November 24, 2025 12:45 PM GMT M Idea China Consumer: Raw Materials Price Chartbook | Asia Pacific Raw Materials Price Movements (Oct-25) and Stock Implications In this month's summary of key raw material price trends and implications for relevant Hong Kong/China consumer stocks, we highlight the decline in milk powder prices, corn prices and hog/ pork/piglet prices, while metal prices saw an uptick. Implications for stocks: Yili (600887.SS, OW), Mengniu (2319.HK, OW): Similar to 2024, raw milk prices have ...

Financial Data and Key Metrics Changes - Revenue for Q3 2025 increased by 9% year-over-year to $2.8 million, compared to $2.6 million in Q3 2024, driven by strong performance in the shelf-stable product portfolio [14][7] - Gross profit totaled approximately $0.3 million, down from $0.7 million in the prior year, due to higher labor, freight, and raw material costs [14] - Net loss for the quarter was $4 million, compared to a net loss of $2.1 million in Q3 2024 [15] Business Line Data and Key Metrics Changes - The shelf-stable product portfolio grew by 54% year-over-year in Q3, with notable brands like KICK Sports Nutrition, Vitamin Way, Pulp, and Pickle Party contributing to this growth [14][7] - Core herb portfolio saw significant growth, with Hydrobasil up 21% and Wheatgrass up 59% year-over-year [14] Market Data and Key Metrics Changes - The functional food and beverage market is projected to grow from approximately $400 billion to $610 billion by 2030, indicating a strong market opportunity for the company [9] - In the U.S., sales of natural, organic, and functional products are expected to reach $386 billion by 2028, reinforcing the company's strategic alignment with market trends [9] Company Strategy and Development Direction - The company is evolving towards a consumer packaged goods (CPG) model, focusing on non-perishable product expansion and higher-value branded portfolio [7] - Strategic partnerships with major retailers like Kroger and Fresh Market are being strengthened, expanding the company's retail footprint [8] - The company is pursuing new categories such as nutraceuticals, sustainable proteins, and functional foods, guided by a zero-waste approach [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for continued growth, emphasizing disciplined execution and product innovation [13] - The current political environment is pushing for less processed foods, creating opportunities for the company to align with consumer demand for clean-label products [28] Other Important Information - The company has refinanced its outstanding debt, securing lower interest rates and more favorable terms, which is expected to reduce annual interest expenses [15] - The company ended the quarter with $0.8 million in cash and equivalents, down from $3.5 million at year-end 2024 [15] Q&A Session Summary Question: Utilization of the Natural Shrimp facility - Management discussed the facility's impressive location and its potential for R&D on next-generation products, including nutraceuticals and food [22][24] Question: Opportunities with grocery stores - Management confirmed that major grocery chains like ShopRite, Kroger, and Fresh Market represent significant opportunities moving into 2026, driven by demand for clean-label products [27][28] Question: Margin related to private label products - Management indicated that while private label products may have lower margins, they provide volume and long-term relationships with major retailers, which are crucial for business growth [31][32]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 increased by 9% year-over-year to $2.8 million, up from $2.6 million in Q3 2024, driven by strong performance in the shelf-stable product portfolio [14][7] - Gross profit totaled approximately $0.3 million, down from $0.7 million in the prior year, reflecting higher labor, freight, and raw material costs [14] - Net loss increased to $4 million from a net loss of $2.1 million in Q3 2024 [15] Business Line Data and Key Metrics Changes - The shelf-stable product portfolio grew by 54% year-over-year in Q3 2025, with notable growth in brands such as KICK Sports Nutrition, Vitamin Way, Pulp, and Pickle Party [14][7] - Core herb portfolio saw growth with Hydrobasil up 21% and Wheatgrass up 59% year-over-year [14] Market Data and Key Metrics Changes - The functional food and beverage market is projected to grow from approximately $400 billion to $610 billion by 2030, indicating a significant opportunity for the company [9] - In the U.S., sales of natural, organic, and functional products are expected to reach $386 billion by 2028, reinforcing the company's strategic alignment with market trends [9] Company Strategy and Development Direction - The company is evolving towards a consumer packaged goods (CPG) model, focusing