What impact will the implementation of the new standard in May have on the paper industry team?

According to the industry division, papermaking only accounts for a small proportion in light industry. There are roughly 20 listed companies whose main business is distinct, and their performance is uneven. However, it is this small team that has quietly stepped out of the big market in this year's market rebound. All stocks outperformed the broader market, and the shares of Kane and Murray Paper doubled. What inspired the enthusiasm of this plate?

The implementation of the new environmental standards in May is conducive to the recovery of the industry's prosperity.

The new discharge standard will be implemented on May 1, which not only greatly increases the sewage discharge limit, but also adds four control indicators. The scattered papermaking capacity of the industry, especially the low-grade cultural paper with non-wood pulp as raw material, which accounts for 80% of the pollution sources of the industry, is the focus of elimination. Domestic advanced paper machines have basically been put into production since the mid-1990s. The inventory capacity before 1.994 can be roughly classified as backward capacity, which should not be lower than the output of 2 1.35 million tons in that year, which is also consistent with the backward capacity of 2 1 10,000 tons in 2005 according to the statistics of the association. The scale elimination of backward production capacity began in 2006. Up to now, 5.47 million tons have been eliminated in three years, and the inventory still reaches about150,000 tons, accounting for 17% of the current capacity of about 90 million tons, which means that the strict implementation of standards will increase the operating rate of the industry by the same percentage point, which will have a significant impact on the prosperity of the industry. Therefore, the current relative depression of the demand side of the industry should not be the only factor to judge the prosperity of the paper industry, and the reduction of supply is as important as the increase of demand.

Observing that in recent two years, the Ministry of Environmental Protection has strictly enforced the law. For example, it strictly implemented the energy conservation and emission reduction plan, and closed more than 1000 small factories every year from 2006 to 2008. The "one-vote veto" of project approval has been repeatedly honored, which makes us believe that its law enforcement means will continue. During the year, some work plans of the Ministry of Environmental Protection are worthy of attention: first, focus on special inspections of heavily polluting industries and key pollutant discharge enterprises in key river basins from April to June; Second, in July and August, conduct a comprehensive inventory of construction projects since July 2008, focusing on rectifying unapproved projects; March, September and June 5438+ 10 to conduct a comprehensive inspection of the paper industry to promote pollution reduction and structural adjustment. This shows that the catalytic effect of environmental protection is still continuing.

Therefore, under the policy background of "maintaining growth, promoting development and adjusting structure", "adjusting structure" is more suitable for the adjustment direction of paper industry than "maintaining growth".

The growth rate of investment in fixed assets has slowed down, and its self-purification function is outstanding.

The self-purification function of the industry is highlighted in investment. In the first two months of this year, the investment in fixed assets in the whole industry was 5.35 billion yuan, down 1 1.3% compared with 6.03 billion yuan in the same period last year, becoming the first month of cumulative year-on-year negative growth in recent years. If we consider the environmental protection investment made by the industry in response to the May standard this year, the decline will be even greater. The industry does not necessarily need negative investment growth to improve prosperity. The growth rate of 16.9% in 2006 brought about a continuous rise in the prosperity in the next year and a half.

On the one hand, the current decline in investment growth rate comes from manufacturers' pessimism about the future prospects of the industry; On the other hand, it also comes from the shutdown of projects under construction and the postponement or even cancellation of proposed projects. The suspension of the project is of substantial significance to the current weakening of supply.

It is expected that the peak sales season will come and the recovery will continue.

The second quarter is the inherent sales peak season in the industry, and some manufacturers even reported the increase in orders since March. The rebound in demand also benefited from the excessive destocking of pre-dealers and downstream printing plants. At present, there are stock replenishment in these two links of the industrial chain, which will exceed the normal consumption of paper products, that is, the combination of stock demand and production demand may accelerate the demand rebound in stages, while paper manufacturers generally reflect that the current order is sustainable, which is in line with the strong correlation between paper products demand and economic growth, and it is difficult for paper products consumption to have a sustained negative growth under the background of economic growth.

