Investment Rating - The report maintains a positive outlook on the light industry and paper-making sector for the mid-2025 earnings forecast, indicating a favorable investment rating for these industries [1]. Core Insights - The report highlights a divergence in performance within the export sector for Q2 2025, with companies that have a global supply chain showing resilience against external tariff disruptions. Notable performers include Jiangxin Home, Jiayi Co., and Tianzhen Co. [4][5]. - The two-wheeler segment is expected to benefit from government subsidies and new standards, with companies like Yadi Holdings and Aima Technology showing strong growth potential [4]. - The light consumer goods sector is characterized by a robust domestic demand, particularly in personal care products, with companies like Baiya Co. and Dengkang Oral Care expected to perform well [4]. - The packaging industry is undergoing consolidation, with leading companies experiencing a slowdown in capital expenditure, indicating a shift towards a harvest phase [4]. - The home furnishing sector is facing short-term order impacts due to the pause in government subsidies, but long-term growth is anticipated through market integration and new product categories [4]. - The paper-making sector is expected to see stable profitability due to low raw material costs and improved supply-demand dynamics [4]. Summary by Sections Export Sector - Q2 2025 shows performance divergence due to increased external disruptions, with companies like Jiangxin Home expected to see a 40%+ growth in net profit [5][6]. - Jiayi Co. anticipates a 30%+ revenue increase, while Tianzhen Co. is expected to recover orders significantly [4][5]. Two-Wheeler Sector - Companies like Aima Technology and Ninebot are projected to grow by 20% and 50% respectively in Q2 2025, driven by new product launches and market demand [8][9]. Light Consumer Goods - The sector is expected to show resilience, with companies like Chaohongji and Baiya Co. projected to grow by 20% and 2% respectively in revenue [10][11]. Packaging Industry - The report notes a continued consolidation trend, with companies like Yutong Technology and Baosteel Packaging expected to maintain stable revenue growth [12][14]. Home Furnishing Sector - The sector is facing challenges due to subsidy pauses, but companies like Mousse and Zhizhong Home are expected to adapt and show growth in the long term [13][15]. Paper-Making Sector - The report indicates stable profitability for the paper-making sector, with companies like Sun Paper and Huawang Technology expected to benefit from improved market conditions [17].

Core Viewpoint - The article discusses the recent price adjustments made by Nine Dragons Paper, led by Zhang Yin, in response to rising operational costs and the challenges faced in the paper industry, which is characterized by cyclical fluctuations and pressure on profit margins [2][3][8]. Price Adjustments - On July 15, Nine Dragons Paper implemented a price increase of 30 yuan per ton for corrugated paper at its Dongguan and Quanzhou bases [2]. - This marks the third price adjustment in the past half month, indicating a strategy of gradual price increases amid fluctuating market conditions [3][5]. Industry Context - The paper industry is highly cyclical, with prices closely tied to macroeconomic changes. Key raw materials like wood pulp and waste paper are subject to price volatility and supply instability [8][9]. - Since 2021, paper mills have been releasing capacity while downstream demand has not kept pace, leading to a challenging environment where price adjustments are necessary to maintain market share [11]. Financial Performance - Nine Dragons Paper's market capitalization has dropped over 70% from its peak, currently hovering around 16 billion HKD [4]. - In the 2024 fiscal year, the company reported a revenue of 33.46 billion RMB, with a gross profit of 3.19 billion RMB, reflecting an 18% increase in gross profit year-on-year [33]. Strategic Initiatives - Zhang Yin is focusing on expanding production capacity and moving towards high-end products to avoid price wars in the low-end market [30]. - The company is also investing in upstream integration to enhance raw material supply capabilities, which constitute about 60% of total production costs [35]. Future Outlook - Analysts predict a potential market recovery around September, with seasonal demand expected to increase during the National Day and Mid-Autumn Festival periods [19][20]. - Nine Dragons is expanding its production capacity significantly, with new projects expected to come online in the second quarter of this year, aiming for a total design capacity of 819 million tons of fiber raw materials and 2,537 million tons of paper production [38][39].

