Comments on the Management of Guanhao High-tech Board of Directors in 2023
() The operating comments of the Board of Directors in 2023 are as follows:
I. Discussion and analysis of business conditions
In 2023, the demand in the end market of the paper industry was weak, and the large-scale introduction of new production capacity in the industry led to a serious imbalance between supply and demand in the market. The price of superimposed wood pulp fluctuated greatly and the product price lost support, which brought great influence and challenges to the company’s operation. The board of directors of the company thoroughly studied and implemented the Supreme Leader’s Socialism with Chinese characteristics Thought in the new era and the spirit of the 20th National Congress, and comprehensively implemented the strategic plan of "one body, two wings and four-wheel drive". On the one hand, it strengthened the chain to make it stronger and better, and on the other hand, it set up a professional technology research and development and industrial cultivation team to cultivate and incubate the special materials industry in various ways, such as joint research and development, Industry-University-Research cooperation and pilot platform construction. Through many measures, such as strengthening party building, defining strategy, emphasizing reform, improving management, preventing risks and grasping the security environment, we can cultivate opportunities in the crisis and open up new opportunities in the changing situation.
(A) strengthen party building, innovative management model to deepen the integration of party building management
During the reporting period, the Party Committee of the Company adhered to the core of implementing the spirit of the 20th Party Congress, and carried out the second batch of "Seven Grasping" projects to study and implement the theme education of Socialism with Chinese characteristics Thought of the Supreme Leader in the new era and party building, focusing on the mission and task of cultivating and incubating strategic emerging industries, innovating the theoretical learning mode of "learning+research+discussion", promoting the party and government team to accelerate the absorption and mastery of frontier knowledge, theories and transformation modes of strategic emerging industries, and accelerating the exploration of new ideas for enterprise management and reform and transformation. Match the management mode of "operation-controlled headquarters+cost-quality production base", innovate the vertical management mode of party committees, optimize the distribution of party branches in headquarters and bases directly under the Central Government, and continuously enhance the party affairs and business stickiness of enterprises. Unswervingly promote the party’s self-revolution, explore and practice the "big supervision" three-dimensional supervision and control system, and continue to build a "three non-corruptions" supervision system with platform characteristics.
(B) determine the strategy, identify the strategic positioning and firm strategic guidance.
In order to implement the requirements of SASAC on unswervingly becoming stronger, better and bigger state-owned capital and state-owned enterprises, the company further clarifies its development ideas, finds the right strategic direction, adheres to innovation, firmly becomes stronger and better, and expands the strategic positioning of coating new materials and related industries, with comprehensive reform, scientific and technological innovation, intelligent manufacturing and sustainable development system as the guarantee. Adhere to the specialty paper industry as the foundation, strengthen the chain to make up the chain, and build a high-end green specialty paper industry base with core competitiveness; Focus on scientific and technological innovation in the field of new materials, deepen strategic emerging industries such as special fiber composite materials, precision coating and special chemical new materials, and strive to build a world-class new material industry company.
During the reporting period, the development pattern of pulp-paper integration in Zhanjiang East Island Industrial Base took shape. The 300,000-ton high-grade coated white cardboard project has completed the installation of the main equipment, the 60,000-ton special paper project has completed the capping of the workshop and started the installation of the equipment, acquired 100% equity of Zhanjiang Zhongzhi and started the construction of the 400,000-ton chemical pulp project of Zhanjiang Zhongzhi, and the bidding for the main equipment of the pilot test line project of special fiber composite materials has been completed.
(3) Emphasis on reform, deepening reform actions and empowering scientific and technological innovation
During the reporting period, we thoroughly interpreted and analyzed the policies and guidelines for the reform of state-owned enterprises, innovatively formulated the action plan for deepening reform and upgrading, further improved the reform measures of "Science and Technology Reform Action", and won the "Benchmark" rating in the special assessment of "Science and Technology Reform Action" in 2022, achieving a high-quality and successful conclusion of the three-year reform of state-owned enterprises. During the reporting period, the company optimized the mechanism of scientific and technological innovation, further strengthened the dominant position of enterprise innovation, and effectively stimulated the kinetic energy of scientific and technological innovation. 47 new authorized patents, including 11 invention patents; 10 new release standards, including 4 national standards, 1 industry standard and 5 group standards; Many national, provincial and ministerial talents have been introduced through flexible talent introduction and Industry-University-Research cooperation, and 13 scientific and technological innovation projects and 8 Industry-University-Research projects are being promoted in an orderly manner; The conversion income of scientific and technological achievements such as digital hot stamping film and medical film coating in the field of special materials exceeds 77 million yuan.
(D) improve management, adjust the structure of ram lean and continuously improve management efficiency.
During the reporting period, the company continuously improved its management level by adjusting its product structure, consolidating lean management and minimizing its operating losses. First, optimize and improve the product structure. Judge the market status and development trend, constantly optimize the product structure, focus on core products such as thermal paper and liquid packaging paper, quickly adjust the marketing strategy, ensure that the supply of core products meets the needs of customers, and achieve steady improvement in business performance. The second is to broaden the special paper track. We have successfully developed special paper such as base paper for roof wrapping, SBS high-folding-resistant cigarette card, high-temperature heat-sensitive paper, and the current output exceeds 15,000 tons. In the future, with the mature product technology, stable formula and cost optimization, the downstream demand is expected to be further opened, laying the foundation for the release of new production capacity of the company. The third is to continue to do lean management. With on-site management, CI projects and special breakthrough projects as the starting point, we will deepen lean management and lead the transformation and upgrading of enterprises’ digital intelligence. At the same time, lean management will be incorporated into the overall strategic layout of the enterprise, which will run through all links of production, warehousing, logistics and management, optimize production organization and management, improve production efficiency, strengthen cost control and maximize the management efficiency of the company.
