Core Assessment

Jiangsu Longchen Greentech's industrial foundation is a regional network comprising recovered-fiber collection, three industrial-paper bases in mainland China, a corrugated-box network across East and Central China, and combined heat-and-power and water-recycling systems. In the first half of 2026, both the industrial-paper and corrugated-packaging segments of Longchen Paper & Packaging improved, providing operating evidence of the value created by integrating paper and box production.

Paper mills determine supply, while the corrugated-box network determines delivery; recovery, energy and water systems determine whether the network can endure.

01 · MANUFACTURING NETWORK

Behind 3.07 Million Tonnes Is a Mainland Manufacturing Network

According to the China Paper Association's 2025 Annual Report on China's Paper Industry, Jiangsu Longchen Greentech Co., Ltd. produced 3.07 million tonnes of paper and paperboard in 2025, down 0.97% year on year and ranking ninth among the key enterprises listed in the report. The association also notes that the ranking is based on the data it was able to collect.

This scale marker alone does not explain Jiangsu Longchen Greentech's organizational footprint. Longchen Paper & Packaging's consolidated financial statements for the second quarter of 2026 show that the group holds 100% of Jiangsu Longchen Greentech through Long Chen Paper (China) Holdings, Kunshan Rongzhong Investment and Suzhou Manguo Packaging. Jiangsu Longchen Greentech is, in turn, connected to industrial-paper bases in Wuxi, Pinghu and Hubei, as well as packaging operations in Kunshan, Suzhou, Shanghai, Hangzhou and Central China.

Longchen Paper & Packaging's website currently lists Wuxi Longchen, Pinghu Longchen and Hubei Longchen as its low-carbon papermaking bases in mainland China; its eco-packaging and corrugated-box network covers Kunshan, Suzhou, Shanghai, Hangzhou and several cities in Central China. The group's consolidated structure for the second quarter of 2026 also includes Jiaxing Longchen Intelligent Eco-Packaging Co., Ltd.

Scope boundary: The association does not disclose whether the 3.07-million-tonne figure represents the output of Jiangsu Longchen Greentech as a single legal entity or an aggregate that includes related mainland paper mills. Longchen Paper & Packaging's 2024 Sustainability Report states that its mainland industrial-paper capacity was 3.3 million tonnes; the two figures cannot be used directly to calculate capacity utilization.

Sources: China Paper Association, 2025 Annual Report on China's Paper Industry; Longchen Paper & Packaging, consolidated financial statements for the second quarter of 2026.

02 · FROM FIBER TO DELIVERY

How the Network Runs from Recovered Fiber to Corrugated Boxes

Longchen Paper & Packaging describes itself as a vertically integrated manufacturer of low-carbon paper and eco-packaging that uses recovered paper as its primary raw material. Its main products include linerboard, corrugating medium, corrugated board and corrugated boxes. The 2024 Sustainability Report likewise places recovered-paper collection, low-carbon papermaking, eco-packaging and post-consumer product recovery within a single value chain.

The challenge in this chain is not simply whether recovered paper is available. Moisture, contaminants, stickies, ash content, fiber length and batch consistency affect pulp yield, paper-machine runnability, strength properties, and steam and chemical consumption per tonne—ultimately shaping the cost and quality of linerboard and corrugating medium.

The financial statements for the first half of 2026 report intercompany sales and receivables between paper mills in Wuxi, Pinghu and Hubei and packaging entities in Jiangsu, Xiasha, Suzhou, Wuhan and Hunan. These transactions confirm that actual supply relationships exist between the paper mills and corrugated-box plants, rather than merely links on an organizational chart.

Industrial paper secures base-paper supply; the corrugated-box network addresses customer proximity, lead times, structural design and service responsiveness. Because corrugated boxes have clear transport and service radii, regional plants can shorten delivery times and return customer feedback to manufacturing more quickly.

