The hottest paper industry welcomes the favorable

Paper industry: welcome the favorable policies and enter the rising channel

2012 will be the starting point for the medium and long-term improvement of the paper industry. The logic lies in: 1. Stable demand growth: China's paper industry is a market where consumption and production are at home and raw materials are abroad, which makes the consumption of the paper industry mainly depend on domestic consumption, and the impact of foreign changes on the consumption of the paper industry is relatively weak; 2. Supply growth decelerates: domestic paper consumption is relatively stable growth, supply improvement will be the logic of industry opportunities, and supply will significantly improve in 2013; 3. The profit elasticity of the industry will become larger: in the past few years, the profits of the paper industry chain have remained in the pulping link, reflecting the different supply-demand relationship between pulping and papermaking links. With the peak of overseas pulp capacity release, we judge that the profits of the industry chain may be transferred to the papermaking link in the future, which will bring greater performance elasticity to the paper companies

industry perspective:

we believe that the improvement of paper industry profits requires two conditions: first, the upstream squeeze on industry profits is alleviated, which mainly depends on the global raw material supply and demand and cost changes; 2、 The rising pricing power of enterprises mainly depends on the improvement of industry supply and demand and the improvement of concentration. Only if the above two conditions are met, the profitability of paper l experimental instruments and equipment will have a qualitative change, and paper stocks are expected to bring rich returns to investors

the cycle of removing iron filings and dirt when raw materials enter the boom downturn: the supply and consumption of wood pulp depends on the world. Affected by the continued deterioration of the European debt crisis, the decline in global economic growth will drag down global wood pulp consumption. It is expected that the growth rate of global wood pulp consumption will be about 2.5% in the next three years, nearly 1 percentage point lower than the historical average. In terms of supply, the wood pulp projects restarted in 2009 will enter the release period in 2012. In 2012, the world's large-scale wood pulp except China will put into production 13.2 million tons of new capacity, with an average annual increase of 3.3 million tons. It is expected that the global commodity pulp will continue to be in a state of overcapacity in the next few years at the wheel base of two wheels away from the front axle. The industry starts to decline year by year, and the wood pulp price will remain low as a whole

the paper industry will stand at the starting point of improvement in 2012: the release of large-scale production capacity of the industry is coming to an end in 2012. In the future, whether in terms of government policies, industry investment attraction, or enterprise willingness and ability, the new production capacity of the paper industry will be greatly reduced. At the same time, policies such as environmental protection standards and elimination of backward production capacity will continue to accelerate the withdrawal of small and medium-sized enterprises and promote stock integration; We believe that the supply logic will push the paper industry boom into the upward channel, and 2012 will be the starting point of this round of long-term improvement of the paper industry

paper industry profits will improve quarter by quarter: we believe that the current paper consumption has reached the bottom. With the arrival of the seasonal peak season in the second quarter, downstream dealers and printing plants will face the demand for replenishment. Moreover, since the paper price has been in the decline channel in the second half of last year, dealers and printing plants are pessimistic about the market as a whole, the channel inventory is generally low, and the paper price is basically at the bottom, there is rebound demand. Stimulated by the mentality of buying up rather than buying down, It is expected that the sales of paper mills will improve significantly from March

risk tips:

the cost of raw materials rebounded sharply; Capacity release exceeded expectations; The economic downturn led to a lower than expected number of sales affecting more than 500 downstream enterprises