Xianhe proposes A-share issuance to fund expansion

Xianhe Co., Ltd. plans to issue A-share stocks to raise up to 3 billion yuan. The funds will be primarily allocated to the second phase of the high-performance paper-based new materials project in Sanjiangkou New District, Guangxi, with 2.1 billion yuan, and to supplement working capital with 900 million yuan. This initiative, approved by the board on September 26, 2025, is pending shareholder and regulatory approvals.

The issuance aims to reinforce Xianhe's market leadership and support its "forest-pulp-paper integrated" development strategy, which includes expanding production capacity for special papers and enhancing supply chain security. The company noted that the project aligns with national industrial policies and is projected to yield positive economic benefits, despite potential short-term dilution of earnings per share due to the implementation period.

Xianhe's previous convertible bond issuance in November 2021 raised 2.05 billion yuan. As of June 30, 2025, 1.48 billion yuan of these funds have been invested, with 622.58 million yuan remaining. The company's dividend policy for 2025-2027 emphasizes a cash dividend ratio of at least 80% if there are no major capital expenditure plans.