Sources: Longchen Paper & Packaging website, Company Profile; Longchen Paper & Packaging, 2024 Sustainability Report.

03 · OPERATING RESULTS

Both Paper and Packaging Returned to Profit in the First Half of 2026

In 2025, Longchen Paper & Packaging recorded consolidated revenue of NT$44.708 billion, down approximately 6.47% year on year; a consolidated gross margin of 9.85%; an operating loss of approximately NT$13 million; a net loss attributable to owners of the parent of approximately NT$517 million; and net cash inflows from operating activities of NT$1.141 billion. Even a fully integrated value chain remains exposed to the combined pressures of paper prices, demand, costs and production-line ramp-up.

Operating results improved more clearly in the first half of 2026: consolidated revenue reached NT$24.248 billion, up approximately 13.23% year on year; consolidated gross margin rose from 9.33% to 10.86%; operating profit was NT$232 million, compared with an operating loss of NT$121 million a year earlier; and net profit attributable to owners of the parent was NT$243 million, compared with a net loss of NT$570 million.

Both core segments also returned to profit. External revenue from industrial paper was NT$18.109 billion, up approximately 15.48%, with segment profit of NT$314 million versus a loss of NT$305 million a year earlier. The corrugated-packaging segment—corrugated board and boxes—reported external revenue of NT$5.849 billion, up approximately 11.31%, and segment profit of NT$122 million versus a loss of NT$192 million.

The simultaneous improvement in revenue, gross margin, segment profit and operating cash flow says more about the system's operating quality than group net profit alone. Company-reported figures show cumulative consolidated revenue of NT$28.535 billion for January–July 2026, up 13.88%, with cumulative operating profit of NT$350 million and profit before tax of NT$478 million.

Financial scope: All amounts above are in New Taiwan dollars and are reported on the consolidated, segment or geographic basis of the Taiwan-listed parent, Longchen Paper & Packaging. They must not be presented as the standalone results of Jiangsu Longchen Greentech. The industrial-paper and corrugated-packaging segments include operations in both Taiwan and mainland China. The January–July figures are internally compiled, unaudited company data and remain subject to the financial statements reviewed or audited by the company's accountants.

Sources: Longchen Paper & Packaging, 2025 consolidated financial statements; Longchen Paper & Packaging, consolidated financial statements for the second quarter of 2026.

04 · CAPACITY REALISATION

The Hubei Base Will Determine Whether Scale Converts into Profit

Longchen Paper & Packaging's consolidated financial statements disclose that Hubei Longchen planned an annual paperboard capacity of 1.5 million tonnes together with a 100 MW combined heat-and-power project. The first-phase project, comprising 1.15 million tonnes of paperboard capacity and the CHP facility, has been completed. The second-phase 350,000-tonne production line has also been completed, but grid-connection procedures are still under way, with acceptance expected in 2026.

The mainland investment schedule for the first half of 2026 shows that Hubei Longchen recorded a net loss of approximately NT$306 million. Over the same period, Pinghu Longchen earned approximately NT$29 million, while Wuxi Longchen and Jiangsu Longchen Greentech each recorded a small loss. The group's industrial-paper and corrugated-packaging segments returned to profit overall, but the individual bases remain at different operating stages.

The value of the Hubei base lies in linking recovered fiber in Central China with industrial-paper production, combined heat and power, and corrugated-box plants in Wuhan, Xiantao, Jingzhou and Hunan. The next indicators to watch are acceptance and operating load for the 350,000-tonne line, energy consumption per unit, paper-machine stability, internal offtake of base paper, regional orders and operating cash flow—not merely the planned capacity of 1.5 million tonnes.

Project boundary: Completion of a production line does not mean it has been connected to the grid, accepted, operated stably, run at full capacity or made profitable. Nor can Hubei Longchen's loss be attributed solely to the new line's ramp-up on the basis of public financial statements alone.