on non-perishable product expansion and higher-value branded portfolio [7] - Plans to pursue new categories including nutraceuticals, sustainable proteins, and functional foods, guided by a zero-waste approach [12][13] - The company aims to strengthen retail partnerships and advance product innovation to build long-term shareholder value [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for continued growth, particularly in the fourth quarter, which is traditionally a strong season [13] - The company is well-positioned to capitalize on the growing demand for clean-label, better-for-you products, with major retailers showing interest in private label collaborations [28][29] Other Important Information - The company has completed its strategic exit from the floral and lettuce categories, which is reflected in the current quarter's performance [14] - The company refinanced its outstanding debt, securing lower interest rates and more favorable terms, which is expected to reduce annual interest expenses [15] Q&A Session Summary Question: Can you talk about the build-out of the Natural Shrimp facility and its intended utilization? - Management highlighted the facility's impressive location and plans for R&D on next-generation products, with significant opportunities from major retailers [22][24] Question: Are grocery stores the largest opportunity moving into 2026? - Management confirmed that grocery chains like ShopRite, Kroger, and Fresh Market represent significant opportunities, driven by demand for clean-label products [27][28] Question: How are margins affected by private label products? - Management indicated that while private label may have lower margins, there are opportunities for volume contracts and deeper relationships with major retailers [31][32] Question: What is the outlook for KICK Sports Nutrition? - Management noted that KICK is gaining traction and is well-positioned to meet the growing consumer interest in plant-forward performance nutrition [10][30]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 increased by 9% year-over-year to $2.8 million, compared to $2.6 million in Q3 2024, driven by strong performance in the shelf-stable product portfolio [14][15] - Gross profit totaled approximately $0.3 million, down from $0.7 million in the prior year, due to higher labor, freight, and raw material costs [15] - Net loss for the quarter was $4 million, compared to a net loss of $2.1 million in Q3 2024 [15] Business Line Data and Key Metrics Changes - The shelf-stable product portfolio grew by 54% year-over-year in Q3, with notable performance from brands like KICK Sports Nutrition, Vitamin Way, Pulp, and Pickle Party [14][15] - Core herb portfolio saw growth, with Hydrobasil up 21% and Wheatgrass up 59% year-over-year [15] Market Data and Key Metrics Changes - The functional food and beverage market is projected to grow from approximately $400 billion to $610 billion by 2030, indicating a significant opportunity for the company [10] - In the U.S., sales of natural, organic, and functional products are expected to reach $386 billion by 2028, reinforcing the company's strategic alignment with market trends [10] Company Strategy and Development Direction - The company is evolving towards a consumer packaged goods (CPG) model, focusing on non-perishable product expansion and higher-value branded portfolio [7][8] - Strategic partnerships with major retailers like Kroger and Fresh Market are being leveraged to expand the retail footprint and enhance brand visibility [9][13] - The company is pursuing new categories, including nutraceuticals and sustainable proteins, to align with its commitment to health and environmental responsibility [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for continued growth, emphasizing disciplined execution and product innovation [13][44] - The company is optimistic about the upcoming holiday season, traditionally a strong period for sales, and is focused on expanding its innovative product offerings [25][44] Other Important Information - The company has refinanced its outstanding debt, securing lower interest rates and more favorable terms, which is expected to reduce annual interest expenses [15] - The facility acquired from Natural Shrimp is undergoing a gap analysis for R&D on next-generation products, indicating a focus on innovation and sustainability [21][24] Q&A Session Summary Question: Utilization of the Natural Shrimp facility - Management discussed the facility's impressive capabilities and plans for R&D on nutraceuticals and food products, highlighting strong relationships with major retailers [21][24] Question: Opportunities in grocery stores for 2026 - Management confirmed that grocery chains like ShopRite, Kroger, and Fresh Market represent significant opportunities moving into 2026, driven by demand for clean-label products [27][28] Question: Margin considerations for private label products - Management indicated that while private label products may have lower margins, they provide volume and long-term contracts, which are essential for business stability [31][33]

