Report Industry Investment Rating No specific industry investment rating is provided in the report. Core Viewpoints - In terms of supply, overseas new - capacity addition is limited in 2025 - 2026. With major overseas broadleaf pulp mills announcing production cuts and conversions in the second half of this year, the global wood pulp supply pressure is expected to ease in 2026, and the growth rate of broadleaf pulp shipments may slow down. European economic improvement may increase the proportion of trade pulp sent to Europe, alleviating China's import pressure. However, domestic broadleaf pulp new - capacity addition in recent years may bring more supply next year, and the overall domestic supply may remain relatively loose [5][50]. - Regarding demand, although a large amount of finished paper capacity was put into production this year, terminal demand was insufficient, paper was in surplus, and paper mills' operating rates were low. The downstream paper mills were cautious in raw material procurement, resulting in high port inventories. But the continuous expansion of paper capacity will create marginal incremental demand for pulp, which may support the pulp price to stabilize gradually. Next year, the demand for cultural paper is not expected to be strong, and packaging paper and household paper are likely to be the main growth points [5][50]. - Overall, in the short - term, the improvement in pulp supply and demand is insufficient, and the pulp price may stay at the bottom. In the medium - to - long - term, the pulp price center is expected to rise. It is recommended to wait for the bottom - building and then consider long - position opportunities when the price is low. The breakthrough from the bottom depends on substantial improvement in supply and demand. Attention should also be paid to the impact of the remaining cloth - needle warehouse receipts on the market [6][51]. Summary by Directory 2025 Pulp Market Review - The pulp price showed a trend of continuous decline followed by wide - range fluctuations at a low level throughout the year. It can be divided into five stages: from January to early February, it fluctuated strongly; from mid - February to early May, it declined continuously; from mid - May to July, it fluctuated widely; from August to early October, it hit a new low again; from mid - October to the present, it consolidated at a low level [12][13]. Pulp Supply - Demand Analysis Global Wood Pulp Supply - In 2025, overseas pulp mills had few large - scale new installations. The capacity ramp - up of Suzano's broadleaf pulp in Brazil was the main source of market pressure. The global broadleaf pulp shipments remained at a high level throughout the year, and the global softwood pulp shipments recovered rapidly in the third quarter. The shipments to Western Europe and North America decreased, while the demand from China increased significantly. In 2025, from January to September, the cumulative global softwood pulp shipments increased by 0.6% year - on - year, and the cumulative global broadleaf pulp shipments increased by 7.7% year - on - year. In September, pulp mills reduced inventories, but the overall inventory was still at a relatively high level compared to the same period, and the softwood pulp inventory pressure was higher than that of broadleaf pulp [16]. - Looking ahead to 2026, the pressure of overseas new - capacity release is expected to ease, and the global broadleaf pulp supply pressure may decrease marginally. The growth rate of broadleaf pulp shipments may slow down, while the softwood pulp may still see a slight increase in the short - term due to high inventory and rising shipments [17]. European Consumption and Inventory - European demand remained weak. In October, the consumption of softwood pulp in Europe was 230,000 tons, a month - on - month increase of 1.8% and a year - on - year decrease of 9.3%; the consumption of broadleaf pulp was 562,800 tons, a month - on - month increase of 5.9% and a year - on - year increase of 5.3%. In October, the inventory days at European pulp mills remained at a historical high, suppressing the pulp price. Most European ports' inventories decreased month - on - month in September, and the total European port inventory decreased by 4.39% month - on - month, but it was still at a relatively high level in recent years [21]. China's Pulp Imports - In 2025, the cumulative global pulp shipments increased slightly year - on - year. Due to weak demand in the European and American markets, China became the main destination for increased shipments. From January to October, China's cumulative pulp imports increased by 4.8% year - on - year. The increase in China's pulp imports mainly came from the rise in broadleaf pulp imports, and