【INFORMATION】Paper companies adjust prices to welcome the peak season, and the industry is optimistic about the improvement of industry profits in the second half of the year
Recently, large paper mills such as Nine Dragons Paper, Shanying International, Liwen Paper, and Wuzhou Special Paper have issued price increase letters, announcing that they will raise prices for some products in early September. It is worth noting that since August, domestic paper mills have generally undergone multiple rounds of price increases. Industry insiders point out that the supply and demand of the paper industry are expected to further improve in the second half of the year, and this round of price adjustments demonstrates the determination of paper companies to actively control the market pace during the peak season demand window.
01. Industry pressure in the first half of the yearFrom the recent price increase notices released by paper companies, the reason still directly points to the rise in raw material prices.
It is reported that in the first half of this year, China's paper industry showed a structural adjustment trend in terms of capacity expansion, cost optimization, and export growth. However, some sub sectors are still constrained by supply-demand imbalance, and the overall industry still faces supply and demand pressure and profit differentiation.
In the first half of this year, only 4 out of 23 listed companies in the A-share paper industry achieved positive net profit growth. Industry insiders analyze that due to the slowdown in domestic fast-moving consumer goods consumption growth and cautious channel stocking intentions, raw paper prices continue to bottom out, and the market is in a period of deep structural adjustment.
It is understood that the cost pressure in the paper industry mainly comes from the largest proportion of raw materials and energy, which have significant fluctuations in their trends. Among them, the pulp used in cultural paper is a futures product with strong financial attributes and obvious price fluctuations; The cost of packaging paper waste paper has increased due to weather factors such as rainfall this year.
At the same time as the cost increases, the price of raw paper remains low. According to data monitoring by Zhuochuang Information, the average price of raw paper in the first half of the year is expected to be 4218 yuan/ton, a month on month decrease of 1.82% and a year-on-year decrease of 8.06%. The industry's operating rate once fell below 65%. In this context, paper companies are exploring price increases through price adjustments in order to regain market dominance. At present, with the orderly digestion of channel inventory, it lays the foundation for the recovery of demand in the second half of the year.
From the fluctuation characteristics of the paper industry, it can be found that leading enterprises that layout the entire chain of forest pulp paper integration have strong resistance to cycles. In the first half of this year, Sun Paper maintained its leading position in the industry with a revenue of 19.113 billion yuan and a net profit of 1.78 billion yuan.
According to the semi annual report of Sun Paper, in the second half of the year, the first and second phases of the "Forest Pulp Paper Integration Technical Renovation and Supporting Industrial Park Project" in the Nanning Park of the company's Guangxi base will be basically completed, and the two major parks in Beihai and Nanning will form a higher level of coordination to promote the company's "Forest Pulp Paper Integration" strategy to develop in depth. In addition, we will focus on promoting the pulp forest project in the Laos base, extending it upstream of the industrial chain, continuously improving the self-sufficiency rate of the company's wood pulp and wood chips, thereby enhancing the company's cost control ability, and smoothing out the negative impact of price fluctuations in raw materials such as commercial wood pulp and wood chips.
At present, in addition to Sun Paper Industry, Huatai Co., Ltd., Xianhe Co., Ltd., and others are also promoting the integration of forestry, pulp, and paper industries this year, improving the layout of the industrial chain to resist the impact of cost fluctuations on performance.
Business Society believes that with the upcoming "Golden September and Silver October", downstream markets are actively stocking up, and leading paper mills continue to release price increase information, driving the overall market to be positive. The future market should pay attention to the implementation of price increases, and it is expected that corrugated paper prices will maintain an upward trend in the short term.
Securities firms also stated in their research reports that looking ahead to the second half of the year, stocking up during the Mid Autumn Festival, National Day, and e-commerce peak seasons will be concentrated, and downstream willingness to replenish inventory will increase; At the same time, the central government continues to promote comprehensive rectification of "internal competition", and it is expected that the supply-demand pattern will improve marginally, and the profit curve of advanced paper enterprises can be repaired in the near future.
02. Accelerate the development of overseas marketsIt is worth noting that in the first half of this year, the paper industry actively explored overseas markets under pressure in China and achieved good results.
Taking Bohui Paper Industry as an example, in recent years the company has been deeply involved in the international market. In the first half of this year, the company continued to support rapid growth in its export business through the "digital green transformation".
Bohui Paper Industry stated that export business has become the core engine driving the company's sustainable development. The company continued to deepen the strategic layout of the "the Belt and Road" market, and continued to expand the coverage and stickiness of overseas customers by relying on the three-dimensional linkage mechanism of "exhibition expansion+precise visit+on-site factory inspection". In the first half of the year, dozens of overseas customers were added or deepened in business cooperation.
The company adopts a '2+X' product strategy, with white cardboard and cultural paper as the core, to launch high value-added differentiated products such as food grade coated beef cards, sterile liquid wrapped paper, and zero plastic cup paper, to meet the overseas market's demand for 'paper instead of plastic' and higher food grade safety. ”Bohui Paper pointed out that the significant growth of the company's export business effectively offset the downward pressure on the domestic market and played a key role in smoothing the cyclical fluctuations of the domestic market.
It is reported that in the first half of the year, Bohui Paper Industry added and successfully maintained multiple international certifications such as FSC and ISEGA. The export sales of certified products have increased significantly by 142% year-on-year, and international certification has become an important "passport" for the company to enter the core supply chain of leading enterprises in the global food, beverage, and daily chemical industries. Thanks to the continuous improvement of the international certification system, the company's related products have achieved significant growth in sales in the European and American markets, and the regional contribution value has also increased synchronously.
In terms of Sun Paper Industry, the company's overseas sales revenue increased by 72% year-on-year in the first half of this year. The company stated that strengthening overseas market development is the focus of its future work, continuously increasing the proportion of product exports, and fighting the battle of "doubling overseas" for cultural paper, household paper, specialty paper products, etc., to build a new growth engine driven by both domestic trade and exports.
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