Founder: The strengthening of the RMB exchange rate is expected to benefit the paper sector.

Founder released a research report stating that the rise in raw material prices has led paper companies to clearly express their willingness to raise prices. The strengthening exchange rate has brought about cost optimization, and industry profitability is expected to gradually improve. Integrated companies with a high proportion of self-supplied pulp are expected to benefit more, and it is suggested to pay attention to Shandong Sun Paper (002078.SZ) in the bulk paper sector and Xianhe Co., Ltd. (603733.SH) and Wuzhou Special Paper Group (605007.SH) in the specialty paper sector. Key points from Founder: Events: As of the close of December 25, 2025, the Shenwan Paper Industry Index rose by 3.68%, ranking third in terms of daily increase among the Shenwan secondary industry indices. Renminbi appreciation is expected to benefit companies in the pulp and paper sector in terms of costs On December 25, 2025, the offshore renminbi against the US dollar broke through the 7.0 barrier for the first time since September 2024; the onshore renminbi against the US dollar closed at 7.0066, up 95 basis points from the previous trading day. China's paper industry is about 60% dependent on imported pulp, and since mid-November, the accelerated appreciation of the renminbi is expected to optimize the cost of imported pulp procurement. Overseas pulp mills continue to raise prices Brazil's Suzano announced a $20/ton price hike for the Asian market, applicable to orders placed from December, marking the fourth price hike to the Asian market in 2025; Chile's Arauco announced a $20/ton increase in both softwood and hardwood pulp prices in December, with overseas pulp mill prices rising to provide cost support for domestic paper prices. Domestic paper companies have successively released price increase notices As raw material costs rise, leading domestic paper companies have successively issued price increase notices, with Shandong Sun Paper, Asia Pacific Senbo, APP (China), and Shandong Bohui Paper Industry increasing their product prices by 200 yuan/ton from January 1, 2026. Risk warning: Lower-than-expected end demand, significant fluctuations in raw material prices, significant fluctuations in exchange rates, intensified industry competition, etc.