the total softwood pulp imports also increased, but the increase was relatively small [24][25]. - In 2026, with the recovery of the European economy, the proportion of trade pulp sent to China may decline. The import pressure of broadleaf pulp may decrease, and the increase in softwood pulp imports is also expected to be limited [25]. China's Port Inventories - In 2025, China's pulp port inventories remained at a high level for a long time, indicating an oversupply in the domestic pulp market. Downstream paper mills had low willingness to replenish raw material inventories and mainly made rigid - demand purchases. In November, the port inventory increased slightly, and the inventory pressure remained. The combined pulp inventory of Qingdao Port, Changshu Port, Gaolan Port, Tianjin Port, and Baoding area in late November was about 2.0104 million tons, a 3.55% increase from the previous month [31]. China's Downstream Consumption - In recent years, the large - scale new - capacity addition in the domestic finished paper industry led to over - capacity and insufficient demand, squeezing the paper mills' profits. Some large enterprises limited or stopped production. In 2025, the new - capacity addition of white cardboard and offset paper still put pressure on their profits. Although a large amount of finished paper capacity was put into production, the terminal demand was insufficient, and the overall paper production did not increase significantly. From January to October, the total output of four major types of paper was 31.02 million tons, almost the same as last year. In the long - term, the planned new - capacity addition of paper is still large, and the pulp demand is expected to increase slightly next year. But if the terminal orders do not improve, the upside of the pulp price will be limited [34][35]. 2026 Pulp Market Outlook - Supply: The global wood pulp supply pressure is expected to ease, and the proportion of trade pulp sent to Europe may increase, alleviating China's import pressure. However, domestic broadleaf pulp new - capacity addition may bring more supply, and the overall domestic supply may remain relatively loose [50]. - Demand: Terminal demand is insufficient, and paper mills' operating rates are low. But the continuous expansion of paper capacity will create marginal incremental demand for pulp, which may support the pulp price to stabilize gradually. Next year, packaging paper and household paper are likely to be the main growth points [50]. - Strategy: In the short - term, the pulp market will fluctuate at the bottom. In the medium - to - long - term, attention should be paid to long - position opportunities when the price is low [7].

Investment Rating - The report maintains a "Buy" rating for the company, expecting a price increase of over 15% in the next 6-12 months [6][15]. Core Insights - The company reported a revenue increase of 24.8% for the first three quarters of 2025, with a revenue of 906 million yuan, while net profit decreased by 4.8% to 78 million yuan [2]. - The company is experiencing steady revenue growth due to new production capacities and expansion into overseas markets, with significant contributions expected from new projects in Guangxi and Hubei [3]. - The gross margin improved in Q3 2025, reaching 14.6%, while the net margin was 9.9%, indicating a recovery from previous declines [4]. - The company is focusing on high-margin products in overseas markets, which is expected to contribute significantly to performance improvements [5]. Summary by Sections Performance Review - For Q3 2025, the company achieved a revenue of 307 million yuan, with a net profit of 30 million yuan, reflecting a year-on-year increase of 15.5% and 13.9% respectively [2]. Operational Analysis - The company is successfully ramping up production in new facilities and expanding its customer base internationally, which is expected to enhance revenue stability [3]. - The reliance of downstream customers on the company's supply chain has increased, allowing the company to maintain pricing despite soft demand [3]. Financial Metrics - The gross margin for the first three quarters of 2025 was 14.0%, down 2.5 percentage points year-on-year, but improved to 14.6% in Q3 2025 [4]. - Financial expenses increased due to higher interest costs from long-term borrowings, with the financial expense ratio rising to 3.1% [4]. Earnings Forecast - Projected revenues for 2025-2027 are 12.914 billion yuan, 15.257 billion yuan, and 17.736 billion yuan, representing growth rates of 25.70%, 18.14%, and 16.25% respectively [6]. - Expected net profits for the same period are 1.028 billion yuan, 1.271 billion yuan, and 1.517 billion yuan, with growth rates of 2.37%, 23.70%, and 19.35% respectively [6].