(E) Preventing risks, improving the compliance system and ensuring the steady development of enterprises.
During the reporting period, guided by the "five in one" wind control system, the company fully implemented from "use", "defense", "reform" and "prevention", adhered to the rule of law, focused on improving the awareness of the rule of law, continued to deepen the construction of wind control system and supervision system, firmly adhered to the bottom line and did not touch the red line, and ensured the steady development of enterprises with high-quality wind control. First, continue to deepen the construction of the "five in one" wind control system and strengthen the prevention of major risks. By focusing on key areas, key projects, key positions and important systems, the risk prevention and control mechanism will be consolidated, and the results of risk control implementation will be consolidated and improved continuously with special audits and special inspections as the starting point. The second is to stick to the bottom line, not touch the red line, and continue to deepen the rule of law and compliance work. Pay close attention to key areas and key links, constantly build a "three lines of defense" and improve the long-term mechanism of "promoting management by case" to empower enterprises for high-quality development. The third is to strengthen monitoring, prevent risks, and consolidate risks and internal control management measures. Keep a close eye on the key areas where risks are prone to occur frequently, actively carry out risk assessment, risk investigation and special rectification, and promote all work to be fully effective with closed-loop management. The fourth is to highlight the problem orientation and promote management through auditing. Give full play to the function of internal audit supervision, focus on key areas and major engineering construction projects, highlight the idea of "emphasizing discovery and rectification", and do a good job in the second half of audit supervision.
(VI) Grasp the safety environment and strictly control the healthy development of safety environment risk escort enterprises.
Safety in production: First, implement the construction of double prevention mechanism, complete the construction of the overall framework of "double prevention mechanism", and focus on strengthening "risk identification, risk assessment and risk classification" to promote the participation of all staff and promote the comprehensive identification of risks by means of incentives. The second is the empowerment of frontline employees’ safety capabilities. During the reporting period, the company and its subsidiaries comprehensively formulated and implemented safety education and training programs, and promoted the construction of safety culture through safety education month, safety supervisor mechanism, post risk identification, 6S activities, and post training competitions. The third is the integration of party building and safety production. The company innovatively carried out activities such as party member’s personal violation and party member’s side violation, and party member’s leading cadres took the lead in giving lectures on special party classes on safety production, and took the lead in creating star-rated teams and groups for safety culture construction, which transformed the good experiences and practices in the activities into a long-term mechanism for the company’s safety production and escorted the company’s development. The fourth is to effectively promote the construction of safety management information system. During the reporting period, the first phase of the safety management information integration system was completed, mainly including four business modules: double prevention mechanism, safety training, certificate management and work permit.
Environmental protection production: adhere to the principle of "achieving internal control standards and building a brand outside", strictly implement the requirements of "comprehensive and high standards", upgrade environmental protection equipment, management system, organizational structure, staffing and production control in an all-round way, and actively shape the brand image of green environmental protection manufacturing enterprises. According to the requirements of the company’s "double carbon" work plan, we actively promote energy conservation and emission reduction, transform the waste gas emission concentration far below the industry and national standards through the implementation of ultra-low emission of boilers, effectively reduce the carbon emission per ton of products through the optimization of equipment technical transformation and the adjustment of energy structure, and realize the effectiveness of carbon quota. All the testing indexes reached the standard throughout the year, and no environmental accidents occurred.
Ii. the industry in which the company is located during the reporting period.
In 2023, the global economy recovered difficultly in the turmoil of frequent natural disasters and geopolitical conflicts. Under the guidance of Socialism with Chinese characteristics Thought of the Supreme Leader in the New Era, China’s economy has generally rebounded, with a GDP of over 126 trillion yuan, up 5.2% over the previous year. The domestic consumer market has achieved steady development in a complex and ever-changing environment. The service consumer industries such as catering, tourism and entertainment have recovered significantly, showing a rapid growth trend. Online consumption is also active, and the transaction volume of e-commerce platforms has continued to grow.
With the steady development of China’s economy, combined with the implementation of sustainable development policies such as "Double Carbon Strategy", "Plastic Ban Order" and "Plastic Limit Order", the market demand of paper products and the prosperity of the industry are still improving for a long time. According to the data of the National Bureau of Statistics, in 2023, the national output of machine-made paper and paperboard increased by 6.6% year-on-year, reaching 144.055 million tons, a record high, and the per capita consumption reached 100 kg/year for the first time, achieving the development goal of the Outline of the Tenth Five-Year Plan and Medium-and Long-term High-quality Development of Paper Industry two years ahead of schedule. Judging from the main financial indicators of industrial enterprises above designated size, the operating income of paper and paper products industry was 1,392.62 billion yuan, down 2.4% year-on-year; The total profit was 50.84 billion yuan, a year-on-year increase of 4.4%.
(A) specialty paper industry
During the reporting period, the domestic thermal paper market benefited from the rapid development of express delivery and instant delivery, and the demand continued to grow rapidly. According to the statistics of the State Post Bureau, in 2023, China’s express delivery business totaled 132.07 billion pieces, a year-on-year increase of 19.4%. The sustained and rapid development of the express logistics industry has driven the growth of the market demand for protective thermal paper, and driven by the domestic economic development, consumption upgrading and environmental protection policies, the markets of medium and high-end products such as logistics label thermal paper, Shangchao label thermal paper, lottery thermal paper and environmental protection thermal paper still maintain steady growth, and have certain technical barriers, so the market development prospects are broad. Benefiting from the development of instant delivery, the market demand of ordinary thermal paper is growing rapidly, but at the same time, due to the low barriers to investment and short production cycle, a large number of production capacity are put in one after another, and the imbalance between supply and demand in the industry is becoming increasingly fierce. However, the competitive advantage of pulp-paper integrated enterprises in the field of ordinary thermal paper is becoming more and more obvious because of its cost control and scale.
