China Shengda Packaging (CPGI) research, news, and more from GeoInvesting

Company description

Sat, 01 May 2010 04:00:00 GMT

We are principally engaged in design, manufacture and sale of paper cartons. Paper cartons are flexo printed or color-printed paper cartons in different sizes and strength. We provide packaging solutions for a wide variety of products to food, beverage, household appliance and other consumer product companies.

We have provide packaging solutions to Fortune 500 companies and Top 500 Chinese enterprises, including Hangzhou Wahaha Group Co., Ltd., Nongfu Spring Stock Co., Ltd., Hangzhou Cigarette Company, Samsung’s Chinese subsidiary Suzhou Samsung Electrical Co., Ltd. and Panasonic’s Chinese subsidiary Hangzhou Panasonic Home Electrical Appliance Company.

Comments & Business Outlook

Tue, 14 May 2013 04:00:00 GMT

First Quarter 2013 Financial Results

Revenues decreased by 4.8% to $27.1 million for the first quarter of 2013, mainly due decrease in sales volume.
Gross profit decreased by 3.1% to $5.3 million for the first quarter of 2013 from $5.5 million for the same period of 2012. Gross margin increased by 34 basis points to 19.5% for the first quarter of 2013.
Net income attributable to the Company's common stockholders decreased by $0.6 million, or 43.3%, to $0.9 million for the first quarter of 2013 from $1.5 million for the same period of 2012.
Basic and diluted earnings per share were $0.02 for the first quarter of 2013, as compared to $0.04 for the same period of last year.

Mr. Daliang Teng, Chief Executive Officer of China Shengda Packaging Group commented, "Our revenues for the three months ended March 31, 2013 declined slightly to $27.1 million from $28.5 million for the same period of last year mainly due to the decline in overall sales volume, reflecting continued challenges in macro environment faced by our customers. However, we are pleased to see our gross margin continue to improve, increasing approximately 34 basis points from the same period of last year and 18 basis points sequentially. We are also excited to announce that the construction of our paper mill is finally near its completion and we expect production to commence by the end of the second quarter of 2013.

Comments & Business Outlook

Sun, 31 Mar 2013 04:00:00 GMT

FY 2012 Financial Highlights:

Revenues increased by $1.3 million, or 1.1%, to $125.3 million for 2012 from $124.0 million for 2011.
Gross profit decreased by $3.1 million, or 12.0%, to $22.6 million for 2012 from $25.7 million for 2011. Gross profit as a percentage of revenues was 18.0% for 2012, as compared to 20.7% for 2011.
Net income applicable to common stockholders decreased by $4.0 million, or 42.2%, to $5.6 million for 2012 from $9.6 million for 2011.
Diluted earnings per share were $0.14 for 2012 as compared to $0.25 for 2011.

"As our customers continued to face economic headwinds throughout the year in 2012, our overall sales volume declined slightly from 321.7 million square meters in 2011 to 317.4 million square meters in 2012. Our gross margin also declined from 20.7% in 2011 to 18.0% in 2012 due to increase in cost of raw materials. However, our revenues increased by 1.1% to $125.3 million from $124.0 million as we continued to improve our sales mix in favor of color cartons that carry higher margin and higher average sales price versus flexo cartons," said Mr. Daliang Teng, Chief Executive Officer of China Shengda Packaging Group.

Going Private News

Thu, 06 Dec 2012 05:00:00 GMT

HANGZHOU, China, December 6, 2012 /PRNewswire-FirstCall/ -- China Shengda Packaging Group Inc. (NASDAQ: CPGI), ("China Shengda Packaging" or the "Company"), a leading Chinese paper packaging manufacturer, today announced that its Board of Directors (the "Board") has voted unanimously to dissolve the special committee of its independent directors formed on October 15, 2012 to evaluate the preliminary, non-binding "going private" proposal received from its Chairman, Mr. Nengbin Fang ("Mr. Fang"). The decision to dissolve the special committee was in response to the withdrawal of Mr. Fang's above-mentioned proposal on November 13, 2012.

Mr. Fang has informed the Board that he is still in preliminary discussions with a limited number of shareholders of the Company and potential debt financing sources, including VStone Investment Management Limited, in each case regarding their potential participation in a going private transaction, and that he may approach one or more other shareholders of the Company for such purpose. There can be no assurance, however, that Mr. Fang will make another proposal to take the Company private in the future or that if he does make another proposal to take the Company private that it will be consummated.

