Form 8-K China Shengda Packaging For: May 15

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest event Reported): May 15, 2015

CHINA SHENGDA PACKAGING GROUP INC.
(Exact name of registrant as specified in its charter)

Nevada	333-148232	26-1559574
(State or other jurisdiction of	(Commission File Number)	(IRS Employer Identification No.)
incorporation or organization)

No. 2 Beitang Road
Xiaoshan Economic and Technological Development Zone
Hangzhou, Zhejiang Province 311215
People's Republic of China
(Address of principal executive offices)

(86) 571-82838805
(Registrant's telephone number, including area code)

_______________________________________________
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))

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Item 2.02.

Results of Operations and Financial Condition.

On May 15, 2015, China Shengda Packaging Group Inc., a Nevada Corporation (the “Company”) issued a press release announcing the earnings of the quarter ended March 31, 2015. A copy of the press release is hereby furnished as Exhibit 99.1 and is incorporated herein by reference.

The information contained in this Current Report on Form 8-K and the exhibit attached hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information or such exhibits be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01.

Regulation FD Disclosure.

Reference is made to the disclosure set forth under Item 2.02 above, which disclosure is incorporated herein by reference.

Item 9.01.

Financial Statements and Exhibits.

(d)

Exhibits

99.1	Press release dated May 15, 2015

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	China Shengda Packaging Group Inc.
Date: May 15, 2015
	/s/ Daliang Teng
	Name: Daliang Teng
	Title: Chief Executive Officer

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EXHIBIT INDEX

Exhibit	Description
No.
99.1	Press release dated May 15, 2015

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Exhibit 99.1

China Shengda Packaging Group Inc. Reports First Quarter 2015 Financial Results

HANGZHOU, China, May 15, 2015 /PRNewswire-FirstCall/ -- China Shengda Packaging Group Inc. (NASDAQ: CPGI) ("Shengda" or the "Company"), a leading Chinese paper packaging company, today reported its financial results for the first quarter ended March 31, 2015.

Mr. Daliang Teng, Chief Executive Officer of Shengda, commented, "While Q1 historically had been a light quarter for our business due to the Chinese New Year, we managed to grow our overall revenues by 17.5% year-over-year mainly because our subsidiaries Shengda Zhongtian and Shengda Concept started to contribute in the first quarter of 2015. Gross margin increased by 40 basis points as we further cut losses from our corrugating medium paper business while operating loss also reduced year-over-year as we kept our expenses under tight control."

Mr. Teng continued, "Despite continuing macro weakness in the near future, we believe our further vertical integration and geographical expansion, combined with our stringent cost control, will allow us to continue to grow our business and improve our market position."

First Quarter 2015 Financial Highlights:

• Overall revenues increased by 17.5% to $37.9 million for the first quarter of 2015 mainly driven by increase in sales volume of paper cartons and other paper products mainly because Shengda Zhongtian and Shengda Concept commenced production in the first quarter of 2015.
• Overall gross margin improved by 40 basis points to 13.2% for the first quarter of 2015 from 12.8% for the same period of last year.
• Operating loss decreased to $0.1 million for the first quarter of 2015 from $0.6 million for the same period of last year as we continued our tight control over operating expenses while maintaining growth in revenues.
• Net loss attributable to the Company's stockholders decreased by $0.4 million, or 88.2%, to approximately $0.1 million for the first quarter of 2015 from $0.5 million for the same period of last year.
• Basic and diluted loss per share were $0.00 for the first quarter of 2015, compared with $0.01 for the same period of last year.

Three Months Ended March 31, 2015 Results

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Total revenues for the first quarter of 2015 increased by $5.6 million, or 17.5%, to $37.9 million from $32.3 million for the same period of last year, primarily driven by increased sales volume of paper cartons and other paper products.

