Hong Kong stocks concept tracking | Paper companies start a new round of price increases, signaling the industry has hit bottom and is now rebounding (including concept stocks)

Since October, many paper companies have carried out one or more rounds of price increases. Recently, more companies have announced price adjustment plans for their multiple bases. Paper companies in various regions have followed suit, triggering a new round of price increases in the entire paper industry. On November 6, Shanying International Holdings once again issued a letter announcing a price increase for base paper: starting from November 8, the prices of red cedar, T-paper, and clay-coated paper products at the company's bases in Zhejiang, Anhui, and Fujian will increase by 30 yuan per ton. At the same time, ND PAPER and LEE & MAN PAPER have also recently announced price adjustment plans for their multiple bases. Many securities firms have indicated that there may be limited further downside for pulp prices, and combined with downstream demand gradually entering the traditional peak season, paper companies' profits are expected to recover in the fourth quarter. In November, "price increase + shutdown for maintenance" will become the main theme in the paper industry. ND PAPER previously stated that due to market factors, prices and values of white board paper products have deviated significantly this year, resulting in continuous losses for the company's white board paper products. In order to provide customers with high-quality and stable products and services, as well as prevent excessive competition, the company has decided to increase prices by 200 yuan per ton for all white board paper products starting from November 1, while also shutting down some paper machines. The main reasons for the widespread price increase in the paper industry are the cost requirements and the gradual recovery of market demand. The fourth quarter of each year is usually the traditional peak season for the paper industry, especially with the holiday shopping season and increased demand during holidays, the market demand for paper products significantly rises. Companies are preparing for the peak demand and ensuring production profits through price increase strategies. Although the paper industry still faces various pressures, looking ahead to the fourth quarter, the industry is showing signs of bottoming out. It is expected that the effects of New Year's Day, Spring Festival, and other holidays will continue, leading to an increase in downstream production and a slight rise in demand for white board paper. According to statistics from the China Industrial Research Institute, in the first half of 2024, out of 23 listed companies in the paper industry, 18 companies saw an increase in net profit, while 5 companies saw a decrease. The top 10 companies with the highest year-on-year net profit growth were Wuzhou Special Paper Group, Guangdong Guanhao High-tech, Minfeng Special Paper, Xianhe Co., Ltd., Shanying International Holdings, Shandong Bohui Paper Industrial, Qifeng New Material, Shandong Chenming Paper, Forest Packaging Group, and Zhejiang Jingxing Paper Joint Stock. In the first half of 2024, Shandong Sun Paper achieved operating income of 20.524 billion yuan, a year-on-year increase of 6.11%; net profit attributable to shareholders of the listed company was 1.758 billion yuan, a year-on-year increase of 40.49%. Shandong Bohui Paper Industrial achieved operating income of 9.262 billion yuan, a year-on-year increase of 6.99%, and net profit attributable to shareholders of the listed company was 131 million yuan, turning from a loss of 346 million yuan in the previous year to a profit. As the policies for stable growth, expanding domestic demand, and promoting consumption are implemented, domestic downstream industries are seeing an increase in demand, and the recovery of consumption will drive the market demand for cultural papers, household papers, and packaging papers. Sealand has stated that many leading paper companies have announced increases in cultural paper prices, and cultural paper prices are expected to gradually rise as the peak season arrives and stabilize, with overall stable demand giving leading companies a competitive advantage. Related stocks: ND PAPER (02689): The company previously announced its performance for the year ending June 30, 2024, with revenue reaching 59.496 billion yuan, a 4.86% year-on-year increase; profit attributable to equity holders of the company was 751 million yuan, compared to a loss of 2.383 billion yuan in the previous year. LEE & MAN PAPER (02314): The company's total revenue for the six months ending June 30, 2024, increased by 2.4% year-on-year to 12.5 billion Hong Kong dollars, with net profit rising by 123.4% to 806 million Hong Kong dollars. Shandong Chenming Paper (01812): The company achieved revenue of 5.94 billion yuan in the third quarter. Shandong Chenming Paper stated that this year, due to high raw material prices, lower-than-expected demand in the peak season, and continuous price declines for some products, some products experienced significant losses, affecting overall business performance. To address this, the company is actively taking measures to optimize its product structure and adjust its production capacity layout to adapt to the dynamic market environment.