (Cont'd)
Guarantees between subsidiaries
Date of
the related
announcement
disclosing Counter- Guarantee to
the guarantee Amount of Guarantee Guarantee Type of Collateral guarantee Fulfilled related parties
Name of obligee amount guarantee date provided guarantee if any if any Term or not or not
Shanghai Chenming Pulp & 30 March 2026 70000.00 Joint and several Nil Nil 1 year No No
Paper Sales Co. Ltd. liability guarantee
Huanggang Chenming Pulp & 30 March 2026 20000.00 Joint and several Nil Nil 1 year No No
Paper Co. Ltd. liability guarantee
Huanggang Chenming Port 31 March 2025 592.33 29 December 592.33 Joint and several Nil Nil 2 years No No
Service Co. Ltd. 2025 liability guarantee
Huanggang Chenming Port 30 March 2026 5000.00 Joint and several Nil Nil 1 year No No
Service Co. Ltd. liability guarantee
Hubei Chenming Technology 30 March 2026 5000.00 Joint and several Nil Nil 1 year No No
Industrial Co. Ltd. liability guarantee
Hubei Chenming Technology 30 March 2026 5000.00 Joint and several Nil Nil 1 year No No
Industrial Co. Ltd. liability guarantee
Jilin Chenming Pulp & Fiber 31 March 2025 950.00 26 September 950.00 Joint and several Nil Nil 2 years No No
Trading Co. Ltd. 2025 liability guarantee
Zhanjiang Chenming 30 March 2026 5000.00 Joint and several Nil Nil 1 year No No
Arboriculture Development liability guarantee
Co. Ltd.Foshan Chenming Import and 31 March 2025 495.00 21 September 495.00 Joint and several Nil Nil 3 years No No
Export Trade Co. Ltd. 2025 liability guarantee
Foshan Chenming Import and 30 March 2026 3000.00 Joint and several Nil Nil 1 year No No
Export Trade Co. Ltd. liability guarantee
Hainan Chenming Technology 30 March 2026 50000.00 Joint and several Nil Nil 1 year No No
Co. Ltd. liability guarantee
Jiangxi Chenming Paper Co. 30 March 2026 1000.00 Joint and several Nil Nil 1 year No No
Ltd. liability guarantee
Jiangxi Chenming Paper Co. 30 March 2026 1000.00 Joint and several Nil Nil 1 year No No
Ltd. liability guarantee
Jiangxi Chenming Paper Co. 30 March 2026 1000.00 Joint and several Nil Nil 1 year No No
Ltd. liability guarantee
Shandong Chenming Paper 30 March 2026 5000.00 Joint and several Nil Nil 1 year No No
Co. Ltd. liability guarantee
Shandong Chenming Paper 30 March 2026 15000.00 Joint and several Nil Nil 1 year No No
Co. Ltd. liability guarantee
Shandong Chenming Paper 30 March 2026 20000.00 Joint and several Nil Nil 1 year No No
Co. Ltd. liability guarantee
Shandong Chenming Paper 30 March 2026 80000.00 Joint and several Nil Nil 1 year No No
Co. Ltd. liability guarantee
54 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026V Material Matters
XII. Material contracts and implementation (Cont'd)
2. Significant guarantees (Cont'd)
(1) Guarantees (Cont'd)
Guarantees between subsidiaries
Date of
the related
announcement
disclosing Counter- Guarantee to
the guarantee Amount of Guarantee Guarantee Type of Collateral guarantee Fulfilled related parties
Name of obligee amount guarantee date provided guarantee if any if any Term or not or not
Shandong Chenming Paper 30 March 2026 20000.00 Joint and several Nil Nil 1 year No No
Co. Ltd. liability guarantee
Zhanjiang Chenming 30 March 2026 50000.00 Joint and several Nil Nil 1 year No No
Technology Development Co. liability guarantee
Ltd.Jiangxi Chenming Paper Co. 30 March 2026 50000.00 Joint and several Nil Nil 1 year No No
Ltd. liability guarantee
Jilin Chenming Paper Co. Ltd. 30 March 2026 20000.00 Joint and several Nil Nil 1 year No No
liability guarantee
Zhanjiang Chenming 30 March 2026 20000.00 Joint and several Nil Nil 1 year No No
Technology Development Co. liability guarantee
Ltd.Zhanjiang Chenming Paper 30 March 2026 10000.00 Joint and several Nil Nil 1 year No No
Co. Ltd. liability guarantee
Shandong Chenming Paper 30 March 2026 40000.00 Joint and several Nil Nil 1 year No No
Co. Ltd. liability guarantee
Zhanjiang Chenming Paper 30 March 2026 70000.00 Joint and several Nil Nil 1 year No No
Co. Ltd. liability guarantee
Jiangxi Chenming Paper Co. 30 March 2026 8000.00 Joint and several Nil Nil 1 year No No
Ltd. liability guarantee
Jiangxi Chenming Paper Co. 30 March 2026 20000.00 Joint and several Nil Nil 1 year No No
Ltd. liability guarantee
Jiangxi Chenming Paper Co. 30 March 2026 20000.00 Joint and several Nil Nil 1 year No No
Ltd. liability guarantee
Jilin Chenming Paper Co. Ltd. 30 March 2026 10000.00 Joint and several Nil Nil 1 year No No
liability guarantee
Jilin Chenming Paper Co. Ltd. 30 March 2026 10000.00 Joint and several Nil Nil 3 years No No
liability guarantee
Total amount of guarantee provided for subsidiaries approved during 634000.00 Total amount of guarantee provided for subsidiaries during the –
the reporting period (C1) reporting period (C2)
Total amount of guarantee provided for subsidiaries approved as at 636037.33 Total balance of guarantee provided for subsidiaries as at the 2037.33
the end of the reporting period (C3) end of the reporting period (C4)
SHANDONG CHENMING PAPER HOLDINGS LIMITED 55
INTERIM REPORT 2026V Material Matters
XII. Material contracts and implementation (Cont'd)
2. Significant guarantees (Cont'd)
(1) Guarantees (Cont'd)
Guarantees between subsidiaries
Date of
the related
announcement
disclosing Counter- Guarantee to
the guarantee Amount of Guarantee Guarantee Type of Collateral guarantee Fulfilled related parties
Name of obligee amount guarantee date provided guarantee if any if any Term or not or not
Total amount of guarantee provided (i.e. sum of the above three guarantee amount)
Total amount of guarantee approved during the 4648000.00 Total amount of guarantee during the reporting period 266969.10
reporting period (A1+B1+C1) (A2+B2+C2)
Total amount of guarantee approved as at the end 6992587.28 Total balance of guarantee as at the end of the reporting period 2143292.03
of the reporting period (A3+B3+C3) (A4+B4+C4)
The percentage of total balance of guarantee (i.e. A4+B4+C4) to the net assets of the Company 13756.19%
Of which:
Balance of guarantee provided for shareholders beneficial controllers and its related parties (D) –
Balance of guarantee directly or indirectly provided for obligors with gearing ratio over 70% (E) 753561.38
Total amount of guarantee provided in excess of 50% of net assets (F) 2135501.74
The total amount of the above three guarantees (D+E+F) 2889063.12
For the unexpired guarantee contract the guarantee liability has occurred during the reporting period or there is evidence showing that it is possible to bear joint Nil
liability for repayment (if any)
Providing external guarantees in violation of prescribed procedures (if any) Nil
Details of composite guarantees
The Company and its subsidiaries jointly provided composite guarantees of RMB4815.5711 million for the
subsidiaries. To avoid duplicated calculation such amount was only listed and calculated in the guarantees
provided by the Company to its subsidiaries.
3. Entrusted wealth management
□ Applicable □ Not applicable
The Company did not have any entrusted wealth management during the reporting period.
4. Other material contracts
□ Applicable □ Not applicable
The Company did not have any other material contracts during the reporting period.
56 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026V Material Matters
XIII. Registration form for reception of surveys communications and interviews during the
reporting period
□ Applicable □ Not applicable
Date of Way of Type of Major discussion points and Index of the basic particulars
reception Site of reception reception recipient Recipient information provided of the survey
10 April 2026 Panorama * Online platform Individuals and Investors attending the 2025 The Company’s 2025 financial For details please refer to the
Interactive Platform communication institutions annual results briefing of the position operating results Investor Relations
for Investors Company online resumption of operation and Activity Record Sheet on
Relationship production at production CNINFO (www.cninfo.com.cn)
bases future prospects etc.
16 April 2026 Conference room of Telephone Institutions Bank of Communications The Company’s resumption For details please refer to the
the Company conversation Schroder Fund HSBC of operation and production Investor Relations
Jintrust Fund and Dacheng at production bases Activity Record Sheet on
Fund production capacity CNINFO (www.cninfo.com.cn)
operations measures to
reduce costs improve
efficiency and reduce debts
etc.
15 May 2026 Panorama * Online platform Individuals and Investors attending the 2026 The Company’s production For details please refer to the
Interactive Platform communication institutions online collective reception and operations financial Investor Relations
for Investors day for investors of listed position other risk warnings Activity Record Sheet on
Relationship companies in Shandong measures to mitigate debt CNINFO (www.cninfo.com.cn)
risks etc.
20 May 2026 Conference room of On-site visit Institutions 13 institutions including The Company’s development For details please refer to the
the Company Changjiang Securities strategies and financial Investor Relations
CITIC Securities E Fund position market conditions Activity Record Sheet on
Management Caitong for machine-made paper CNINFO (www.cninfo.com.cn)
Asset Management HFT products and measures to
Investment Management mitigate debt risks.and Double-Safeguard
SHANDONG CHENMING PAPER HOLDINGS LIMITED 57
INTERIM REPORT 2026V Material Matters
XIV. Other matters of significance
□ Applicable □ Not applicable
1. Full resumption of operation and production at production basesDuring the reporting period the Company adhered to the principles of “safety first efficiency first and profitabilityfirst” strengthened its corporate management and coordinated the progress on the resumption of operation and
production at production bases. The cadres and employees at Zhanjiang Chenming worked in close collaboration with
the Group’s support team to tackle key challenges efficiently completing key tasks such as fund raising equipment
maintenance securing raw materials and establishing market connections thereby successfully fully resuming operation
and production at the Zhanjiang production base. As of the date of this report the five major production bases of the
Company in Shouguang Zhanjiang Huanggang Jiangxi and Jilin have fully resumed production. Moving forward the
Company will continue to deepen end-to-end cost reduction and efficiency enhancement accelerate the all-around
new product development and coordinate the progress on production and operations reform and innovation and team
development. It will make every effort to improve operational performance steadily mitigate debt risks and drive the
Company towards sustained stable and high-quality development.For details please refer to the relevant announcement disclosed by the Company on CNINFO on 14 March 2026
(Announcement No.: 2026-004) and the announcement disclosed by the Company on the website of Hong Kong Stock
Exchange on 16 March 2026.
2 Information disclosure index for 2026 Interim Report
Announcement Date of Publication website
No. Subject matter publication and index
2026-001 2025 Annual Results Forecast 31 January 2026 http://www.cninfo.com.cn
2026-002 Announcement on Unusual Price Movement of Shares of the 26 February 2026 http://www.cninfo.com.cn
Company
2026-003 Announcement on Unusual Price Movement of Shares of the 11 March 2026 http://www.cninfo.com.cn
Company
2026-004 Announcement on Full Resumption of Production at the 14 March 2026 http://www.cninfo.com.cn
Production Bases of the Company
2026-005 Announcement on Unusual Price Movement of Shares of the 18 March 2026 http://www.cninfo.com.cn
Company
2026-006 Special Statement on Matters Covered in the 2025 Audit 31 March 2026 http://www.cninfo.com.cn
Report by the Board of Directors
2026-007 Announcement on Resolutions of the Third Meeting of the 31 March 2026 http://www.cninfo.com.cn
Eleventh Session of the Board of Directors
2026-008 Announcement on the Company’s Unrecovered Losses 31 March 2026 http://www.cninfo.com.cn
Exceeding One-third of the Total Paid-up Share Capital
2026-009 Notice of 2025 Annual General Meeting 31 March 2026 http://www.cninfo.com.cn
2026-010 2025 Annual Report Summary 31 March 2026 http://www.cninfo.com.cn
2026-011 Announcement on the 2025 Annual Online Performance 31 March 2026 http://www.cninfo.com.cn
Briefing
2026-012 Special Statement on Securities Investment in 2025 31 March 2026 http://www.cninfo.com.cn
2026-013 Announcement on Proposed Non-distribution of Profit for 31 March 2026 http://www.cninfo.com.cn
2025
2026-014 Announcement on Carrying out Factoring Business of 31 March 2026 http://www.cninfo.com.cn
Accounts Receivable
2026-015 Announcement on Carrying out Equipment Financing 31 March 2026 http://www.cninfo.com.cn
Business
58 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026V Material Matters
XIV. Other matters of significance (Cont'd)
2 Information disclosure index for 2026 Interim Report (Cont'd)
Announcement Date of Publication website
No. Subject matter publication and index
2026-016 Announcement on Expected Provision of Guarantees to 31 March 2026 http://www.cninfo.com.cn
Subsidiaries for 2026
2026-017 Announcement on External Guarantees Provided by the 31 March 2026 http://www.cninfo.com.cn
Company’s Majority-owned Subsidiaries
2026-018 Announcement on Re-appointment of Auditor for 2026 31 March 2026 http://www.cninfo.com.cn
2026-019 Announcement on Estimated Day-to-day Related Party 31 March 2026 http://www.cninfo.com.cn
Transactions for 2026
2026-020 Announcement on Remuneration Plan for Directors and 31 March 2026 http://www.cninfo.com.cn
Senior Management for 2026
2026-021 Announcement on Purchase of Directors’ and Senior 31 March 2026 http://www.cninfo.com.cn
Management Liability Insurance
2026-022 Announcement on Cumulative Newly Overdue Debts and 31 March 2026 http://www.cninfo.com.cn
Litigation
2026-023 Announcement on Provision for Impairment of Assets 31 March 2026 http://www.cninfo.com.cn
2026-024 Special Statement on Removal of Impacts of Matters Covered 31 March 2026 http://www.cninfo.com.cn
by the Non-standard Opinion in 2024 Internal Control Audit
Report by the Board of Directors
2026-025 Special Statement on Removal of the Significant Uncertainty 31 March 2026 http://www.cninfo.com.cn
Concerning Going Concern as Set Out in 2024 Audit Report
by the Board of Directors
2026-026 Announcement on Change in Investor Contact Information 14 April 2026 http://www.cninfo.com.cn
2026-027 2026 First Quarterly Report 30 April 2026 http://www.cninfo.com.cn
2026-028 Announcement on Unusual Price Movement of Shares of the 8 May 2026 http://www.cninfo.com.cn
Company
2026-029 Announcement on Participating in the 2026 Online Collective 13 May 2026 http://www.cninfo.com.cn
Reception Day for Investors of Listed Companies in
Shandong
2026-030 Announcement on Resolutions of the 2025 Annual General 16 May 2026 http://www.cninfo.com.cn
Meeting
2026-031 Announcement on Receipt of the Decision on Administrative 6 June 2026 http://www.cninfo.com.cn
Regulatory Measures from the Shandong Securities
Regulatory Bureau
2026-032 Announcement on Resolutions of the Second Extraordinary 13 June 2026 http://www.cninfo.com.cn
Meeting of the Eleventh Session of the Board of Directors
2026-033 Announcement on Equity and Debt Transfer of a Subsidiary 13 June 2026 http://www.cninfo.com.cn
2026-034 Notice of 2026 First Extraordinary General Meeting 13 June 2026 http://www.cninfo.com.cn
2026-035 Announcement on New Cumulated Litigation 13 June 2026 http://www.cninfo.com.cn
2026-036 Announcement on Resolutions of 2026 First Extraordinary 1 July 2026 http://www.cninfo.com.cn
General Meeting
XIV. Matters of significance of subsidiaries of the Company
□ Applicable □ Not applicable
SHANDONG CHENMING PAPER HOLDINGS LIMITED 59
INTERIM REPORT 2026VI Changes in Share Capital and Shareholders
I. Changes in shares
1. Changes in shares
Unit: share
Opening balance Change during the reporting period (+/-) Closing balance
Shares
converted
from
Amount Percentage New issue Bonus issue reserves Others Subtotal Amount Percentage
I. Restricted shares 12545934 0.43% 0 0 0 -5194584 -5194584 7351350 0.25%
1. Shares held by other domestic
investors 12545934 0.43% 0 0 0 -5194584 -5194584 7351350 0.25%
Including: Shares held by domestic
natural persons 12545934 0.43% 0 0 0 -5194584 -5194584 7351350 0.25%
II. Non-restricted shares 2928910266 99.57% 0 0 0 5194584 5194584 2934104850 99.75%
1. RMB ordinary shares 1694219750 57.60% 0 0 0 5194584 5194584 1699414334 57.78%
2. Domestic listed foreign shares 706385266 24.01% 0 0 0 0 0 706385266 24.01%
3. Overseas listed foreign shares 528305250 17.96% 0 0 0 0 0 528305250 17.96%
III. Total number of shares 2941456200 100.00% 0 0 0 0 0 2941456200 100.00%
The reasons for such changes
□ Applicable □ Not applicable
On 28 October 2025 the Company completed the election of a new Board of Directors and the reform of the
Supervisory Committee resulting in the departure of certain Directors senior management members and supervisors.In accordance with the relevant share management regulations the 5194584 RMB ordinary shares held in aggregate
by the aforementioned departing individuals were subject to a six-month lock-up period from the date of their departure.The lock-up period for these shares expired on 27 April 2026 and the restrictions were lifted resulting in a reduction of
5194584 shares in the restricted shares of the Company during the reporting period while the number of non-restricted
shares increased by 5194584 shares accordingly.Approval of changes in shareholding
□ Applicable □ Not applicable
Transfer of shares arising from changes in shareholding
□ Applicable □ Not applicable
Progress of share repurchase
□ Applicable □ Not applicable
Progress of decrease in the holding of repurchased shares by way of bidding
□ Applicable □ Not applicable
The effects of changes in shareholding on financial indicators such as basic earnings per share diluted earnings
per share and net assets per share attributable to ordinary shareholders of the Company for the latest year and the
latest period
□ Applicable □ Not applicable
Other information considered necessary by the Company or required by the securities regulatory authorities to be
disclosed
□ Applicable □ Not applicable
60 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VI Changes in Share Capital and Shareholders
I. Changes in shares (Cont'd)
2. Changes in restricted shares
□ Applicable □ Not applicable
Unit: share
Restricted Restricted
Restricted shares shares Restricted
shares at the released increased shares at the
Name of beginning of during during end of
shareholder the period the period the period the period Reason for restriction Date of release from restriction
Hu Changqing 792857 792857 0 0 Locked-up shares of Senior 27 April 2026
Management
Li Xingchun 2000000 2000000 0 0 Locked-up shares of Senior 27 April 2026
Management
Li Feng 1356027 1356027 0 0 Locked-up shares of Senior 27 April 2026
Management
Li Kang 149300 149300 0 0 Locked-up shares of Senior 27 April 2026
Management
Li Zhenzhong 746400 746400 0 0 Locked-up shares of Senior 27 April 2026
Management
Li Mingtang 150000 150000 0 0 Locked-up shares of Senior 27 April 2026
Management
Li Weixian 271575 0 0 271575 Locked-up shares of Senior In accordance with relevant
Management requirements for shares held by
Directors and Senior Management
Dong Lianming 112500 0 0 112500 Locked-up shares of Senior In accordance with relevant
Management requirements for shares held by
Directors and Senior Management
Yuan Xikun 67275 0 0 67275 Locked-up shares of Senior In accordance with relevant
Management requirements for shares held by
Directors and Senior Management
SHANDONG CHENMING PAPER HOLDINGS LIMITED 61
INTERIM REPORT 2026VI Changes in Share Capital and Shareholders
I. Changes in shares (Cont'd)
2. Changes in restricted shares (Cont'd)
Restricted Restricted
Restricted shares shares Restricted
shares at the released increased shares at the
Name of beginning of during during end of
shareholder the period the period the period the period Reason for restriction Date of release from restriction
Chen Hongguo 6000000 0 0 6000000 Restricted shares of the The Company made payment for the
participants of the Share Incentive repurchase of 6000000 restricted
Scheme shares under the Share Incentive
Scheme on 1 November 2024.The share repurchase transfer and
cancellation of such restricted shares
with the Shenzhen Branch of China
Securities Depository and Clearing
Corporation Limited were not completed
by the Company as they were subject to
judicial freeze.Li Xueqin 900000 0 0 900000 Restricted shares of the The Company made payment for the
participants of the Share Incentive repurchase of 900000 restricted shares
Scheme under the Share Incentive Scheme on 1
November 2024.The share repurchase transfer and
cancellation of such restricted shares
with the Shenzhen Branch of China
Securities Depository and Clearing
Corporation Limited were not completed
by the Company as they were subject to
judicial freeze.Total 12545934 5194584 0 7351350 – –
II. Issuance and listing of securities
□ Applicable □ Not applicable
62 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VI Changes in Share Capital and Shareholders
III. Total number of shareholders and shareholdings
Unit: share
Total number of ordinary 93718 of which 77810 were Total number of holders of 0
shareholders as at the end of holders of A shares 15598 were preference shares with restored
the reporting period holders of B shares and 310 were voting right as at the end of the
holders of H shares reporting period
Shareholdings of shareholders interested in more than 5% of the shares of the Company or Top 10 shareholders (excluding the shares lent under refinancing business)
Changes
Number of (increase or
shares held at decrease) Share pledged
the end of during the Number of Number of marked or frozen
Percentage of the reporting reporting restricted non-restricted Status of
Name of shareholder Nature of shareholder shareholding period period shares held shares held shares Number
CHENMING HOLDINGS COMPANY LIMITED State-owned legal person 15.50% 455781319 0 0 455781319 Pledged 386811546
Frozen 409956441
HKSCC NOMINEES LIMITED Overseas legal person 12.70% 373424775 1250 0 373424775 N/A 0
CHENMING HOLDINGS (HONG KONG) LIMITED Overseas legal person 12.38% 364131563 0 0 364131563 N/A 0
(Note 1)
Jin Xing Domestic natural person 1.31% 38622315 737288 0 38622315 N/A 0
Chen Hongguo (Note 2) Domestic natural person 0.65% 19080044 0 0 19080044 Frozen 19080044
Wang Fanliang Domestic natural person 0.32% 9406000 6006700 0 9406000 N/A 0
Ji Zhongqiu Domestic natural person 0.31% 8996674 988500 0 8996674 N/A 0
Shouguang Zhongli Commercial and Trading Co. Domestic non-state- 0.31% 8972750 7053400 0 8972750 N/A 0
Ltd. owned legal person
Xu Hekun Domestic natural person 0.28% 8380250 0 0 8380250 N/A 0
Pan Jiankai Domestic natural person 0.26% 7770206 -9700 0 7770206 N/A 0
Strategic investors or general legal persons who become the top ten Nil
shareholders due to the placement of new shares
Related party relationship or acting in concert among the above shareholders A shareholder Chenming Holdings (Hong Kong) Limited which is an overseas legal person is a wholly-owned subsidiary of a
shareholder Chenming Holdings Company Limited which is a state-owned legal person. Save for the above it is not aware
that any other shareholders of tradable shares are persons acting in concert. It is also not aware that any other shareholders of
tradable shares are related to each other.Explanation of the aforementioned shareholders’ entrusted/entrusted voting Nil
rights and waiver of voting rights
Special explanation for designated repurchase accounts among the top ten In November 2024 pursuant to the 2020 Restricted A Share Incentive Scheme (Draft) the Company made payments for the
shareholders repurchase of restricted shares not yet unlocked for the third unlocking period under the 2020 Restricted A Share Incentive
Scheme. In the process of completing the procedures for the share transfer and cancellation the 6000000 restricted shares
held by Mr. Chen Hongguo were judicially frozen. Hence the procedures for the transfer and cancellation of such restricted
shares were not yet completed with the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited.The 19080044 shares held by Mr. Chen Hongguo being a domestic natural person excludes the 6000000 restricted shares
under the share incentive scheme.SHANDONG CHENMING PAPER HOLDINGS LIMITED 63
INTERIM REPORT 2026VI Changes in Share Capital and Shareholders
III. Total number of shareholders and shareholdings (Cont'd)
Shareholdings of the top ten non-restricted shareholders (excluding the shares lent under refinancing business and the
locked-up shares of the Senior Management)
Number of
non-restricted
shares held as
at the end of the Class of shares
Name of shareholder reporting period Class of shares Number
CHENMING HOLDINGS COMPANY LIMITED 455781319 RMB ordinary shares 455781319
HKSCC NOMINEES LIMITED 373424775 Overseas listed foreign shares 373424775
CHENMING HOLDINGS (HONG KONG) LIMITED (Note 1) 364131563 Domestic listed foreign shares 210717563
Overseas listed foreign shares 153414000
Jin Xing 38622315 Domestic listed foreign shares 38622315
Chen Hongguo (Note 2) 19080044 RMB ordinary shares 19080044
Wang Fanliang 9406000 RMB ordinary shares 9406000
Ji Zhongqiu 8996674 RMB ordinary shares 8996674
Shouguang Zhongli Commercial and Trading Co. Ltd. 8972750 RMB ordinary shares 8972750
Xu Hekun 8380250 Domestic listed foreign shares 8380250
Pan Jiankai 7770206 Domestic listed foreign shares 7770206
Related party relationship or acting in concert among A shareholder Chenming Holdings (Hong Kong) Limited which
the top ten shareholders of non-restricted shares and is an overseas legal person is a wholly-owned subsidiary of a
between the top ten shareholders of non-restricted shareholder Chenming Holdings Company Limited which is a state-
shares and the top ten shareholders owned legal person. Save for the above it is not aware that any
other shareholders of tradable shares are persons acting in concert.It is also not aware that any other shareholders of tradable shares
are related to each other.Securities margin trading of top ten ordinary Chenming Holdings Company Limited held 455781319 RMB
Shareholders ordinary shares of which 409956441 shares were held through
ordinary account and 45824878 shares were held through credit
guarantee security account.Note 1: In order to meet its own capital needs Chenming Holdings (Hong Kong) Limited conducted share financing business with overseas
institutions entrusting 210717563 B shares and 153414000 H shares of the Company held by it to the custody brokerage designated by
overseas institutions. The aforesaid shares were subject to the risk of not to be recovered which may lead to a reduction in the Company’s
shareholding but does not affect Chenming Holdings’ position as the largest shareholder and does not affect the Company’s control. For
details please refer to the announcement disclosed by the Company on CNINFO on 18 July 2023 (announcement no.: 2023-058) and the
insider information disclosed by the Company on the website of Hong Kong Stock Exchange on 18 July 2023.Note 2: On 1 November 2024 pursuant to the 2020 Restricted A Share Incentive Scheme (Draft) the Company made payments to the participants for
the repurchase of restricted shares not yet unlocked for the third unlocking period under the 2020 Restricted A Share Incentive Scheme. In the
process of completing the procedures for the share transfer and cancellation the 6000000 restricted shares held by Mr. Chen Hongguo were
judicially frozen. Hence the procedures for the transfer and cancellation of such restricted shares were not yet completed with the Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited. The 19080044 shares held by Mr. Chen Hongguo being a domestic
natural person excludes the 6000000 restricted shares to be cancelled under the share incentive scheme.
64 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VI Changes in Share Capital and Shareholders
III. Total number of shareholders and shareholdings (Cont'd)
Share lending by shareholders interested in more than 5% top 10 shareholders and top 10 shareholders of non-restricted
shares under refinancing business
□ Applicable □ Not applicable
Changes of top 10 shareholders and top 10 shareholders of non-restricted shares due to lending/returning of shares
under refinancing business as compared to prior period
□ Applicable □ Not applicable
Whether an agreed repurchase transaction was entered into during the reporting period by the top 10 ordinary
shareholders and top 10 non-restricted ordinary shareholders of the Company
□ Yes □ No
The top 10 ordinary shareholders and top 10 non-restricted ordinary shareholders of the Company did not enter into any
agreed repurchase transaction during the reporting period.IV. Changes in shareholding of Directors and Senior Management
□ Applicable □ Not applicable
There was no change in the shareholding of the Directors and Senior Management of the Company during the reporting
period. Please see the 2025 annual report for details.V. Change of controlling shareholders or beneficial controllers
Where the Company has previously disclosed that its actual controller is planning a change of control but this has not yet
been finalised please provide an update on the progress of the change of control.□ Applicable □ Not applicable
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 controllers during the reporting period
□ Applicable □ Not applicable
There was no change of beneficial controllers of the Company during the reporting period.VI. Preference shares
□ Applicable □ Not applicable
The Company had no preference shares during the reporting period.SHANDONG CHENMING PAPER HOLDINGS LIMITED 65
INTERIM REPORT 2026VI Changes in Share Capital and Shareholders
VII. Securities interests held by Directors and chief executives disclosed in accordance with the
Listing Rules of Hong Kong Stock Exchange
As at 30 June 2026 the interests and short positions held by each of the Directors and chief executives of the Company in the
shares underlying shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the
Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong) (the “SFO”)) as recorded in the register required to
be kept under section 352 of the SFO are set out as follows:
Company
Number of shares
(A shares) held as
at the end of the As a percentage
reporting period of the total shares
Name Position (shares) of the Company
Directors
Jiang Yanshan Chairman acting general manager – –
Meng Feng Executive Director deputy general manager – –
Liu Peiji Executive Director deputy general manager – –
Li Weixian Executive Director deputy general manager 362100 0.01%
Zhu Yanli Executive Director deputy general manager – –
financial controller
Song Yuchen Non-executive Director – –
Wang Ying Non-executive Director – –
Zhang Zhiyuan Independent non-executive Director – –
Luo Xinhua Independent non-executive Director – –
Wan Gang Independent non-executive Director – –
Kong Pengzhi Independent non-executive Director – –
Save as disclosed above as at 30 June 2026 none of the Directors or chief executives of the Company had any interests or
short positions in the shares underlying shares or debentures of the Company or any of its associated corporations which
were required to be filed in the register of the Company required to be maintained pursuant to section 352 of the SFO or which
were required to be notified to the Company and the Hong Kong Stock Exchange pursuant to the Model Code for Securities
Transactions by Directors of Listed Issuers as contained in Appendix C3 to the Listing Rules of Hong Kong Stock Exchange.As at 30 June 2026 none of the Directors or chief executives or their respective spouses or children under the age of 18 held
or exercised any rights to subscribe for the share capital or debentures of the Company or its associated corporations.
