Last Year, Soaring Paper Prices Printed Bosses Are So Profitable? 1

- May 27, 2018-

Last year, soaring paper prices printed bosses are so profitable? 1

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As time progresses, listed companies have announced or revised their 2017 performance forecasts one after another. There are good news, but also worry about. Due to different products and different stages of development, the performance of each company reflects its own operating strength. In the past 2017, what happened to the print and paper industry? In the case of paper prices falling and environmental pressure exerted, the legendary market rebound is indeed a matter of fact, or is it a matter of fact? Here's a quick look.


One year of "killing each other", the three "accidents" of the transcripts for the printing and paper industries

On January 26, the National Bureau of Statistics announced the revenue and profit of industrial enterprises above designated size in 2017.

The industrial enterprises above designated size in the "printing and recording media duplication industry" (abbreviated as "printing industry") have handed in a fairly good transcript: revenue of 816.31 billion yuan, a year-on-year increase of 6.5%; total profit of 55.87 billion yuan, year-on-year Increased by 6.9%. The growth rate of profits was 0.4 percentage points faster than revenue, and the increase in output increased the amount of income. In an effort to reverse the embarrassing situation in which the enterprises in the circle had “increased production without increasing income” over the years. In terms of total profit growth alone, in 2017, it even hit a new high of nearly three years.

Paper price printing

Changes in Revenue and Gross Profit Growth Rate of Industrial Enterprises above Designated Size in Printing Industry in 2014-2017

This change occurred in the sharp fluctuations in the price of paper, and it was surprising that in 2017 the boss was suffering. Considering that industrial enterprises above designated size accounted for more than 60% of the total revenue of the printing industry, it is entirely reasonable to believe that in 2017, the printing market will recover.

Of course, the growth of the printing circle is even brighter, and there is still no way to compare with the papermaking industry. In 2017, the industrial enterprises above designated size in the “Paper and Paper Products Industry” (referred to as “papermaking industry”) achieved revenue of 1,541.31 billion yuan, a year-on-year increase of 13.7%; total profits were 102.86 billion yuan, an increase of 36.2% year-on-year. The profit growth rate is 22.5 percentage points higher than the revenue, and this is called "small yield increase."

When thinking of the past year, in the paper price “roller coaster”-like market, the paper mills and printing factories that should have loved each other and walk hand in hand have unprecedented strained relations. In some regions, even two types of enterprises “declare war” and “mutually” mutually. In the fight to fight the situation, the boss may have to say: The paper mills are not yet making money. Their soaring profits are built on the "pain" of the printing factory.

In this year's ups and downs of paper prices, the performance of some paper mills and paper merchants is indeed unflattering. In the unexpected market turmoil, in order to maintain high prices, gaining profits, chaos occur frequently, losing the morality and mutual trust that should be up and down the industrial chain.

However, comparing the statistics of industrial enterprises above the scale of papermaking and printing industry, we found three "accidents."

First, the revenue of the papermaking industry did not grow faster than expected. Looking back on 2017, how big did the bosses feel about the increase in paper prices? More than dare to say, twenty-three percent no problem, right? If this increase is achieved, as long as the output of the paper industry does not fall, the revenue growth will not be less than 20% at least, but it is actually only 13.7%.

Second, the profit margin of the paper industry is not as imaginary as it is. In 2017, the total profits of industrial enterprises above designated size in the papermaking industry grew by 22.5 percentage points higher than the revenue, and the profit of some listed companies increased by a factor of two. What is the profit margin of the papermaking industry? The overall level of industrial enterprises above designated size is: 8.25%. In the physical industry, of course, not bad, but there is no imagination of the students of Sanhao, and there is no significant advantage with the printing industry. In 2017, the profit rate of industrial enterprises above designated size in the printing industry was 7.93%.

The third is that the falling price of paper does not drag down the profit margin of large-scale printing companies. The rise in paper prices once put pressure on the bosses in the circle, and there are indeed companies that have fallen into losses or have suffered a decline in profits due to the inability to quickly implement price transmission. However, on the whole, the profits of industrial enterprises above designated size in the printing industry rose in 2017, and the profit rate increased by 0.96 percentage point from 2016. For an industry, this increase is considerable.

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