The paper industry in the hottest era of M & A the

2022-07-26
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Paper industry in the era of M & A: the overall pricing of domestic paper industry is low

the era of M & A has come. In addition to the emerging petrochemical industry, there are also many M & A opportunities in the food and beverage, retail, paper making, steel, energy and power industries. This time, I will first introduce the paper industry

the paper industry is one of the few industries in China where the total supply exceeds the demand. The market capacity and growth potential are huge. At present, China has become the second largest paper and paperboard consumer in the world. From January to November 2005, the paper industry achieved a total sales revenue of 225.9 billion yuan, a year-on-year increase of 25.8%%, and a total profit of 10.45 billion yuan, a year-on-year increase of 15.9%%, showing a good industry prosperity. Lijianhua, chairman of Huatai Group, predicts that China's paper industry will enter a golden period of development during the 11th Five Year Plan period, and both production and consumption will maintain double-digit growth. UPM is the world's largest printing paper supplier and one of the global Fortune 500 enterprises. Beisongning, group president and CEO of UPM, said that China has become an important platform for the company's production and sales in the Asia Pacific region, and expressed optimism about China's development potential in the future

the continuous growth of paper consumption

the continuous improvement of the paper production and consumption market is directly related to the rapid growth of the domestic economy, the improvement of people's quality of life and the enhancement of health awareness. Nowadays, paper products are no longer limited to the fields of culture, education and life carriers, but become one of the necessary raw materials for all industries of the national economy. New varieties are emerging and products are sold all over the country. With the improvement of environmental protection awareness, the replacement of plastic packaging and cloth bag packaging with paper packaging has effectively reduced energy consumption, which has become a new trend in the packaging market. In addition, the market share of napkins, high-grade toilet roll paper and paper diapers is also expanding rapidly, but there is still a considerable gap with the per capita consumption level of developed countries. It is estimated that by 2010, more than 90% of China's total consumption of 60million tons to 70million tons will be the consumption of modern paper products. The transformation of consumption structure provides a good opportunity for the development of domestic paper enterprises

after phased development, the domestic paper industry has emerged as a leading enterprise, and the degree of equipment modernization is fully in line with international standards. In the past decade, China has introduced nearly 80 paper machines, with an annual production capacity of 12million tons, accounting for one fourth of the total capacity of the national paper machines. According to statistics, from January to September 2005, the sales profit margin of the top ten large paper-making enterprises was 6.68%, significantly better than the industry average of 4.31%. The total sales revenue was 40.91 billion yuan, accounting for 19.6% of the total sales revenue of the industry. The total assets were 86.382 billion yuan, accounting for 20.1% of the total assets of the industry. The total profits were 2.711 billion yuan, accounting for 30.07% of the total profits of the industry

leading enterprises expand rapidly

for example, Chenming paper is currently the largest paper-making enterprise in China. With Shouguang, Shandong as the center, it has set up production bases in Wuhan, Chibi, Nanchang, Qihe, Shanghai, Jilin and other places, built six Chenming industrial parks, set up 13 subsidiaries throughout the country, and has 7 world-class paper-making production lines and 15 domestic leading paper-making production lines, forming a paper-making oriented A production system supporting the production of raw materials, energy supply, machinery manufacturing and other related industries. Paper products include more than 200 varieties of 8 series in three categories: cultural paper, newspaper paper and packaging paper. The leading products are high-grade coated paper, coated white cardboard, low weight coated paper, paper, double offset paper, size book paper, electrostatic copying paper, writing paper, etc

the diversified and high-grade product structure, scale advantages and comprehensive cost advantages can make Chenming in a favorable position in the competition. In order to further open the international market, Chenming has successively set up 10 branches in Hong Kong, South Korea, Japan, the United States, the United Kingdom, Australia, South Africa and other places, gradually built an international marketing network, and introduced its products to more than 50 countries and regions

the main economic indicators of Chenming paper industry have remained the first in the same industry in China for 11 consecutive years, and the expansion speed is quite amazing. From 2001 to 2005, the production capacity increased from 500000 tons to 3million tons, and it has entered the top 500 Chinese enterprises and the top 50 paper industries in the world. In the past two years, it has continued its expansion strategy. The operation of Jiangxi Chenming light coated paper project and the headquarters white cardboard project has been basically normal by the end of 2005, and will become an important profit growth point in 2006, The calendering paper project, Jilin project and special paper project successively put into operation in 2006 will provide a growth point for the profits in 2007, and the Zhanjiang forest paper integration project will become a long-term profit growth point. The company strives to use about five years to achieve an output of more than 6million tons and enter the top ten in the world paper industry

benefited from the appreciation of RMB

compared with the Hong Kong market, the overall pricing of the domestic paper sector is low. On February 20, Nine Dragons Paper issued a prospectus in Hong Kong. It plans to issue 4billion shares, including 1billion shares for public development. The offering price range is 2 4 Hong Kong dollars. The company predicts that the diluted earnings per share in 2006 will reach 0.26 yuan, and the issue price earnings ratio calculated based on this is 11 6X. Due to the enthusiastic response to the IPO of Nine Dragons Paper, the listed Liwen paper rose strongly. Last week, it reached a new high since its listing, with a dynamic P/E ratio of nearly 17 times, which is significantly higher than g Huatai and Chenming paper. If only PE pricing, it means that Chenming paper is undervalued by 100% (after the share reform), and G Huatai is undervalued by 80%

the pricing of paper stocks in the A-share market highlights the acquisition value. At the end of 2005, Huatai Group invested 2.28 billion yuan to build a high-end color offset paper production line with an annual output of 400000 tons, while the current actual circulation market value of G Huatai is only equivalent to the investment of the production line

in addition, the appreciation of RMB will reduce the production cost of paper enterprises and the import cost of paper-making equipment, which will continuously improve the methods and logic of vibration testing, and increase the profits of paper-making enterprises, which will also constitute a positive stimulus to the paper-making sector. It is suggested to pay attention to Chenming paper, G Huatai and G Yuezhi

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