Going Private News

Wed, 14 Nov 2012 05:00:00 GMT

HANGZHOU, China, November 14, 2012 /PRNewswire-FirstCall/ -- China Shengda Packaging Group Inc. (NASDAQ: CPGI), ("China Shengda Packaging" or the "Company") a leading Chinese paper packaging manufacturer, today announced, that the special committee of its board of directors (the "Board") has received a letter (the "Letter") from its Chairman, Mr. Nengbin Fang ("Mr. Fang"), withdrawing the preliminary non-binding proposal that he submitted to the Board on October 15, 2012 to acquire all of the shares of common stock of the Company that are not currently owned by him and his family in a going-private transaction, although he intends to continue to pursue a possible going-private transaction with respect to the Company. Mr. Fang stated in an amendment to his Schedule 13D filing with the Securities and Exchange Commission that he is in preliminary discussions with a limited number of shareholders of the Company and potential debt financing sources, including VStone Investment Management Limited, in each case regarding their potential participation in a going private transaction, and that he may approach one or more other shareholders of the Company for such purpose. There can be no assurance, however, that Mr. Fang will make another proposal to take the Company private in the future or that if he does make another proposal to take the Company private that it will be consummated.

Comments & Business Outlook

Wed, 14 Nov 2012 05:00:00 GMT

Third Quarter 2012 Results

Revenues decreased 1.8% to $33.0 million from $33.6 million in the prior year period.
Gross profit remained largely the same at $6.0 million as in the same period of 2011.
Net income attributable to common stockholders decreased 41.1% to $1.4 million, or $0.04 per diluted share, from$2.3 million, or $0.06 per diluted share, in the same period of 2011.

"The third-quarter results were below our expectations due to slack demand resulting from macroeconomic headwinds faced by our customers. Although this led to a decline in both sales volume and revenues, we managed to control raw material costs, largely maintain pricing, and improve sales mix in favor of higher-margin color cartons. We therefore achieved higher gross margin both sequentially and on a year-over-year basis. However, we continued to face a challenging and competitive business environment that required increased sales and marketing spending making it harder to control operating expenses," said Mr. Daliang Teng, Chief Executive Officer of China Shengda Packaging.

Business Outlook

For fiscal 2012, China Shengda Packaging maintains its expectations for revenues of between $115 million and $125 million. However, the Company now expects net income of between $5.5 million and $6.5 million and diluted earnings per share of between $0.14 and $0.17, lower than its previous estimates of net income of between $6.5 million and $7.5 million, and diluted earnings per share of $0.17 and $0.19.

The Company foresees increasing raw material costs remaining a challenge while it looks to monitor its operating efficiency more closely and promote the sale of higher-price and higher margin color cartons. In an environment of muted demand from its client base as industries in the Yangtze River Delta experience modest growth in domestic demand and reduced export demand for their products, the Company is addressing its challenges with better service levels, keen prices, new products and robust marketing efforts. The costs associated with these efforts are expected to reduce profitability for the remainder of the year.

Investor Alert

Fri, 02 Nov 2012 04:00:00 GMT

HANGZHOU, China, November 2, 2012 /PRNewswire-FirstCall/ -- China Shengda Packaging Group Inc. (NASDAQ: CPGI) ("China Shengda Packaging" or the "Company"), a leading Chinese paper packaging manufacturer, today announced that that it has regained compliance with the minimum bid-price requirement of the NASDAQ Stock Market ("NASDAQ") for continued listing of the Company's common stock.

As previously disclosed, the Company received a notice from the NASDAQ on May 7, 2012 that its common stock had failed to maintain a minimum bid-price of $1.00 over the previous 30 consecutive business days, as required by the Listing Rules of the NASDAQ.

On October 30, 2012, the Company received confirmation from the NASDAQ that it had regained compliance with continued listing standards under Listing Rule 5450(a)(1), after the closing bid-price of the Company's common stock had been $1.00 per share or greater for the last 10 consecutive business days, i.e., from October 15, 2012 to October 26, 2012.

Going Private News

Mon, 15 Oct 2012 04:00:00 GMT

HANGZHOU, China, Oct. 15, 2012 /PRNewswire-FirstCall/ -- China Shengda Packaging Group Inc. (NASDAQ: CPGI) ("China Shengda Packaging" or the "Company"), a leading Chinese paper packaging manufacturer, today announced that that its Board of Directors has received a preliminary, non-binding proposal (the "Proposal") from its Chairman, Mr. Nengbin Fang ("Mr. Fang"), in which Mr. Fang has offered to acquire all of the outstanding shares of the Company's common stock he and his family currently do not own in a going-private transaction at a proposed price of$1.40 per share to be paid in cash. According to the Proposal, Mr. Fang intends to fund the acquisition with a combination of debt and equity financing. Currently, Mr. Fang and his family collectively beneficially own approximately 54.03% of the Company's common stock. A copy of the proposal letter is attached as Exhibit A.

The Company's Board of Directors has established a special committee (the "Special Committee") to consider this Proposal and any additional proposals that may be made by Mr. Fang and his affiliates, if any. The Special Committee is comprised of the following independent directors of the Company: Mr. Zhihai Mao , Mr. Michael Zhang , and Mr. Yaoquan Zhang .

There can be no assurance that any definitive offer will be made, that any agreement will be executed, or that a transaction with Mr. Fang or any other transaction will be approved or consummated.