During the reporting period, influenced by the international environment and geopolitics, the global white cardboard consumption demand growth weakened year-on-year, and the domestic industry’s downward cycle superimposed new production capacity was put into operation one after another, which led to a significant decline in the profitability of white cardboard enterprises. On January 1, 2023, the state implemented a "zero tariff" import policy for paper products such as white cardboard. Foreign paper products hit the domestic market, and the new capacity of the domestic paper industry continued to be put on. The growth rate of consumption was far less than the release rate of new capacity, and the imbalance between supply and demand was further intensified. After the price of the mainstream market of white cardboard fell rapidly, it maintained a low operating trend, and the profitability was slowly restored. However, with the promulgation and implementation of the national policies such as Opinions on Further Strengthening the Control of Plastic Pollution and Announcement on Matters Related to the Total Ban on the Import of Solid Waste, the demand for replacing plastic with paper and other white cardboard packaging will maintain steady growth, and the overall demand is expected to further expand.
During the reporting period, with the continuous improvement of per capita disposable income and consumption level, the diversified demand for textile products, technologies, etc. also gradually increased. At the same time, with the promotion of environmental protection policies, the traditional heavily polluting printing and dyeing industry continued to transform and upgrade, and the market demand of Thermal Sublimation transfer paper, which has the advantages of environmental protection and immediate delivery, continued to grow. During the reporting period, the iteration of printing equipment in the downstream processing enterprises of the industrial chain was accelerated, and the development trend of thermal sublimation in transfer paper was obvious.
(2) Special materials industry
During the reporting period, the export market of self-adhesive labels faced the double blow of intensified competition and falling prices, and the domestic market also faced the situation of overcapacity and sluggish demand. Through market research, new product development, sales strategy and product structure optimization and adjustment, the company continued to strengthen industrial coordination, and seized large consumer markets such as e-commerce, fresh food and new tea, and the sales volume of self-adhesive labels with variable information categories increased substantially.
Driven by the growth of personalized demand and the maturity of digital printing technology, the market demand of digital printing film is growing rapidly. As a new technology and product applied in the fields of clothing and decoration, with the gradual maturity of the industrial chain, digital printing film has been encroaching on the traditional plate-making printing markets such as gravure printing, silk screen printing and offset printing by virtue of its advantages of print on demand, fast delivery, economy and environmental protection, and the demand will maintain rapid growth in the next few years.
Affected by factors such as centralized procurement of medical consumables, the demand for thermal medical films keeps growing. At the same time, driven by the safety and toughness requirements of the supply chain, the performance and quality of domestic products have gradually improved, approaching or even surpassing some imported products, and the localization rate has been continuously improved.
Iii. Business of the Company during the reporting period
The company’s main business includes research and development, manufacturing and sales of special paper (thermal paper, thermal sublimation transfer paper, high-grade coated white cardboard, etc.), special materials (self-adhesive labels, medical film coatings, digital printing films, papermaking chemicals, etc.) and color printed matter.
(1) Special paper
The company’s specialty paper products are mainly thermal paper, thermal sublimation transfer paper, high-grade coated white cardboard and so on. At present, there are 2 special base paper production lines, 8 special paper coating production lines, 3 high-grade coated white cardboard production lines and 1 film coating production line. Among them, the annual production capacity of special base paper is 185,000 tons, the annual production capacity of special coated paper is 170,000 tons and the annual production capacity of high-grade coated white cardboard is 600,000 tons. The above production capacity is distributed in Zhanjiang and Zhuhai production bases in Guangdong.
1. Thermal paper is mainly used in bills, labels, faxes, cashier and ATM paper. Among them, the special protective thermal paper independently developed by the company is used in high-end fields such as China Sports Lottery, China Welfare Lottery and Civil Aviation Boarding Pass, and occupies a major market share. It is the main supplier of Fucai and Sports Lottery paper in major provinces. Economically protective thermal paper also occupies the position of a major domestic supplier in the fields of logistics, supermarkets and medical labels, and its products are widely used in many well-known express logistics enterprises such as Zhongtong, Yuantong, SF Express and Jitu. In addition, based on the application requirements of differentiated functions of products and the development trend of environmental protection in the industry, the company has introduced heat-resistant labels, medical heat-sensitive paper, high-definition imaging heat-sensitive paper, scratch-resistant heat-sensitive paper, bottomless self-adhesive heat-sensitive paper, phenol-free heat-sensitive paper, etc., and has achieved good market promotion and application effects.
2. Thermal sublimation transfer paper is mainly used in the field of digital inkjet transfer printing of textiles including polyester clothing and home textiles. With the increasingly stringent requirements of environmental protection and the increasing demand of consumers for personalization and high-end, the market volume of digital inkjet transfer materials has grown rapidly, and it has occupied an important share in the international market. With excellent quality and mature technology, the company occupies the main share in the domestic market and the export market in Southeast Asia.
3. White cardboard for tobacco packaging occupies a dominant position in the domestic high-end tobacco packaging field, and it is the earliest enterprise in China to realize the import substitution of white cardboard for tobacco packaging, and has successively won the China International Paper and Paper Brand Gold Award and the National Science and Technology Progress Award. The company adheres to the strategy of high-end differentiated products to serve downstream customers, and independently develops cigarette packaging products such as colored fiber anti-counterfeiting coated white cardboard, natural fiber anti-counterfeiting coated white cardboard, tobacco fiber anti-counterfeiting coated white cardboard, etc., to help downstream customers prevent counterfeiting from the source of packaging materials and achieve the remarkable anti-counterfeiting effect of "easy identification and difficult imitation". Innovative research and development of high loose thickness cigarette cards, soft package hardened cigarette cards, high folding resistance cigarette cards and other products, to better meet the needs of the tobacco industry to practice environmental responsibility, new product development, import substitution and so on.
