Market review of this week: SW light industry manufacturing industry lost 300 in Shanghai and Shenzhen this week. From February 14 to February 18, 2022, 64.52% of shenwanyi industry recorded positive earnings; SW light manufacturing industry index rose 0.62%, underperforming the CSI 300 index by about 0.46 percentage points in the same period. 75% of the secondary sub industries of SW light industry manufacturing recorded positive earnings, and SW entertainment products, SW papermaking and SW household products increased by 5.04%, 0.91% and 0.05% respectively; Only SW packaging printing recorded negative earnings (- 0.42%). Over 60% of the stocks in the industry recorded positive returns.
Key industry news: (1) the paper supply chain crisis in Europe and the United States has triggered the transfer of some orders to China. Among the main types of paper, the export increment of white card is higher, and relevant manufacturers are expected to benefit. The demand increase superimposed on the cost pressure, and the paper mills’ willingness to continue to raise prices slightly is strong, but on the whole, the downstream is still mainly on the sidelines. People interviewed by Zhejiang paper enterprises said that at present, there are both long and short factors in China’s paper industry. The supply chain crisis in Europe and the United States has boosted the price of pulp, and Chinese enterprises are facing greater cost pressure. However, the supply chain crisis also led to a supply gap in Europe and the United States, causing some orders to return to China. Some white cardboard manufacturers produced continuously during the Spring Festival, which also provided favorable conditions for this round of price increases after the festival. (2) After the manufacturers of corrugated paper and box board announced the price increase, the price of many kinds of paper such as white gray background, cow card, special paper and household paper also increased. The weak demand in the downstream market can not erase the confidence of the upstream paper manufacturers in chasing high profits. A price increase offensive in spring has been launched. Price rise paper enterprises include Zhongnan paper, Dongguan Jintian Paper Co., Ltd., Henan Jianghe Paper Co., Ltd. (3) On February 14, Quzhou Wuzhou Special Paper Co.Ltd(605007) , Zhejiang Huachuan industry and Henan Jianghe paper issued a price increase letter, saying that affected by the rise of wood pulp, coal, chemical industry and other comprehensive costs, the price of grasin base paper will be increased by 500 yuan / ton on February 16 and March 1 respectively, with a total increase of 1000 yuan / ton twice. In addition, several paper enterprises said that they would make adjustments from April 1. (4) The South African Paper Industry Association said that the supply chain interrupted by covid-19 epidemic has directly affected the consumption, demand and recycling of paper products in the country. In addition, due to the interruption of major international routes, the sharp rise in the export price of waste paper in South Africa has promoted the continuous decline of inventory level. Waste paper traders prefer the export market, and the local paper industry cannot compete with the export price.
Maintain the recommended rating of the industry. In the papermaking sector, the recent crisis in the supply chain of papermaking in Europe and the United States has triggered the transfer of some orders to China. The export increment of white cardboard among China’s main types of paper is ahead, and the relevant white cardboard manufacturers are expected to benefit. After the year, the paper mills intensively issued a new round of price increase letters due to the increased demand and superimposed cost pressure. The willingness of paper mills to continue to raise prices slightly is strong, but on the whole, downstream businesses are still mainly on the sidelines. It is suggested to pay attention to the main manufacturers of white cardboard in China: Shandong Bohui Paper Industry Co.Ltd(600966) (600966), Shandong Chenming Paper Holdings Limited(000488) (000488), etc.
Risk tips: covid-19 epidemic continues to repeat, industry competition intensifies, real estate boom is less than expected, downstream demand is less than expected, raw material price fluctuation, tobacco policy risk, exchange rate fluctuation intensifies and other risks.