The first quarter improved slightly. In the fourth quarter of 2008, production enterprises took the initiative to go to inventory. By the end of June this year, 5438+ 10, the inventory of high-priced raw materials had been basically digested, the turnover days of finished products were gradually reduced, and the inventory pressure of production enterprises and distributors was reduced. The first quarter is expected to become a low profit point for the whole year, and pay attention to the rebound of gross profit margin of the paper industry in the second quarter. 1-In February, the industry profit declined as expected. Due to the weak paper sales since the fourth quarter, the low capacity utilization rate and the continuous decline in international pulp prices, the company's profit in the first quarter was poor. However, with the stabilization of wood pulp prices and the recovery of demand in the second quarter, we expect the gross profit margin of the industry to rise to the historical average of about 14% in the future. Investors are advised to pay close attention to the paper industry in the second quarter.

The loss of self-pulping was in line with previous expectations, and domestic enterprises imported a large number of wood pulp to lock in the production cost in the second quarter. Due to the sharp drop of international pulp price and the rigidity of domestic wood cost, the profit of pulp production has dropped rapidly. At present, the tax-included cost of domestic wood pulp production is 4200-4500 yuan/ton, so under the background that the international pulp price is less than 4000 yuan, domestic self-pulping is bound to lose money. However, it is worth noting that domestic paper enterprises vigorously imported wood pulp in the first quarter. In February, the import volume reached1180,000 tons, up 44% from the previous month. Under the background of stable pulp price, a large number of domestic imports in the first quarter can lock the production cost at a low level, which is conducive to the improvement of profits in the second quarter.

Capacity expansion+elimination of backward leading enterprises will benefit

The recovery of domestic demand has led to the rising demand for raw materials and the recent rebound in pulp prices. At present, the price of needle broadleaf pulp has rebounded by about 65,438+05% from the low point, while manufacturers and raw material distributors are more enthusiastic about buying wood pulp, which

Compared with other parts of the world, the price of pulp is still in decline. Although the rise of pulp price will promote the rise of paper price, it can not lead to the increase of paper profit itself, which is determined by the supply and demand relationship of paper products. However, in the process of promoting the rise of paper products by pulp prices, paper distributors often add fuel to the fire, which makes the increase of paper prices exceed the price of raw materials, and paper enterprises benefit invisibly, just as dealers sold their stocks in the second half of last year and paper enterprises lost money. Based on the reasons that the global stock of wood pulp is still high, the start-up of pulp mills is declining, and pulp projects may still increase in the future, we judge that the pulp price lacks the motivation to continue to rise. Unless the exchange rate factor continues to play a role, its promotion to domestic paper prices is likely to be phased. Although the increase of pulp price may not bring sustainable substantial benefits to paper manufacturers, it at least reflects the improvement of paper demand, and the interests of manufacturers will come more from the improvement of paper supply and demand.

Because the first quarter is the traditional off-season of papermaking consumption, the sales of paper enterprises are not smooth, and the price of raw materials fell twice in February, which led to the low profit level of enterprises in the first quarter. But for the whole year, the stabilization of pulp price in the second quarter is a high probability event, which will lead to some inventory demand in the downstream, and with the arrival of the peak demand season in the second quarter, the chain data of the paper industry will improve rapidly. Therefore, the profit rebound of paper enterprises can be actively laid out under the guidance of valuation level.

The demand of paper industry is relatively rigid (except for box board paper), and the expansion and elimination of production capacity have become the main driving factors of the prosperity. When the industry profit exceeds the industry average profit, the new production capacity gradually enters and eventually forms a high point of prosperity; When the profit of the industry goes down or even loses money, the production capacity will gradually withdraw (except for environmental protection to eliminate backward small production capacity factors), so that the rest (surplus and expansion) can get reasonable profits. In the long run, due to the high homogeneity of products in the paper industry, the profitability of the industry must be maintained at the level of long-term average industrial profit rate. It is impossible to make long-term high profits and long-term losses.