White paperboard for food packaging is a high-grade coated white paperboard with a rapid growth in market demand. The company’s white cardboard for food packaging is mainly oriented to the middle and high-end application market. The raw materials are 100% imported pure wood pulp certified by FSC, and the product technology is mature and leading, which can effectively meet the diversified needs of customers. Among them, the company’s liquid packaging white cardboard took the lead in breaking the monopoly of foreign technology, independently developed liquid aseptic packaging base paper for liquid milk, fruit juice, herbal tea and other beverages, effectively replacing imported products, and has obtained product life cycle carbon footprint verification certification. The company is the main domestic supplier of leading international liquid packaging enterprises, and occupies an important market share in the domestic liquid packaging market. The company’s food packaging products, such as coated oil-proof food cards and high-grade paper cups, have advanced technology and stable quality. It is the only supplier in the Asia-Pacific region designated by world-renowned catering groups, and has established stable cooperative relations with many well-known catering brands at home and abroad. In addition, the company actively responded to the national policy calls such as "plastic ban order" and "plastic restriction order", adhered to the concept of green sustainable development, and successfully developed plastic-free and degradable paper packaging products such as "plastic-free coated food paper" and "degradable PBS coated paper", which have been applied in the market in batches, effectively replacing PE coated paper and reducing the use of non-degradable plastic products.
High-grade social white cardboard is mainly used in high-end medicine, cosmetics, daily necessities and other sub-packaging market fields. Focusing on subdividing differentiated markets, the company has launched a variety of functional high-end products with unique features, which have the characteristics of excellent post-processing adaptability and exquisite printing effect, and can meet the personalized and customized packaging needs of customer groups. The company independently developed and patented the "personalized identification code anti-counterfeiting coated white cardboard", which was successfully applied to the packaging of high-end series products such as medicine and cosmetics, focusing on anti-counterfeiting function and personalized customization of high-end brands. White cardboard products with different functions, such as blister white cardboard, cold chain storage and transportation white cardboard, and high white premium card, show excellent packaging performance under specific application requirements and are well recognized by the market and customers.
(2) Special materials
The company’s special material products are mainly self-adhesive labels, medical film coatings, digital printing films, papermaking chemicals and so on. There are 4 self-adhesive coating production lines, 1 precision coating production line, 1 thermal medical film coating preparation system, 2 latex production lines and 1 calcium carbonate production line. Among them, the annual production capacity of adhesive is 95,000 tons, the annual production capacity of film-based materials is 5,000 tons, the latex production capacity is 150,000 tons, and the calcium carbonate production capacity is 20,000 tons. The above production capacity is located in Zhanjiang, Guangdong, Zhuhai and Pinghu, Zhejiang.
1. Self-adhesive labels are mainly used in variable information labels, anti-counterfeiting labels and basic labels in logistics, medicine, daily chemical, food and alcohol industries. As the most important way of all labels, self-adhesive labels account for 41%, and the annual market demand keeps increasing by about 5%. The per capita use of self-adhesive labels in China is about 5㎡/ year, which is much lower than that in Japan and the United States, and there is great room for development. At present, the company’s self-adhesive labels are mainly used and exported by well-known terminal brands.
2. Digital printing film is a consumable used in digital inkjet printing, which is mainly used for customization of finished products such as clothes, bags, shoes and hats. Compared with traditional printing methods, it has the advantages of print on demand and quick delivery. The company has patented water-based coating technology, the whole production process is green and environmentally friendly, and the comprehensive benefits far exceed those of solvent-based coating products.
3. Thermosensitive medical film coatings are mainly used in the medical field. Based on the production technology of thermal paper, nano-grinding technology and capsule synthesis technology, the company developed thermal medical film coatings to meet the needs of customers and realize partial import substitution. The product quality has been widely recognized by the downstream industries in the industrial chain.
4. Papermaking chemical industry is an industry that the company extends to the upstream of the industrial chain. The main products include carboxyl styrene-butadiene latex, styrene-acrylic latex, ultrafine calcium carbonate and chemical additives for papermaking. As coating adhesives and pigments, these products are widely used in papermaking and coating industry, and their quality has reached the first-class level in China. The company can supply customized products to customers, serve the technological innovation and new product development of downstream industries, and is a well-known enterprise of latex for paper making in China.
(3) Color printed matter
Color printing is the business that the company extends to the downstream of the industrial chain, focusing on the production and technological innovation of fully automatic packaging products such as folding cartons, cartons, wet adhesive labels, self-adhesive labels, shrink labels, film labels, bar code printing, brochures, books and periodicals, which can meet the needs of variable data printing. Color printing products are mainly oriented to end-consumer industries, such as pharmaceuticals, condiments, various drinks, etc., and provide customers with one-stop packaging solutions including scheme design and material production. From the material end, they can provide customers with customized solutions and provide customers with more environmentally friendly, economical and personalized packaging materials. At present, there are 7 high-speed printing machines, 8 die-cutting machines and other production equipment, which are located in Foshan production base, Guangdong Province, with an offset printing capacity of about 260 million and a flexographic printing capacity of about 100 million meters.
