The progress of the 3 million tons of new projects of Nine Dragons Paper has slowed down, why?
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On September 19, Nine Dragons Paper announced its 2018 financial report. For the year ended June 30, 2018, the company's operating income was 52.782 billion yuan, a year-on-year increase of 34.8%, surpassing 50 billion yuan for the first time! The net profit attributable to shareholders of the company was 7.848 billion yuan, a year-on-year increase of 79%! Both data are the highest in history! Xiaolong sent a good news: the revenue broke 50 billion, the profit reached 7.8 billion, both hit a record high!
Although the business performance is as good as the previous quarters, in the Xiaolong annual report, we also vaguely saw the trend of the industry development cycle has peaked. An obvious signal is that several new projects under construction by Xiaolong did not achieve the expected progress, all delayed. In particular, the third phase of Quanzhou Xiaolong was even removed from the annual report.
Analysis of the reasons for Xiaolong to postpone the project, first of all, can eliminate the factors of the tight capital chain. From the perspective of revenue, profit, debt ratio and cash flow in the annual report, Xiaolong is in the best period of enterprise development, and does not exist. The situation of tight funds. The reason for the delay is only a concern for the market.
First of all, the raw materials are inseparable topics.
A total of more than 3 million tons of production capacity, and all of them are imported high-grade paper machines. If they are full, they need at least 4 million tons of waste paper raw materials. If the products are all positioned high-grade cardboard, they need a lot of waste and commercial pulp. Under the current situation of supply and demand of waste paper, Nine Dragons Paper is difficult to achieve, and may even have a big impact on the market.
Second, supply and demand have undergone fundamental changes.
Different from the previous years, the price increase is different. In the past year, Xiaolong has been slightly “silent” in the market. The truth behind it is that “paper is more difficult to sell”. Although in July and August, several leading paper packaging enterprises in the country took the lead in "consulting" and limited production at the same time, expecting to reverse the momentum, but the effect is not good, there is no obvious change in paper prices, especially some small and medium-sized paper mills, the current inventory is relatively Gao, in Hebei and Shandong, many companies have chosen to stop production of some paper machines to control inventory.
Finally, the impact of Sino-US trade war is uncertain
The Sino-US trade war has entered a feverish day, and both sides have officially implemented a new tariff policy, and there is no hope of an armistice in the short term. For Nine Dragons Paper, the trade war not only affects the demand of upstream and downstream industries and the investment of enterprises, but also has a greater impact on the foreign exchange market and the stock market. Enterprises must constantly adjust their corporate strategies according to the actual trade war situation.
Xiaolong is a listed company, and announced the construction progress of new projects as required, but in China, there are millions of tons of new packaging paper capacity under construction. These projects are bigger or smaller, to what extent, Time is still hard to count. However, in the current situation, there are many factors of market instability, and rushing to put into production is not a good thing for enterprises.