Source: Longchen Paper & Packaging, consolidated financial statements for the second quarter of 2026.

05 · NEXT OPERATING SYSTEM

Low Carbon, Intelligence and Organizational Restructuring Open the Next Phase

Longchen's circular capabilities extend beyond recovered-paper collection to combined heat and power, waste-heat recovery, water recycling, waste valorization and regional packaging. The company's 2024 Sustainability Report states that it operates three low-carbon paper mills and eight eco-packaging and corrugated-box plants in mainland China. It also says that, after mainland industrial-paper capacity reached 3.3 million tonnes, the operating focus shifted toward carbon reduction, expansion of corrugated-box operations, equipment upgrades and a higher internal-consumption ratio for industrial paper.

The company's 2026 public materials state that hardware and software upgrades at upstream industrial-paper mills and downstream corrugated-box plants over the past eight years have enabled production data to connect automatically, and that AI applications in manufacturing are planned for the next three years. Just-in-time operations, production scheduling, quality prediction, predictive maintenance, inventory management and transport dispatch are the most direct areas in which these digital capabilities can produce measurable results.

On 12 August 2026, Longchen Paper & Packaging's board approved a proposed transformation into an investment holding company. The plan would spin off the Taiwan industrial-paper and corrugated-packaging businesses into a wholly owned subsidiary and rename the parent Longchen Investment Holdings; the mainland business would continue to be managed by L&C and its subsidiaries. The proposal remains subject to approval at an extraordinary general meeting on 1 October 2026, with 4 January 2027 tentatively set as the effective date of the demerger.

The restructuring indicates that Longchen is seeking to separate regional accountability more clearly across Taiwan, mainland China, Japan and other overseas operations, assigning manufacturing, resource allocation and strategic partnerships to more clearly defined organizations. For Jiangsu Longchen Greentech, this may strengthen its role as the group's mainland industrial platform, but the actual impact will depend on shareholder approval and subsequent implementation.

Evidence boundary: The company's disclosed low-carbon indicators, AI plans and organizational transformation represent corporate data, future plans and a proposal still awaiting approval, respectively. Each must be tested against energy consumption, yield, downtime, inventory turns, order quality, profit and cash flow.

Sources: Longchen Paper & Packaging website, Green Technology; Smart-Manufacturing Foundations and AI Applications; Longchen Paper & Packaging press release on its proposed transformation into an investment holding company.

CONCLUSION

Circular Manufacturing Must Ultimately Deliver Operating Results

The research value of Jiangsu Longchen Greentech lies in the circular-packaging system behind the 3.07-million-tonne scale marker: recovered fiber enters the Wuxi, Pinghu and Hubei paper mills; base paper then flows into corrugated-board and box plants across East and Central China; and energy, water and digital systems support both manufacturing and delivery.

In the first half of 2026, the industrial-paper and corrugated-packaging segments both returned to profit, revenue from the China market continued to grow, and operating cash flow improved materially. These results provide clearer operating evidence of Longchen's vertically integrated capabilities and illustrate the value that can emerge when recovered paper, a regional corrugated-box network and lean operations work together.

The next-phase agenda is clear: stabilize the new Hubei production line, increase internal offtake of industrial paper and the quality of corrugated-box orders, continue reducing energy and water costs, and translate AI deployment and organizational restructuring into measurable gains in efficiency, profit and cash flow.

When recovered fiber can be converted reliably into industrial paper, corrugated board and boxes—and delivered rapidly to regional customers—circular manufacturing becomes an operating capability capable of producing repeatable results.

NEXT COMPANY · NO.10

Next: Liansheng Paper

According to the China Paper Association's table of 2025 output by key enterprises, Liansheng Paper ranked tenth with paper and paperboard output of 2.824 million tonnes, up 0.57% year on year.

The ranking determines only the order of this series. The next article will develop an independent assessment after separate research, without presuming that Liansheng follows Jiangsu Longchen Greentech's model.