Iv. analysis of core competitiveness during the reporting period
(A) brand and channel advantages
The company thoroughly implements the quality policy of "quality is in detail, standard is law", strives for perfection in technology and craft, establishes long-term cooperative relations with large-scale high-quality customers at home and abroad, and is the most stable and reliable partner of customers, laying a solid foundation for enhancing brand influence. Hongta Renheng, the holding subsidiary of the company, won the highest award in China’s scientific and technological circles-the first prize of national scientific and technological progress. Hongta brand coated white cardboard has a leading position in the domestic and international white cardboard industry, representing the highest level of production, technology and products of coated white cardboard in China, and enjoys a good reputation in domestic and international markets. The leading product, coated white cardboard for cigarette packs, accounts for nearly a quarter of the market segment. The company has advanced thermal technology, stable product quality and excellent performance, and has obvious competitive advantages in the field of protective high-end thermal paper, and its market share ranks in the forefront of the industry. Brands such as Guanhao, Haozheng and Hongmei have high popularity, reputation and integrity in the industry.
(B) the advantages of scientific and technological innovation
Focusing on the concept of high-quality sustainable development, the company always insists on "innovation" as the core driving force for enterprise development. While devoting itself to technological innovation, it also adheres to the principle of "market-oriented, customer-centered", firmly grasps the future product positioning, takes the initiative and overcomes difficulties. During the reporting period, the company’s scientific and technological innovation transformation platform took the "stuck neck" cutting-edge technology as the direction, deepened cooperation with universities, scientific research institutions, technology holders, customers and other resource parties, explored and enriched the transformation mode of scientific and technological research and development, and enhanced the independent innovation capability of "science and technology reform enterprises". Establish and improve the incentive mechanism and fault-tolerant and error-correcting mechanism, mobilize and stimulate the enthusiasm, initiative and creativity of technicians for innovation, accelerate the iterative upgrading of new products, and successively develop and introduce many new products to the market, such as aseptic roof liquid packaging paper, plastic-free coated food cardboard, SBS single-sided coated tobacco cardboard, medical thermal paper, medical film coating and digital printing film, actively practice the concept of green environmental protection, develop a green circular economy, and promote products with "paper instead of plastic" and personalized needs. Provide customers with customized solutions from the material side, and provide customers with more environmentally friendly, more economical and more personalized packaging materials. At present, the company has reserved a number of new technologies and products, and continues to develop and promote them.
The company has four provincial engineering technology research centers, four provincial enterprise technology centers and doctoral workstations, and seven companies and subsidiaries have obtained the certification of "high-tech enterprises". Established a professional R&D team led by deputy chief engineer, senior engineer and doctor, and participated by technicians with bachelor degree or above, and won 12 scientific and technological awards at or above the provincial level. The company’s protective thermal paper, white cardboard for cigarettes and other core technologies have reached the international advanced level. The company has advanced equipment, including papermaking and coating equipment imported from internationally renowned companies such as BMB in Switzerland, VALMET in Finland, VOITH in Germany, etc. The equipment has a high degree of automation, exquisite technology, efficient and stable overall operation and low energy consumption, and the product quality ranks in the forefront of the industry.
(C) Management advantages
Through years of business accumulation, the company has trained a large number of outstanding technical innovation and management talents, and established a high-level, broad-minded and advanced management decision-making team. At the same time, the company actively promotes the mechanism reform, and through a series of reform measures such as implementing tenure system and contractual management, establishing and improving the medium and long-term incentive and restraint mechanism, further improving the market-oriented selection and employment system, continuously improving the market-oriented operating mechanism, and doing a solid job of "attracting talents", "retaining talents" and "cultivating talents", the company’s management level has been continuously improved. The company will bring lean management into the overall strategic layout of the enterprise, run through all links of production, warehousing, logistics and management, optimize production organization and management, improve production efficiency and optimize production costs; Actively explore and improve the management mode of "operation control headquarters+cost quality production base", establish an efficient and orderly comprehensive management mechanism, and continuously improve the management level and market competitiveness of enterprises.
(D) the advantages of intelligent management
Through the construction of enterprise core information system, ERP system (NCC)+ manufacturing system (MES)+ other supply chain auxiliary systems, a system platform with supply chain business as the core is built. Through informatization, digitalization, intelligent and orderly construction, the overall digital and intelligent management system of the enterprise will be gradually built.
Carry out digital intelligence construction based on actual business requirements: business departments put forward digital construction requirements from the perspective of business management, combining various business application scenarios and production management application scenarios; In view of the above requirements, the information department screens the requirements consistent with the planning requirements on the basis of the overall informationization, digital construction planning and top-level system design requirements of the parent company, and designs the scheme from the technical perspective to organize the construction of the digital intelligent system together with the business department.
Taking the ERP system (NCC) as the core, we should build a complete auxiliary operation system to improve the comprehensiveness of information management and the efficiency of supply chain. Relying on the actual business needs of the supply chain, we will gradually plan and implement TMS, WMS, SRM, CRM and other systems, and gradually build systems such as delivery plan assembly recommendation, AGV automatic guidance and handling warehouse, vehicle reservation, intelligent weighbridge, logistics tracking, electronic receipt, automatic freight settlement, and data center, and build a digital intelligent platform that matches the company management. In 2023, the company’s smart warehousing project was selected into the list of excellent national intelligent manufacturing scenarios, and the data management application passed the national DCMM data certification. The company made steady progress on the journey of digital intelligence and continuously improved its core competitiveness.
(E) Advantages of environmental protection governance
The company has always adhered to the concept of high-quality sustainable development, vigorously promoted the construction of green manufacturing system and actively fulfilled its social responsibilities. The company runs the concept of green development through daily production and business activities, constantly develops environmental protection products, selects foreign renewable high-quality wood pulp raw materials, implements energy-saving and emission-reduction transformation of production lines, introduces the concept of green ecological design, and promotes the resource utilization and harmless treatment of wastewater and solid waste. Guanhao Gaoxin, Hongta Renheng, Zhuhai Huafeng and Huaxin Color Printing successively won the honorary title of "National Green Factory". During the reporting period, all the tests were up to standard, and no environmental accidents occurred.
