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Light manufacturing industry: paper focus on peak season performance, packaging focus on sub-sectors to improve opportunities.
Release time:
2024-06-18
2024-06-17, Dongxing Securities released a research report on the light industry manufacturing industry, the report pointed out that paper focus on peak season performance, packaging focus on sub-areas of improvement opportunities.
Review the performance of the paper packaging industry: pulp and paper prices and paper enterprise cost dislocation operation, 23 years of wood pulp paper profit before low after high. 2023 cultural paper, white cardboard, special paper earnings overall pressure, quarterly point of view is showing a low after the high trend, the main factor is the pulp and paper prices and paper costs of the dislocation of the operation. In the first half of the year, due to the short-term rapid and substantial decline in pulp prices, paper prices are also under short-term pressure, while the cost of paper enterprises is relatively lagging behind. In the second half of the year, with the recovery of pulp prices, the arrival of the peak season, paper prices to get support, and paper enterprises cost dividends appear, earnings show a repair trend. Relatively speaking, cultural paper and specialty paper with better supply and demand perform better than white cardboard. As of Q1 2024, the cost of paper companies is still relatively low, and earnings are stable month-on-month. From the impact of imported paper to the peak season price increases, 23 years of box tile paper earnings quarter by quarter repair. Affected by the zero tariff policy of some imported paper, the import volume of corrugated paper in 2023 increased, and the paper enterprises were impacted by the pressure of paper price and the increase of downtime loss at the initial stage, and the profit pressure was obvious. Subsequently, with the paper enterprises controlling the purchase price of waste paper, the production and sales gradually improved, and the demand released in peak season, the paper price and the profit of paper enterprises improved. The current sector profitability is still fragile, 24 years Q1 off-season earnings level is relatively low, but better than the same period last year. Paper packaging revenue is weak, metal packaging benefits raw materials price reduction. Affected by the pace of demand repair, the paper packaging sector revenue was under pressure in 2023, with 24Q1 revenue flat at a low base. As paper prices fell year-on-year, the overall gross profit growth rate of the sector was slightly better than that of the revenue side. The price of metal packaging raw materials fell in 2023, and earnings increased significantly despite lower selling prices dragging down revenue. 24Q1 sector revenue earnings increased year-on-year, or benefited from the better business climate of downstream beverage consumption. Looking to the future: wood pulp cost pressure test is approaching, pay attention to price increases and pulp paper integration. Since March 2024, the price of outer plate wood pulp has continued to rise, driving up domestic pulp prices. Considering the lag of pulp price in the paper enterprise cost end, it is expected that the cost of pulp for paper enterprises will gradually rise in Q2-Q3. Looking ahead to the second half of the year, although there is more production capacity in the broad-leaved pulp, but the supply of coniferous pulp is tight, while the overseas pulp demand boom or will continue, also do not rule out the year there are still supply disturbances. It is expected that the speed and magnitude of the pulp price correction in the second half of the year will be limited, and the cost of paper enterprises may be difficult to fall significantly during the year. Therefore, paper companies need to pay attention to product price increases and the relationship between supply and demand in the industry. Q2 demand is weak, cultural paper, white cardboard prices appear a certain correction. Follow-up, the demand boom is high, the peak season there is a certain demand, the industry's new production capacity pressure is small, price increases are more hopeful to land, relatively optimistic about the cultural paper, special paper plate. In addition, a higher degree of pulp and paper integration or ushered in the promotion, external sales of wood pulp/dissolved pulp paper enterprises, but also have the advantage of coping with cost pressures. In summary, it is recommended to pay attention to the integrated layout of forest pulp paper, pulp dissolving pulp business is expected to contribute to profit, the peak season is expected to benefit from the cultural paper just needed by the sun paper industry (002078), as well as Q1 to promote price increases, the degree of pulp and paper integration ushered in the promotion of crane shares (603733). Box tile paper prices short-term weakness, peak season earnings are expected to pick up. Since entering Q2, box board paper, corrugated paper price performance is weak, or indicate that the short-term demand business climate is insufficient, downstream stocking is more cautious. Considering the simultaneous decline in national waste prices, waste paper pulp import costs or supported by external waste prices, it is judged that the profitability of the Q2 sector is still relatively low. Looking ahead, off-season paper prices are expected to be low volatility, around September into the traditional peak season, paper prices are expected to benefit from the release of demand to be boosted. The current U.S. waste prices rise, the cost advantage of imported paper will narrow, the impact on the supply side will weaken, conducive to the paper enterprises off-season stable prices, peak season price increases landing. Earnings in the packaging segment improved, while focusing on dividend performance. In terms of paper packaging, consumer electronics packaging is expected to benefit from a downstream recovery, with a relatively better demand outlook, given the boom in downstream demand. The current cost of packaging paper is more stable, the cost of the package is expected to be controllable year-on-year. It is recommended to pay attention to the release of the peak season performance of leading companies. Metal packaging, demand growth is expected to be relatively stable, cost, aluminum prices since April 2024 higher, tinplate prices are slightly weaker, it is expected that two pieces of cans profit or short-term pressure, and three pieces of cans business accounted for a higher proportion of the package enterprises or better earnings performance. In addition, some packaging companies have achieved stable dividends in recent years, with a good level of dividend yield. Focus on packaging companies with relatively high dividend yields, stable performance or a pick-up period. It is recommended to pay attention to the consumer electronics packaging leader Yutong Technology (002831), which will increase dividends in 2023. Risk Warning: Economic growth is less than expected, raw material price fluctuations exceed expectations, industry competition intensifies.
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