Comments & Business Outlook

Tue, 14 Aug 2012 04:00:00 GMT

Second Quarter 2012 Results

Revenues increased 12.5% to $36.7 million from $32.6 million in the prior year period.
Gross profit declined 5.6% to $5.9 million from $6.2 million in the same period of 2011.
Net income attributable to common stockholders decreased 27.1% to $1.7 million, or $0.04 per diluted share, from $2.3 million, or $0.06 per diluted share, in the same period of 2011.

"The business environment remains challenging and in line with our expectations as previously reported. Pricing is somewhat stable but raw material costs continue to rise beyond our ability to pass them along to our customers. In that context, the second quarter produced a solid performance. We added new customers and increased our sales volumes and revenues significantly compared to last year. The apparent per meter price decline is mainly a function of sales mix. Gross margins declined due to higher raw materials costs, but control of our operating costs enabled us to generate operating income in line with our expectations," said Mr. Daliang Teng, Chief Executive Officer of China Shengda Packaging.

Business Outlook

The Company reiterates its expectations for fiscal 2012 revenues of between $115 million and $125 million, net income of between $6.5 million and $7.5 million, and diluted earnings per share of between $0.17 and $0.19.

The Company continues to anticipate slow growth in demand from its client base as industries in the Yangtze River Delta experience modest growth in domestic demand and reduced export demand for their products. "We are pleased with our efforts to address this environment with better service levels, keen prices and new products, and with the response of our top line to this difficult market," said Mr. Teng. "We are continuing to negotiate with major new customers today, emphasizing color printing which commands higher pricing."

Mr. Teng concluded, "The second quarter developed along the lines we expected and our outlook for the year is broadly unchanged. We maintain our focus on adding new customers, providing top class customer service and controlling costs. We are looking forward to the opening of our paper mill at the end of the year and its contribution to the control of the cost of our raw materials."

Comments & Business Outlook

Fri, 23 Mar 2012 04:00:00 GMT

Fourth Quarter 2011 Results

Revenues decreased $7.4 million, or 19.4%, to $30.8 million for the three months ended December, 31, 2011, from $38.2 million during the same period of 2010
Gross profit declined 40.3% to $6.4 million from $10.8 million in the same period of 2010. Gross profit from flexo cartons declined 40.2% to $4.6 million from $7.7million in the same period of 2010.
Net income attributable to common stockholders decreased to $1.6 million, or $0.05 per diluted share, from $5.3 million, or $0.16 per diluted share, in the same period of 2010.

"Revenues of $124 million and net income of $9.6 million were within our guidance ranges for full year 2011. However our markets and our financial performance are currently volatile due to cross-currents of variability affecting the global consumer who buys the final products from our manufacturing customers. We are concentrating on broadening our customer base and vertically integrating into paper manufacture in order to grow our business and at the same time reduce fluctuations in revenues and margins," Mr. Daliang Teng, Chief Executive Officer of China Shengda Packaging, said.

Comments & Business Outlook

Fri, 23 Dec 2011 05:00:00 GMT

HANGZHOU, China, Dec. 23, 2011 /PRNewswire-Asia-FirstCall/ -- China Shengda Packaging Group Inc. (NASDAQ: CPGI) ("China Shengda Packaging" or the "Company"), a leading Chinese paper packaging manufacturer, is revising its financial guidance for the year ending December 31, 2011 as follows:

$ millions Revised guidance Previous Guidance Actual 2010

Net Income $120 to $130 $115 to $125 $130
Revenues $9.5 to $10.5 $11.5 to $12.5 $19.3

As was pointed out in the earnings press release for the third quarter of 2011, lower raw materials cost trends that were appearing in October might not persist during the remainder of the fourth quarter, and this has proven to be the case. Higher than anticipated raw materials costs are the main reason why gross profits are expected to be lower in the fourth quarter than was previously expected. Those additional costs are not being entirely passed on to customers. If these conditions persist, the Company also expects to enter 2012 with gross margins under pressure from raw materials costs.

Resolution of Legal Issues

Mon, 19 Dec 2011 05:00:00 GMT

HANGZHOU, China, December 19, 2011 /PRNewswire-Asia-FirstCall/ -- China Shengda Packaging Group Inc. (NASDAQ: CPGI) ("China Shengda Packaging" or the "Company"), a leading Chinese paper packaging manufacturer, today announced that the Company received a notice (the "Notice") from The NASDAQ Stock Market on December 15, 2011 indicating that the Company's common stock has regained compliance with NASDAQ's $1.00 minimum closing bid price requirement. The Notice indicated that NASDAQ determined that the closing bid price of the Company's common stock had been at $1.00 per share or greater for ten consecutive business days. As previously announced, the Company received a letter from NASDAQ indicating that for 30 consecutive business days the bid price of the Company's common stock had closed below the minimum $1.00 per share requirement for continued listing on The NASDAQ Global Market. The Notice indicated that this matter is now closed.