Core Viewpoint - The company, Nine Dragons Paper, led by Zhang Yin, is adjusting its pricing strategy in response to rising operational costs and market conditions, with recent price increases for corrugated paper indicating a cautious approach to navigating a challenging market environment [2][3][4]. Group 1: Pricing Strategy - Nine Dragons Paper has implemented a new round of price increases, raising corrugated paper prices by 30 yuan per ton at its Dongguan and Quanzhou bases [2]. - This marks the third price adjustment in the past half month, reflecting ongoing pressures from rising operational costs [2][5]. - The company is currently in a "testing" phase for price increases, as the overall market remains stagnant [3]. Group 2: Market Conditions - The paper industry is characterized by strong cyclicality, with prices closely tied to macroeconomic changes [4]. - Since 2021, paper mills have been releasing capacity while downstream demand has not kept pace, leading to a challenging balance for the company [4][5]. - The average price of waste paper has decreased by 0.66% month-on-month, while corrugated paper prices have dropped by 1.41%, indicating pressure on industry profits [5]. Group 3: Financial Performance - Nine Dragons Paper's average selling price for products is projected to be approximately 2930 yuan per ton for the second half of 2024, down 4% year-on-year and over 20% from 2021 [8]. - The company reported a significant loss of 2.38 billion yuan in the 2023 fiscal year, marking its first loss in 17 years [16]. - Despite challenges, the company has seen some recovery, with a 1.2 times year-on-year increase in net profit to 669 million yuan in the latest reporting period [20]. Group 4: Expansion and Investment - Zhang Yin is focusing on expanding production capacity and enhancing raw material supply capabilities, with plans to increase total design capacity to 819 million tons of fiber raw materials and 2537 million tons of paper production [22][25]. - Significant investments are being made in high-end products and upstream integration, including the acquisition of four integrated pulp and paper factories in the U.S. [22][26]. - The company’s total assets are expected to reach 143.3 billion yuan by the end of 2024, with a substantial portion of the increase attributed to property, plant, and equipment [27]. Group 5: Debt and Future Outlook - As a result of its expansion efforts, Nine Dragons Paper's total liabilities have risen to 143.3 billion yuan, with a debt ratio exceeding 65% [28]. - The company is optimistic about future demand in the packaging paper sector, anticipating that government initiatives to boost consumption will support the industry [28].

Core Viewpoint - The recent surge in Hong Kong paper stocks is driven by a combination of falling raw material prices, improved demand, and low valuation levels, indicating a potential recovery in the paper industry [3][11]. Group 1: Market Performance - From June 20 to July 14, paper stocks in Hong Kong experienced a significant increase, with an average rise of approximately 15%, outperforming the Hang Seng Index [1][4]. - Notable companies such as Sunshine Paper and Nine Dragons Paper saw monthly gains of 19% and nearly 12%, respectively [1][3]. - The paper sector recorded a cumulative increase of 13.73% during this period, with a trading volume of 2.520 billion shares and a total transaction value exceeding 5.6 billion HKD [4][5]. Group 2: Cost and Pricing Dynamics - The decline in international wood pulp prices, with European softwood pulp prices dropping about 15% since the beginning of the year, has positively impacted paper companies' profit margins [3][10]. - Major companies have raised their factory prices for cultural paper by 300-500 HKD per ton since June, reflecting a strong demand recovery and low inventory levels in downstream sectors [3][10]. - The combination of lower costs and successful price increases is expected to enhance profit expectations for paper companies in the upcoming quarters [10][11]. Group 3: Demand Signals - Seasonal demand for educational materials during the summer is expected to boost printing needs, while packaging paper benefits from recovering orders in consumer electronics and home appliances [11]. - Export performance has been strong, with a 34% year-on-year increase in corrugated paper exports from January to May, particularly to emerging markets in Southeast Asia and the Middle East [11]. Group 4: Valuation and Market Sentiment - The paper sector in Hong Kong is currently undervalued, with dynamic P/E ratios for companies like Nine Dragons Paper and Lee & Man Paper below their five-year averages [11]. - Recent inflows from southbound funds into leading paper companies indicate a shift in market sentiment towards optimism regarding the sector's recovery [11].

Core Viewpoint - Nine Dragons Paper Industries has announced a price increase for its corrugated paper products, raising prices by 30 CNY per ton (approximately 4 USD) at its Dongguan base starting from July 15 [1] Group 1 - The price adjustment at the Dongguan base applies specifically to the "Dielong" brand of corrugated paper [1] - The Quanzhou base will also see a similar price increase of 30 CNY per ton for its corrugated paper products, effective from July 15 [1]