Core Insights - Edible Garden AG Incorporated reported a 9% year-over-year revenue growth for Q3 2025, reaching $2.8 million, driven by a strategic shift towards a consumer packaged goods (CPG) model and expansion into shelf-stable product categories [2][6][4] - The company experienced significant growth in non-perishable unit sales, which increased approximately 49.3% year-over-year, alongside a 90.2% rise in international vitamin and supplements revenue [5][6] - The company is optimistic about future growth, believing that the most challenging phase of its transformation is behind, positioning itself for long-term sustainable profitability [4][6] Financial Performance - Revenue for Q3 2025 was $2.8 million, up from $2.6 million in Q3 2024, primarily due to strong performance in shelf-stable products [6] - Gross profit decreased to approximately $0.3 million from $0.7 million in the prior-year quarter, attributed to higher costs and inflationary pressures [7] - Selling, general and administrative expenses rose to $3.8 million from $2.2 million year-over-year, mainly due to increased depreciation and associated costs from recent asset acquisitions [8] Strategic Developments - The company expanded its distribution network, including partnerships with Kroger and The Fresh Market, and increased its international presence through collaborations with PriceSmart and Amazon [4] - The acquisition of NaturalShrimp's assets is expected to enhance vertical integration and sustainable aquaculture capabilities, aligning with the company's mission [4] - Edible Garden's CPG-focused strategy allows for expansion beyond fresh produce into branded shelf-stable offerings, catering to the growing demand for clean-label and functional foods [4][5] Product Performance - Hydroponic Basil sales increased by 28.6%, Potted Herbs by 22.6%, and Wheatgrass by 59.2% year-over-year, indicating strong consumer demand in these categories [5] - The company's portfolio includes brands like Kick. Sports Nutrition, Pickle Party™, Pulp®, and Vitamin Whey®, which are driving momentum and expected to contribute to margin improvement [4][5]

Financial Data and Key Metrics Changes - The company's leverage in dollar terms increased to 3.3 times, with stable net debt but a decline in EBITDA over the last 12 months due to lower pulp prices [6][7] - Cash cost production decreased by 7% compared to the third quarter of 2024, with cash costs running below BRL 800 per ton [4][5] Business Line Data and Key Metrics Changes - Significant reductions in wood costs were noted, driven by operational efficiencies and improved wood quality, contributing to lower specific consumption [3][4] - The cash cost of production ex-downtime is expected to be the most competitive in the fourth quarter of 2024-2025 [5] Market Data and Key Metrics Changes - Prices of domestic wood chips in China have increased, impacting the cash cost of production for Chinese producers [15][16] - The market for softwood is weaker compared to hardwood, with prices dropping due to an abundance of softwood in the Chinese market [17][18] Company Strategy and Development Direction - The company is focusing on reducing cash production costs and extracting value from recent investments, particularly in packaging and joint ventures [10][11] - Future CAPEX guidance for 2025 is set at BRL 13.3 billion, with expectations of a declining trend in CAPEX for subsequent years [9][65] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining cash costs below BRL 800 per ton and highlighted the importance of operational efficiencies [10][26] - The outlook for pulp prices remains cautious, with expectations of gradual price increases but limited optimism due to oversupply conditions [32][49] Other Important Information - The company has a healthy hedge portfolio with a total value of $6 billion, which could provide a positive cash impact of nearly BRL 2.5 billion over the next two years [8] - The company is committed to its guidance for 2027 and is confident in delivering on its targets [33] Q&A Session Summary Question: Dynamics of wood chips and softwood in the Chinese market - Management noted an uptick in prices for both domestic and imported wood chips in China, which is expected to increase cash costs for Chinese producers [15][16] Question: Cash cost trajectory and improvements - Management indicated that they aim to maintain cash costs below BRL 800 per ton and highlighted a 4% reduction in wood consumption per ton due to a new wood supply