Paper stocks, which have not been noticed by the market for a long time, continue to suffer heavy losses.
On February 2, Hong Kong paper stocks opened high and went low. As of **, Integrated Environmental Protection Group (00923.)HK) fell more than 9%, Sunshine Paper (02002HK), Nine Dragons Paper (02689HK) followed the fall.
If you look at the long-term axis, since 2023, the valuation center of the paper industry has accelerated downward, and the paper stock index has fallen by more than 4% in the past year or so.
At the same time, the performance differentiation of listed paper companies is also very serious.
Paper enterprises are "cold and warm" different
In 2023, the paper industry will gradually recover after the "cold winter", and the shipments of some papermaking enterprises will be greatly improved, which will promote a significant improvement in performance.
On January 30, Nine Dragons Paper, a leading paper company, issued a positive profit forecast for the six months ended December 31, 2023, during which the company expects to achieve a net profit of about 200 million to 400 million yuan, compared with a loss of 13 in the previous year8.9 billion yuan.
For the performance turnaround, the company said that it was mainly due to the increase in product sales, and the decline in raw material costs was greater than the decline in product sales, resulting in an increase in gross profit margin.
In addition, Mountain Eagle International (600567SH), Rongsheng Environmental Protection (603165SH) also recently disclosed its 2023 earnings forecast.
Thanks to the improvement of the prosperity of the paper industry, Shanying International's paper sector will achieve simultaneous growth in production and sales in 2023, and the comprehensive gross profit margin of products will increase compared with the previous year, and it is expected to achieve a net profit attributable to the parent company of 95 million yuan to 14.3 billion yuan, a year-on-year turnaround.
Coincidentally, affected by market supply and demand, the decline in raw materials has led to an increase in the gross profit margin of products, and Rongsheng Environmental Protection is expected to achieve a net profit attributable to the parent company of 2 in 20236.2 billion to 29.5 billion yuan, an increase of 55 percent year-on-year83% to 7546%。
However, it should be noted that not all paper companies have ushered in the performance of cash, and some companies have fallen into the quagmire of losses.
Chenming Paper, a Hong Kong-listed company, expects to achieve a net loss attributable to the parent company of 1.2 billion yuan to 1.3 billion yuan in 2023, turning from profit to loss year-on-year.
Behind the change in performance, the company said that due to the lack of domestic demand, the company's main production base Zhanjiang Chenming was affected by the accident of the pulp slag sales unit, the capacity utilization rate was reduced, and the production and sales of machine-made paper decreased year-on-year, which affected the efficiency.
In addition, affected by weak downstream demand and the centralized launch of new production capacity, the ** of machine-made paper, especially white cardboard, fell sharply year-on-year; However, raw materials such as woodchips, raw coal, and chemicals are still running at a high level, which seriously squeezes the company's profit space and has a great impact on the company's efficiency.
Also affected by multiple factors such as the downturn in the consumer market and the launch of new production capacity, Yibin Paper (600793SH) expects to achieve a net loss attributable to the parent of 75 million yuan to 88 million yuan in 2023, compared with a profit of 2959 million yuan in the same period last year250,000 yuan; Yueyang Forest Paper (600963SH) is also expected to have a net loss attributable to the parent of 2$500 million to $20 billion yuan.
Behind the differentiation of paper enterprises' performance, it comes from the difference in the demand for paper for different purposes and the difference in quality.
Industry insiders pointed out that due to the rigid demand of the party and government, as well as teaching materials and auxiliary materials, the sales volume and the first level of cultural paper have remained relatively stable. The white cardboard (wrapping paper) is due to the impact of flat domestic demand and the impact of new production capacity. The agency expects that in the next few years, on the basis of the existing production capacity, there will be more than 2 million tons of additional production capacity, and the contradiction between supply and demand is still severe.
Industry leaders have raised prices one after another
Under the resonance of supply and demand, a number of paper companies have recently issued price increase letters, firing the first shot of price increases in the year.
Since January 15, MCC Paper has raised all its products for cultural paper by 200 yuan on the basis of the current **; From January 22, Baichuan Paper raised 200 yuan per ton for light paper, dictionary paper, coated base paper and other products;
From February 1, Nine Dragons Paper's bases in Dongguan, Taicang, Chongqing, Tianjin, Hubei, Shenyang and Quanzhou will increase in price by 30 yuan, mainly involving kraftliner and corrugated paper.
In addition, Shandong Chenming and Sun Paper simultaneously raised all cultural paper products on February 1 and March 1.
This price rise wave not only involves cultural paper and packaging paper, but also the driving force of its price increase comes from raw wood pulp.
According to the data of the business community, the spot price of imported wood pulp last year showed an "N" shaped trend, and climbed to a high level in October, and then there was a **. However, as of February 1, the reference price of softwood pulp market was 5,810 yuan ton, and the hardwood pulp was 5,098 yuan ton, which was still at a high level.
In addition, the recovery of terminal demand is also an important factor to stimulate the price increase of paper enterprises. According to industry insiders, cultural paper is about to enter the bidding and production stage of spring teaching materials, and downstream demand will increase. Compared with last year, this year's paper companies issued price increase letters earlier, and the increase was also higher than last year.
With the gradual implementation of paper enterprise price increases, the industry will regain its vitality, and production enterprises will be able to obtain greater profit margins and help improve performance. Huatai ** said that although there are still challenges in the short-term market, the inflection point of the industry is gradually approaching.
However, blindly relying on price increases to increase profitability is not a long-term solution, and in the long run, it will also cause some consumers to turn to other alternatives, which will weaken the entire industry.
Therefore, if paper companies want to maintain long-term competitiveness, they must reduce the phenomenon of unreasonable increase as much as possible to avoid causing too much burden on consumers. At the same time, strengthening R&D investment and technology upgrading, and launching more environmentally friendly and practical products are also indispensable and important directions for industrial development.
Author: Hong Xiaodou.