1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report - The short - term pulp market may continue the low - level oscillation pattern. Spot prices are suppressed by high inventory and have limited room for rebound. Later, attention should be paid to port inventory, seasonal demand during the "Golden September and Silver October", terminal demand orders, and the capital trend in the market under the support of rising broadleaf prices. Although Suzano's price increase and marginal improvement in demand inject rebound momentum, high inventory and delivery risks still restrict the upside space. The valuation of the futures market is neutral and slightly low. The recommended strategies are to try long positions on far - month contracts on dips [88]. 3. Summary by Directory 3.1 Industry News - Shandong Sun Paper plans to invest up to 1.53 billion yuan in a 700,000 - ton high - grade packaging paper project at its Yandian plant in Shandong, with a construction period of 18 months. It also announced a 600,000 - ton bleached chemical pulp project with a total investment of up to 3.51 billion yuan [5]. - As of August 28, 2025, the inventory of pulp in major Chinese ports showed a downward trend. The inventory in Changshu Port was 515,000 tons, down 15,000 tons (2.8% MoM); in Qingdao Port, it was 1.39 million tons, down 10,000 tons (0.7% MoM); in Gaolan Port, it was 52,000 tons, down 10,000 tons (16.1% MoM). The total inventory of major ports was 2.084 million tons, down 48,000 tons (2.3% MoM) [5]. 3.2 Market Data 3.2.1 Market Trends - On August 29, 2025, the basis of Silver Star was 682 yuan/ton, down 1.45% MoM and up 251.55% YoY; the Silver Star - Russian Needle spread was 82 yuan/ton, up 95.24% MoM and 139.81% YoY [12]. - The 11 - 01 month spread was - 326 yuan/ton, down 27.34% MoM; the 01 - 05 month spread was - 20 yuan/ton, down 200% MoM [17]. 3.3 Fundamental Data 3.3.1 Price - The prices of imported coniferous pulp in the spot market declined slightly. The prices of Silver Star, Cariboo, Northern Wood, Lion Brand, and Russian Needle all decreased compared to the previous period. The prices of imported broadleaf pulp showed a mixed trend, with some regions showing a slight increase due to cost pressure, while others were weak due to limited acceptance from downstream paper mills [29][34]. - The import profits of coniferous and broadleaf pulp decreased. The import profit of Silver Star was - 159 yuan/ton on August 29, 2025, down 92.32% MoM and 1082.86% YoY [27]. 3.3.2 Supply - The supply of domestic chemimechanical pulp increased this week. The weekly output of domestic chemimechanical pulp was 872,000 tons on August 28, 2025, up 3.81% MoM [44]. - In June 2025, the inventory in European ports increased YoY and MoM, and the global pulp outbound volume increased seasonally MoM but was lower YoY. In May, the W20 pulp inventory increased significantly [48][52]. - In June, the export volume of coniferous pulp from Canada, Chile, Finland, and the United States to China increased MoM but was still at a low level YoY. In July, the export volume of Chilean coniferous pulp to China increased significantly. In June, the export volume of broadleaf pulp from Brazil and Indonesia to China decreased slightly MoM but was at a high level YoY. In July, the export volume of Brazilian broadleaf pulp to China remained at a high level YoY, while that of Uruguay decreased significantly MoM [55][57]. - In July 2025, the total import volume of Chinese pulp decreased. The import volume of coniferous pulp decreased by 4.64% MoM, and that of broadleaf pulp decreased by 5.84% MoM [61]. 3.3.3 Demand - The domestic offset paper market was in a supply - demand game, with light trading. The production of large - scale factories was basically stable, but the industry's profitability was poor, and there were situations of paper machine conversion and shutdown for maintenance. The downstream consumption was flat, and the purchasing was mainly for replenishment [64]. - The copperplate paper market was sluggish. Factories maintained stable production, but demand continued to decline due to various factors. The consumption of base paper by downstream users was slow, and the market was in a stalemate [67]. - The white cardboard market was stable. Both supply and demand increased, and large - scale manufacturers achieved a balance between production and sales. Some paper mills planned to raise prices in September [70]. - The living paper market was in a flat consolidation. The terminal demand did not improve significantly, and the industry's operating rate remained at a low level. The price of raw pulp had limited support for the price of living paper [73]. - In July, the retail sales in the pulp terminal demand areas weakened seasonally MoM. The retail sales of cultural office supplies and daily necessities increased significantly YoY, while the retail sales of books and magazines and the production of dairy products decreased YoY [76]. 3.3.4 Inventory - As of August 29, 2025, the total warehouse receipt quantity of pulp was 247,400 tons, with 229,200 tons in warehouses and 18,200 tons in factories, down 1.79% and 0% MoM respectively, and down 48.45% and 38.46% YoY respectively [78]. - The total inventory of the five major ports (Qingdao, Changshu, Gaolan, Tianjin, and Rizhao) was 2.084 million tons on August 29, 2025, down 2.25% MoM and up 12.71% YoY [85].