66 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VI Changes in Share Capital and Shareholders
VIII. Interests and short position of substantial shareholders in shares and underlying shares
disclosed in accordance with the Listing Rules of Hong Kong Stock Exchange
As at 30 June 2026 the following shareholders (other than the Directors or chief executives of the Company) had interests or
short positions in the Company’s shares and underlying shares as shown in the share register maintained by the Company in
accordance with Section 336 of the SFO:
Approximate shareholding as
a percentage of
Number of shares Total share Class of
Name held (shares) capital (%) shares (%)
Chenming Holdings Company Limited 455781319 A shares (L) 15.50 26.70
Chenming Holdings (Hong Kong) Limited 210717563 B shares (L) 7.16 29.83
Chenming Holdings (Hong Kong) Limited 153414000 H shares (L) 5.22 29.04
(L) – Long position (S) – Short position (P) – Lending pool
Save as disclosed above as at 30 June 2026 no other person had interests or short positions in the Company’s shares and
underlying shares as recorded in the register maintained under section 336 of the SFO.IX. Purchase sale and redemption of shares
The Company and any of its subsidiaries did not purchase sell or redeem any listed securities of the Company during the
reporting period.SHANDONG CHENMING PAPER HOLDINGS LIMITED 67
INTERIM REPORT 2026VII Bonds
□ Applicable □ Not applicable
68 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
I. Auditors’ Report
Is the interim report audited
□ Yes √ No
The interim financial report is unaudited.II. Financial Statements
The unit in the notes to the financial statements is: RMB
1. Consolidated balance sheet
Prepared by: Shandong Chenming Paper Holdings Limited
30 June 2026
Unit: RMB
Item Closing balance Opening balance
CURRENT ASSETS:
Monetary funds 186813752.54 210398721.95
Financial assets held for trading 28271109.88 38791121.74
Bills receivable 1225918850.92 793939333.83
Accounts receivable 867034650.86 742744136.20
Accounts receivable financing 41192518.58 35978138.45
Prepayments 505693902.62 281930888.07
Other receivables 324297609.39 302065195.40
Including: Interest receivable – –
Dividend receivable – –
Inventories 3867248020.61 3316198760.70
Non-current assets due within one year 6883842.48 194204719.66
Other current assets 273083453.68 252296160.14
Total current assets 7326437711.56 6168547176.14
NON-CURRENT ASSETS:
Long-term receivables 2395468186.10 2338612032.26
Long-term equity investments 2158047535.21 2095953345.27
Other non-current financial assets 327304236.77 327934626.32
Investment property 5308201964.56 5402063721.57
Fixed assets 28129230253.42 29219679495.81
Construction in progress 619683872.37 626640521.92
Bearer biological assets 1873537.13 1873537.13
Right-of-use assets 149106993.10 151298017.92
Intangible assets 1568733364.33 1603982531.66
Goodwill – –
Long-term prepaid expenses 204326998.50 232398577.62
Deferred income tax assets 2359137415.22 2032088838.62
Other non-current assets 418621439.03 419076485.89
Total non-current assets 43639735795.74 44451601731.99
Total assets 50966173507.30 50620148908.13
SHANDONG CHENMING PAPER HOLDINGS LIMITED 69
INTERIM REPORT 2026VIII Financial Report
II. Financial Statements (Cont’d)
1. Consolidated balance sheet (Cont’d)
Item Closing balance Opening balance
CURRENT LIABILITIES:
Short-term borrowings 20943144749.90 21227831812.02
Bills payable – –
Accounts payable 10059603145.13 8608727052.92
Receipts in advance 49188622.80 61929311.57
Contract liabilities 501500772.85 296299701.36
Employee benefits payable 404577344.04 369594500.65
Taxes payable 205085105.54 203168557.15
Other payables 3895222465.04 4772023040.44
Including: Interest payable 544885105.71 428732780.80
Dividend payable 207427065.81 220493880.88
Non-current liabilities due within one year 2152781290.16 2313171903.83
Other current liabilities 1538683766.34 1539511608.24
Total current liabilities 39749787261.80 39392257488.18
NON-CURRENT LIABILITIES:
Long-term borrowings 6240589747.20 5576510739.72
Lease liabilities 33303316.56 34350249.10
Long-term payables 1871465556.33 1685368809.50
Provisions 27854602.90 28234945.73
Deferred income 1033300884.69 1084582814.76
Deferred income tax liabilities 16405789.06 5667037.66
Other non-current liabilities – –
Total non-current liabilities 9222919896.74 8414714596.47
Total liabilities 48972707158.54 47806972084.65
OWNERS’ EQUITY:
Share capital 2934556200.00 2934556200.00
Other equity instruments – –
Capital reserves 5256833276.12 5241279229.79
Less: Treasury shares – –
Other comprehensive income -895352487.81 -915388419.92
Special reserves 41398480.59 38543270.36
Surplus reserves 1212009109.97 1212009109.97
General risk provisions 68048751.10 68048751.10
Retained profit -8461687633.35 -7675212549.17
Total equity attributable to owners of the parent company 155805696.62 903835592.13
Minority interest 1837660652.14 1909341231.35
Total owners’ equity 1993466348.76 2813176823.48
Total liabilities and owners’ equity 50966173507.30 50620148908.13
Legal Representative: Head in charge of accounting: Head of the accounting department:
Jiang Yanshan Zhu Yanli Zhang Bo
70 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
II. Financial Statements (Cont’d)
2. Balance sheet of the parent company
Unit: RMB
Item Closing balance Opening balance
CURRENT ASSETS:
Monetary funds 16581993.34 20121939.63
Bills receivable 4493579.36 7684717.68
Accounts receivable 1649317939.71 1803060358.70
Accounts receivable financing – –
Prepayments 247006542.15 299434218.95
Other receivables 5882289469.89 5711975196.11
Including: Interest receivable – –
Dividend receivable 142500000.00 142500000.00
Inventories 195042711.23 203763590.31
Non-current assets due within one year – –
Other current assets 152718.40
Total current assets 7994884954.08 8046040021.38
NON-CURRENT ASSETS:
Long-term receivables 538722444.55 538722444.55
Long-term equity investments 16486062687.78 16699360999.95
Other non-current financial assets 85326921.84 85957311.39
Investment property – –
Fixed assets 2968735998.78 3054291530.80
Construction in progress 7254851.69 6554327.41
Right-of-use assets 945833.64 970833.66
Intangible assets 440706293.56 447824474.44
Goodwill – –
Long-term prepaid expenses – –
Deferred income tax assets 694755599.72 635383720.83
Other non-current assets 12021421.38 12021421.38
Total non-current assets 21234532052.94 21481087064.41
Total assets 29229417007.02 29527127085.79
CURRENT LIABILITIES:
Short-term borrowings 10067864212.37 10768516993.00
Bills payable – –
Accounts payable 2001017501.42 1349394835.97
Receipts in advance – –
Contract liabilities 71378118.76 71378118.76
Employee benefits payable 107240560.27 107424275.99
Taxes payable 13652111.36 27747939.41
Other payables 3338867693.21 4015226171.54
Including: Interest payable 218257527.44 181402282.74
Dividend payable – –
Non-current liabilities due within one year 1279292546.18 1152644543.30
Other current liabilities – 58393191.82
Total current liabilities 16879312743.57 17550726069.79
SHANDONG CHENMING PAPER HOLDINGS LIMITED 71
INTERIM REPORT 2026VIII Financial Report
II. Financial Statements (Cont’d)
2. Balance sheet of the parent company (Cont’d)
Item Closing balance Opening balance
NON-CURRENT LIABILITIES:
Long-term borrowings 1314373035.31 700604804.17
Long-term payables 66893286.41 39009936.72
Provisions 5935000.00 8892127.36
Deferred income 30754606.60 31839852.52
Deferred income tax liabilities – –
Total non-current liabilities 1417955928.32 780346720.77
Total liabilities 18297268671.89 18331072790.56
OWNERS’ EQUITY:
Share capital 2934556200.00 2934556200.00
Other equity instruments – –
Capital reserves 5005865917.53 5005865917.53
Less: Treasury shares – –
Other comprehensive income – –
Special reserves 9474200.42 9034647.37
Surplus reserves 1199819528.06 1199819528.06
Retained profit 1782432489.12 2046778002.27
Total owners’ equity 10932148335.13 11196054295.23
Total liabilities and owners’ equity 29229417007.02 29527127085.79
72 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
II. Financial Statements (Cont’d)
3. Consolidated income statement
Unit: RMB
Item First half of 2026 First half of 2025
I. Total revenue 6865428943.30 2106630952.30
Including: Revenue 6865428943.30 2106630952.30
II. Total operating costs 8430771100.65 4968507848.84
Including: Operating costs 7359303725.50 3727203720.24
Taxes and surcharges 97169987.01 61186804.84
Sales and distribution expenses 61132178.95 51113266.56
General and administrative expenses 229781989.79 287771131.26
Research and development expenses 122589398.49 36567185.69
Finance expenses 560793820.91 804665740.25
Including: Interest expenses 597393968.38 774744373.14
Interest income 47229758.99 26462669.15
Add: Other income 64874425.35 22794816.03
Investment income (“-” denotes loss) 246703873.46 -430669782.44
Including: Investment income from associates and joint ventures 58382935.96 -345974520.50
Gains on derecognition of financial assets measured
at amortised cost -4222648.81 -84861658.28
Gain on change in fair value (“-” denotes loss) 6305627.24 -129487561.79
Credit impairment loss (“-” denotes loss) 41637485.75 -506322424.22
Loss on impairment of assets (“-” denotes loss) -16686173.24 -240561409.32
Gain on disposal of assets (“-” denotes loss) -5096931.79 -9814609.63
III. Operating profit (“-” denotes loss) -1227603850.58 -4155937867.91
Add: Non-operating income 910198.62 1069763.18
Less: Non-operating expenses 8095432.54 26198489.55
IV. Total profit (“-” denotes total loss) -1234789084.50 -4181066594.28
Less: Income tax expenses -315925611.60 3603600.91
V. Net profit (“-” denotes net loss) -918863472.90 -4184670195.19
(i) Classification according to the continuity of operation
1. Net profit from continuing operations (“-” denotes net loss) -1103419481.65 -4172096377.14
2. Net profit from discontinued operations (“-” denotes net loss) 184556008.75 -12573818.05
(ii) Classification according to ownership
1. Net profit attributable to owners of the parent company
(“-” denotes net loss) -786475084.18 -3857953190.56
2. Profit or loss of minority interest (“-” denotes net loss) -132388388.72 -326717004.63
VI. Net other comprehensive income after tax 20035932.11 -16019923.39
Net other comprehensive income after tax attributable to owners of
the parent company 20035932.11 -16019923.39
(i) Other comprehensive income that cannot be reclassified to profit
and loss – –
(ii) Other comprehensive income that will be reclassified to profit and
loss 20035932.11 -16019923.39
1. Other comprehensive income that may be reclassified to profit
and loss under the equity method 3961253.98 -3795486.93
2. Exchange differences arising from translation of financial
statements denominated in foreign currencies 16074678.13 -12224436.46
Other comprehensive income net of tax attributable to minority interest – –
SHANDONG CHENMING PAPER HOLDINGS LIMITED 73
INTERIM REPORT 2026VIII Financial Report
II. Financial Statements (Cont’d)
3. Consolidated income statement (Cont’d)
Item First half of 2026 First half of 2025
VII. Total comprehensive income -898827540.79 -4200690118.58
Total comprehensive income attributable to owners of the parent
company -766439152.07 -3873973113.95
Total comprehensive income attributable to minority interest -132388388.72 -326717004.63
VIII. Earnings per share:
(i) Basic earnings per share -0.27 -1.31
(ii) Diluted earnings per share -0.27 -1.31
Legal Representative: Head in charge of accounting: Head of the accounting department:
Jiang Yanshan Zhu Yanli Zhang Bo
4. Income statement of the parent company
Unit: RMB
Item First half of 2026 First half of 2025
I. Revenue 158845285.99 239501119.75
Less: Operating costs 177940367.32 263902147.07
Taxes and surcharges 21649982.08 8073550.14
Sales and distribution expenses 7106800.91 3835197.64
General and administrative expenses 50298007.38 53315461.23
Research and development expenses 18828120.41 7832614.00
Finance expenses 150391406.97 216106623.08
Including: Interest expenses 202406245.10 276973038.79
Interest income 42854088.01 81057423.14
Add: Other income 4478209.61 28614313.82
Investment income (“-” denotes loss) -95447431.35 231495721.27
Including: Investment income from associates and joint ventures 67451687.83 -5404278.73
Gains on derecognition of financial assets measured at
amortised cost (“-” denotes loss) – –
Gain on change in fair value (“-” denotes loss) – –
Credit impairment loss (“-” denotes loss) 37205049.92 -23927394.33
Loss on impairment of assets (“-” denotes loss) -62106811.37
Gain on disposal of assets (“-” denotes loss) -2303960.22 4766089.03
II. Operating profit (“-” denotes loss) -323437531.12 -134722554.99
Add: Non-operating income 30001.00 167528.01
Less: Non-operating expenses 309861.92 19033827.69
III. Total profit (“-” denotes total loss) -323717392.04 -153588854.67
Less: Income tax expenses -59371878.89 -51186056.65
IV. Net profit (“-” denotes net loss) -264345513.15 -102402798.02
(i) Net profit from continuing operations (“-” denotes net loss) -264345513.15 -102402798.02
(ii) Net profit from discontinued operations (“-” denotes net
loss) – –
V. Total comprehensive income -264345513.15 -102402798.02
74 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
II. Financial Statements (Cont’d)
5. Consolidated cash flow statement
Unit: RMB
Item First half of 2026 First half of 2025
I. Cash flows from operating activities:
Cash received from sales of goods and rendering of services 7576134184.35 2454250322.21
Tax rebates received – –
Cash received relating to other operating activities 19855037.80 342606805.59
Subtotal of cash inflows from operating activities 7595989222.15 2796857127.80
Cash paid for goods and services 6272085572.51 1310359147.70
Cash paid to and for employees 486933849.93 432100405.57
Payments of taxes and surcharges 205903492.62 113625874.01
Cash paid relating to other operating activities 308683321.21 155468426.33
Subtotal of cash outflows from operating activities 7273606236.27 2011553853.61
Net cash flows from operating activities 322382985.88 785303274.19
II. Cash flows from investing activities:
Cash received from investments 630389.55 –
Cash received from investment income 850880.82 –
Net cash received from disposal of fixed assets intangible
assets and other long-term assets 9184305.68 17583570.00
Net cash received from disposal of subsidiaries and other
business units 491929993.24 650000.00
Cash received relating to other investing activities – –
Subtotal of cash inflows from investing activities 502595569.29 18233570.00
Cash paid for purchase of fixed assets intangible assets and
other long-term assets 45956129.22 2732142.00
Cash paid for investment – –
Net cash paid for acquisition of subsidiaries and other
business units – 508955916.13
Cash paid relating to other investing activities – –
Subtotal of cash outflows from investing activities 45956129.22 511688058.13
Net cash flows from investing activities 456639440.07 -493454488.13
SHANDONG CHENMING PAPER HOLDINGS LIMITED 75
INTERIM REPORT 2026VIII Financial Report
II. Financial Statements (Cont’d)
5. Consolidated cash flow statement (Cont’d)
Item First half of 2026 First half of 2025
III. Cash flows from financing activities:
Cash received from investments 98000000.00 –
Including: Cash received from subsidiaries from minority
investments 98000000.00 –
Cash received from borrowings 10060929669.91 12289124127.60
Cash received relating to other financing activities 4853343140.74
Subtotal of cash inflows from financing activities 10158929669.91 17142467268.34
Cash repayments of amounts borrowed 10498345681.12 16908452033.18
Cash paid for dividend and profit distribution or interest
payment 390767689.58 479202789.04
Including: Dividend and profit paid by subsidiaries to minority
shareholders 2949315.07 –
Cash paid relating to other financing activities 77799514.12 134663869.67
Subtotal of cash outflows from financing activities 10966912884.82 17522318691.89
Net cash flows from financing activities -807983214.91 -379851423.55
IV. Effect of foreign exchange rate changes on cash and cash
equivalents -1782580.74 -961270.77
V. Net increase in cash and cash equivalents -30743369.70 -88963908.26
Add: Balance of cash and cash equivalents as at the beginning
of the period 137296882.34 151943246.31
VI. Balance of cash and cash equivalents as at the end of
the period 106553512.64 62979338.05
76 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
II. Financial Statements (Cont’d)
6. Cash flow statement of the parent company
Unit: RMB
Item First half of 2026 First half of 2025
I. Cash flows from operating activities:
Cash received from sales of goods and rendering of services 341390168.85 368739278.31
Tax rebates received – –
Cash received relating to other operating activities 1048761.03 7896986.34
Subtotal of cash inflows from operating activities 342438929.88 376636264.65
Cash paid for goods and services 80234587.90 157337634.27
Cash paid to and for employees 139684358.40 113495613.54
Payments of taxes and surcharges 57562036.60 25245395.18
Cash paid relating to other operating activities 10267340.78 17316970.73
Subtotal of cash outflows from operating activities 287748323.68 313395613.72
Net cash flows from operating activities 54690606.20 63240650.93
II. Cash flows from investing activities:
Cash received from investments 630389.55 –
Cash received from investment income 850880.82 –
Net cash received from disposal of fixed assets intangible
assets and other long-term assets 15097.40 12091460.00
Net cash received from disposal of subsidiaries and other
business units – –
Cash received relating to other investing activities – –
Subtotal of cash inflows from investing activities 1496367.77 12091460.00
Cash paid for purchase of fixed assets intangible assets and
other long-term assets 16314508.22 –
Cash paid for investment – –
Net cash paid for acquisition of subsidiaries and other
business units – –
Cash paid relating to other investing activities – –
Subtotal of cash outflows from investing activities 16314508.22 –
Net cash flows from investing activities -14818140.45 12091460.00
SHANDONG CHENMING PAPER HOLDINGS LIMITED 77
INTERIM REPORT 2026VIII Financial Report
II. Financial Statements (Cont’d)
6. Cash flow statement of the parent company (Cont’d)
Item First half of 2026 First half of 2025
III. Cash flows from financing activities:
Cash received from investments – –
Cash received from borrowings 7661650381.00 5450190140.83
Cash received relating to other financing activities – 1344321473.63
Subtotal of cash inflows from financing activities 7661650381.00 6794511614.46
Cash repayments of amounts borrowed 7553506406.10 6722974722.24
Cash paid for dividend and profit distribution or interest
payment 145787996.80 143049448.89
Cash paid relating to other financing activities 2300000.00 3710625.20
Subtotal of cash outflows from financing activities 7701594402.90 6869734796.33
Net cash flows from financing activities -39944021.90 -75223181.87
IV. Effect of foreign exchange rate changes on cash and cash
equivalents -10924.35 -24936.16
V. Net increase in cash and cash equivalents -82480.50 83992.90
Add: Balance of cash and cash equivalents as at the beginning
of the period 91976.07 268719.28
VI. Balance of cash and cash equivalents as at the end of the
period 9495.57 352712.18
78 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
SHANDONG CHENMING PAPER HOLDINGS LIMITED 79
INTERIM REPORT 2026
II. Financial Statements (Cont’d)
7. Consolidated statement of changes in owners’ equity
Amount for the period
Unit: RMB
First half of 2026
Equity attributable to owners of the parent company
Other equity instruments Other
Preference Perpetual Less: comprehensive Special Surplus General risk Total owners’
Item Share capital shares bonds Others Capital reserves Treasury shares income reserves reserves provisions Retained profit Others Subtotal Minority interest equity
I. Balance as at the end of the
prior year 2934556200.00 – – – 5241279229.79 – -915388419.92 38543270.36 1212009109.97 68048751.10 -7675212549.17 – 903835592.13 1909341231.35 2813176823.48
II. Balance as at the beginning
of the year 2934556200.00 – – – 5241279229.79 – -915388419.92 38543270.36 1212009109.97 68048751.10 -7675212549.17 – 903835592.13 1909341231.35 2813176823.48
III. Changes in the year
(“-” denotes decrease) – – – – 15554046.33 – 20035932.11 2855210.23 – – -786475084.18 – -748029895.51 -71680579.21 -819710474.72
(i) Total comprehensive
income – – – – – – 20035932.11 – – – -786475084.18 – -766439152.07 -132388388.72 -898827540.79
(ii) Capital paid in and
reduced by shareholders
(or owners) – – – – 15554046.33 – – – – – – – 15554046.33 60707809.51 76261855.84
1. Ordinary shares paid
by shareholders – – – – 15554046.33 – – – – – – – 15554046.33 60707809.51 76261855.84
2. Amount of share-
based payments
recognised in
shareholders’ equity – – – – – – – – – – – – – – –
3. Others – – – – – – – – – – – – – – –
(iii) Profit distribution – – – – – – – – – – – – – – –
(iv) Transfer within
shareholders’ equity – – – – – – – – – – – – – – –
(v) Special reserves – – – – – – – 2855210.23 – – – – 2855210.23 – 2855210.23
1. Withdrawn in the
period – – – – – – – 3125587.98 – – – – 3125587.98 – 3125587.98
2. Used in the period
(denotes in “-”) – – – – – – – -270377.75 – – – – -270377.75 – -270377.75
(vi) Others – – – – – – – – – – – – –
IV. Balance as at the end of the
year 2934556200.00 – – – 5256833276.12 -895352487.81 41398480.59 1212009109.97 68048751.10 -8461687633.35 – 155805696.62 1837660652.14 1993466348.76VIII Financial Report
80 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026
II. Financial Statements (Cont’d)
7. Consolidated statement of changes in owners’ equity (Cont’d)
Amounts for the prior year
Unit: RMB
First half of 2025
Equity attributable to owners of the parent company
Other equity instruments Other
Preference Perpetual Capital Less: comprehensive Special Surplus General risk Total owners’
Item Share capital shares bonds Others reserves Treasury shares income reserves reserves provisions Retained profit Subtotal Minority interest equity
I. Balance as at the end of the prior year 2934556200.00 – – – 5207678622.75 – -913708670.15 26800491.53 1212009109.97 80950584.11 607818020.70 9156104358.91 3679666266.24 12835770625.15
II. Balance as at the beginning of the year 2934556200.00 – – – 5207678622.75 – -913708670.15 26800491.53 1212009109.97 80950584.11 607818020.70 9156104358.91 3679666266.24 12835770625.15
III. Changes in the year (“-” denotes decrease) – – – – 33600607.04 – -16019923.39 3031364.33 – – -3857953190.56 -3837341142.58 -1303375431.28 -5140716573.86
(i) Total comprehensive income – – – – – – -16019923.39 – – – -3857953190.56 -3873973113.95 -326717004.63 -4200690118.58
(ii) Capital paid in and reduced by shareholders
(or owners) – – – – 33600607.04 – – – – – – 33600607.04 -978682819.59 -945082212.55
1. Ordinary shares paid by shareholders – – – – – – – – – – – – -978682819.59 -978682819.59
2. Amount of share-based payments
recognised in shareholders’ equity – – – – – – – – – – – – – –
3. Others – – – – 33600607.04 – – – – – – 33600607.04 – 33600607.04
(iii) Profit distribution – – – – – – – – – – – – – –
(iv) Transfer within shareholders’ equity – – – – – – – – – – – – 2024392.94 2024392.94
(v) Special reserves – – – – – – – 3031364.33 – – – 3031364.33 – 3031364.33
1. Withdrawn in the period – – – – – – – 3633487.86 – – – 3633487.86 – 3633487.86
2. Used in the period (denotes in “-”) – – – – – – – -602123.53 – – – -602123.53 – -602123.53
(vi) Others – – – – – – – – – – – – – –
IV. Balance as at the end of the year 2934556200.00 – – – 5241279229.79 – -929728593.54 29831855.86 1212009109.97 80950584.11 -3250135169.86 5318763216.33 2376290834.96 7695054051.29VIII Financial Report
SHANDONG CHENMING PAPER HOLDINGS LIMITED 81
INTERIM REPORT 2026
II. Financial Statements (Cont’d)
8. Statement of changes in owners’ equity of the parent company
Amount for the period
Unit: RMB
First half of 2026
Other equity instruments Other
Preference Perpetual Less: comprehensive Special Surplus Total owners’
Item Share capital shares bonds Others Capital reserves Treasury shares income reserves reserves Retained profit Others equity
I. Balance as at the end of the prior year 2934556200.00 – – – 5005865917.53 – – 9034647.37 1199819528.06 2046778002.27 – 11196054295.23
II. Balance as at the beginning of the year 2934556200.00 – – – 5005865917.53 – – 9034647.37 1199819528.06 2046778002.27 – 11196054295.23
III. Changes in the year (“-” denotes decrease) – – – – – – – 439553.05 – -264345513.15 – -263905960.10
(i) Total comprehensive income – – – – – – – – – -264345513.15 – -264345513.15
(ii) Capital paid in and reduced by
shareholders (or owners) – – – – – – – – – – – –
1. Amount of share-based payments
recognised in shareholders’ equity – – – – – – – – – – – –
2. Others – – – – – – – – – – – –
(iii) Special reserves – – – – – – – 439553.05 – – – 439553.05
1. Withdrawn in the period – – – – – – – 541895.40 – – – 541895.40
2. Used in the period (denotes in “-”) – – – – – – – -102342.35 – – – -102342.35
IV. Balance as at the end of the year 2934556200.00 – – – 5005865917.53 – – 9474200.42 1199819528.06 1782432489.12 – 10932148335.13VIII Financial Report
82 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026
II. Financial Statements (Cont’d)
8. Statement of changes in owners’ equity of the parent company (Cont’d)
Amounts for the prior year
Unit: RMB
First half of 2025
Other equity instruments Other
Preference Perpetual Less: comprehensive Special Surplus Total owners’
Item Share capital shares bonds Others Capital reserves Treasury shares income reserves reserves Retained profit equity
I. Balance as at the end of the prior year 2934556200.00 – – – 5032163419.19 – – 7405266.87 1199819528.06 2471033182.58 11644977596.70
II. Balance as at the beginning of the year 2934556200.00 – – – 5032163419.19 – – 7405266.87 1199819528.06 2471033182.58 11644977596.70
III. Changes in the year (“-” denotes decrease) – – – – -26297501.66 – – – – -102402798.02 -128700299.68
(i) Total comprehensive income – – – – – – – – – -102402798.02 -102402798.02
(ii) Capital paid in and reduced by shareholders (or
owners) – – – – -26297501.66 – – – – – -26297501.66
1. Amount of share-based payments recognised
in shareholders’ equity – – – – – – – – – – –
2. Others – – – – -26297501.66 – – – – – -26297501.66
(iii) Special reserves – – – – – – – – – – –
1. Withdrawn in the period – – – – – – – – – – –
2. Used in the period (denotes in “-”) – – – – – – – – – – –
IV. Balance as at the end of the year 2934556200.00 – – – 5005865917.53 – – 7405266.87 1199819528.06 2368630384.56 11516277297.02VIII Financial Report
III. General Information of the Company
1. Company overview
The predecessor of Shandong Chenming Paper Holdings Limited (hereinafter referred to as the “Company” a joint-
stock company incorporated in Shouguang City Shandong Province) was Shandong Shouguang Paper Mill Corporation
which was changed as a joint stock company with limited liability through offering to specific investors in May 1993. In
December 1996 with approval by Lu Gai Zi [1996] No. 270 issued by the People’s Government of Shandong Province
and Zheng Wei [1996] No. 59 of the Securities Committee of the State Council the Company was changed as a joint
stock company with limited liability established by share offer. The Company’s headquarters is located at No. 2199
Nongsheng East Road Shouguang City Shandong Province.In May 1997 with approval by Zheng Wei Fa [1997] No. 26 issued by the Securities Committee of the State Council
the Company issued 115000000 domestic listed foreign shares (B shares) under public offering which were listed and
traded on Shenzhen Stock Exchange from 26 May 1997.In September 2000 with approval by Zheng Jian Gong Si Zi [2000] No. 151 issued by the China Securities Regulatory
Commission the Company issued additional 70000000 RMB ordinary shares (A shares) which were listed and traded
on Shenzhen Stock Exchange from 20 November 2000.In June 2008 with approval by the Stock Exchange of Hong Kong Limited the Company issued 355700000 H shares.At the same time 35570000 H shares were allocated to the National Council for Social Security Fund by our relevant
state-owned shareholder and converted into overseas listed foreign shares (H shares) for the purpose of reducing the
number of state-owned shares. The additionally issued H shares were listed and traded on Hong Kong Stock Exchange
on 18 June 2008.As at 30 June 2026 the total share capital of the Company was 2934556200 shares. For details please refer to Note
VII. 39.Principal business activities: the Company is principally engaged in among other things processing and sale of paper
products (including machine-made paper and paper board) papermaking raw materials machinery and chemicals;
generation and sale of electric power and thermal power; forestry saplings growing and sale investment properties and
property service.The financial statements and notes thereto were approved at the fifth meeting of the eleventh session of the board of
directors of the Company (the “Board”) on 28 August 2026.
2. Scope of consolidation
Subsidiaries of the Company included in the scope of consolidation in 2026 totalled 70. For details please refer to
Note X “Interest in other entities”. The scope of consolidation of the Company during the year had no new companiesincluded and two companies less compared to the prior year. For details please refer to Note IX “Change in scope ofconsolidation”.SHANDONG CHENMING PAPER HOLDINGS LIMITED 83
INTERIM REPORT 2026VIII Financial Report
IV. Basis of Preparation of the Financial Statements
1. Basis of preparation
These financial statements are prepared in accordance with the accounting standards for business enterprises the
application guidelines thereof interpretations and other related rules (collectively referred to as “ASBEs”) promulgated
by the Ministry of Finance. In addition the Company also discloses relevant financial information in accordance withthe “Preparation Rules for Information Disclosure by Companies Offering Securities to the Public No. 15 – GeneralProvisions on Financial Reports” (revised in 2023) of the CSRC.The financial statements are presented on a going concern.The Company’s financial statements have been prepared on an accrual basis. Except for certain financial instruments
the financial statements are prepared under the historical cost convention. In the event that impairment of assets
occurs a provision for impairment is made accordingly in accordance with the relevant regulations.
2. Going concern
No facts or circumstances comprise a material uncertainty about the Company’s going concern basis within 12 months
since the end of the reporting period.V. Significant Accounting Policies and Accounting Estimates
Specific accounting policies and accounting estimates are indicated as follows:
The Company and its subsidiaries are engaged in the business of machine-made paper electricity and heat paper chemicals
property services etc. The Company and its subsidiaries have formulated a number of specific accounting policies and
accounting estimates for transactions and matters such as revenue recognition determination of performance progress and
R&D expenses based on their actual production and operation characteristics in accordance with the requirements of the
relevant ASBEs. For details please refer to the descriptions under Note V. 27 “Revenue”. For an explanation of the criticalaccounting judgments and estimates made by the management please refer to Note V. 35 “Critical accounting judgments andestimates”.
1. Statement of compliance with the Accounting Standards for Business Enterprises
These financial statements have been prepared in conformity with the ASBEs which truly and fully reflect the financial
position of the consolidated entity and the Company as at 30 June 2026 and relevant information such as the operating
results and cash flows of the consolidated entity and the Company for 2026.
2. Accounting period
The accounting period of the Company is from 1 January to 31 December of each calendar year.
3. Operating cycle
The operating cycle of the Company lasts for 12 months.
84 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
4. Functional currency
The functional currency of the Company and its domestic subsidiaries is Renminbi (“RMB”). Overseas subsidiaries of the
Company recognise U.S. dollar (“USD” or “US$”) Japanese yen (“JPY”) Euro (“EUR”) and South Korean Won (“KRW”)
as their respective functional currency according to the general economic environment in which these subsidiaries
operate. The Company prepares the financial statements in RMB.
5. Determination method and selection basis of importance standards
√ Applicable □ Not applicable
Item Importance standards
Significant accounts receivable with single provision Overdue accounts receivable and the amount of a single
for bad debt provisions receivable exceeds 0.5% of total assets
Write-off of significant accounts receivable during The amount of a single write-off exceeds 0.5% of net assets
the period
Significant prepayments aged more than one year Aged more than one year and the single amount exceeds 0.5% of
total assets
Significant receipts in advance aged more than one Aged more than one year and the single amount exceeds 0.5% of
year total assets
Significant other payables aged more than one year Aged more than one year and the single amount exceeds 0.5% of
total assets
Significant accounts payable aged more than one Aged more than one year and the single amount exceeds 0.5% of
year total assets
Bad debt provisions with significant amounts Individually identified or classified into the third stage the amount
reversed or recovered during the current period transferred or recovered exceeds 0.5% of total assets
Significant construction in progress Projects with budgets exceeding 0.5% of total assets
Significant non-wholly owned subsidiaries The total assets of the subsidiary exceed 10% of the Company
on a consolidated basis and the revenue or pre-tax profit
exceeds 10%
Significant investing activities Investment amount exceeds 0.5% of total assets
Significant joint ventures and associates The joint venture or associate operates normally with an
accounting amount exceeding 0.5% of total assets
Significant transfers of assets The transaction amount exceeds 0.5% of total assets
Significant pending litigations The subject matter amount of the litigation exceeds RMB10
million
Significant debt restructuring The restructuring amount exceeds 0.5% of total assets
SHANDONG CHENMING PAPER HOLDINGS LIMITED 85
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
6. Accounting treatment of business combinations under common control and not under common control
(1) Business combination under common control
For the business combination involving entities under common control the assets and liabilities of the party being
merged that are obtained in the business combination by the absorbing party shall be measured at the carrying
amounts as recorded by the ultimate controlling party in the consolidated financial statements at the combination
date. The difference between the carrying amount of the consideration paid for the combination and the carrying
amount of the net assets obtained in the combination is charged to the capital reserve. If the capital reserve is not
sufficient to absorb the difference any excess shall be adjusted against retained earnings.Business combinations involving entities under common control and achieved in stages
The assets and liabilities of the party being merged that are obtained at the combination by the absorbing party
shall be measured at the carrying value as recorded by the ultimate controlling party in the consolidated financial
statements at combination date. The difference between the sum of the carrying value from original shareholding
portion and the new investment cost incurred at combination date and the carrying value of net assets obtained
at combination date shall be adjusted to capital reserve if the balance of capital reserve is not sufficient to absorb
the differences any excess is adjusted to retained earnings. The long-term investment prior to the absorbing party
obtaining the control of the party being merged the recognised profit or loss comprehensive income and other
change of owners’ equity at the closer date of the acquisition date and combination date under common control
shall separately offset the opening balance of retained earnings and profit or loss during comparative statements.
(2) Business combination not under common control
For business combinations involving entities not under common control the cost for each combination is
measured at the aggregate fair value at acquisition date of assets given liabilities incurred or assumed and
equity securities issued by the acquirer in exchange for control of the acquiree. At acquisition date the acquired
assets liabilities or contingent liabilities of acquiree are measured at their fair value.
86 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
6. Accounting treatment of business combinations under common control and not under common control
(Cont’d)
(2) Business combination not under common control (Cont’d)
Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net
assets the difference is recognised as goodwill and subsequently measured on the basis of its cost minus
accumulative impairment provision; Where the cost of combination is less than the acquirer’s interest in the fair
value of the acquiree’s identifiable net assets the difference is recognised in profit or loss for the current period
after reassessment.Business combinations involving entities not under common control and achieved in stages
The combination cost is the sum of consideration paid at acquisition date and fair value of the acquiree’s equity
investment held prior to acquisition date. The cost of equity of the acquiree held prior to acquisition date shall be
remeasured at the fair value at acquisition date and the difference between the fair value and carrying amount
shall be recognised as investment income or loss for the current period. Other comprehensive income and
changes of other owners’ equity related with acquiree’s equity held prior to acquisition date shall be transferred
to investment profit or loss for current period at acquisition date except for the other comprehensive income
incurred by the changes of net assets or net liabilities due to the remeasurement of defined benefit plans and
the other comprehensive income related to investments in non-trading equity instruments that were previously
designated as at fair value through other comprehensive income.
(3) Transaction fees attribution during business combination
The audit legal valuation advisory and other intermediary fees and other relevant administrative expenses arising
from business combinations are recognised in profit or loss when incurred. Transaction costs of equity or debt
securities issued as the considerations of business combination are included in the initial recognition amounts.
7. Judgment criteria for control and preparation of consolidated financial statements
(1) Judgment criteria for control
The scope of consolidation of the consolidated financial statements is determined on the basis of control. The
term “control” refers to the fact that the Company has power over the investee and is entitled to variable returns
from its involvement with the investee and the ability to use its power over the investee to affect the amount of
those returns. The Company will reassess when changes in relevant facts and circumstances result in changes in
the relevant elements involved in the definition of control.When judging whether to include a structured entity into the scope of consolidation the Company
comprehensively considers all facts and circumstances including assessing the purpose and design of the
structured entity identifying the types of variable returns and assessing whether to control the structured entity
on the basis of whether it bears part or all of the return variability by participating in its related activities.SHANDONG CHENMING PAPER HOLDINGS LIMITED 87
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
7. Judgment criteria for control and preparation of consolidated financial statements (Cont’d)
(2) Basis for preparation of the consolidated financial statements
The consolidated financial statements are prepared by the Company based on the financial statements of the
Company and its subsidiaries and other relevant information. In preparing the consolidated financial statements
the accounting policies and accounting periods of the Company and its subsidiaries shall be consistent and intra-
company significant transactions and balances are eliminated.A subsidiary and its business acquired through a business combination involving entities under common control
during the reporting period shall be included in the scope of the consolidation of the Company from the date
of being controlled by the ultimate controlling party and its operating results and cash flows from the date of
being controlled by the ultimate controlling party are included in the consolidated income statement and the
consolidated cash flow statement respectively.For a subsidiary and its business acquired through a business combination involving entities not under common
control during the reporting period its income expenses and profits are included in the consolidated income
statement and cash flows are included in the consolidated cash flow statement from the acquisition date to the
end of the reporting period.The shareholders’ equity of the subsidiaries that is not attributable to the Company is presented under
shareholders’ equity in the consolidated balance sheet as minority interest. The portion of net profit or loss of
subsidiaries for the period attributable to minority interest is presented in the consolidated income statement
under the “profit or loss of minority interest”. When the amount of loss attributable to the minority shareholders of
a subsidiary exceeds the minority shareholders’ portion of the opening balance of owners’ equity of the subsidiary
the excess amount shall be allocated against minority interest.
(3) Acquisition of non-controlling interests in subsidiaries
The difference between the long-term equity investments costs acquired by the acquisition of non-controlling
interests and the share of the net assets from subsidiaries from the date of acquisition or the date of combination
based on the new shareholding ratio as well as the difference between the proceeds from the partial disposal
of the equity investment without losing control over its subsidiary and the disposal of the long-term equity
investment corresponding to the share of the net assets of the subsidiaries from the date of acquisition or the date
of combination is adjusted to the capital reserve. If the capital reserve is not sufficient any excess is adjusted to
retained earnings.
(4) Accounting treatment for loss of control over subsidiaries
For the loss of control over a subsidiary due to disposal of a portion of the equity investment or other reasons
the remaining equity is remeasured at fair value on the date when the control is lost. The difference arising from
the sum of consideration received for disposal of equity interest and the fair value of remaining equity interest
over the sum of the share of the carrying amount of net assets of the former subsidiary calculated continuously
from the purchase date based on the shareholding percentage before disposal and the goodwill is recognised as
investment income in the period when the control is lost.Other comprehensive income related to equity investment in the former subsidiary shall be accounted for on the
same basis as the former subsidiary’s direct disposal of relevant assets or liabilities when the control is lost. Other
changes in owners’ equity related to the former subsidiary that are accounted for using the equity method shall be
transferred to current profit or loss at the time when the control is lost.
88 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
8. Classification of joint arrangements and accounting treatment for joint operations
A joint arrangement refers to an arrangement of two or more parties have joint control. The joint arrangements of the
Company comprise joint operations and joint ventures.
(1) Joint operations
Joint operations refer to a joint arrangement during which the Company is entitled to relevant assets and
obligations of this arrangement.The Company recognises the following items in relation to its interest in a joint operation and accounts for them in
accordance with the relevant ASBEs:
A. the assets held solely by it and assets held jointly according to its share;
B. the liabilities assumed solely by it and liabilities assumed jointly according to its share;
C. the revenue from sale of output from joint operations;
D. the revenue from sale of output from joint operations according to its share;
E. the fees solely incurred by it and fees incurred from joint operations according to its share.
(2) Joint ventures
Joint ventures refer to a joint arrangement during which the Company only is entitled to net assets of this
arrangement.The Company accounts for its investments in joint ventures in accordance with the requirements relating to
accounting treatment using equity method for long-term equity investments.
9. Standards for recognising cash and cash equivalents
Cash refers to cash on hand and deposits readily available for payment purpose. Cash equivalents refer to short-term
and highly liquid investments held by the Company which are readily convertible into known amount of cash and which
are subject to insignificant risk of value change.SHANDONG CHENMING PAPER HOLDINGS LIMITED 89
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
10. Foreign currency operations and translation of statements denominated in foreign currency
(1) Foreign currency operations
The foreign currency operations of the Company are translated into the functional currency at the prevailing spot
exchange rate on the date of exchange.On the balance sheet date foreign currency monetary items shall be translated at the spot exchange rate on
the balance sheet date. The exchange difference arising from the difference between the spot exchange rate
on the balance sheet date and the spot exchange rate upon initial recognition or the last balance sheet date will
be recognised in profit or loss for the period. The foreign currency non-monetary items measured at historical
cost shall still be measured by the functional currency translated at the spot exchange rate on the date of the
transaction. Foreign currency non-monetary items measured at fair value are translated at the spot exchange
rate on the date of determination of the fair value. The difference between the amounts of the functional currency
before and after the translation will be recognised in profit or loss or other comprehensive income for the period
based on the nature of the non-monetary items.
(2) Translation of financial statements denominated in foreign currency
When translating the financial statements denominated in foreign currency of overseas subsidiaries assets and
liabilities on the balance sheet are translated at the spot exchange rate prevailing at the balance sheet date;
owner’s equity items except for “retained profit” are translated at the spot exchange rates at the dates on which
such items arose.Income and expenses items in the income statement are translated at the average exchange rate for the year.All items in the cash flow statements shall be translated at the average exchange rate for the year. Effects arisingfrom changes of exchange rate on cash shall be presented separately as the “effect of foreign exchange ratechanges on cash and cash equivalents” item in the cash flow statements.The differences arising from translation of financial statements shall be included in the “other comprehensiveincome” item in owners’ equity in the balance sheet.On disposal of foreign operations and loss of control exchange differences arising from the translation of financial
statements denominated in foreign currencies related to the disposed foreign operations which has been included
in owners’ equity in the balance sheet shall be transferred to profit or loss in whole or in proportionate share in the
period in which the disposal took place.
90 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
11. Financial instruments
A financial instrument is a contract that gives rise to a financial asset of one party and a financial liability or equity
instrument of another party.
(1) Recognition and derecognition of financial instruments
Financial asset or financial liability will be recognised when the Company became one of the parties under a
financial instrument contract.Financial asset that satisfied any of the following criteria shall be derecognised:
* the contract right to receive the cash flows of the financial asset has terminated;
* the financial asset has been transferred and meets the derecognition criteria for the transfer of financial
asset as described below.A financial liability (or a part thereof) is derecognised only when the present obligation is discharged in full or in
part. If an agreement is entered between the Company (debtor) and a creditor to replace the existing financial
liabilities with new financial liabilities and the contractual terms of the new financial liabilities are substantially
different from those of the existing financial liabilities the existing financial liabilities shall be derecognised and the
new financial liabilities shall be recognised.Conventionally traded financial assets shall be recognised and derecognised at the trading date.
(2) Classification and measurement of financial assets
The Company classifies the financial assets according to the business model for managing the financial assets
and characteristics of the contractual cash flows as follows: financial assets measured at amortised cost financial
assets measured at fair value through other comprehensive income and financial assets measured at fair value
through profit or loss.Financial assets are measured at fair value upon initial recognition. For financial assets measured at fair value
through profit or loss relevant transaction costs are directly recognised in profit or loss for the current period.For other categories of financial assets relevant transaction costs are included in the amount initially recognised.Accounts receivable arising from sales of goods or rendering services without significant financing component
are initially recognised based on the transaction price expected to be entitled by the Company.Financial assets measured at amortised cost
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated
at fair value through profit or loss:
The Company’s business model for managing such financial assets is to collect contractual cash flows;
The contractual terms of the financial asset stipulate that cash flows generated on specific dates are solely
payments of principal and interest on the principal amount outstanding.Subsequent to initial recognition such financial assets are measured at amortised cost using the effective interest
method. A gain or loss on a financial asset that is measured at amortised cost and is not part of a hedging
relationship shall be recognised in profit or loss for the current period when the financial asset is derecognised
amortised using the effective interest method or with impairment recognised.SHANDONG CHENMING PAPER HOLDINGS LIMITED 91
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
11. Financial instruments (Cont’d)
(2) Classification and measurement of financial assets (Cont’d)
Financial assets measured at fair value through other comprehensive income
A financial asset is classified as measured at fair value through other comprehensive income if it meets both of the
following conditions and is not designated at fair value through profit or loss:
The Company’s business model for managing such financial assets is achieved both by collecting collect
contractual cash flows and selling such financial assets;
The contractual terms of the financial asset stipulate that cash flows generated on specific dates are solely
payments of principal and interest on the principal amount outstanding.Subsequent to initial recognition such financial assets are subsequently measured at fair value. Interest calculated
using the effective interest method impairment losses or gains and foreign exchange gains and losses are
recognised in profit or loss for the current period and other gains or losses are recognised in other comprehensive
income. On derecognition the cumulative gain or loss previously recognised in other comprehensive income is
reclassified from other comprehensive income to profit or loss.Financial assets measured at fair value through profit or loss
The Company classifies the financial assets other than those measured at amortised cost and measured at fair
value through other comprehensive income as financial assets measured at fair value through profit or loss. Upon
initial recognition the Company irrevocably designates certain financial assets that are required to be measured
at amortised cost or at fair value through other comprehensive income as financial assets measured at fair value
through profit or loss in order to eliminate or significantly reduce accounting mismatch.Upon initial recognition such financial assets are measured at fair value. Except for those held for hedging
purposes gains or losses (including interests and dividend income) arising from such financial assets are
recognised in the profit or loss for the current period.The business model for managing financial assets refers to how the Company manages its financial assets in
order to generate cash flows. That is the Company’s business model determines whether cash flows will result
from collecting contractual cash flows selling financial assets or both. The Company determines the business
model for managing financial assets on the basis of objective facts and specific business objectives for managing
financial assets determined by key management personnel.The Company assesses the characteristics of the contractual cash flows of financial assets to determine whether
the contractual cash flows generated by the relevant financial assets on a specific date are solely payments of
principal and interest on the principal amount outstanding. The principal refers to the fair value of the financial
assets at the initial recognition. Interest includes consideration for the time value of money for the credit risk
associated with the principal amount outstanding during a particular period of time and for other basic lending
risks costs and profits. In addition the Company evaluates the contractual terms that may result in a change in
the time distribution or amount of contractual cash flows from a financial asset to determine whether it meets the
requirements of the above contractual cash flow characteristics.
92 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
11. Financial instruments (Cont’d)
(2) Classification and measurement of financial assets (Cont’d)
Financial assets measured at fair value through profit or loss (Cont’d)
All affected financial assets are reclassified on the first day of the first reporting period following the change in
the business model where the Company changes its business model for managing financial assets; otherwise
financial assets shall not be reclassified after initial recognition.
(3) Classification and measurement of financial liabilities
At initial recognition financial liabilities of the Company are classified as financial liabilities measured at fair value
through profit or loss and financial liabilities measured at amortised cost. For financial liabilities not classified
as measured at fair value through profit or loss relevant transaction costs are included in the amount initially
recognised.Financial liabilities measured at fair value through profit or loss
Financial liabilities measured at fair value through profit or loss comprise held-for-trading financial liabilities and
financial liabilities designated at fair value through profit or loss upon initial recognition. Such financial liabilities
are subsequently measured at fair value and the gains or losses from the change in fair value and the dividend or
interest expenses related to the financial liabilities are included in the profit or loss of the current period.Financial liabilities measured at amortised cost
Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method
and the gains or losses arising from derecognition or amortisation are recognised in profit or loss for the current
period.Financial guarantee contracts
Financial guarantee contracts that are not designated as financial liabilities measured at fair value through profit
or loss are initially measured at fair value. Subsequently they are measured at the higher of the loss allowance
determined using the expected credit loss model and the balance of the initial recognition amount less cumulative
amortisation.Classification between financial liabilities and equity instruments
A financial liability is a liability if:
* it has a contractual obligation to pay in cash or other financial assets to other parties.* it has a contractual obligation to exchange financial assets or financial liabilities under potential adverse
condition with other parties.* it is a non-derivative instrument contract which will or may be settled with the entity’s own equity
instruments and the entity will deliver a variable number of its own equity instruments according to such
contract.* it is a derivative instrument contract which will or may be settled with the entity’s own equity instruments
except for a derivative instrument contract that exchanges a fixed amount of cash or other financial asset
with a fixed number of its own equity instruments.SHANDONG CHENMING PAPER HOLDINGS LIMITED 93
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
11. Financial instruments (Cont’d)
(3) Classification and measurement of financial liabilities (Cont’d)
Classification between financial liabilities and equity instruments (Cont’d)
Equity instruments are any contract that evidences a residual interest in the assets of an entity after deducting all
of its liabilities.If the Company cannot unconditionally avoid the performance of a contractual obligation by paying cash or
delivering other financial assets the contractual obligation meets the definition of financial liabilities.Where a financial instrument must or may be settled with the Company’s own equity instruments the Company’s
own equity instruments used to settle such instrument should be considered as to whether it is as a substitute
for cash or other financial assets or for the purpose of enabling the holder of the instrument to be entitled to the
remaining interest in the assets of the issuer after deducting all of its liabilities. For the former it is a financial
liability of the Company; for the latter it is the Company’s own equity instruments.
(4) Fair value of financial instruments
The methods for determining the fair value of the financial assets or financial liabilities are set out in Note V. 12.
(5) Impairment of financial assets
The Company makes provision for impairment based on expected credit losses (ECLs) on the following items:
Financial assets measured at amortised cost;
Receivables and investment in debt instruments measured at fair value through other comprehensive income;
Contract assets as defined in the Accounting Standards for Business Enterprises No. 14 – Revenue;
Lease receivables;
Financial guarantee contracts (except those measured at fair value through profit or loss or formed by continuing
involvement of transferred financial assets or the transfer does not qualify for derecognition).
94 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
11. Financial instruments (Cont’d)
(5) Impairment of financial assets (Cont’d)
Measurement of ECLs
ECLs are the weighted average of credit losses of financial instruments weighted by the risk of default. Credit
losses refer to the difference between all contractual cash flows receivable according to the contract and
discounted according to the original effective interest rate and all cash flows expected to be received i.e. the
present value of all cash shortages.The Company takes into account reasonable and well-founded information such as past events current conditions
and forecasts of future economic conditions and calculates the probability-weighted amount of the present value
of the difference between the cash flows receivable from the contract and the cash flows expected to be received
weighted by the risk of default.The Company measures ECLs of financial instruments at different stages. If the credit risk of the financial
instrument did not increase significantly upon initial recognition it is at the first stage and the Company makes
provision for impairment based on the ECLs within the next 12 months; if the credit risk of a financial instrument
increased significantly upon initial recognition but has not yet incurred credit impairment it is at the second stage
and the Company makes provision for impairment based on the lifetime ECLs of the instrument; if the financial
instrument incurred credit impairment upon initial recognition it is at the third stage and the Company makes
provision for impairment based on the lifetime ECLs of the instrument.For financial instruments with low credit risk on the balance sheet date the Company assumes that the credit
risk did not increase significantly upon initial recognition and makes provision for impairment based on the ECLs
within the next 12 months.Lifetime ECLs represent the ECLs resulting from all possible default events over the expected life of a financial
instrument. The 12-month ECLs are the ECLs resulting from possible default events on a financial instrument
within 12 months (or a shorter period if the expected life of the financial instrument is less than 12 months) after
the balance sheet date and is a portion of lifetime ECLs.The maximum period to be considered when estimating ECLs is the maximum contractual period over which the
Company is exposed to credit risk including renewal options.For the financial instruments at the first and second stages and with low credit risks the Company calculates
the interest income based on the book balance and the effective interest rate before deducting the impairment
provisions. For financial instruments at the third stage interest income is calculated based on the amortised cost
after deducting impairment provisions made from the book balance and the effective interest rate.For receivables such as bills receivable accounts receivable accounts receivable financing other receivables
and contract assets if the credit risk characteristics of a customer are significantly different from other customers
in the portfolio or the credit risk characteristics of such customer change significantly the Company will make a
separate provision for bad debts for such receivables. In addition to the receivables for which bad debt provisions
are made individually the Company divides the receivables into portfolios based on credit risk characteristics and
calculates bad debt provisions on a combined basis.SHANDONG CHENMING PAPER HOLDINGS LIMITED 95
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
11. Financial instruments (Cont’d)
(5) Impairment of financial assets (Cont’d)
Bills receivable and accounts receivable
For bills receivable and accounts receivable regardless of whether there is a significant financing component the
Company always makes provision for impairment at an amount equal to lifetime ECLs.When the Company is unable to assess the information of ECLs for an individual financial asset or contract assets
at a reasonable cost it classifies bills receivable accounts receivable and contract assets into portfolios based on
the credit risk characteristics and calculates the ECLs on a portfolio basis. The basis for determining the portfolios
is as follows:
A. Bills receivable
Bills receivable portfolio 1: Bank acceptance bills
Bills receivable portfolio 2: Commercial acceptance bills
B. Accounts receivable
Accounts receivable portfolio 1: Due from related party customers
Accounts receivable portfolio 2: Due from non-related party customers
Accounts receivable portfolio 3: Factoring receivables
For bills receivable classified as a portfolio the Company refers to the historical credit loss experience combined
with the current situation and the forecast of future economic conditions to calculate the ECLs based on default
risk exposure and lifetime ECL rate.For accounts receivable classified as a portfolio the Company refers to the historical credit loss experience
combined with the current situation and the forecast of future economic conditions to prepare a comparison
table of the ageing of accounts receivable and the lifetime ECL rate to calculate the ECLs. The aging of accounts
receivable is calculated from the date of recognition.Other receivables
The Company classifies other receivables into portfolios based on credit risk characteristics and calculates the
ECLs on a portfolio basis. The basis for determining the portfolios is as follows:
Other receivables portfolio 1: Amount due from government authorities
Other receivables portfolio 2: Amount due from related parties
Other receivables portfolio 3: Other receivables
For other receivables classified as a portfolio the Company calculates the ECLs based on default risk exposure
and the ECL rate over the next 12 months or the entire lifetime. For other receivables grouped by aging the aging
is calculated from the date of recognition.