deal [25][26] Question: Expectations for London Pulp Week - Management expressed optimism about discussions on unsustainable market conditions and the potential for unexpected closures impacting supply dynamics [28][30] Question: Performance of the US packaging business - Management reported positive EBITDA contributions from the US packaging business and emphasized ongoing efforts to improve logistics and operational efficiency [38][39] Question: Updates on Lenzing investment - Management is currently analyzing trends and investment opportunities in Lenzing but has no immediate plans to increase their stake [37] Question: Long-term fundamentals for pulp - Management maintains a cautious view on the structural fundamentals for pulp, noting that while imports are increasing, local production remains stagnant [49] Question: Impact of floods in Southeast Asia on wood prices - Management acknowledged that recent floods have influenced wood chip prices in the short term, particularly in southern China and Vietnam [57][58] Question: Expansion CAPEX and future projects - Management indicated a declining trend in CAPEX for the next year, with fewer projects in the pipeline as major projects are completed [65]

Financial Data and Key Metrics Changes - The company's cash cost decreased by 7% compared to Q3 2024, driven by operational efficiencies and input cost reductions [2][4] - Net debt remained stable quarter-on-quarter, but leverage in dollar terms increased to 3.3 times due to a decline in EBITDA over the last 12 months primarily from lower pulp prices [3][4] - The cash cost of production ex-downtime is now below BRL 800 per ton, indicating strong operational performance [3][4] Business Line Data and Key Metrics Changes - The Ribas units contributed significantly to improvements across all cash cost components, particularly in wood costs, which saw a notable reduction [2][4] - The company is focusing on cash production costs and aims to maintain a competitive cash cost in the upcoming quarters [6][7] Market Data and Key Metrics Changes - Prices of domestic wood chips in China have increased, impacting the cash cost of production for Chinese producers [11][12] - The dynamics for softwood in China have weakened, with prices dropping due to an abundance of supply, while hardwood prices are recovering [10][12][14] Company Strategy and Development Direction - The company is committed to reducing cash costs and extracting value from recent investments, particularly in packaging and joint ventures [7][8][9] - Future CAPEX guidance for 2025 is set at BRL 13.3 billion, with a focus on maintaining operational efficiency and managing costs [6][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering competitive cash costs in Q4 2024-2025, despite potential downtimes affecting specific quarters [3][6] - The management highlighted the unsustainable pricing scenario in the pulp market, indicating a cautious outlook while monitoring market dynamics closely [20][34] Other Important Information - The company has a healthy hedge portfolio with a total value of $6 billion, which could provide a positive cash impact of nearly BRL 2.5 billion over the next two years [5] - The company is not planning to exercise the option to acquire an additional stake in Lenzing in the short term, focusing instead on analyzing market trends [27] Q&A Session All Questions and Answers Question: Dynamics of wood chips and softwood in the Chinese market - Management noted an uptick in prices for both domestic and imported wood chips in China, which is expected to increase cash costs for Chinese producers [11][12] Question: Cash cost improvements and future expectations - Management confirmed that they are running below BRL 800 per ton and are focused on maintaining this level while exploring further cost-cutting opportunities [15][18] Question: Expectations for London Pulp Week - Management indicated that the current market scenario is unsustainable, with expectations of increased closures and a potential shift in pricing dynamics [20][21] Question: Growth opportunities in the US paper market - Management highlighted that there are still significant growth opportunities in the US market, particularly in food service, and emphasized the focus on improving efficiency [47][48]

Earnings Conference Call 3Q25 Disclaimer This presentation contains what are considered "forward-looking statements," as defined in Section 27A of the 1933 Securities Act and Section 21E of the 1934 Securities Exchange Act, as amended. Some of these forward-looking statements are identified with words such as "believe," "may," "could," "would," "possible," "will," "should," "expect," "intend," "plan," "anticipate," "estimate," "potential," "outlook" or "continue," as well as the negative forms of these word ...