V. Main operations during the reporting period
During the reporting period, the company achieved operating income of 7,403,369,683.68 yuan, down 8.44% year-on-year; The total profit was -206,037,259.02 yuan, down 140.46% year-on-year; The net profit attributable to shareholders of listed companies was -46,239,663.16 yuan, down 112.00% year-on-year.
VI. The Company’s Discussion and Analysis on the Company’s Future Development
(A) the industry pattern and trends
1. The industry boom is under pressure in the short term, but it is improving in the long term.
In recent years, China’s paper industry has experienced a series of challenges and changes to adapt to the new economic environment and market demand. In 2023, due to geographical conflicts and other factors, the global economic growth slowed down, the demand growth rate of paper products market slowed down simultaneously, and the superimposed new production capacity and raw material costs were under pressure, and the downward pressure on the paper industry was obvious. However, from the development trend, based on the traditional paper products, China’s paper industry is gradually turning to special paper and other new paper products with high technical content and high added value, which are more widely used in product packaging, electronics, medical care, construction and other fields. At the same time, policies such as "double carbon strategy", "plastic ban order" and "plastic restriction order" are also accelerating the arrival of new market opportunities such as "replacing plastic with paper" and "replacing ash with white". In 2023, the per capita consumption of machine-made paper and paperboard in China reached 100 kg/year for the first time, but it is still lower than the per capita consumption level of 150-300 kg/year in developed countries, and the development prospect of China’s paper industry is still broad.
2. Leading enterprises promote resource reorganization, and the competition is more concentrated.
With the accelerated transformation of China’s paper industry to the market of high-quality and high value-added products, and with the sustained and strong support of economic recovery, the specialty paper industry will continue to maintain a high expansion speed in the future, and the industry competition pattern will accelerate its evolution. Large-scale leading enterprises will consolidate their scale advantages through mergers and acquisitions and capacity expansion, and accelerate the construction of product capabilities in diversified markets to improve their market competitiveness and risk resistance. At the same time, through the upstream and downstream industry consolidation, we will realize the synergy from raw materials to finished products, improve efficiency, and thus achieve the purpose of improving profitability. With the development of national policies and consumption trends, and the trend of terminal demand specialization and high-end, the production capacity of specialty paper will continue to gather in leading enterprises. From the perspective of the development of supply and demand, the supply and demand of specialty paper will remain relatively balanced in the short term, but with the increasing scale of single-machine production of specialty paper, the production capacity of some specialty paper products will be surplus. Among them, the contradiction of oversupply of white cardboard is difficult to alleviate in the short term, and the capacity utilization rate will continue to decrease. On the whole, with the concentration and expansion of production capacity, the trend of homogeneous low-price competition in the mainstream market of specialty paper will become more prominent.
3. Deepen the extension of industrial chain and reconstruct the cost competitive advantage.
Under the influence of complicated international politics, economy, trade and supply and demand situation, the prices of related bulk raw materials and energy in the paper industry fluctuate sharply, and the profitability of paper enterprises is greatly challenged. In order to smooth the cost fluctuation, on the one hand, large leading enterprises accelerate the diversification and high-end of their product structure, on the other hand, actively promote the integrated layout of forestry, pulp and paper to enhance the company’s safety margin and growth momentum. In addition, in order to seize resources and markets, gain more advantages of high quality and low price resources, reduce operating costs and expand production scale, China paper enterprises continue to speed up the pace of setting up factories in the sea, Southeast Asia and the United States and Europe have become hot investment areas, and wrapping paper and pulp projects are still the key layout direction, so as to reduce the import cost of raw materials and the export cost of finished products of domestic factories, further improve the layout of upstream and downstream and global industrial chains, and improve the risk resistance and profitability of enterprises.
(II) Company development strategy
The company will build a high-end green specialty paper industry with a moderate and effective scale as the foundation, cultivate and incubate related multi-strategic emerging industries as the strategic logic, base itself on the strategic positioning of strengthening, improving and expanding the coating of new materials and related industries, continue to promote the in-depth integration of party building and management, carry out the comprehensive reform measures of "scientific and technological reform action", shape new quality productivity with scientific and technological innovation, steadily improve the digital and intelligent level of production, unswervingly take the road of green and sustainable development, and actively fulfill its social responsibilities. By building new production capacity and seeking mergers and acquisitions, we will optimize the industrial structure, integrate high-quality resources, improve the layout of specialty paper industry, and build a high-end green specialty paper industrial base with core competitiveness. Build an open science and technology innovation platform, focus on cultivating and incubating multiple strategic emerging industries, further improve corporate governance, establish and improve market-oriented selection and employment and incentive and restraint mechanisms, introduce leading talents in scientific and technological innovation, focus on cutting-edge technologies, and strive to become a world-class coating new material industry company.
(3) Business plan
In 2024, the company will adhere to the guidance of Socialism with Chinese characteristics Thought of the Supreme Leader in the New Era, thoroughly implement the spirit of the 20th Party Congress, adhere to the new development concept, give full play to the core role of the party’s leadership, focus on the strategic positioning of strengthening and improving the coating of new materials and related industries, and make overall plans to promote the company’s "14th Five-Year Plan", comprehensively promote the company’s high-quality development and continuously create value for shareholders.
1. Insist on comprehensively strengthening the party’s leadership and promoting the integration and empowerment of party building and management.
