Packaging / Advertising & Office

With the arrival of the school season, Mid-Autumn Festival and National Day, the "cultural paper peak season" expected by the paper industry has officially arrived.

Although the industry has just collectively handed over a very dazzling half-year performance, the price of cultural paper has fallen since the second quarter, and even if the industry teamed up, it was once difficult to reverse and the price bottomed out, which invisibly added to this traditional peak season. There is a hint of worry, and the industry has a strong wait-and-see mood.

"Under the background of the double reduction policy, this year's peak season performance will be slightly weaker than in previous years, and the peak season may be in a state of not busy." IPG China Chief Economist Bai Wenxi said in an interview with a reporter from the Securities Daily. However, at the same time, most people in the industry still have expectations when interviewed by reporters, "The most difficult thing is nothing more. We are still confident in the follow-up market."

It is precisely this kind of fundamentals bottoming out and the expectation that the peak season has arrived, which has recently promoted the shock and rebound of the stock price of the papermaking sector. Among them, Huatai shares two daily limit in three days from September 8 to 10, and Bohui Paper continued to rise steadily after the daily limit on September 8.

Bright performance in the first half of the year

According to data from Eastern Fortune Choice, 25 domestic A-share paper companies achieved a total operating income of approximately 93.6 billion yuan in the first half of this year, 23 achieved positive growth year-on-year, and 7 of them achieved a year-on-year growth rate of more than 50%.

It is worth noting that there are three companies with revenues of more than 10 billion yuan, namely Chenming Paper, Sun Paper and Shanying International, and they are all above 15.1 billion yuan. The total revenue of the three companies is about 48.2 billion yuan, accounting for more than half of the industry's total revenue. From a vertical perspective, most of the companies’ revenues in the first half of this year have achieved their best performance in history.

In terms of net profit, 25 companies are in a profitable state. There are as many as 14 companies whose net profit attributable to their parent companies have increased by more than 100% year-on-year. Among them, Sun Paper achieved a net profit of 2.232 billion yuan in the first half of the year, becoming the king of profit in the industry. Similarly, the four companies with a net profit of more than 1 billion yuan: Sun Paper, Chenming Paper, Bohui Paper and Shanying International, achieved a total net profit of 6.771 billion yuan, accounting for 65% of the industry's total net profit of 10.422 billion yuan.

Chenming Paper said that the boom in the industry in the first half of this year has driven up the price of paper products; at the same time, as the price of wood pulp continues to rise steadily, it is good for large pulp and paper integration enterprises, and the benefits of the paper industry sector have increased significantly.

Sun Paper believes that since the beginning of this year, under the framework of the "carbon peak and carbon neutral" rules, my country's paper industry has tended to be leading companies in the competitive landscape, and the industry's large-scale and intensified development has become a trend; Shanying International also said, " Under the "double carbon" goal, leading papermaking companies and some small and medium-sized enterprises will form different development situations, which will eventually force outdated production capacity to clear up and achieve a further increase in industry concentration.

"The increase in concentration is more beneficial than disadvantages for the industry." Fan Guiwen, sales director of Kumaila (China) Co., Ltd., said in an interview with a reporter from the Securities Daily. , Both have greater advantages, are more convenient for government supervision, and will also reverse the situation that many parties who once maliciously competed and grabbed the market at low prices and low quality all lost.

Industry wait-and-see sentiment

However, it is unknown whether the brilliant response papers submitted by the industry collectively will run through the whole year.

In particular, since May and June, the price of cultural paper has taken the lead. Although the industry has joined hands to "maintain stability" in paper prices and issued successive price increase letters at the end of July and early August, it is still difficult to stop the decline. The reporter interviewed several paper companies and learned that the current ex-factory price of cultural paper for writing and printing is about 5,100 yuan to 5,300 yuan per ton. This price has fallen by more than 2,000 yuan from the highest point of more than 7,000 yuan per ton in May. .

During the interview, the reporter also found that at the time of the peak demand for traditional cultural paper in the Golden 9th and the Silver 10th, the current paper price trend is unclear, the future is unpredictable, and the whole market has a strong wait-and-see atmosphere.

Pang Fucheng, the secretary of the board of Sun Paper, said that since the second quarter, cultural paper has been affected by the surge in imports and "exports to domestic sales", and the weakening of the demand side of cultural paper in the off-season has caused the price of cultural paper to drop rapidly.

"The current profitability of the industry is basically at a break-even point, while for small companies, it is basically at a loss." Pang Fucheng believes that with the arrival of the peak season for traditional cultural paper, the demand for cultural paper will all recover. "Of course the trend is not so sure, and further verification by the market is needed."

A brokerage analyst also told the "Securities Daily" reporter that the current consensus is that the price of cultural paper has bottomed out, but there are still doubts about whether the demand season can trigger the price increase and the extent of the upward rebound. "This round of paper price decline is not caused by domestic demand, but due to changes in supply-side imports and exports. Therefore, the key variable that determines the upward inflection point and range of the next cycle is also the suppression of supply-side imports and when will export restrictions be achieved? ease."

"It is indeed full of uncertainty. This is closely related to the overall recovery of the domestic economy and the degree of recovery of international trade." Fan Guiwen also told the "Securities Daily" reporter. As far as cultural paper is concerned, the expectation is neutral, so just packaging. , Especially in terms of food and pharmaceutical packaging, there are good expectations. Southwest Securities industry analysts also said that entering the third quarter, cultural paper and white cardboard fell more than pulp prices, and the price of waste paper remained strong. It is expected that the profitability of cultural paper companies in the third quarter will decline from the previous quarter, and the profitability of packaging paper will be relatively Stablize.

Paper companies still have confidence

In the above context, most of the paper companies interviewed by the reporter still have confidence in the future trend of the industry.

Pang Fucheng, the secretary of the board of Sun Paper, believes that although the industry's prosperity has not yet recovered, there will not be too much room for the downside. "The most difficult situation is nothing more than this. At present, our operating rate is still very normal. This is where our confidence lies."

In addition, the confidence of the industry, in addition to the aforementioned further increase in industry concentration and the maintenance of a relatively normal operating rate, also comes from the accelerated expansion of advantageous production capacity and the diversified layout of leading companies with a complete industrial chain.

Take Chenming Paper, Sun Paper, and Bohui Paper as examples: Chenming Paper has laid out an industrial chain integration strategy as early as 20 years ago. The company has 4.3 million tons of raw materials for self-made pulp. The cost advantage and the supporting transportation advantages of water transportation and land transportation make its self-made wood pulp cost hundreds of yuan lower than the general market price, and the overall transportation cost is also better than that of the same industry; Sun Paper has now built three bases in Shandong, Guangxi and Laos. In the second half of this year, as the Guangxi base paper and pulp projects are put into operation one after another, the pulp and paper production capacity of Sun Paper will exceed 10 million tons; and after Bohui Paper is acquired by APP (China), it will be able to enjoy the group’s forest, pulp and paper integration. The cost advantage brought by the layout of the paper effectively improves the cost advantage and profitability of pulp.

At the same time, companies with a coordinated layout of multiple paper types will have stronger anti-risk capabilities. Sun Paper said that although cultural paper has been affected to some extent, the price of the company’s cardboard paper was relatively stable in the first half of the relatively off-season. The performance of "off-season is not weak" counterattacked. As the peak season approaches, better downstream demand is expected to drive the business's profitability to maintain above the historical median.