Comments & Business Outlook

Mon, 14 Nov 2011 05:00:00 GMT

Third Quarter 2011 Results

Revenues increased $2.7 million, or 8.7%, to $33.6 million for the three months ended September, 2011, from $30.9 million during the same period of 2010.

Net income attributable to common stockholders decreased 51.5% to $2.3 million, or $0.06 per diluted share, from $4.8 million, or $0.15 per diluted share, in the same period of 2010.

"Volumes were 8% ahead of the same quarter last year and revenues 9% higher. Average selling prices were marginally higher overall. We are pleased that we increased our presence in the market place through higher levels of shipments," Mr. Daliang Teng, Chief Executive Officer of China Shengda Packaging, commented. "Despite the growth in revenues, labor and raw material cost pressures persisted and our margins were lower as we absorbed some of those higher costs. Even so, early in the fourth quarter, raw materials prices appear to be softening and we expect to meet our full year guidance for both sales and EPS."

Business Outlook

The Company reiterates its guidance for the full fiscal year of 2011, of revenues of between $115 million and $125 million, net income of between $11.5 million and $12.5 million, and diluted earnings per share of between $0.29 and $0.32.

The Company anticipates that the fourth quarter of the year will experience stronger sales and margins than were experienced in the first three quarters of the year. However, the Company expects headwinds to persist:

The restrictive financial policies of the PBOC will continue to impact the manufacturing enterprises in the YRD
Although raw materials prices have been flat to down during October compared to third quarter levels, inflation in raw material prices and labor costs in China may occur. These costs, based on past experience of management, are very difficult to pass on in full to customers

Mr. Teng concluded, "Volumes were again strong during the third quarter. That momentum, together with a higher priced mix of product sales during the fourth quarter and lower raw materials prices will help deliver full year results within our guidance range and we expect to enter 2012 with an upward trend in performance."

Investor Alert

Mon, 31 Oct 2011 04:00:00 GMT

HANGZHOU, China, October 31, 2011 /PRNewswire-Asia-FirstCall/ -- China Shengda Packaging Group Inc. (NASDAQ: CPGI) ("China Shengda Packaging" or the "Company"), a leading Chinese paper packaging manufacturer, today announced the Company received a letter from the NASDAQ Stock Market on October 27, 2011 indicating that, for the previous 30 consecutive business days, the bid price of the Company's common stock had closed below the minimum $1.00 per share requirement for continued inclusion on The NASDAQ Global Market under NASDAQ Listing Rule 5450(a)(1). The letter did not indicate the Company's non-compliance with any other listing requirement. The notification has no effect at this time on the listing of the Company's common stock, which will continue to trade on the NASDAQ Global market under the symbol CPGI.

The Company has been provided 180 calendar days, or until April 24, 2012, to regain compliance. If at any time before this date the Company's common stock has a closing bid price of $1.00 or more for a minimum of 10 consecutive business days, NASDAQ staff will notify the Company that it has regained compliance.

If the Company has not regained compliance by April 24, 2012, it may be eligible for additional time. The Company would be required to meet certain continued listing requirements and the initial listing criteria for The NASDAQ Capital Market except for the bid price requirement and will need to provide written notice of its intention to cure its deficiency during the second compliance period. If it meets these criteria, NASDAQ staff will notify the Company that it has been granted an additional 180 day compliance period. If the Company is not eligible for an additional compliance period, NASDAQ will provide the Company with written notification that its common stock will be delisted. At that time, the Company can appeal NASDAQ's determination to delist its common stock to a NASDAQ Hearings Panel.

CFO Trail

Mon, 22 Aug 2011 04:00:00 GMT

HANGZHOU, China, August 20, 2011 /PRNewswire-Asia-FirstCall/ -- China Shengda Packaging Group Inc. (NASDAQ: CPGI) ("China Shengda Packaging" or the "Company"), a leading Chinese paper packaging manufacturer, today announced the appointment of Ken He as the Company's new Chief Financial Officer, effective August 19, 2011. Ken He succeeds Thomas Jiayao Wu, who resigned as Chief Financial Officer on August 19, 2011 for personal reasons.

Before joining the Company, Mr. He spent two years as an Investment Director of Wealthcharm Investments Limited, a private investment company. Prior to that, Mr. He spent five years with PricewaterhouseCoopers in Australia and China, during which time he developed experience of and familiarity with Chinese and Hong Kong accounting standards, international accounting standards and U.S. GAAP. Mr. He holds a Master's degree in Applied Finance from Macquarie University, the Certified Public Accountant designation from the Chinese Institute of CPA, Certified Practicing Accountant designation from the CPA Australia, and the Chartered Financial Analyst designation from the CFA Institute.

"We are glad to add Ken He as our Chief Financial Officer. His rich international experience in financial control and accounting will serve us well as we pursue our expansion plans across new products and geographies," said Mr. Daliang Teng, Chief Executive Officer of China Shengda Packaging. "We believe that Mr. He will leverage his expertise in the US capital markets and strengthen our profile as a US listed company. Finally, we would like to thank Mr. Wu for his significant contribution to our business during his tenure."

