Lee & Man Paper will actively seize business opportunities as the industry cycle turns for the better, exploring business opportunities in countries and cities along the “Belt and Road”

Lee & Man Paper will actively seize business opportunities as the industry cycle turns for the better, exploring business opportunities in countries and cities along the “Belt and Road”

The Pulp and Paper Times
Stepping into 2024, with demand in and outside mainland China continuing to improve, Lee & Man Paper Group’s business also gradually recovered. In addition, although the prices of waste paper and pulp were volatile during the first half of the year, the Group, having pushed to integrate its industrial chain over the years, was able to flexibly allocate raw material supply, giving full play to the advantage of its business model, as such saw a marked climb in profit and satisfactory overall performance for the period.

The Group’s total revenue for the six months ended 30 June 2024 increased by 2.4% to HK$12.5 billion as compared with the same period last year. Net profit increased by 123.4% to HK$806 million. Earnings per share for the period were HK17.69 cents (2023: HK7.15 cents).

Dr Raymond Lee, Chairman of Lee & Man Paper, said, “During the period under review, overall production capacity of paper manufacturing industry is gradually recovering to a healthy level. Paper manufacturers started sales promotion to gain market shares. Coupled with demand in and outside mainland China continuing to improve, the Group’s business gradually recovered. Although the prices of waste paper and pulp were volatile during the first half of the year, the Group, having pushed to integrate its industrial chain over the years, was able to flexibly allocate raw material supply, giving full play to the advantage of its business model, as such saw a marked climb in profit and satisfactory overall performance for the period.”

Facing market changes and challenges, the Group consolidated its upstream resources to develop a vertical business model that covers pulp-making and waste paper recycling, a move to ensure its raw material supply chain is secure and stable, and effectively control cost, thereby further improve profitability.

With regard to the packaging paper business, the PRC government has speeded up tackling plastic pollution issues, with the aim of strictly controlling plastic packaging and promoting adoption of recyclable packaging, enabling the Group to stabilize its packaging paper business. As the mainland economy gradually warms up, consumer demand is expected to rebound at faster pace. That together with more shopping festivals and holidays falling in the second half year are going to help steadily push up demand for packaging paper. The Group will also continue to implement effective cost control measures to maintain competitiveness and consolidate market share.

Regarding overseas markets, the Group will continue to take advantages of the geographical location and resources of the production bases in Vietnam and Malaysia to help it penetrate further the Southeast Asian market and enhance overall operational efficiency. At the same time, the Group will actively explore business opportunities in countries and cities along the “Belt and Road”, strengthen integration and international deployment of its industrial chain, and optimize its cost structure and increase export sales, so as to enhance profitability.

the Group actively expanded markets along the “Belt and Road”. Its overseas production bases in Vietnam and Malaysia operated smoothly, allowing it to give full play to its cost advantage and achieve the goal of integrating pulp and paper. They have continued to make positive contributions to the Group’s total revenue. The four papermaking production lines in Malaysia, which quickly moved into normal operation, have also helped the Group as an overseas production base to snatch share of the export market and explore new customer sources.

Mr Edmond Lee, Chief Executive Officer of Lee & Man Paper, concluded, “On top of striving to grow its core business, the Group has taken the initiative to shoulder the corporate responsibility of fostering green development. Via recycling waste paper and employing advanced production technologies, it has achieved the goals of saving energy and reducing emissions. It has also continued to develop and launch various environmentally-friendly products to promote sustainable development of the environment and society. Looking ahead, with the production capacity release peak near its end and as the economy revives plus market demand rebounds, the paper manufacturing industry can expect to see the turning point of supply and demand returning to balance. That will gradually buttress growth of the industry. The Group will actively seize business opportunities as the industry cycle turns for the better, speed up introducing diverse products and integration of its industrial chain, push to optimize operational efficiency and explore business opportunities in Mainland China and in the international market, to the ends of maintaining steady profit growth and promoting long-term development of the Group.”

Regarding tissue paper business, the Group, committed to research and development and production of high-quality and environmentally-friendly consumer tissue paper, has introduced natural bamboo unbleached tissue to the market caring about environmental protection and health. That agrees with the Group’s business philosophy of pursuing high quality and green development. As at 30 June 2024, the Group’s total annual production capacity of tissue paper was approximately 1.1 million tons. With the mainland economy gradually recovering and the traditional consumption peak seasons being in the second half year, demand for tissue paper is expected to increase steadily. The Group will actively identify changes in consumer preferences and realize fully the advantages of its industrial chain to promote the long-term development of its tissue paper business.
 

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