Core Viewpoint - Sun Paper Industry plans to invest in two major projects in its Shandong base, including a 600,000-ton bleaching chemical pulp project and a 700,000-ton high-end packaging paper project, with total investments not exceeding RMB 3.51 billion and RMB 1.53 billion respectively [1][5] Investment Projects - The 600,000-ton bleaching chemical pulp project aims to enhance the production capacity of the Shandong base, reducing reliance on external purchases of bleaching wood pulp and improving cost control [3][6] - The 700,000-ton high-end packaging paper project aligns with the company's long-term development strategy and is expected to further enhance the efficiency of the three major bases [1][5] Strategic Development - Sun Paper Industry's "Four Three Three" strategy focuses on adjusting its business structure to achieve a profit distribution among three segments: paper making, biomass new materials, and fast-moving consumer goods, with revenue shares targeted at 40%, 30%, and 30% respectively [3][6] - The company has established a strategic layout with three major bases in Shandong, Guangxi, and Laos, which are crucial for achieving high-efficiency collaborative development [3][7] Market Positioning - The company aims to enhance its product competitiveness and market share in the northern market by optimizing and upgrading production facilities across its Shandong base [6][7] - Sun Paper Industry is recognized as one of the few listed companies in China that has achieved "forest-pulp-paper integration" and full-category coverage, which strengthens its ability to withstand industry cyclical fluctuations [7] Future Outlook - The company is set to launch significant new production capacities by 2025, including various projects that are expected to improve profitability as pulp and paper prices recover [6][7]

Core Viewpoint - The article discusses the recent price adjustments by Nine Dragons Paper, led by Zhang Yin, in response to rising operational costs and the cyclical nature of the paper industry, highlighting the challenges and strategies in navigating a fluctuating market [4][5][6]. Group 1: Cost Pressures - The paper industry is highly cyclical, with prices closely tied to macroeconomic changes, leading to significant pressure on companies like Nine Dragons Paper [14]. - Since 2021, paper mills have been releasing capacity while downstream demand has not kept pace, forcing companies to adjust prices frequently to maintain market share [17][18]. - As of July, the average price of waste paper has decreased by 0.66% month-on-month, while the price of corrugated paper has dropped by 1.41%, indicating that raw material cost reductions are not sufficient to alleviate profit pressures [19][20]. Group 2: Navigating the Downturn - Zhang Yin has led Nine Dragons Paper for nearly 30 years, with the company experiencing its first loss in 2023, amounting to 2.38 billion RMB [35]. - Despite the downturn, there are signs of market recovery, with improved demand for packaging paper and a gradual increase in market conditions [36][37]. - The company has successfully reduced inventory levels, with stock decreasing to 9.5 billion RMB, a reduction of 647 million RMB year-on-year [24]. Group 3: Capacity Expansion - Zhang Yin is focusing on increasing control over raw material supply by investing in upstream integration, including acquiring paper mills in the U.S. and establishing recycling operations in China [46]. - Nine Dragons is expanding its production capacity, with new projects in Guangxi and Hubei expected to increase annual design capacity to 8.19 million tons and paper production capacity to 25.37 million tons [48][49]. - The total assets of Nine Dragons reached 138.71 billion RMB by the end of 2024, reflecting a significant increase in investment in property, plants, and equipment [52].

Governance and Compliance - In 2024, the company adhered to various laws and regulations to enhance its corporate governance structure, aligning with the requirements set by the China Securities Regulatory Commission [1] - The company was included in the Shenzhen 50 Index and received an ESG AAA rating, reflecting its commitment to compliance and governance [2] Financial Performance - The company achieved an industrial output value exceeding 46 billion CNY in 2024, marking a doubling of output for two consecutive years [5] - The net profit for 2024 was reported at 5.13 billion CNY, with a total revenue of 53.24 billion CNY, representing a 10% year-on-year increase in total production [7] Production and Projects - By the end of 2024, the company had invested 94.5 billion CNY in its Nanning project, which includes multiple production lines for various paper products [5] - The company aims to achieve a forest land retention target of 120,000 hectares by 2030, with significant progress made in 2024 [6] Environmental Initiatives - The company’s renewable energy sources accounted for 44.75% of its total energy consumption, with ongoing projects in solar and biomass energy [8] - In 2024, the company invested 5.15 billion CNY in ecological and environmental management, focusing on waste treatment and clean production [13] Market Strategy - The company emphasizes a "price-performance ratio" approach, focusing on the balance between product quality and pricing [3] - The company plans to enhance its capital structure and reduce financial risks while ensuring stable cash flow [9] Community Engagement - In 2024, the company allocated 7.67 million CNY to various public welfare initiatives, including 4 million CNY for educational support [10] Future Outlook - The company anticipates continued growth in high-end packaging and specialty paper markets, despite challenges in the cultural paper sector due to digitalization [19] - The overall paper and board production in China reached 158.47 million tons in 2024, a historical high, with a year-on-year growth of 8.6% [21]