Xianhe(603733)2021-03-10 10:31Company Overview and Development - Founded in 2001, the company has grown rapidly over 20 years, focusing on high-performance paper-based functional materials [2] - Operates 3 paper production bases in China with 47 modern paper production lines, 1 pulp production line, 21 coating production lines, and 7 super calenders [2] - Annual production capacity exceeded 900,000 tons in 2020, expected to reach 1.1 million tons in 2021 [2] - Serves over 2,000 direct customers with a diversified product portfolio and strong technical, environmental, and management advantages [2] New Subsidiary and Product Expansion - Established Zhejiang Kerui New Materials Co Ltd on February 20, 2021, focusing on new material R&D, paper product sales, and eco-friendly products like paper straws [3] - The subsidiary will develop more high-margin products and enrich the company's product structure [3] Industry Position and Future Strategy - Positioned to capitalize on the global "paper replacing plastic" trend [4] - Strategic focus on new tobacco, consumer food, healthcare, and express logistics industries [4] - Plans to expand into global supply chain markets and collaborate with international enterprises [4] Raw Material and Cost Management - Paper pulp cost fluctuations have limited impact due to its smaller proportion in total production costs [5] - Maintains sufficient raw material inventory and adjusts product prices to offset cost increases [5] - Well-established management system to handle market changes with weak cyclicality [5] Capacity Expansion and Utilization - 2021 is a year of capacity release with new production lines expected to reach 1.1 million tons [6][7] - 300,000-ton food-grade paperboard project to be operational in the first half of 2022 [7] - High capacity utilization due to close collaboration with downstream customers [7] - Typical project implementation cycle ranges from 1.5 to 2 years [7] Pricing Strategy and Market Demand - Implemented price increases of 1,000-2,000 yuan in late February due to strong market demand and full production capacity [8] - Continues to monitor raw material prices and market acceptance for potential future price adjustments [8] Customer Base and Customization - Serves over 2,000 valuable downstream customers with customized production capabilities [9] - Actively expanding market presence and exploring potential clients [9] - Subsidiary Henan Xianhe Specialty Pulp & Paper Co Ltd has 51,000 tons of self-produced pulp capacity [9] Pulp Production and Future Projects - Produces various specialty pulps including poplar, wheat straw, and Chinese alpine rush [10] - Guangxi Laibin project with total investment of 11.8 billion yuan includes 2.5 million tons of high-performance paper-based materials and fiber preparation [10] - Plans to start pulp production lines first, with capacity expected in 2023 [10] Service Provider Transformation - Transitioning from supplier to service provider in the high-performance paper-based functional materials field [11] - Offers comprehensive solutions including R&D, production, technical support, and after-sales services [11] - Provides customized development and testing services to meet specific customer requirements [11]