Hong Kong Stock Concept Track | Guangdong Paper Industry Publishes First "Anti-Inflation" Initiative Letter - Industry Congestion Price Tide Sweeps In (Concept Stocks)
It was learned that recently, the Guangdong Paper Industry Association published a letter titled "On Promoting the Development of the Guangdong Paper Industry's 'Anti-Inflation' Initiative to Achieve High-Quality Development". This is also the first "anti-inflation" initiative letter issued by the paper industry. The letter proposed four initiatives: one is to resolutely resist low-priced and disorderly competition, maintain market fairness; two is to actively optimize production capacity structure and promote technology equipment upgrades; three is to strengthen quality leadership and innovative driving to achieve value-competitive transformation; four is to build a self-regulatory mechanism for the industry and co-build a good ecological environment.
It was learned that Guangdong Province is the second-largest paper-producing province in the country, with a total output of 2648.33 million tons in 2024, setting a new high and increasing by 8.1% year-on-year, accounting for 16.7% of the national paper output. Among them, packaging paper accounts for 72.3% of the province's total output, with main products including boxboard, corrugated paper, etc.
CITIC Securities expressed that "anti-inflation" policies are densely issued, focusing on opportunities for investment in paper and packaging industries. The paper industry has a surplus of production capacity, long-term low profitability, and some paper species and metal containers have high concentration ratios, which may benefit from the "anti-inflation" policy. It is recommended to focus on companies with leading positions in the industry chain, scale advantages, and environmental and energy-saving leadership.
It's worth noting that the paper industry has recently experienced a wave of price hikes. Companies such as Jialong Paper, Jiangxi Liuwen Paper, and Hubei Rongcheng Paper have successively released price increase notices, announcing that they will raise prices for products such as corrugated paper and recycled cardboard from August 1st, with an adjustment range of 30 yuan per ton. Since the beginning of this year, companies have released three rounds of price increase notices in March-April, May, and July, showing a significant increase in industry pricing frequency.
The main driving force behind this round of price increases is the rise in raw material costs. According to monitoring data, as of July 21st, the market price of waste yellow paper was 1475 yuan per ton, up 15 yuan per ton from June 30th. The increase in prices mainly comes from a tight supply situation. Rainy weather has affected the local area's waste paper trading, resulting in a decrease in overall waste yellow paper market supplies.
This year's first half saw the packaging paper industry's most important products, such as corrugated cardboard and boxboard, continue to maintain a supply-demand imbalance, with prices showing a downward trend. According to data from Zhoubao Information, China's corrugated cardboard market average price was 2682 yuan per ton in the first half of this year, down 2.44% year-on-year; China's boxboard market average price was 3616 yuan per ton, down 3.42% year-on-year. From a profitability perspective, the paper industry's profit rate for corrugated cardboard was 9.97%, down 1.11 percentage points from last year; the boxboard industry's profit rate was 18.96%, down 1.24 percentage points from last year, and the industry as a whole continues to face pressure.
Industry insiders believe that the paper companies' recent consecutive price increase notices are an attempt to stimulate downstream packaging factories and cardboard manufacturers to increase their purchases, thereby accelerating the pace of paper production and reducing inventory pressures.
Country Futures said that from a historical perspective, paper-based products in the industry chain have clear periodic characteristics. From a performance perspective, the pulp and paper industry's price increases lag behind those of general industrial products, raw materials lag behind finished products. Given the recent "anti-inflation" sentiment, paper-related products with potential for price increases are expected to continue receiving attention from investors.
Related Concept Stocks:Morning Paper Industry (01812): Morning Paper Industry published its interim results for 2025, expecting net profit of RMB 35-40 billion, down from the previous year's RMB 2865 million. The company explained that this decline is due to the main production base still being under maintenance, resulting in a significant decrease in production and sales volumes, affecting income and profits; as a result of the stoppage, the company recorded impairments and bad debts for some assets and accounts receivable.
Jialong Paper Industry (02689): Citi published a research report stating that based on cost savings expectations, it is expected that Jialong Paper Industry's profitability will improve, raising its rating from "neutral" to "buy", with an estimated total return exceeding 55%. The report predicts that Jialong Paper Industry will release its semi-annual results in September, with core shareholder income increasing by 58% year-on-year to RMB 8.11 billion, while revenue remains stable at around RMB 287.82 billion. Therefore, Citi expects the company to announce a positive earnings warning prior to the release of its interim results.
Liuwen Paper (02314): Liuwen Paper is a global paper industry leader that mainly produces packaging materials such as boxboard, corrugated cardboard, and tissue paper, with multiple production bases and offices in China and overseas. As of 2024, the company's operating revenue was RMB 240.73 billion, with net profit of RMB 12.16 billion.