First, adhere to political integrity. Strictly implement and continuously deepen the "first topic" system, strengthen the exploration of the "learning+research+discussion" mode of the theoretical learning center group of the party Committee, and promote the gradual progress to the research field of special topics, and open up the "last mile" of theoretical achievements transformation. The second is to insist on strong organization. Party organizations focus on "strong guidance, mechanism building, team leading and new achievements", and deepen the application of the "party member Commando" action and the "Party building to promote business" project around the two key tasks of R&D platform and project construction. At the same time, the ISO9000 standard is introduced into the work flow of Party building, and the "Party Building Quality Management System" is constructed by five models, including system standard management, Party building brand management and demand improvement management, so as to realize the organic combination of tangible product production and intangible product service for the first time in the system. The third is to adhere to integration and empowerment. Deepen the implementation of the "cohesion, integration, empowerment and effectiveness" party building brand, and empower the multi-dimensional integration of party building, enterprise management and strategy. Continue to rely on the decision-making and deliberation system and mechanism of the Party Committee, study and plan ahead, promote the company’s resources, mechanisms, platforms and other elements to gather on the R&D platform, and promote the incubation of original R&D achievements of enterprises.
2. Anchoring strategic objectives, focusing on strengthening the chain of main business and strengthening scientific and technological innovation.
The first is to build a special paper industry base with core competitiveness. Actively promote the construction of Zhanjiang base, steadily promote the installation and commissioning of 300,000 tons of high-grade coated white cardboard projects and 60,000 tons of special paper projects, accelerate the construction of 400,000 tons of chemimechanical pulp projects, and comprehensively promote the transformation and upgrading of digital intelligence. The second is to strengthen the chain and promote the upgrading of auxiliary industries. Focus on the development status of paper chemicals, self-adhesive labels and color printing business sectors, analyze the difficulties and blocking points in the benchmarking industry, and formulate feasible industrial upgrading plans. The third is to strengthen scientific and technological innovation. Improve the construction of science and technology platform, optimize the organizational structure, accelerate the establishment of experimental platforms for special fiber materials, precision coating materials and fine chemical materials, increase the introduction of talents, establish and improve the incentive and restraint mechanism for scientific and technological talents, and fully stimulate the kinetic energy of scientific and technological innovation. Steadily promote the pilot test line project of special fiber composite materials; Accelerate the investment and construction of new precision coating and wiring, seize market opportunities and expand market share; Continue to optimize new coatings for medical films, further expand production capacity and increase import substitution.
3. Deepen the reform of state-owned enterprises and focus on strengthening their core competitiveness.
According to the deployment and requirements of the State-owned Assets Supervision and Administration Commission on deepening and upgrading the reform of state-owned enterprises, we will solidly promote the implementation of the reform plan and ledger of the "Scientific Reform Action". Through improving the corporate governance system and mechanism, perfecting the market-oriented mechanism of selecting and employing people, strengthening the market-oriented incentive and restraint mechanism, and stimulating the kinetic energy of scientific and technological innovation, we will further consolidate and consolidate the reform results. Focus on scientific and technological innovation and incubation of strategic emerging industries. First, establish a differentiated salary mechanism for scientific and technological talents and actively introduce scientific and technological talents in new materials industries; The second is to improve the medium and long-term incentive and restraint mechanism, effectively bind the core personnel of the scientific research team, and stimulate the kinetic energy of scientific and technological innovation; The third is to increase the power of granting scientific and technological innovation projects, simplify the decision-making process and improve the decision-making efficiency of science and technology innovation projects. Gradually improve the company’s innovation system and mechanism, further strengthen the dominant position of enterprise innovation, and strive to enhance the core competitiveness of enterprises.
4. Strengthen internal control management and build a bottom line for compliance management.
Focus on key areas, key links and major engineering projects, with special audits and special inspections as the starting point, and promote the construction of the "five-in-one" risk control system in an orderly manner to achieve the control objectives of strong internal control, risk prevention and compliance promotion. The first is to build a risk prevention and control barrier. Further improve the construction of risk control system, rely on the results of risk identification and evaluation, promote advanced risk judgment, early warning, early prevention and control, and early disposal, and resolutely prevent and control major risks. The second is to keep the bottom line of legal compliance. Further enhance the depth and intensity of the "three legal audits" of major decisions, economic contracts and rules and regulations, organically integrate legal argumentation with business management decisions, and ensure that the concept of compliance management is integrated into the company’s decision-making and implementation system. The third is to lay a solid foundation for the internal control system. Focus on the effectiveness of internal control design and implementation of core businesses, key links and important positions such as investment management, fund control, bidding and procurement, debt risk, etc., and make a comprehensive evaluation to promote all work to be effective with closed-loop management. The fourth is continuous audit supervision to promote reform through investigation. Through the audit of key areas, key links and major engineering projects, problems are found to promote system improvement and process optimization, and give full play to the supervision and evaluation role of the third line of defense, so as to promote reform and form closed-loop management.
5. Enhance the prevention and control of safety and environmental risks and adhere to safe and green development.
(1) Safety production management
First, the whole system focuses on promoting the "two votes and three systems". Focus on the creation of inspection and maintenance work tickets and operation tickets for specific scenes, clarify the specific forms and content carriers of "shift system", "patrol inspection system" and "equipment periodic test rotation system", formalize and standardize the inspection and maintenance, operation and equipment management processes, and reduce the hidden risks of irregular operation. The second is to deepen the construction of the dual prevention mechanism system. We will continue to promote the accurate investigation of hidden dangers of major accidents and major hazards, conduct targeted investigation of ineffective hidden dangers of risk control measures, dynamically identify risks, evaluate the effectiveness of control measures, continuously adjust and optimize the dual prevention mechanism, and build a long-term safety risk prevention and control mechanism. The third is to implement governance in the field of special risk prevention and control. Deploy special topics to study the systematic management of inspection and maintenance, the safety management and control mode of construction projects and the safety management of project trial operation, form the standardization of judgment standards for major accidents, promote the standardization of internal control of special (dangerous) operations, and improve the level of safety governance in special fields. The fourth is to actively promote the informatization construction of safety production and realize "institutionalization of safety management, formalization of system and informatization of form". Achieve the goal of zero general and above safety accidents throughout the year.