96 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
11. Financial instruments (Cont’d)
(5) Impairment of financial assets (Cont’d)
Long-term receivables
The Company’s long-term receivables include finance lease receivables warranty deposits receivable and
instalment receivable for asset transfers.The Company classifies the finance lease receivables warranty deposits receivable and instalment receivable for
asset transfers into portfolios based on the credit risk characteristics and calculates the ECLs on a portfolio basis.The basis for determining the portfolios is as follows:
A. Finance lease receivables
Finance lease receivables portfolio 1: Receivables not past due
Finance lease receivables portfolio 2: Overdue receivables
B. Other long-term receivables
Other long-term receivables portfolio 1: Warranty deposits receivable
Other long-term receivables portfolio 2: Sublease receivable for woodland
Other long-term receivables portfolio 3: Equity transfer receivables
Other long-term receivables portfolio 4: Debt transfer receivables
For finance lease receivables warranty deposits receivable and instalment receivable for asset transfers the
Company refers to the historical credit loss experience combined with the current situation and the forecast of
future economic conditions and calculates the ECLs based on default risk exposure and lifetime ECL rate.Except for those of finance lease receivables warranty deposits receivable and instalment receivable for asset
transfers the ECLs of other receivables and long-term receivables classified as a portfolio are measured based on
default risk exposure and ECL rate over the next 12 months or the entire lifetime.Debt investments and other debt investments
For debt investments and other debt investments the Company measures the ECLs based on the nature of the
investment the types of counterparty and risk exposure and default risk exposure and ECL rate within the next
12 months or the entire lifetime.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 97
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
11. Financial instruments (Cont’d)
(5) Impairment of financial assets (Cont’d)
Assessment of significant increase in credit risk
In assessing whether the credit risk of a financial instrument has increased significantly upon initial recognition the
Company compares the risk of default of the financial instrument at the balance sheet date with that at the date
of initial recognition to determine the relative change in risk of default within the expected lifetime of the financial
instrument.In determining whether the credit risk has increased significantly upon initial recognition the Company considers
reasonable and well-founded information including forward-looking information which can be obtained without
unnecessary extra costs or efforts. Information considered by the Company includes:
The debtor’s failure to make payments of principal and interest on their contractually due dates;
An actual or expected significant deterioration in a financial instrument’s external or internal credit rating (if any);
An actual or expected significant deterioration in the operating results of the debtor;
Existing or expected changes in the technological market economic or legal environment that have a significant
adverse effect on the debtor’s ability to meet its obligation to the Company.Depending on the nature of the financial instruments the Company assesses whether there has been a significant
increase in credit risk on either an individual basis or a collective basis. When the assessment is performed on a
collective basis the financial instruments are grouped based on their common credit risk characteristics such as
past due information and credit risk ratings.The Company determines that the credit risk on a financial asset has increased significantly if it is more than 30
days past due.Credit-impaired financial assets
At balance sheet date the Company assesses whether financial assets measured at amortised cost and debt
investments measured at fair value through other comprehensive income are credit-impaired. A financial asset is
credit-impaired when one or more events that have an adverse effect on the estimated future cash flows of the
financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable
events:
Significant financial difficulty of the issuer or debtor;
A breach of contract by the debtor such as a default or delinquency in interest or principal payments;
For economic or contractual reasons relating to the debtor’s financial difficulty the Company having granted to
the debtor a concession that would not otherwise consider;
It becoming probable that the debtor will enter bankruptcy or other financial reorganisation;
The disappearance of an active market for that financial asset because of financial difficulties of the issuer or
debtor.
98 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
11. Financial instruments (Cont’d)
(5) Impairment of financial assets (Cont’d)
Presentation of provisions for ECLs
ECLs are remeasured at each balance sheet date to reflect changes in the financial instrument’s credit risk upon
initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss in profit or loss for
the current period. For financial assets measured at amortised cost the provisions of impairment are deducted
from the carrying amount of the financial assets presented in the balance sheet; for debt investments at fair value
through other comprehensive income the Company makes provisions of impairment in other comprehensive
income without reducing the carrying amount of the financial asset.Write-offs
The book balance of a financial asset is directly written off to the extent that there is no realistic prospect of
recovery of the contractual cash flows of the financial asset (either partially or in full). Such write-off constitutes
derecognition of such financial asset. This is generally the case when the Company determines that the debtor
does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject
to the write-off. However financial assets that are written off could still be subject to enforcement activities in
order to comply with the Company’s procedures for recovery of amounts due.If a write-off of financial assets is subsequently recovered the recovery is credited to profit or loss in the period in
which the recovery occurs.
(6) Transfer of financial assets
Transfer of financial assets refers to the transfer or delivery of financial assets to another party other than the
issuer of such financial assets (the transferee).If the Company transfers substantially all the risks and rewards of ownership of the financial asset to the
transferee the financial asset shall be derecognised. If the Company retains substantially all the risks and rewards
of ownership of a financial asset the financial asset shall not be derecognised.If the Company neither transfers nor retains substantially all the risks and rewards of ownership of the financial
asset it accounts for the transaction as follows: if the Company does not retain control it derecognises the
financial asset and recognises any resulting assets or liabilities; if the control over the financial asset is not waived
the relevant financial asset is recognised according to the extent of its continuing involvement in the transferred
financial asset and the relevant liability is recognised accordingly.
(7) Offset of financial assets and financial liabilities
If the Company owns the legitimate rights of offsetting the recognised financial assets and financial liabilities
which are enforceable currently and the Company plans to realise the financial assets or to clear off the financial
liabilities on a net amount basis or simultaneously the net amount of financial assets and financial liabilities shall
be presented in the balance sheet upon offsetting. Otherwise financial assets and financial liabilities are presented
separately in the balance sheet without offsetting.SHANDONG CHENMING PAPER HOLDINGS LIMITED 99
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
12. Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.The Company measures the relevant asset and liability at fair value based on the presumption that the orderly
transaction to sell the asset or transfer the liability takes place either in the principal market for the relevant asset or
liability or in the absence of a principal market in the most advantageous market for relevant the asset or liability. The
principal or the most advantageous market must be a trading market accessible by the Company at the measurement
date. The Company adopts the presumption that market participants would use when pricing the asset or liability in their
best economic interest.If there exists an active market for a financial asset or financial liability the Company uses the quotation on the active
market as its fair value. If the market for a financial instrument is inactive the Company uses valuation technique to
recognise its fair value.Fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic
benefits by using the asset in its best use or by selling it to another market participant that would use the asset in its
best use.The Company adopts valuation techniques that are appropriate in the current circumstance and for which sufficient data
and other information are available prioritises the use of relevant observable inputs and uses unobservable inputs only
under the circumstances where such relevant observable inputs cannot be obtained or practicably obtained.Assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the
fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole. Level 1:
based on quoted prices (unadjusted) in active markets for identical assets or liabilities obtainable at the measurement
date. Level 2: observable inputs for the relevant asset or liability either directly or indirectly except for Level 1 input.Level 3: unobservable inputs for the relevant assets or liability.At each balance sheet date the Company reassesses assets and liabilities measured at fair value that are recognised
in the financial statements on a recurring basis to determine whether transfers have occurred between fair value
measurement hierarchy levels.
13. Inventories
(1) Classification of inventories
Inventories of the Company mainly include raw materials work in progress goods in stock development products
and consumable biological assets etc.
(2) Pricing of inventories dispatched
Inventories of the Company are measured at their actual cost when obtained. Cost of raw materials goods in
stock and others will be calculated with weighted average method when being dispatched.Consumable biological assets refer to biological assets held-for-sale which include growing timber. Consumable
biological assets without a stock are stated at historical cost at initial recognition and subsequently measured
at fair value when there is a stock. Changes in fair values shall be recognised as profit or loss in the current
period. The cost of self-planting self-cultivating consumable biological assets is the necessary expenses
directly attributable to such assets prior to canopy closure including borrowing costs eligible for capitalisation.Subsequent expenses such as maintenance cost incurred after canopy closure shall be included in profit or loss
for the current period.The cost of consumable biological assets shall at the time of harvest or disposal be carried forward at carrying
amount using the stock volume proportion method.
100 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
13. Inventories (Cont’d)
(3) Recognition of and provision for inventory impairment
At the balance sheet date inventories are measured at the lower of cost and net realisable value. If the net
realisable value is below the cost of inventories a provision for inventory impairment is made.Net realisable value refers to the amount of the estimated price of inventories less the estimated cost incurred
upon completion estimated sales expenses and taxes and levies. The realisable value of inventories shall be
determined on the basis of definite evidence purpose of holding the inventories and effect of after-balance-sheet
date events.The Company usually makes provisions for inventory impairment on the basis of individual inventory items;
however for inventories with large quantities and lower unit prices these inventories are accrued impairment
according to inventory categories.
(4) Inventory stock taking system
The Company implements permanent inventory system as its inventory stock taking system.
(5) Amortisation of low-value consumables and packaging materials
The low-value consumables of the Company are amortised when issued for use.Packaging materials for turnover are amortised when issued for use.
14. Long-term equity investments
Long-term equity investments include the equity investments in subsidiaries joint ventures and associates. Associates
of the Company are those investees that the Company imposes significant influence over.
(1) Determination of initial investment cost
Long-term equity investments acquired through business combinations: for a long-term equity investment
acquired through a business combination involving enterprises under common control the investment cost shall
be the absorbing party’s share of the carrying amount of the owners’ equity under the consolidated financial
statements of the ultimate controlling party on the date of combination. For a long-term equity investment
acquired through a business combination involving enterprises not under common control the investment cost of
the long-term equity investment shall be the cost of combination.Long-term equity investments acquired through other means: for a long-term equity investment acquired by cash
payment the initial investment cost shall be the purchase cost actually paid; for a long-term equity investment
acquired by issuing equity securities the initial investment cost shall be the fair value of equity securities issued.
(2) Subsequent measurement and method for profit or loss recognition
Investments in subsidiaries shall be accounted for using the cost method. Except for the investments which meet
the conditions of holding for sale investments in associates and joint ventures shall be accounted for using the
equity method.For a long-term equity investment accounted for using the cost method the cash dividends or profits declared by
the investees for distribution shall be recognised as investment gains and included in profit or loss for the current
period except the case of receiving the actual consideration paid for the investment or the declared but not yet
distributed cash dividends or profits which is included in the consideration.SHANDONG CHENMING PAPER HOLDINGS LIMITED 101
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
14. Long-term equity investments (Cont’d)
(2) Subsequent measurement and method for profit or loss recognition (Cont’d)
For a long-term equity investment accounted for using the equity method where the initial investment cost
exceeds the investor’s interest in the fair value of the investee’s identifiable net assets at the acquisition date no
adjustment shall be made to the investment cost of the long-term equity investment. Where the initial investment
cost is less than the investor’s interest in the fair value of the investee’s identifiable net assets at the acquisition
date adjustment shall be made to the carrying amount of the long-term equity investment and the difference shall
be charged to profit or loss for the current period.Under the equity method investment gain and other comprehensive income shall be recognised based on the
Company’s share of the net profits or losses and other comprehensive income made by the investee respectively.Meanwhile the carrying amount of long-term equity investment shall be adjusted. The carrying amount of long-
term equity investment shall be reduced based on the Group’s share of profit or cash dividend distributed by
the investee. In respect of the other movement of net profit or loss other comprehensive income and profit
distribution of investee the carrying amount of long-term equity investment shall be adjusted and included in
the capital reserves (other capital reserves). The Group shall recognise its share of the investee’s net profits or
losses based on the fair values of the investee’s individual separately identifiable assets at the time of acquisition
after making appropriate adjustments thereto according to the accounting policies and accounting periods of the
Company.For additional equity investment made in order to obtain significant influence or common control over investee
without resulted in control the initial investment cost under the equity method shall be the aggregate of fair value
of previously held equity investment and additional investment cost on the date of transfer. For investments in non-
trading equity instruments that were previously classified as at fair value through other comprehensive income the
cumulative fair value changes associated with them that were previously included in other comprehensive income
are transferred to retained earnings upon the change to the equity method of accounting.In the event of loss of common control or significant influence over investee due to partial disposal of equity
investment the remaining equity interest after disposal shall be accounted for according to the Accounting
Standard for Business Enterprises No. 22 – Recognition and measurement of Financial Instruments. The difference
between its fair value and carrying amount shall be included in profit or loss for the current period. In respect
of other comprehensive income recognised under previous equity investment using equity method it shall be
accounted for in accordance with the same accounting treatment for direct disposal of relevant asset or liability by
investee at the time when equity method was ceased to be used. Movement of other owners’ equity related to the
previous equity investment shall be transferred to profit or loss for the current period.In the event of loss of control over investee due to partial disposal of equity investment the remaining equity
interest which can apply common control or impose significant influence over the investee after disposal shall be
accounted for using equity method. Such remaining equity interest shall be treated as accounting for using equity
method since it is obtained and adjustment was made accordingly. For the remaining equity interest which cannot
apply common control or impose significant influence over the investee after disposal it shall be accounted for
using the Accounting Standard for Business Enterprises No. 22 – Recognition and measurement of Financial
Instruments. The difference between its fair value and carrying amount as at the date of losing control shall be
included in profit or loss for the current period.
102 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
14. Long-term equity investments (Cont’d)
(2) Subsequent measurement and method for profit or loss recognition (Cont’d)
If the shareholding ratio of the Company is reduced due to the capital increase of other investors and as a result
the Company loses the control of but still can apply common control or impose significant influence over the
investee the net asset increase due to the capital increase of the investee attributable to the Company shall be
recognised according to the new shareholding ratio and the difference with the original carrying amount of the
long-term equity investment corresponding to the shareholding ratio reduction part that should be carried forward
shall be recorded in the profit or loss for the current period; and then it shall be adjusted according to the new
shareholding ratio as if equity method is used for accounting when acquiring the investment.In respect of the transactions between the Company and its associates and joint ventures the share of unrealised
gain or loss arising from internal transactions shall be eliminated by the portion attributable to the Company.Investment gain or loss shall be recognised accordingly. However any unrealised loss arising from internal
transactions between the Company and an investee is not eliminated to the extent that the loss is impairment loss
of the transferred assets.
(3) Basis for determining the common control and significant influence on the investee
Common control is the contractually agreed sharing of control over an arrangement which relevant activities of
such arrangement must be decided by unanimously agreement from parties who share control. When determining
if there is any common control it should first be identified if the arrangement is controlled by all the participants
or the group consisting of the participants and then determined if the decision on the arranged activity can be
made only with the unanimous consent of the participants sharing the control. If all the participants or a group
of participants can only decide the relevant activities of certain arrangement through concerted action it can
be considered that all the participants or a group of participants share common control on the arrangement. If
there are two or more participant groups that can collectively control certain arrangement it does not constitute
common control. When determining if there is any common control the relevant protection rights will not be taken
into account.Significant influence is the power of the investor to participate in the financial and operating policy decisions of
an investee but to fail to control or joint control the formulation of such policies together with other parties. When
determining if there is any significant influence on the investee the influence of the voting shares of the investee
held by the investor directly and indirectly and the potential voting rights held by the investor and other parties
which are exercisable in the current period and converted to the equity of the investee including the warrants
stock options and convertible bonds that are issued by the investee and can be converted in the current period
shall be taken into account.When the Company holds directly or indirectly through the subsidiary 20% (inclusive) to 50% of the voting shares
of the investee it is generally considered to have significant influence on the investee unless there is concrete
evidence to prove that it cannot participate in the production and operation decision-making of the investee and
cannot pose significant influence in this situation. When the Company owns less than 20% (exclusive) of the
voting shares of the investee it is generally considered that it has not significantly influenced on the investee
unless there is concrete evidence to prove that it can participate in the production and operation decision-making
of the investee and can impose significant influence in this situation.
(4) Impairment test method and impairment provision
For the method for making impairment provision for the investment in subsidiaries associates and joint ventures
please refer to Note V. 23.SHANDONG CHENMING PAPER HOLDINGS LIMITED 103
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
15. Investment property
Investment property refers to real estate held to earn rentals or for capital appreciation or both. The investment property
of the Company includes leased land use rights land use rights held for sale after appreciation and leased buildings.The investment property of the Company is measured initially at cost upon acquisition and subject to depreciation or
amortisation in the relevant periods according to the relevant provisions on fixed assets or intangible assets.For the method for making impairment provision for the investment property adopted cost method for subsequent
measurement please refer to Note V. 23.When an investment property is sold transferred retired or damaged the amount of proceeds on disposal of the
property net of the carrying amount and related tax and surcharges is recognised in profit or loss for the current period.
16. Fixed assets
(1) Conditions for recognition of fixed assets
Fixed assets represent the tangible assets held by the Company using in the production of goods rendering of
services and for operation and administrative purposes with useful life over one year.Fixed assets are recognised when it is probable that the related economic benefits will flow to the Company and
the costs can be reliably measured.The Company’s fixed assets are initially measured at the actual cost at the time of acquisition.Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is probable
that the associated economic benefits will flow to the Company and the related cost can be reliably measured.The cost of routine repairs of fixed assets that do not qualify as capitalised subsequent expenditure is charged to
current profit or loss or included in the cost of the related assets in accordance with the beneficiary object when
incurred. The carrying amount of the replaced part is derecognised.
(2) Depreciation method of fixed assets
The Company adopts the straight-line method for depreciation. Provision for depreciation will be started when the
fixed asset reaches its expected usable state and stopped when the fixed asset is derecognised or classified as a
non-current asset held for sale. Without regard to the depreciation provision the Company determines the annual
depreciation rate by category estimated useful lives and estimated residual value of the fixed assets as below:
Annual
depreciation
Category Useful life (year) Residual value (%) rate (%)
Housing and building structure 20-40 5-10 2.25-4.75
Machinery and equipment 8-20 5-10 4.50-11.88
Transportation equipment 5-8 5-10 11.25-19.00
Electronic equipment and others 5 5-10 18.00-19.00
Where for the fixed assets for which impairment provision is made to determine the depreciation rate the
accumulated amount of the fixed asset impairment provision that has been made shall be deducted.
104 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
16. Fixed assets (Cont’d)
(3) The impairment test method and impairment provision method of the fixed assets are set out in Note V. 23.
(4) The Company will review the useful lives estimated net residual value and depreciation method of the fixed assets
at the end of each year.When there is any difference between the useful lives estimate and the originally estimated value the useful
lives of the fixed asset shall be adjusted. When there is any difference between the estimated net residual value
estimate and the originally estimated value the estimated net residual value shall be adjusted.
(5) Disposal of fixed assets
A fixed asset is derecognised on disposal or when it is expected that there shall be no economic benefit arising
from using or after disposal. Where the fixed assets are sold transferred retired or damaged the income received
after disposal after deducting the carrying amount and related taxes are recognised in profit or loss for the current
period.
17. Construction in progress
Construction in progress of the Company is recognised based on the actual construction cost including all necessary
expenditures incurred for construction projects capitalised borrowing costs for the construction in progress before it
has reached the working condition for its intended use and other related expenses during the construction period.A construction in progress is reclassified to fixed assets when it has reached the working condition for its intended use.For technological transformation or new machine-made paper projects the projects will be put into trial operation for a
period of time (usually three months) upon completion of construction. After the internal acceptance is completed during
the trial operation period the construction in progress will be transferred to fixed assets.The method for impairment provision of construction in progress is set out in Note V. 23.
18. Materials for project
The materials for project of the Group refer to various materials prepared for construction in progress including
construction materials equipment not yet installed and tools for production.The purchased materials for project are measured at cost and the planning materials for project are transferred to
construction in progress. After the completion of the project the remaining materials for project are transferred to
inventory.The method for impairment provision of materials for project is set out in Note V. 23.The closing balance of materials for project is presented as “construction in progress” item in the balance sheet.SHANDONG CHENMING PAPER HOLDINGS LIMITED 105
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
19. Borrowing costs
(1) Recognition principle for the capitalisation of the borrowing costs
The borrowing costs incurred by the Company directly attributable to the acquisition construction or production
of a qualifying asset will be capitalised and included in the cost of relevant asset. Other borrowing costs will be
recognised as expenses when incurred according to the incurred amount and included in the profit or loss for the
current period. When the borrowing costs meet all the following conditions capitalisation shall be started:
* the capital expenditure has been incurred which includes the expenditure incurred by paying cash
transferring non-cash assets or undertaking interest-bearing liabilities for acquiring constructing or
producing the qualifying assets;
* the borrowing costs have been incurred; and
* the acquisition construction or production activity necessary for the asset to be ready for its intended use
or sale has been started.
(2) Capitalisation period of borrowing costs
When a qualifying asset acquired constructed or produced by the Company is ready for its intended use or sale
the capitalisation of the borrowing costs shall discontinue. The borrowing costs incurred after a qualifying asset
is ready for its intended use or sale shall be recognised as expenses when incurred according to the incurred
amount and included in the profit or loss for the current period.Capitalisation of borrowing costs shall be suspended during periods in which the acquisition construction or
production of a qualifying asset is interrupted abnormally when the interruption is for a continuous period of more
than 3 months. The capitalisation of the borrowing costs shall be continued in the normal interruption period.
(3) Calculation methods for capitalisation rate and capitalised amount of the borrowing costs
Where funds are borrowed for a specific purpose the amount of interest to be capitalised shall be the actual
interest expense incurred on that borrowing for the period less any bank interest earned from depositing the
borrowed funds before being used into banks or any investment income on the temporary investment of those
funds. Where funds are borrowed for general purpose the Company shall determine the amount of interest
to be capitalised on such borrowings by applying a capitalisation rate to the weighted average of the excess
amounts of cumulative expenditures on the asset over and above the amounts of specific-purpose borrowings.The capitalisation rate shall be the weighted average of the interest rates applicable to the general-purpose
borrowings.During the capitalisation period exchange differences on a specific purpose borrowing denominated in foreign
currency shall be capitalised. Exchange differences related to general-purpose borrowings denominated in foreign
currency shall be included in profit or loss for the current period.
106 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
20. Bearer biological assets
(1) Standards for recognising bearer biological assets
Bearer biological assets refer to biological assets held for the purpose of producing agricultural products
providing labour services or renting. The Company’s bearer biological assets are mainly tea trees. Bearer
biological assets are initially measured at cost. The cost of a planted or propagated bearer biological asset
includes the expenses directly attributable to the asset and necessarily incurred before the asset is ready for its
intended production and operation including the borrowing costs that are eligible for capitalisation.The management protection and feeding costs of a biological asset subsequent to crown closure or after the
asset is ready for its intended production and operation are expensed and recognised in profit or loss as incurred.According to experience the tea trees grown by the Company generally take 7 years to reach the crown closure
stage.Depreciation of bearer biological assets is calculated using the straight-line method over the estimated useful life
of each biological asset less its residual value as follows:
Annual
depreciation
Type of bearer biological assets Useful life (year) Residual value (%) rate (%)
Tea tree 20 5.00
The Company reviews the useful life and estimated net residual value of a bearer biological asset and the
depreciation method applied at least at each financial year-end. A change in the useful life or estimated net
residual value of a fixed asset or the depreciation method used shall be accounted for as a change in accounting
estimate.The difference between the disposal income of the sale loss death or damage of a bearer biological asset net of
its carrying amount and related taxes is recognised in profit or loss for the current period.
(2) Treatment of impairment of bearer biological assets
The method for impairment provision of bearer biological assets is set out in Note V. 23.SHANDONG CHENMING PAPER HOLDINGS LIMITED 107
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
21. Intangible assets
The intangible assets of the Company include land use rights software patents and certificates of third party right.The intangible asset is initially measured at cost and its useful life is determined upon acquisition. If the useful life is
finite the intangible asset will be amortised over the estimated useful life using the amortisation method that can reflect
the estimated realisation of the economic benefits related to the asset starting from the time when it is available for use.If it is unable to reliably determine the estimated realisation straight-line method shall be adopted for amortisation.The intangible assets with uncertain useful life will not be amortised. The amortisation methods for the intangible assets
with finite useful life are as follows:
The basis for
Category Useful life determining useful life Method of amortisation Remark
Land use rights 50-70 Years of certificate Straight-line method
Software 5-10 Estimated years for Straight-line method
software replacement
Patents 5-20 Useful life of purchase Straight-line method
Certificates of third party right 3 Useful life of purchase Straight-line method
The Company reviews the useful life and amortisation method of the intangible assets with finite useful life at the end of
each year. If it is different from the previous estimates the original estimates will be adjusted and will be treated as a
change in accounting estimate.If it is estimated on the balance sheet date that certain intangible asset can no longer bring future economic benefit to
the company the carrying amount of the intangible asset will be entirely transferred into the profit or loss for the current
period.The impairment method for the intangible assets is set out in Note V. 23.
22. R&D expenses
The R&D expenses of the Company are expenses directly related to the R&D activities of the Company including the
wages R&D staff direct investment costs depreciation expenses and long-term prepaid expenses design expenses
equipment testing expenses amortisation expenses of intangible assets and outsourced R&D expenses and other
expenses. Among them the wages of R&D staff are included in R&D expenses based on working hours of related
projects. Equipment production lines and sites shared between R&D activities and other production and operation
activities are included in R&D expenses according to the proportion of working hours and the proportion of area.The Company divides the expenses on internal R&D projects into expenses in the research phase and expenses in the
development phase.Expenses in the research phase are recognised in profit or loss when incurred.Expenses in the development phase will only be capitalised if they meet all of the following conditions: it is technically
feasible to complete the intangible asset for use or sale; there is an intention to complete and use or sell the intangible
asset; the intangible asset will generate economic benefits including demonstrating that there is a market for the
products produced using the intangible asset or for the intangible asset itself and if the intangible asset is to be used
internally its usefulness can be demonstrated; there are sufficient technical financial and other resources to support the
completion of the development of the intangible asset and the ability to use or sell the intangible asset; the expenses
attributable to the development phase of the intangible asset can be reliably measured. Development expenses that do
not meet the above conditions are included in profit or loss for the period.
108 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
22. R&D expenses (Cont’d)
After meeting the above conditions and passing the technical feasibility and economic feasibility studies to become a
formal project the Company’s research and development project will enter the development phase.Capitalised expenses in the development phase are presented as development expenses on the balance sheet and are
transferred to intangible assets from the date the project is put to its intended use.All R&D expenses of the Company are included in the current profits and losses when incurred.
23. Asset impairment
Impairment of long-term equity investments in subsidiaries associates and joint ventures asset impairment on
investment property fixed assets construction in progress bearer biological assets measured at cost right-of-
use assets intangible assets goodwill and others (excluding inventories deferred tax assets and financial assets)
subsequently measured at cost is determined as follows:
The Company determines if there is any indication of asset impairment as at the balance sheet date. If there is any
evidence indicating that an asset may be impaired recoverable amount shall be estimated for impairment test. Goodwill
arising from business combinations intangible assets with an indefinite useful life and intangible assets not ready for
intended use will be tested for impairment annually regardless of whether there is any indication of impairment.The recoverable amount of an asset is the higher of its fair value less costs of disposal and the present value of the
future cash flows expected to be derived from the asset. The Company estimates the recoverable amount of an
individual asset. If it is not possible to estimate the recoverable amount of the individual asset the Company shall
determine the recoverable amount of the asset group to which the asset belongs. The determination of an asset group
is based on whether major cash inflows generated by the asset group are independent of the cash inflows from other
assets or asset groups.When the recoverable amount of an asset or an asset group is less than its carrying amount the carrying amount is
reduced to its recoverable amount. The reduction amount is charged to profit or loss and an impairment provision is
made accordingly.For the purpose of impairment test of goodwill the carrying amount of goodwill acquired in a business combination is
allocated to the relevant asset groups on a reasonable basis from the acquisition date; where it is difficult to allocate
to the related asset groups it is allocated to the combination of related asset groups. The related asset groups or
combination of asset groups are those which can benefit from the synergies of the business combination and are not
larger than the reportable segments identified by the Company.In the impairment test if there is any indication that an asset group or a combination of asset groups related to goodwill
may be impaired the Company first tests the asset group or set of asset groups excluding goodwill for impairment
calculates the recoverable amount and recognises the corresponding impairment loss. An impairment test is then carried
out on the asset group or combination of asset groups containing goodwill by comparing its carrying amount with its
recoverable amount. If the recoverable amount is lower than the carrying amount an impairment loss is recognised for
goodwill.An impairment loss recognised shall not be reversed in a subsequent period.
24. Long-term prepaid expenses
The long-term prepaid expenses incurred by the Company shall be recognised based on the actual cost and evenly
amortised over the estimated benefit period. For the long-term prepaid expense that cannot benefit the subsequent
accounting periods its value after amortisation shall be entirely included in the profit or loss for the current period.SHANDONG CHENMING PAPER HOLDINGS LIMITED 109
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
25. Employee benefits
(1) Scope of employee benefits
Employee benefits are all forms of considerations or compensation given by an enterprise in exchange for
services rendered by employees or for the termination of employment. Employee benefits include short-term staff
remuneration post-employment benefits termination benefits and other long-term employee benefits. Employee
benefits include benefits provided to employees’ spouses children other dependants survivors of the deceased
employees or other beneficiaries.Employee benefits are presented as “employee benefits payable” and “long-term employee benefits payable” in
the balance sheet respectively according to liquidity.
(2) Short-term staff remuneration
Employee wages actually incurred bonuses and social insurance contributions such as medical insurance work
injury insurance maternity insurance and housing fund contributed at the applicable benchmarks and rates
are recognised as a liability as the employees provide services with a corresponding charge to profit or loss or
included in the cost of assets.
(3) Post-employment benefits
Post-employment benefit plans include defined contribution plans and defined benefit plans. A defined
contribution plan is a post-employment benefit plan under which the Company pays fixed contributions into
a separate fund and the Company has no further obligations for payment. A defined benefit plan is a post-
employment benefit plan other than a defined contribution plan.Defined contribution plans
Defined contribution plans include basic pension insurance and unemployment insurance.During the accounting period in which an employee provides service the amount payable calculated according to
the defined contribution plan is recognised as a liability and included in the profit or loss for the current period or
the cost of relevant assets.
(4) Termination benefits
When the Company provides termination benefits to employees employee benefits liabilities arising from
termination benefits are recognised in profit or loss for the current period at the earlier of the following dates: when
the Company cannot revoke unilaterally compensation for dismissal due to the cancellation of labour relationship
plans and employee redundant proposals; the Company recognises cost and expenses related to payment of
compensation for dismissal and restructuring.For the early retirement plans economic compensations before the actual retirement date were classified as
termination benefits. During the period from the date of cease of render of services to the actual retirement
date relevant wages and contribution to social insurance for the employees proposed to be paid are recognised
in profit or loss on a one-off basis. Economic compensation after the official retirement date such as normal
pension is accounted for as post-employment benefits.
110 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
25. Employee benefits (Cont’d)
(5) Other long-term benefits
Other long-term employee benefits provided by the Group to employees that meet the conditions for defined
contribution plans are accounted for in accordance with the relevant provisions relating to defined contribution
plans as stated above. If the conditions for defined benefit plans are met the benefits shall be accounted forin accordance with the relevant provisions relating to defined benefit plans but the “changes arising from theremeasurement of net liabilities or net assets of defined benefit plans” in the relevant employee benefits shall be
included in the current profit and loss or the relevant costs of assets.
26. Provisions
Obligations pertinent to the contingencies which satisfy the following conditions are recognised by the Company as
provisions:
(1) the obligation is a current obligation borne by the Company;
(2) it is likely that an outflow of economic benefits from the Company will be resulted from the performance of the
obligation;
(3) the amount of the obligation can be reliably measured.
The provisions shall be initially measured based on the best estimate for the expenditure required for the performance
of the current obligation after taking into account relevant risks uncertainties time value of money and other
factors pertinent to the contingencies. If the time value of money has significant influence the best estimates shall
be determined after discounting the relevant future cash outflow. The Company reviews the carrying amount of the
provisions on the balance sheet date and adjust the carrying amount to reflect the current best estimates.If all or some expenses incurred for settlement of recognised provisions are expected to be borne by the third party
the compensation amount shall on a recoverable basis be recognised as asset separately and compensation amount
recognised shall not be more than the carrying amount of provisions.SHANDONG CHENMING PAPER HOLDINGS LIMITED 111
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
27. Revenue
(1) General principles
The Company recognises revenue when it satisfies a performance obligation in the contract i.e. when the
customer obtains control of the relevant goods or services.Where a contract has two or more performance obligations the Company on the commencement date of the
contract allocates the transaction price to each performance obligation based on the percentage of respective
unit price of goods or services guaranteed by each performance obligation and recognises as revenue based on
the transaction price that is allocated to each performance obligation.If one of the following conditions is fulfilled the Company performs its performance obligation within a certain
period; otherwise it performs its performance obligation at a point of time:
* when the customer simultaneously receives and consumes the economic benefits provided by the Company
when the Company performs its obligations under the contract.* when the customer is able to control the goods in progress in the course of performance by the Company
under the contract.* when the goods produced by the Company under the contract are irreplaceable and the Company has the
right to payment for performance completed to date during the whole contract term.For performance obligations performed within a certain period the Company recognises revenue by measuring
the progress towards completion of that performance obligation within that certain period. When the progress
of performance cannot be reasonably determined if the costs incurred by the Company are expected to be
compensated the revenue shall be recognised at the amount of costs incurred until the progress of performance
can be reasonably determined.For performance obligation performed at a point of time the Company recognises revenue at the point of time at
which the customer obtains control of relevant goods or services. To determine whether a customer has obtained
control of goods or services the Company considers the following indications:
* The Company has the current right to receive payment for the goods or services which is when the
customer has the current payment obligations for the goods.* The Company has transferred the legal title of the goods to the customer which is when the client
possesses the legal title of the goods.* The Company has transferred the physical possession of goods to the customer which is when the
customer obtains physical possession of the goods.* The Company has transferred all of the substantial risks and rewards of ownership of the goods to the
customer which is when the customer obtains all of the substantial risks and rewards of ownership of the
goods.* The customer has accepted the goods or services.* Other information indicates that the customer has obtained control of the goods.
112 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
27. Revenue (Cont’d)
(2) Specific methods
The Company’s revenue mainly comes from the following types of business: sales of goods and provision of
property services.Sales of goods
The Company produces and sells machine-made paper and raw materials electricity and steam papermaking
chemicals and other products.In terms of domestic sales revenue is recognised at a point in time when the control over the goods is transferred
after the Company has delivered the goods (other than electricity and steam) sold to the location as specified in
the contract and the customer has accepted the goods.In terms of overseas sales revenue is recognised on the day when the goods (other than electricity and steam)
sold are loaded on board and declared.The sales of electricity and steam by the Company are performance obligations performed within a certain
period. For sales of electricity the Company recognises revenue from sales of electricity based on the quantity of
electricity delivered to customers every month at a price agreed in the contract. For sales of steam the Company
recognises revenue from sales of steam based on the amount of steam delivered to customers every month at a
price agreed in the contract.The credit periods granted by the Company to customers in various industries are consistent with the practices of
various industries therefore there is no significant financing component.The Company provides product quality assurance for the sales of products and recognises corresponding
provisions. The Company does not provide any additional services or additional quality assurance so the product
quality assurance does not constitute a separate fulfilment obligation.The Company’s cooperation model with distributors is outright sales and the recognition of sales revenue under
the distribution model is consistent with the direct sales model.Certain contracts between the Company and its customers contain arrangements on sales rebates which will give
rise to variable consideration. The Company determines the best estimates on the variable consideration based on
expected values or the most probable amount provided that transaction prices including variable consideration
shall not exceed the cumulative amount of recognised revenue upon the removal of relevant uncertainties in
connection with which a significant reversal is highly unlikely.For sales of machine-made paper with sales return clauses the revenue recognised is subject to the cumulative
amount of recognised revenue in connection with which a significant reversal is highly unlikely. The Company
recognises the liabilities according to the expected amount of refund and recognises the carrying amount of the
goods returned at the time of transfer deducting the estimated cost of recovering the goods as an asset (including
the loss of the value of the returned goods).SHANDONG CHENMING PAPER HOLDINGS LIMITED 113
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
27. Revenue (Cont’d)
(2) Specific methods (Cont’d)
Provision of property services
The Company provides property services to external parties. Since the customers obtain and consume the
economic benefits brought by the Company’s performance of the contract while the Company performs the
contract the Company recognises revenue according to the progress of the contract performance. Since the
performance progress occurs evenly the Company recognises revenue by amortising on a straight-line basis over
the service period.For assets that have not experienced credit impairment the Company determines its interest income based on
the amount of the book balance of the financial asset (i.e. without considering the impact of impairment) multiplied
by the effective interest rate.There are two cases for financial assets with credit impairment:
For financial assets that are not credit-impaired when purchased or originated but are credit-impaired in
subsequent periods the Company shall in the subsequent periods when impairment occurs determine its
income based on the amount of the amortised cost of the financial asset (i.e. the book balance minus the accrued
impairment) multiplied by the effective interest rate (the effective interest rate determined at the time of initial
recognition which does not change due to the occurrence of impairment).For financial assets that are credit-impaired when purchased or originated the Company shall upon initial
recognition determines its income based on the amount of the amortised cost of the financial asset multiplied
by the credit-adjusted effective interest rate (i.e. the interest rate at which the projected future cash flows after
impairment are discounted to the amortised cost at the time of purchase or origination).
114 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
28. Contract costs
Contract costs are either the incremental costs of obtaining a contract or the costs to fulfil a contract.Incremental costs of obtaining a contract are those costs that the Company incurs to obtain a contract that it would not
have incurred if the contract had not been obtained e.g. sales commission. The Company recognises the incremental
costs of obtaining a contract as an asset if it expects to recover those costs. Other costs of obtaining a contract other
than incremental costs that are expected to be recovered are recognised in profit or loss in the period in which they are
incurred.If the costs to fulfil a contract are not within the scope of inventories or other ASBEs the Company recognises an asset
from the costs incurred to fulfil a contract only if those costs meet all of the following criteria:
* the costs relate directly to an existing contract or to a specifically identifiable anticipated contract including direct
labour direct materials allocations of overheads (or similar costs) costs that are explicitly chargeable to the
customer and other costs that are incurred only because the Company entered into the contract;
* the costs enhance resources of the Company that will be used in satisfying performance obligations in the future;
* the costs are expected to be recovered.Assets recognised for the costs of obtaining a contract and assets recognised for the costs to fulfil a contract (the “assetsrelated to contract costs”) are amortised on the same basis as the related goods or services revenue and recognised in
profit or loss for the current period. If the amortisation period does not exceed one year it shall be recognised in profit
or loss for the current period.The Company recognises an impairment loss by providing for the excess amount to the extent that the carrying amount
of an asset related to contract costs exceeds the difference between:
* remaining amount of consideration that the Company expects to receive in exchange for the goods or services to
which the asset relates;
* the cost estimated to be happened for the transfer of related goods or services.SHANDONG CHENMING PAPER HOLDINGS LIMITED 115
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
29. Government grants
A government grant is recognised when the grant will be received and that the Company will comply with the conditions
attaching to the grant.If a government grant is in the form of a monetary asset it is measured at the amount received or receivable. If a
government grant is in the form of non-monetary asset it is measured at fair value; if the fair value cannot be obtained in
a reliable way it is measured at the nominal amount of RMB1.Government grants obtained for acquisition or construction of long-term assets or other forms of long-term asset
formation are classified as government grants related to assets while the remaining government grants are classified as
government grants related to revenue.Regarding the government grant not clearly defined in the official documents and can form long-term assets the part
of government grant which can be referred to the value of the assets is classified as government grant related to assets
and the remaining part is government grant related to revenue. For the government grant that is difficult to distinguish
the entire government grant is classified as government grant related to revenue.A government grant related to an asset shall be recognised as deferred income and evenly amortised to profit or loss
over the useful life of the asset in a reasonable and systematic manner. For a government grant related to revenue if
the grant is a compensation for related costs expenses or losses incurred the grant shall be recognised in profit or
loss for the current period or used to offset related costs; if the grant is a compensation for related costs expenses or
losses to be incurred in subsequent periods the grant shall be recognised as deferred income and recognised in profit
or loss over the periods in which the related costs expenses or losses are recognised or used to offset related costs. A
government grant measured at nominal amount is directly included in profit or loss for the current period. The Company
adopts a consistent approach to the same or similar government grants.A government grant related to daily activities is recognised in other gains or used to offset related costs relying on
the essence of economic business; otherwise recognised in non-operating income or used to offset non-operating
expenses.For the repayment of a government grant already recognised if the carrying amount of relevant assets was written off
at initial recognition the carrying amount of the assets shall be adjusted; if there is any related deferred income the
repayment shall be offset against the carrying amount of the deferred income and any excess shall be recognised in
profit or loss for the current period; otherwise the repayment shall be recognised directly in profit or loss for the current
period.