Group 1 - The "reverse invoicing" policy implemented in China benefits the resource recovery industry by facilitating tax refunds and reducing tax burdens for businesses [1][2] - As of the tax settlement period in 2025, over 170,000 taxpayers have received timely tax refunds, and more than 30,000 individuals have completed tax payment guidance [1] - The policy allows resource recovery enterprises to issue invoices to individuals selling scrapped products, which helps them deduct VAT input tax and recognize costs for corporate income tax [1][2] Group 2 - Companies like Nine Dragons Paper (Quanzhou) Co., Ltd. are among the first beneficiaries of the "reverse invoicing" policy, improving invoicing efficiency and resolving previous challenges related to invoicing [1] - The policy also lowers tax risks for resource recovery companies, enabling them to successfully deduct VAT input tax and account for costs before tax [2] - The "reverse invoicing" mechanism promotes compliance and protects taxpayer rights, contributing to high-quality development by reinvesting funds into production [2]

1. Report Information - Report Type: Pulp Daily Report [1] - Date: June 11, 2025 [2] 2. Industry Investment Rating - No information provided. 3. Core Viewpoints - The new round of imported pulp quotes remained stable, the port destocking speed was still slow, the implementation effect of downstream price increase letters was average, and the shutdown of the 690,000 - ton per - annum softwood pulp mill Joutseno in Finland due to poor orders boosted the market trend, leading to a wide - range rebound in pulp prices [8]. 4. Summary by Section 4.1 Market Review and Operation Suggestions - **Pulp Futures**: The previous settlement price of the 09 - contract of pulp futures was 5,256 yuan/ton, and the closing price was 5,284 yuan/ton, a rise of 0.53%. The 01 - contract and 05 - contract also showed different price changes [7]. - **Spot Market**: The intended transaction price range of softwood pulp in the Shandong wood pulp market was 5,280 - 6,750 yuan/ton, and the low - end price remained stable compared with the previous trading day. The quotation of Shandong Yinxing was 6,150 - 6,170 yuan/ton [7]. - **Supply and Demand**: Chilean Arauco announced its June quotes, with Yinxing at 740 US dollars/ton and Jinxing at 620 US dollars/ton, unchanged from the previous period. The shipment volume of softwood pulp from 20 major pulp - producing countries in April decreased by 7.2% year - on - year, and the cumulative year - on - year increase from January to April was 1.4%. China's pulp imports in May were 3.02 million tons, a month - on - month increase of 4.3% and a year - on - year increase of 6.9%. As of June 5, 2025, the weekly pulp inventory in major regions and ports decreased by 2.6% month - on - month. The downstream market had a clear demand for improving profitability, but the follow - up of terminal orders was limited, and the raw material procurement mentality was cautious [8]. 4.2 Industry News - Jiulong Paper is promoting a forest - pulp - paper integration project in Beihai, Guangxi. The first production line is planned to be put into operation in June 2025, and the other two production lines will be put into operation in stages in September and December. The project aims to achieve full production in 2025, with a total investment of 35 billion yuan, covering an area of 5,120 mu. After the project is put into operation, the annual output value is expected to reach 70 billion yuan, and the annual tax will increase by 3 billion yuan. The pulp production capacity is expected to reach 14.4 million tons [9]. 4.3 Data Overview - The report presents multiple data charts, including pulp futures price, spot price, price difference, inventory, and other data, with data sources mainly from Wind, Zhuochuang Information, and the Research and Development Department of Jianxin Futures [7][11][20]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints The report provides daily observations on the pulp market, including market conditions, important news, logical analyses, and trading strategies. Market conditions cover futures and spot prices of different pulp types. Important news includes company - related events, project investments, and international trade situations. Logical analyses are based on various economic and industry data, and trading strategies offer suggestions for single - sided and arbitrage trading. 3. Summary by Related Catalogs Market Conditions - Futures market shows various trends such as weak, small, and high - level oscillations. For example, on 25 - 06 - 09, the SP main 09 contract was in a weak oscillation, closing at 5222 points, down 2 points or 0.04% [1]. - Spot prices of different pulp types (coniferous, broad - leaf, natural, and chemical mechanical) vary in different regions. For instance, in the Shandong market on 25 - 06 - 06, the import coniferous pulp market had relatively light trading, and prices of some brands were adjusted with the market [5]. Important News - North American paper giant Georgia - Pacific plans to permanently close its Cedar Springs box - board paper mill later this year, affecting about 535 jobs and with an annual capacity of 1 million tons [1]. - China's C&D Group plans to invest $2 billion in a pulp and finished paper production project in Vietnam's Quang Binh province [11]. - In 2025, India's paper and board imports reached a record 2.05 million tons, and imports from China increased by 33% [8]. Logical Analysis - In April, European coniferous pulp consumption decreased by 17.6% year - on - year, and domestic living paper production increased by 9.4% year - on - year in May, which is favorable for the broad - needle price difference [6]. - As of the end of last Friday, the inventory of the SHFE SP contract decreased by 75.6% year - on - year, while the social inventory of domestic pulp in five ports increased by 33.4 million tons year - on - year [1]. Trading Strategies - Single - sided trading: Suggestions include holding long positions, waiting and seeing, and making small - scale trial purchases. For example, on 25 - 06 - 09, it was recommended to wait and see for the SP main 07 contract and pay attention to the support at last Friday's low [1]. - Arbitrage trading: Usually involves waiting and seeing or reducing positions and waiting. For example, on 25 - 06 - 09, it was recommended to wait and see for the arbitrage strategy (long - short) [1].

