Nine Dragons Paper: Breakthrough Sales over 20 million tonnes, Net Profit soared 177% against headwinds

Nine Dragons Paper: Breakthrough Sales over 20 million tonnes, Net Profit soared 177% against headwinds

- Nine Dragons Group made a breakthrough in sales volume which exceeded 20.0 million tonnes for the first time, and increased by 9.6% to a new record high of 21.5 million tonnes
-The Group’s total annual design production capacity for fibre raw materials will reach approximately 10.2 million tonnes (wood pulp of 7.4 million tonnes, recycled pulp of 0.7 million tonnes and wood fibre of 2.1 million tonnes), and the total annual design production capacity for paper will reach approximately 25.4 million tonnes
- Annual Report extracts for FY 24-25

The Pulp and Paper Times

During FY2025, the international economy and trade accelerated its restructuring. China’s economy underwent structural adjustments, with consumer confidence remaining persistently sluggish. Compounded by sharply volatile costs and selling prices under more intense competition, the profitability of the paper making industry was posed with multiple stresses.

Facing the challenging and complex business conditions, Nine Dragons Paper (Holding) Limited focused the concerted efforts of all and forged ahead with unwavering strategic plans to advance its transformation of raw material, delivering a highly impressive annual result. During the year, the Nine Dragons Group made a breakthrough in sales volume which exceeded 20.0 million tonnes for the first time, and increased by 9.6% to a new record high of 21.5 million tonnes. Net profit per tonne of paper for the year amounted to approximately RMB102.5, driving total net profit to grow by 177.3% year-on-year to RMB2.2 billion against headwinds, outperforming the industry. This not only demonstrates the exceptional resilience of the Group in its operations, but also highlights the foresight and effectiveness of our strategic deployment plan.

In terms of products, leveraging the advantages in integrated pulp and paper production of its two new bases in Beihai and Hubei, the Group has comprehensively increased the proportion of high-end paper grades, thereby optimizing its profit structure. These two major bases are progressively becoming the profit safeguard and growth engines of the Group. During the year, a production capacity of 1.2 million tonnes for bleached folding boxboard and 0.6 million tonnes for printing and writing paper was successfully achieved in Beihai base and Hubei base respectively. During Q3 of 2025, a production capacity of approximately 0.4 million tonnes for printing and writing paper in the Beihai base and 1.2 million tonnes for bleached folding boxboard in Hubei base was achieved successively. This has further enriched the Group’s high-end product portfolio and promoted its annual design production capacity of paper to the milestone of exceeding 25.0 million tonnes, consolidating its position as the world leader. Through vertical integration of the wood pulp supply chain, the Group has effectively controlled costs and enhanced quality, supporting the performance upgrades and brand premium for high-end paper categories while reinforcing our core competitiveness in the premium paper market.

Major Capital Expenditure and Expansion Plan

The Group is investing in an annual design production capacity of approximately 3.4 million tonnes of wood pulp, as well as an annual design production capacity of 2.5 million tonnes of bleached folding boxboard and printing and writing paper in Beihai, Guangxi Zhuang Autonomous Region, Jingzhou, Hubei Province, Chongqing and Tianjin. Upon completion of the above projects, the Group’s total annual design production capacity for fibre raw materials will reach approximately 10.2 million tonnes (wood pulp of 7.4 million tonnes, recycled pulp of 0.7 million tonnes and wood fibre of 2.1 million tonnes), and the total annual design production capacity for paper will reach approximately 25.4 million tonnes. The vertical integration of the raw material supply chain of wood pulp not only enables the Group to effectively control its costs and enhance its quality, but also fuels the performance upgrade and drives brand premiums of high-end paper classes, thereby consolidating the Group’s sustainable core competitiveness in the long run.

FINANCIAL REVIEW 

Revenue

The Group achieved a revenue of approximately RMB63,240.5 million for FY2025, representing an increase of approximately 6.3% as compared with FY2024. The major contributor of the Group’s revenue was still its packaging paper business, including linerboard, high performance corrugating medium, coated duplex board and bleached folding boxboard, which accounted for approximately 90.0% of the revenue, with the remaining revenue of approximately 10.0% generated from its printing and writing paper, high value specialty paper and pulp products.

The Group’s revenue for FY2025 increased by approximately 6.3% as compared with FY2024, resulting from the net effect of the increase in sales volume of approximately 9.6% and the decrease in average selling price of approximately 3.0%.

Future Outlook 

Looking ahead to FY2026, we will encounter both opportunities and challenges. With the continual introduction of a series of more positive policies by the Chinese government to expand domestic demand and promote consumption, the demand in the packaging paper industry will be supported. Nonetheless, the escalating tensions in international relations, the sluggish recovery of economy and consumption, and the continuous release of new capacity will affect market demand and supply. However, we firmly believe that the environmental trend of “replacing plastic with paper” and the optimization of the supply side driven by “anti-involution” campaign will improve the supply and demand pattern in the paper manufacturing industry. Meanwhile, the Group is determined to deepen its strategy of pulp and paper integration, which will further enhance its cost control capabilities, solidify its core competitive advantages in the long term, and serve as a core ballast and growth engine for the Group’s future profitability.

The Group will exercise stringent control over production costs, deepen lean management and increase the proportion of high value-added products, maintaining sustainable supply of exemplary quality paper that embodies the characteristics of Nine Dragons Paper. At the same time, the Group will continue to optimize the balance between production and sales, and utilize technology to enhance both quality and efficiency while adhering to prudent financial strategies and strengthening green and compliant operations so as to achieve high-quality and sustainable development.
 

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