Sunday, October 1, 2017

至資匯 “大马 Paper & Corrugated Packaging Stocks 吃不到也赚到” (华/Eng )

資匯”周刊这期报道了纸和瓦楞纸包装行业,并与钢铁行业做比较。

前提是纸和瓦楞纸包装行业从不是投资研究的重点,大众对其经济知之甚少。 因此,資匯”尝试扩大我们知识圈
的努力确实值得赞赏。

与钢铁周转不同,資匯”的文章得出结论是马来西亚纸瓦楞纸包装公司将不会从中国近期的变化中获益。

这封信的目的是展示二级思维,以验证介词。


The Busy Weekly covers paper & corrugated packaging industry this week. This industry is compared to steel industry in this issue.

The paper & corrugated packaging industry is under-studied and little is known about its economy. Therefore, the weekly paper has its own merit being the first formal attempt to help expand our circle of competence.

Unlike the steel turnaround, the weekly paper concludes that Malaysian paper & corrugated packaging companies will not benefit from the changes in China's arena.

It is the objective of this letter to demonstrate the second-level thinking in order to verify that preposition.







































背景

中国政府最近颁发禁止废品进口令

其目标包括混合废纸 - 纸和瓦楞纸包装的关键原料。废纸分为三类:旧瓦楞纸箱,旧报纸和混合纸。

中国于7月18日发布最新的环保倡议,预计在年底生效。此举无疑向外国废纸出口商倒了一桶冷水。

国务院办公厅表示,到2019年底的目标是“逐步停止可以用国内资源取代的固体废物的进口”。中国似乎倾向采购国内的可回收利用物质,以便更好地控制环境素质。

这显示了中国政府针对改善环境的决心。此举遵循2013年“绿色围栏”和今年的“国家剑”计划。最新报告指出,中国的目标是“在进出口,运输,利用等步骤中不断加强对固体废物的监督管理,确保自然环境的安全”。

中国政府“通过禁止进口废物加强固体废物,进口管理制度改革和实施计划”可能会改变国际和国内市场的格局。

这将会如何影响马来西亚的纸和瓦楞纸包装公司?

Background

The Chinese government has recently banned importation of scrap commodities.

China is targeting mixed scrap paper - a key raw material in making paper & corrugated packaging. Wastepaper falls under three classifications — old corrugated containers, old newspapers, and mixed papers.

This latest environmental initiative by China that was published on July 18 and is scheduled to take effect at the end of the year is nevertheless chilling for scrap paper exporters.

The General Office of the State Council said the goal by the end of 2019 is to “gradually halt the importation of solid waste that can be replaced with domestic resources.” China appears to be moving toward domestically procured recyclables that it can better control.

This is the latest Chinese government effort to crack down on the environmental impact of scrap imports. It follows the 2013 “Green Fence” and this year’s “National Sword” initiatives. China’s goal, as stated in the latest report, is to “ensure the safety of the natural environment by continuously strengthening the supervision and management of solid wastes at the importation, transport, utilization, and other steps.”

The Chinese government’s 'Reform and Implementation Plan to Enhance Solid Waste Import Management System by Prohibiting the Entry of Foreign Waste' could change the landscape of international and national markets.

How would that affect paper & corrugated packaging companies based in Malaysia?

概念框架

在我们尝试回答之前,让我们考虑以下两个概念框架:

左图 - 当大型出口商停止出口时,其连锁效应的逻辑观点
右图 - 当大型进口商停止进口时,其连锁效应的逻辑观点

Conceptual framework

Before we attempt to answer that, let's consider the two conceptual frameworks below:

On the left - A logical view on its chain effects when large exporters halt exports
On the right - A logical view on its chain effects when large importers halt imports


鉴于其独立角色(大型出口商或进口商),其贸易政策对国际和国内需求动态的影响明显不同。

供需定律是解释资源供给与资源需求之间的相互作用的理论。 供需法定义了特定产品的可用性和该产品的需求(或需求)对价格的影响。 一般来说,低供应量和高需求量增加价格,而相比之下,供应越多,需求越来越低,价格趋于下降。

他们看起来很学术。我们有必要通过实际事件来说明这些连锁效应。

Given their separate role (being large exporters or importers), their trade policy has distinctly different impact on the international and domestic suppy-demand dynamics.

The law of supply and demand is the theory explaining the interaction between the supply of a resource and the demand for that resource. The law of supply and demand defines the effect the availability of a particular product and the desire (or demand) for that product has on price. Generally, a low supply and a high demand increases price, and in contrast, the greater the supply and the lower the demand, the lower the price tends to fall.

They look academic. It is necessary to to illustrate these chain effects through real events.

