Hong Kong Stock Concept Tracking | Guangdong Paper Industry Releases First Anti-Overwork Initiative, Industry Faces Intensive Price Hikes (Including Concept Stocks)

According to the Zhitong Finance APP, recently, the Guangdong Provincial Paper Industry Association issued a "Proposal to Promote the 'Anti-Internal Competition' and High-Quality Development of the Paper Industry in Guangdong Province." This is the first "anti-internal competition" proposal issued in the domestic paper industry. The proposal outlines four initiatives: first, resolutely resist low-price and disorderly competition to maintain fair market order; second, actively optimize capacity structure and promote technological equipment upgrades; third, strengthen quality leadership and innovation-driven development to achieve a transformation in value competition; fourth, establish a self-discipline and collaborative mechanism within the industry to build a good ecosystem. It is understood that Guangdong Province is the second-largest paper-producing province in the country, with a paper and paperboard output of 26.4833 million tons in 2024, reaching a historical high and a year-on-year increase of 8.1%, accounting for 16.7% of the national total output of paper and paperboard. Among this, the output of packaging paper accounts for 72.3% of the total output in the province, with main products including boxboard and corrugated base paper. CITIC Construction Investment Securities stated that with the intensive introduction of "anti-internal competition" policies, attention should be paid to investment opportunities in the paper and packaging sectors. The paper and metal packaging industries are experiencing serious overcapacity and have long been in a low-profit state. Some types of paper and two-piece metal cans have a high concentration, which is expected to benefit from the implementation of "anti-internal competition" policies. It is recommended to focus on leading enterprises in the industry that excel in environmental protection and energy consumption levels, and possess advantages in the industrial chain and scale. It is worth mentioning that recently, the paper industry has experienced a wave of price adjustments. Leading companies such as ND PAPER, Jiangxi Lee & Man Paper, and Hubei Rongcheng Paper have successively issued price increase notices, announcing price hikes for corrugated paper, recycled kraft paper, and other products starting from August 1, with an adjustment range of 30 yuan/ton. Since the beginning of this year, paper companies have frequently issued price increase notices in March-April, May, and July, indicating a significant acceleration in the frequency of price adjustments in the industry. The rise in raw material costs has become the main driving factor for this round of price increases. According to monitoring data, as of July 21, the market price of waste yellow board paper was 1,475 yuan/ton, an increase of 15 yuan/ton compared to June 30. The price increase of waste yellow board paper in July was mainly due to overall tight supply. Rainy weather affected the trading of waste paper in some regions, leading to a decrease in the overall supply of waste yellow board paper. Additionally, benefiting from the warming macroeconomic fundamentals and the popularity of "anti-internal competition" policies, domestic pulp futures prices have also continued to rebound recently. In the first half of this year, the packaging paper industry's main market for corrugated and boxboard paper continued the supply-demand imbalance pattern from last year, with prices showing an overall downward trend. According to data monitoring from Zhuochuang Information, the average market price of corrugated paper in China in the first half of this year was 2,682 yuan/ton, a year-on-year decrease of 2.44%; the average market price of boxboard paper in China was 3,616 yuan/ton, a year-on-year decrease of 3.42%. From the industry's profitability perspective, the gross profit margin of the corrugated paper industry in the first half of the year was 9.97%, a decline of 1.11 percentage points compared to the same period last year; the gross profit margin of the boxboard paper industry was 18.96%, a decline of 1.24 percentage points compared to the same period last year, indicating that the overall profitability of the industry continues to be under pressure. Industry insiders believe that the recent series of price increase notices from paper companies can be seen as a "counterattack" by the packaging paper industry against the continuously declining market conditions this year. Analysts point out that this collective price increase by leading paper manufacturers is a tentative process of raising prices, with clear strategic intentions. On one hand, it aims to stimulate downstream packaging and carton factories to increase purchases, thereby accelerating the paper mills' own shipment speed and reducing inventory pressure Guotai Junan Futures stated that historically, commodities in the paper industry chain exhibit significant post-cycle characteristics. In terms of performance, the price increase rhythm of the pulp and paper industry chain lags behind that of industrial products in general, with raw materials lagging behind finished products. Combined with the recent surge in the "anti-involution" market sentiment, sectors with price increase potential may continue to attract capital attention. Related Concept Stocks: Chenming Paper (01812): Chenming Paper issued a profit warning for the first half of 2025, expecting a net loss attributable to shareholders of 3.5 billion to 4 billion yuan, compared to a profit of 28.65 million yuan in the same period last year. Chenming Paper explained that the decline in performance is due to the main production base still being in a shutdown maintenance state, with a significant year-on-year drop in production and sales, affecting revenue and causing a sharp decline in profits; due to the shutdown impact, the company has made provisions for impairment and bad debts on some assets and receivables. Nine Dragons Paper (02689): Citigroup released a research report stating that based on expected cost savings, Nine Dragons Paper's profitability is expected to improve, upgrading the company's rating from "neutral" to "buy," with an expected total return potential exceeding 55%. The bank indicated that Nine Dragons Paper will announce its performance for the second half of this year in September, with core profit attributable to shareholders expected to surge by 58% year-on-year to 811 million yuan, while revenue is expected to remain flat at approximately 28.782 billion yuan. Therefore, Citigroup anticipates that the company will announce a positive profit warning in August, about a month before the performance release. Lee & Man Paper (02314): Lee & Man Paper is a global paper manufacturing enterprise primarily producing packaging paperboard, gray cardboard, and household paper products, with multiple production bases and offices in China and overseas. The company is one of the global leaders in the paper industry, with an annual production capacity exceeding 9 million tons, including approximately 7 million tons of packaging paper, about 1 million tons of pulp, and around 1.3 million tons of sanitary paper. As of the 2024 annual report, Lee & Man Paper's total operating revenue was 24.073 billion yuan, with a net profit of 1.216 billion yuan