116 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
30. Deferred income tax assets and deferred income tax liabilities
Income tax comprises current income tax expense and deferred income tax expense which are included in profit or
loss for the current period as income tax expenses except for deferred tax arising from a business combination which
is adjusted against the carrying amount of goodwill and deferred tax related to transactions or events that are directly
recognised in owners’ equity which are recognised in owners’ equity.Temporary differences arising from the difference between the carrying amount of an asset or liability and its tax base
at the balance sheet date of the Company shall be recognised as deferred income tax using the balance sheet liability
method.All the taxable temporary differences are recognised as deferred income tax liabilities except for those incurred in the
following transactions:
(1) The initial recognition of goodwill and the initial recognition of an asset or liability in a transaction which is neither
a business combination nor affects accounting profit or taxable profit when the transaction occurs (other than a
single transaction that the initially recognised assets and liabilities result in an equal amount of taxable temporary
differences and deductible temporary differences);
(2) The taxable temporary differences associated with investments in subsidiaries associates and joint ventures and
the Company is able to control the timing of the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.The Company recognises a deferred income tax asset for the carry forward of deductible temporary differences
deductible losses and tax credits to subsequent periods to the extent that it is probable that future taxable profits
will be available against which the deductible temporary differences deductible losses and tax credits can be utilised
except for those incurred in the following transactions:
(1) The transaction is neither a business combination nor affects accounting profit or taxable profit when the
transaction occurs (other than a single transaction that the initially recognised assets and liabilities result in an
equal amount of taxable temporary differences and deductible temporary differences);
(2) The deductible temporary differences associated with investments in subsidiaries associates and joint ventures
the corresponding deferred income tax asset is recognised when both of the following conditions are satisfied: it is
probable that the temporary difference will reverse in the foreseeable future and it is probable that taxable profits
will be available in the future against which the temporary difference can be utilised.At the balance sheet date deferred income tax assets and deferred income tax liabilities are measured at the tax
rates that are expected to apply to the period when the asset is realised or the liability is settled and their tax effect is
reflected accordingly.At the balance sheet date the Company reviews the carrying amount of a deferred income tax asset. If it is probable
that sufficient taxable profits will not be available in future periods to allow the benefit of the deferred tax asset to be
utilised the carrying amount of the deferred tax asset is reduced. Any such reduction in amount is reversed when it
becomes probable that sufficient taxable profits will be available.SHANDONG CHENMING PAPER HOLDINGS LIMITED 117
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
30. Deferred income tax assets and deferred income tax liabilities (Cont’d)
At the balance sheet date deferred income tax assets and deferred income tax liabilities are presented as the net
amount after offsetting when the following conditions are met at the same time:
(1) The tax payer within the Company has the legal right to settle current income tax assets and current income tax
liabilities on a net basis;
(2) Deferred income tax assets and deferred income tax liabilities are related to income taxes levied by the same tax
collection and administration authority on the same taxpayer within the Company.
31. Leases
(1) Identification of leases
On the beginning date of the contract the Company (as a lessee or lessor) assesses whether the customer in
the contract has the right to obtain substantially all of the economic benefits from use of the identified asset
throughout the period of use and has the right to direct the use of the identified asset throughout the period of
use. If a contract conveys the right to control the use of an identified asset and multiple identified assets for a
period of time in exchange for consideration the Company identifies such contract is or contains a lease.
(2) The Company as lessee
On the beginning date of the lease the Company recognises right-of-use assets and lease liabilities for all leases
except for short-term lease and low-value asset lease with simplified approach.The accounting policy for right-of-use assets is set out in Note V. 32.The lease liability is initially measured at the present value of the lease payments that are not paid at the beginning
date of the lease using the interest rate implicit in the lease. Where the interest rate implicit in the lease cannot be
determined the incremental borrowing rate is used as the discount rate. Lease payments include fixed payments
and in-substance fixed payments less any lease incentives receivable; variable lease payments that are based
on an index or a rate; the exercise price of a purchase option if the lessee is reasonably certain to exercise
that option; payments for terminating the lease if the lease term reflects the lessee exercising that option of
terminating; and amounts expected to be payable by the lessee under residual value guarantees. Subsequently
the interest expense on the lease liability for each period during the lease term is calculated using a constant
periodic rate of interest and is recognised in profit or loss for the current period. Variable lease payments not
included in the measurement of lease liabilities are recognised in profit or loss for the period in which they actually
arise.
118 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
31. Leases (Cont’d)
(2) The Company as lessee (Cont’d)
Short-term lease
Short-term leases refer to leases with a lease term of less than 12 months from the commencement date except
for those with a purchase option.Lease payments on short-term leases are recognised in the cost of related assets or current profit or loss on a
straight-line basis over the lease term.For short-term leases the Company chooses to adopt the above simplified approach for the following types of
assets that meet the conditions of short-term lease according to the classification of leased assets.Low-value equipment
Transportation vehicles
Low-value asset lease
A low-value asset lease is a lease that the value of a single leased asset is below RMB40000 when it is a new
asset.Lease payments on low-value asset leases are recognised on a straight-line basis over the lease term and either
included in the cost of the related asset or charged to profit or loss for the current period.For a low-value asset lease the Company chooses the above simplified approach based on the specific
circumstances of each lease.Lease modification
The Company accounts for a lease modification as a separate lease when the modification occurs and the
following conditions are met: * the lease modification expands the scope of lease by adding the right to use
one or more of the leased assets; and * the increase in consideration is equivalent to the separate price for the
expanded scope of lease adjusted for that contractual situation.Where a lease modification is not accounted for as a separate lease at the effective date of the lease modification
the Company reallocates the consideration of the modified contract redetermines the lease term and remeasures
the lease liability based on the present value of the lease payments after the modification and the revised discount
rate.If a lease modification results in a reduction in the scope of the lease or a shortening of the lease term the
Company reduces the carrying amount of the right-of-use asset accordingly and includes in the profit or loss for
the period the gain or loss associated with the partial or complete termination of the lease.Where other lease modifications result in a remeasurement of the lease liability the Company adjusts the carrying
amount of the right-of-use asset accordingly.SHANDONG CHENMING PAPER HOLDINGS LIMITED 119
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
31. Leases (Cont’d)
(3) The Company as lessor
When the Company is a lessor a lease is recognised as a finance lease whenever the terms of the lease transfer
substantially all the risks and rewards of asset ownership to the lessee. All leases other than financial leases are
recognised as operating leases.Finance leases
Under finance leases the Company accounts for finance lease receivables at the beginning of the lease term at
the net lease investment which is the sum of the unsecured residual value and the present value of the lease
receipts outstanding at the commencement date of the lease discounted at the interest rate implicit in the lease.The Company as lessor calculates and recognises interest income for each period of the lease term based on
a fixed periodic interest rate. Variable lease payments acquired by the Company as lessor that are not included
in the net measurement of lease investments are included in profit or loss for the period when they are actually
incurred.Derecognition and impairment of finance lease receivables are accounted for in accordance with the requirements
under the Accounting Standard for Business Enterprises No. 22 – Recognition and Measurement of Financial
Instruments and the Accounting Standards for Business Enterprises No. 23 – Transfer of Financial Assets.Operating lease
Lease payments under operating leases are recognised in profit or loss for the current period on a straight-line
basis over the lease term. Initial direct costs incurred in relation to operating leases are capitalised and amortised
over the lease term on the same basis as rental income and recognised in profit or loss for the current period. The
variable lease payments obtained in relation to operating leases that are not included in the lease payments are
recognised in profit or loss in the period in which they actually incurred.Lease modification
The Company accounts for a modification in an operating lease as a new lease from the effective date of the
modification and the amount of lease receipts received in advance or receivable in respect of the lease prior to the
modification is treated as a receipt under the new lease.The Company accounts for a modification in a finance lease as a separate lease when the change occurs and
the following conditions are met: * the modification expands the scope of lease by adding the right to use one
or more of the leased assets; and * the increase in consideration is equivalent to the separate price for the
expanded scope of lease adjusted for that contractual situation.Where a finance lease is modified and not accounted for as a separate lease the Company accounts for the
modified lease in the following circumstances: * If the modification takes effect on the lease commencement
date the lease will be classified as an operating lease the Company will account for it as a new lease from the
effective date of the lease modification and use the net lease investment before the effective date of the lease
modification as the book value of the lease asset; * If the modification takes effect on the lease commencement
date the lease will be classified as a finance lease and the Company will conduct accounting treatment in
accordance with the Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of
Financial Instruments on modifying or renegotiating contracts.
120 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
31. Leases (Cont’d)
(4) Sublease
When the Company is an intermediate lessor the sublease is classified with reference to the right-of-use assets
arising from the head lease. If the head lease is a short-term lease for which the Company adopts a simplified
approach then the Company classifies the sublease as an operating lease.
(5) Sale and leaseback
The lessee and the lessor shall assess and determine whether the transfer of assets in a sale and leaseback
transaction is a sale in accordance with the requirements of the Accounting Standard for Business Enterprises No.
14 – Revenue.
Where asset transfer under the sale and leaseback transactions is a sale the lessee shall measure the right –
of-use assets created by the sale and leaseback based on the portion of carrying amount of the original assets
related to right of use obtained upon leaseback and only recognise relevant profit or loss for the right transferred
to the lessor. The lessor shall account for the purchase of assets in accordance with other applicable ASBEs and
account for the lease of assets in accordance with the Accounting Standard for Business Enterprises No. 21 –
Lease.Where asset transfer under the sale and leaseback transactions is not a sale the lessee shall continue to recognise
the transferred assets while recognising a financial liability equal to the transfer income and account for such
liability according to the Accounting Standard for Business Enterprises No. 22 – Recognition and Measurement of
Financial Instruments; the lessor shall not recognise the transferred assets but recognise a financial asset equal
to the transfer income and account for such asset according to the Accounting Standard for Business Enterprises
No. 22 – Recognition and Measurement of Financial Instruments.
32. Right-of-use assets
(1) Conditions for recognition of right-of-use assets
Right-of-use assets are defined as the right of underlying assets in the lease term for the Company as a lessee.Right-of-use assets are initially measured at cost at the commencement date of the lease. The cost includes the
amount of the initial measurement of lease liability; lease payments made at or before the inception of the lease
less any lease incentives enjoyed; initial direct costs incurred by the Company as lessee; costs to be incurred in
dismantling and removing the underlying assets restoring the site on which it is located or restoring the underlying
asset to the condition required by the terms and conditions of the lease incurred by the Company as lessee. As
a lessee the Company recognises and measures the costs of dismantling and restoration in accordance with the
Accounting Standard for Business Enterprises No. 13 – Contingencies. Subsequently the lease liability is adjusted
for any remeasurement of the lease liability.
(2) Depreciation method of right-of-use assets
The Company uses the straight-line method for depreciation. Where the Company as a lessee is reasonably
certain to obtain ownership of the leased asset at the end of the lease term such asset is depreciated over the
remaining useful life of the leased asset. Where ownership of the lease assets during the lease term cannot be
reasonably determined right-of-use assets are depreciated over the lease term or the remainder of useful lives of
the lease assets whichever is shorter.
(3) For the methods of impairment test and impairment provision of right-of-use assets please refer to Note V. 23.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 121
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
33. Production safety expenses and maintenance costs
According to relevant provisions the Company makes provisions for production safety expenses based on the revenue
of the power plant in the previous year and the prescribed percentages. The specific provisions are as follows: * if
the revenue of the previous year did not exceed RMB10 million provisions would be made at 3%; * if the revenue of
the previous year exceeded RMB10 million but did not exceed RMB100 million provisions would be made at 1.5%; *
if the revenue of the previous year exceeded RMB100 million but did not exceed RMB1000 million provisions would
be made at 1%; * if the revenue of the previous year exceeded RMB1000 million but did not exceed RMB5000
million provisions would be made at 0.8%; * if the revenue of the previous year exceeded RMB5000 million but did
not exceed RMB10000 million provisions would be made at 0.6%; * if the revenue of the previous year exceeded
RMB10000 million provisions would be made at 0.2%.Provisions for production safety expenses and maintenance costs are included in the cost of related products or profit
or loss of the current period and are included in “special reserves” correspondingly.When the provisions for production safety expenses and maintenance costs are utilised within the prescribed scope
if such production safety expenses are applied and related to revenue expenditures specific reserve is directly offset.When fixed assets are incurred they are included in the “construction in progress” item and transferred to fixed assets
when the status of the assets is ready for intended use. They are then offset against specific reserve based on the
amount included in fixed assets while corresponding amount is recognised in accumulated depreciation. Such fixed
assets are no longer depreciated in subsequent periods.
34. Debt restructuring
(1) The Company as the debtor
The debt is derecognised when the current obligation of the debt is discharged. Specifically when the uncertainty
about the execution process and results of the debt restructuring agreement is eliminated the gains and losses
related to the debt restructuring are recognised.If debt restructuring is carried out by repaying debts with assets the Company shall derecognise the relevant
assets and the debts paid off when they meet the conditions for derecognition and the difference between the
book value of the debts paid off and the book value of the transferred assets shall be included in the current profit
and loss.If the debt is converted into equity instruments for debt restructuring the Company shall derecognise the debts
paid off when they meet the conditions for derecognition. When the Company initially recognises an equity
instrument it is measured based on the fair value of the equity instrument. If the fair value of the equity instrument
cannot be measured reliably it is measured based on the fair value of the debt paid off. The difference between
the book value of the debts paid off and the recognised amount of the equity instrument shall be included in the
current profit and loss.When a debt restructuring involves the modification of other terms of a debt the Company shall recognise and
measure the restructured debts in accordance with the Accounting Standards for Business Enterprises No. 22 –
Recognition and Measurement of Financial Instruments and the Accounting Standards for Business Enterprises
No. 37 – Presentation of Financial Instruments.When a debt is settled by multiple assets or combination of various methods in a debt restructuring the Company
shall recognise and measure the equity instruments and restructured debts in accordance with the aforementioned
methods and the difference between the book value of the debts paid off and the sum of the book value of the
transferred assets and the recognised amount of the equity instruments and restructured debts shall be included
in the current profit and loss.
122 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
34. Debt restructuring (Cont’d)
(2) The Company as the creditor
The debt receivable are derecognised when the contractual rights to receive the cash flows under the debt
receivable expire. Specifically when the uncertainty about the execution process and results of the debt
restructuring agreement is eliminated the gains and losses related to the debt restructuring are recognised.If debt restructuring is carried out by repaying debts with assets the Company shall initially recognise assets
other than the transferred financial assets at cost. In particular the cost of inventories includes the fair value of the
debt receivable and any directly attributable expenditure including taxes transportation costs handling costs
insurance and other costs for bringing the assets to the current position and condition; the cost of investment in
associates or joint ventures includes the fair value of the debt receivable and any directly attributable expenditure
including taxes; the cost of investment property includes the fair value of the debt receivable and any directly
attributable expenditure including taxes; the cost of fixed assets includes the fair value of the debt receivable
and any directly attributable expenditure including taxes transportation costs handling costs installation costs
professional service fees and other costs for bringing the assets to the status for intended use; the cost of
intangible assets includes the fair value of the debt receivable and any directly attributable expenditure including
taxes for bringing the assets to the status for intended use. The difference between the fair value and the book
value of the debt receivable is included in the current profit and loss.When the debt restructuring causes the Company to convert the debt receivable to an equity investment of joint
ventures or associates the Company shall measure the initial investment cost based on the sum of the fair value
of debt receivable and any directly attributable taxes and other costs of the investment. The difference between
the fair value and the book value of the debt receivable is included in the current profit and loss.When a debt restructuring involves the modification of other terms of a debt the Company recognises and
measures the restructured debt receivable in accordance with the Accounting Standards for Business Enterprises
No. 22 – Recognition and Measurement of Financial Instruments.When a debt is settled by multiple assets or combination of various methods in a debt restructuring the Company
first recognises and measures the financial assets received and restructured debt receivable in accordance
with the Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of Financial
Instruments and then allocates the net value which is the fair value of the debt receivable deducted by the
recognised amount of financial assets received and restructured debt receivable to the costs of non-financial
assets received based on their relative fair value. The difference between the fair value and the book value of the
debt receivable is included in the current profit and loss.SHANDONG CHENMING PAPER HOLDINGS LIMITED 123
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
35. Critical accounting judgments and estimates
The Company gives continuous assessment on among other things the reasonable expectations of future events and
the critical accounting estimates and key assumptions adopted according to its historical experience and other factors.The critical accounting estimates and key assumptions that are likely to lead to significant adjustment risks of the
carrying amount of assets and liabilities for the next financial year are listed as follows:
Deferred income tax assets
Deferred income tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit
will be available against which the losses can be utilised. Significant management judgement is required to determine
the amount of deferred income tax assets that can be recognised based upon the likely timing and amount of future
taxable profits together with future tax planning strategies.Classification of financial assets
Significant judgements involved in determining the classification of financial assets include the analysis of business
models and contractual cash flow characteristics.Factors considered by the Company in determining the business model for a group of financial assets include how the
asset’s performance is evaluated and reported to key management personnel how risks are assessed and managed
and how the relevant management personnel are compensated.When the Company assesses whether the contractual cash flows of the financial assets are consistent with basic
lending arrangements the main judgements are described as below: whether the principal amount may change over
the life of the financial asset (for example if there are repayments of principal); whether the interest includes only
consideration for the time value of money credit risk other basic lending risks and a profit margin and cost. For
example whether the amount repaid in advance reflects only the outstanding principal and interest thereon as well as
reasonable compensation paid for early termination of the contract.Measurement of the ECLs of accounts receivable
The Company calculates the ECLs of accounts receivable using the exposure to default risk and ECL rate of accounts
receivable and determines the ECL rate based on default probability and default loss rate. When determining the ECL
rate the Company adjusts its historical data by referring to information such as historical credit loss experience as well
as current situation and forward-looking information. When considering the forward-looking information indicators used
by the Company include the risk of economic downturn external market environment technology environment and
changes in customers. The assumptions relating to the ECL calculation are monitored and reviewed by the Company on
a regular basis.Measurement of past due credit losses on finance lease receivables
The Company calculates the ECLs of financial lease receivables using the exposure to default risk and ECL rate of
financial lease receivables and determines the ECL rate based on default probability and default loss rate. When
determining the ECL rate the Company takes into account the current status and repayment ability of the counterparty
while considering the value of collateral guarantees and other credit enhancement measures related to the lease
receivables.
124 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
35. Critical accounting judgments and estimates (Cont’d)
Impairment of goodwill
The Company assesses the impairment of goodwill at least annually which requires estimates of the use value of asset
groups allocated with goodwill. When estimating the use value the Company is required to estimate the future cash
flows from such asset groups while selecting the appropriate discount rate to calculate the present value of future cash
flows.Impairment of inventories
On the balance sheet date the Company determines the net realisable value of its inventories based on the estimated
selling prices of the inventories less costs estimated to be incurred upon completion estimated selling expenses and
related taxes. The realisable value of inventories shall be determined on the basis of definite evidence purpose of
holding the inventories and effect of after-balance-sheet-date events. If the net realisable value is below the cost of
inventories a provision for inventory impairment is made.Impairment of fixed assets and long-term equity investments
The Company assesses the impairment of fixed assets and long-term equity investments at least annually. When any
event or change in circumstances indicates that the carrying amount may not be recoverable the carrying amount of
such project is reviewed for impairment. If the carrying amount of an asset exceeds its recoverable amount impairment
loss is recognised for the difference. The recoverable amount is determined as the higher of the asset’s fair value less
costs of disposal and the present value of the asset’s estimated future cash flows. A number of assumptions are made
in estimating the recoverable amount of assets including future cash flows and discount rates relating to non-current
assets. If future events differ from these assumptions the recoverable amount shall be revised which may have an
impact on the operations or financial position of the Company.
36. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
The Company did not have any change in significant accounting policies during the year.
(2) Changes in significant accounting estimates
The Company did not have any change in significant accounting estimates during the year.
(3) First-time implementation of new accounting standards from 2026 onwards involving adjustments to the
financial statements at the beginning of the year of initial application
□ Applicable √ Not applicable
SHANDONG CHENMING PAPER HOLDINGS LIMITED 125
INTERIM REPORT 2026VIII Financial Report
VI. Taxation
1. Main tax types and tax rates
Tax type Tax base Tax rate
Value added tax (VAT) VAT payable (VAT payable is calculated by 13/9/6
multiplying taxable sales amount by the
applicable tax rate less current deductible
input VAT)
Property tax Rental income and property price 1.2/12
Urban maintenance and construction tax Actual turnover tax paid 7
Enterprise income tax Taxable income 25
Disclosure of taxable entities subject to different EIT tax rates
Name of taxable entity EIT tax rate
Shandong Chenming Paper Holdings Limited 15
Shouguang Meilun Paper Co. Ltd. 15
Jilin Chenming Paper Co. Ltd. 15
Zhanjiang Chenming Pulp & Paper Co. Ltd. 15
Huanggang Chenming Pulp & Paper Co. Ltd. 15
Shouguang Xinyuan Coal Co. Ltd. 20
Shouguang Chenming Papermaking Machine Co. Ltd. 20
Jiangxi Chenming Logistics Co. Ltd. 20
Zhanjiang Chenming Arboriculture Development Co. Ltd. Exempt from EIT
Nanchang Chenming Arboriculture Development Co. Ltd. Exempt from EIT
Chenming Arboriculture Co. Ltd. Exempt from EIT
Yangjiang Chenming Arboriculture Development Co. Ltd. Exempt from EIT
2. Tax incentives
(1) Enterprise income tax
On 7 December 2024 the Company obtained the High and New Technology Enterprise Certificate (Certificate No.:
GR202437001530). Pursuant to the requirements under the Law of the People’s Republic of China on Enterprise
Income Tax and the relevant policies the Company is subject to a corporate income tax rate of 15% of taxable
income and is entitled to the preferential treatment for three years.Shouguang Meilun Paper Co. Ltd. a subsidiary of the Company obtained the High and New Technology
Enterprise Certificate (Certificate No.: GR202437000114) on 7 December 2024. Pursuant to the requirements
under the Law of the People’s Republic of China on Enterprise Income Tax and the relevant policies Shouguang
Meilun is subject to an enterprise income tax rate of 15% of taxable income and is entitled to the preferential
treatment for three years.
126 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VI. Taxation (Cont’d)
2. Tax incentives (Cont’d)
(1) Enterprise income tax (Cont’d)
Jilin Chenming Paper Co. Ltd. a subsidiary of the Company obtained the High and New Technology Enterprise
Certificate (Certificate No.: GR202522000396) on 28 October 2025. Pursuant to the requirements under the Law of
the People’s Republic of China on Enterprise Income Tax and the relevant policies Jilin Chenming is subject to an
enterprise income tax rate of 15% of taxable income and is entitled to the preferential treatment for three years.Zhanjiang Chenming Pulp & Paper Co. Ltd. a subsidiary of the Company obtained the High and New Technology
Enterprise Certificate (Certificate No.: GR202444002840) on 19 November 2024. Pursuant to the requirements
under the Law of the People’s Republic of China on Enterprise Income Tax and the relevant policies Zhanjiang
Chenming is subject to an enterprise income tax rate of 15% of taxable income and is entitled to the preferential
treatment for three years.Huanggang Chenming Pulp & Paper Co. Ltd. a subsidiary of the Company obtained the High and New
Technology Enterprise Certificate (Certificate No.: GR202342003128) on 5 December 2023. Pursuant to the
requirements under the Law of the People’s Republic of China on Enterprise Income Tax and the relevant policies
Huanggang Chenming is subject to an enterprise income tax rate of 15% of taxable income and is entitled to the
preferential treatment for three years.Pursuant to the requirements of Rule 27(1) of Law of the People’s Republic of China on Enterprise Income Tax and
Rule 86(1) of Regulations for the Implementation of Law of the People’s Republic of China on Enterprise Income
Tax Zhanjiang Chenming Arboriculture Development Co. Ltd. Yangjiang Chenming Arboriculture Development
Co. Ltd. Nanchang Chenming Arboriculture Development Co. Ltd. and Chenming Arboriculture Co. Ltd. all
of which are the subsidiaries of the Company are entitled to preferential tax treatment and have completed the
filings for EIT reduction for exemption from EIT.Shouguang Xinyuan Coal Co. Ltd. Shouguang Chenming Papermaking Machine Co. Ltd. and Jiangxi Chenming
Logistics Co. Ltd. are all subsidiaries of the Company and qualify as small low-profit enterprises. Pursuant to the
Announcement on Tax and Fee Policies for Further Supporting the Development of Small and Micro Enterprises
and Individual Businesses issued by Ministry of Finance and the State Taxation Administration (Announcement No.
12 2023 of the Ministry of Finance and the State Taxation Administration) small low-profit enterprises calculate
their taxable income at a reduced rate of 25% and pay enterprise income tax at a rate of 20%.
(2) VAT
Pursuant to Article 24(1) of the Value-Added Tax Law of the People’s Republic of China and Article 26 of the
Implementing Regulations of the Value Added Tax Law of the People’s Republic of China Zhanjiang Chenming
Arboriculture Development Co. Ltd. Yangjiang Chenming Arboriculture Development Co. Ltd. Nanchang
Chenming Arboriculture Development Co. Ltd. and Chenming Arboriculture Co. Ltd. all of which are subsidiaries
of the Company are exempt from VAT and have completed the filings for VAT reduction for exemption from VAT.SHANDONG CHENMING PAPER HOLDINGS LIMITED 127
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements
1. Monetary funds
Unit: RMB
Item Closing balance Opening balance
Treasury cash 1092559.82 2409711.16
Bank deposit 105460952.82 134887171.18
Other monetary funds 74678181.03 63728850.28
Interest accrued on deposits 5582058.87 9372989.33
Total 186813752.54 210398721.95
Including: Total deposits in overseas banks 11141096.08 87837664.31
Other explanations:
* Other monetary funds of RMB684007.03 were the guarantee deposit for the application for acceptance bills by
the Company of which RMB684007.03 was locked up.* Other monetary funds of RMB29238981.19 were the guarantee deposit for the application for letter of credit with
the banks by the Company of which RMB18271510.64 was locked up.* Other monetary funds of RMB5740595.00 were the guarantee deposit for the application for loans with the banks
by the Company.* Other monetary funds of RMB39014597.81 were locked up due to reasons such as litigations or being unused
for a long time resulting in restriction on the use of that account’s balance.
2. Financial assets held for trading
Unit: RMB
Item Closing balance Opening balance
Financial assets measured at fair value through profit or loss 28271109.88 38791121.74
Including: Investment in equity instruments 28271109.88 38791121.74
Total 28271109.88 38791121.74
Other explanation: Financial assets held for trading were shares of China Bohai Bank subscribed by the Company.
128 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
3. Bills receivable
(1) Bills receivable by category
Unit: RMB
Item Closing balance Opening balance
Bank acceptance bills 1225558850.92 793939333.83
Commercial acceptance bills 360000.00
Total 1225918850.92 793939333.83
(2) Disclosure by bad debt provision method
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Provision Provision
Category Amount Percentage Amount percentage Book value Amount Percentage Amount percentage Book value
Bills receivable assessed collectively for
bad debt provision 1225918850.92 100.00% 1225918850.92 793939333.83 100.00% 793939333.83
Including:
Bank acceptance bills 1225558850.92 99.97% 1225558850.92 793939333.83 100.00% 793939333.83
Commercial acceptance bills 360000.00 0.03% 360000.00
Total 1225918850.92 100.00% 1225918850.92 793939333.83 100.00% 793939333.83
Number of category being assessed collectively for bad debt provision: 2
Name of category being assessed collectively for bad debt provision: Bank acceptance bills
Unit: RMB
Closing balance
Name Book balance Bad debt provision Provision percentage
Bank acceptance bills 1225558850.92
Total 1225558850.92
SHANDONG CHENMING PAPER HOLDINGS LIMITED 129
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
3. Bills receivable (Cont’d)
(2) Disclosure by bad debt provision method (Cont’d)
Name of category being assessed collectively for bad debt provision: Commercial acceptance bills
Unit: RMB
Closing balance
Name Book balance Bad debt provision Provision percentage
Commercial acceptance bills 360000.00
Total 360000.00
(3) Bills receivable endorsed or discounted by the Company but not yet due as at the balance sheet date
Unit: RMB
Amount Amount not yet
derecognised as derecognised as
at the end of at the end of
Item the period the period
Bank acceptance bills 1203896935.87
Total 1203896935.87
4. Accounts receivable
(1) Disclosure by ageing
Unit: RMB
Closing book Opening book
Ageing balance balance
Within 1 year (including 1 year) 759605691.57 678753229.22
1 to 2 years 80981317.82 101784033.19
2 to 3 years 64349581.69 33088622.94
Over 3 years 379312613.55 364766347.06
Subtotal 1284249204.63 1178392232.41
Less: Bad debt provision 417214553.77 435648096.21
Total 867034650.86 742744136.20
The basis used by the ageing analysis of the accounts receivable of the Company: the ageing of accounts
receivable is the length of time of the Company’s outstanding accounts receivable based on invoice date. The
closing balance is recognised one by one from the end of the period onwards until the amounts add up to the
balance. It is also broken up by intervals of within 1 year 1-2 years 2-3 years and over 3 years.
130 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
4. Accounts receivable (Cont’d)
(2) Disclosure by bad debt provision method
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Provision Provision
Percentage percentage Percentage percentage
Category Amount (%) Amount (%) Book value Amount (%) Amount (%) Book value
Accounts receivable assessed individually
for bad debt provision 331127628.53 25.78 331127628.53 100.00 330577872.37 28.05 330462462.30 99.97 115410.07
Accounts receivable assessed collectively
for bad debt provision 953121576.10 74.22 86086925.24 9.03 867034650.86 847814360.04 71.95 105185633.91 12.41 742628726.13
Including:
Due from related party customers 32127911.88 2.50 239028.71 0.74 32699694.88 4293349.49 0.37 367735.61 8.57 3925613.88
Due from non-related party customers 920993664.22 71.72 85847896.53 9.32 834334955.98 843521010.55 71.58 104817898.30 12.43 738703112.25
Total 1284249204.63 100.00 417214553.77 32.49 867034650.86 1178392232.41 100.00 435648096.21 36.97 742744136.20
Items assessed individually for bad debt provision:
Unit: RMB
Opening balance Closing balance
Bad debt Bad debt Provision Reason for
Name Book balance provision Book balance provision percentage making provision
Customer 1 26697528.70 26697528.70 26697528.70 26697528.70 100.00 Long outstanding
Customer 2 19898829.81 19898829.81 19898829.81 19898829.81 100.00 Long outstanding
Customer 3 14813369.27 14813369.27 14813369.27 14813369.27 100.00 Long outstanding
Customer 4 14453432.93 14453432.93 14453432.93 14453432.93 100.00 Long outstanding
Customer 5 13396601.22 13396601.22 13396601.22 13396601.22 100.00 Long outstanding
Customer 6 10954285.12 10954285.12 10954285.12 10954285.12 100.00 Long outstanding
Customer 7 10624137.64 10624137.64 10624137.64 10624137.64 100.00 Long outstanding
Customer 8 10614691.35 10614691.35 10614691.35 10614691.35 100.00 Long outstanding
Customer 9 10250525.02 10250525.02 10250525.02 10250525.02 100.00 Long outstanding
71 companies including
customer 10 198874471.31 198759061.24 199424227.47 199424227.47 100.00 Long outstanding
Total 330577872.37 330462462.30 331127628.53 331127628.53
SHANDONG CHENMING PAPER HOLDINGS LIMITED 131
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
4. Accounts receivable (Cont’d)
(2) Disclosure by bad debt provision method (Cont’d)
Number of category being assessed collectively for bad debt provision: 2
Name of category being assessed collectively for bad debt provision: Due from related parties
Unit: RMB
Closing balance
Provision
Name Book balance Bad debt provision percentage (%)
Within 1 year 31989611.18 228747.77 0.72
1 to 2 years 138300.70 10280.94 7.43
Total 32127911.88 239028.71 0.74
Name of category being assessed collectively for bad debt provision: Due from non-related parties
Unit: RMB
Closing balance
Provision
Name Book balance Bad debt provision percentage (%)
Within 1 year 727616080.39 7783111.82 1.07
1 to 2 years 80843017.12 17642385.32 21.82
2 to 3 years 64349581.69 24613921.44 38.25
Over 3 years 48184985.02 35808477.95 74.31
Total 920993664.22 85847896.53 9.32
132 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
4. Accounts receivable (Cont’d)
(3) Provision recovery or reversal of bad debt provision for the period
Bad debt provision for the period:
Unit: RMB
Changes in the period
Opening Recovery or Closing
Category balance Provision reversal Written-off Others balance
Bad debt provision 435648096.21 6875070.27 16775415.28 -8533197.43 417214553.77
Total 435648096.21 6875070.27 16775415.28 -8533197.43 417214553.77
Explanation: “Others” included a decrease in bad debts of RMB8510796.29 from disposal of subsidiaries and a
decrease in bad debts of RMB22401.14 due to changes in exchange rates.
(4) Top five accounts receivable based on closing balance of debtors
The total amount of top five accounts receivable and contract assets based on closing balance of debtors for the
period amounted to RMB259601693.63 in total accounting for 20.21% of the total closing balance of accounts
receivable and contract assets. The closing balance of the corresponding bad debt provision amounted to
RMB49225151.26 in total.Unit: RMB
As a percentage Closing balance
of the closing of bad debt
Closing balance balance of the provision of
of accounts total accounts accounts
Name of entity receivable receivable (%) receivable
Customer 1 62673728.26 4.88 1140661.86
Customer 2 56974729.52 4.44 871516.47
Customer 3 52402698.21 4.08 953729.11
Customer 4 45493811.40 3.54 45493811.40
Customer 5 42056726.24 3.27 765432.42
Total 259601693.63 20.21 49225151.26
SHANDONG CHENMING PAPER HOLDINGS LIMITED 133
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VII. Notes to items of the consolidated financial statements (Cont’d)
5. Accounts receivable financing
(1) Accounts receivable financing by category
Unit: RMB
Item Closing balance Opening balance
Bank acceptance bills 41192518.58 35978138.45
Total 41192518.58 35978138.45
Explanation: All the accounts receivable financing of the Company were bank acceptance bills. Since the terms
of the bank acceptance bills did not exceed one year and both parties to the endorsement of the bills agreed to
offset equal amounts of accounts receivable and payable based on the face value of the bills fair value equalled
amortised cost.Certain subsidiaries of the Company discount and endorse part of the bank acceptance bills based on their daily
capital management needs. Therefore the bank acceptance bills of the subsidiaries are classified as financial
assets measured at fair value through other comprehensive income.The Company has no bank acceptance bill assessed individually for impairment provision. At the end of the
period the Company believed that there was no significant credit risk in the bank acceptance bills held and no
major losses would be incurred due to default of banks.
(2) Disclosure by bad debt provision method
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Provision Provision
Category Amount Percentage Amount percentage Book value Amount Percentage Amount percentage Book value
Items assessed collectively for bad debt provision 41192518.58 100.00% 41192518.58 35978138.45 100.00% 35978138.45
Including:
Bank acceptance bills 41192518.58 100.00% 41192518.58 35978138.45 100.00% 35978138.45
Total 41192518.58 100.00% 41192518.58 35978138.45 100.00% 35978138.45
Number of category being assessed collectively for bad debt provision: 1
Name of category being assessed collectively for bad debt provision: Bank acceptance bills
Unit: RMB
Closing balance
Name Book balance Bad debt provision Provision percentage
Bank acceptance bills 41192518.58
Total 41192518.58
134 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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VII. Notes to items of the consolidated financial statements (Cont’d)
5. Accounts receivable financing (Cont’d)
(3) Accounts receivable financing endorsed or discounted but not yet due as at the balance sheet date
Unit: RMB
Amount Amount not yet
derecognised as derecognised as
at the end of at the end of
Item the period the period
Bank acceptance bills 1327700536.78
Total 1327700536.78
Explanation: The credit risk and deferred payment risk of bank acceptance bills used for discounting were very
small and the interest rate risk related to the bills had been transferred to the banks. It was determined that the
major risks and rewards of the ownership of the bills had been transferred so these bills were derecognised.
6. Other receivables
Unit: RMB
Item Closing balance Opening balance
Other receivables 324297609.39 302065195.40
Total 324297609.39 302065195.40
SHANDONG CHENMING PAPER HOLDINGS LIMITED 135
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VII. Notes to items of the consolidated financial statements (Cont’d)
6. Other receivables (Cont’d)
(1) Other receivables
1) Classification of other receivables by nature
Unit: RMB
Closing book Opening book
Nature balance balance
Open credit 496853994.84 530150792.13
Guarantee deposit and deposit 15793751.27 17728522.85
Reserve and borrowings 10117617.08 7630872.36
Others 11831405.12 8967157.23
Subtotal 534596768.31 564477344.57
Bad debt provision 210299158.92 262412149.17
Total 324297609.39 302065195.40
2) Disclosure by ageing
Unit: RMB
Closing book Opening book
Ageing balance balance
Within 1 year (including 1 year) 92748870.05 90215052.30
1 to 2 years 81246141.02 229760548.66
2 to 3 years 162190057.26 14229629.01
Over 3 years 198411699.98 230272114.60
Subtotal 534596768.31 564477344.57
Bad debt provision 210299158.92 262412149.17
Total 324297609.39 302065195.40
The basis used by the ageing analysis: the ageing of other receivables is the length of time of the Company’s
outstanding other receivables based on invoice date. The closing balance is recognised one by one from the
end of the period onwards until the amounts add up to the balance. It is also broken up by intervals of within
1 year 1-2 years 2-3 years and over 3 years.
136 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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VII. Notes to items of the consolidated financial statements (Cont’d)
6. Other receivables (Cont’d)
(1) Other receivables (Cont’d)
3) Disclosure by bad debt provision method
√ Applicable □ Not applicable
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Provision Provision
Percentage percentage Percentage percentage
Category Amount (%) Amount (%) Book value Amount (%) Amount (%) Book value
Items assessed
individually for bad
debt provision 152565759.82 28.54 133492563.60 87.50 19073196.22 174722856.98 30.95 154029984.81 88.16 20692872.17
Items assessed
collectively for bad
debt provision 382031008.49 71.46 76806595.32 20.10 305224413.17 389754487.59 69.05 108382164.36 27.81 281372323.23
Including:
Amount due from
government
agencies 7263017.19 1.36 1160933.95 15.98 6102083.24 7377645.24 1.31 760793.30 10.31 6616851.94
Amount due from
related parties 244985578.53 45.83 44789914.47 18.28 200195664.06 257408963.53 45.60 82110849.54 31.90 175298113.99
Other receivables 129782412.77 24.28 30855746.90 23.77 98926665.87 124967878.82 22.14 25510521.52 20.41 99457357.30
Total 534596768.31 100.00 210299158.92 39.34 324297609.39 564477344.57 100.00 262412149.17 46.49 302065195.40
Items assessed individually for bad debt provision:
Unit: RMB
Opening balance Closing balance
Bad debt Bad debt Provision Reason for
Name Book balance provision Book balance provision percentage (%) making provision
Customer 1 42786737.29 32120815.44 22853672.29 12187750.44 53.33 Uncertain recovery to
a certain extent
Customer 2 11002393.00 11002393.00 11002393.00 11002393.00 100.00 Uncertain recovery to
a certain extent
Customer 3 9408410.84 5077194.70 9408410.84 5077194.70 53.96 Uncertain recovery to
a certain extent
Customer 4 6197937.85 6197937.84 6005795.43 6005795.42 100.00 Uncertain recovery to
a certain extent
201 customers including 105327378.00 99631643.83 103295488.26 99219430.04 96.05 Uncertain recovery to
customer 5 a certain extent
Total 174722856.98 154029984.81 152565759.82 133492563.60 87.50
SHANDONG CHENMING PAPER HOLDINGS LIMITED 137
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
6. Other receivables (Cont’d)
(1) Other receivables (Cont’d)
3) Disclosure by bad debt provision method (Cont’d)
Bad debt provision based on the general model of ECLs:
Unit: RMB
Stage 1 Stage 2 Stage 3
Lifetime ECLs
ECLs for the (not credit- Lifetime ECLs
Bad debt provision next 12 months impaired) (credit-impaired) Total
Balance as at 1 January 2026 108382164.36 154029984.81 262412149.17
Balance as at 1 January 2026
for the period
– Transferred to stage 2
– Transferred to stage 3
– Reversed to stage 2
– Reversed to stage 1
Provision for the period 6229869.14 400004.76 6629873.90
Reversal for the period 37381372.47 985642.17 38367014.64
Transfer for the period
Write-off for the period 187591.15 19937565.00 20125156.15
Other changes -236474.56 -14218.80 -250693.36
Balance as at 30 June 2026 76806595.32 133492563.60 210299158.92
Explanation: “Others” included a decrease in bad debts of RMB55728.58 from disposal of subsidiaries and
a decrease in bad debts of RMB194964.78 due to changes in exchange rates.Changes in carrying book balances with significant changes in loss provision for the period
□ Applicable √ Not applicable
4) Other receivables actually written off for the period
Unit: RMB
Item Write-off amount
Other receivables actually written off 20125156.15
138 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
6. Other receivables (Cont’d)
(1) Other receivables (Cont’d)
4) Other receivables actually written off for the period (Cont’d)
In particular material write-off of other receivables was as follows:
Unit: RMB
Write-off Whether arising
Nature of other Reason for procedures from related
Name of entity receivables Write-off amount write-off performed party transactions
Customer 1 Open credit 19933065.00 Irrecoverable Yes No
Total 19933065.00
5) Provision recovery or reversal of bad debt provision for the period
Bad debt provision for the period:
Unit: RMB
Changes in the period
Opening Recovery or Transfer or Closing
Category balance Provision reversal write-off Others balance
Other receivables 262412149.17 6629873.90 38367014.64 20125156.15 -250693.36 210299158.92
Total 262412149.17 6629873.90 38367014.64 20125156.15 -250693.36 210299158.92
6) Top five other receivables according to closing balance of debtors
The total amount of the Company’s top five other receivables based on closing balance of debtors for the
period was RMB295390574.69 which accounted for 55.24% of the closing balance of the total other
receivables. The closing balance of corresponding bad debt provision amounted to RMB56928819.75.Unit: RMB
As a percentage
of the closing
balance of total
other receivables Closing balance of
Name of entity Nature Closing balance Ageing (%) bad debt provision
Customer 1 Financial support 147567756.61 Within 1 year 1 to 2 years and 2 to 3 years 27.60 27559486.48
Customer 2 Financial support 85130749.84 Within 1 year 1 to 2 years and 2 to 3 years 15.92 6618024.97
Customer 3 Open credit 22853672.29 Over 5 years 4.27 12187750.44
Customer 4 Open credit 20626387.00 Within 1 year and 1 to 2 years 3.86 1031319.35
Customer 5 Open credit 19212008.95 Within 1 year and 1 to 5 years or above 3.59 9532238.51
Total 295390574.69 55.24 56928819.75
SHANDONG CHENMING PAPER HOLDINGS LIMITED 139
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
7. Prepayments
(1) Prepayments by ageing
Unit: RMB
Closing balance Opening balance
Ageing Amount Percentage (%) Amount Percentage (%)
Within 1 year 390600812.36 77.24 175145505.30 62.12
1 to 2 years 115093090.26 22.76 106785382.77 37.88
Total 505693902.62 100.00 281930888.07 100.00
(2) Top five prepayments based on closing balance of prepaid parties
The total amount of top five prepayments based on closing balance of prepaid parties for the period amounted to
RMB170844705.04 accounting for 33.78% of the closing balance of the total prepayments.Unit: RMB
As a percentage
of the closing
Closing balance balance of the
Name of entity of prepayments total prepayments
Supplier 1 57266206.85 11.32%
Supplier 2 33347426.39 6.59%
Supplier 3 31805326.89 6.29%
Supplier 4 30436484.19 6.02%
Supplier 5 17989260.72 3.56%
Total 170844705.04 33.78%
140 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
8. Inventories
(1) Categories of inventories
Unit: RMB
Closing balance Opening balance
Impairment Impairment
provision for provision for
inventories or inventories or
performance Carrying performance Carrying
Item Book balance costs amount Book balance costs amount
Raw materials 1251282541.25 11648088.72 1239634452.53 1717133758.35 17057043.13 1700076715.22
Work-in-process products 163260699.46 163260699.46 22951311.02 22951311.02
Goods in stock 1405602334.32 20659835.76 1384942498.56 559227643.16 29138403.73 530089239.43
Consumable biological assets 1079410370.06 1079410370.06 1063081495.03 1063081495.03
Total 3899555945.09 32307924.48 3867248020.61 3362394207.56 46195446.86 3316198760.70
Note: Consumable biological assets are forestry assets.