Revenues of paper cartons and other paper products increased by $4.9 million, or 18.6%, to $31.0 million for the first quarter of 2015 from $26.1 million for the same period of last year. Sales volume of paper cartons increased by 19.7 million square meters, or 29%, to 87.6 million square meters for the first quarter of 2015 from 67.9 million square meters for the same period of last year while the average price of paper cartons and other paper products decreased to $0.36 per square meter for the first quarter of 2015 from $0.38 per square meter for the same period of last year. Color and flexo cartons accounted for 22.1% and 59.6% of total revenues for the first quarter of 2015, compared to 25.3% and 55.6%, respectively, for the same period of last year. Average sales prices per square meter for color and flexo cartons were approximately $0.40 and $0.34, respectively, for the first quarter of 2015, compared to approximately $0.39 and $0.38, respectively, for the same period of last year. Consumer and industrial goods manufacturing sectors remained the Company's principal markets. Major customers remained home appliances & electronics manufacturers, and food, beverage & cigarette manufacturers in the Yangtze River Delta Region, which accounted for 19.6% and 21.8%, respectively, of total revenues for the first quarter of 2015, compared to 22.1% and 21.2%, respectively, for the same period of last year.

Revenues of corrugating medium paper decreased by $0.8 million, or 9.1%, to $8.5 million for the first quarter of 2015, from $9.3 million for the same period of last year. The decrease was mainly resulted from declines in both sales volume and average selling price. Sales volume and average selling price of corrugating medium paper was approximately 24.3 thousand tons and $349 per ton, respectively, for the first quarter of 2015, compared to 25.4 thousand tons and $368 per ton, respectively, for the same period of last year.

Overall gross profit increased by $0.9 million, or $ 21.1%, to $5.0 million for the first quarter of 2015 from $4.1 million for the same period of last year, as a result of increase in revenues of our paper cartons and other paper products business as well as decline in gross loss of the corrugating medium paper business. Gross profit of paper cartons and other paper products increased by $0.4 million, or 7.2%, to $5.8 million for the first quarter of 2015 from $5.4 million for the same period of last year. Gross profit of color and flexo cartons were $1.7 million and $4.1 million, respectively, for the first quarter of 2015, compared to $1.7 million and $3.7 million, respectively, for the same period of last year. Gross loss of corrugating medium paper was $0.8 million for the first quarter of 2015, down from $1.3 million for the same period of last year. Overall gross margin improved by 40 basis points to 13.2% for the first quarter of 2015 from 12.8% for the same period of last year. Gross (loss) margins for paper cartons and other paper products and corrugating medium paper were 18.8% and negative 9.5%, respectively, for the first quarter of 2015, compared to 20.7% and negative 13.8%, respectively, for the same period of last year.

Selling expenses were $1.9 million for the first quarter of 2015, essentially unchanged from the same period of last year. As a percentage of revenues, selling expenses decreased to 4.9% for the first quarter of 2015 from 5.7% for the same period of last year.

General and administrative expenses increased by $0.4 million, or 13.2%, to $3.2 million for the first quarter of 2015 from $2.8 million for the same period of last year. This increase was mainly due to the increase in staff costs, which include salary, benefits, social insurance and other relevant staff expenses. As a percentage of revenues, general and administrative expenses decreased to 8.5% for the first quarter of 2015 from 8.8% for the same period of last year.

As a result of the forgoing, operating loss was approximately $0.1 million for the first quarter of 2015, compared to $0.6 million for the same period of last year. Operating loss margin was 0.2% or the first quarter of 2015, compared to 1.7% for the same period of last year.

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Net loss attributable to the Company's common stockholders decreased by approximately $0.4 million, or 88.2%, to $0.1 million for the first quarter of 2015, from $0.5 million for the same period of last year. Basic and diluted loss per share were $0.00 for the first quarter of 2015, compared to $0.01 for the same period of last year.

Financial Condition

As of March 31, 2015, the Company had cash and cash equivalents of $8.0 million and restricted cash of $12.9 million, compared to $10.9 million and $13.8 million, respectively, at December 31, 2014. Working capital was $25.2 million as of March 31, 2015, compared to $30.7 million at December 31, 2014. Total equity for stockholders of Shengda was $113.4 million as of March 31, 2015, compared to $113.0 million at December 31, 2014.

