Meeting minutes of receiving institutional investors’ research activities
1、 Institutional Research
Meeting time: February 22, 2022
Meeting place: company conference room (No. 69, Tianhu South Road, Qujiang District)
Conference form: teleconference communication
Participants: Wang Yuzhe, Secretary of the board of directors, China Securities Co.Ltd(601066) securities, Gf Securities Co.Ltd(000776) asset management, Zhongtai Securities Co.Ltd(600918) asset management, Shenwan asset management, founder asset management, thousand joint venture management, Guangfa fund, Guangbao fund, Nanfang fund, power Jiahe fund, lingzhan investment and Yude investment
2、 Main contents of teleconference communication
1. Introduction to the development history of the company
Since its establishment in 2001, the company has always taken high-performance paper-based functional materials as its main business, closely followed the demand changes in the fields of consumption and industry, and achieved 20 years of rapid growth. As one of the largest R & D and production enterprises of paper-based functional materials in China, the company is committed to providing one-stop solutions for downstream customers. It has five production bases in China, including Zhejiang Qujiang, Henan Neixiang and Zhejiang Changshan, Guangxi Laibin (under construction) and Hubei Shishou (under construction). The company and its holding subsidiaries and joint ventures now have 50 modern papermaking production lines, One pulp production line, 21 coating production lines and 7 super calenders, and has the production capacity of the whole industrial chain of forest land, chemical industry, pulping, energy, logistics, base paper and paper products. The industrial width and industrial depth layout are relatively perfect. Up to now, the annual production capacity of the company and its joint venture company has reached 1.1 million tons, and there are more than 2600 downstream direct sales customers. At the same time, the company also takes the R & D and manufacturing of paper-based functional materials as the core, actively promotes the realization of made in China 2025, implements the intelligent management of factories, and actively arranges in new materials, new energy and upstream and downstream integration such as energy manufacturing, chemical materials, industrial water treatment and solid waste treatment, distributed photovoltaic power generation, logistics and C-end products. While expanding its main business and giving full play to its scale advantages, the company’s product diversification advantages, flexible production capacity, technical scheme advantages, environmental protection governance advantages, management innovation advantages, brand customer advantages and the company’s “home culture” advantages are important guarantees for the stable development of Xianhe Co.Ltd(603733) . At the same time, the company also attaches great importance to sustainable development, actively promotes the use of new energy, and is contributing to the sustainable development of the industry together with suppliers and customers upstream and downstream of the industrial chain.
2. I would like to ask about the production of the company and the price rise of finished paper
At present, the company has fully released production capacity and stable operation. After the Spring Festival, it is the traditional peak season of the market, and the overall delivery volume of the company will be improved. In terms of the current market environment, the company has made positive price adjustment, and the subsequent company will dynamically track the market price trend and adjust the product price in time according to the market conditions and other factors.
3. What is the current price of wood pulp and its impact on the company
At present, the overall wood pulp is still in a stable state, and the price is expected to rise in the second quarter. The company will timely adjust the pulp inventory in combination with the production order and wood pulp price, especially when the price is low, reasonably increase the inventory preparation, and adjust the price in the downstream market according to the rising cost of some raw materials, Reasonably digest the possible impact of rising costs. At present, the company has sufficient pulp inventory to support the production and operation of the company. At the same time, the company’s management team is stable, has rich experience in cost control, and has maintained a stable and good cooperative relationship with raw material suppliers for many years, which can well ensure the supply of raw materials. The company is also actively adjusting relevant sales prices and market strategies according to the current changes in market costs.
4. How about the 300000 ton food paperboard project in 2022
The plant of the 300000 ton food cardboard project of the company is under construction. It is expected to complete the construction of the plant in May 2022 and start production from July to August. The company will design and assemble machines and equipment according to the needs of different customers. The project is mainly based on new high gram and heavy high-grade food packaging materials, which are mainly used for the packaging of high-grade food and drugs, such as medicine boxes, cigarette boxes, milk bags, meal bags, fast food, etc. it has the characteristics of replacing plastic products, innovative environmental protection, cleanliness, oil and temperature resistance, and is degradable and pollution-free.
5. What is the company’s investment in environmental protection and relevant certification
The company is the first batch of “Zhejiang green enterprises” in Zhejiang Province and the “national green factory” named by the Ministry of industry and information technology. It has always attached great importance to environmental protection and sustainable development and adhered to the sustainable development path of circular economy. The company has obtained professional certifications such as ISO14001 environmental management system, FSSC food safety system, FSC / COC and PEFC / COC China forest production and marketing supervision chain. At the same time, the company has established an energy big data analysis system, which uses automation and information technology to implement centralized dynamic monitoring and digital management on the consumption of water, electricity, steam and other main energy of the production line, so as to optimize energy consumption and improve efficiency. In recent years, the company has also invested in the construction of pollution control, green energy and energy saving and consumption reduction facilities such as alkali recovery system, middle water treatment system, white water recovery system, black liquor comprehensive utilization system and Cecep Solar Energy Co.Ltd(000591) power generation system, which has achieved the discharge of wastewater, waste gas and noise up to standard, the legal and compliant treatment of solid waste, and remarkable results in energy conservation and consumption reduction.
6. What is the production status of the company’s new production line
Xiawang paper PM5 project has been successfully put into operation in late December 2021, releasing a production capacity of more than 70000 tons; Zhefeng pm9 project in Changshan area of the company has been put into operation in November 2021, releasing a capacity of 40000 tons, and the two production lines are full-load production. In addition, the company carried out the technical improvement project of Zhefeng PM4 in 2021, restoring the production capacity of 40000 tons. The new production capacity of the company is mainly composed of release materials, transfer materials, food packaging and medical packaging materials.
7. What is the production capacity of Guangxi and Hubei bases
The company’s investment project in Guangxi base is a high-performance paper-based new material and fiber preparation project with an annual output of 2.5 million tons. It includes 1.5 million tons of pulp fiber preparation project (including 1 million tons of chemical pulp and 500000 tons of chemical mechanical pulp), 1 million tons of high-performance paper-based new material paper project and supporting auxiliary facilities such as cogeneration, logistics supply chain and energy management of the main project, as well as other supporting projects for the extension of the industrial chain. It is expected to be put into operation in the second half of 2023. The main products of the future production line of the project will focus on food, medical treatment, transfer printing, daily consumer materials and so on.
The investment project of the company in Hubei base is a high-performance paper-based new material project with an annual output of 2.5 million tons. Including 900000 tons of pulp fiber materials (reed based pulp fiber materials, chemical mechanical pulp fiber materials), 1.4 million tons of paper-based functional materials, 200000 tons of coated paper deep-processing materials, supporting alkali recovery, middle water treatment, thermoelectricity and other projects. It is expected to be put into operation by the end of 2023. The main products of the future production line of the project will focus on furniture decoration, food series and so on.
The company hopes that the projects in Guangxi and Hubei bases will make more use of local forest resources and plant fiber advantages, break through the bottleneck in the preparation of special pulp raw materials, layout the upstream industrial chain, expand the industrial scale of the company and strengthen the expansion of advantageous products.
For the specific progress of the project, please refer to the company’s project progress announcement disclosed by the company in legal information disclosure media such as Shanghai Stock Exchange. The subsequent company will disclose the information in strict accordance with the requirements of information disclosure according to the actual situation, and investors are invited to pay attention to the company’s announcement information.
Xianhe Co.Ltd(603733) board of directors February 24, 2022
