NORTHEAST SECURITIES·2025-11-11 08:13Investment Rating - The report maintains an "Outperform" rating for the metal packaging industry [11]. Core Insights - The metal packaging industry, particularly the two-piece can segment, is expected to see a recovery in profitability as supply dynamics shift and demand from the beverage sector remains stable [3][4]. - The two-piece can market is characterized by cyclical price fluctuations influenced by supply-demand imbalances, with recent trends indicating a potential bottoming out of prices [2][56]. - The increasing canning rate in the beer and soft drink sectors is projected to be a key driver for future demand growth for two-piece cans [3][32]. Summary by Sections Industry Overview - The metal packaging industry generated revenue of CNY 150.56 billion in 2023, accounting for 13.05% of the overall packaging industry [1][19]. - Approximately 70% of the demand for metal packaging comes from the food and beverage sector, with two-piece cans being a significant product [1][18]. Price Dynamics - The price of two-piece cans has experienced three distinct phases: 1. A decline from CNY 0.52 to CNY 0.37 per can during the capacity concentration phase (2012-2016) due to oversupply [2]. 2. A recovery to CNY 0.54 per can during the industry consolidation phase (2016-2022) as market concentration increased [2]. 3. A projected decline to CNY 0.47 per can during the current capacity expansion phase (2022-2024) as competition intensifies [2][56]. Demand Drivers - The canning rate for beer in China is expected to rise from 21.21% in 2016 to 29.56% in 2024, leading to an increase in demand for two-piece cans from 28.96 billion to 31.55 billion cans [3][32]. - Each 1% increase in the canning rate is estimated to add approximately 1.061 billion cans to demand [3][32]. Industry Consolidation - The market share of leading companies is expected to increase following the acquisition of COFCO Packaging by ORG Packaging, which will further concentrate the market [3][49]. - The top three companies are projected to control nearly 80% of the market share post-acquisition [3][49]. Cost Structure - The price of aluminum, a major cost component in can production, significantly impacts profitability; a CNY 0.01 increase in can price can lead to a 45% increase in net profit per unit [4][56]. International Expansion - Leading companies are actively establishing overseas production bases to enhance profitability, with significant investments planned in countries like Vietnam and Thailand [52][54].