Net cash used in operating activities was $0.8 million for the first quarter of 2015, compared to net cash provided by operating activities of $3.7 million for the same period of last year. This was attributable to net loss of $0.1 million, adjusted by depreciation and amortization expenses of $1.8 million, and a net decrease in cash from accounts and notes receivable of $2.0 million and a net decrease in cash from other working capital items of $0.5 million.

Net cash used in investing activities was $2.1 million for the first quarter of 2015, compared to $1.8 million for the same period of last year. The $2.1 million was mainly used for purchases of property, plant and equipment at our subsidiaries Shengda Concept and Shengda Zhongtian.

Net cash provided by financing activities was nil for the first quarter of 2015, compared to $1.0 million for the same period of last year. During the three months ended March 31, 2015, we did not receive proceeds from loans or repay loans.

About China Shengda Packaging Group Inc.

China Shengda Packaging Group Inc. is a leading paper packaging company in China. It is principally engaged in design, manufacturing and sale of flexo-printed and color-printed corrugated paper cartons in a variety of sizes and strengths. It also manufactures corrugating medium paper and corrugated paperboards, which are used for the production of flexo-printed and color-printed cartons. The Company provides paper packaging solutions to a wide variety of industries, including food, beverage, cigarette, household appliance, consumer electronics, pharmaceuticals, chemicals, machinery and other consumer and industrial sectors in China.

Safe Harbor Statements

This press release may contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Any statements set forth above that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors include, but are not limited to, the Company's ability to expand to new markets, the ability to grow business through vertical integration and geographical expansion, the ability to access capital for expansion and continued investment in R&D, the ability to acquire other companies, changes from anticipated levels of sales, changes in national or regional economic and competitive conditions, current or future volatility in the credit market and future market conditions, changes in relationships with customers, changes in profit margins of principal product and other factors discussed from time to time in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

Company Contact:

China Shengda Packaging Group Inc.

Cindy Hu, Board Secretary

Tel: +86-571 8283 8770

E-mail: [email protected]

Website: http://www.cnpti.com/

Investor Relations Contact:

Weitian Group LLC

Tina Xiao

Tel: +1-917-609-0333

Email: [email protected]

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CHINA SHENGDA PACKAGING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in US$)

		March 31,			December 31,
ASSETS		2015			2014
Current assets		(Unaudited)
Cash and cash equivalents	$	8,028,542		$	10,909,547
Restricted cash		12,884,090			13,764,420
Accounts and notes receivable, net		42,635,137			40,385,615
Inventories		17,588,023			16,197,839
Prepayments and other receivables		3,238,871			1,714,052
Amount due from related parties		123,253			51,093
Deductable value added tax payable		1,025,382			867,869
Total current assets		85,523,298			83,890,435
Non-current assets
Property, plant and equipment, net		76,273,465			72,274,052
Land use right		11,634,494			11,650,850
Deferred tax assets		3,424,414			2,965,241
Goodwill		181,149			180,373
Total assets	$	177,036,820		$	170,960,951
LIABILITIES AND EQUITY
Current liabilities
Accounts and notes payable	$	45,478,884		$	41,954,268
Amounts due to related parties		1,325,858			2,961,704
Accrued expenses and other payables		4,047,345			2,964,988
Taxes payable		1,422,169			1,826,922
Short-term loans		3,500,000			3,500,000
Current portion of long-term loans		4,500,000			-
Total current liabilities		60,274,256			53,207,882
Non-current liabilities
Long-term loans		-			4,500,000
Total liabilities	$	60,274,256		$	57,707,882
Commitment and contingencies
Equity
Stockholders' equity
Common stock (US$0.001 par value, 190,000,000 shares authorized,       38,790,811 shares issued and outstanding at March 31, 2015 and       December 31, 2014)		38,791			38,791
Additional paid-in capital		43,036,464			43,036,464
Appropriated retained earnings		8,467,835			8,293,281
Unappropriated retained earnings		49,655,975			49,894,124
Accumulated other comprehensive income		12,250,015			11,778,550
Total equity for stockholders of China Shengda Packaging		113,449,080			113,041,210
Noncontrolling interest		3,313,484			211,859
Total equity		116,762,564			113,253,069
Total liabilities and equity	$	177,036,820		$	170,960,951