1. Report Industry Investment Rating - Not provided in the document 2. Core View of the Report - The pulp market is expected to remain under pressure in the short term. With abundant supply and inventory accumulation during the holiday, pulp prices are likely to stay weak. Affected by the overall macro - market atmosphere and its own weak fundamentals, the market is unlikely to improve in the short term [92]. 3. Summary by Relevant Catalogs 3.1 Industry News - As of October 9, 2025, the pulp inventory in Changshu Port reached 482,000 tons, up 30,000 tons (6.6% MoM); in Qingdao Port, it was 1,395,000 tons, down 30,000 tons (2.1% MoM); in Gaolan Port, it was 54,000 tons, up 13,000 tons (31.7% MoM). The total inventory of mainstream ports was 2,077,000 tons, up 44,000 tons (2.2% MoM) [5][6]. - Jilin Chenming Paper resumed production on September 28, 2025, after 11 months of shutdown. It is expected to achieve an output value of 160 million yuan by the end of 2025 and over 1 billion yuan in 2026 [6]. 3.2 Market Data 3.2.1 Market Trends - On October 10, 2025, the basis of Silver Star was 732 yuan/ton, up 15.46% MoM and 64.86% YoY; the basis of Russian Needle was 262 yuan/ton, up 42.39% MoM and 495.45% YoY; the Silver Star - Russian Needle spread was 470 yuan/ton, up 4.44% MoM and 17.50% YoY [13]. - The 11 - 01 month - spread was - 290 yuan/ton, down 13.28% MoM; the 01 - 05 month - spread was - 58 yuan/ton, down 141.67% MoM [18]. 3.3 Fundamental Data 3.3.1 Price - The needle - broadleaf spread converged. On October 10, 2025, the spread of Silver Star - Goldfish was 1,270 yuan/ton, down 11.19% MoM and 12.41% YoY; the spread of Russian Needle - Goldfish was 800 yuan/ton, down 18.37% MoM and 23.81% YoY [23]. - The import profit of both softwood and hardwood pulp decreased. On October 10, 2025, the import profit of softwood pulp (Silver Star) was - 179 yuan/ton, down 209.51% MoM and 3921.24% YoY; the import profit of hardwood pulp (Star) was - 165.35 yuan/ton, up 370% MoM and down 360.36% YoY [26]. - The price of softwood pulp in the Shandong market decreased compared with before the holiday. On October 10, 2025, the price of Silver Star was 5,520 yuan/ton, down 2.30% MoM and 10.97% YoY [28]. - The price of hardwood pulp slightly increased due to the external price support. On October 10, 2025, the price of Goldfish was 4,250 yuan/ton, up 0.71% MoM and down 10.53% YoY [32]. - The price of natural and chemimechanical pulp: On October 10, 2025, the price of Venus was 4,850 yuan/ton, down 1.02% MoM and 10.19% YoY; the price of Kunhe was 3,700 yuan/ton, unchanged MoM and up 2.78% YoY [35]. 3.3.2 Supply - The wood chip purchase price of some paper enterprises in East China increased. On October 10, 2025, the purchase price of eucalyptus wood chips by Liansheng Pulp and Paper was 1,160 yuan/ton, up 3.57% MoM [39]. - The price of domestic hardwood pulp increased. On October 10, 2025, the daily average price of chemimechanical pulp in China was 3,825 yuan/ton, unchanged MoM and up 2.00% YoY; the daily ex - factory price of Asia - Pacific Senbo hardwood pulp was 4,400 yuan/ton, up 3.53% MoM and down 12.87% YoY [43]. - In August 2025, the European port inventory increased MoM, and the global pulp out - port volume increased seasonally MoM but was lower YoY [46]. - In August 2025, the W20 softwood pulp shipment was low, and the inventory was high; the hardwood pulp shipment remained high, but the inventory days were low [48]. - In July 2025, the export volume of softwood pulp from four countries (Canada, Finland, Chile, and the US) to China increased significantly MoM, and the performance was neutral YoY. In August, the export volume of Canadian softwood pulp to China continued to grow. In September, the export volume of Chilean softwood pulp to China increased MoM [53]. - In August 2025, the export volume of hardwood pulp from four countries (Brazil, Indonesia, Uruguay, and Chile) to China decreased MoM but was at a high level YoY. In September, the export volume of Brazilian hardwood pulp to China increased significantly MoM, the export volume of Uruguayan hardwood pulp to China increased MoM, and the export volume of Chilean hardwood pulp to China continued to decline MoM [54]. - In August 2025, China's pulp import volume decreased overall. The import volume of softwood pulp decreased by 5.01% MoM, hardwood pulp by 6.92% MoM, and chemimechanical pulp by 27.41% MoM [58]. 3.3.3 Demand - The average price of offset paper was weakly consolidated. The supply was abundant, but the demand was weak, and the support for the pulp market was insufficient [62]. - The average price of coated paper fluctuated downward. Affected by the macro - environment and electronic media, the demand was weak, and the support for the pulp market was limited [66]. - The price of white cardboard slightly increased. The market supply was stable, and the market transaction gradually returned to normal [70]. - The market of tissue paper was sorted within the range, with stable prices and limited support from the raw pulp market [74]. - In August 2025, the retail sales in the pulp terminal demand area rebounded slightly seasonally MoM, and the year - on - year growth of cultural office supplies, daily necessities, and books and magazines was significant [78]. 3.3.4 Inventory - The futures inventory: On October 10, 2025, the total warehouse receipt quantity of pulp in warehouses was 225,300 tons, down 0.36% MoM and 40.33% YoY; in factories, it was 6,400 tons, down 30.30% MoM and 76.63% YoY [81]. - The spot inventory: The sample inventory of domestic mainstream ports increased. During the holiday, the arrival volume was normal, but the shipment volume slowed down, leading to inventory accumulation [87].