The three criteria of company status+product demand+valuation determine the idea of stock selection.

In terms of industry investment, China Merchants Securities believes that there are three main points: 1. Look at the company's status, management level and share growth ability; 2. Look at the size of the product stage, that is, the demand growth of sub-industries; 3. Cheap degree of hard valuation (PB, dividend yield and micro-company research).

(A) the status quo of the company-mergers and acquisitions make heroes.

In the overall downturn of the industry, risks and opportunities coexist. Leading enterprises can shorten the technology development cycle and cost, expand market share, accelerate the pace of becoming bigger and stronger, and become large pulp and paper enterprises with advanced level and international competitiveness by merging and reorganizing enterprises with resources and technological advantages at home and abroad.

Both the light industry revitalization plan and the environmental protection policy encourage merger and reorganization, which promotes the improvement of industry concentration. Looking for beneficiaries in the change of production capacity.

(b) Look at the increasing demand for products-different paper types have different stage sizes.

From the perspective of per capita paper consumption, per capita paper consumption is highly positively correlated with the level of economic development. With the acceleration of urbanization in China, the consumption of paper and high-grade paper will increase. In 2006, China's per capita paper consumption was 54 kg, which was 76% of the global average of 70.8 kg, far below the average of Europe 139 kg and North America's average of 292 kg. There is still a lot of room for long-term growth.

The demand growth potential of unused paper is very different. The annual consumption and trend of various kinds of paper in China suggest that the paper with strong growth momentum is: white cardboard, offset paper, coated paper, boxboard paper and newsprint from strong to weak.

As a high-grade packaging paper, white cardboard is the strongest industry. While the overall packaging demand increases, there is also an erosive growth from low-end packaging (transportation packaging) to high-grade packaging (consumer packaging), achieving double growth.

As cultural paper, offset paper and coated paper have strong growth ability.

Due to the rapid development of the Internet and the global non-intermediation (print media), newsprint is the weakest paper.

The demand for cardboard is highly related to economic prosperity, and it is the most unstable paper.

(3) Hard valuation-get involved when it is cheap enough.

Generally speaking, there is not much difference between products and technologies in papermaking enterprises, and the average profit rate of the industry is its inevitable result (leading enterprises may have a slightly higher profit rate). The principle of investing in paper companies should be hard valuation (PB and analysis of the company's industry competitiveness), that is, when the price is cheap enough, it will be involved, and when the valuation is less attractive, it will be out. Paper companies do not have the potential for long-term high valuation.

(4) According to the above three points, the companies are classified as follows:

Sun Paper: the leading company in the strongest industry (white cardboard), with a high sub-industry status and a reasonable hard valuation slightly higher than the average level of the paper industry.

Jin Dong Paper Industry: a leading enterprise in a strong sub-industry (coated paper and household paper). The listed companies will increase the proportion of paper companies in the total market value after listing.

Chenming Paper: the leading enterprise in sub-sectors is the winner of the paper enclosure movement from history to the present. The disadvantage is that every paper type is the first in China.

Annie shares: a strong enterprise in a strong sub-industry (paper for business activities). At present, the industry is highly decentralized and the demand is growing rapidly. The overall market and share increase have double growth opportunities.

Bohui Paper and Murray Paper: Strong enterprises (cultural paper) with strong sub-industries.

Yueyang Paper: Sub-industries are relatively stable, and China has the best natural endowment of "forest-paper integration", but compared with the whole world, China has a very poor natural endowment of "forest-paper integration".

Huatai Co., Ltd.: Small sub-industry stage (weak demand growth ability), the world's largest leading newsprint enterprise, with poor growth and strong stability. When hard valuation (cash dividend rate, PB, PE) is attractive, there will be high-security investment opportunities.

Hexing packaging: Sub-industries have strong volatility and fierce competition, but high dispersion. Standardization has been done well, and the prospect of extensional growth can be expected.

Shanghai Caanen maternal and infant products co., ltd