(2) Impairment provision for inventories and performance costs
Unit: RMB
Increase during the period Decrease during the period
Opening Reversal or Closing
Item balance Provision Others transfer Others balance
Raw materials 17057043.13 5029.74 5413984.15 11648088.72
Goods in stock 29138403.73 14447539.18 22667962.89 258144.26 20659835.76
Total 46195446.86 14452568.92 28081947.04 258144.26 32307924.48
Basis for recognition of net realisable Reason for reversal or written-off of
value/residual consideration with impairment provision for inventories/
Item future cost performance costs during the period
Raw materials The cost of raw materials is higher than Written-off of impairment provision for
their net realisable value inventories due to sales of impaired
spare parts during the period
Goods in stock The cost of goods in stock is higher than Written-off of impairment provision for
their net realisable value inventories due to sales of impaired
goods in stock during the period
Other explanation: others decreased due to disposal of Yujing Hotel.SHANDONG CHENMING PAPER HOLDINGS LIMITED 141
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
9. Non-current assets due within one year
Unit: RMB
Item Closing balance Opening balance
Long-term receivables due within one year 6883842.48 194204719.66
Total 6883842.48 194204719.66
Explanations: * Long-term receivables due within one year amounting to RMB2523662.15 (opening balance:
RMB17874763.63) were deposits receivables; * Long-term receivables due within one year amounting
to RMB584237.93 (opening balance: RMB368464.72) were sublease receivables; * Long-term
receivables due within one year amounting to RMB3775942.40 (opening balance: RMB175961491.31)
were equity transfer receivables.
10. Other current assets
Unit: RMB
Item Closing balance Opening balance
Input tax amount to be deducted 210386224.87 195703989.75
Prepaid expenses 50996468.64 44689608.58
Prepaid tax 8304463.03 9103609.81
Other payments 3396297.14 2798952.00
Total 273083453.68 252296160.14
11. Long-term receivables
(1) Particulars of long-term receivables
Unit: RMB
Closing balance Opening balance
Bad debt Carrying Bad debt Carrying Discount
Item Book balance provision amount Book balance provision amount rate range
Deposit for finance lease 128388963.64 128388963.64 131898975.36 131898975.36 3%-12%
Less: Unrealised financing income 24569752.02 24569752.02 22819303.12 22819303.12
Sublease receivable for woodland 19631128.16 899519.98 18731608.18 19799728.16 899519.98 18900208.18 3.6%
Less: Unrealised financing income 6725284.89 6725284.89 6941058.10 6941058.10
Equity transfer receivables 568132025.00 568132025.00 743396900.00 743396900.00 3.5%
Less: Unrealised financing income 44563021.53 44563021.53 56582365.94 56582365.94
Debt transfer receivables 2262956136.67 2262956136.67 2262956136.67 2262956136.67 3.5%
Less: Unrealised financing income 478018656.30 478018656.30 508717826.72 508717826.72
Less: Long-term payables due within one year 6883842.48 6883842.48 194204719.66 194204719.66
Less: Other current liabilities 21979990.17 21979990.17 29274914.41 29274914.41
Total 2396367706.08 899519.98 2395468186.10 2339511552.24 899519.98 2338612032.26
142 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
11. Long-term receivables (Cont’d)
(2) Disclosure by bad debt provision method
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Provision Provision
Percentage percentage Carrying Percentage percentage Carrying
Category Amount (%) Amount (%) amount Amount (%) Amount (%) amount
Assessed individually for bad debt provision
Including:
Assessed collectively for bad debt provision 2396367706.08 100.00 899519.98 0.04 2395468186.10 2339511552.24 100.00 899519.98 0.04 2338612032.26
Including:
Deposits receivable 79315559.30 3.31 79315559.30 61929994.20 2.65 61929994.20
Sublease receivable for woodland 12321605.34 0.51 899519.98 7.30 11422085.36 12490205.34 0.53 899519.98 7.20 11590685.36
Equity transfer receivables 519793061.07 21.69 519793061.07 510853042.75 21.84 510853042.75
Debt transfer receivables 1784937480.37 74.49 1784937480.37 1754238309.95 74.98 1754238309.95
Total 2396367706.08 100.00 899519.98 0.04 2395468186.10 2339511552.24 100.00 899519.98 0.04 2338612032.26
Number of categories of items assessed collectively for bad debt provision: 4
Name of category being assessed collectively for bad debt provision: Deposits receivable
Unit: RMB
Closing balance
Provision
Name Book balance Bad debt provision percentage (%)
Within 1 year
1 to 2 years 19843812.58
2 to 3 years 4274512.29
Over 3 years 55197234.43
Total 79315559.30
SHANDONG CHENMING PAPER HOLDINGS LIMITED 143
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
11. Long-term receivables (Cont’d)
(2) Disclosure by bad debt provision method (Cont’d)
Name of category being assessed collectively for bad debt provision: Sublease receivable for woodland
Unit: RMB
Closing balance
Provision
Name Book balance Bad debt provision percentage (%)
Within 1 year
1 to 2 years 29065.83 703.39 2.42
2 to 3 years 46326.49 1894.75 4.09
3 to 4 years 1651994.25 103937.72 6.29
4 to 5 years 343411.04 32556.36 9.48
Over 5 years 10250807.73 760427.76 7.42
Total 12321605.34 899519.98 7.30
Name of category being assessed collectively for bad debt provision: Equity transfer receivables
Unit: RMB
Closing balance
Provision
Name Book balance Bad debt provision percentage (%)
Within 1 year
1 to 2 years 191060161.82
2 to 3 years 238494348.53
Over 3 years 90238550.72
Total 519793061.07
144 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
11. Long-term receivables (Cont’d)
(2) Disclosure by bad debt provision method (Cont’d)
Name of category being assessed collectively for bad debt provision: Debt transfer receivables
Unit: RMB
Closing balance
Provision
Name Book balance Bad debt provision percentage (%)
Within 1 year
1 to 2 years
2 to 3 years
Over 3 years 1784937480.37
Total 1784937480.37
Bad debt provision based on the general model of ECLs
Unit: RMB
Stage 1 Stage 2 Stage 3
Lifetime ECLs
ECLs for the (not credit- Lifetime ECLs
Bad debt provision next 12 months impaired) (credit-impaired) Total
Balance as at 1 January 2026 899519.98 899519.98
Balance as at 1 January 2026 for
the period
– Transferred to stage 2
– Transferred to stage 3
– Reversed to stage 2
– Reversed to stage 1
Provision for the period
Reversal for the period
Transfer for the period
Write-off for the period
Other changes
Balance as at 30 June 2026 899519.98 899519.98
SHANDONG CHENMING PAPER HOLDINGS LIMITED 145
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
12. Long-term equity investments
Unit: RMB
Change for the period
Investment Distribution
gain or loss Adjustment Other of cash
Opening balance recognised of other change dividend or Closing balance
Opening balance of impairment Additional Withdrawn under equity comprehensive in equity profit Impairment Closing balance of impairment
Investee (carrying amount) provision contribution contribution method income interest declared provision Others (carrying amount) provision
I. Joint ventures
Shouguang Chenming Huisen New-style
Construction Materials Co. Ltd. 8628248.47 -461714.59 250000.00 7916533.88
Weifang Port Wood Chip Wharf Co. Ltd. 73048226.95 -5491919.25 67556307.70
Shouguang Meite Environmental
Technology Co. Ltd. 15557756.32 3200254.34 18758010.66
Weifang Xingxing United Chemical Co. Ltd. 61230494.34 30643890.78 61230494.34 30643890.78
Subtotal 158464726.08 30643890.78 -2753379.50 250000.00 155461346.58 30643890.78
II. Associates
Zhuhai Dechen New Third Board Equity
Investment Fund Company (Limited
Partnership) 24776145.22 708070.78 25484216.00
Ningbo Kaichen Huamei Equity Investment
Fund Partnership (Limited Partnership) 146082017.37 72476415.75 218558433.12
Nanchang Tianchen Port Co. Ltd. 52060383.31 6110988.50 570432.14 52630815.45 6110988.50
Goldtrust Futures Co. Ltd. 199333467.07 4010000.00 6868414.01 206201881.08 4010000.00
Xuchang Chenming Paper Co. Ltd. 5994545.96 5994545.96
Chenming (Qingdao) Asset Management
Co. Ltd. 3315927.52 220835.14 3536762.66
Wuhan Chenming Hanyang Paper Holdings
Co. Ltd. 226042189.38 4048296.84 -1075454.50 224966734.88 4048296.84
Guangdong Nanyue Bank Co. Ltd. 1285878489.32 -18632397.86 3961253.98 1271207345.44
Subtotal 1937488619.19 20163831.30 61136315.46 3961253.98 2002586188.63 20163831.30
Total 2095953345.27 50807722.08 58382935.96 3961253.98 250000.00 2158047535.21 50807722.08
Determination of net amount of recoverable amount measured at fair value after deducting disposal expenses
□ Applicable √ Not applicable
Determination of recoverable amount based on the present value of expected future cash flows
□ Applicable √ Not applicable
146 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
13. Other non-current financial assets
Unit: RMB
Item Closing balance Opening balance
Investment in debt instruments 241977314.93 241977314.93
Investment in equity instruments 85326921.84 85957311.39
Total 327304236.77 327934626.32
14. Investment property
(1) Investment property under the cost method
√ Applicable □ Not applicable
Unit: RMB
Housing and
Item building structure Total
I. Original carrying amount
1. Opening balance 6962001486.94 6962001486.94
2. Increase during the period
3. Decrease during the period
4. Closing balance 6962001486.94 6962001486.94
II. Accumulated depreciation and accumulated amortisation
1. Opening balance 1451018845.12 1451018845.12
2. Increase during the period 93861757.01 93861757.01
(1) Provision or Amortisation 93861757.01 93861757.01
3. Decrease during the period
4. Closing balance 1544880602.13 1544880602.13
III. Impairment provision
1. Opening balance 108918920.25 108918920.25
2. Increase during the period
3. Decrease during the period
4. Closing balance 108918920.25 108918920.25
IV. Carrying amount
1. Closing carrying amount 5308201964.56 5308201964.56
2. Opening carrying amount 5402063721.57 5402063721.57
SHANDONG CHENMING PAPER HOLDINGS LIMITED 147
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
14. Investment property (Cont’d)
(1) Investment property under the cost method (Cont’d)
Note: Investment properties under the Company primarily include:
* Pujiang International Finance Plaza located at No. 1098 Dongdaming Road Hongkou District Shanghai is a long-term held office
property of Shanghai Hongtai Real Estate Co. Ltd. a subsidiary of the Company and leasehold land mainly used for external rental or
office purposes;
* Jinan Chenming Finance Building (濟南晨鳴金融大廈) located in No. 7 Zone Hanyu Financial Business Center No. 7000 Jingshi Road
Jinan Innovation Zone is a long-term held office property of Shandong Chenming Investment Limited a subsidiary of the Company and
leasehold land mainly used for external rental or office purposes;
* Fatum Apartment (法朵公寓) located at No. 463 Anbo Road No. 22 Lane 467 Anbo Road Yangpu District Shanghai is a long-term
held office property of Shanghai Heruiming Property Management Co. Ltd. a subsidiary of the Company and leasehold land mainly used
for external rental purposes;
* Guangzhou Zhengjia Plaza (廣州正佳廣場) located at Room 3901-3926 No. 372 Huanshi East Road Yuexiu District Guangzhou is a
long-term held office property of Guangzhou Chenming Property Management Co. Ltd. a subsidiary of the Company and leasehold land
mainly used for external rental purposes;
* Shenzhen Zhuoyue Baozhong Times Square (深圳卓越寶中時代廣場) located at Room 3201-3210 Building C Zhuoyue Baozhong
Times Square (Phase 2) Xin’an Sub-district Bao’an District Shenzhen is a long-term held office property of Guangzhou Chenming
Property Management Co. Ltd. a subsidiary of the Company and leasehold land mainly used for external rental purposes.* Shanghai Xizang South Road shop located at No. 518-528 Xizang South Road Shanghai is a long-term store held by Wuhan Junheng
Property Management Co. Ltd. a subsidiary and leasehold land mainly for external rental purposes.Explanation: * For details of restricted ownership please refer to note VII. 24.Determination of recoverable amount as the net amount of fair value less disposal expenses
□ Applicable √ Not applicable
Determination of present value of recoverable amount based on expected cash flows
□ Applicable √ Not applicable
148 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
15. Fixed assets
Unit: RMB
Item Closing balance Opening balance
Fixed assets 28129230253.42 29219679495.81
Total 28129230253.42 29219679495.81
(1) Particulars of fixed assets
Unit: RMB
Electronic
Housing and Machinery and Transportation equipment and
Item building structure equipment equipment others Total
I. Original carrying amount:
1. Opening balance 11642580936.20 43329017031.91 241860214.83 399904514.61 55613362697.55
2. Increase during the period 5630665.00 53327550.37 103973.17 1057220.94 60119409.48
(1) Acquisition 30020241.12 103973.17 1057220.94 31181435.23
(2) Transferred from
construction in progress 5630665.00 23307309.25 28937974.25
3. Decrease during the period 191632339.22 25607379.78 1771984.06 121819633.23 340831336.29
(1) Disposal or retirement 191632339.22 25607379.78 1771984.06 121819633.23 340831336.29
4. Closing balance 11456579261.98 43356737202.50 240192203.94 279142102.32 55332650770.74
II. Accumulated depreciation
1. Opening balance 3190249336.81 22117467080.62 200461944.42 253219311.68 25761397673.53
2. Increase during the period 145512843.22 843150020.67 3389459.03 1830253.15 993882576.07
(1) Provision 145512843.22 843150020.67 3389459.03 1830253.15 993882576.07
3. Decrease during the period 58002281.19 16719238.98 1574047.22 107849693.10 184145260.49
(1) Disposal or retirement 58002281.19 16719238.98 1574047.22 107849693.10 184145260.49
4. Closing balance 3277759898.84 22943897862.31 202277356.23 147199871.73 26571134989.11
III. Impairment provision
1. Opening balance 67085640.40 557750764.76 13889.13 7435233.92 632285528.21
2. Increase during the period
3. Decrease during the period
4. Closing balance 67085640.40 557750764.76 13889.13 7435233.92 632285528.21
IV. Carrying amount
1. Closing carrying amount 8111733722.74 19855088575.43 37900958.58 124506996.67 28129230253.42
2. Opening carrying amount 8385245958.99 20653799186.53 41384381.28 139249969.01 29219679495.81
Explanation: For details of restricted ownership please refer to note VII. 24.SHANDONG CHENMING PAPER HOLDINGS LIMITED 149
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
15. Fixed assets (Cont’d)
(2) Particulars of temporarily idle fixed assets
Unit: RMB
Original carrying Accumulated Impairment Carrying
Item amount depreciation provision amount Remark
Housing and building structure 72464084.41 29302597.88 3093008.64 40068477.89
Machinery and equipment 1357992076.66 793134904.26 335153202.89 229703969.51
Electronic equipment and others 1851227.95 1587755.71 251732.52 11739.72
Total 1432307389.02 824025257.85 338497944.05 269784187.12
(3) Particulars of fixed assets without obtaining property right certificates
Unit: RMB
Reason for not yet
obtaining property
Item Carrying amount right certificates
Housing and building structure (Chongmin Culture Development
(Shanghai) Co. Ltd.) 1096363182.57 Under application
Housing and building structure (Zhanjiang Chenming Pulp & Paper
Co. Ltd.) 850554617.10 Under application
Housing and building structure (Shouguang Meilun Paper Co. Ltd.) 447100966.86 Under application
Housing and building structure (Jiangxi Chenming Paper Co. Ltd.) 180646694.36 Under application
Housing and building structure (Shandong Chenming Paper
Holdings Limited) 126602660.78 Under application
Housing and building structure (Huanggang Chenming Pulp &
Paper Co. Ltd.) 21674519.96 Under application
Total 2722942641.63
16. Construction in progress
Unit: RMB
Item Closing balance Opening balance
Construction in progress 612845949.11 619780121.33
Materials for project 6837923.26 6860400.59
Total 619683872.37 626640521.92
150 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
16. Construction in progress (Cont’d)
(1) Particulars of construction in progress
Unit: RMB
Closing balance Opening balance
Impairment Carrying Impairment Carrying
Item Book balance provision amount Book balance provision amount
Relocation of Wuhan 4800 papermaking
machine project (Zhanjiang Chenming) 554811998.96 94359128.45 460452870.51 555984128.45 94359128.45 461625000.00
Technological transformation project 149367698.78 11645893.36 137721805.42 143562303.05 11645893.36 131916409.69
Environmental retrofit and alkali boilers flue
gas denitrification deep governance project
(Huanggang Pulp & Paper) 7561814.92 7561814.92 19712686.12 19712686.12
300000-tonne softwood pulp project
(Shandong Chenming) 12703321.77 6177296.25 6526025.52 12703321.77 6177296.25 6526025.52
Others 19170138.78 18586706.04 583432.74 18586706.04 18586706.04
Total 743614973.21 130769024.10 612845949.11 750549145.43 130769024.10 619780121.33
(2) Changes in material construction in progress projects for the period
Unit: RMB
Including: Capitalisation
Transfer to Other Capitalised rate of the
Increase fixed asset deductions Accumulated Accumulated interest interest
Opening during the during the during the Closing investment to Construction capitalised amount during amount during
Project name Budget balance period period period balance budget (%) progress (%) interest the period the period Source of fund
Relocation of Wuhan 4800 papermaking 800000000.00 555984128.45 1172129.49 554811998.96 69.35 71.00 Self-owned funds
machine project (Zhanjiang Chenming) and borrowings
300000-tonne softwood pulp project 1488980000.00 12703321.77 12703321.77 0.85 0.70 Self-owned funds
(Shandong Chenming) and borrowings
Total 2288980000.00 568687450.22 1172129.49 567515320.73 － － －
Other deductions of the Wuhan relocation project during the period mainly include the use by Zhanjiang Chenming
workshop and the transfer for use by other subsidiaries.SHANDONG CHENMING PAPER HOLDINGS LIMITED 151
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
16. Construction in progress (Cont’d)
(3) Impairment provision for construction in progress for the period
Unit: RMB
Opening Increase during Decrease during Closing Reason for
Item balance the period the period balance provision
Relocation of Wuhan 4800 papermaking
machine project (Zhanjiang) 94359128.45 94359128.45
Differentiated viscose fibre and spinning
and chemical project (Huanggang
Pulp & Paper) 12609724.89 12609724.89
300000-tonne softwood pulp project
(Shandong Chenming) 6177296.25 6177296.25
Automation upgrade for water treatment
(Jilin Chenming) 662764.60 662764.60
Others 16960109.91 16960109.91
Total 130769024.10 130769024.10 －
(4) Impairment provision for construction in progress
□ Applicable √ Not applicable
(5) Materials for project
Unit: RMB
Closing balance Opening balance
Impairment Impairment
Item Book balance provision Book value Book balance provision Book value
Special materials 6837923.26 6837923.26 6860400.59 6860400.59
Total 6837923.26 6837923.26 6860400.59 6860400.59
152 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
17. Bearer biological assets
(1) Bearer biological assets under the cost method
√ Applicable □ Not applicable
Unit: RMB
Item Tea tree Total
I. Original carrying amount
1. Opening balance 18735371.32 18735371.32
2. Increase during the period
(1) Cultivation
3. Decrease during the period
(1) Disposal
(2) Others
4. Closing balance 18735371.32 18735371.32
II. Accumulated depreciation
1. Opening balance
2. Increase during the period
3. Decrease during the period
4. Closing balance
III. Impairment provision
1. Opening balance 16861834.19 16861834.19
2. Increase during the period
3. Decrease during the period
4. Closing balance 16861834.19 16861834.19
IV. Carrying amount
1. Closing carrying amount 1873537.13 1873537.13
2. Opening carrying amount 1873537.13 1873537.13
(2) Impairment test on bearer biological assets under the cost method
□ Applicable √ Not applicable
SHANDONG CHENMING PAPER HOLDINGS LIMITED 153
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
18. Right-of-use assets
(1) Particulars of right-of-use assets
Unit: RMB
Housing and
Item Land use rights building structure Total
I. Original carrying amount
1. Opening balance 185914371.29 5480552.86 191394924.15
2. Increase during the period 1000000.00 1000000.00
(1) Transfer 1000000.00 1000000.00
3. Decrease during the period 557454.59 557454.59
(1) Transfer or held for sale 557454.59 557454.59
4. Closing balance 185356916.70 6480552.86 191837469.56
II. Accumulated depreciation –
1. Opening balance 38542223.66 1554682.57 40096906.23
2. Increase during the period 2963273.70 163777.42 3127051.12
(1) Provision 2963273.70 163777.42 3127051.12
3. Decrease during the period 493480.89 493480.89
(1) Transfer or held for sale 493480.89 493480.89
4. Closing balance 41012016.47 1718459.99 42730476.46
III. Impairment provision
1. Opening balance
2. Increase during the period
(1) Provision
3. Decrease during the period
(1) Disposal
4. Closing balance
IV. Carrying amount
1. Closing carrying amount 144344900.23 4762092.87 149106993.10
2. Opening carrying amount 147372147.63 3925870.29 151298017.92
154 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
19. Intangible assets
(1) Particulars of intangible assets
Unit: RMB
Certificates of
Item Land use rights Software Patents third party right Total
I. Original carrying amount
1. Opening balance 2193792582.09 21435964.86 27493613.05 15908674.87 2258630834.87
2. Increase during the period 196200.00 196200.00
(1) Acquisition 196200.00 196200.00
3. Decrease during the period 20587581.00 676068.38 21263649.38
(1) Disposal 20587581.00 676068.38 21263649.38
4. Closing balance 2173205001.09 20759896.48 27689813.05 15908674.87 2237563385.49
II. Accumulated amortisation
1. Opening balance 615535064.27 21435964.86 1768599.21 15908674.87 654648303.21
2. Increase during the period 24210394.53 25806.69 24236201.22
(1) Provision 24210394.53 25806.69 24236201.22
3. Decrease during the period 9378414.89 676068.38 10054483.27
(1) Disposal 9378414.89 676068.38 10054483.27
4. Closing balance 630367043.91 20759896.48 1794405.90 15908674.87 668830021.16
III. Impairment provision
1. Opening balance
2. Increase during the period
3. Decrease during the period
4. Closing balance
IV. Carrying amount
1. Closing carrying amount 1542837957.18 25895407.15 1568733364.33
2. Opening carrying amount 1578257517.82 25725013.84 1603982531.66
As at the end of the period the intangible assets from internal R&D of the Company accounted for 0.00% of the
balance of intangible assets.Explanation: For details of restricted ownership please refer to note VII. 24.
(2) Information and resources recognised as intangible assets
□ Applicable √ Not applicable
SHANDONG CHENMING PAPER HOLDINGS LIMITED 155
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
19. Intangible assets (Cont’d)
(3) Land use rights without proper title certificates
Unit: RMB
Reason for not yet
obtaining property
Item Carrying amount right certificates
Land (Zhanjiang Chenming Pulp & Paper Co. Ltd.) 54908449.01 Under application
Land (Shandong Chenming Paper Holdings Limited) 1251582.00 Under application
Total 56160031.01
(4) Impairment test on intangible assets
□ Applicable √ Not applicable
20. Goodwill
(1) Original carrying amount of goodwill
Unit: RMB
Increase during Decrease during
the period the period
Arising from
Name of investee or event Opening business Closing
generating goodwill balance combinations Disposal balance
Jilin Chenming Paper Co. Ltd. 14314160.60 14314160.60
Jiangxi Chenming Port Co. Ltd. 8273638.42 8273638.42
Total 22587799.02 22587799.02
(2) Provision for impairment of goodwill
Unit: RMB
Increase during Decrease during
Name of investee or event Opening the period the period Closing
generating goodwill balance Provision Disposal balance
Jilin Chenming Paper Co. Ltd. 14314160.60 14314160.60
Jiangxi Chenming Port Co. Ltd. 8273638.42 8273638.42
Total 22587799.02 22587799.02
156 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
20. Goodwill (Cont’d)
(3) Specific determination of recoverable amount
Determination of recoverable amount as the net amount of fair value less disposal expenses
□ Applicable √ Not applicable
Determination of recoverable amount based on the present value of expected future cash flows
□ Applicable √ Not applicable
(4) Fulfilment of performance undertaking and corresponding impairment of goodwill
Goodwill was formed when a performance undertaking existed and the reporting period or the previous period fell
within the performance undertaking period.□ Applicable √ Not applicable
21. Long-term prepaid expenses
Unit: RMB
Opening Increase during Amortisation Other Closing
Item balance the period during the period deductions balance
Bank financial advisory fees 196822500.05 26242999.98 170579500.07
Woodland expenses 6400670.14 189339.71 6211330.43
Others 29175407.43 1639239.43 27536168.00
Total 232398577.62 28071579.12 204326998.50
SHANDONG CHENMING PAPER HOLDINGS LIMITED 157
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
22. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets before offsetting
Unit: RMB
Closing balance Opening balance
Deductible Deductible
temporary Deferred income temporary Deferred income
Item difference tax assets difference tax assets
Provision for impairment of assets 217619133.47 36825433.10 285110497.72 49745802.22
Unrealised profit for internal transaction
Deferred income 116362908.60 17668186.29 124286727.16 19065837.91
Deductible loss 13582258857.17 2304643795.83 11848018483.09 1963277198.49
Total 13916240899.24 2359137415.22 12257415707.97 2032088838.62
(2) Deferred income tax liabilities before offsetting
Unit: RMB
Closing balance Opening balance
Taxable Taxable
temporary Deferred income temporary Deferred income
Item differences tax liabilities differences tax liabilities
Asset valuation increment from business
combinations involving entities not under
common control 27303606.00 4095540.90 29326095.33 4398914.30
Unrealised gain or loss arising from
intra-group transactions 49240992.64 12310248.16 5072493.44 1268123.36
Total 76544598.64 16405789.06 34398588.77 5667037.66
(3) The breakdown of unrecognised deferred income tax assets
Unit: RMB
Item Closing balance Opening balance
Deductible temporary difference 1996570936.32 1892186000.35
Deductible loss 2428895233.24 2419096409.51
Total 4425466169.56 4311282409.86
158 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
22. Deferred income tax assets/Deferred income tax liabilities (Cont’d)
(4) Expiry of deductible loss of unrecognised deferred income tax assets falls in the years as follows
Unit: RMB
Year Closing balance Opening balance Remark
2026–121576764.07
2027351545946.83354571231.45
2028162909469.47183443840.16
20291133044674.691052221145.73
2030627845563.27707283428.10
2031153549578.98–
Total 2428895233.24 2419096409.51
23. Other non-current assets
Unit: RMB
Closing balance Opening balance
Impairment Carrying Impairment Carrying
Item Book balance provision amount Book balance provision amount
Payments for engineering and equipment 129556772.51 8466700.00 121090072.51 139310773.13 8466700.00 130844073.13
Proposed refund of land payment 288232412.76 288232412.76 288232412.76 288232412.76
Emission rights 9298953.76 9298953.76
Total 427088139.03 8466700.00 418621439.03 427543185.89 8466700.00 419076485.89
SHANDONG CHENMING PAPER HOLDINGS LIMITED 159
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
24. Assets with restricted ownerships or right to use
Unit: RMB
End of the period Beginning of the period
Type of Type of
Item Book balance Carrying amount restriction Restriction Book balance Carrying amount restriction Restriction
Fixed assets 39540922512.68 20237217488.05 Charged As collateral for bank borrowings and 39673397581.16 21032970345.50 Charged As collateral for bank borrowings and
long-term payables (Note VII. 15) long-term payables (Note VII. 15)
Investment property 6897297786.90 5264061227.98 Charged As collateral for bank borrowings (Note 6897297786.90 5357575638.82 Charged As collateral for bank borrowings
VII. 14) (Note VII. 14)
Intangible assets 1822125821.08 1279681854.88 Charged As collateral for bank borrowings and 1842713402.08 1308852997.82 Charged As collateral for bank borrowings and
long-term payables (Note VII. 19) long-term payables (Note VII. 19)
Long-term equity 1574291359.16 1568954478.69 Frozen Pledged and locked up due to 1584342692.88 1578247974.28 Frozen Pledged and locked up due to creditors’
investments creditors’ rights guarantee rights guarantee (Note VII. 12)
(Note VII. 12)
Inventories 902652115.08 900473074.35 Charged and As collateral for contract performance. 764268342.37 741627115.10 Charged and As collateral for contract performance.court seizure Seizure due to non-payment court seizure Seizure due to non-payment
(Note VII. 8) (Note VII. 8)
Monetary funds 74678181.03 74678181.03 Pledged and As deposits for acceptance bills and 63728850.28 63728850.28 Pledged and As deposits for acceptance bills and
locked up letters of credit security deposits locked up letters of credit security deposits
for loans deposit reserves or for loans deposit reserves or account
account locked-up freezing by locked-up freezing by litigation etc.litigation etc. (Note VII. 1) (Note VII. 1)
Total 50811967775.93 29325066304.98 50825748655.67 30083002921.80
Other explanations:
As at 30 June 2026 housing building structure and equipment with the book value of RMB20237217488.05
(31 December 2025: book value of RMB21032970345.50) investment properties with the book value of
RMB5264061227.98 (31 December 2025: book value of RMB5357575638.82) and intangible assets with the book
value of RMB1279681854.88 (31 December 2025: book value of RMB1308852997.82) were pledged as collateral for
long-term borrowings of RMB3614680095.89 (31 December 2025: RMB3650321853.80) short-term borrowings of
RMB960000000.00 (31 December 2025: RMB960000000.00) and long-term payables of RMB3374591339.90 (31
December 2025: RMB3373734381.04).
160 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
25. Short-term borrowings
(1) Classification of short-term borrowings
Unit: RMB
Item Closing balance Opening balance
Credit borrowings 11690376568.88 11979509006.38
Guaranteed borrowings 8259248181.02 8259872805.64
Mortgage borrowings 960000000.00 960000000.00
Discounted borrowings 33520000.00 28450000.00
Total 20943144749.90 21227831812.02
Explanation of the classification of short-term borrowings:
* For classification and amount of mortgage borrowings and mortgage assets please see 1. Monetary funds
and 24. Assets with restricted ownerships or right to use in Note VII.* Mortgage borrowings of RMB960000000.00 were also guaranteed by related parties.* Short-term borrowings included accrued interest of RMB148914168.39.
(2) Overdue outstanding short-term borrowings
At the end of the period the overdue debts of the Company totalled RMB2909604083.88 of which overdue
short-term borrowings amounted to RMB934910183.88 and in accordance with Interpretation No. 17 the
liabilities transferred to short-term borrowings totalled RMB1974693900.00 including overdue bank acceptance
bills of RMB804693900.00 and overdue long-term borrowings of RMB1170000000.00.Major overdue outstanding short-term borrowings are as follows:
Unit: RMB
Overdue
Borrower Closing balance Borrowing rate Overdue time interest rate
Bank 1 940000000.00 4.90% 2024-12-20 5.78%
Bank 2 167500000.00 3.50% 2025-11-10 6.00%
Bank 3 150000000.00 3.90% 2025-2-12 12.00%
Bank 4 100200000.00 3.80% 2025-11-13 5.70%
Bank 5 85500000.00 4.15% 2024-11-21 6.15%
Total 1443200000.00 － － －
SHANDONG CHENMING PAPER HOLDINGS LIMITED 161
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
26. Accounts payable
(1) Particulars of accounts payable
Unit: RMB
Item Closing balance Opening balance
Payment for goods 9636731017.26 8153559514.97
Payment for engineering 134389900.61 192204178.21
Payment for equipment 172759316.59 166260317.16
Service fees 7996946.56 389791.05
Others 107725964.11 96313251.53
Total 10059603145.13 8608727052.92
(2) Disclosure by ageing
Unit: RMB
Item Closing balance Reason for outstanding or not transfer
Within 1 year (including 1 year) 6286435369.85 As agreed in the contract and failure to pay in full due to
a shortage of funds
1 to 2 years 3308486987.54 As agreed in the contract and failure to pay in full due to
a shortage of funds
2 to 3 years 213949900.73 As agreed in the contract and failure to pay in full due to
a shortage of funds
Over 3 years 250730887.01 As agreed in the contract and failure to pay in full due to
a shortage of funds
Total 10059603145.13
The basis used by the ageing analysis of the accounts payable of the Company: the ageing of accounts payable
is the length of time of the Company’s outstanding accounts payable based on invoice date. The closing balance
is recognised one by one from the end of the period onwards until the amounts add up to the balance. It is also
broken up by intervals of within 1 year 1-2 years 2-3 years and over 3 years.
162 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
27. Other payables
Unit: RMB
Item Closing balance Opening balance
Other payables 3142910293.52 4122796378.76
Interest payable 544885105.71 428732780.80
Dividend payable 207427065.81 220493880.88
Total 3895222465.04 4772023040.44
(1) Interest payable
Unit: RMB
Item Closing balance Opening balance
Interest on overdue borrowings and appropriation of funds 315734158.10 265779595.63
Interest on overdue bills 188301053.60 139431608.24
Interest on overdue finance lease payments 40849894.01 23521576.93
Total 544885105.71 428732780.80
(2) Dividend payable
Unit: RMB
Item Closing balance Opening balance
Minority shareholder 1 42000000.00 42000000.00
Minority shareholder 2 30000000.00 30000000.00
Minority shareholder 3 30000000.00 30000000.00
Minority shareholder 4 28323937.26 28323937.26
Minority shareholder 5 27000000.00 27000000.00
Minority shareholder 6 21000000.00 21000000.00
Minority shareholder 7 18000000.00 18000000.00
Minority shareholder 8 10933184.93 24000000.00
Minority shareholder 9 113295.75 113295.75
Minority shareholder 10 56647.87 56647.87
Total 207427065.81 220493880.88
SHANDONG CHENMING PAPER HOLDINGS LIMITED 163
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
27. Other payables (Cont’d)
(3) Other payables
1) Other payables by nature
Unit: RMB
Item Closing balance Opening balance
Open credit 2387183030.12 3366576146.66
Accrued expenses 443064951.58 476305081.06
Guarantee deposit deposit and warranty 228713203.07 204143549.97
Others 83949108.75 75771601.07
Total 3142910293.52 4122796378.76
28. Receipts in advance
(1) Particulars of receipts in advance
Unit: RMB
Item Closing balance Opening balance
Prepaid rents and property fees 49188622.80 61929311.57
Total 49188622.80 61929311.57
29. Contract liabilities
Unit: RMB
Item Closing balance Opening balance
Payment for goods in advance 501500772.85 296299701.36
Total 501500772.85 296299701.36
164 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
30. Employee benefits payable
(1) Particulars of staff remuneration payables
Unit: RMB
Increase during Decrease during
Item Opening balance the period the period Closing balance
I. Short-term remuneration 360803247.09 439341616.74 410431998.22 389712865.61
II. Retirement benefit plan-defined
contribution scheme 8791253.56 81991069.51 75917844.64 14864478.43
III. Termination benefits 592060.44 592060.44
IV. Other benefits due within one year
Total 369594500.65 521924746.69 486941903.30 404577344.04
(2) Particulars of short-term remuneration
Unit: RMB
Increase during Decrease during
Item Opening balance the period the period Closing balance
1. Salaries bonuses allowance and
subsidies 304386805.64 354152028.08 343857221.61 314681612.11
2. Staff welfare 11245162.70 11245162.70
3. Social insurance premium 3896314.20 36584015.00 34198223.00 6282106.20
Of which: Medical insurance
premium 2945367.09 32982791.98 30913845.96 5014313.11
Work-related injury
insurance premium 666634.68 3307001.23 2922968.26 1050667.65
Maternity insurance
premium 284312.43 294221.79 361408.78 217125.44
4. Housing provident funds 32033334.31 31918659.74 17098951.26 46853042.79
5. Union funds and workers’
education 19169407.77 5438796.81 4032439.65 20575764.93
6. Other short-term remuneration 1317385.17 2954.41 1320339.58
Total 360803247.09 439341616.74 410431998.22 389712865.61
(3) Particulars of defined contribution plan
Unit: RMB
Increase during Decrease during
Item Opening balance the period the period Closing balance
1. Basic pension insurance premiums 7960518.98 78664283.35 72905828.26 13718974.07
2. Unemployment insurance
premiums 830734.58 3326786.16 3012016.38 1145504.36
Total 8791253.56 81991069.51 75917844.64 14864478.43
SHANDONG CHENMING PAPER HOLDINGS LIMITED 165
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VII. Notes to items of the consolidated financial statements (Cont’d)
31. Taxes payable
Unit: RMB
Item Closing balance Opening balance
Property tax 102003523.26 87753548.45
Value added tax 38555489.13 61371499.03
Land use tax 31649090.10 24244163.62
Land appreciation tax 7876101.58 7876101.58
Stamp duty 7222945.01 7340819.31
Resource tax 5466764.41 4197008.75
Environmental protection tax 4330215.58 3671483.63
Urban maintenance and construction tax 3347112.35 2452751.51
Educational surcharges and others 2869489.37 2217514.48
Individual income tax 1116934.93 1392474.96
Enterprise income tax 647439.82 651191.83
Total 205085105.54 203168557.15
32. Non-current liabilities due within one year
Unit: RMB
Item Closing balance Opening balance
Long-term borrowings due within one year 1736322137.10 1708085598.10
Long-term payables due within one year 414356185.28 603473207.11
Lease liabilities due within one year 2102967.78 1613098.62
Total 2152781290.16 2313171903.83
33. Other current liabilities
Unit: RMB
Item Closing balance Opening balance
Overdue finance leasing borrowings 1207683766.34 1471511608.24
Overdue factoring borrowings 56000000.00 68000000.00
Overdue China Development Bank Special Fund 275000000.00
Total 1538683766.34 1539511608.24
166 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
34. Long-term borrowings
(1) Types of long-term borrowings
Unit: RMB
Item Closing balance Opening balance
Mortgage borrowings 3614680095.89 3650321853.80
Credit borrowings 2613482935.31 1921655004.17
Guaranteed borrowings 1748748853.10 1712619479.85
Subtotal 7976911884.30 7284596337.82
Less: Long-term borrowings due within one year 1736322137.10 1708085598.10
Total 6240589747.20 5576510739.72
Other explanations:
* For classification and amount of mortgage borrowings and mortgage assets please see 1. Monetary funds
and 24. Assets with restricted ownerships or right to use in Note VII.* In accordance with Interpretation No. 17 the Company reclassified long-term payables that were past
due and non-current liabilities that were previously reported as due within one year. The loan agreement
stipulates that in the event of a loan overdue the creditor shall require the borrower to immediately repay
the full amount of the loan. Since the above debts had triggered the default clause in the contract and
no extension agreement had been reached with the creditors on the balance sheet date based on the
characteristics of liquidity risk and the immediacy of repayment obligations the Company adjusted the full
amount of the book balance to the “short-term borrowings” account.* Among mortgage borrowings borrowings of RMB3352771101.20 have been guaranteed by related
parties of which the long-term borrowings due within one year amounted to RMB78600000.00.* Long-term borrowings included accrued interest of RMB26092871.58 of which the accrued interest of
long-term borrowings due within one year was RMB1180553.51.
35. Lease liabilities
Unit: RMB
Item Closing balance Opening balance
Lease payments payable 46166889.45 47313243.06
Less: Unrecognised financing expenses 10760605.11 11349895.34
Subtotal 35406284.34 35963347.72
Less: Lease liabilities due within one year 2102967.78 1613098.62
Total 33303316.56 34350249.10
SHANDONG CHENMING PAPER HOLDINGS LIMITED 167
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
36. Long-term payables
Unit: RMB
Item Closing balance Opening balance
Long-term payables 1871465556.33 1685368809.50
Total 1871465556.33 1685368809.50
(1) Long-term payables by nature
Unit: RMB
Item Closing balance Opening balance
Financial leasing borrowings 3374591339.90 3373734381.04
China Development Bank Special Fund 275000000.00 275000000.00
Contributions by other partners 140894158.22 140894158.22
Subtotal 3790485498.12 3789628539.26
Less: Long-term payables due within one year 414356185.28 603473207.11
Less: Other current liabilities 1504663756.51 1500786522.65
Total 1871465556.33 1685368809.50
Other explanation:
* In accordance with Interpretation No. 17 of Accounting Standards for Business Enterprises the Company
reclassified long-term payables that were past due and non-current liabilities that were previously reported
as due within one year. The loan agreement stipulates that in the event of a loan overdue the creditor shall
require the borrower to immediately repay the full amount of the loan. Since the above debts had triggered
the default clause in the contract and no extension agreement had been reached with the creditors on
the balance sheet date based on the characteristics of liquidity risk and the immediacy of repayment
obligations the Company adjusted the full amount of the book balance to the “other current liabilities”
account.* Contributions by other partners refer to the contributions made by other partners to Weifang Chenming
Growth Driver Replacement Equity Investment Fund Partnership (Limited Partnership) and Weifang Chendu
Equity Investment Partnership (Limited Partnership) and such contributions are reclassified as financial
liabilities on a consolidation basis.
