IT Tech Packaging Acquires Tengsheng Paper

Release time: 2019-07-18

BAODING, PRC, IT Tech Packaging, Inc. (NYSE MKT: ITP) ("IT Tech Packaging" or the "Company"), announced that it reached a definitive agreement to acquire 100% equity of Tengsheng Paper Co., Ltd ("Tengsheng"), a leading company in the paper-making industry in Hebei province. The acquisition will help IT Tech Packaging occupy the tissue paper market and consolidate market position in the North of PRC.

IT Tech Packaging Acquires Tengsheng Paper

Tengsheng was founded in 2011, and its market scale and performance of the enterprise have been highly developed during recent years. IT Tech Packaging is located in Xiongan New Area, where the state council decided to set up as a state-level new area, which is another new area of national significance after Shenzhen Special Economic Zone and Shanghai Pudong New Area. It is a grand Millennium Planand has important strategic significance. After the acquisition of Tengsheng, the value of its superior geographical location would show a far-reaching significance for the future development of IT Tech Packaging's business layout.


With the help of the acquisition, the industry chain of IT Tech Packaging will be supplemented, IT Tech Packaging’s market share in the paper making industry will be expanded, and other synergistic effect will be visible.


The tissue paper production plant of IT Tech Packaging was rented from Tengsheng. After the acquisition, the company will obtain Tengsheng’s stable production land to enhance the efficiency of production. In addition, production cost will decline and the profit rate will rise. Therefore, IT Tech Packaging would own a strong pricing power, which is a significant competitiveness for development.


The acquisition is completed under the environment of deleveraging policy and economic downturn. It could prove that IT Tech Packaging has a strong ability of business operation, and has a highly efficient liquidity. The company's determination to continue to expand its production line and market would be the same as always. 


Relevant research shows that PRC's tissue paper consumption is rising rapidly. Tissue paper, as a rigid consumer goods, is closely related to the growth of national GDP, population growth, improvement of quality of life and other factors. Driven by the upgrading of consumption, the improvement of GDP and the improvement of living standards and other factors, the tissue paper industry contained a development trend. Since 2012, the compound growth rate of tissue paper consumption is 6.95%, the market scale has reached 98.8 billion yuan in 2016, and the year-on-year growth rate was 12.06%.


There were still a large gap between PRC and developed countries in terms of the market scale, so domestic tissue paper market has a huge potential to develop. The acquisition is expected to expand IT Tech Packaging’s tissue paper market production line, and IT Tech Packaging performance will be expected a rapid increase in the future.


About IT Tech Packaging, Inc.

Founded in 1996, IT Tech Packaging, Inc. is a leading manufacturer and distributor of diversified paper products in North PRC. Using recycled paper as its primary raw material (except tissue paper products), the Company produces and distributes three categories of paper products: corrugating medium paper, offset printing paper and tissue paper products etc.


With production based in Baoding and Xingtai in North PRC's Hebei Province, the Company has been listed on the NYSE MKT since December 2009. Nowdays, the company has a number of production lines and advanced automatic control equipments at home and abroad, and provides a diversified portfolio of products for more than 100 packaging and printing customers.

Safe Harbor Statements

This press release may contain forward-looking statements. These forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks outlined in the Company's public filings with the Securities and Exchange Commission, including the Company's latest annual report on Form 10-K. All information provided in this press release speaks as of the date hereof. Except as otherwise required by law, the Company undertakes no obligation to update or revise its forward-looking statements.

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Investor Relations:

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Weitian Group LLC

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