Facing Challenges And Moving Forward Firmly: Zhongrong Printing Investor Conference To Explain Growth Strategy And Future Layout In Detail!

Recently, Zhongrong Printing Group Co., Ltd. successfully held an important investor relations event aimed at further strengthening communication and exchange with the capital market, enhancing company transparency, and providing detailed responses and explanations on a series of issues related to company operations, industry development, and market performance.

When talking about the company's global layout, the company stated that in order to actively respond to the global trend of customers, the Vietnam production base was built and successfully put into operation in 2024. Currently, production and operation are normal and have not been significantly affected by geopolitical risks. At present, the production and operation activities of the Vietnam base are proceeding normally and orderly. Through careful planning and effective management, the company ensures that its operations are not significantly affected by external risks such as geopolitics. It is gradually playing its strategic role in serving international customers and expanding overseas markets, laying the foundation for the company's future international development.
Regarding future profit growth points, the company will continue to consolidate its leading advantages in sub sectors such as daily chemical, food, and health products, while accelerating the construction of bases in tobacco product packaging and alcohol packaging. In particular, it will increase investment in the Southwest base, aiming to vigorously develop top customers in this field and actively cultivate new business growth points. As an important Baijiu and tobacco producing area in China, the construction of a strong production base in the southwest region can be closer to core customers, shorten response time, and reduce logistics costs, so as to more effectively win over and serve the leading enterprise customers in these fields, cultivate them into a new and powerful business growth point of the company, and form a new growth engine.
An investor asked about the benefits of the acquisition of Mo Zhihua, and the company explained that this acquisition further expands the company's product production capacity in the East China regional market, enabling it to respond more efficiently to local market demand. It has a positive promoting effect on increasing the company's market share and enhancing its core competitiveness and profitability.
In response to investors' concerns about profitability, the company disclosed that the net profit attributable to shareholders of the listed company for the year 2024 was 144 million yuan, and the net profit attributable to shareholders for the first quarter of 2025 was 39 million yuan. Regarding the overall performance of the industry and the comparison between the company and its peers, the company cited data from industry research institutions and pointed out that the paper packaging industry is currently developing steadily. It is recommended to refer to the regular reports disclosed by the company and peer companies for specific performance and development.
Some investors have expressed concern about the decline in the company's performance in 2024 compared to previous years. In response, the company stated that although its sales revenue increased by 7.3% year-on-year in 2024, its gross profit margin has declined.
The company attributed two main reasons to this: firstly, it is a common challenge faced by the entire paper printing and packaging industry in the current market environment - although raw material prices (such as pulp and base paper) fluctuate, their transmission to downstream is relatively lagging or not smooth, coupled with the price pressure brought by increasingly fierce market competition, resulting in downward pressure on sales prices and squeezing gross profit margins.
Secondly, in recent years, the company's strategic layout in new fields and regions such as paper and plastic packaging, alcohol packaging, and overseas Vietnam bases is still in the early stages of investment and cultivation. These new businesses and bases require significant initial investment, and it will take time for output efficiency and profit contribution to fully reflect and leverage economies of scale. Therefore, the gross profit margin contribution of new businesses has not yet fully compensated for the pressure faced by traditional businesses.

In order to effectively address current challenges, improve business performance, and continuously promote cost reduction and efficiency improvement, the company has formulated and is actively implementing a series of strategic measures and refined management measures. The company will firmly take technology and product innovation as the core driving force, committed to continuously building unique differentiated competitive advantages and sharp and rapid market response capabilities as the fundamental way to enhance profitability. Specifically, the company will focus more closely on the actual needs of customers, not just providing a single packaging product, but further deepening the service connotation, providing comprehensive customized solutions and high standard personalized services, creating value for customers throughout the entire chain from packaging design, material selection to production and delivery.
In terms of internal management, the company will strengthen investment in the research and application of core technologies to ensure that key core technologies can effectively support the continuous upgrading, iteration, and performance optimization of core products. Through core products, the company will build and improve a customized solution system for customers, and enhance the added value of products and services. The company believes that by providing high-quality customers with product solutions with higher technological content, stronger functionality, and more significant added value, it can effectively improve the overall profit level and profit quality of the company. The company also stated that through the above-mentioned efforts, it will help improve its business situation, strive to achieve the predetermined goals set by the equity incentive mechanism, and fully mobilize the enthusiasm of the team.
The company emphasizes that the current operating conditions remain stable, and the management will continue to strive to improve business performance, promote sustainable and healthy development of the company, and strive to repay investors with better performance. The company's financial director also added that although the stock price is affected by various factors, as the finance department, the company attaches great importance to shareholder returns and has formulated an active dividend plan. In the future, the company will continue to innovate and improve the quality of operations to further enhance profitability and effectively return to investors. At the same time, the company will continue to actively provide suggestions to the board of directors and jointly explore measures for market value management.
Finally, the company expressed a positive view on the future development prospects of the packaging industry. The company points out that the packaging industry is not an independent auxiliary industry, but an indispensable and important component of the modern industrial system. It is not only a key carrier for products to enter the market and realize their commercial value, but also an important foundation and key force to support the high-quality development of the social economy.
With the sustained prosperity and development of the national economy, as well as the rapid progress and continuous evolution of modern business models, especially e-commerce and logistics distribution industries, the functions and roles of the packaging industry are increasingly prominent. It has been deeply and widely integrated into various links of the national economy from production and manufacturing, product circulation, terminal sales to final consumption, becoming an important bridge connecting producers and consumers and a key link in realizing value transmission.The company believes that under the favorable background of sustained economic recovery and gradual recovery of consumer market demand, the packaging and printing industry in China is expected to continue to maintain a steady growth trend. The company cited publicly available data from the National Bureau of Statistics, which showed that in 2024, industrial enterprises above designated size in the paper and paper products industry achieved a revenue of 1.46 trillion yuan, a year-on-year increase of 3.9%. As an objective reflection at the official level, it effectively confirms the overall scale of the packaging and printing industry and its good development trend of continuous and steady growth, further enhancing the company's confidence in the future development prospects of the industry and providing a solid foundation for the company's future development strategy.