168 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
37. Provisions
Unit: RMB
Item Closing balance Opening balance Reason
Pending litigations 5935000.00 5935000.00 Estimated compensation for losses
Late fees relating to taxes 21919602.90 22299945.73 Estimated late fees relating to taxes
Total 27854602.90 28234945.73
Other explanations: The Company was involved in a number of legal proceedings and a total of RMB5935000.00 was
provided as provisions based on the potential compensation for losses
38. Deferred income
Unit: RMB
Increase during Decrease during
Item Opening balance the period the period Closing balance Reason
Government grants 1084582814.76 100000.00 51381930.07 1033300884.69 Financial provision
Total 1084582814.76 100000.00 51381930.07 1033300884.69
Items in respect of government grants:
Unit: RMB
Include in
New grants non-operating Include in
during income for other income Other changes Asset-related/
Item Accounting item Opening balance the period the period for the period for the period Closing balance income-related
Funding for environmental
protection Deferred income 427487869.80 25464041.36 402023828.44 Asset-related
Huanggang pulp-forestry-paper
project Deferred income 354538082.13 12513108.90 342024973.23 Asset-related
Infrastructure and environmental
protection engineering Deferred income 161540853.04 5758794.74 155782058.30 Asset-related
Financial subsidies for technical
transformation project Deferred income 80084805.76 100000.00 4672713.57 75512092.19 Asset-related
Zhanjiang forestry-pulp-paper
project Deferred income 34428065.51 2047316.46 32380749.05 Asset-related
Project fund for National Key
Technology Research and
Development Program Deferred income 464325.00 82350.00 381975.00 Asset-related
Others Deferred income 26038813.52 843605.04 25195208.48 Asset-related
Total 1084582814.76 100000.00 51381930.07 1033300884.69
SHANDONG CHENMING PAPER HOLDINGS LIMITED 169
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
39. Share capital
Unit: RMB
Increase/decrease during the period (+/-)
Shares converted
Opening balance New issue Bonus issue from reserves Others Subtotal Closing balance
Total number of shares 2934556200.00 2934556200.00
40. Capital reserves
Unit: RMB
Increase during Decrease during
Item Opening balance the period the period Closing balance
Capital premium (share premium) 4512258642.58 15554046.33 4527812688.91
Other capital reserves 729020587.21 729020587.21
Total 5241279229.79 15554046.33 5256833276.12
Other explanations including changes (increase or decrease) during the period and reasons for such changes: Ningbo
Kaichen Huamei Equity Investment Fund Partnership (Limited Partnership) made a capital contribution to Huanggang
Chenming Paper Technology Co. Ltd. a subsidiary of the Company and acquired 8.93% equity interest therein. The
capital reserves increased by RMB15554046.33 as a result of the equity transaction.
170 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
41. Other comprehensive income
Unit: RMB
Amount during the period
Less: Transferred Less: Transferred
from other from other
comprehensive comprehensive
income in prior income in prior Attributable
Incurred before periods to profit periods to Attributable to to minority
income tax for or loss during retained profit Less: Income parent company shareholders
Item Opening balance the period the period during the period tax expenses after tax after tax Closing balance
I. Other comprehensive income
that cannot be reclassified to
profit or loss
II. Other comprehensive income
that will be reclassified to
profit and loss -915388419.92 20035932.11 20035932.11 -895352487.81
Including: Other comprehensive
income that may
be reclassified to
profit and loss
under the equity
method -12732452.54 3961253.98 3961253.98 -8771198.56
Exchange differences
arising from
translation of
financial
statements
denominated in
foreign currencies -902655967.38 16074678.13 16074678.13 -886581289.25
Total other comprehensive income -915388419.92 20035932.11 20035932.11 -895352487.81
42. Special reserves
Unit: RMB
Increase during Decrease during
Item Opening balance the period the period Closing balance
Production safety expenses 38543270.36 3125587.98 270377.75 41398480.59
Total 38543270.36 3125587.98 270377.75 41398480.59
SHANDONG CHENMING PAPER HOLDINGS LIMITED 171
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
43. Surplus reserves
Unit: RMB
Increase during Decrease during
Item Opening balance the period the period Closing balance
Statutory surplus reserves 1212009109.97 1212009109.97
Total 1212009109.97 1212009109.97
44. General risk provisions
Unit: RMB
Increase during Decrease during
Item Opening balance the period the period Closing balance
General risk provisions 68048751.10 68048751.10
Total 68048751.10 68048751.10
Explanation: The closing balance of general risk provisions was accrued by the Company’s subsidiary Shandong
Chenming Group Finance Co. Ltd. based on 1% of the balance of the receivables.
45. Retained profit
Unit: RMB
Item The period The prior period
Retained profit as at the end of the prior period before adjustment -7675212549.17 607818020.70
Adjustment to opening balance of retained earnings (increase + decrease -)
Opening balance of retained profit after adjustment -7675212549.17 607818020.70
Add: Net profit for the period attributable to shareholders of the parent
company -786475084.18 -8295932402.88
Use of capital reserve to offset loss
Less: Transfer of general risk reserves -12901833.01
Retained profit as at the end of the period -8461687633.35 -7675212549.17
172 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
46. Revenue and operating costs
Unit: RMB
Amount for the period Amount for the prior period
Item Revenue Costs Revenue Costs
Principal activities 6838779661.52 7353670210.27 2065819778.86 3694908807.12
Other activities 26649281.78 5633515.23 40811173.44 32294913.12
Total 6865428943.30 7359303725.50 2106630952.30 3727203720.24
Breakdown of revenue and operating costs:
Unit: RMB
Machine-made paper Hotel and property rentals Others Total
Category of contract Revenue Operating costs Revenue Operating costs Revenue Operating costs Revenue Operating costs
Type of business 6782125812.36 7246659287.84 72609985.91 103260732.11 10693145.03 9383705.55 6865428943.30 7359303725.50
Including:
Machine-made paper 5638065819.61 6173048462.99 5638065819.61 6173048462.99
Chemical pulp 1000397697.29 932122259.06 1000397697.29 932122259.06
Electricity and steam 120613397.81 135858517.18 120613397.81 135858517.18
Property and rentals 72028058.26 103260732.11 72028058.26 103260732.11
Others 23048897.65 5630048.61 581927.65 10693145.03 9383705.55 34323970.33 15013754.16
By geographical area 6782125812.36 7246659287.84 72609985.91 103260732.11 10693145.03 9383705.55 6865428943.30 7359303725.50
Including:
Chinese Mainland 5566245451.72 6038335049.38 72609985.91 103260732.11 10693145.03 9383705.55 5649548582.66 6150979487.04
Other countries and regions 1215880360.64 1208324238.46 1215880360.64 1208324238.46
By the timing of delivery 6782125812.36 7246659287.84 72609985.91 103260732.11 10693145.03 9383705.55 6865428943.30 7359303725.50
Including:
Goods (at a point in time) 6659728051.41 7110309064.42 8777363.01 3214922.16 9098186.39 4760078.56 6677603600.81 7118284065.14
Services (within a certain period) 122397760.95 136350223.42 63832622.90 100045809.95 1594958.64 4623626.99 187825342.49 241019660.36
By sales channels 6782125812.36 7246659287.84 72609985.91 103260732.11 10693145.03 9383705.55 6865428943.30 7359303725.50
Including:
Distribution 5036616786.58 5390708563.67 5036616786.58 5390708563.67
Direct sales 1745509025.78 1855950724.17 72609985.91 103260732.11 10693145.03 9383705.55 1828812156.72 1968595161.83
Total 6782125812.36 7246659287.84 72609985.91 103260732.11 10693145.03 9383705.55 6865428943.30 7359303725.50
SHANDONG CHENMING PAPER HOLDINGS LIMITED 173
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
46. Revenue and operating costs (Cont’d)
Information related to performance obligations:
Company’s
Whether the commitments
Nature of goods that the person is the expected to Types of quality assurance
Time for fulfilment of Significant terms Company undertakes to primary person be refunded to offered by the Company
Item performance obligations of payment transfer in charge customers and related obligations
Machine-made Domestic sales on the Domestic sales tend Produces easily Yes No Guaranteed quality
paper day of delivery to the to be provided on an distinguishable assurance should there
customer; foreign sales invoice basis; foreign be objections to product
on the day of customs sales tend to be quality within 7 days of
clearance prepaid arrival the products can
be returned and
exchanged
Other explanations: The Company’s performance obligations for sales of machine-made paper are generally less than
one year and the Company takes advance payments or provides credit terms depending on the customer.When the Company is the primary responsible party for a sale it generally obtains the unconditional right to receive
payment when control of the merchandise is transferred to the customer either at the time of shipment or upon delivery
to the destination specified by the customer.Information related to the transaction price allocated to residual performance obligations:
At the end of the reporting period the amount of revenue with signed contracts but unfulfilled or uncompleted
performance obligation was RMB2009034018.72 in which RMB2009034018.72 was expected to be recognised in
2026.
174 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
47. Taxes and surcharges
Unit: RMB
Amount for Amount for
Item the period the prior period
Urban property tax 42792494.44 40761759.16
Land use tax 20988010.75 8657177.86
Stamp duty 8528944.93 3465570.60
Resource tax 7019968.23 1458473.24
Urban maintenance and construction tax 6712463.95 3261575.91
Environmental tax 6117800.99 1180968.27
Educational surcharges 4909437.14 2344185.65
Water conservation funds 31036.03 29570.39
Others 69830.55 27523.76
Total 97169987.01 61186804.84
48. General and administrative expenses
Unit: RMB
Amount for Amount for
Item the period the prior period
Wages and surcharges 100026216.49 122791612.84
Depreciation expenses 58217322.27 61317109.84
Amortisation of intangible assets and long-term expenses 21929622.59 23807875.66
Welfare expenses 10783767.77 16120053.90
Insurance premium 4621667.52 5009295.05
Repair cost and consumption of materials 4337147.43 4190028.66
Intermediary service expenses 5025117.21 7766799.04
Business hospitality expenses 2519981.68 3519641.27
Travel expenses 3240448.53 3516583.41
Litigation expenses 906320.74 7811341.86
Legal costs 142081.96 5418632.83
Others 18032295.60 26502156.90
Total 229781989.79 287771131.26
SHANDONG CHENMING PAPER HOLDINGS LIMITED 175
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
49. Sales and distribution expenses
Unit: RMB
Amount for Amount for
Item the period the prior period
Wages and surcharges 38521584.43 29832933.51
Travel expenses 8695404.79 3233398.64
Business hospitality expenses 4808730.85 3181247.99
Depreciation expenses 2250213.97 2313519.46
Rental expenses 1442627.63 1681184.07
Selling commissions 953129.45 1001014.52
Office expenses 312107.57 151615.98
Others 4148380.26 9718352.39
Total 61132178.95 51113266.56
50. Research and development expense
Unit: RMB
Amount for Amount for
Item the period the prior period
Consumption of materials 48652420.18 6530356.81
Wages and surcharges 34893495.03 10026470.26
Depreciation expenses 16860377.11 14930274.98
Utilities 9648857.52 1770284.72
Insurance premium 7698864.39 2282295.78
Welfare expenses 2083551.00 469909.54
Housing provident funds 1738322.86 350817.26
Other expenses 1013510.40 206776.34
Total 122589398.49 36567185.69
51. Finance expenses
Unit: RMB
Amount for Amount for
Item the period the prior period
Interest expenses 597393968.38 774744373.14
Less: Capitalised interest amount
Interest income 47229758.99 26462669.15
Foreign exchange gains and losses -18294077.22 -437994.69
Less: Capitalisation of foreign exchange gains and losses
Bank charges and others 28923688.74 56822030.95
Total 560793820.91 804665740.25
176 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
52. Other income
Unit: RMB
Amount for Amount for
Source of other income the period the prior period
Government grants – amortised deferred income included in profit or loss 51381930.07 51375768.98
Government grants – directly included in profit or loss 2041899.21 1180571.41
Additional deduction of VAT 10425752.96 7174324.76
Gain on debt restructuring 819000.00 -37171293.24
Tax and fee credits for the employment of priority groups 121763.34 20800.00
Refund of handling fees for withholding and payment of individual
income tax 84079.77 214644.12
Total 64874425.35 22794816.03
53. Gain on change in fair value
Unit: RMB
Amount for Amount for
Source of gain on change in fair value the period the prior period
Gain on change in fair value of consumable biological assets measured
at fair value 15704467.20 -129059190.34
Financial assets held for trading -9398839.96 -428371.45
Total 6305627.24 -129487561.79
54. Investment income
Unit: RMB
Amount for Amount for
Item the period the prior period
Income from long-term equity investments accounted for using the equity
method 58382935.96 -345974520.50
Investment gain on derecognition of financial assets -4222648.81 -84861658.28
Investment gain on disposal of long-term equity investments 191942705.49 166396.34
Dividend on financial assets held for trading and other non-current
financial assets 600880.82
Total 246703873.46 -430669782.44
SHANDONG CHENMING PAPER HOLDINGS LIMITED 177
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
55. Credit impairment loss
Unit: RMB
Amount for Amount for
Item the period the prior period
Bad debt loss of accounts receivable 9900345.01 -57120747.20
Bad debt loss of other receivables 31737140.74 -179763373.73
Bad debt loss of financial lease payments -269438303.29
Total 41637485.75 -506322424.22
56. Loss on impairment of assets
Unit: RMB
Amount for Amount for
Item the period the period
I. Inventory impairment losses and impairment losses on performance
costs -16686173.24 -3392947.12
II. Impairment losses on fixed assets -237168462.20
Total -16686173.24 -240561409.32
57. Gain on disposal of assets
Unit: RMB
Amount for Amount for
Source of gain on disposal of assets the period the prior period
Gain on disposal of fixed assets -2128911.26 -15280125.77
Gain on disposal of intangible assets -2315094.34 3608128.98
Sublease -652926.19 1857387.16
Total -5096931.79 -9814609.63
178 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
58. Non-operating income
Unit: RMB
Included in
non-recurring
Amount for Amount for profit or loss in
Item the period the prior period the period
Fines compensation income 760355.09 506006.84 760355.09
Exempted debts 149705.48 44005.86 149705.48
Gain on damage and retirement of non-current
assets 63.59 424361.80 63.59
Others 74.46 95388.68 74.46
Total 910198.62 1069763.18 910198.62
59. Non-operating expenses
Unit: RMB
Included in
non-recurring
Amount for Amount for profit or loss in
Item the period the prior period the period
Fines and late payment charges 6186973.21 6186973.21
Loss on damage and retirement of non-current
assets 1263344.77 7365056.39 1263344.77
Utilisation cancellation and trading of carbon
emission quota 645114.56 645114.56
Litigation 18557771.90
Others 275661.26
Total 8095432.54 26198489.55 8095432.54
60. Income tax expenses
(1) Particulars of income tax expenses
Unit: RMB
Amount for Amount for
Item the period the prior period
Current income tax expenses 6884198.78 3591433.75
Deferred income tax expenses -322809810.38 12167.16
Total -315925611.60 3603600.91
SHANDONG CHENMING PAPER HOLDINGS LIMITED 179
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
60. Income tax expenses (Cont’d)
(2) The reconciliation between accounting profit and income tax expenses
Unit: RMB
Amount for
Item the period
Total profit -1234789084.50
Income tax expenses calculated at statutory/applicable tax rates -185218362.67
Effect of different tax rates applicable to subsidiaries -144008986.85
Adjustments to income tax for prior periods 9791034.25
Profit and loss of joint ventures and associates accounted for using the equity method -8433713.58
Effect of non-deductible costs expenses and losses 2343272.90
Effect of utilisation of previously unrecognised deductible loss on deferred income tax
assets -22636528.38
Effect of current unrecognised deductible temporary difference or deductible loss arising
from deferred tax income assets 35887192.28
Tax effect of R&D fee deduction -3649519.55
Income tax expense -315925611.60
61. Other comprehensive income
Unit: RMB
Amount for the period
Less: Transferred
from other
comprehensive
income in prior Less: Attributable Attributable to
Incurred before periods to profit to minority parent company
income tax for or loss during Less: Income tax shareholders after tax
Item the period (1) the period (2) expenses (3) after tax (4) (5)=(1)-(2)-(3)-(4)
I. Other comprehensive income that
cannot be reclassified to profit or loss
II. Other comprehensive income that will
be reclassified to profit and loss 20035932.11 20035932.11
1. Other comprehensive income
that may be reclassified to
profit and loss under the equity
method 3961253.98 3961253.98
2. Exchange differences arising
from translation of financial
statements denominated in
foreign currencies 16074678.13 16074678.13
Total other comprehensive income 20035932.11 20035932.11
180 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
61. Other comprehensive income (Cont’d)
Unit: RMB
Amount for the prior period
Less: Transferred
from other
comprehensive
income in prior Less: Attributable Attributable to
Incurred before periods to profit to minority parent company
income tax for or loss during Less: Income tax shareholders after tax
Item the period (1) the period (2) expenses (3) after tax (4) (5)=(1)-(2)-(3)-(4)
I. Other comprehensive income that
cannot be reclassified to profit or loss
II. Other comprehensive income that will
be reclassified to profit and loss -16019923.39 -16019923.39
1. Other comprehensive income
that may be reclassified to
profit and loss under the equity
method -3795486.93 -3795486.93
2. Exchange differences arising
from translation of financial
statements denominated in
foreign currencies -12224436.46 -12224436.46
Total other comprehensive income -16019923.39 -16019923.39
SHANDONG CHENMING PAPER HOLDINGS LIMITED 181
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
62. Items on statements of cash flow
(1) Cash relating to operating activities
Cash received relating to other operating activities
Unit: RMB
Amount for Amount for
Item the period the prior period
Open credit and other income 15931486.29 16692884.99
Government grants 2247742.32 1395215.53
Interest income 1675809.19 28395905.89
Net proceeds from the leasing 296122799.18
Total 19855037.80 342606805.59
Cash paid relating to other operating activities
Unit: RMB
Amount for Amount for
Item the period the prior period
Expenses and open credit 308683321.21 155468426.33
Total 308683321.21 155468426.33
(2) Cash relating to financing activities
Cash received relating to other financing activities
Unit: RMB
Amount for Amount for
Item the period the prior period
Net recovery of guarantee deposit 4853343140.74
Total 4853343140.74
182 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
62. Items on statements of cash flow (Cont’d)
(2) Cash relating to financing activities (Cont’d)
Cash paid relating to other financing activities
Unit: RMB
Amount for Amount for
Item the period the prior period
Repayment of equipment finance lease 35850183.37 96850437.40
Acquisition of non-controlling interests 30000000.00 35748432.27
Net expense of guarantee deposit 10949330.75
Current accounts 1000000.00 2065000.00
Total 77799514.12 134663869.67
Changes in liabilities arising from financing activities
√ Applicable □ Not applicable
Unit: RMB
Increase during the period Decrease during the period
Item Opening balance Cash changes Non-cash changes Cash changes Non-cash changes Closing balance
Short-term borrowings 21227831812.02 8490743171.31 679855229.15 8685113748.25 770171714.33 20943144749.90
Long-term borrowings 7284596337.82 1074990000.00 846572907.40 1195531805.36 33715555.56 7976911884.30
Long-term payables 3789628539.26 36707142.23 35850183.37 3790485498.12
Other payables (financing) 1476401403.98 495196498.60 918837819.14 1052760083.44
Lease liabilities 35963347.72 589290.23 1146353.61 35406284.34
Total 33814421440.80 10060929669.91 1563724569.01 10835333556.12 805033623.50 33798708500.10
SHANDONG CHENMING PAPER HOLDINGS LIMITED 183
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
63. Supplementary information on cash flow statement
(1) Supplementary information on cash flow statement
Unit: RMB
Amount for Amount for
Supplementary information the period the prior period
1. Reconciliation of net profit as cash flows from operating
activities:
Net profit -918863472.90 -4184670195.19
Add: Provision for asset impairment -24951312.51 746883833.54
Depreciation of fixed assets and depreciation of
investment properties 1087744333.08 1150193136.16
Depreciation of right-of-use assets 3127051.12 7354049.19
Amortisation of intangible assets 24236201.22 24241399.66
Amortisation of long-term prepaid expenses 28071579.12 28020607.34
Loss on disposal of fixed assets intangible assets and
other long-term assets (“-” denotes gain) 5096931.79 74046077.18
Loss on retirement of fixed assets (“-” denotes gain) 1263281.18 6940694.59
Loss on changes in fair value (“-” denotes gain) -6305627.24 129487561.79
Finance expenses (“-” denotes gain) 597393968.38 774744373.14
Investment loss (“-” denotes gain) -246703873.46 430669782.44
Decrease in deferred income tax assets
(“-” denotes increase) -327048576.60 4123582.66
Increase in deferred income tax liabilities
(“-” denotes decrease) 10738751.40 -3893456.63
Decrease in inventories (“-” denotes increase) -520832862.50 171157767.76
Decrease in operating receivables (“-” denotes increase) -756866372.73 319526202.19
Increase in operating payables (“-” denotes decrease) 1366282986.53 1106477858.37
Others
Net cash flows from operating activities 322382985.88 785303274.19
2. Major investing and financing activities not involving cash
settlements:
Capital converted from debts
Convertible corporate bonds due within one year
Fixed assets under finance leases
3. Net change in cash and cash equivalents:
Closing balance of cash 106553512.64 62979338.05
Less: Opening balance of cash 137296882.34 151943246.31
Add: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents -30743369.70 -88963908.26
184 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
63. Supplementary information on cash flow statement (Cont’d)
(2) Net cash from disposal of subsidiaries received in current period
Unit: RMB
Amount
Cash or cash equivalents received in the current period from disposal of subsidiaries 316665304.66
Of which: Shandong Yujing Grand Hotel Co. Ltd. 316665304.66
Less: Cash and cash equivalents held by the subsidiary on the date of loss of control 186.42
Of which: Shandong Yujing Grand Hotel Co. Ltd. 186.42
Add: Cash or cash equivalents received in the current period from disposal of subsidiaries
in prior periods 175264875.00
Of which: Shandong Shengming Corporate Management Co. Ltd. 175264875.00
Net cash received from disposal of subsidiaries 491929993.24
(3) Cash and cash equivalents composition
Unit: RMB
Item Closing balance Opening balance
I. Cash 106553512.64 137296882.34
Of which: Treasury cash 1092559.82 2409711.16
Bank deposit that can be used for payment at
any time 105460952.82 134887171.18
II. Cash equivalent
III. Balance of cash and cash equivalents as at the end of the
period 106553512.64 137296882.34
(4) Monetary funds other than cash and cash equivalents
Unit: RMB
Amount for Amount for Reasons why it is not cash
Item the period the prior period and cash equivalents
Other monetary funds 74678181.03 63728850.28 See Note VII.1 for details
Interest accrued on deposits 5582058.87 9372989.33 See Note VII.1 for details
Total 80260239.90 73101839.61
64. Notes to items of statements of changes in owners’ equity
Nil
SHANDONG CHENMING PAPER HOLDINGS LIMITED 185
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
65. Foreign currency items
(1) Foreign currency items
Unit: RMB
Closing foreign Closing balance
Item currency balance Exchange rate in RMB
Monetary funds
Including: USD 9538473.71 6.8109 64965590.59
EUR 9656.29 7.7671 75001.37
HKD 235225.97 0.86855 204305.52
Accounts receivable
Including: USD 17296299.19 6.8109 117803364.15
EUR 17022.20 7.7671 132213.13
Other receivables
Including: USD 1931278.76 6.8109 13153746.51
EUR 79898.82 7.7671 620582.12
Accounts payable
Including: USD 83707109.86 6.8109 570120754.55
EUR 512499.99 7.7671 3980638.67
Other payables
Including: EUR 9224.11 7.7671 71644.58
Short-term borrowings
Including: USD 6956998.90 6.8109 47383423.81
Long-term borrowings
Including: EUR 4286718.27 7.7671 33295369.47
(2) Explanation on overseas operating entities (including major overseas operating entities) which shall disclose
their overseas principal places of business functional currency and basis. Reasons shall be disclosed if there
is any change in the functional currency.√ Applicable □ Not applicable
Principal place of
No. Name of subsidiary business Place of operation Functional currency
1 Chenming GmbH Hamburg Germany Hamburg Germany EUR
2 Chenming Paper Korea Co. Ltd. Seoul Korea Seoul Korea KRW
3 Chenming (Overseas) Co. Ltd. Hong Kong China Hong Kong China USD
4 Chenming (Singapore) Co. Ltd. Singapore Singapore USD
5 Chenming (HK) Limited Hong Kong China Hong Kong China USD
186 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
66. Leases
(1) The Company as a lessee
√ Applicable □ Not applicable
Variable lease payment not included in lease liabilities measurement
□ Applicable √ Not applicable
Simplified treatment of lease expenses for short-term leases or leases of low-value assets
√ Applicable □ Not applicable
Unit: RMB
Amount for
Item the period
Short-term lease expenses 2484827.10
Total 2484827.10
(2) The Company as a lessor
Operating lease as a lessor
√ Applicable □ Not applicable
Unit: RMB
Including: Income
related to variable
lease payments not
included in lease
Item Lease income receipts
Lease income 54931977.28
Total 54931977.28
SHANDONG CHENMING PAPER HOLDINGS LIMITED 187
INTERIM REPORT 2026VIII Financial Report
VII. Notes to items of the consolidated financial statements (Cont’d)
66. Leases (Cont’d)
(2) The Company as a lessor (Cont’d)
Financial lease as a lessor
□ Applicable √ Not applicable
Undiscounted lease payments for each of the next five years
√ Applicable □ Not applicable
Unit: RMB
Annual undiscounted lease payments
Item Closing balance Opening balance
The first year 110380072.40 140742027.37
The second year 146522137.40 148401301.62
The third year 149680797.83 151864581.72
The fourth year 153972798.55 148513224.23
The fifth year 151579152.78 154290681.50
Total undiscounted lease payments after five years 152358893.66 160281567.85
Total 864493852.62 904093384.29
VIII. R&D Expenses
Unit: RMB
Amount during Amount during
Item the period the prior period
Consumption of materials 48652420.18 6530356.81
Wages and surcharges 34893495.03 10026470.26
Depreciation expenses 16860377.11 14930274.98
Utilities 9648857.52 1770284.72
Insurance premium 7698864.39 2282295.78
Welfare expenses 2083551.00 469909.54
Housing provident funds 1738322.86 350817.26
Other expenses 1013510.40 206776.34
Total 122589398.49 36567185.69
Of which: R&D expenses included in profit or loss 122589398.49 36567185.69
188 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
SHANDONG CHENMING PAPER HOLDINGS LIMITED 189
INTERIM REPORT 2026
IX. Change in Scope of Consolidation
1. Disposal of a subsidiary
Any transaction or event that results in the loss of control of any subsidiary during the period
√ Yes □ No
Unit: RMB
Determination
Difference and key
between Carrying assumption of
consideration amount of Fair value of fair value of
and share of remaining remaining remaining Relevant other
net assets shareholding shareholding shareholding comprehensive
of relevant as of the date as of the date as of the date income of
subsidiary Remaining of loss of of loss of of loss of former
Disposal Disposal Disposal The basis for as per shareholding control as per control as per Gain or loss in control as per subsidiary
consideration percentage at method at the determining the consolidated as of the date consolidated consolidated fair value of consolidated transferred to
at the date of the date of date of loss Date of loss date of loss of financial of loss of financial financial remaining financial profit or loss or
Name of subsidiary loss of control loss of control of control of control control statements control statements statements shareholding statements retained profit
Shandong Yujing Grand Hotel Co. Ltd. 117160000.00 90.05% Disposal 2026.6.30 Transfer of control 191931871.19 0.00% 0.00 0.00 N/A N/A N/A
Any transaction or event that results in the loss of control of any subsidiary during the period
□ Yes √ No
2. Change in scope of consolidation due to other reasons
Explanation: During the period Chenming Paper Japan Co. Ltd. a subsidiary of the Company was deregistered.VIII Financial Report
X. Interest in Other Entities
1. Interest in subsidiaries
(1) Constitution of the Group
Unit: RMB’0000
Registered Principle Issued Issued
capital place of Place of Nature of Shareholding (%) debt share
Name of subsidiary (’0000) business incorporation business Type of legal person Direct Indirect Acquisition securities capital
Shouguang Meilun Paper 480104.55 Shouguang Shouguang Paper making For-profit corporation 68.28 18.50 Establishment 0 0
Co. Ltd.Shouguang Meichen Energy 100.00 Shouguang Shouguang Electricity For-profit corporation 100 Establishment 0 0
Technology Co. Ltd.Shandong Chenming Paper 1000.00 Weifang Weifang Paper product For-profit corporation 100 Establishment 0 0
Co. Ltd. trading
Shouguang Kunhe Trading 1000.00 Shouguang Shouguang Trading For-profit corporation 100 Establishment 0 0
Co. Ltd.Shouguang Chenming Art 2000.00 (USD) Shouguang Shouguang Paper making For-profit corporation 75 25 Establishment 0 0
Paper Co. Ltd.Shandong Chenming Pulp & 10000.00 Shouguang Shouguang Sales of paper For-profit corporation 100 Establishment 0 0
Paper Sales Co. Ltd.Shanghai Chenming Pulp & 10000.00 Shanghai Shanghai Paper product For-profit corporation 100 Establishment 0 0
Paper Sales Co. Ltd. trading
Shandong Chenming Paper 10000.00 Shouguang Shouguang Paper product For-profit corporation 100 Establishment 0 0
Sales Co. Ltd. trading
Chenming International Trade 200.00 (USD) Hong Kong Hong Kong Paper product For-profit corporation 100 Establishment 0 0
Import and Export Co. trading
Limited
Shouguang Chenming Import 70000.00 Shouguang Shouguang Trading For-profit corporation 35.71 64.29 Establishment 0 0
and Export Trade Co. Ltd.Jiangxi Chenming Supply Chain 200.00 Jiangxi Jiangxi Trading For-profit corporation 70 Establishment 0 0
Management Co. Ltd.Zhanjiang Chenming Pulp & 691357.24 Zhanjiang Zhanjiang Paper making For-profit corporation 80.28 Establishment 0 0
Paper Co. Ltd.Zhanjiang Chenming 130000.00 Zhanjiang Zhanjiang Arboriculture For-profit corporation 100 Establishment 0 0
Arboriculture Development
Co. Ltd.Yangjiang Chenming 22000.00 Yangjiang Yangjiang Arboriculture For-profit corporation 100 Establishment 0 0
Arboriculture Development
Co. Ltd.Guangdong Huirui Investment 25800.00 Zhanjiang Zhanjiang Investment For-profit corporation 100 Establishment 0 0
Co. Ltd.Hubei Changjiang Chenming 200100.00 Huanggang Huanggang Fund For-profit corporation 59.97 Establishment 0 0
Huanggang Equity Investment
Fund Partnership (Limited
Partnership)
Hainan Chenming Technology 20000.00 Haikou Haikou Wholesale and For-profit corporation 100 Establishment 0 0
Co. Ltd. retail
Foshan Chenming Import and 20000.00 Foshan Foshan Trading For-profit corporation 100 Establishment 0 0
Export Trade Co. Ltd.
190 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
X. Interest in Other Entities (Cont’d)
1. Interest in subsidiaries (Cont’d)
(1) Constitution of the Group (Cont’d)
Registered Principle Issued Issued
capital place of Place of Nature of Shareholding (%) debt share
Name of subsidiary (’0000) business incorporation business Type of legal person Direct Indirect Acquisition securities capital
Zhanjiang Chenming 10000.00 Zhanjiang Zhanjiang Paper product For-profit corporation 100 Establishment 0 0
Technology Development trading
Co. Ltd.Zhanjiang Chenming Paper 1000.00 Shouguang Shouguang Paper product For-profit corporation 100 Establishment 0 0
Co. Ltd. trading
Guangdong Chenming Panels 1000.00 Guangdong Guangdong Panels For-profit corporation 100 Establishment 0 0
Co. Ltd.Jiangxi Chenming Tea Co. Ltd. 1000.00 Jiangxi Jiangxi Tea business For-profit corporation 100 Establishment 0 0
Jiangxi Chenming Paper 32673.32 (USD) Nanchang Nanchang Paper making For-profit corporation 100 Establishment 0 0
Co. Ltd.Jiangxi Chenming Logistics 500.00 Nanchang Nanchang Logistics For-profit corporation 100 Establishment 0 0
Co. Ltd.Jiangxi Chenming Paper 10000.00 Nanchang Nanchang Trading For-profit corporation 100 Establishment 0 0
Products Co. Ltd.Nanchang Kunheng Trading 1000.00 Nanchang Nanchang Trading For-profit corporation 100 Establishment 0 0
Co. Ltd.Nanchang Chenming 1000.00 Nanchang Nanchang Arboriculture For-profit corporation 100 Establishment 0 0
Arboriculture Development
Co. Ltd.Jiangxi Chenming Port Co. Ltd. 1507.00 Jiangxi Jiangxi Cargo For-profit corporation 100 Merger and 0 0
transportation acquisition
Jilin Chenming Paper Co. Ltd. 300000.00 Jilin Jilin Paper making For-profit corporation 100 Acquisition 0 0
Fuyu Chenming Paper Co. Ltd. 30800.00 Fuyu Fuyu Paper making For-profit corporation 100 Establishment 0 0
Jilin Chenming New Wall 1000.00 Jilin Jilin Wall materials For-profit corporation 100 Establishment 0 0
Materials Co. Ltd.Jilin Chenming Paper Co. Ltd. 1000.00 Jilin Jilin Logistics For-profit corporation 100 Establishment 0 0
Jilin Chenming Pulp & Fiber 5000.00 Jilin Jilin Trading For-profit corporation 100 Establishment 0 0
Trading Co. Ltd.Huanggang Chenming Pulp & 335000.00 Huanggang Huanggang Pulp production For-profit corporation 14.09 85.91 Establishment 0 0
Paper Co. Ltd.Huanggang Chenming Paper 100000.00 Huanggang Huanggang Paper making For-profit corporation 91.07 Establishment 0 0
Technology Co. Ltd.Huanggang Chenming Port 5000.00 Huanggang Huanggang Port services For-profit corporation 100 Establishment 0 0
Service Co. Ltd.Hubei Huanggang Chenming 300.00 Huanggang Huanggang Capital market For-profit corporation 60 Establishment 0 0
Equity Investment Fund services
Management Co. Ltd.Hubei Chenming Technology 5000.00 Huanggang Huanggang Paper product For-profit corporation 100 Establishment 0 0
Industrial Co. Ltd. trading
Shandong Chenming Group 500000.00 Jinan Jinan Finance For-profit corporation 80 20 Establishment 0 0
Finance Co. Ltd.SHANDONG CHENMING PAPER HOLDINGS LIMITED 191
INTERIM REPORT 2026VIII Financial Report
X. Interest in Other Entities (Cont’d)
1. Interest in subsidiaries (Cont’d)
(1) Constitution of the Group (Cont’d)
Registered Principle Issued Issued
capital place of Place of Nature of Shareholding (%) debt share
Name of subsidiary (’0000) business incorporation business Type of legal person Direct Indirect Acquisition securities capital
Chenming (HK) Limited 9990.00 (USD) Hong Kong Hong Kong Paper product For-profit corporation 100 Establishment 0 0
trading
Shandong Chenming 20000.00 Jinan Jinan Investment For-profit corporation 100 Establishment 0 0
Investment Limited
Jinan Chenming Paper Sales 10000.00 Jinan Jinan Investment For-profit corporation 100 Establishment 0 0
Co. Ltd. management/
paper product
trading
Chenming GmbH 65.00 (USD) Germany Germany Paper product For-profit corporation 100 Establishment 0 0
trading
Yimei Limited (依美有限公司) 50.00 (USD) British Virgin British Virgin Investment For-profit corporation 100 Establishment 0 0
Islands Islands
Chenming Paper Korea Co. Ltd. 100.00 (USD) South Korea South Korea Paper product For-profit corporation 100 Establishment 0 0
trading
Chenming (Overseas) Co. Ltd. 2000.00 (USD) Hong Kong Hong Kong Paper product For-profit corporation 100 Establishment 0 0
trading
Chenming (Singapore) Co. Ltd. 2000.00 (USD) Singapore Singapore Paper product For-profit corporation 100 Establishment 0 0
trading
Meilun (BVI) Limited 5.00 (USD) Cayman Cayman Commerce For-profit corporation 100 Establishment 0 0
Shanghai Chenming Industry 370000.00 Shanghai Shanghai Property For-profit corporation 100 Establishment 0 0
Co. Ltd. investment and
management
Shanghai Hongtai Tengda 8000.00 Shanghai Shanghai Trading For-profit corporation 100 Establishment 0 0
Industrial Development
Co. Ltd.Shanghai Chenyin Trading 41000.00 Shanghai Shanghai Trading For-profit corporation 51 Establishment 0 0
Co. Ltd.Shanghai Hongtai Real Estate 60391.77 Shanghai Shanghai Real estate For-profit corporation 100 Merger and 0 0
Co. Ltd. acquisition
Shanghai Hongtai Property 200.00 Shanghai Shanghai Property For-profit corporation 100 Merger and 0 0
Management Co. Ltd. acquisition
Shanghai Heruiming Property 30150.00 Shanghai Shanghai Property For-profit corporation 100 Merger and 0 0
Management Co. Ltd. management acquisition
Wuhan Junheng Property 39600.00 Wuhan Wuhan Property For-profit corporation 100 Merger and 0 0
Management Co. Ltd. acquisition
Guangzhou Chenming Property 100000.00 Guangzhou Guangzhou Property For-profit corporation 100 Establishment 0 0
Management Co. Ltd.Shanxi Fuyin Industrial Trading 36000.00 Taiyuan Taiyuan Wholesale and For-profit corporation 100 Acquisition 0 0
Co. Ltd. retail
Chongmin Culture Development 20000.00 Shanghai Shanghai Lease and For-profit corporation 100 Acquisition 0 0
(Shanghai) Co. Ltd. business
services
192 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
X. Interest in Other Entities (Cont’d)
1. Interest in subsidiaries (Cont’d)
(1) Constitution of the Group (Cont’d)
Registered Principle Issued Issued
capital place of Place of Nature of Shareholding (%) debt share
Name of subsidiary (’0000) business incorporation business Type of legal person Direct Indirect Acquisition securities capital
Shouguang Chenming 200.00 Shouguang Shouguang Machinery For-profit corporation 100 Establishment 0 0
Papermaking Machine Co. Ltd. manufacturing
Shouguang Hongxiang Printing 80.00 Shouguang Shouguang Printing and For-profit corporation 100 Acquisition 0 0
and Packaging Co. Ltd. packaging
Shouguang Chenming Modern 1000.00 Shouguang Shouguang Transportation For-profit corporation 100 Establishment 0 0
Logistic Co. Ltd.Shouguang Hongyi Decorative 200.00 Shouguang Shouguang Packaging For-profit corporation 100 Merger and 0 0
Packaging Co. Ltd. acquisition
Shouguang Xinyuan Coal 300.00 Shouguang Shouguang Coal For-profit corporation 100 Merger and 0 0
Co. Ltd. acquisition
Shouguang City Run Sheng 2380.00 Shouguang Shouguang Purchase and For-profit corporation 100 Merger and 0 0
Wasted Paper Recycle sale of waste acquisition
Co. Ltd.Huanggang Chenming 7000.00 Huanggang Huanggang Arboriculture For-profit corporation 100 Establishment 0 0
Arboriculture Development
Co. Ltd.Chenming Arboriculture Co. Ltd. 10000.00 Wuhan Wuhan Arboriculture For-profit corporation 100 Establishment 0 0
Hailaer Chenming Paper Co. Ltd. 1600.00 Hailaer Hailaer Paper making For-profit corporation 75 Establishment 0 0
Weifang Chenming Growth 100000.00 Weifang Weifang Fund For-profit corporation 79 Establishment 0 0
Driver Replacement Equity
Investment Fund Partnership
(Limited Partnership)
Weifang Chendu Equity 32000.00 Shouguang Shouguang Capital market For-profit corporation 79.69 Establishment 0 0
Investment Partnership services
(Limited Partnership)
Weifang Chenchuang Equity 90300.00 Weifang Weifang Equity For-profit corporation 99.67 Merger and 0 0
Investment Fund Partnership investment acquisition
(Limited Partnership)
(2) Major non-wholly owned subsidiaries
Unit: RMB
Gain or loss Dividend to
attributable to minority interest
minority interest declared during Closing balance
Name of subsidiary Minority interest during the period the period of minority interest
Shouguang Meilun Paper Co. Ltd. 13.21% -53741822.82 1327026625.25
Zhanjiang Chenming Pulp & Paper Co. Ltd. 19.72% -77912637.68 751129547.55
SHANDONG CHENMING PAPER HOLDINGS LIMITED 193
INTERIM REPORT 2026VIII Financial Report
194 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026
X. Interest in Other Entities (Cont’d)
1. Interest in subsidiaries (Cont’d)
(3) Key financial information of major non-wholly owned subsidiaries
Unit: RMB
Closing balance Opening balance
Non-current Non-current Non-current Non-current
Name of subsidiary Current assets assets Total assets Current liabilities liabilities Total liabilities Current assets assets Total assets Current liabilities liabilities Total liabilities
Shouguang Meilun Paper
Co. Ltd. 6574157714.59 9990618327.98 16564776042.57 9493120258.79 1005145019.48 10498265278.27 5638334917.92 9266216250.55 14904551168.47 7547551168.31 881715334.28 8429266502.59
Zhanjiang Chenming Pulp
& Paper Co. Ltd. 6430230689.43 13066278985.90 19496509675.33 13579295257.78 496152329.36 14075447587.14 5643877771.78 13253813129.03 18897690900.81 12688287928.17 397269726.29 13085557654.46
Unit: RMB
Amount during the period Amount during the prior period
Total Cash flows Total Cash flows
comprehensive from operating comprehensive from operating
Name of subsidiary Revenue Net profit income activities Revenue Net profit income activities
Shouguang Meilun Paper Co. Ltd. 3721141504.87 -406700591.19 -406700591.19 37597122.96 805084480.98 -677427573.67 -677427573.67 22602677.62
Zhanjiang Chenming Pulp & Paper Co. Ltd. 712391415.90 -395032412.14 -391071158.16 -124511175.91 143191538.56 -844270649.67 -848066136.60 49662737.05VIII Financial Report
X. Interest in Other Entities (Cont’d)
2. Transaction changing shareholding in but not causing to loss of control over subsidiaries
(1) Changing in shareholding in subsidiaries
Ningbo Kaichen Huamei Equity Investment Fund Partnership (Limited Partnership) made a capital contribution
to Huanggang Chenming Paper Technology Co. Ltd. a subsidiary of the Company and acquired 8.93% equity
interest therein. Following this transaction the Company holds a 91.07% equity interest in Huanggang Chenming
Paper Technology Co. Ltd. and has not lost control.The Company’s subsidiary Huanggang Chenming Paper Technology Co. Ltd. purchased 39.98% equity
interest in Hubei Changjiang Chenming Huanggang Equity Investment Fund Partnership (Limited Partnership)
held by Hubei Changjiang (Huanggang) Industrial Investment Fund Partnership (Limited Partnership). Following
this transaction the Company holds 99.95% equity interest in Hubei Changjiang Chenming Huanggang Equity
Investment Fund Partnership (Limited Partnership).
