Aug. 04, 2023
At present, China's packaging industry has formed an independent, complete and complete industrial system with paper packaging, plastic packaging, metal packaging, glass packaging, packaging printing and packaging machinery as its main products. The rapid development of China's packaging industry not only basically meets the needs of domestic consumption and commodity export, but also plays an important role in protecting commodities, facilitating logistics, promoting sales, and serving consumption.
Affected by the slowdown in downstream consumption growth, the income of key packaging companies in 2022H1 will increase slightly. In 2022H1, the revenue increased by 3.8% year-on-year, and in 2022Q2, the single quarter fell by -4.2% year-on-year. The main reason for the slowdown was: in 2022H1, the total social retail sales increased by 8.4% year-on-year. Among them, the typical downstream of listed packaging companies, such as tobacco and wine clubs, saw a year-on-year decline of 1.7% %, the growth rate of soft drink production was only 3.3%, and the shipment of mobile phones fell by 5.1% year-on-year, which had a certain impact on the manufacturers of corrugated packaging, color boxes, cigarette labels and plastic packaging. Paper packaging, cigarette labels, metal packaging, The 2022H1 revenue of plastic packaging companies increased by 4.3%, 8.0%, 2.5% and 1.5% year-on-year; on the other hand, the pricing of some products followed the decline in raw material prices, which also slowed down revenue growth (such as boxboard and corrugated packaging).
Leading companies continue to promote industry integration and have obvious competitive advantages: In the past few years, under the background of stricter environmental protection policies and rising labor and raw material prices, the process of industry mergers and acquisitions has accelerated, which has led to a significant increase in the bargaining power of leading industrial chains. Sub-sectors such as metal, plastic and paper packaging have all benefited from the increase in the concentration of downstream customers, and orders continue to concentrate on packaging leaders. On the other hand, through high-quality services and nationwide radiation, the leader consolidates the stickiness of existing customers, accelerates the layout of new markets, and continues to expand market share.
Build a comprehensive packaging service provider, expand new business and increase the added value of products and services: Downstream customers have increasingly diversified products, increased demand for packaging, and prefer packaging leaders with comprehensive service capabilities. Packaging companies continue to extend the industrial chain through acquisitions and technology research and development The vertical depth, such as cross-border social packaging, smart packaging Internet of Things, one-stop design and development services, etc.
Under the background of weak overall utilization rate of packaging in the first half of the year, profitability still improved.
1) From a macro perspective, the scissors difference between CPI and PPI expands. PPI represents the price of raw materials, and CPI represents the price of products. The difference between PPI and CPI reached its peak in 2018Q2 (4.7% and 1.9% respectively), and then reversed rapidly, and continued to expand until July 2019 (-0.3% and 2.8% respectively), which is the same as the gross profit margin of packaging companies from The trend from low to high is relatively consistent. Taking into account the raw material inventory factor, profitability is expected to continue to improve in the subsequent quarters.
2) Bargaining power drives profitability: With industry consolidation, leading market share and bargaining power increase, profitability expansion drives gross profit margin improvement (more notable are: metal two-piece can industry, box board corrugated paper packaging industry).
Paper packaging: The gross profit margin of key companies (Jinjia, Yutong Technology, Hexing Packaging, Meiyingsen) in 2019Q2 has improved significantly year-on-year, with a year-on-year increase of about 2.1pct. Profitability improvement is:
1) The price of raw materials has fallen: the prices of various paper types in 2018Q2 are relatively high, and the prices of various paper types in 2019Q2 have dropped significantly year-on-year (coated paper, offset paper, white cardboard, whiteboard, and containerboard decreased by 19%, 14%, and 13% year-on-year , 12% and 20%), taking into account the raw material inventory cycle, the profitability of the industry in 2022Q3 is expected to continue to increase month-on-month.
2) Increased right to speak in industry integration: The paper packaging industry continues to integrate. For example, the order volume of Hexing Packaging, a leader in corrugated cardboard, continues to grow against the trend. Industry integration promotes the bottoming out of the industry's profitability.
3) Enhance value chain addition: use paper packaging as a carrier to provide high value-added services for brand owners and increase the overall gross profit margin. Deep integration of offline packaging business.
Metal packaging: Key companies (O.R.G., COFCO Packaging (0906.HK), Baosteel Packaging, and Shengxing Co., Ltd.) had an arithmetic average gross profit margin of 17.8% in 2019H1, a year-on-year increase of 0.7pct. Profitability improvement:
1) The two-piece can industry has returned to the upward channel. After experiencing excessive production capacity, the two-piece can industry suffered continuous losses from 2016 to 2017, and at the same time increased integration among leaders (including ORG's shareholding in COFCO Packaging, the acquisition of Ball Asia Pacific, Shengxing acquired Pacific, etc.), the current CR4 market share has reached 70%, the bargaining power has improved significantly, and the industry has entered the profitable upward channel. At the beginning of 2019, the price of two-piece cans was successfully raised by 0.7-0.8 cents/can. In 2022H1, the gross profit margin of the two-piece can business of ORG, Baosteel Packaging and COFCO Packaging increased by 6.5pct, 2.2pct and 0.2pct year-on-year.
2) The price of raw materials is stable and slightly down. In 2022H1, the price of aluminum ingots fell by 4% year-on-year, and the spot price of overseas LME aluminum fell by 17% year-on-year, which drove the gross profit margin of the two-piece can industry to increase.
The future development trend of China's packaging industry, green, low-carbon, and environmental protection will become the main axis of development
1. The regional pattern will gradually change
The pattern of the packaging industry in the key regions of the "Yangtze River Delta", "Pearl River Delta" and "Bohai Rim" will not change very soon, and will still develop synchronously with the regional economy. However, with the large-scale development of the western region With the revitalization of the old industrial base in Northeast China, the overall unbalanced development of the packaging industry will be significantly changed. This is an opportunity for expansion and development for excellent packaging companies in the "three major sectors".
2. Develop in a holistic and systematic direction
To develop systematic packaging solutions in the traditional sense such as buying packaging materials and sending machines in a holistic and systematic direction. As the market matures, suppliers who cannot provide complete solutions cannot systematically reduce packaging costs. Capabilities will be weakened, and packaging companies need a holistic and systematic approach to packaging.
3. Structural adjustment will be accelerated
With the impact of changes in the development environment at home and abroad and the superposition of economic quality and structural contradictions, China's packaging industry will enter a critical development period, that is, the golden development period to the problem-prone period. The long-standing overcapacity and excessive dependence on energy resources Structural and qualitative defects such as consumption, weak independent innovation ability, weak enterprise competitiveness, and disproportionate industrial scale and economic benefits will become more and more obvious, which will lead to inevitable regional industrial restructuring in recent years. Structural adjustment It is a process of big waves washing the sand, a process of optimization and reorganization, and an opportunity for advantageous enterprises to take off.
4. "Green, low-carbon, and environmental protection" will be the main axis of future packaging industry development
With the introduction of the implementation plan to promote green packaging in the express delivery industry, e-commerce, express delivery, takeaway and other industries have taken the lead in restricting the use of a series of non-degradable plastic packaging related implementation plans, and urged localities, especially cities, to increase their implementation.