Comments & Business Outlook

Mon, 15 Aug 2011 04:00:00 GMT

Second Quarter 2011 Results

Revenues decreased $0.7 million, or 2.2%, to $32.6 million for the three months ended June 30, 2011, from $33.3 million during the same period of 2010.
Net income attributable to common stockholders decreased 54.5% to $2.3 million, or $0.06 per diluted share, from $5.0 million, or $0.16 per diluted share, in the same period of 2010.

"Although our revenues decreased 2% compared to the same quarter last year, revenues increased 21.0% between the first and second quarters of 2011. This recovery reflected efforts to enhance our leading position in the paper packaging industry, especially in the Yangtze River Delta ('YRD'), where we added new customers during the quarter," Mr. Daliang Teng, Chief Executive Officer of China Shengda Packaging, commented. "The growth in revenues between the first and second quarters resulted in a mix of products with lower gross margins, in part because of the nature of the product and in part because of continuing labor and raw material cost pressures. Even so, our current order activity points towards a stronger second half of the year with a return to a higher margin product mix."

Business Outlook

The Company anticipates that the second half of the year will experience stronger sales and margins than were experienced in the first half of the year. Expectations for the second half improvement are based on the Company's current order activity, its recent ability to add new customers and the addition of its new automated flexo printing slotting and die-cutting line. However the Company expects headwinds to persist:

The restrictive financial policies of the PBOC will continue to impact the manufacturing enterprises in the YRD
Electricity shortages in the YRD during the summer season which are more severe than those experienced historically
Inflation in raw material prices and labor costs in China that, based on the experience of management, are very difficult to pass on in full to customers

Mr. Teng concluded, "We are encouraged by the pick-up in sales in the second quarter. We are continuing to build customer relationships and look forward to offering new options from our new flexo line in the second half, all of which will provide momentum as we head in to 2012."

Comments & Business Outlook

Mon, 25 Jul 2011 04:00:00 GMT

HANGZHOU, China, July 25, 2011 /PRNewswire-Asia-FirstCall/ -- China Shengda Packaging Group Inc. (NASDAQ: CPGI) ("China Shengda Packaging" or the "Company"), a leading Chinese paper packaging manufacturer, today announced that the Company's wholly-owned subsidiary Zhejiang Great Shengda Packaging Co., Ltd. ("Great Shengda") has launched a new fully-automated production line for five-color flexo printing, slotting and die-cutting.

The new line will increase annual production capacity by 30 million square meters for flexo printing, slotting and die-cutting. The new production line features modern equipment that meets international quality and safety standards and is expected to improve efficiency and reduce waste. The new line commenced production in July and is expected to reach its targeted utilization rate of 75% within two months. The new production line currently shares the existing customer base and will assist to fill up the healthy order pipeline in the first few months of operation.

"Our new line upgrades the technology at Great Shengda and allows us to provide higher quality products, improve efficiency and fill our orders more quickly," said Mr. Daliang Teng, Chief Executive Officer of China Shengda Packaging.

Notable Share Transactions

Tue, 19 Jul 2011 04:00:00 GMT

HANGZHOU, China, July 18, 2011 /PRNewswire-Asia-FirstCall/ -- China Shengda Packaging Group Inc. (NASDAQ: CPGI) ("China Shengda Packaging" or the "Company"), a leading Chinese paper packaging manufacturer, today announced that its board of directors has approved a share repurchase program for up to $5 million of its common stock over the next twelve months, subject to market and other conditions.

Notable Share Transactions

Thu, 16 Jun 2011 04:00:00 GMT

HANGZHOU, China, June 16, 2011 /PRNewswire-Asia/ -- China Shengda Packaging Group Inc. (NASDAQ: CPGI) ("China Shengda Packaging" or the "Company"), a leading Chinese paper packaging manufacturer, today announced that the Company's Chairman, Mr. Nengbin Fang, has purchased 500,000 shares of China Shengda Packaging stock on the open market for approximately $0.6 million.

Upon the completion of this share purchase, Mr. Fang beneficially owned approximately 5.2 million shares of common stock of the Company, representing an ownership stake of 13.2%.

Mr. Fang commented, "I believe that our Company's shares are currently undervalued. This share purchase demonstrates my confidence in China Shengda Packaging and reflects my commitment to increasing shareholder value. I will consider purchasing additional shares if our share price continues to trade at these levels."

Comments & Business Outlook

Fri, 13 May 2011 04:00:00 GMT

First Quarter Results:

Revenues declined 2.4% to $26.9 million from $27.6 million in the prior year period.

