Specialist
Former divisional head at Nine Dragons Paper Industry (Chongqing) Co Ltd
Agenda
- Raw material supply shortage in the paper packaging industry – impacts on supply and demand, price dynamics and downstream industry
- Domestic waste paper supply prediction, price trends of raw materials and paper packaging, and companies’ profit improvement potential after the novel coronavirus impact is mitigated
- Comparison of Nine Dragons (HKG: 2689) and Shanying (SHA: 600567) – raw material acquisition abilities and cost advantages
- Paper-making cost breakdown, implicit costs and cost management
Questions
1.
According to public information, prices of white cardboard paper, linerboard paper and corrugated paper have gone up. Could you analyse the causes of the paper packaging price increase?
2.
Is the inventory mainly from the production resumed after the Spring Festival?
3.
If 50% of the production lines are in operation, what is the cost for manufacturing a tonne of paper? What about the cost if 60% of the production lines are in operation?
4.
What is the reasonable inventory level for paper manufacturers?
5.
What do you think are the supporting factors for paper manufacturers to raise prices?
6.
Among white cardboard paper, linerboard paper and corrugated paper, which one is affected the most? Regarding the downstream market segment such as paper packaging for mobile phones or express logistics cartons, which segments do you think have less demand?
7.
What do you think will be the general paper packaging price trend? What will the percentage of the price change of the whole year? What do you think will be the price level for each quarter?
8.
What have been the price trends of raw materials so far this year? What about the price trends of foreign and domestic waste paper raw materials?
9.
It’s said that the import restraint on foreign waste paper this year will cause a gap in raw material supply. Given the uncertainty of the downstream demand, how big do you think the gap will be this year?
10.
In terms of major paper manufacturers, such as Nine Dragons, Shanying and Lee & Man Paper, which one is stronger in the acquisition of domestic paper waste?
11.
You mentioned increasing raw materials by importing waste paper pulp from Southeast Asia. What are main risks behind this model?
12.
Do Nine Dragons, Shanying and Lee & Man Paper plan to develop overseas business?
13.
What is the development direction of the base paper industry? Which company will outperform others? Will there be a collaborated price protection among companies or will they still compete against each other?
14.
In addition to raw materials and labour, paper manufacturers differ greatly in the criteria of the equipment depreciation, such as the service life. Why are they so different in the depreciation of paper machines?
15.
Do Nine Dragons, Shanying and Lee & Man Paper invest heavily in equipment?
16.
In terms of the cost of raw materials, labour and the depreciation of machines, which one still has room for decline?
17.
How competitive are Nine Dragons, Shanying and Lee & Man Paper in costs in comparison with the industry average? What is the gap?
18.
How do you expect the profit of base paper industry in 2020? What is the approximate net profit per tonne in 2020? Do you think the profit in 2020 will be more than that in 2019?
19.
Among Nine Dragons, Shanying and Lee & Man Paper, which one will have a better outlook?
