Industry hopes for ‘bottom reversal’
Corrugated box board paper is the main packaging paper in the current society, and its application scope radiates to food and beverage, household appliances, clothing, shoes and hats, medicine, express and other industries. Box board corrugated paper can not only replace wood with paper, replace plastic with paper, and can be recycled, is a kind of green packaging material, the current demand is very large.
In 2022, the domestic consumer market was hit hard by the pandemic, with total retail sales of consumer goods falling by 0.2 percent. Due to this impact, the total consumption of corrugated paper in China from January to September 2022 was 15.75 million tons, down 6.13% compared with the same period last year; China’s consumption of box board paper totaled 21.4 million tons, down 3.59 percent from the same period last year. Reflected to the price, the average price of the box board paper market fell as high as 20.98%; The average price of corrugated paper fell as high as 31.87%.
News shows that industry leader Nine Dragons Paper for the six months ended December 31, 2022 (the period) of the group’s equity holders should account for losses expected to obtain about 1.255-1.450 billion yuan. Mountain Eagle International has previously released an annual performance forecast, in 2022 to achieve net profit attributable to the mother of -2.245 billion yuan, to achieve non-attributable net profit of -2.365 billion yuan, including 1.5 billion yuan of goodwill. Both companies have never been in this position since they were founded.
It can be seen that in 2022, the paper industry will be constrained by geopolitics and upstream raw material costs. As paper packaging leaders, the shrinking profits of Nine Dragons and Mountain Eagle are symptomatic of broader problems across the industry in 2022.
However, with the release of new wood pulp capacity in 2023, Shen Wan Hongyuan pointed out that the balance between supply and demand of wood pulp is expected to be tight in 2023, and the price of wood pulp is expected to return from the high to the historical central price level. The price of upstream raw materials falls, the supply and demand and competitive pattern of special paper is better, the product price is relatively rigid, is expected to release the profit elasticity. In the medium term, if consumption recovers, the demand for bulk paper is expected to improve, the demand elasticity brought by the replenishment of the industrial chain, and the profit and valuation of bulk paper are expected to rise from the bottom. Some of the corrugated paper made of wine boxes, tea boxes, cosmetic boxes and so on, are expected to grow.
In addition, the industry is still expanding production cycle, leading for the main driving force of expansion. Excluding the impact of the epidemic, capital expenditure of major listed companies accounted for 6.0% of the industry’s fixed asset investment. The proportion of leading capital expenditure in the industry continues to increase. Affected by the epidemic, the sharp fluctuation of raw material and energy prices, as well as environmental protection policies, small and
Post time: Feb-20-2023