On November 22, China Sunshine Paper Holdings Limited (2002. HK) (hereinafter referred to as "Sunshine Paper") announced that Xiamen C&D Paper & Pulp Group Co., Ltd. (hereinafter referred to as "C&D Paper & Pulp "), a subsidiary of C&D Group (600153. SH), has fulfilled all delivery conditions for subscribing to 162 million ordinary shares of Sunshine Paper through its wholly-owned subsidiary Hong Kong Paper Source Co., Ltd. (hereinafter referred to as "Hong Kong Paper Source"), and the delivery under the share subscription agreement has been completed on the same day.
After the completion of the delivery, Hong Kong Paper Source, a wholly owned subsidiary of C&D Paper & Pulp, officially became the second largest shareholder of Sunshine Paper , holding 14.34% of the shares. According to the announcement, the total amount of proceeds from this subscription is approximately HKD 402 million. After deducting all related expenses, the net amount of proceeds from the subscription is approximately HKD 401 million, making it a major event in the paper industry this year. This subscription will expand the company's shareholder base, enhance its capital base, and improve its financial condition. In the future, the funds will be used to support the development of the company's existing business, including finished paper business and high-end packaging paper business.
Insiders in the paper industry pointed out that the paper industry is currently showing two "accelerations": one is the acceleration of concentration, and the other is the acceleration of vertical integration of the industry chain. The introduction of C&D Paper & Pulp by Sunshine Paper is a typical "strong combination" among industry leaders, which helps to leverage their respective advantages, deepen cooperation between the two sides, and is of great significance for reducing company business costs and enhancing long-term performance growth. At the same time, from the perspective of the trend of national mixed ownership reform, the introduction of state-owned shareholders by Sunshine Paper will have a sustained impact on the future competitive landscape of the paper industry.
It is reported that in the first half of 2023, Sunshine Paper achieved a revenue of 4.208 billion yuan and a net profit attributable to the parent company of 193 million yuan, a significant increase of 18.4% year-on-year, with a growth rate higher than the majority of peers in the same industry. The company is a leading enterprise in coated and uncoated white top testliner in China. The market share of coated exceeds 50% annually, and uncoated exceeds 30%. In recent years, the company has continued to expand its business around the main business of packaging paper. In 2021, the company's corrugated paper project was officially put into production, and the company officially entered the forefront of China's corrugated base paper production capacity.
For Sunshine Paper, the introduction of C&D Paper & Pulp, a state-owned enterprise with strong industry synergy and strength, as a strategic shareholder will help the company gain more support in terms of business resources, capital operation, and financing. C&D Paper & Pulp's investment in Sunshine Paper is also another important milestone in its extension from supply chain services to industrial chain layout.
