Founder Securities released a research report stating that rising raw material prices have strengthened paper companies' resolve to maintain high prices, while a stronger exchange rate brings cost optimization. Industry profitability is expected to gradually improve, with integrated pulp and paper enterprises boasting high self-supply ratios of pulp likely to benefit more. For the bulk paper sector, Sun Paper (002078.SZ) is recommended, and for the specialty paper sector, Xianhe Co., Ltd. (603733.SH) and Wuzhou Special Paper (605007.SH) are suggested for attention. The main views of Founder Securities are as follows.
As of the close on December 25, 2025, the Shenwan Paper Industry Index rose by 3.68%, ranking third in single-day gains among Shenwan's secondary industry indices. The appreciation of the Renminbi is expected to benefit pulp-and-paper companies more significantly on the cost side.
On December 25, 2025, the offshore Renminbi broke through the 7.0 mark against the US dollar during trading, the first time since September 2024; the onshore Renminbi closed at 7.0066 against the dollar, up 95 basis points from the previous trading day. With China's paper industry relying on imported pulp for about 60% of its needs, the accelerated appreciation of the Renminbi since mid-November is expected to optimize the procurement costs of imported pulp.
Overseas pulp mills continue to raise prices. Brazil's Suzano announced a price increase of $20 per ton for the Asian market, applicable to orders placed from December onward, marking its fourth price hike for Asia in 2025. Chile's Arauco announced a $20 per ton increase for both softwood and hardwood pulp in December. The rising offers from overseas pulp mills provide cost-side support for domestic paper price increases.
Amid rising raw material costs, leading domestic paper companies have successively issued price hike notices. Effective January 1, 2026, Sun Paper, Asia Symbol, APP (China), and Bohui Paper will raise prices for their respective products by 200 yuan per ton.
Risks include terminal demand falling short of expectations, significant fluctuations in raw material prices, substantial exchange rate volatility, and intensifying industry competition.