Mr. Daliang Teng, Chief Executive Officer of China Shengda Packaging, commented, "We did not lose any customers in the first quarter, but our orders from existing customers declined. Manufacturing enterprises in the YRD, many of whom are our largest customers, felt the impact of more restrictive financial policies implemented by the PBOC during the first quarter of 2011. In addition, after the Chinese New Year holiday, we experienced an unexpected shortage of workers. While there are always some percentage of workers that delay or do not return following the Chinese New Year, this phenomenon was more pronounced this year in the YRD region. As a result of these shortages, we were unable to fulfill certain orders. Our furniture packaging business saw the greatest impact given that the December to April timeframe is the peak season for the furniture manufacturing industry."

Net income attributable to common stockholders decreased 20.1% to $3.4 million, or $0.09 per diluted share, from $4.3 million, or $0.16 per diluted share, in the same period of 2010.

The Company expects fiscal 2011 revenues of between $115 million and $125 million, net income of between $11.5 million and $12.5 million, and diluted earnings per share of between $0.29 and $0.32.

Liquidity Requirements

Tue, 29 Mar 2011 04:00:00 GMT

The Company currently generates its cash flow through operations which it believes will be sufficient to sustain the current level of operations for at least the next twelve months.

We attempted to estimate our funding requirements in order to implement our growth plans. Our growth plans include growth through acquisitions. Although the proceeds from the public offering closed on December 10, 2010 (the “Public Offering”) should be sufficient for us to implement our near term acquisition strategy, we may require additional capital in order to successfully operate businesses that we acquire.

Comments & Business Outlook

Mon, 28 Mar 2011 04:00:00 GMT

Fourth Quarter Earnings:

Revenue increased 54.1% to $38.2 million from $24.8 million in the same period last year
Gross profit increased 55.7% to $10.8 million from $6.9 million in the same period last year
Gross margin increased 20 basis points to 28.1% from 27.9% in the same period last year
Net income attributable to common stockholders increased 55.4% to $5.3 million from $3.3 million in the same period last year
Diluted earnings per share increased 33.3% to $0.16 from $0.12 in the same period last year

Full Year 2010 Highlights

Revenue increased 37.4% to $130.1 million from $94.7 million last year
Gross profit increased 43.5% to $36.5 million from $25.4 million last year
Gross margin increased 120 basis points to 28.1% from 26.9% last year
Net income attributable to common stockholders increased 59.1% to $19.3 million from $12.2 million last year
Diluted earnings per share increased 43.2% to $0.63 from $0.44 last year
Cash flow from operations increased 18.7% to $20.0 million from $16.8 million last year

"We are very pleased to announce strong sales, earnings, EPS, and operating cash flow growth in 2010," said Mr. Daliang Teng, Chief Executive Officer of China Shengda Packaging. "We have a leading market position and strong reputation in China's paper packaging market and were able to command higher prices for our products as well as achieve higher sales volumes in 2010. The strength of the paper packaging market in China, from which we also benefited, was driven by rising consumer purchasing power and the growth of the Chinese economy. We also increased our margin performance by passing on some of the cost increase of our raw materials to our customers, improving our equipment utilization, reducing waste and processing times, and adding higher margin packaging products to our product portfolio. The year 2010 was an important one for China Shengda Packaging as our shares began trading on The NASDAQ Global Market in December. We are proud of this accomplishment and look forward to continuing to deliver strong financial results to our shareholders in the years ahead."

Mr. Teng concluded, "We believe we are well positioned to benefit from a number of favorable trends in our market. China's packaging market is the second largest in the world only after the U.S. Despite China's huge packaging market, per capita paper packaging consumption in China is only a fraction of that in the United States, Japan, and Europe. This suggests a large market potential for paper packaging in China. With environmental concerns becoming an increasingly important topic around the world, packaging materials are expected to be energy saving, toxic-free, reusable, degradable and multi-functional. Government mandates as well as consumer preferences make paper a more environmentally-friendly substitute for metal, plastic or glass as a packaging material. All of the foregoing translates into significant growth potential for the corrugated paper packaging industry in the China. Furthermore, as the standard of living rises, consumers are becoming more discerning about product image and presentation. This increased consumer sophistication translates into growing demand for high-quality and aesthetically pleasing packaging. We are well positioned to take advantage of these market trends as we expand our capacity for color-printed cartons."

Comments & Business Outlook

Mon, 07 Mar 2011 05:00:00 GMT

HANGZHOU, China, March 7, 2011 /PRNewswire-Asia/ -- China Shengda Packaging Group Inc. today announced that on March 7, 2011, the Company signed a Letter of Intent (“LOI”) to purchase the land use rights for a 166,533 square meter plot of land in Yancheng City, Jiangsu Province, China for $11.4 million in order to build a paper manufacturing plant.

China Shengda Packaging plans to build the new plant in two phases. Phase I, which is expected to be completed by the end of 2011, will entail the construction of 100,000 to 150,000 tons per annum of paper capacity and is expected to require capital expenditures of $34.2 million, including the cost of acquiring the land use rights. Phase II, which is expected to be completed by the end of 2012, will entail the construction of 100,000 to 150,000 tons per annum of paper capacity and is expected to require $18.2 million. The Company plans to fund the purchase of the land use rights and construction of the new plant through the proceeds received from its recently closed equity financing and internal cash generation.