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CHINA SHENGDA PACKAGING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Amounts in US$)

		Three Months Ended March 31,
		2015			2014
		(Unaudited)			(Unaudited)
Revenues	$	37,927,419		$	32,289,979
Cost of goods sold		32,920,876			28,156,680
Gross profit		5,006,543			4,133,299
Operating expenses
Selling expenses		1,865,438			1,849,929
General and administrative expenses		3,217,461			2,843,048
		5,082,899			4,692,977
Other income/(expenses)
Interest income		123,162			497,819
Interest expense		(191,789	)		(323,685	)
Subsidy income		13,016			-
Other expense		-			(641,445	)
		(55,611	)		(467,311	)
Non-operating income/(expenses)		(121,891	)		116,086
Loss before income tax expense and noncontrolling interest		(253,858	)		(910,903	)
Income tax benefit		154,049			327,083
Net loss		(99,809	)		(583,820	)
Net loss attributable to noncontrolling interest		(36,214	)		(46,128	)
Net loss attributable to Company's common stockholders	$	(63,595	)	$	(537,692	)
Basic and diluted loss per share	$	(0.00	)	$	(0.01	)
Weighted-average number of shares outstanding - basic and diluted		38,790,811			38,790,811
Comprehensive income/(loss):
Net loss	$	(99,809	)	$	(583,820	)
					(1,016,788	)
Foreign currency translation adjustment		471,309
					(1,600,608	)
Comprehensive income/(loss)		371,500
Comprehensive income/(loss) attributable to noncontrolling interest		(36,370	)		(45,789	)
Net comprehensive income/(loss) attributable to the Company's common stockholders	$	407,870		$	(1,554,819	)

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CHINA SHENGDA PACKAGING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in US$)

		Three Months Ended March 31,
		2015			2014
		(Unaudited)			(Unaudited)
Cash flows from operating activities
Net loss	$	(99,809	)	$	(583,820	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization expenses		1,830,116			2,098,987
Deferred tax		(444,502	)		(495,581	)
Loss from disposal of property, plant and equipment		-			641,445
Change in operating assets and liabilities:
Restricted cash		935,525			571,900
Accounts and notes receivable		(2,063,749	)		6,458,591
Inventories		(535,992	)		(3,042,023	)
Prepayments and other receivables		(1,470,454	)		(2,635,072	)
Accounts and notes payable		2,255,240			590,571
Amount due from (to) related party		(1,713,158	)		(301,589	)
Accrued expenses and other payables		1,030,747			(106,182	)
Tax payables		(563,965	)		537,051
Net cash (used in) provided by operating activities		(840,001	)		3,734,278
Cash flows from investing activities
Purchase of property, plant and equipment		(2,002,882	)		(2,026,524	)
Prepayment paid for construction in progress		(72,515	)		-
Proceeds from disposal of property, plant and equipment		-			177,023
Net cash used in investing activities		(2,075,397	)		(1,849,501	)
Cash flows from financing activities
Proceeds from short-term loans		-			4,043,582
Proceeds from long-term loans		-			4,533,292
Repayment of short-term loans		-			(3,226,582	)
Repayment of long-term loans		-			(4,533,292	)
Restricted cash		-			147,060
Net cash flows provided by financing activities		-			964,060
Effect of foreign currency exchange rate fluctuation on cash and cash equivalents		34,393			(81,117	)
Net changes in cash and cash equivalents		(2,881,005	)		2,767,720
Cash and cash equivalents, beginning of year		10,909,547			6,569,495
Cash and cash equivalents, end of year	$	8,028,542		$	9,337,215
Cash paid during the year for:
Interest paid	$	181,636		$	171,875
Income taxes paid	$	164,143		$	273,681
Non-cash financing transactions:
Property, plant and equipment and inventory injected by NCI	$	3,137,995		$	-

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