On the evening of October 25, Yueyang Forest Paper released its third quarter results. The company's operating income in the first three quarters was 5.15 billion yuan, of which operating income in the third quarter was 1.58 billion yuan, a year-on-year decrease. In the first three quarters, the net profit attributable to shareholders of listed companies was a loss.
The company explained that from the beginning of the year to the end of the reporting period, the overall market demand for the cultural paper industry was weak, coupled with the release of new production capacity by competitors in the industry, resulting in fierce competition in the overall market. The sales price of the company's paper products fell compared with the same period last year, and the decline was higher than the cost. The decline caused the parent company's gross profit margin to be lower than that of the same period last year. In addition, natural disasters have adversely affected the Company's forest assets. During the reporting period, the company transferred part of the equity of its subsidiary Hunan Shuangyang Hi-Tech Chemical Co., Ltd. and gave up the preferential subscription rights for capital increase. The final shareholding ratio was 38.72%. Starting from March 2024, the company will no longer be included in the company's consolidated statements, and the company will change its accounting from the cost method to the equity method.
However, the third quarterly report shows that the company’s net cash flow generated from operating activities increased significantly during the reporting period. Yueyang Linzhi said that this was mainly due to the subsidiary Chengtong Kaisheng Ecological Construction Co., Ltd.’s “receipts from sales of goods and provision of services” in this period. "cash" increased compared with the same period last year.
In the first three quarters of 2024, facing the current complex operating environment, the company strives to occupy a favorable position in the industry transformation through technological innovation and professional operations.
In terms of business, Yueyang Forestry and Paper continues to promote the development strategy of “pulp and paper plus related diversification”. In the papermaking business, the company actively adjusts its product structure to adapt to the market and accelerates the research and industrial transformation of new scientific and technological achievements. As reviewed and approved by the company's third extraordinary general meeting of shareholders in 2022, the company invested in the construction of the first phase of a quality improvement and upgrading comprehensive technical transformation project with an annual output of 450,000 tons of cultural paper, building the company's papermaking base into a green, energy-saving, intelligent manufacturing recycling industry base. During the reporting period, project construction and installation work were progressed in an orderly manner, and trial production is expected to begin at the end of 2024. This will expand the scale of papermaking production capacity, achieve system quality upgrades, and optimize product structure.
At the same time, the carbon sink business is regarded as a new growth point for Yueyang Forestry and Paper.
On September 2, 2024, the National Greenhouse Gas Voluntary Emission Reduction Registration System and Information Platform announced 29 CCER (Nationally Certified Voluntary Emission Reduction) projects, including 10 forestry and other carbon sink type projects. As a "pioneer" in carbon sinks, Chengtong Carbon Sink, a subsidiary of Yueyang Forest Paper, has two forestry carbon sink projects among the first batch of publicly announced projects in the country. This also gives the industry high hopes for the company’s carbon sequestration business.
A review of public information shows that in recent years, under the advocacy of the concept of green development, listed companies have frequently made efforts in the field of carbon sinks. "With the restart of the CCER market, companies need to accurately understand and master the transaction settlement rules to better seize the opportunities in the voluntary emission reduction market. In addition, companies need to verify, evaluate and verify the emission reductions generated by various projects, and prepare Declaring materials and submitting them to the exchange for issuance is a key step to ensure the authenticity and accuracy of emission reductions," Liu Youhua, deputy director of the Wealth Research Department of Paibai.com, said in an interview with a reporter from Securities Daily.
Chen Xingwen, chief strategy officer of Kurosaki Capital, told reporters that there are "gold nuggets" in the field of CCER, and it is recommended that companies pay attention to project development and methodology updates to ensure that projects meet the latest standards to obtain market certification and transactions. For example, use the financial service opportunities brought by the restart of CCER to innovate green financial products, increase the demand for funds for ecological projects, and revitalize corporate ecological assets. In addition, incorporating CCER into long-term strategic planning to achieve sustainable development and carbon neutrality goals is not only a need for long-term corporate development, but also an important manifestation of responding to national strategies and fulfilling social responsibilities. Through these measures, companies can achieve sustainable development on a green and low-carbon track while bringing long-term value to investors.
Judging from the public information of Yueyang Forest Paper, in addition to seizing domestic market opportunities, Yueyang Forest Paper has also set its sights on the world, formulated a global strategy for carbon sequestration asset development, and provided international carbon credit cooperation for many foreign companies. Development services cover an area of nearly 10 million acres. In May 2024, a strategic cooperation framework agreement was signed with Sanli Wood Industry (Gabon), stipulating that the two parties will conduct in-depth cooperation in the fields of international carbon credit development and trading, forest resource reserves and other fields. This cooperation focuses on the rich forest resources of Gabon, Africa, covering a vast forest land with a total area of 850,000 hectares, and realizes the establishment of a framework for carbon sinks to "go overseas".