(2) Effect of the transactions on minority interest and equity attributable to the owners of the parent company
Unit: RMB
Shouguang
Chenming Art Paper
Co. Ltd.Cost of acquisition/disposal consideration 98000000.00
－Cash 98000000.00
－Fair value of non-cash assets
Total cost of acquisition/disposal consideration 98000000.00
Less: Share of net assets of the subsidiary calculated based on the proportion of equity
interest acquired/disposed of 82445953.67
Difference 15554046.33
Including: Capital reserve adjustment 15554046.33
Surplus reserve adjustment
Retained profit adjustment
3. Interest in joint ventures or associates
(1) Major joint ventures and associates
Accounting
method for
investment in
Principle place Place of Nature of Shareholding joint ventures or
Name of joint venture and associate of business incorporation business Direct Indirect associates
Guangdong Nanyue Bank Co. Ltd. Guangdong Guangdong Bank 4.46% Equity method
Explanation on shareholding in joint venture or associate differs from corresponding proportion of voting rights:
The basis for holding less than 20% of the voting power but having significant influence or the basis for holding
20% or more of the voting power but not having significant influence: The Company holds 4.46% equity interest
in Guangdong Nanyue Bank Co. Ltd. but is the second largest shareholder and is able to exercise significant
influence over Guangdong Nanyue Bank Co. Ltd. by appointing one director to the board of directors (out of a
total of nine directors on the board of directors).SHANDONG CHENMING PAPER HOLDINGS LIMITED 195
INTERIM REPORT 2026VIII Financial Report
X. Interest in Other Entities (Cont’d)
3. Interest in joint ventures or associates (Cont’d)
(2) Key financial information of major joint ventures
Unit: RMB
Closing balance/ Opening balance/
amount for the amount for the
period prior period
Shouguang Jintou Shouguang Jintou
Industrial Investment Industrial Investment
Partnership Partnership
(Limited Partnership) (Limited Partnership)
Current assets
Including: Cash and cash equivalents
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Minority interest
Equity interest attributable to shareholders of the parent company
Share of net assets based on shareholding
Adjustments
－Goodwill
－Unrealised profit for internal transaction
－Others
Carrying amount of equity investment in joint ventures
Fair value of equity investment in joint ventures with a quoted price in the
open market
Revenue 231186861.32
Finance expenses -60398.70
Income tax expenses
Net profit -335442177.93
Net profit from discontinued operations
Other comprehensive income
Total comprehensive income -335442177.93
Dividends received from joint ventures during the year
196 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
X. Interest in Other Entities (Cont’d)
3. Interest in joint ventures or associates (Cont’d)
(3) Key financial information of major associates
Unit: RMB
Closing balance/ Opening balance/
amount for the amount for the
period prior period
Guangdong Nanyue Guangdong Nanyue
Bank Co. Ltd. Bank Co. Ltd.Current assets 184906104236.56 213834774008.61
Non-current assets 124042048262.63 124669090061.85
Total assets 308948152499.19 338503864070.46
Current liabilities 254225782346.49 290958764493.77
Non-current liabilities 26202058175.66 18695631540.20
Total liabilities 280427840522.15 309654396033.97
Minority interest
Equity interest attributable to shareholders of the parent company 28520311977.04 28849468036.49
Share of net assets based on shareholding 1271207345.44 1285878489.32
Adjustments
－Goodwill
－Unrealised profit for internal transaction
－Others
Carrying amount of equity investment in associates 1271207345.44 1285878489.32
Fair value of equity investment in associates with a quoted price in the
open market
Revenue 1227033784.10 1410036732.55
Net profit 91751518.86 253497246.80
Net profit from discontinued operations
Other comprehensive income 92131013.99 -85100603.78
Total comprehensive income 183882532.85 168396643.02
Dividends received from associates during the year
(4) Summary financial information of non-major joint ventures and associates
Unit: RMB
Closing balance/ Opening balance/
amount for the amount for the
period prior period
Joint ventures:
Total carrying amount of investment 155461346.58 158464726.08
Total amount of the following items based on shareholding
－Net profit -2753379.50 -16411934.76
－Other comprehensive income
－Total comprehensive income -2753379.50 -16411934.76
Associates:
Total carrying amount of investment 731378843.19 651610129.87
Total amount of the following items based on shareholding
－ Net profit 79768713.32 16919251.24
－Other comprehensive income
－Total comprehensive income 79768713.32 16919251.24
SHANDONG CHENMING PAPER HOLDINGS LIMITED 197
INTERIM REPORT 2026VIII Financial Report
XI. Government grants
1. Government grants recognised at the end of the reporting period at the amount receivable
□ Applicable √ Not applicable
Reasons for not receiving the estimated amount of government grants at the estimated time
□ Applicable √ Not applicable
2. Liabilities in respect of government grants
√ Applicable □ Not applicable
Unit: RMB
Include in
non-operating Include in other
New grants income for income for Other changes Asset-related/
Item Accounting item Opening balance during the period the period the period for the period Closing balance income-related
Funding for environmental
protection Deferred income 427487869.80 25464041.36 402023828.44 Asset-related
Huanggang pulp-forestry-
paper project Deferred income 354538082.13 12513108.90 342024973.23 Asset-related
Infrastructure and
environmental protection
engineering Deferred income 161540853.04 5758794.74 155782058.30 Asset-related
Financial subsidies for
technical transformation
project Deferred income 80084805.76 100000.00 4672713.57 75512092.19 Asset-related
Zhanjiang forestry-pulp-paper
project Deferred income 34428065.51 2047316.46 32380749.05 Asset-related
Project fund for National Key
Technology Research and
Development Program Deferred income 464325.00 82350.00 381975.00 Asset-related
Others Deferred income 26038813.52 843605.04 25195208.48 Asset-related
Total 1084582814.76 100000.00 51381930.07 1033300884.69
198 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
XI. Government grants (Cont’d)
3. Government grants included in profit or loss for the period
√ Applicable □ Not applicable
Unit: RMB
Amount for Amount for
Item Accounting item the period the prior period
Funding for environmental protection Other income 25464041.36 25474041.36
Huanggang pulp-forestry-paper project Other income 12513108.90 12513108.90
Infrastructure and environmental protection
engineering Other income 5758794.74 5758794.74
Financial subsidies for technological transformation
project Other income 4672713.57 4700763.02
Zhanjiang forestry-pulp-paper project Other income 2047316.46 2113105.92
Government awards Other income 900000.00 130000.00
Afforestation subsidy Other income 723899.21 39730.53
Enterprise reform and development subsidies Other income 350000.00 218000.00
Project fund for National Key Technology Research
and Development Program Other income 82350.00 82350.00
Tax refund Other income 20000.00
Employment stabilisation subsidy Other income 2000.00
Others Other income 1033368.38 1504445.92
Total 53545592.62 52556340.39
SHANDONG CHENMING PAPER HOLDINGS LIMITED 199
INTERIM REPORT 2026VIII Financial Report
XII. Risk relating to financial instruments
Main financial instruments of the Company include monetary funds bills receivable accounts receivable accounts receivable
financing other receivables non-current assets due within one year other current assets financial assets held for trading
other non-current financial assets long-term receivables accounts payable other payables short-term borrowings non-
current liabilities due within one year other current liabilities long-term borrowings lease liabilities and long-term payables.Details of financial instruments refer to related notes. The risks associated with these financial instruments and the risk
management policies adopted by the Company to mitigate these risks are described below. The management of the Company
manages and monitors these exposures to ensure that the above risks are controlled in a limited extent.
1. Various risks from financial instruments
The Company aims to seek the appropriate balance between the risks and benefits in order to mitigate the adverse
effects on the Company’s financial performance from financial risk. Based on such risk management objectives the
Company’s risk management policies are established to identify and analyse the risks faced by the Company to
set appropriate risk limits and devise corresponding internal control procedures and to monitor risks faced by the
Company. Such risk management policies and internal control systems are reviewed regularly to adapt to changes in
market conditions and the Company’s activities. The internal audit department of the Company undertakes both regular
and ad-hoc reviews of risk management controls and procedures.Risks associated with the financial instrument of the Company mainly include credit risk liquidity risk market risk
(including exchange rate risk interest rate risk and commodity price risk).The board of directors is responsible to plan and establish the Company’s risk management structure make risk
management policies and related guidelines and supervise the implementation of risk management. The Company
has already developed risk management policies to identify and analyse risks that the Company face. These policies
mentioned specific risks covering market credit risk and liquidity risk etc. The Company regularly assesses market
environment and the operation of the Company changes to determine if to make alteration to risk management policy
and systems. The Company’s risk management is implemented by Risk Management Committee according to the
approval of the board of directors. The Risk Management Committee works closely with other business department of
the Company to identify evaluate and avoid certain risks. The Company’s internal audit department will audit the risk
management control and procedures regularly and report the result to Audit Committee of the Company.The Company spreads risks through diverse investment and business lines and through making risk management
policy to reduce risks of single industry specific area and counterparty.
(1) Credit risk
Credit risk refers to risk associated with the default of contract obligation of a transaction counterparty resulting in
financial losses to the Company.The Company manages credit risk based on category. Credit risks mainly arose from bank deposit bills
receivable accounts receivable other receivables and long-term receivables etc.
200 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
XII. Risk relating to financial instruments (Cont’d)
1. Various risks from financial instruments (Cont’d)
(1) Credit risk (Cont’d)
The Company’s bank deposits are mainly deposited in state-owned banks and other large and medium-sized
listed banks. The Company anticipated that the bank deposit does not have significant credit risk. For accounts
receivable other receivables and long-term receivables the Company set related policies to control exposure
of credit risks. The Company evaluates client’s credit quality and set related credit period based on the client’s
financial status credit records and other factors such as current market situation etc. The Company keeps
monitor the client’s credit record and for client with deteriorate credit records the Company will ensure the credit
risk is under control in whole by means of written notice of payment collection shorten or cancel credit period.The Company’s debtor spread over different industry and area. The Company continued to assess the credit
evaluation to receivables and purchase credit guarantee insurance if necessary.The biggest credit risk exposure of the Company is the carrying amount of each financial asset in the balance
sheet. The Company did not provide financial guarantee which resulted in credit risks.The amount of top 5 accounts receivable of the Company accounted for 20.21% (2025: 18.28%) of the
Company’s total accounts receivable. The amount of top 5 other receivable of the Company accounted for
55.24% (2025: 57.68%) of the Company’s total other receivables.
(2) Liquidity risk
Liquidity risk refers to the risks that the Company will not be able to meet its obligations associated with its
financial liabilities that are settled by delivering cash or other financial assets.To manage the liquidity risk the Company monitors and maintains a level of cash and cash equivalents to finance
the Company’s operations and mitigate the effects of fluctuations in cash flows. The management of the Company
monitors the usage of bank borrowings and ensures compliance with the borrowing agreements. In the meantime
we obtain commitments from major financial institutions to provide sufficient standby funds to meet short-term
and long-term funding needs.Operating cash of the Company was generated from capital and bank and other borrowings. As at the end of the
period the Company maintained the existing bank loans as before (the unused bank loan facilities as at the end of
the prior year were RMB38 million).SHANDONG CHENMING PAPER HOLDINGS LIMITED 201
INTERIM REPORT 2026VIII Financial Report
XII. Risk relating to financial instruments (Cont’d)
1. Various risks from financial instruments (Cont’d)
(2) Liquidity risk (Cont’d)
As at the end of the period the financial assets financial liabilities and off balance sheet guarantee held by the
Company are analysed by their maturity date as below at their remaining undiscounted contractual cash flows (in
RMB’0000):
Closing balance
Item Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total
Financial assets:
Monetary funds 18123.17 18123.17
Financial assets held for trading 2827.11 2827.11
Bills receivable 122591.89 122591.89
Accounts receivable 128424.92 128424.92
Accounts receivable financing 4119.25 4119.25
Other receivables 53459.68 53459.68
Long-term receivables 20121.79 90091.81 182121.83 292335.43
Other non-current financial assets 32730.42 32730.42
Other current assets 339.63 339.63
Non-current assets due within
one year 2821.84 2821.84
Total financial assets 332707.49 20121.79 90091.81 214852.25 657773.34
Financial liabilities:
Short-term borrowings 2079423.06 2079423.06
Bills payable
Accounts payable 1005960.31 1005960.31
Other payables 335033.74 335033.74
Non-current liabilities due within
one year 224848.44 224848.44
Other current liabilities 158899.68 158899.68
Long-term borrowings 75480.38 327290.70 218796.66 621567.74
Lease liabilities 322.92 1707.43 2586.34 4616.69
Long-term payables 84177.57 107392.35 191569.92
Total financial liabilities and
contingent liabilities 3804165.23 159980.87 436390.48 221383.00 4621919.58
202 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
XII. Risk relating to financial instruments (Cont’d)
1. Various risks from financial instruments (Cont’d)
(2) Liquidity risk (Cont’d)
As at the end of the prior year the financial liabilities and off-balance sheet guarantees held by the Company
are analysed by their maturity date as below based on their remaining undiscounted contractual cash flows (in
RMB’0000):
Opening balance
Item Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total
Financial assets:
Monetary funds 20102.57 20102.57
Financial assets held for trading 3879.11 3879.11
Bills receivable 79393.93 79393.93
Accounts receivable 117839.22 117839.22
Accounts receivable financing 3597.81 3597.81
Other receivables 56447.73 56447.73
Long-term receivables 22273.51 85946.09 182121.83 290341.43
Other non-current financial assets 32793.46 32793.46
Other current assets 279.90 279.90
Non-current assets due within
one year 22005.00 22005.00
Total financial assets 303545.27 22273.51 85946.09 214915.29 626680.16
Financial liabilities:
Short-term borrowings 2111259.38 2111259.38
Accounts payable 860872.71 860872.71
Other payables 434329.03 434329.03
Non-current liabilities due within
one year 239668.26 239668.26
Other current liabilities 165995.04 165995.04
Long-term borrowings 39129.52 361526.23 156018.01 556673.76
Lease liabilities 277.47 1402.07 3051.79 4731.33
Long-term payables 75048.40 105998.05 181046.45
Total financial liabilities and
contingent liabilities 3812124.42 114455.39 468926.35 159069.80 4554575.96
The financial liabilities disclosed above are based on cash flows that are not discounted and may differ from the
carrying amount of the line items of the balance sheet.Maximum guarantee amount for signed guarantee contracts does not represent the amount to be paid.SHANDONG CHENMING PAPER HOLDINGS LIMITED 203
INTERIM REPORT 2026VIII Financial Report
XII. Risk relating to financial instruments (Cont’d)
1. Various risks from financial instruments (Cont’d)
(3) Market risk
Market risk including interest rate risk exchange rate risk and other price risks refers to the risk that the fair value
or future cash flow of a financial instrument will be fluctuated due to the changes in market price.Interest rate risk
Interest rate risk refers to the risk that the fair value or future cash flow of a financial instrument will be fluctuated
due to the floating rate. Interest rate risk arises from recognised interest-bearing financial instrument and
unrecognised financial instrument (e.g. loan commitments).The Company’s interest rate risk arises from long-term interest-bearing liabilities including long-term borrowing
and bonds payable. Financial liabilities issued at floating rate expose the Company to cash flow interest rate
risk. Financial liabilities issued at fixed rate expose the Company to fair value interest rate risk. The Company
determines the relative proportions of its fixed rate and floating rate contracts depending on the prevailing market
conditions and to maintain an appropriate combination of financial instruments at fixed rate and floating rate
through regular reviews and monitors.The Company closely monitors the interest rate position of the Company. The Company did not enter into any
interest rate hedging arrangements. However the management is responsible to monitor the risks of interest
rate and consider to hedge significant interest risk if necessary. Increase in interest rates will increase the cost
of new borrowing and the interest expenses with respect to the Company’s outstanding floating rate interest-
bearing borrowings and therefore could have a material adverse effect on the Company’s financial result. The
management will make adjustments with reference to the latest market conditions. These adjustments may
include enter into interest swap agreement to mitigate its exposure to the interest rate risk.Interest bearing financial instrument held by the Company are as follows (in RMB’0000):
Amount for Amount for
Item the period the prior period
Financial instrument with fixed interest rate
Financial liabilities
Including: Short-term borrowings 2079423.06 2111259.38
Long-term borrowings 621567.74 556673.76
Long-term borrowings due within one year 173514.16 169216.27
Total 2874504.96 2837149.41
Financial instrument with float interest rate
Financial assets
Including: Monetary funds 18013.91 19861.60
Total 18013.91 19861.60
204 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
XII. Risk relating to financial instruments (Cont’d)
1. Various risks from financial instruments (Cont’d)
(3) Market risk (Cont’d)
Interest rate risk (Cont’d)
The financial instruments held by the Company at the reporting date expose the Company to fair value interest
rate risk. This sensitivity analysis as above has been determined assuming that the change in interest rates had
occurred at the reporting date and arisen from the recalculation of the above financial instrument issued at new
interest rates. The non-derivative tools issued at floating interest rate held by the Company at the reporting date
expose the Company to cash flow interest rate risk. The effect to the net profit and shareholder’s equity illustrated
in the sensitivity analysis as above is arisen from the effect to the annual estimate amount of interest expenses or
revenue at the floating interest rate. The analysis is performed on the same basis for prior year.Exchange rate risk
Exchange rate risk refers to the risk that the fair value or future cash flows of a financial instrument will be
fluctuated due to the changes in foreign currency rates. Foreign currency risk arises on financial instruments that
are denominated in a currency other than the functional currency in which they are measured.The principal business of the Company is situated within the PRC and is denominated in RMB. However foreign
exchange risks still exist for the assets and liabilities in foreign currencies and future foreign currency transactions
as recognised by the Company (assets and liabilities in foreign currencies and foreign currency transactions are
mainly denominated in USD EUR HKD and JPY).The following table details the financial assets and liabilities held by the Company which were denominated in
foreign currencies and amounted to RMB as at the end of the period are as follows (in RMB’0000):
Liabilities denominated Assets denominated
in foreign currency in foreign currency
Item Closing balance Opening balance Closing balance Opening balance
USD 61750.42 44980.44 19592.27 12292.53
EUR 3734.77 3120.86 82.78 765.06
HKD 20.43 6.42
JPY 1.09 813.14
Total 65485.19 48102.39 19695.48 13877.15
The Company continuously monitors the size of the Group’s foreign currency transactions and foreign currency
assets and liabilities to minimise the foreign exchange risks it faces and for this reason the Company may aim to
avoid foreign exchange risk by signing forward foreign exchange contracts or currency swap contracts.SHANDONG CHENMING PAPER HOLDINGS LIMITED 205
INTERIM REPORT 2026VIII Financial Report
XII. Risk relating to financial instruments (Cont’d)
1. Various risks from financial instruments (Cont’d)
(3) Market risk (Cont’d)
Exchange rate risk (Cont’d)
With other variables unchanged the after-tax effect of the possible reasonable changes in the exchange rate of
foreign currency to RMB on the current profit and loss of the Company is as follows (in RMB’0000):
Increase (decrease) in after-tax profits Amount for the period Amount for the prior period
Increase in exchange rate of USD 5% -2107.91 5% -1634.40
Decrease in exchange rate of USD -5% 2107.91 -5% 1634.40
Increase in exchange rate of EUR 5% -182.60 5% -117.79
Decrease in exchange rate of EUR -5% 182.60 -5% 117.79
Other price risks
Other price risks refer to the risk of fluctuations caused by changes in market prices other than exchange rate
risks and interest rate risks whether arising from factors related to a single financial instrument or its issuer or
from factors related to all similar financial instruments traded on the market. Other price risks can stem from
changes in commodity prices stock market indexes equity instrument prices and other risk variables.Listed equity instrument investments held by the Company classified as financial assets held for trading other
non-current financial assets and other equity instrument investments are measured at fair value on the balance
sheet date. Therefore the Company is subject to the risk of changes in the securities market.The Company monitors closely the impact of price changes on the price risk of the Company’s investment in
equity securities. Currently the Company has not taken any measures to avoid other price risks. However the
management is responsible for monitoring other price risks and will consider holding multiple equity securities
portfolios to reduce the price risk of equity securities investment when necessary.With other variables unchanged the after-tax effect of the change of -27.12% (prior year: 4.11%) in equity
securities investment prices on the Company’s current profit and loss and other comprehensive income is as
follows (in RMB’0000):
Increase (decrease) in Increase (decrease) in other
after-tax profits comprehensive income
Balance for Balance for Balance for Balance for
Item the period the prior period the period the prior period
Due to the rise in the price of equity
securities investment
Due to the decline in the price of equity
securities investment -1052.00 -56.69
206 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
XII. Risk relating to financial instruments (Cont’d)
2. Capital management
The objective of the Company’s capital risk management is to safeguard the Company’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.In order to maintain or adjust the capital structure the Company may adjust its financing methods adjust the number
of dividends paid to shareholders return capital to shareholders issue new shares and other equity instruments or
disposes assets to reduce its liabilities.The Company monitors capital on the basis of the gearing ratio. This ratio is calculated as net liabilities divided by total
capital. As at the end of the period the Company’s gearing ratio was 96.09% (end of the prior year: 94.44%).
3. Financial assets
(1) By transfer method
√ Applicable □ Not applicable
Unit: RMB
Nature of Amount of
financial assets financial assets Confirmation of
Transfer Method transferred transferred derecognition Basis for derecognition
Transfer by Debt receivable 199505304.66 Derecognised Where the Company transferred
agreement substantially all of the risks and
rewards
Endorsement or Bills receivable 1203896935.87 Not derecognised Where the Company retains almost all
discounting the risks and rewards including the
risk of default associated with it
Endorsement or Accounts receivable 1327700536.78 Derecognised Where the Company transferred
discounting financing substantially all of the risks and
rewards
Total 2731102777.31
SHANDONG CHENMING PAPER HOLDINGS LIMITED 207
INTERIM REPORT 2026VIII Financial Report
XII. Risk relating to financial instruments (Cont’d)
3. Financial assets (Cont’d)
(2) Financial assets derecognised due to transfer
√ Applicable □ Not applicable
Unit: RMB
Method of Amount of
financial assets financial assets Gains or losses associated
Item transfer derecognised with derecognition
Debt receivable Derecognition 199505304.66 Where the Company transferred
substantially all of the risks and rewards
Accounts receivable Derecognition 1327700536.78 Where the Company transferred
financing substantially all of the risks and rewards
Total 1527205841.44
XIII. Fair value disclosure
1. Fair value of assets and liabilities measured at fair value as at the end of the period
Unit: RMB
Fair value at the end of the period
Fair value Fair value Fair value
measurements measurements measurements
categorised into categorised into categorised into
Item Level 1 Level 2 Level 3 Total
I. Measurement of fair value on an ongoing
basis － － － －
(i) Financial assets held for trading 28271109.88 28271109.88
1. Financial assets measured at fair
value through profit or loss 28271109.88 28271109.88
(1) Equity instrument investments 28271109.88 28271109.88
(ii) Accounts receivable financing 41192518.58 41192518.58
(iii) Other non-current financial assets 327304236.77 327304236.77
(iv) Biological assets 1079410370.06 1079410370.06
1. Consumable biological assets 1079410370.06 1079410370.06
Total assets measured at fair value on an
ongoing basis 28271109.88 1447907125.41 1476178235.29
208 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
XIII. Fair value disclosure (Cont’d)
2. Basis for determining the market value of continuous and non-continuous level 1 fair value measurement
items
For financial assets that are traded in an active market the Company determines the fair value based on the quoted
price in the active market.
3. Qualitative and quantitative information on the valuation techniques used and important parameters for
continuous and non-continuous level 3 fair value measurement items
Unit: RMB
Fair value as at the Range
Item end of the period Valuation techniques Unobservable inputs (weighted average)
Consumable biological
assets
Forestry 1079410370.06 Replacement cost method roll Unit price per tonne of Eucalyptus wood 530
back method of market price Eucalyptus wood
revaluation method of harvest Unit price per tonne of wet pine Wet pine 550
Unit price per tonne of fir wood Fir wood 500
4. Reconciliation of opening and closing book value for continuous level 3 fair value measurement items
and sensitive analysis of unobservable inputs
Unit: RMB
Total profit or loss for the period
Transferred to other
Opening Transfer to Transfer from Transferred to comprehensive Closing
Item (current amount) balance level 3 level 3 profit and loss income balance
Accounts receivable financing 35978138.45 5214380.13 41192518.58
Other non-current financial assets 327934626.32 630389.55 327304236.77
Biological assets: 1063081495.03 624407.83 15704467.20 1079410370.06
Consumable biological assets 1063081495.03 624407.83 15704467.20 1079410370.06
Total 1426994259.80 5838787.96 630389.55 15704467.20 1447907125.41
XIV. Related parties and related party transactions
1. Parent company of the Company
Shareholding of the Voting right of the
Name of parent Place of Registered parent company parent company
company incorporation Business nature capital in the Company (%) in the Company (%)
Chenming Holdings Shouguang Investment in manufacture of paper 1238787700 15.50 15.50
Co. Ltd. electricity steam and arboriculture
The ultimate controller of the Company is Shouguang State-owned Assets Supervision and Administration Office.
2. Subsidiaries of the Company
For details of the Company’s subsidiaries please refer to Note X. 1.SHANDONG CHENMING PAPER HOLDINGS LIMITED 209
INTERIM REPORT 2026VIII Financial Report
XIV. Related parties and related party transactions (Cont’d)
3. Joint ventures and associates of the Company
For details of material joint ventures and associates of the Company please refer to Note X. 3.Balance of related party transaction between the Company and its joint ventures or associates during the period or prior
periods are as follows:
Name of joint ventures or associates Relation
Weifang Port Wood Chip Wharf Co. Ltd. A joint venture of the Company
Shouguang Meite Environmental Technology Co. Ltd. A joint venture of the Company
Weifang Xingxing United Chemical Co. Ltd. A joint venture of the Company
Shouguang Chenming Huisen New-style Construction Materials A joint venture of the Company
Co. Ltd.Wuhan Chenming Qianneng Electric Power Co. Ltd. A subsidiary of an associate of the Company
Wuhan Chenming Hanyang Paper Holdings Co. Ltd. An associate of the Company
Chenming (Qingdao) Asset Management Co. Ltd. An associate of the Company
Guangdong Nanyue Bank Co. Ltd. An associate of the Company
4. Other related parties
Name of other related parties Relation
Lide Technology Co. Ltd. A subsidiary of a company invested by the Directors
and Senior Management of the Company within
the past twelve months
Shandong Shengming Corporate Management Co. Ltd. A subsidiary disposed of within the past twelve
months
Shandong Yujing Grand Hotel Co. Ltd. A subsidiary disposed of within the past twelve
months
Century Sunshine (Shouguang) Specialty Paper Co. Ltd. An entity in which the former chairman of the
Company’s controlling shareholder served as a
director within the past twelve months
Jiang Yanshan Li Weixian Liu Peiji Meng Feng Zhu Yanli Key management personnel
Song Yuchen Wang Ying Zhang Zhiyuan Luo Xinhua
Wan Gang Kong Pengzhi Ge Guangming Dong Lianming
Guo Qinyan Yuan Xikun Chu Hon Leung
210 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
XIV. Related parties and related party transactions (Cont’d)
5. Related party transactions
(1) Purchase and sales of goods and rendering and receiving services
Table on purchase of goods/receiving of services
Unit: RMB
Whether the
Transaction transaction Amount
Subject matter of the Amount for facility facility is for the prior
Related party related party transactions the period approved exceeded period
Weifang Port Wood Chip Wharf Port miscellaneous fees 8729442.87 50000000.00 No 2333303.83
Co. Ltd.Shouguang Meite Environmental Purchase of chemical 39500000.00 N/A N/A
Technology Co. Ltd. materials
Table on sales of goods/providing of services
Unit: RMB
Subject matter of the related Amount for Amount for
Related party party transactions the period the prior period
Shouguang Chenming Huisen New-style Construction Sales of electricity and steam 5950791.20 6210617.19
Materials Co. Ltd.Shouguang Huixin Construction Materials Co. Ltd. Sales of electricity etc. 10948.60
Shouguang Meite Environmental Technology Co. Ltd. Sales of electricity water etc. 4230642.00 73146.00
Century Sunshine (Shouguang) Specialty Paper Co. Ltd. Sales of electricity and steam 12258400.00
(2) Related party leasing
The Company as lessor:
Unit: RMB
Lease income Lease income
recognised recognised
for the current for the previous
Name of lessee Type of leased asset period period
Shouguang Meite Environmental Technology Co. Ltd. Housing and building structure 733944.95 733944.96
Shandong Shengming Corporate Management Co. Ltd. Housing and building structure 174230.74
Lide Technology Co. Ltd. Housing and building structure – 331694.20
SHANDONG CHENMING PAPER HOLDINGS LIMITED 211
INTERIM REPORT 2026VIII Financial Report
XIV. Related parties and related party transactions (Cont’d)
5. Related party transactions (Cont’d)
(3) Related party guarantee
The Company as guarantor
Unit: RMB
Whether
Commencement performance
Amount under date of Expiry date of guarantee
Party being guaranteed guarantee guarantee of guarantee is completed
Chenming (HK) Limited 29281791.31 2025/8/21 2026/8/20 No
Chenming (HK) Limited 20934447.08 2024/1/4 2030/1/3 No
Chenming (HK) Limited 6978149.01 2024/1/4 2030/1/3 No
Hainan Chenming Technology Co. Ltd. 50000000.00 2025/7/20 2026/7/20 No
Hainan Chenming Technology Co. Ltd. 110000000.00 2025/7/21 2026/7/18 No
Hainan Chenming Technology Co. Ltd. 8400000.00 2025/7/2 2026/7/2 No
Hainan Chenming Technology Co. Ltd. 70000000.00 2025/11/26 2026/11/26 No
Hainan Chenming Technology Co. Ltd. 50000000.00 2026/1/15 2027/1/14 No
Hainan Chenming Technology Co. Ltd. 34500000.00 2026/3/17 2027/3/17 No
Hainan Chenming Technology Co. Ltd. 91500000.00 2026/3/18 2027/3/18 No
Hainan Chenming Technology Co. Ltd. 39600000.00 2026/6/9 2027/6/8 No
Huanggang Chenming Pulp & Paper Co. Ltd. 20000000.00 2024/4/28 2026/4/27 No
Huanggang Chenming Pulp & Paper Co. Ltd. 90000000.00 2024/5/20 2026/5/19 No
Huanggang Chenming Pulp & Paper Co. Ltd. 30000000.00 2024/7/19 2026/7/18 No
Huanggang Chenming Pulp & Paper Co. Ltd. 45000000.00 2024/8/14 2026/8/13 No
Huanggang Chenming Pulp & Paper Co. Ltd. 50000000.00 2024/9/23 2026/9/23 No
Huanggang Chenming Pulp & Paper Co. Ltd. 30000000.00 2024/10/18 2026/10/18 No
Huanggang Chenming Pulp & Paper Co. Ltd. 56000000.00 2024/2/23 2027/12/5 No
Huanggang Chenming Pulp & Paper Co. Ltd. 731640000.00 2019/12/16 2031/12/15 No
Huanggang Chenming Pulp & Paper Co. Ltd. 73485646.20 2025/2/28 2027/9/28 No
Huanggang Chenming Pulp & Paper Co. Ltd. 30000000.00 2026/1/16 2029/1/7 No
Huanggang Chenming Pulp & Paper Co. Ltd. 80471277.79 2022/5/20 2026/10/27 No
Huanggang Chenming Pulp & Paper Co. Ltd. 43135811.44 2022/11/30 2028/2/25 No
Huanggang Chenming Pulp & Paper Co. Ltd. 19121917.65 2023/1/12 2027/4/24 No
Huanggang Chenming Pulp & Paper Co. Ltd. 25867503.52 2023/3/9 2026/3/9 No
Huanggang Chenming Pulp & Paper Co. Ltd. 39745680.72 2023/4/22 2026/12/10 No
Huanggang Chenming Pulp & Paper Co. Ltd. 115026490.76 2023/7/6 2027/11/15 No
Huanggang Chenming Pulp & Paper Co. Ltd. 56581649.91 2023/11/23 2027/11/23 No
Huanggang Chenming Pulp & Paper Co. Ltd. 79106721.76 2024/1/30 2028/1/30 No
Huanggang Chenming Pulp & Paper Co. Ltd. 46597225.13 2024/9/13 2029/3/13 No
Jilin Chenming Pulp & Fiber Trading Co. Ltd. 10000000.00 2024/9/24 2026/9/24 No
Jilin Chenming Paper Co. Ltd. 15000000.00 2026/6/15 2027/6/14 No
Jilin Chenming Paper Co. Ltd. 32500000.00 2025/11/6 2028/11/6 No
Jilin Chenming Paper Co. Ltd. 47500000.00 2025/12/17 2028/9/29 No
Jilin Chenming Paper Co. Ltd. 183875999.23 2023/12/15 2026/11/13 No
Jilin Chenming Paper Co. Ltd. 90998111.11 2024/9/29 2026/9/28 No
Jilin Chenming Paper Co. Ltd. 179500000.00 2025/11/6 2030/10/29 No
212 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
XIV. Related parties and related party transactions (Cont’d)
5. Related party transactions (Cont’d)
(3) Related party guarantee (Cont’d)
The Company as guarantor (Cont’d)
Unit: RMB
Whether
Commencement performance
Amount under date of Expiry date of guarantee
Party being guaranteed guarantee guarantee of guarantee is completed
Jiangxi Chenming Paper Co. Ltd. 60000000.00 2026/2/10 2027/2/9 No
Jiangxi Chenming Paper Co. Ltd. 30000000.00 2026/2/11 2027/2/9 No
Jiangxi Chenming Paper Co. Ltd. 30000000.00 2026/2/13 2027/2/10 No
Jiangxi Chenming Paper Co. Ltd. 30000000.00 2026/2/13 2027/2/11 No
Jiangxi Chenming Paper Co. Ltd. 113450000.00 2026/2/14 2027/2/13 No
Jiangxi Chenming Paper Co. Ltd. 19959366.67 2025/4/3 2026/1/26 No
Jiangxi Chenming Paper Co. Ltd. 59748619.03 2025/4/8 2026/1/26 No
Jiangxi Chenming Paper Co. Ltd. 19800000.00 2026/5/30 2027/5/19 No
Jiangxi Chenming Paper Co. Ltd. 19800000.00 2026/5/30 2027/5/19 No
Jiangxi Chenming Paper Co. Ltd. 20350000.00 2026/5/30 2027/5/19 No
Jiangxi Chenming Paper Co. Ltd. 19545000.00 2025/11/30 2026/11/29 No
Jiangxi Chenming Paper Co. Ltd. 20000000.00 2025/11/30 2026/11/29 No
Jiangxi Chenming Paper Co. Ltd. 20000000.00 2025/11/30 2026/11/29 No
Jiangxi Chenming Paper Co. Ltd. 3500000.00 2025/11/30 2026/11/29 No
Jiangxi Chenming Paper Co. Ltd. 6500000.00 2025/11/30 2026/11/29 No
Jiangxi Chenming Paper Co. Ltd. 2965100.00 2025/12/20 2026/12/20 No
Jiangxi Chenming Paper Co. Ltd. 2850400.00 2025/12/21 2026/12/21 No
Jiangxi Chenming Paper Co. Ltd. 979314.95 2025/12/30 2026/12/30 No
Jiangxi Chenming Paper Co. Ltd. 1050948.10 2025/12/30 2026/12/30 No
Jiangxi Chenming Paper Co. Ltd. 1289794.55 2025/12/30 2026/12/28 No
Jiangxi Chenming Paper Co. Ltd. 2000000.00 2025/12/30 2026/12/28 No
Jiangxi Chenming Paper Co. Ltd. 2008854.97 2025/12/30 2026/12/29 No
Jiangxi Chenming Paper Co. Ltd. 5000000.00 2025/12/30 2026/12/30 No
Jiangxi Chenming Paper Co. Ltd. 17000000.00 2025/12/30 2026/12/30 No
Jiangxi Chenming Paper Co. Ltd. 29000000.00 2025/12/30 2026/12/29 No
Jiangxi Chenming Paper Co. Ltd. 50000000.00 2025/12/30 2026/12/29 No
Jiangxi Chenming Paper Co. Ltd. 70000000.00 2025/12/30 2026/12/29 No
Jiangxi Chenming Paper Co. Ltd. 80000000.00 2025/12/30 2026/12/29 No
Jiangxi Chenming Paper Co. Ltd. 91200000.00 2025/12/30 2026/12/28 No
Jiangxi Chenming Paper Co. Ltd. 9979500.00 2025/12/16 2026/10/27 No
Jiangxi Chenming Paper Co. Ltd. 64500000.00 2025/9/11 2028/8/29 No
Jiangxi Chenming Paper Co. Ltd. 30000000.00 2025/9/12 2028/8/29 No
Jiangxi Chenming Paper Co. Ltd. 20000000.00 2025/9/18 2028/8/29 No
Jiangxi Chenming Paper Co. Ltd. 100000000.00 2025/9/24 2028/8/29 No
Jiangxi Chenming Paper Co. Ltd. 100000000.00 2025/9/25 2028/8/29 No
Jiangxi Chenming Paper Co. Ltd. 100000000.00 2025/9/26 2028/8/29 No
SHANDONG CHENMING PAPER HOLDINGS LIMITED 213
INTERIM REPORT 2026VIII Financial Report
XIV. Related parties and related party transactions (Cont’d)
5. Related party transactions (Cont’d)
(3) Related party guarantee (Cont’d)
The Company as guarantor (Cont’d)
Unit: RMB
Whether
Commencement performance
Amount under date of Expiry date of guarantee
Party being guaranteed guarantee guarantee of guarantee is completed
Jiangxi Chenming Paper Co. Ltd. 500000000.00 2025/12/31 2028/8/29 No
Jiangxi Chenming Paper Co. Ltd. 10000000.00 2026/1/8 2028/8/29 No
Jiangxi Chenming Paper Co. Ltd. 57600000.00 2024/9/29 2026/12/29 No
Jiangxi Chenming Paper Co. Ltd. 30000000.00 2023/9/8 2026/8/22 No
Jiangxi Chenming Paper Co. Ltd. 106975661.00 2022/2/28 2030/11/28 No
Jiangxi Chenming Paper Co. Ltd. 14966942.18 2023/12/4 2030/11/15 No
Jiangxi Chenming Paper Co. Ltd. 30000000.00 2024/10/17 2027/10/17 No
Jiangxi Chenming Paper Co. Ltd. 13971781.19 2022/10/11 2026/9/7 No
Jiangxi Chenming Paper Co. Ltd. 11259827.27 2022/8/18 2029/3/24 No
Jiangxi Chenming Paper Co. Ltd. 52835042.81 2022/5/23 2029/12/15 No
Jiangxi Chenming Paper Co. Ltd. 40039789.79 2024/4/30 2026/10/29 No
Shandong Chenming Pulp & Paper Sales Co. Ltd. 150000000.00 2024/2/8 2025/2/12 No
Shandong Chenming Pulp & Paper Sales Co. Ltd. 50000000.00 2024/9/24 2025/9/23 No
Shandong Chenming Pulp & Paper Sales Co. Ltd. 400000000.00 2025/3/29 2027/3/20 No
Shandong Chenming Pulp & Paper Sales Co. Ltd. 24999884.00 2026/3/23 2027/3/22 No
Shandong Chenming Pulp & Paper Sales Co. Ltd. 50000000.00 2026/3/23 2027/3/22 No
Shandong Chenming Pulp & Paper Sales Co. Ltd. 75000000.00 2026/3/23 2027/3/22 No
Shandong Chenming Pulp & Paper Sales Co. Ltd. 126591245.00 2026/4/1 2027/3/31 No
Shandong Chenming Pulp & Paper Sales Co. Ltd. 128402137.00 2026/4/1 2027/3/31 No
Shandong Chenming Pulp & Paper Sales Co. Ltd. 101549733.00 2026/4/1 2027/3/31 No
Shandong Chenming Pulp & Paper Sales Co. Ltd. 203370000.00 2026/6/24 2027/6/23 No
Shandong Chenming Pulp & Paper Sales Co. Ltd. 100000000.00 2026/6/24 2027/6/23 No
Shandong Chenming Pulp & Paper Sales Co. Ltd. 32680000.00 2026/6/24 2027/6/23 No
Shandong Chenming Pulp & Paper Sales Co. Ltd. 153810000.00 2026/6/24 2027/6/23 No
Shanghai Chenming Pulp & Paper Sales Co. Ltd. 5600000.00 2024/6/4 2025/5/30 No
Shanghai Chenming Pulp & Paper Sales Co. Ltd. 6300000.00 2024/6/14 2025/6/9 No
Shanghai Chenming Pulp & Paper Sales Co. Ltd. 5600000.00 2024/6/20 2025/5/28 No
Shanghai Chenming Pulp & Paper Sales Co. Ltd. 20000000.00 2024/6/21 2025/6/18 No
Shanghai Chenming Pulp & Paper Sales Co. Ltd. 8750000.00 2023/2/13 2027/6/30 No
Shanghai Chenming Pulp & Paper Sales Co. Ltd. 519000000.00 2024/10/18 2029/9/24 No
Shanghai Chenming Pulp & Paper Sales Co. Ltd. 11220000.00 2025/2/28 2028/2/27 No
Shanghai Heruiming Property Management Co. Ltd. 20000000.00 2025/4/2 2025/9/30 No
Shanghai Heruiming Property Management Co. Ltd. 59980000.00 2024/5/23 2024/11/8 No
Shanghai Hongtai Real Estate Co. Ltd. 1984545455.00 2023/6/9 2038/3/20 No
214 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
XIV. Related parties and related party transactions (Cont’d)
5. Related party transactions (Cont’d)
(3) Related party guarantee (Cont’d)
The Company as guarantor (Cont’d)
Unit: RMB
Whether
Commencement performance
Amount under date of Expiry date of guarantee
Party being guaranteed guarantee guarantee of guarantee is completed
Shouguang Chenming Import and Export Trade Co. Ltd. 120000000.00 2025/11/19 2028/11/18 No
Shouguang Meilun Paper Co. Ltd. 71649000.00 2023/10/23 2024/10/23 No