Core Insights - Mercer International Inc. reported a significant decline in third quarter 2025 Operating EBITDA, posting negative $28.1 million compared to positive $50.5 million in the same quarter of 2024, and negative $20.9 million in the second quarter of 2025 [2][15][36] - The company experienced a net loss of $80.8 million ($1.21 per share) in Q3 2025, a stark contrast to the net loss of $17.6 million ($0.26 per share) in Q3 2024 and a slight improvement from the net loss of $86.1 million ($1.29 per share) in Q2 2025 [2][12][36] Financial Performance - Total revenues for Q3 2025 decreased by approximately 9% to $458.1 million from $502.1 million in Q3 2024, primarily due to lower pulp and manufactured products sales realizations, partially offset by higher lumber sales realizations [13][34] - Costs and expenses increased by approximately 7% to $525.7 million in Q3 2025 from $493.3 million in Q3 2024, driven by higher per unit fiber costs and negative foreign exchange impacts [14][36] - The pulp segment's revenues decreased by approximately 9% to $339.0 million in Q3 2025 from $373.3 million in Q3 2024, with pulp revenues specifically declining by about 10% [18][34] Market Conditions - The decline in pulp market demand and pricing was attributed to persistent global economic uncertainties, fiber scarcity in Germany, and increased pulp substitution [3][6] - Sales realizations for both softwood and hardwood pulp decreased due to lower prices across all markets, with a notable price gap of approximately $200 per ton between softwood and hardwood pulp [6][19] - Lumber sales realizations remained stable in Q3 2025, with expectations for modest price increases in Europe due to higher fiber costs and slightly higher prices in the U.S. driven by duties and tariffs [7][8] Strategic Initiatives - The company is advancing its "One Goal One Hundred" program, targeting $100 million in profitability improvement actions by the end of 2026, with an expectation of realizing approximately $30 million in cost savings by the end of 2025 [4][8] - A carbon capture and sequestration project is being developed at the Peace River mill, which is currently in the conceptual engineering stage, with a pilot expected to be operational in Q4 2025 [5][8] Operational Highlights - In Q3 2025, pulp mills experienced 32 days of downtime, including 20 days of planned maintenance and 12 days of unplanned downtime due to mechanical failure [10][24] - Total pulp production increased by approximately 10% to 458,708 ADMTs in Q3 2025 from 415,837 ADMTs in Q3 2024, attributed to improved production reliability [24][36] - The solid wood segment's revenues decreased by approximately 6% to $117.2 million in Q3 2025 from $125.1 million in Q3 2024, primarily due to lower manufactured products revenues [26][34]

Core Insights - Metsä Board reported a comparable operating loss of €45.6 million in Q3 2025, a significant decline from a profit of €41.9 million in Q3 2024 [1] - Sales decreased to €441.2 million in Q3 2025, down from €499 million in the same quarter of the previous year [1] - The company achieved a net cash flow from operations of €122 million in Q3 2025, a substantial increase from €4.6 million in Q3 2024 [1] Financial Performance - Working capital releases in Q3 2025 totaled approximately €120 million, with a target of an additional €150 million release by the end of 2025 [2] - Paperboard deliveries fell to 332,000 tonnes in Q3 2025, down from 388,000 tonnes in Q3 2024 [2] - Average paperboard prices remained stable compared to the previous quarter [2] Market Conditions - The paperboard market is described as challenging due to weak consumer demand, US tariffs, and overcapacity [3] - Production of paperboard, BCTMP, and pulp has been curtailed to manage market conditions and free up working capital [3] - The annual maintenance shutdown at the Husum integrated mill and an investment shutdown at the Simpele paperboard machine significantly impacted production volumes and profitability [3] Pulp Market Dynamics - Demand for market pulp has been weak in Europe and China, leading to a decline in pulp prices [4] - Pulp production at Metsä Fibre's Joutseno mill has been paused for four months since June [4] - The overall impact of pulp on Metsä Board's performance in Q3 2025 was "clearly negative" [5] Strategic Initiatives - The company has initiated a cost savings and profitability improvement program aimed at increasing its EBITDA run-rate by €200 million by the end of 2027 [5] - The program is progressing as planned in Q3 2025 [5] Future Outlook - No specific operating result guidance was provided for upcoming quarters, but the company expects positive cash flow from operations [6] - A slight seasonal decrease in paperboard delivery volumes is anticipated from the previous quarter [6] - Results for Q4 2025 may include insurance claims related to past incidents at Metsä Fibre's bioproduct mill [6] External Factors - Falling pulpwood prices in Finland and Sweden are expected to support profitability from 2026 [7] - Exchange rate movements, including hedge effects, are projected to negatively impact Q4 2025 and Q1 2026 [7] - The CEO highlighted that high pulpwood prices and a weak dollar are affecting the competitiveness of European paperboard and pulp producers [8]