Recently, Liwen Paper announced its performance for the year ended December 31, 2023. In 2023, the total revenue of the group decreased by 14.5% compared to last year to HKD 24.9 billion, and the annual profit decreased by 12.3% compared to last year to HKD 1.2 billion. The total sales reached 6.54 million tons, and the average net profit per ton of products was HKD 176. Looking back on the year, the mainland implemented zero tariffs on imports of various paper products, coupled with the increasing production capacity of the industry, and paper companies generally lowered prices. On the other hand, market demand was weak in the first half of the year, and the industry was in a destocking cycle, putting pressure on operational efficiency; Until the traditional consumption peak season in the second half of the year, the demand for paper products gradually rebounded, paper prices continued to rise, and industry profits improved.
Newly added annual production capacity of 950,000 tons of wood pulp, with a total production capacity of 1.4 million tons at the Malay base
In the face of market supply and demand and policy changes, Liwen Paper actively promotes the extension of the industrial chain upstream, develops a vertical business model covering pulp making and waste paper recycling, to ensure raw material supply, control costs, and improve profitability. Looking back on the year, the group's newly added wood pulp production lines located in Chongqing, Jiangxi, and Guangxi have been put into operation one after another, with an annual production capacity of 950,000 tons and a total wood pulp production capacity of 1.2 million tons.
In addition, the overseas production base previously laid out by Liwen Paper leverages its cost advantage and provides considerable profits. To further expand into the Southeast Asian market, the group has put into operation its fourth paper production line in Malaysia with an annual production capacity of 350,000 tons. Currently, the total production capacity of the Malaysian production base is 1.4 million tons.
The papermaking industry still has significant development space
The packaging paper business is the main core business of Liwen Paper. With the increasing economic support from the mainland, domestic demand is expected to further improve, and the demand for major paper products such as packaging paper is gradually recovering. In terms of overseas markets, Liwen Paper will make good use of production facilities in Malaysia and Vietnam, cooperate with local resources, and optimize operational efficiency. At the same time, we will continue to strengthen export sales, fully expand business development opportunities in countries and cities along the the Belt and Road, strengthen the international layout of industries, and expand the profit base.
In terms of toilet paper business, Liwen Paper adheres to the concept of high-end and green environmental protection, and launches natural bamboo fiber primary color toilet paper to meet the market's demand for environmentally friendly and healthy paper. It is expected that the economic environment in the mainland will gradually improve, and the demand for toilet paper will steadily increase. At present, the total annual production capacity of the group's toilet paper is about 1.1 million tons.
In addition, Liwen Paper also focuses on developing pulp projects and will actively integrate with the newly added wood pulp production lines in Chongqing, Jiangxi, and Guangxi. Through vertical integration operations, it will further stabilize the supply of raw materials for toilet paper, optimize production costs, and maximize profits in the pulp and toilet paper businesses.
Li Wen Paper stated that in the long run, there is still considerable room for development in the paper industry. The Group will adhere to a prudent business strategy, actively seek development opportunities in the paper industry, continuously expand and optimize various business operations, develop towards industrial chain integration, further improve operational stability, strengthen profitability foundation, and maintain the Group's market competitiveness in the paper industry.
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