Investment Rating - The report maintains a "Positive" investment rating for the paper and light industry sector [6]. Core Insights - The light manufacturing industry index increased by 2.18%, outperforming the market by 1.30 percentage points, with the paper sub-sector rising by 1.78%, also surpassing the market by 0.90 percentage points [2][12]. - The report highlights that the cultural paper sector is entering an off-peak season, leading to a decline in pulp prices, while recommending leading companies in the integrated pulp and paper industry [4]. Summary by Sections Market Overview - The light manufacturing industry index rose by 2.18%, ranking 8th among 28 first-level industries, with the paper sub-sector increasing by 1.78% [2][12]. - The four major sub-sectors of light manufacturing, ranked by growth, are entertainment products, furniture, paper, and packaging printing, with respective increases of 5.51%, 2.03%, 1.78%, and 1.21% [12][18]. Industry Data Tracking - The report notes that the national waste paper price increased slightly by 4 CNY/ton, while the prices of various pulp types remained stable or decreased [9][24]. - The average market price for finished paper remained stable, with specific increases noted for white cardboard, which rose by 16 CNY/ton to 4095 CNY/ton [37][41]. Profitability Analysis - Profitability levels for finished paper products showed differentiation, with small paper companies experiencing increases in profitability, while larger companies faced declines [46][49]. - For instance, small enterprises in double glue paper saw an increase of 17 CNY/ton, while large enterprises experienced a decrease of 10 CNY/ton [46][51]. Production and Trade Data - The cumulative production of mechanical paper and paperboard from January to April 2025 reached 51.57 million tons, reflecting a year-on-year growth of 3.3% [55][56]. - Import volumes for paper and paperboard decreased by 10.5% year-on-year, while export volumes increased by 11.1% during the same period [55][58].

Investment Rating - The report maintains a "Positive" investment rating for the paper and light industry sector [6] Core Viewpoints - The light manufacturing industry index increased by 0.87%, underperforming the market by 0.25 percentage points, while the paper sub-sector declined by 0.47%, underperforming the market by 1.59 percentage points [2][13] - The report highlights that the cultural paper sector is entering an off-season, with pulp and paper prices declining [4] - Recommendations include leading companies in the integrated pulp and paper industry such as Sun Paper (002078, Buy), and special paper leaders like Xianhe Co. (603733, Buy) [4] Summary by Sections Market Review - The light manufacturing industry index rose by 0.87%, while the paper sub-sector fell by 0.47%, ranking 12th among 28 first-level industries [2][13] - The four major sub-sectors of light manufacturing ranked by growth were furniture, packaging and printing, cultural and entertainment products, and paper, with respective increases of 1.67%, 1.09%, 0.21%, and a decrease of 0.47% in the paper sector [2][13] Industry Chain Data Tracking - The report notes a decline in wood pulp product prices, with the average market price for double glue paper dropping by 48 CNY/ton, copper plate paper by 10 CNY/ton, and white card paper by 41 CNY/ton [39] - The profitability of wood pulp products is declining, with small paper companies experiencing a decrease of 78 CNY/ton for double glue paper, while large companies saw a decrease of 48 CNY/ton [49] - Mechanized paper and board production for the first quarter of 2025 reached 38.19 million tons, a year-on-year increase of 3.8% [58] Raw Materials - Domestic waste paper prices slightly increased by 1 CNY/ton, while foreign waste prices remained stable [24] - The report indicates that the inventory of wood pulp at two major Chinese ports reached 1.81 million tons, a 1% increase from the previous month [25][33] Profitability Levels - Profitability for wood pulp products is declining, with small companies seeing significant drops in profitability across various paper types [49] - The report highlights a divergence in profitability for boxboard paper, with low-grade boxboard increasing by 7 CNY/ton while high-grade boxboard decreased by 8 CNY/ton [56]