The paper industry is facing pressure to raise prices, and special paper is thriving

The paper industry is facing pressure to raise prices, and special paper is thriving

As the pressure on both ends of cost and demand weakens, the paper industry is expected to reverse its predicament. Among them, the special paper track is favored by institutions by virtue of its own advantages, and it is expected to take the lead in getting out of the trough. Chocolate box

A reporter from the Financial Associated Press learned from the industry that in the first quarter of this year, the demand for specialty paper recovered, and some interviewed companies said that “February hit a new high in single-month shipments.” The good demand is also reflected in the price increase. Taking Xianhe (603733) (603733.SH) as an example, since February, the company’s thermal transfer paper has experienced two rounds of price increases of 1,000 yuan/ton each. Due to the 2-4 Month is the peak season for summer clothing, and the industry expects it to be smoother.Chocolate box

In contrast, traditional bulk paper such as white cardboard and household paper is subject to oversupply, and the demand side has not improved significantly. The implementation of the first round of price increases this year is not satisfactory. According to data from the National Bureau of Statistics, from January to February this year, the revenue of enterprises above designated size in the papermaking and paper products industry was 209.36 billion yuan, a year-on-year decrease of 5.6%, and the total profit was 2.84 billion yuan, a year-on-year decrease of 52.3%.

The price of titanium dioxide, the main raw material for papermaking in Q1 this year, has risen strongly, and the price of pulp has been running at a high level. In this context, whether the price can be raised smoothly has become the key for paper companies to maintain profits.date box

In terms of export sales, the export of special paper is expected to continue to grow. Industry insiders pointed out that compared with 2022, the external situation of special paper exports this year is more favorable. “The price of natural gas in Europe has stabilized first, and the price of sea freight has come down. The unit price of papermaking is low and the volume is large. Freight costs have a great impact on our industry. .In addition, the transportation time has also been shortened, which is very helpful for us to compete with overseas counterparts.”

Wuzhou Special Paper (605007.SH) also said in a recent survey that the shrinkage of domestic production capacity in Europe is long-term, and its competitiveness is not as good as that of Chinese suppliers.

In 2022, the export business prosperity of paper companies will rise. Among them, the export advantage of special paper is the most obvious. The annual report shows that the export business of Huawang Technology (605377.SH) and Xianhe Co., Ltd. increased by 34.17% and 130.19% respectively year-on-year, and the gross profit also increased year-on-year. Under the background of the industry as a whole “increasing income but not increasing profits”, export business has an impact on the profits of paper companies more significant.

In this context, the specialty paper track is favored by institutions. According to public data, since the beginning of this year, Xianhe Stock and Wuzhou Special Paper have been surveyed by nearly a hundred institutions, ranking among the top institutions in the paper industry. A private equity person told a reporter from the Financial Associated Press that considering the cyclical nature of the paper industry, the competition for bulk paper production is too fierce during the downward phase, the supply and demand of special paper are relatively balanced, and the competition pattern is relatively better. What is a little worrying is that related paper Enterprises have aggressively expanded production in recent years, and there is pressure in the short-term market to absorb so much new capacity.paper-gift-packaging

Among the major special paper companies, Xianhe Stock and Wuzhou Special Paper have the highest growth rates in production capacity. This year, Xianhe Co., Ltd. will have a 300,000-ton food cardboard project put into operation, and Wuzhou Special Paper’s new 300,000-ton chemical-mechanical pulp production line will also be put into operation within this year. In contrast, Huawang Technology’s production capacity expansion is relatively conservative. The company expects to add 80,000 tons of decorative base paper production capacity this year.

In 2022, the performance of special paper companies will be divided. Huawang Technology has grown against the market, with revenue and net profit increasing by 16.88% and 4.18% year-on-year, respectively. The reason is that the company’s core business of decorative paper exports accounts for a relatively high proportion, which is obviously driven by exports. In addition, the pulp trade can also help. The performance of Xianhe shares is not satisfactory, and the net profit in 2022 will drop by 30.14% year-on-year. Although the company has many product lines, the gross profit of core products has dropped sharply. Although the export business has performed well, the driving effect is limited due to the low proportion.