Wuzhou Special Paper(SH:605007)2023-08-14 08:12Financial Performance - In the first half of 2023, the operating revenue was CNY 2.84 billion, a year-on-year decrease of 4-5% [3] - The main business cost increased by 7% year-on-year, resulting in a net loss of CNY 12 million [3] - Sales volume for paper products was 426,000 tons, down from 495,000 tons last year, primarily due to the impact of the production line transition [3] Future Outlook - Full-year sales volume is expected to be between 1,000,000 and 1,050,000 tons [3] - Cost pressure is anticipated to ease in the second half of the year following the production launch of 300,000 tons of chemical pulp at the Jiangxi base [3] - The price of products is expected to stabilize, with various paper types having issued price increase notices recently [3] New Projects - The Jiangxi base is set to launch a 300,000-ton chemical pulp production line by the end of September 2023, with full production expected in Q4 [3] - The first phase of the Hanchuan project in Hubei is expected to be operational by June 2024, with a designed capacity of 600,000 tons of industrial packaging paper [3] Profitability and Cost Management - The profitability of cultural paper is expected to improve with the self-supply of chemical pulp [4] - The cost of wood pulp inventory in July was close to market procurement prices, indicating a favorable cost advantage for self-produced chemical pulp [4] - Energy costs have stabilized post-Q2, with coal prices ranging from CNY 800 to 850 per ton [4] Market Dynamics - The market for food white cards has seen new additions this year, indicating significant changes in supply and demand dynamics [5] - The demand for tracing paper is reported to be good, suggesting a positive market outlook for this product line [5]