Core Insights - The construction of the Pinglu Canal in Qinzhou is progressing rapidly, with significant investments and infrastructure developments aimed at enhancing the city's logistics and transportation capabilities [1][2]. Group 1: Infrastructure Development - The Pinglu Canal project has seen a total investment of approximately 596.81 billion yuan, accounting for 82.1% of the estimated project cost [1]. - Key infrastructure includes the completion of a 300,000-ton oil terminal, a 200,000-ton navigation channel, and four automated container terminals, adding 16 berths for vessels over 10,000 tons and increasing port throughput capacity by 49.73 million tons and container capacity by 2.63 million TEUs [1]. Group 2: Trade and Logistics Expansion - The port's cargo throughput has surpassed 200 million tons, with container throughput expected to reach 6.96 million TEUs in 2024, marking a 92.4% increase since 2020 [2]. - The Western Land-Sea New Corridor has facilitated over 10,000 sea-rail intermodal trains annually, doubling the volume since 2020 and expanding coverage to 18 provinces and 163 stations [2]. Group 3: Cross-Border Trade and Investment - Qinzhou has established a cross-border logistics network with ASEAN, launching 84 container shipping routes and direct shipping services with Malaysia and Vietnam [3]. - The total foreign trade volume with ASEAN countries is projected to reach 14.69 billion yuan in 2024, a 72.9% increase year-on-year, with ASEAN investments accounting for over one-third of the city's actual foreign capital utilization since the start of the 14th Five-Year Plan [2][3].

Core Insights - The construction of the Pinglu Canal and its associated infrastructure is a significant opportunity for the city of Qinzhou, enhancing its development as a coastal canal city with high-quality growth and openness [3] Infrastructure Development - The Pinglu Canal project has seen a total investment of approximately 596.81 billion yuan, accounting for 82.1% of the estimated project cost [3] - Key infrastructure includes the completion of a 300,000-ton oil terminal, a 200,000-ton channel, and four automated container terminals, adding 16 berths for vessels over 10,000 tons and increasing port throughput capacity by 49.73 million tons and container capacity by 2.63 million TEUs [3][4] Cargo and Trade Growth - The port's cargo throughput has surpassed 200 million tons, with container throughput expected to reach 6.96 million TEUs in 2024, marking a 92.4% increase since 2020 [4] - The Western Land-Sea New Corridor has seen the annual operation of over 10,000 sea-rail intermodal trains, doubling since 2020, and expanding coverage to 18 provinces, 75 cities, and 163 stations [4] ASEAN Trade and Investment - Qinzhou has established a cross-border industrial chain for products like bird's nest and palm oil, facilitating continuous imports from ASEAN countries [6] - The city has opened 84 container shipping routes, including direct routes to Malaysia and Vietnam, and has seen a 72.9% year-on-year increase in trade with ASEAN countries, with total trade expected to reach 14.69 billion yuan in 2024 [6]

Group 1 - The paper industry chain is expected to see a price recovery due to multiple factors such as the approaching peak season, collaboration among leading companies, and low levels of profitability and inventory [1] - Leading paper manufacturers are anticipated to benefit from higher raw material self-sufficiency and economies of scale [1] - Recommendations include companies with strong operational capabilities such as Sun Paper (002078.SZ) and Nine Dragons Paper (02689), which is accelerating its integrated layout of boxboard and pulp [1] Group 2 - The price of recycled paper has accelerated, with a significant increase in August, where prices for recycled boxboard rose by 125-195 RMB compared to early July, and AA-grade high corrugated prices increased by 165-265 RMB [1] - The company expects continued price increases in August and September, leading to a widening price gap and a recovery in profitability [1] - In the wood pulp sector, domestic prices for hardwood pulp have risen by 150-190 RMB/ton compared to early July, with international prices also increasing [2] - The upcoming peak season is expected to drive further price increases for hardwood pulp as paper manufacturers replenish their stocks [2]

