Chenming Paper Announces 2008 Annual Results, Profit Attributable to Equity Holders Surges by 10.9% to RMB1.1 Billion.

Hong Kong, Apr 9, 2009 - (ACN Newswire) - Shandong Chenming Paper Holdings Limited ("Chenming Paper" or the "Company"; stock code for H shares: 1812 / stock code for A shares: 000488 / stock code for B shares: 200488) , the largest paper producer in China, today announced its annual results for the year ended 31 December 2008 ( the "year under review").

Chenming Paper recorded steady growth for the year under review. Revenue for the Company rose 3.7%% to RMB15,430,910,000 as compared to the corresponding period of the previous year. Profit before tax increased by 4.4% to RMB1,590,797,000 and profit attributable to equity holders of the Company surged by 10.9%% to RMB1,102,288,000. The increase in revenue was mainly due to an expanded production scale benefiting from the commencement of production of the 98,000-tonne annual capacity waste paper project, the 120,000-tonne annual capacity art paper project and the Jilin 300-tonne daily chemical pulp production line, while the proprietary 300,000-tonne per annum super art paper project and the Jilin 180,000-tonne light weight coated paper project achieved benchmark during the reporting period. In addition, the sales price for the year on an integrated basis was higher than that of 2007. Basic earnings per share of the Company amounted to RMB0.58. The Board has recommended the distribution of a final dividend of RMB0.05 per share.

Commenting on the first annual results announcement since its listing on the main board of the HKEx, Chairman of Chenming Paper, Mr. Chen Hongguo, said "In 2008, the Company was listed successfully in Hong Kong and became the first company to have A shares, B shares and H shares listed in China and Hong Kong, which marked an important milestone in the Companys history. Despite the turnaround of the domestic economy from rapid development to slowdown due to the global financial crisis, the Company achieved a growth of 300,000 tonnes in annual paper production as compared with 2007 and maintained an increase in sales price by leveraging on the Companys leading position in the industry. At the same time, the Company had taken effective measures to tackle all challenges, including reinforcing its efforts in research and development of new products to optimize product offerings, adopting flexible sales strategies to lower inventory levels, implementing a policy to avoid business risks and strengthening controls on raw materials procurement to minimize costs. All of these contributed to the increase in operating efficiency

and in turn the steady growth in profits of the Company."

During the year under review, the Company has enhanced its product innovation ability by utilizing its established national-level technology centers and post-doctoral technological research workstations, as well as cooperating with advanced international corporations such as Arjo Wiggins of France and Sappi of South Africa. As a result the Company has been able to produce a series of high value-added new products that accommodate market demand, such as lightweight paper for phone books and low gram copperplate paper. These further enriched the Companys product mix and strengthened its competitiveness, thereby helping build its international brand image in both domestic and overseas markets.

The Company has also strengthened controls on its products and production line in order to enhance its management capabilities. Optimizing the production process by recycling wastewater and other waste emissions, together with operations involving the mixed usage of solid waste substances, resulted in energy savings and reduced emissions and created a win-win situation economically and environmentally.

Looking ahead, although the global financial crisis has brought uncertainties to the business environment for all industries, Chinas papermaking industry is still experiencing a general growth trend. The Company believes that, following the integration of the market in the second half of 2008, the papermaking industry will begin to stabilize and the price for upstream raw materials and paper products can be maintained at a reasonable point of balance for profitability. The implementation of new environmental protection policies and renewed efforts in implementing policies related to the papermaking industry will lead to a higher degree of industry concentration which will be beneficial to enterprises of larger scale.

In respect to raw material supply, the Company established the Zhanjiang wood pulp project and ancillary raw materials bases as its major development targets. At present, 3 million mu of raw materials base in the Zhanjiang wood pulp project is under development smoothly and on schedule. The selection of land sites, legal and commercial exchanges, and construction of apparatus have already been completed. The implementation of this project will mean a new raw material structure for the Company with its proprietary wood pulp as the backbone and waste paper as a complement, further reducing the proportion of wood pulp purchased from external parties. The Company also accelerated the construction of the Hubei forestry project base, establishing a "forestry-pulp-paper integration" production chain and strengthening the sustainable development capacity of the Company.

Mr. Chen concluded, "Looking ahead in 2009, we will accelerate the adjustment of our product structure to improve technical equipment and product grades, proactively develop new products, reduce emissions, enhance energy savings and accelerate the forestry-pulp-paper integration, strengthening the Companys leading position in Chinas papermaking industry. We will also take advantage of our capital operation to seek potential merger and acquisition opportunities, aiming to become a premier paper producer in the world and maximize the returns to our shareholders."

About Chenming Paper Holdings Limited

Chenming Paper was the first company listed with A shares, B shares and H shares in mainland China and Hong Kong. Chenming Paper is the largest paper producer in China in terms of sales revenue over consecutive years, according to the China Paper Association. It is also the 25th largest paper producer in the world in terms of annual production capacity. The Company currently operates 9 production bases with an annual production capacity of more than 3 million tonnes. Chenming Paper produces seven main categories of paper products, including art paper, light weight coated paper, white paper board, duplex press paper, writing paper, news press paper and paperboard. In 2007, the "Chenming" trademark was named a China Well-known Trademark by the State Administration for Industry and Commerce.

Source: Chenming Paper Holdings Limited

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