"We had initially explored opportunities to acquire a paper manufacturing company with an annual capacity of 250,000 to 300,000 tons to achieve vertical integration of our production process," said Mr. Daliang Teng, Chief Executive Officer of China Shengda Packaging. "However, given the increase in valuations among potential targets and the level of proceeds from the Company's recent equity raise, we concluded it would be more cost effective for the Company and our shareholders to build a new plant in order to fulfill our strategic objectives."

"By integrating upstream through the construction of a paper manufacturing plant we believe we will be able to better manage our raw material costs and, more importantly, extend our product improvement and development capability to the raw paper production level. We currently purchase raw paper from our PRC suppliers. As raw paper constitutes approximately 70% of our cost of goods sold, we expect that this vertical integration will enable us to more effectively manage our production costs and control the supply and the quality of our raw materials.

Deal Flow

Fri, 17 Dec 2010 05:00:00 GMT

On December 10, 2010, China Shengda Packaging Group Inc. , together with China Seed Ventures, L.P., entered into an Underwriting Agreement with Oppenheimer & Co. Inc. as representative of the several underwriters, relating to the underwritten public offering of an aggregate of 8,145,631 shares of the Company’s common stock, of which 8,000,000 shares are to be issued and sold by the Company and 145,631 shares are to be sold by the Selling Stockholder, at a public offering price of $4.00 per share. The net proceeds to the Company from the sale of the Shares to be issued and sold by the Company are expected to be approximately $28.9 million, after deducting underwriting discounts and commissions of $0.22 per share and estimated offering expenses payable by the Company, assuming no exercise by the Underwriters of their option to purchase up to an additional 1,200,000 shares of Common Stock.

Comments & Business Outlook

Sat, 06 Nov 2010 04:00:00 GMT

The following are some financial highlights for the third quarter of 2010:

Sales Revenue: Sales revenue increased $6.1 million, or 24.6%, to $30.9 million for the third quarter of 2010 from $24.8 million for the same period of last year.

Gross Profit: Gross profit of $8.4 million represented 27.2% of sales revenue for the third quarter of 2010, compared with gross profit of $6.7 million that represented 27.0% of sales revenue for the same period in 2009.

Net Income attributable to China Packaging common stockholders: Net income attributed to our stockholders increased $1.5 million, or 45.9%, to $4.8 million for the third quarter of 2010, from $3.3 million for the same period of last year.

Basic and fully diluted net income per share: Basic and fully diluted net income per share was $0.15 for the third quarter of 2010, compared with $0.12 for the same period last year.

During the third quarter of 2010, we continued to see strong demand for our products and growth in our revenues. The packaging industry continued to expand during the third quarter of 2010 in large part, we believe, due to Chinese government policies designed to stimulate the economy, and improve infrastructure throughout China and encourage domestic consumption, and growth in urbanization and industrialization throughout China.

We benefited from the economic recovery of the region since the financial crisis in 2008. According to the Development Research Center of the State Council of China, the economy in the YRD region experienced significant growth in 2009 and 2010, representing a GDP growth rate of 7.3% from 2008 to 2009 and 20.6% from the first half of 2009 to the same period of 2010. We expect the economy of the YRD region to continue to grow into the rest of 2010 and 2011, which we believe will provide a favorable macroeconomic environment for our business.

Fiscal 2010 Guidance

We expect that revenues for the fiscal full year of 2010 will be in the range of $122 to $126 million, compared with $94.7 million in 2009.

In October 2010, one of our wholly-owned subsidiary, Zhejiang Great Shengda Packaging Co., Ltd. ("Great Shengda") was qualified as a high-tech company, as a result of which Great Shengda will be entitled to a preferential tax rate of 15% for three years beginning in 2010 and the preferential tax rate will be applied retroactively from January 1, 2010. The preferential tax rate is subject to completion of registration with PRC Ministry of Science and Technology and approval by the local tax bureau. Great Shengda is in the process of registering its high-tech status with the competent authorities.

Subject to the above preferential tax rate, we expect to generate net income attributable to China Shengda Packaging Group Inc. common stockholders in the range of $20 million to $21 million for the full fiscal year of 2010, compared with $12.2 million in 2009. The guidance represents the Company's current view, and is subject to change.

Deal Flow

Sat, 30 Oct 2010 04:00:00 GMT

China Packaging Group seeks to raise money

In conjunction with this proposed raise:

"We have applied to list our common stock on The NASDAQ Global Market under the symbol "CGPI."

