The paper mill Rongcheng suffered from market volatility, and the profitability in 2018 was significantly weakened. In the third quarter, the operation turned losses, which was the first quarterly loss in the past four and a half years. Looking ahead to the market, due to the lack of market conditions in the fourth quarter, the Group strengthened the investment layout of cross-strait carton factories, hoping to create more added value, improve product structure and enhance profitability.
Rongcheng’s net profit before tax in the third quarter was 1.83 million, a decrease of 98.88% from the previous announcement of 163 million.
Rongcheng 2018 consolidated revenue of 13.186 billion in the third quarter (note: this article is NT), the season decreased by 12.4%, an annual increase of 4.66%, a new high in the same period, but the gross profit margin was 13.41%, the profit rate was 3.57%, and the score was nearly 6 years. 3 years and a half low, plus the loss outside the industry, the owner's after-tax loss of 30.91 million, loss of 0.03 per share, for the first quarter of 2014, see a single quarter loss.
In the first three quarters of the accumulated revenue, the combined revenues reached a new high of 39.516 billion, an increase of 23.44%, but the gross profit margin was 14.14%, and the profit margin was 5.61%, which was a record low of nearly 5 years and a short period of nearly 6 years. In addition to the loss of the industry, the net profit after tax of the owner is 956 million, down 67.95%, which is the low of the same period in the past three years, with a surplus of 0.84 per share.
Rongcheng’s net profit before tax in the third quarter was 1.83 million, which was 99.88% lower than the previous announcement of 163 million. The company explained that the accounting treatment in the cross-strait is inconsistent, including recognition of the IPO-related professional service fees of China Luzi Company, inventory price loss, etc. The fee, resulting in the pre-tax net profit reviewed by the accountant is lower than the self-contained number.
In the first half of the year, the price difference of waste paper reached 1,200 RMB. In the fourth quarter, the market was not busy in the peak season, and the market was difficult to control.
Zeng Yongfang, a spokesperson for Rongcheng, previously said that the spread of waste paper in China's land for the first half of the year was as high as 1,000 to 1,200 yuan, and has gradually been reduced to around 200 yuan at the beginning of this month, helping to reduce the cost burden. However, the current volatility of waste paper prices is still frequent and violent, and the market outlook is still difficult to control.
Looking forward to this season, Zou Yongfang admits that China's land market demand for the fourth quarter is not prosperous, including double 11, European and American Thanksgiving and Christmas and other carton orders, not as strong as the past two years, the judgment should be a Sino-US trade war The impact and the soaring price of cartons in the first half of the year have led to the influence of factors such as the replacement of other materials by small businesses and the disappearance of demand from small factories.
Strengthening the capacity building of downstream carton factories, Rongcheng hopes that the proportion of cartons will increase to 70%.
Rongcheng plans to strengthen the capacity building of the downstream carton factory, and announced that it will spend 92 million yuan to purchase 9 land for Baolong, which will be used to expand Yunlin Carton Factory. It is expected to spend another 300 million pieces of procurement equipment, and it is expected that after the new capacity is opened. The capacity of the carton in Taiwan is expected to increase by 30% annually, from 360 million square meters per year to 470 million square meters.
At the same time, Rongcheng continued to invest in China's land expansion. The Jingzhou Carton Factory was put into operation in July. The Wuhan Carton Factory, which was built with a capital of RMB240 million, is expected to be put into operation in the first half of next year, which will help boost profitability. As for the 250,000-ton corrugated paper production line of Hubei Rongcheng Phase II, it is also expected to start production in the third quarter of next year.
Zou Yongfang said that green packaging is the trend. Carton products can directly contact customers, understand and assist customers to provide lighter and more environmentally friendly products, and the added value space is relatively high. At present, the contribution of paperboard and cardboard boxes is about half of the total. In the future, it is hoped that the proportion of cartons can be gradually increased to 70%, which will help optimize product structure and enhance profitability.
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