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Excerpts:
The company announced that it would be unable to further invest the additional funds to the pulp-paper company for quite a long time in the future and it would terminate the subscription of the remaining registered capital for the pulp-paper company. When Meili Paper Group fulfills the sufficient funding, it will provide the additional amount of Rmb124m. Equity ratio of the company in the pulp-paper company would be reduced to 31.58% from 45.17% accordingly.
MCC Meili Paper is the first papermaker to implement forest-paper integration and the pulp-paper company belongs to the forest-paper integration project. Due to the influence of the state’s macro-control, the company is facing financial stress and unable to carry on the investment forwards. The remaining capital will be provided by Meili Paper Group instead, which will directly lead to the declined holding of the pulp-paper and reduce the investment income for the company. The production line with capacity of 260,000-ton white paperboard and 200,000-ton poplar chemical machine pulp will be put into operation soon and 08-09 EPS for the company is expected to be Rmb0.50 and Rmb0.76. "Overweight" rating is unchanged.