Last year’s “high cost and low demand” in the paper industry put pressure on performance
Since last year, the paper industry has been under multiple pressures such as “shrinking demand, supply shocks, and weakening expectations”. Factors such as rising raw and auxiliary materials and energy prices have pushed up costs, resulting in a sharp decline in the industry’s economic benefits.
According to the statistics of Oriental Fortune Choice, as of April 24, 16 of the 22 domestic A-share listed paper-making companies have disclosed their 2022 annual reports. Although 12 companies achieved year-on-year growth in operating income last year, only 5 companies increased their net profit last year. , and the remaining 11 experienced declines of varying degrees. “Increasing income is difficult to increase profits” has become the portrait of the paper industry in 2022.chocolate box
Entering 2023, the “fireworks” will become more and more prosperous. However, the pressure faced by the paper industry still exists, and it is even more difficult to use multiple paper types, especially packaging paper such as box board, corrugated, white card, and white board, and the off-season is even weaker. When will the paper industry usher in the dawn?
The industry honed its internal skills
Talking about the internal and external environment faced by the paper industry in 2022, companies and analysts have reached a consensus: Difficult! The difficulty lies in the fact that the prices of wood pulp at the cost end are at historically high levels, and it is difficult to raise prices due to the sluggish downstream demand, “both ends are squeezed”. Sun Paper stated in the company’s annual report that 2022 will be the most difficult year for my country’s paper industry since the international financial crisis in 2008.chocolate box
Despite such difficulties, in the past year, through unremitting efforts, the entire paper industry has overcome the above-mentioned many unfavorable factors, achieved a steady and slight increase in output, and guaranteed the market supply of paper products.
According to data released by the National Bureau of Statistics, the General Administration of Customs and the China Paper Association, in 2022, the national output of paper and cardboard will be 124 million tons, and the operating income of paper and paper products enterprises above designated size will be 1.52 trillion yuan, a year-on-year increase of 0.4%. 62.11 billion yuan, a year-on-year decrease of 29.8%.baklava box
The “industry bottoming period” is also a critical period for transformation and upgrading, an integration period that accelerates the clearance of outdated production capacity and concentrates industry adjustments. According to the annual report, in the past year, a number of listed companies have been “strengthening their internal skills” around their established strategies to enhance their core competitiveness.
The most important direction is to speed up the deployment of leading paper companies to “integrate forestry, pulp and paper” in order to have the ability to smooth out the industry’s cyclical fluctuations.
Among them, during the reporting period, Sun Paper started to deploy a new forestry-pulp-paper integration project in Nanning, Guangxi, enabling the company’s “three major bases” in Shandong, Guangxi, and Laos to achieve high-quality coordinated development and complement the strategic location layout The shortcomings in the industry have allowed the company to successfully stand on a new level with a total pulp and paper production capacity of over 10 million tons, which has opened up a broader room for growth for the company; Chenming Paper, which currently has a pulp and paper production capacity of over 11 million tons, has achieved self-sufficiency by ensuring self-sufficiency The “quality and quantity” of pulp supply, supplemented by a flexible procurement strategy, consolidated the cost advantage of raw materials; during the reporting period, the chemical bamboo pulp technical transformation project of Yibin Paper was fully completed and put into operation, and the annual chemical pulp production was effectively increased.baklava box
The weakening of domestic demand and the impressive growth of foreign trade were also a notable feature of the paper industry last year. Data show that in 2022, the paper industry will export 13.1 million tons of pulp, paper and paper products, a year-on-year increase of 40%; the export value will be 32.05 billion US dollars, a year-on-year increase of 32.4%. Among the listed companies, the most outstanding performance is Chenming Paper. The company’s sales revenue in overseas markets in 2022 will exceed 8 billion yuan, a year-on-year increase of 97.39%, far exceeding the industry level and hitting a record high. The relevant person in charge of the company told the “Securities Daily” reporter that on the one hand, it has benefited from the external environment, and on the other hand, it has also benefited from the company’s overseas strategic layout in recent years. At present, the company has initially formed a global sales network.
Industry profit recovery will be gradually realized
Entering 2023, the situation of the paper industry has not improved, and although different paper types face different situations in the downstream market, overall, the pressure has not been alleviated. For example, the packaging paper industry such as boxboard and corrugated still fell into a long-term crisis in the first quarter. Downtime, the dilemma of continuous price drop.
During the interview, a number of paper industry analysts from Zhuo Chuang Information introduced to reporters that in the first quarter of this year, the supply of white cardboard market increased as a whole, the demand was lower than expected, and the price was under pressure. In the second quarter, the market will enter the off-season of industry consumption. It is expected that the market will The center of gravity is still likely to decline; the corrugated paper market was weak in the first quarter, and the contradiction between supply and demand was prominent. Against the background of the increase in imported paper volume, paper prices were under pressure. In the second quarter, the corrugated paper industry was still in the traditional off-season for consumption. .
“In the first quarter of cultural paper, double-adhesive paper showed a significant improvement, mainly due to the significant decline in pulp costs, and the support of the peak season of demand, the market center of gravity was strong and volatile and other factors, but the performance of social orders was mediocre, and the price center of gravity in the second quarter There may be a slight loosening.” Zhuo Chuang Information analyst Zhang Yan told the “Securities Daily” reporter.
According to the situation of listed companies that have disclosed their first quarterly reports for 2023, the continuation of the industry’s overall difficulties in the first quarter further squeezed the company’s profit margins. For example, Bohui Paper, the leader of white board paper, lost 497 million yuan in net profit in the first quarter of this year, a decrease of 375.22% from the same period in 2022; Qifeng New Materials also lost 1.832 million yuan in net profit in the first quarter, a year-on-year decrease of 108.91%.cake box
In this regard, the reason given by the industry and the company is still the weak demand and the increasing contradiction between supply and demand. As the “May 1st” holiday is approaching, the “firework” in the market is getting stronger, but why has there been no change in the paper industry?
Fan Guiwen, general manager of Kumera (China) Co., Ltd., told the “Securities Daily” reporter that the “hot” “fireworks” in the media are actually limited to limited regions and industries. gradually prospered.” “The industry should still be in the stage of digesting the inventory in the hands of dealers. It is expected that after the May Day holiday, there should be a demand for supplementary orders.” Fan Guiwen said.
However, many companies are still optimistic about the long-term development of the industry. Sun Paper said that my country’s economy is currently recovering in an all-round way. As an important basic raw material industry, the paper industry is expected to usher in stable growth driven by the recovery (recovery) of overall demand.
According to the analysis of Southwest Securities, the terminal demand of the papermaking sector is expected to pick up under the expectation of consumption recovery, which will drive up the paper price, while the downward expectation of the pulp price will gradually increase.
Post time: May-03-2023