Reverse Merger Activity

Wed, 12 May 2010 04:00:00 GMT

Update:

On April 29, 2010, China Packaging Group Inc. entered into a securities purchase agreement with certain accredited investors. Under the Securities Purchase Agreement, the Company agreed to issue and sell to the Investors 1,456,311 shares of the Company’s common stock, representing approximately 4.63% of the issued and outstanding capital stock of the Company on a fully-diluted basis as of and immediately after consummation of the transactions contemplated by the Securities Purchase Agreement, for an aggregate purchase price of approximately $5 million or $3.433 per share.
The Company agreed to issue to Hangzhou Xin Shengda Investment Co., Ltd. 3,750,000 shares of the Company’s common stock in exchange for the transfer of certain real estate if the lead investor makes a written request on or before the 180th day following the Company’s next underwritten public offering.

Updated share count: 31,453,801 to 35,844,311

Reverse Merger Activity

Sat, 01 May 2010 04:00:00 GMT

China Packaging Group Inc became a public company via a reverse merger transaction on April 8, 2010.

Company Snapshot:

The design, manufacture and sale of paper cartons.We believe we are among the leading paper packaging manufacturers in the PRC in terms of production capacity and have the capacity to take large orders for our customers, many of whom are amongst PRC’s Top 500 Enterprises or Fortune 500 companies.

Industry Snapshot:

The Chinese packaging industry has been growing steadily since the mid-1980s with one of the highest growth rates in the international packaging market. The country's packaging industry remains the world's third largest packaging market since 2006, employing over three million people and worth over $81 billion. The packaging industry became China's 14th largest industry sector and contributes to about 2.5% of the country's GDP.

The domestic packaging industry has evolved greatly with China’s robust economic growth. Since the 1980s, China has established 13,000 packaging companies with a production value of over RMB 400 billion in 2009. It boasts over 4,000 corrugation production lines, greater than the aggregate number in America, Japan and Europe combined. According to the Euromonitor International’s Report of Packaging Industry in China, the total annual output value of the packaging industry is expected to exceed RMB 600 billion at an annual growth rate of 16% by 2015.

Competitive Landscape:

The packaging market in China is highly segmented and competitive. There are over 13,000 paper board manufacturers in China, most of which are relatively small in size. The top 30 manufacturers only have an aggregate of 11% of the Chinese market. The primary barriers to enter the market include obtaining a printing license and significant capital investment in large-scale production facilities. The total sales of paper cartons was 30 billion square meters in 2008. Great Shengda’s current annual capacity is 310 million square meters, accounting for over 1% of the Chinese market. We believe our competitive advantages are: cost-effectiveness, large production capacity, advanced technologies and equipments deployed in our manufacture process, and our well-known brand name.

Strategy:

We plan to increase our production capacity to meet the expected increase in demand for our products. Further, as consumers place greater emphasis on image and packaging of products, manufacturers of consumer products have increasingly sought to differentiate their products by focusing on the aesthetics of the packaging design and utilizing their product packaging as a medium for advertisement. We plan to focus on the development of our color printing capabilities to cater to this market segment of customers.

We believe that the paper packaging industry has a substantial growth potential. We plan to increase our market share and develop new customers by increasing our existing sales and marketing activities and strengthening our customer service support in regions beyond the Yangtze River Delta Economic District.

Currently, we do not manufacture raw paper, a key raw material for the production of our paper boards and paper cartons. Instead, we have been purchasing raw paper from suppliers based in the PRC. We plan to explore opportunities for acquiring paper manufacturing companies so as to achieve vertical integration of our production process. We expect that such vertical integration will enable us to effectively manage our costs and become a self-sufficient one-stop paper packaging manufacturer that is equipped to manufacture upstream products such as paper as well as downstream products. In addition, to increase vertical integration of our operations, we plan to establish a manufacturing facility in Jiangsu. The manufacturing facility will engage in the production of high-strength raw paper that can be used in the manufacture of our paper cartons.

In order to penetrate into key markets within the Yangtze River Delta Economic District, we plan to set up a processing factory and warehouse in Suzhou. In addition, we plan to strengthen our customer service network by establishing two customer service centers in Nanjing and Wuhu which will be in close proximity to us.

Post Merger Share Calculation:

3,038,000 : Pre reverse merger outstanding shares
27,600,000: Newly issued shares of Common Stock

GeoTeam® best effort calculation of total post reverse merger outstanding shares assuming full conversions: 30,638,000

Financial Snapshot:

	Full Year 2009	Full Year 2008	Full Year 2007
GAAP Revenue	$96.7 million	$92.3 million	$79.1 million
GAAP Net Income	$12.2	$9.0	$7.9
Tax Rate	11.4%	16.1%	12.8%
Fully Tax-Adjusted Net Income ^a	$9.6 million	$7.8 million	$6.6 million
Fully Diluted Shares	30,638,000	n/a	n/a
ProForma Adjusted EPS (using new share count)	$0.31	n/a	n/a

^aThe GeoTeam® figures apply a 25% and 36% tax rate for Chinese and United States companies respectively.

Liquidity Requirements

Sat, 01 May 2010 04:00:00 GMT

We believe that we maintain good relationships with the various banks we deal with and our current available working capital, and bank loans referenced above, should be adequate to sustain our operations at our current levels through at least the next twelve months.