Group 1 - The company Yueyang Lin Paper plans to increase its wholly-owned subsidiary Maoyuan Forestry's registered capital by 1.4 billion yuan through debt-to-equity conversion, raising the total from 471 million yuan to 1.871 billion yuan [1] - The total assets of Maoyuan Forestry are reported to be 3.439 billion yuan, with total liabilities of 2.961 billion yuan, resulting in a debt-to-asset ratio of 86% [1] - The capital increase aims to respond to state-owned asset management needs and strategic transformation, as mandated by the State-owned Assets Supervision and Administration Commission [1][2] Group 2 - Following the capital increase, Maoyuan Forestry's debt-to-asset ratio is expected to decrease to approximately 45%, improving its financial structure and risk resilience [2] - The paper industry has been experiencing a downturn, but Yueyang Lin Paper has managed to turn a profit through asset integration, projecting a net profit of 130 million to 156 million yuan for the first half of 2025 [3] - The company has seen a 60% year-on-year increase in finished paper exports from January to July this year, indicating a successful expansion in market reach [3] Group 3 - The paper industry is currently witnessing a price increase trend, driven by rising raw material costs and improved demand expectations [3][4] - The market for corrugated and boxboard paper has shown signs of easing supply-demand dynamics, with downstream packaging manufacturers increasing their procurement activities [4] - Analysts suggest that the paper industry, characterized by imbalanced supply and demand, is likely to benefit from the current market conditions as it stabilizes at a low profitability level [4]

Group 1 - The SP2509 contract experienced significant volatility in July, rising from 5080 points to a peak of 5560 points, an increase of 9.4%, followed by a decline of 6.1% in the last week [1] - The macroeconomic factors are driving the market more than the fundamentals, as indicated by the stable pulp spot market and weakening basis [1] - Global economic indicators, such as Citigroup's Global Surprise Index, have remained above zero this year, with most data exceeding expectations [1] Group 2 - In June, China's social financing increased by 4.20 trillion yuan, marking seven consecutive months of year-on-year growth, supporting the logic of a strong macroeconomic environment [1] - The supply of hardwood pulp has decreased compared to softwood pulp, while downstream consumption continues to rise, indicating a better fundamental outlook for hardwood pulp [1] - The price spread between hardwood and softwood pulp is expected to narrow from -174 points to -1211 points by the second half of 2024, reflecting an improvement in hardwood pulp fundamentals [1] Group 3 - The softwood pulp supply side is underperforming, with a sales-to-inventory ratio of 0.92 in Europe for June, leading to seven consecutive months of inventory accumulation [1] - Domestic imports of softwood wood chips and pulp reached 793,000 tons in June, marking a marginal increase for seven consecutive months, which negatively impacts SP valuations [1] - The domestic paper industry is facing ongoing operational pressures, with total profits decreasing by 21.4% year-on-year in June and total losses increasing by 29.8% year-on-year [1] Group 4 - In May, electricity consumption in the paper industry was 846 million kilowatt-hours, a year-on-year decrease of 2.1%, falling below the average of 875 million kilowatt-hours for the previous year [1] - By the end of July, the paper industry issued an anti-involution initiative, aiming to reduce finished paper production, limit wood pulp capacity expansion, and improve the quality of finished paper [1] - Overall, the market fundamentals are considered average [1]

Group 1 - The report indicates that the "bull market atmosphere" is continuously strengthening, with the main logic of "anti-involution" significantly improving the supply-demand structure for midstream manufacturing in 2026 [6][14] - The report suggests that the conditions for residents to fully allocate equity are still lacking, but the profit effect is accelerating, potentially leading to an earlier time for comprehensive incremental speculation in A-shares [6][14] - The report recommends actively seeking new structural opportunities in the current market phase, which is seen as a transitional stage for the market to find the main structure of the bull market [6][14] Group 2 - The report highlights the "iron triangle" stocks: Ruike Laser, Giant Network, and Heng Rui Medicine, which are expected to perform well due to their strong market positions and growth potential [6][17] - Other recommended stocks include: Pengding Holdings, Yangnong Chemical, Sun Paper, Zhongmin Resources, China Shipbuilding, Maifusi (Hong Kong), and Jianfa International Group (Hong Kong) [6][17] - The report emphasizes the importance of technology with industrial trend catalysts and midstream manufacturing with improved supply-demand dynamics as key investment themes [6][14] Group 3 - The previous stock combination from July 1 to July 31, 2025, achieved a return of 5.11%, with A-shares averaging a 3.53% increase, while the Hang Seng Index saw an increase of 2.91% [6][2] - Since the first release of the stock combination on March 28, 2017, the cumulative increase has reached 322.85%, with A-shares up 251.34% and Hong Kong stocks up 809.47% [6][2] - The report provides detailed performance metrics for the recommended stocks, including market capitalization and price changes, indicating a strong performance relative to benchmarks [6][15]