Shouguang Meilun Paper Co. Ltd. 20000000.00 2026/1/12 2027/1/11 No
Shouguang Meilun Paper Co. Ltd. 55369145.00 2026/5/27 2027/5/26 No
Shouguang Meilun Paper Co. Ltd. 278306779.00 2026/6/24 2027/6/23 No
Shouguang Meilun Paper Co. Ltd. 45727471.00 2026/6/2 2027/6/1 No
Shouguang Meilun Paper Co. Ltd. 98114605.00 2026/6/2 2027/6/1 No
Shouguang Meilun Paper Co. Ltd. 199400000.00 2025/11/12 2026/12/12 No
Shouguang Meilun Paper Co. Ltd. 133253598.00 2025/12/12 2026/12/11 No
Shouguang Meilun Paper Co. Ltd. 49497280.00 2025/12/15 2026/12/14 No
Shouguang Meilun Paper Co. Ltd. 93998400.00 2025/12/31 2026/12/30 No
Shouguang Meilun Paper Co. Ltd. 25113500.00 2025/12/31 2026/12/30 No
Shouguang Meilun Paper Co. Ltd. 44000000.00 2025/12/31 2026/12/30 No
Shouguang Meilun Paper Co. Ltd. 59900000.00 2025/12/31 2026/12/30 No
Shouguang Meilun Paper Co. Ltd. 162119849.15 2022/3/14 2029/5/25 No
Shouguang Meilun Paper Co. Ltd. 17907687.59 2021/12/14 2028/2/14 No
Shouguang Meilun Paper Co. Ltd. 109591059.28 2022/11/25 2028/1/15 No
Shouguang Meilun Paper Co. Ltd. 51627551.13 2024/7/5 2029/8/15 No
Shouguang Meilun Paper Co. Ltd. 27000000.00 2024/6/28 2027/6/28 No
Shouguang Meilun Paper Co. Ltd. 42725817.15 2024/5/24 2028/11/24 No
Shouguang Meilun Paper Co. Ltd. 59240954.05 2024/5/28 2028/5/26 No
Shouguang Meilun Paper Co. Ltd. 25446656.28 2024/4/12 2025/4/12 No
Shouguang Meilun Paper Co. Ltd. 498499725.03 2024/1/18 2029/1/18 No
Shouguang Meilun Paper Co. Ltd. 42278885.85 2024/1/29 2027/1/28 No
Shouguang Meilun Paper Co. Ltd. 42973200.00 2023/10/25 2029/9/25 No
Shouguang Meilun Paper Co. Ltd. 14978745.04 2023/10/8 2028/2/15 No
Shouguang Meilun Paper Co. Ltd. 34420409.16 2023/8/30 2028/4/5 No
Shouguang Meilun Paper Co. Ltd. 114500000.00 2023/6/9 2030/9/20 No
Shouguang Meilun Paper Co. Ltd. 5000000.00 2023/3/29 2028/3/20 No
Shouguang Meilun Paper Co. Ltd. 12000000.00 2023/1/18 2028/1/18 No
Shouguang Meilun Paper Co. Ltd. 5074948.25 2022/12/29 2026/11/25 No
Shouguang Meilun Paper Co. Ltd. 194000000.00 2022/12/27 2027/12/24 No
Shouguang Meilun Paper Co. Ltd. 21466666.64 2022/9/30 2026/12/15 No
Shouguang Meilun Paper Co. Ltd. 30000000.00 2022/8/25 2025/8/25 No
Shouguang Meilun Paper Co. Ltd. 14345230.30 2022/6/6 2025/6/5 No
Shouguang Meilun Paper Co. Ltd. 21399530.65 2022/6/28 2027/9/28 No
SHANDONG CHENMING PAPER HOLDINGS LIMITED 215
INTERIM REPORT 2026VIII Financial Report
XIV. Related parties and related party transactions (Cont’d)
5. Related party transactions (Cont’d)
(3) Related party guarantee (Cont’d)
The Company as guarantor (Cont’d)
Unit: RMB
Whether
Commencement performance
Amount under date of Expiry date of guarantee
Party being guaranteed guarantee guarantee of guarantee is completed
Shouguang Meilun Paper Co. Ltd. 8850506.04 2022/5/24 2028/10/30 No
Shouguang Meilun Paper Co. Ltd. 2887491.97 2021/12/20 2025/12/20 No
Shouguang Meilun Paper Co. Ltd. 269000000.00 2021/9/9 2029/12/20 No
Shouguang Meilun Paper Co. Ltd. 29400000.00 2024/7/23 2026/7/23 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 85500000.00 2023/11/29 2024/11/21 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 100000000.00 2023/12/9 2026/12/8 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 100000000.00 2025/12/31 2026/12/30 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 38000000.00 2024/3/21 2026/3/20 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 10500000.00 2024/3/26 2026/3/31 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 31000000.00 2024/3/28 2026/3/27 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 30000000.00 2024/3/29 2026/3/27 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 75770782.44 2024/5/23 2024/11/26 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 38372000.00 2024/6/6 2027/5/27 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 47784000.00 2024/6/6 2027/5/26 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 200000000.00 2024/7/12 2026/7/9 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 29000000.00 2024/7/18 2026/7/15 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 100000000.00 2024/7/23 2026/7/22 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 67000000.00 2024/7/24 2026/7/20 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 41408350.00 2024/7/24 2026/7/20 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 60000000.00 2024/8/7 2026/8/6 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 59000000.00 2024/8/8 2026/8/7 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 67000000.00 2024/8/14 2026/8/13 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 100000000.00 2024/9/25 2025/9/24 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 78000000.00 2024/10/10 2025/10/10 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 62000000.00 2024/10/11 2026/3/31 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 109900000.00 2024/10/15 2025/10/14 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 730401.44 2024/10/17 2025/1/16 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 167500000.00 2024/11/11 2025/11/10 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 6000000.00 2024/11/13 2025/5/12 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 100200000.00 2024/11/14 2026/3/31 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 59460000.00 2024/11/20 2025/11/19 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 940000000.00 2018/3/26 2029/3/25 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 65000000.00 2022/6/17 2025/6/16 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 65000000.00 2022/6/17 2025/6/16 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 50000000.00 2024/9/12 2025/1/12 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 50000000.00 2024/9/20 2025/1/17 No
216 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
XIV. Related parties and related party transactions (Cont’d)
5. Related party transactions (Cont’d)
(3) Related party guarantee (Cont’d)
The Company as guarantor (Cont’d)
Unit: RMB
Whether
Commencement performance
Amount under date of Expiry date of guarantee
Party being guaranteed guarantee guarantee of guarantee is completed
Zhanjiang Chenming Pulp & Paper Co. Ltd. 14030000.00 2025/1/3 2026/1/8 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 204960000.00 2025/3/29 2025/9/28 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 45660000.00 2025/3/29 2025/9/28 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 129880000.00 2025/3/31 2025/9/30 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 67000000.00 2025/1/3 2025/7/3 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 65000000.00 2025/1/10 2025/7/10 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 13790000.00 2025/4/28 2025/10/27 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 10000000.00 2025/7/30 2026/7/30 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 7900000.00 2025/9/18 2026/9/18 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 35250000.00 2025/12/19 2026/12/18 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 35250000.00 2025/12/19 2026/12/18 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 16000000.00 2026/3/27 2027/3/26 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 5000000.00 2025/3/10 2026/3/8 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 40000000.00 2025/3/10 2026/3/8 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 39900000.00 2025/3/10 2026/3/8 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 25000000.00 2025/3/31 2026/3/30 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 25290000.00 2025/3/31 2026/3/30 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 25000000.00 2026/5/15 2027/5/14 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 45000000.00 2026/6/17 2027/6/16 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 63000000.00 2024/5/31 2027/5/26 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 40000000.00 2024/6/26 2027/6/22 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 48000000.00 2024/6/28 2027/6/23 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 62000000.00 2024/6/28 2027/6/23 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 50290000.00 2026/4/27 2027/4/26 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 50000000.00 2026/4/27 2027/4/26 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 48700000.00 2026/4/27 2027/4/26 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 60000000.00 2026/5/18 2027/5/17 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 98350000.00 2026/5/19 2027/5/18 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 49505526.00 2026/5/25 2027/5/24 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 494474.00 2026/5/25 2027/5/24 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 47500000.00 2026/6/16 2027/6/15 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 35000000.00 2026/6/17 2027/6/16 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 30000000.00 2026/6/17 2027/6/16 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 4630000.00 2026/6/18 2027/6/18 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 12300000.00 2026/6/18 2027/6/18 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 9000000.00 2026/6/18 2027/6/18 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 60540260.41 2022/6/29 2030/6/29 No
SHANDONG CHENMING PAPER HOLDINGS LIMITED 217
INTERIM REPORT 2026VIII Financial Report
XIV. Related parties and related party transactions (Cont’d)
5. Related party transactions (Cont’d)
(3) Related party guarantee (Cont’d)
The Company as guarantor (Cont’d)
Unit: RMB
Whether
Commencement performance
Amount under date of Expiry date of guarantee
Party being guaranteed guarantee guarantee of guarantee is completed
Zhanjiang Chenming Pulp & Paper Co. Ltd. 49970000.00 2023/3/31 2029/3/17 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 60000000.00 2023/6/2 2026/6/2 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 60900191.21 2023/6/20 2026/6/20 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 299200000.00 2024/4/29 2029/4/28 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 164172110.17 2023/11/8 2030/11/8 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 58940000.00 2024/6/27 2024/12/27 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 70000000.00 2024/6/27 2024/12/27 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 26620000.00 2024/6/28 2024/12/28 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 25000000.00 2024/6/28 2024/12/28 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 69440000.00 2024/6/28 2024/12/28 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 30000000.00 2024/7/2 2025/1/2 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 65000000.00 2024/8/14 2025/2/14 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 274400000.00 2016/8/18 2028/3/13 No
Zhanjiang Chenming Arboriculture Development Co. Ltd. 44100000.00 2024/3/29 2027/3/21 No
Weifang Port Wood Chip Wharf Co. Ltd. 77395000.00 2017/12/15 2027/12/20 No
Total 18269420606.36
6. Related party accounts receivable and accounts payable
(1) Accounts receivable
Unit: RMB
Closing balance Opening balance
Book Bad debt Book Bad debt
Item Related party balance provision balance provision
Accounts receivable Shouguang Chenming Huisen New-style 2592789.60 47188.77 1242213.20 22608.28
Construction Materials Co. Ltd.Accounts receivable Shouguang Chenming Guangyuan Property 3051136.29 345127.33
Management Co. Ltd.Accounts receivable Shandong Yujing Grand Hotel Co. Ltd. 18840183.06
Accounts receivable Century Sunshine (Shouguang) Specialty 10538500.00 191800.70
Paper Co. Ltd.Accounts receivable Shandong Shengming Corporate 156439.22 39.24
Management Co. Ltd.Other receivables Wuhan Chenming Hanyang Paper 147567756.61 27559486.48 161681854.41 30010602.34
Holdings Co. Ltd.Other receivables Shouguang Meite Environmental 12287072.08 10612403.02 11939404.05 10535572.35
Technology Co. Ltd.Other receivables Weifang Port Wood Chip Wharf Co. Ltd. 85130749.84 6618024.97 83230249.84 41564674.85
Other receivables Shanghai Chenxinming Industrial 300000.00
Development Co. Ltd.Other receivables Qingdao Chenming Paper Products Sales 257455.23
Co. Ltd.Prepayment Shouguang Huixin Construction Materials 130816.20
Co. Ltd.
218 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
XIV. Related parties and related party transactions (Cont’d)
6. Related party accounts receivable and accounts payable (Cont’d)
(2) Accounts payable
Unit: RMB
Closing book Opening book
Item Related party balance balance
Accounts payable Wuhan Chenming Qianneng Electric Power Co. Ltd. 4869.10 4869.10
Accounts payable Wuhan Chenming Hanyang Paper Holdings 14078980.10 14034825.00
Co. Ltd.Accounts payable Weifang Xingxing United Chemical Co. Ltd. 26905494.34 26905494.34
Accounts payable Weifang Port Wood Chip Wharf Co. Ltd. 17437830.70 16812701.25
Accounts payable Shouguang Meite Environmental Technology 12231398.23 8668875.09
Co. Ltd.Other payables Chenming (Qingdao) Asset Management Co. Ltd. 2010109.59 1806000.00
Other payables Chenming Holdings Co. Ltd. 35215687.73 35870656.11
Other payables Weifang Xingxing United Chemical Co. Ltd. 16860000.00 16860000.00
Other payables Shouguang Chenming Guangyuan Real Property 208955749.51
Company Limited
Other payables Shandong Dingkun Asset Management Partnership 171500.00
(Limited Partnership)
Other payables Shandong Shengming Corporate Management 46156087.64
Co. Ltd.Contract liabilities Chenming Management and Consulting (Shandong) 273900.00
Co. Ltd.Contract liabilities Shouguang Chenming Guangyuan Real Property 239618.43
Company Limited
Receipts in advance Century Sunshine (Shouguang) Specialty Paper 119900.00
Co. Ltd.
(3) Deposits with related parties
Unit: RMB
Closing book Opening book
Item Related party balance balance
Bank deposit Guangdong Nanyue Bank Co. Ltd. 1.05 2777.07
Other monetary funds Guangdong Nanyue Bank Co. Ltd. 2166012.54 2163322.52
(4) Loans from related parties
Unit: RMB
Closing book Opening book
Item Related party balance balance
Short-term borrowings Guangdong Nanyue Bank Co. Ltd. 758840000.00 759790000.00
SHANDONG CHENMING PAPER HOLDINGS LIMITED 219
INTERIM REPORT 2026VIII Financial Report
XV. Undertaking and contingency
1. Significant commitments
(1) Capital commitments
Unit: RMB
Capital commitments contracted for but not yet necessary
to be recognised in the financial statement Closing balance Opening balance
Commitments in relation to acquisition and construction
of long-term assets 305724260.20 303504260.20
2. Contingency
(1) Significant contingencies as at the balance sheet date
Contingent liabilities arising from pending litigation and arbitration and their financial impacts
Unit: RMB
Amount of the
Plaintiff Defendant Cause of action Trial to be heard subject matter Case status
Plaintiff 1 The Company Litigation filed by the plaintiff Hangzhou Intermediate 190147150.00 Pending first
for default on repayment of People’s Court instance ruling
borrowings
Plaintiff 2 The Company Litigation filed by the plaintiff Zhanggong District 40039789.79 Pending first
for default on repayment of People’s Court of instance ruling
overdue payment for goods Ganzhou City
Plaintiff 3 The Company Construction agreement Mazhang District 32477000.00 Pending first
dispute People’s Court of instance ruling
Zhanjiang City
Plaintiff 4 The Company Dispute over non-payment Luchuan County 15670000.00 Pending first
of commercial paper upon People’s Court instance ruling
maturity
Plaintiff 5 The Company Litigation filed by the plaintiff Mazhang District 14076468.32 Pending first
for default on repayment of People’s Court instance ruling
overdue payment for goods
Plaintiff 6 The Company Land infringement liability Qingzhou City People’s 11879000.00 Pending second
dispute Court instance ruling
Total 304289408.11
220 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
XV. Undertaking and contingency (Cont’d)
2. Contingency (Cont’d)
(2) Description should also be made even the Company did not have any significant contingency that should be
disclosed
The Company did not have any significant contingency that should be disclosed.XVI. Post-balance sheet event
20826013 A shares of the Company held by Chenming Holdings were subject to a judicial auction on the Beijing Dongcheng
District People’s Court Judicial Auction Platform on JD.com from 10:00 a.m. on 13 August 2026 to 10:00 a.m. on 14 August
2026 (except for any extensions). On 14 August 2026 the judicial auction of the 20826013 A shares of the Company held
by Chenming Holdings was concluded in full. These shares represented 0.71% of the Company’s total share capital and
the final auction price was RMB36862043.01. For specific details please refer to the relevant information published on
the Beijing Dongcheng District People’s Court Judicial Auction Platform on JD.com. Upon completion of the transfer of all
shares sold in this judicial auction Chenming Holdings’ total shareholdings in the Company will be reduced to 799086869
shares representing 27.17% of the Company’s total share capital. The judicial auction of the shares of the Company held by
Chenming Holdings does not result in a change of control of the Company nor does it have a material adverse effect on the
Company’s corporate governance structure or its ongoing concern.XVII. Other Material Matters
1. Debt restructuring
The Company will take the initiative to communicate with its creditors for extension of loan terms and reduction of
interest rates so as to alleviate the pressure on loan repayment in the short term. Provincial debt committees were
established to agree on “no loan cancellations or delays” and further negotiate new credit facilities in the form of a
syndicated loan specifically for resumption of operation and production and interest rate reductions and extensions of
debts to ensure sufficient liquidity for operations and production resumption of the Company.
2. Discontinued operation
Unit: RMB
Amount for Amount for
Item the period the prior period
Revenue from discontinued operations (A) 10013414.94 8302961.20
Less: Termination of operating expenses (B) 17383526.13 20521929.95
Total profit from discontinued operations (C) -7370111.19 -12218968.75
Less: income tax expense for termination of operations (D)
Net profit from operating activities (E = C-D) -7370111.19 -12218968.75
Asset impairment loss/(reversal) (F) -5751.25 -354849.30
Total proceeds from disposal (G) 191931871.19
Disposal of related income tax expenses (H)
Net profit of disposal (I = G-H) 191931871.19
Net profit from discontinued operations (J = E + F + I) 184556008.75 -12573818.05
Of which: D iscontinued operating profit attributable to shareholders
of the parent company 185289907.06 -11322723.15
Discontinued operating profit attributable to minority shareholders -733898.31 -1251094.90
Net cash flow from operating activities -605948.34 -169232.24
Net cash flow from investing activities
Net cash flow from financing activities
SHANDONG CHENMING PAPER HOLDINGS LIMITED 221
INTERIM REPORT 2026VIII Financial Report
XVII. Other Material Matters (Cont’d)
3. Segment information
(1) Basis for determination and accounting policies
According to the Company’s internal organisational structure management requirements and internal reporting
system the Company’s operating business is divided into 3 reporting segments. These report segments are
determined based on the financial information required by the Company’s daily internal management. The
management of the Group regularly evaluates the operating results of these reporting segments to determine the
allocation of resources to them and evaluate their performance.The Company’s reporting segments include:
(1) Machine paper segment which is responsible for production and sales of machine paper;
(2) Hotels and property rentals segment which is responsible for hotel services and property rental;
(3) Other segments which are responsible for the above segments otherwise.
The transfer prices of the transfer transactions between the Company’s segments are based on market prices.Segment report information is disclosed in accordance with the accounting policies and measurement standards
adopted by each segment when reporting to management. These accounting policies and measurement basis are
consistent with the accounting policies and measurement basis used in preparing the financial statements.
(2) Financial Information of Reporting Segment
Unit: RMB
Machine- Hotel and Inter-segment
Prior period or end of the prior period made paper property rentals Others offset Total
Revenue 7028155563.78 75433501.70 123500887.85 361661010.03 6865428943.30
Including: Revenue from external transactions 6782125812.36 72609985.91 10693145.03 6865428943.30
Revenue from inter-segment transactions 246029751.42 2823515.79 112807742.82 361661010.03
Including: Revenue from principal activities 6894549541.18 74826574.03 120482233.32 251078687.01 6838779661.52
Operating costs 7538315100.01 57940417.27 115984575.41 352936367.19 7359303725.50
Including: Costs of principal activities 7410581292.74 57940417.27 115981108.76 230832608.50 7353670210.27
Operating expenses 53529839.74 7602339.21 61132178.95
Including: Wages 35447865.68 3073718.75 38521584.43
Depreciation expenses 440792.88 1809421.09 2250213.97
Office expenses 311360.07 747.50 312107.57
Travel expenses 8688281.26 7123.53 8695404.79
Selling commissions 3582.99 949546.46 953129.45
Rental expenses 1442627.63 – 1442627.63
Hospitality expenses 4804215.51 4515.34 4808730.85
Others 2391113.72 1757266.54 4148380.26
Operating profit/(loss) -1381949690.07 162764459.30 6597408.26 15016028.07 -1227603850.58
Total assets 46623046251.00 8004569420.34 7297706967.19 10959149131.23 50966173507.30
Total liabilities 42118489674.30 5766422414.04 1630589286.75 542794216.55 48972707158.54
Fixed assets purchased 30989588.41 191846.82 31181435.23
Intangible assets purchased 196200.00 196200.00
Construction in progress purchased 19284178.56 19284178.56
222 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
XVIII. Major Item Notes of the Parent Company’s Financial Statements
1. Bills receivable
(1) Bills receivable by category
Unit: RMB
Item Closing balance Opening balance
Bank acceptance bills 4493579.36 7684717.68
Commercial acceptance bills
Total 4493579.36 7684717.68
(2) Bills receivable pledged by the Company as at the end of the period
There was no pledged bank acceptance bills accounted for bills receivable as at the end of the period.
(3) Bills receivable endorsed or discounted by the Company but not yet due as at the balance sheet date at the
end of the reporting period
Unit: RMB
Amount not yet
Amount derecognised derecognised as at
as at the end of the the end of the
Item reporting period reporting period
Bank acceptance bills 4484579.36
Total 4484579.36
2. Accounts receivable
(1) Disclosure by ageing
Unit: RMB
Closing book Opening book
Ageing balance balance
Within 1 year 1634019090.51 1805177349.81
1 to 2 years 17454450.00 189054.07
2 to 3 years 189006.01
Over 3 years 4502821.17 4502821.17
Subtotal 1656165367.69 1809869225.05
Less: Bad debt provision 6847427.98 6808866.35
Total 1649317939.71 1803060358.70
SHANDONG CHENMING PAPER HOLDINGS LIMITED 223
INTERIM REPORT 2026VIII Financial Report
XVIII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
2. Accounts receivable (Cont’d)
(2) Disclosure by bad debt provision method
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Provision Provision
Percentage percentage Percentage percentage Carrying
Category Amount (%) Amount (%) Carrying amount Amount (%) Amount (%) amount
Assessed individually for bad
debt provision
Assessed collectively for bad
debt provision 1656165367.69 100.00 6847427.98 0.41 1649317939.71 1809869225.05 100.00 6808866.35 0.38 1803060358.70
Including:
Due from related parties 1634019090.51 98.66 1634019090.51 1787722899.81 98.78 1787722899.81
Due from non-related parties 22146277.18 1.34 6847427.98 30.92 15298849.20 22146325.24 1.22 6808866.35 30.74 15337458.89
Total 1656165367.69 100.00 6847427.98 0.41 1649317939.71 1809869225.05 100.00 6808866.35 0.38 1803060358.70
Number of categories being assessed collectively for bad debt provision: 2
Items assessed collectively for bad debt provision: Due from related parties
Unit: RMB
Closing balance
Book Bad debt Provision
Name balance provision percentage (%)
Within 1 year 1634019090.51
Total 1634019090.51
Items assessed collectively for bad debt provision: Due from non-related parties
Closing balance
Book Bad debt Provision
Name balance provision percentage (%)
Within 1 year
1 to 2 years 17454450.00 2249007.57 12.89
2 to 3 years 189006.01 95599.24 50.58
Over 3 years 4502821.17 4502821.17 100.00
Total 22146277.18 6847427.98
224 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
XVIII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
2. Accounts receivable (Cont’d)
(3) Provision recovery or reversal of bad debt provision for the period
Bad debt provision for the period:
Unit: RMB
Changes in the period
Opening Recovery or Closing
Category balance Provision reversal Written-off Others balance
Bad debt provision 6808866.35 38576.13 14.50 6847427.98
Total 6808866.35 38576.13 14.50 6847427.98
(4) Top five accounts receivable based on closing balance of debtors
The total amount of top five accounts receivable based on closing balance of debtors for the period amounted
to RMB1645809600.30 in total accounting for 99.38% of the total closing balance of accounts receivable. The
closing balance of the corresponding bad debt provision amounted to RMB6671607.57 in total.Unit: RMB
As a percentage Closing balance
of the closing of bad debt
Closing balance balance of the provision of
of accounts total accounts accounts
Name of entity receivable receivable (%) receivable
Customer 1 1167896276.80 70.52
Customer 2 445772441.50 26.92
Customer 3 20263832.00 1.22
Customer 4 7454450.00 0.45 2249007.57
Customer 5 4422600.00 0.27 4422600.00
Total 1645809600.30 99.38 6671607.57
SHANDONG CHENMING PAPER HOLDINGS LIMITED 225
INTERIM REPORT 2026VIII Financial Report
XVIII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
3. Other receivables
Unit: RMB
Item Closing balance Opening balance
Interest receivable
Dividend receivable 142500000.00 142500000.00
Other receivables 5739789469.89 5569475196.11
Total 5882289469.89 5711975196.11
(1) Dividend receivable
1) Classification of dividends receivable
Unit: RMB
Item (or investee) Closing balance Opening balance
Shouguang Chenming Art Paper Co. Ltd. 142500000.00 142500000.00
Total 142500000.00 142500000.00
(2) Other receivables
1) Classification of other receivables by nature
Unit: RMB
Closing book Opening book
Nature balance balance
Open credit 5832873771.22 5700252589.33
Guarantee deposit and deposit 4313950.00 4314449.08
Reserve and borrowings 5639646.50 5189667.08
Subtotal 5842827367.72 5709756705.49
Bad debt provision 103037897.83 140281509.38
Total 5739789469.89 5569475196.11
226 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
XVIII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
3. Other receivables (Cont’d)
(2) Other receivables (Cont’d)
2) Disclosure by ageing
Unit: RMB
Ageing Closing book balance Opening book balance
Within 1 year (including 1 year) 3812174449.77 4291577401.96
1 to 2 years 1204572924.99 1311253000.77
2 to 3 years 759945779.73 6507927.37
Over 3 years 66134213.23 100418375.39
Subtotal 5842827367.72 5709756705.49
Bad debt provision 103037897.83 140281509.38
Total 5739789469.89 5569475196.11
3) Disclosure by bad debt provision method
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Provision Provision
Percentage percentage Percentage percentage
Category Amount (%) Amount (%) Book value Amount (%) Amount (%) Book value
Assessed individually for bad
debt provision 64186369.90 1.10 63086459.45 98.29 1099910.45 63731312.34 1.12 63046136.82 98.92 685175.52
Assessed collectively for bad
debt provision 5778640997.82 98.90 39951438.38 0.69 5738689559.44 5646025393.15 98.88 77235372.56 1.37 5568790020.59
Including:
Amount due from government
agencies 100054.07 0.00 92054.07 92.00 8000.00 100054.07 0.00 92054.07 92.00 8000.00
Amount due from related parties 5756901023.50 98.53 34204307.92 0.59 5722696715.58 5623849338.09 98.50 71588327.55 1.27 5552261010.54
Other receivables 21639920.25 0.37 5655076.39 26.13 15984843.86 22076000.99 0.39 5554990.94 25.16 16521010.05
Total 5842827367.72 100.00 103037897.83 1.76 5739789469.89 5709756705.49 100.00 140281509.38 2.46 5569475196.11
SHANDONG CHENMING PAPER HOLDINGS LIMITED 227
INTERIM REPORT 2026VIII Financial Report
XVIII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
3. Other receivables (Cont’d)
(2) Other receivables (Cont’d)
3) Disclosure by bad debt provision method (Cont’d)
Items assessed individually for bad debt provision:
Unit: RMB
Opening balance Closing balance
Provision
Book Bad debt Book Bad debt percentage
Name balance provision balance provision (%) Reason for provision
Customer 1 5526048.24 5526048.24 5526048.24 5526048.24 100.00 Uncertain recovery to a
certain extent
Customer 2 4725039.89 4725039.89 4725039.89 4725039.89 100.00 Uncertain recovery to a
certain extent
Customer 3 4019935.23 4019935.23 4019935.23 4019935.23 100.00 Uncertain recovery to a
certain extent
Customer 4 2871239.32 2871239.32 2871239.32 2871239.32 100.00 Uncertain recovery to a
certain extent
Customer 5 2820742.72 2820742.72 2820742.72 2820742.72 100.00 Uncertain recovery to a
certain extent
Customer 6 2650339.91 2650339.91 2650339.91 2650339.91 100.00 Uncertain recovery to a
certain extent
91 customers including 41117967.03 40432791.51 41573024.59 40473114.14 97.35 Uncertain recovery to a
customer 7 certain extent
Total 63731312.34 63046136.82 64186369.90 63086459.45
228 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
XVIII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
3. Other receivables (Cont’d)
(2) Other receivables (Cont’d)
3) Disclosure by bad debt provision method (Cont’d)
Bad debt provision based on the general model of ECLs:
Unit: RMB
Stage 1 Stage 2 Stage 3
Lifetime ECLs
ECLs for the (not credit- Lifetime ECLs
Bad debt provision next 12 months impaired) (credit-impaired) Total
Balance as at 1 January 2026 77235372.56 63046136.82 140281509.38
Balance as at 1 January 2026
for the period
– Transferred to stage 2
– Transferred to stage 3
– Reversed to stage 2
– Reversed to stage 1
Provision for the period 40322.63 40322.63
Reversal for the period 37283934.18 37283934.18
Transfer for the period
Write-off for the period
Other changes
Balance as at 30 June 2026 39951438.38 63086459.45 103037897.83
Changes in carrying book balances with significant changes in loss provision for the period
□ Applicable √ Not applicable
4) Provision recovery or reversal of bad debt provision for the period
Bad debt provision for the period:
Unit: RMB
Changes in the period
Opening Recovery or Transfer or Closing
Category balance Provision reversal write-off Others balance
Other receivables 140281509.38 40322.63 37283934.18 103037897.83
Total 140281509.38 40322.63 37283934.18 103037897.83
SHANDONG CHENMING PAPER HOLDINGS LIMITED 229
INTERIM REPORT 2026VIII Financial Report
XVIII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
3. Other receivables (Cont’d)
(2) Other receivables (Cont’d)
5) Top five accounts receivable based on closing balance of debtors
The total amount of top five accounts receivable based on closing balance of debtors for the period
amounted to RMB4428366661.77 in total accounting for 75.80% of the total closing balance of accounts
receivable. The closing balance of the corresponding bad debt provision amounted to RMB0.00 in total.Unit: RMB
Percentage to
total closing Closing balance
balance of other of bad debt
Name of entity Nature Closing balance Ageing receivables (%) provision
Customer 1 Open credit 2263028487.63 Within 1 year 38.73
Customer 2 Open credit 1416723252.37 Within 1 year 24.25
Customer 3 Open credit 316505304.66 Within 1 year 5.42
Customer 4 Open credit 250000000.00 Within 1 year 4.28
Customer 5 Open credit 182109617.11 Within 1 year 3.12
Total 4428366661.77 75.80
4. Long-term equity investments
Unit: RMB
Closing balance Opening balance
Impairment Impairment
Item Book balance provision Book value Book balance provision Book value
Investment in subsidiaries 16163010434.42 16163010434.42 16443510434.42 16443510434.42
Investment in associates
and joint ventures 329046799.32 5994545.96 323052253.36 261845111.49 5994545.96 255850565.53
Total 16492057233.74 5994545.96 16486062687.78 16705355545.91 5994545.96 16699360999.95
230 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
XVIII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
4. Long-term equity investments (Cont’d)
(1) Investment in subsidiaries
Unit: RMB
Opening Opening Closing Closing
balance balance Change for the period balance balance
(carrying of impairment Additional Withdrawn Impairment (carrying of impairment
Investee amount) provision contribution contribution provision Others amount) provision
Chenming Paper Korea Co. Ltd. 6143400.00 6143400.00
Chenming GmbH 4083235.00 4083235.00
Hailaer Chenming Paper Co. Ltd. 12000000.00 12000000.00
Huanggang Chenming Pulp &
Paper Co. Ltd. 471980547.20 471980547.20
Huanggang Chenming Arboriculture
Development Co. Ltd. 70000000.00 70000000.00
Jinan Chenming Paper Sales Co. Ltd. 100000000.00 100000000.00
Shandong Yujing Grand Hotel
Co. Ltd. 280500000.00 280500000.00
Zhanjiang Chenming Pulp &
Paper Co. Ltd. 5275000000.00 5275000000.00
Shouguang Chenming Modern
Logistic Co. Ltd. 10000000.00 10000000.00
Shouguang Chenming Art
Paper Co. Ltd. 113616063.80 113616063.80
Shouguang Meilun Paper Co. Ltd. 4949441979.31 4949441979.31
Shouguang Chenming Import
and Export Trade Co. Ltd. 250000000.00 250000000.00
Shouguang Chenming
Papermaking Machine Co. Ltd. 2000000.00 2000000.00
Shouguang Hongxiang Printing
and Packaging Co. Ltd. 3730000.00 3730000.00
Shandong Chenming Group
Finance Co. Ltd. 4000000000.00 4000000000.00
Chenming Arboriculture Co. Ltd. 45000000.00 45000000.00
Weifang Chenming Growth
Driver Replacement
Equity Investment Fund
Partnership (Limited
Partnership) 559722323.96 559722323.96
Weifang Chendu Equity
Investment Partnership
(Limited Partnership) 290292885.15 290292885.15
Total 16443510434.42 280500000.00 16163010434.42
SHANDONG CHENMING PAPER HOLDINGS LIMITED 231
INTERIM REPORT 2026VIII Financial Report
XVIII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
4. Long-term equity investments (Cont’d)
(2) Investment in associates and joint ventures
Unit: RMB
Change for the period
Investment
Opening Opening gain or loss Adjustment Distribution Closing Closing
balance balance of recognised of other Other change of cash balance balance
(carrying impairment Additional Withdrawn under equity comprehensive in equity dividend or Impairment (carrying of impairment
Investee amount) provision contribution contribution method income interest profit declared provision Others amount) provision
I. Associates
Zhuhai Dechen New Third
Board Equity Investment
Fund Company (Limited
Partnership) 24776145.22 708070.78 25484216.00
Ningbo Kaichen Huamei
Equity Investment Fund
Partnership (Limited
Partnership) 146082017.37 72476415.75 218558433.12
Chenming (Qingdao) Asset
Management Co. Ltd. 3315927.52 220835.14 3536762.66
Xuchang Chenming Paper
Co. Ltd. 5994545.96 5994545.96
Subtotal 174174090.11 5994545.96 73405321.67 247579411.78 5994545.96
II. Joint ventures
Shouguang Chenming
Huisen New-style
Construction Materials
Co. Ltd. 8628248.47 -461714.59 250000.00 7916533.88
Weifang Port Wood Chip
Wharf Co. Ltd. 73048226.95 -5491919.25 67556307.70
Subtotal 81676475.42 -5953633.84 250000.00 75472841.58
Total 255850565.53 5994545.96 67451687.83 250000.00 323052253.36 5994545.96
Determination of recoverable amount as the net amount of fair value less disposal expenses
□ Applicable √ Not applicable
Determination of recoverable amount based on the present value of expected future cash flows
□ Applicable √ Not applicable
232 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
XVIII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
5. Revenue and operating costs
Unit: RMB
Amount for the period Amount for the prior period
Item Revenue Costs Revenue Costs
Principal activities 137902874.69 161234996.47 73344245.36 217883215.76
Other activities 20942411.30 16705370.85 166156874.39 46018931.31
Total 158845285.99 177940367.32 239501119.75 263902147.07
Breakdown information of operating revenues and operating costs:
Unit: RMB
Machine—made paper Others Total
Category of contract Revenue Operating costs Revenue Operating costs Revenue Operating costs
Type of business 137902874.69 161234996.47 20942411.30 16705370.85 158845285.99 177940367.32
Including:
Machine-made paper 137902874.69 161234996.47 137902874.69 161234996.47
Others 20942411.30 16705370.85 20942411.30 16705370.85
By geographical area 137902874.69 161234996.47 20942411.30 16705370.85 158845285.99 177940367.32
Including:
Chinese Mainland 137902874.69 161234996.47 20942411.30 16705370.85 158845285.99 177940367.32
Other countries and regions
By the timing of delivery 137902874.69 161234996.47 20942411.30 16705370.85 158845285.99 177940367.32
Including:
Goods (at a point in time) 137902874.69 161234996.47 8993104.55 8803993.85 146895979.24 170038990.32
Services (within a certain period) 11949306.75 7901377.00 11949306.75 7901377.00
By sales channels 137902874.69 161234996.47 20942411.30 16705370.85 158845285.99 177940367.32
Including:
Distribution
Direct sales 137902874.69 161234996.47 20942411.30 16705370.85 158845285.99 177940367.32
Total 137902874.69 161234996.47 20942411.30 16705370.85 158845285.99 177940367.32
SHANDONG CHENMING PAPER HOLDINGS LIMITED 233
INTERIM REPORT 2026VIII Financial Report
XVIII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
5. Revenue and operating costs (Cont’d)
Information related to performance obligations:
Whether the Company’s
person is the commitments
Nature of goods primary expected to Types of quality assurance
Time for fulfilment of Significant terms of that the Company person be refunded offered by the Company and
Item performance obligations payment undertakes to transfer in charge to customers related obligations
Machine-made Domestic sales on the day Domestic sales tend to Produces easily Yes No Guaranteed quality
paper of delivery to the be provided on an distinguishable assurance should there be
customer; foreign sales invoice basis; foreign objections to product
on the day of customs sales tend to be prepaid quality within 7 days of
clearance arrival the products can be
returned and exchanged
Other explanation
Information related to the transaction price allocated to residual performance obligations:
At the end of the reporting period the amount of revenue with signed contracts but unfulfilled or uncompleted
performance obligation was RMB394394354.41 in which RMB394394354.41 was expected to be recognised in 2026.
6. Investment income
Unit: RMB
Amount for Amount for
Item the period the prior period
Income from long-term equity investments accounted for using the cost
method 236900000.00
Income from long-term equity investments accounted for using the equity
method 67451687.83 -5404278.73
Investment gain on disposal of long-term equity investments -163500000.00
Investment gain on holding other non-current financial assets 600880.82
Total -95447431.35 231495721.27
234 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026VIII Financial Report
XIX. Supplementary information
1. Breakdown of extraordinary gains or losses for the current period
√ Applicable □ Not applicable
Unit: RMB
Item Amount Remark
Profit or loss from disposal of non-current assets 185582492.52
Government grants except for the government grants closely related to the normal
operation of the Company granted in accordance with an established standard and
having an ongoing effect on the Company’s profit or loss in compliance with national
policies and regulations 26343895.53
Except for effective hedging activities conducted in the ordinary course of business of
the Company gain or loss arising from the change in fair value of financial assets and
financial liabilities held by a non-financial company as well as gain or loss arising from
disposal of its financial assets and financial liabilities 63077575.79
Reversal of provision for impairment of receivables individually tested for impairment 1031050.29
Profit or loss from debt restructuring 819000.00
Profit or loss from changes in the fair value of consumable biological assets subsequently
measured at fair value 15704467.20
Other non-operating income and expenses other than the above items -5921952.74
Total extraordinary gains or losses 286636528.59
Less: Effect of income tax -21154252.74
Effect of minority interests (after tax) 4788823.53
Total 303001957.80 －
SHANDONG CHENMING PAPER HOLDINGS LIMITED 235
INTERIM REPORT 2026VIII Financial Report
XIX. Supplementary information (Cont’d)
1. Breakdown of extraordinary gains or losses for the current period (Cont’d)
Details of other gain or loss items that fall within the definition of extraordinary gain or loss:
□ Applicable √ Not applicable
The Company did not have details of other gain or loss items that fall within the definition of extraordinary gain or loss.Explanation on 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
Item Amount involved Reasons
Other income 27079933.75 Government grants related to assets that are closely related to the Company’s
normal operations are subsequently amortised to other income which has a
continuing effect on the Company’s profit or loss and is therefore accounted
for as recurring profit or loss.
2. Return on net assets and earnings per share
Weighted average Earnings per share
return on net Basic Diluted
Profit for the reporting period assets (%) (RMB per share) (RMB per share)
Net profit attributable to ordinary shareholders
of the Company -150.65% -0.27 -0.27
Net profit after extraordinary gains or losses
attributable to ordinary shareholders of the
Company -208.69% -0.37 -0.37
3. Accounting data difference under accounting standard at home and abroad
(1) Differences of net profit and net assets disclosed in financial reports prepared under IAS and Chinese
accounting standards
□ Applicable √ Not applicable
(2) Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese
accounting standards
□ Applicable √ Not applicable
(3) Reasons for the differences in figures under domestic and foreign accounting standards. The name of the
foreign audit institution shall be indicated if the data audited by the foreign audit institution has been regulated
differently.□ Applicable √ Not applicable
The Board of Shandong Chenming Paper Holdings Limited
28 August 2026
236 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2026
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