(2) ecological environment protection work
The first is to establish a monitoring mechanism and an early warning mechanism. With the help of HSE information system, the company monitors the environmental protection of all bases and subsidiaries online, issues a warning when the pollutant discharge concentration and quantity reach the early warning value, and requires all units to deal with it in time to ensure that the concentration and total amount do not exceed the standard. The second is to actively introduce professional institutions. By introducing the third-party environmental protection housekeeper, the company’s ability and level of environmental protection governance will be improved, hidden problems in environmental protection will be discovered and eliminated in time, and the legal compliance of environmental protection governance will be ensured. The third is to establish a project environmental assessment mechanism. By establishing an environmental assessment mechanism, fully assess the feasibility of environmental protection in the early stage of the project to ensure the orderly implementation of the project. Achieve the goal of 100% qualified rate of monitoring and sampling of waste water, waste gas, noise and solid waste, 100% qualified rate of filing environmental protection files and zero environmental accidents throughout the year.
(4) Possible risks
1. The risk of global economic uncertainty
Under the influence of inflationary pressures and geopolitical conflicts, the global economy showed a weak recovery in 2023, and the momentum of economic growth was obviously insufficient, and the overall demand in the export market declined and recovered slowly. Judging from the development situation of major economies in the world, although the global inflation situation has improved, major institutions in the world generally believe that the momentum of global economic recovery will continue to weaken in 2024, which will have a certain impact on the company’s operating performance due to the influence of geopolitical conflicts, European and American monetary policies, supply chain stability and other uncertain factors, insufficient support from foreign consumers and unsatisfactory demand in export markets.
2. Risks of tariff policy on imported paper
According to the announcement of the State Council Customs Tariff Commission, in 2024, the provisional import tax rate will be applied to 1020 commodities (excluding commodities with tariff quotas), and the "zero tariff" policy for the import of paper products will still be maintained in 2023. The imported paper in the main product markets involved by the company, such as thermal paper, thermal sublimation transfer paper and white cardboard, still enjoys preferential tariff policies. In 2023, some product markets and prices will be affected by the impact of imported paper. In 2024, the "zero tariff" policy will continue to be maintained, and the impact of imported paper on the domestic market will still exist. The contradiction between supply and demand will become more intense due to the continuous expansion of domestic production capacity. The domestic special paper market will be more complicated and changeable, or the domestic market price will be further lowered, affecting the profit margin of the company’s products.
3. Risk of disorderly expansion of industrial capacity
In the next few years, the production capacity of specialty paper industry will continue to expand rapidly, and the economic growth will slow down in the short term. Although the demand has recovered, the growth momentum is still insufficient, the weak balance between supply and demand of specialty paper will be disturbed, in which the imbalance between supply and demand of white cardboard will be further aggravated, and the low-price impact of imported paper will add to the trend of homogeneous low-price competition in the mainstream market of specialty paper. In particular, the white cardboard industry will continue to fight at low prices, and the net loss per ton of paper will become the norm. At the same time, the specialty paper market also has the risk of cross-border impact on the industrial base paper market by the production capacity of double-adhesive culture paper, and more new production capacity of culture paper will be added later, which may have a certain impact on the market prices of thermal paper and specialty paper base paper. Although the company’s product structure is mainly based on relatively differentiated or mid-to high-end market applications, the low mainstream market prices will still affect the market prices of various products, thus affecting the company’s operating performance and profitability.
4. The risk of iterative changes in consumption
With the development and popularization of digital application technology, the trend of electronization and digitalization of bills has accelerated, and the shrinking of carbonless paper market has obviously accelerated due to the influence of common bills’ thermal sensitivity. The promotion of paperless has led to an irreversible downward trend in the sales of relatively high-margin carbonless paper products of the company, which has affected the company’s performance. Based on this situation, the company is also accelerating the iterative upgrading of existing products and new product market development, so as to fill the market share of high-margin products and improve profitability, and better resist the impact of changes in terminal consumer demand.
5. Risks of raw material prices and exchange rate fluctuations
The main raw materials of the company’s products are wood pulp, coal, chemicals, etc. Some raw materials are imported and settled in US dollars, which are greatly influenced by multiple factors such as the international economic situation, import policy, market supply and demand, changes in shipping situation and China market mentality. In order to better avoid the risk of raw material price and exchange rate fluctuations, the company organized professionals to strengthen the forecast and analysis of raw material market, and eliminated or alleviated the adverse effects caused by raw material price and exchange rate fluctuations by strengthening supply chain management, improving and optimizing production technology, increasing export market development, and giving full play to the market discourse power of subdivided products.
6. Risk of policy change
Under the current economic situation, China is still the main driving force of global economic recovery, and China’s economic growth has become one of the main factors affecting the global economy. Therefore, the strength of China’s macroeconomic policies to support economic growth will have an important impact on the recovery of domestic and foreign consumer demand. In addition, the adjustment of policies and strategies related to industry development, taxation, environmental protection and trade at home and abroad will also affect the company’s operation. The company will always pay attention to policy changes, consolidate operation and management, improve operational efficiency, and prevent risks brought by policy changes as much as possible.