During the earnings forecast season of the hot summer of 2025, while many papermaking enterprises were Mired in losses due to weak market demand and overcapacity, an encouraging "warm current" emerged in the industry. Several listed companies, including Mudanjiang Hengfeng Paper Industry, Yueyang Forest Paper, and Yibin Paper Industry, jointly released good news of expected increased performance or turning losses into profits. This strikingly different performance reveals that a fierce differentiation is taking place within China's papermaking industry: some enterprises are under passive pressure during the industry's downward cycle, while others have demonstrated strong operational resilience and achieved remarkable growth against the odds through outstanding internal management, precise strategic mergers and acquisitions, and successful business transformation.
Industry "top student" : Hengfeng Paper Industry has been strengthening its internal capabilities, with net profit expected to nearly double
Amid the widespread pessimism in the industry, the performance forecast of Mudanjiang Hengfeng Paper Co., LTD. (hereinafter referred to as "Hengfeng Paper") is undoubtedly a shot in the arm. The announcement released on July 14th shows that the company expects to achieve a net profit attributable to the parent company's owners of 85 million yuan to 110 million yuan in the first half of 2025. Compared with 56.1566 million yuan in the same period last year, the year-on-year growth rate is expected to reach an astonishing 51.36% to 95.88%.
More importantly, its net profit after deducting non-recurring gains and losses, which reflects the profitability of its main business, performs even better. The estimated amount is between 75 million yuan and 100 million yuan. Compared with 43.4352 million yuan in the same period last year, the year-on-year growth rate is expected to be as high as 72.67% to 130.23%. The strong growth of this core indicator fully demonstrates that the performance improvement of Hengfeng Paper Industry is based on a solid and healthy operational foundation, rather than relying on occasional non-operating income.
Exploring the driving force behind its soaring performance, Hengfeng Paper Industry's answer is a textbook that focuses on "seeking internally and strengthening internal capabilities". The announcement pointed out that in the first half of 2025, the company did not follow the trend but actively grasped the unique rhythm of market operation. The core secret lies in the continuous deepening and implementation of "lean management".
Specifically, the company has effectively reduced the consumption of key raw materials and energy at the production end. In the current context of high costs, this has directly translated into valuable profit margins. On the operational side, the company has been focusing on optimizing its supply chain management system and significantly enhancing inventory turnover efficiency, which means achieving faster sales turnover with less capital occupation.
Meanwhile, through strict control over procurement costs and various operating expenses, the company has successfully integrated the concept of refined management into every aspect of its operation, ultimately achieving a significant increase in performance. The case of Hengfeng Paper Industry shows that even in the challenging "winter" of the external environment, enterprises can still build a solid "moat" and achieve strong endogenous growth by improving internal operational efficiency to the extreme.
The "stroke of genius" for turning losses into profits: The merger and acquisition effect of Yueyang Paper has emerged, successfully weathering the cycle
If the success of Hengfeng Paper Industry stems from its internal strength, then Yueyang Paper Co., LTD. (hereinafter referred to as "Yueyang Paper") has staged a brilliant drama of turning losses into profits by relying on "external expansion" and "favorable timing". According to its pre-profit announcement released on July 14th, the company expects to achieve a net profit attributable to shareholders of 130 million yuan to 156 million yuan in the first half of 2025. Compared with the predicament of a loss of 48.6166 million yuan in the same period of the previous year, it has achieved a complete reversal. Its non-GAAP net profit is also expected to reach 113 million yuan to 139 million yuan, reversing the loss of 45.4837 million yuan in the same period last year at one go.
The remarkable transformation of Yueyang Paper is mainly attributed to two key factors:
Firstly, there is the change in the scope of consolidated financial statements brought about by strategic mergers and acquisitions. In December 2024, the company successfully completed the acquisition of 100% equity of Juntai Technology, which officially became its wholly-owned subsidiary. Since then, the operating results of Juntai Technology have been included in the consolidated financial statements of Yueyang Paper. This external expansion has injected a new and powerful profit engine into the company. However, the financial data of the same period last year did not include this new profit contribution, thus forming a huge positive difference on a year-on-year basis.
Secondly, the favorable impact of non-operating gains and losses. Looking back at the same period in 2024, the company made a considerable impairment provision for its valuable forest assets due to an extremely rare rain, snow and ice disaster. This sudden natural disaster event seriously dragged down the performance at that time. In the first half of 2025, the company was no longer affected by such major adverse factors, shedding its historical burdens and enabling its profits to return to normal levels.
Therefore, the successful turnaround of Yueyang Paper is the result of the combined effect of the "strategic hand" and the "invisible hand". On the one hand, forward-looking merger and acquisition decisions have brought structural growth momentum to the company; On the other hand, getting rid of the occasional negative factors of the same period last year has also created favorable conditions for a significant year-on-year improvement in performance.
Multiple breakthroughs: Yibin Paper Industry's "Three Horses" drive performance back to the profit track
Compared with the former two, the recovery path of Yibin Paper Industry Co., LTD. (hereinafter referred to as "Yibin Paper Industry") is more like a comprehensive victory with multiple breakthroughs and integrated measures. The announcement shows that the company is expected to achieve a net profit attributable to shareholders of the listed company ranging from 18.65 million yuan to 22.8 million yuan in the first half of 2025, successfully emerging from the quagmire of a loss of 22.0154 million yuan in the same period last year. Particularly worth noting is its non-GAAP net profit, which is expected to be between 11.95 million yuan and 14.6 million yuan. Compared with the huge loss of 92.0809 million yuan in the same period last year, it has achieved a fundamental improvement.
The turnaround of Yibin Paper Industry is driven by a clear "trinity" :
Cost reduction and efficiency improvement, as well as optimization of existing resources: The company has continuously optimized its current business structure and strengthened cost control throughout the entire process. Through the implementation of a series of cost reduction and efficiency improvement measures, it has significantly reduced financial expenses, laying a solid foundation for the recovery of overall profitability.
Expand new business and cultivate momentum: The company has added corrugated box business compared with the same period last year and successfully achieved profitability during the reporting period. This move not only expanded the company's product matrix but also opened up new profit growth points, demonstrating its acute market insight and efficient execution ability.
Strengthening the main business and enhancing value: In the core product acetate fiber field, the company has achieved dual year-on-year growth in sales volume and operating income. Even more encouraging is that the gross profit margin of this product has also increased significantly year-on-year. This indicates that the company's market position and bargaining power in its advantageous products have been further consolidated and enhanced.
In addition, the announcement also specifically explained the reasons for the significant difference between the net profit attributable to the parent company and the net profit after deducting non-recurring gains and losses. This is mainly due to the acquisition of 67% equity of Sichuan Pushi Cellulose Acetate Co., Ltd. at the end of 2024. As this merger and acquisition is a business combination under common control, the net profit or loss of the combined party before the combination date should be included in the company's non-recurring profit or loss in accounting treatment. This explains the technical reason for the huge loss in the non-GAAP net profit in the same period last year and also highlights the significant improvement in the main business this year.
To sum up, against the backdrop of the overall pressure on the papermaking industry, the excellent performance reports of Hengfeng Paper, Yueyang Forest Paper and Yibin Paper not only inject confidence into the market, but also provide valuable industry inspirations. Together, they prove that whether by delving into internal capabilities and enhancing operational efficiency, or by precisely expanding outward and optimizing business layout, enterprises have the potential to navigate through industry cycles and achieve value reshaping and growth. This indicates that the future of the industry will no longer be a homogeneous competition where all rise and fall together, but rather an era of differentiation that tests strategic determination, management wisdom and innovative courage even more.
