On the evening of April 29, Chenming Paper (000488) released its 2022 first quarter report. During the reporting period, Chenming Paper achieved an operating income of 8.514 billion yuan and a net profit of 132 million yuan, a month-on-month increase.
Since the middle and late 4th quarter of last year, the prosperity of the papermaking market has gradually recovered. According to public data, as of March 30 this year, the market price of white cardboard was 6,700 yuan / ton, the price of double-adhesive paper was 6,400 yuan / ton, and the price of coated paper had also recovered to more than 6,000 yuan / ton, showing a market recovery. Affected by this, the performance of Chenming Paper in the first quarter achieved a quarter-on-quarter growth.
According to Chenming Paper, in the fourth quarter of 2021, the mainstream wood pulp paper products of Chenming Paper, white cardboard, cultural paper, and coated paper are basically at the bottom of the period of profitability per ton. Entering the first quarter of 2022, due to cost and policy Due to the superposition of advantages, Chenming Paper achieved a net profit of 132 million yuan in a single quarter, and its performance began to bottom out.
On the other hand, recently, the continuous high fluctuation of pulp and energy prices has had a huge impact on the papermaking enterprises from the cost side. The leading enterprises have been accelerating the layout of their respective industrial chains in recent years, promoting the integration of my country’s papermaking industry into an accelerated period.
At present, for the cost of the paper industry, the price of wood pulp has continued to rise since mid-November last year due to global inflation and the epidemic. The price of soft-leaf pulp on the outer disk gradually rose from US$710/ton to US$1,000/ton; the price of hardwood pulp on the outer disk gradually rose from US$560/ton to US$823/ton. In addition, the shortage of transportation capacity has led to a sharp rise in shipping costs, and the cost of raw materials for papermaking enterprises has increased.
In this regard, Chenming Paper has a production capacity of about 4.3 million tons of wood pulp, which has basically achieved the matching of pulp and paper production capacity. In the context of rising wood pulp prices in the market, the cost advantage of self-made pulp can stabilize production costs to a certain extent.
Industry insiders pointed out that the overall supply of wood pulp is tight in the first half of 2022, and pulp prices are expected to be strong. In the second half of 2022, with the release of new production capacity and the gradual repair of the supply side, prices may fall, but the overall price fluctuations will not be over. big. In the second half of 2021, there will be a sharp rise in coal prices and abnormal cyclical fluctuations. It is expected to gradually return to reasonable prices in the later period. Chenming Paper, as the head of wood pulp-based papermaking enterprises, can expect profitability.
Some brokerage analysts believe that although the increase in upstream raw materials and freight costs has led to the overall pressure on the industry. But at the same time, it will also promote the survival of the fittest and improve the concentration of enterprises. In the short term, the increase in pulp prices supports paper prices, and the performance of leading companies can be expected; in the medium and long term, downstream demand continues to expand, and the competition pattern is good.
In addition, the gradual implementation of the RCEP policy will also play a positive role in promoting trade reciprocity and facilitation in the paper industry.
In January this year, the Regional Comprehensive Economic Partnership (RCEP) came into effect. The first batch of countries to take effect include the six ASEAN countries including Brunei, Cambodia, Laos, Singapore, Thailand, and Vietnam, and the non-ASEAN four countries including China, Japan, New Zealand, and Australia. country. Chenming Paper has passed the approval of the General Administration of Customs of the People’s Republic of China, and obtained the Approved Exporter Certification under the RCEP of the Customs of the People’s Republic of China.
Chenming Paper said that on the one hand, the relevant policies of RCEP will be beneficial to the company’s preferential and convenient import of wood chips and other raw materials; on the other hand, as an approved exporter under RCEP approved by the General Administration of Customs, the company will also benefit. Export facilitation in RCEP.
According to the relevant person in charge of Chenming Paper, “After the full implementation of RCEP, it is expected to save customers more than 6 million US dollars in tariff reductions and exemptions each year, which will help the deepening of the internationalization process of enterprises.”