当大出口商减少/限制/禁止出口

食品价格危机2007/08:


  • 出口限制/禁止=>(看似)较低的国际库存
  • (看似)较低的国际库存=>提高交易价格
  • (看似)较低的国际库存=>(恐慌)国家的的需求
  • (恐慌)国家的需求=>提高交易价格

When large exporters reduce/limit/ban exports

Food Price Crisis 2007/08:
  • Export restriction/ban => (seemingly) lower inventory in the international market
  • (Seemingly) lower inventory => higher trading prices
  • (Seemingly) lower inventory => (panic) greater demand from nations
  • (Panic) greater demand from nations => higher trading prices
 

中国钢铁减产2017年:


  • 生产和出口减少=>较低的国际库存
  • 较低的国际库存=>提高交易价格
  • 较低的国际库存=>国家需求增加
  • 国家需求强劲=>提高交易价格

China steel production cut 2017:
  • Production & export reduction => (seemingly) lower inventory in the international market
  • (Seemingly) lower inventory => higher trading prices
  • (Seemingly) lower inventory => intensified demand from nations
  • Intensified demand from nations => higher trading prices

当大进口商减少/限制/禁止进口


2014年8月以来的乳品价格危机:


  • 俄罗斯进口禁令=>国际库存过剩
  • 国际库存过剩=>降低国际交易价格
  • 国际库存过剩=>其他国家更为实惠的需求
  • 来自国家的更大需求=>(略)随着时间的改善了国际交易价格

When large importers reduce/limit/ban imports

Dairy Price Crisis since Aug 2014:
  • Import ban by Russia => inventory glut in the international market
  • Inventory glut => lower trading prices
  • Inventory glut => more affordable demand from other nations
  • Greater demand from nations => (slightly) improved trading prices over time



  
中国

2016年全球进口废纸总值4143.4亿美元。

中国占约36%进口总值,使其成为世界上最大的废纸进口国。

China: the world's largest importer of wastepaper

Globally, countries imported wastepaper valued at $41,734 mil in 2016.

Approximately 36% of the total import value contributed by China, making it the world's largest importer of wastepaper.




中国进口禁令造成大陆内供有限,把中国废纸价格推上新高。

Limited domestic supply resulting from the Chinese import ban of wastepaper has driven wastepaper prices to new heights in China.


另一边厢,这个禁令也导致中国以前的输出伙伴(即美国,加拿大,巴西和印尼)堆积了废纸的存货在它们国内。

更多的国际储存促使了美国国内的废纸价格应声下跌。

由于中国才刚颁发废纸进口禁止令,目前还无法判断废纸价格的未来走势。

The ban also piles up the inventory of wastepaper in those countries (i.e. USA, Canada, Brazil and Indonesia) China previously sourced from. 

As more wastepaper is available in the international market than before, domestic (i.e. USA) wastepaper prices have taken a dip. 

It is however too early to draw an inference on the persistence of the downtrend since the Chinese ban on wastepaper has just kicked in.



马来西亚

马来西亚造纸厂依赖废纸进口,主要来自美国(31%)和巴西(12%)。

中国废纸进口禁止令以后,他们在这些国家采购废纸方面的竞争理应不再那么激烈。

Malaysia: More wastepaper in the international market

Paper mills in Malaysia rely on wastepaper imports, largely from USA (31%) and Brazil (12%).

They should face less intense competition in sourcing wastepaper from these countries after the Chinese policy.































但是,大马造纸厂规模有限,无法满足国内需求。 大马纸和瓦楞纸包装公司因此转而进口。

由于中国已经缺货,大马公司很可能会转向第二大出口国 - 印尼(即另一方面是第四大废纸出口国)进口纸质和纸板。

印尼的供应以其相对较低的价格而闻名。自从中国政策实施以来,印尼堆积了更多的废纸。因此,其价格不太可能发生很大的变化。 当国际需求超过/赶超当地供应量时,情况就会有所改变。

However, the scale of the local paper mills is limited and unable to fulfill domestic demand. Malaysian paper & corrugated packaging companies therefore turn to imports.

As China is already running out of stock, the Malaysian companies are likely to source paper & paperboard from the second largest exporter - Indonesia, who on the other hand was the 4th largest exporter of wastepaper to China.

The Indonesian supply is known for its relatively low prices, and that is unlikely to change much since the country is piled with more wastepaper since the implementation of the Chinese policy. It would be a different case when international demand surpasses/catches up the local supply.  




























大马公司如何竞争

我们现在非常肯定中国和印尼不会在大马倾倒廉价的原材料和瓦楞纸包装产品。

如果我们遵循“奶制品价格危机”的历史记录,在需求放缓的情况下,日益堆积的国际库存量将促使国际价格下降。

然而,由于制造业和网络购物都在全球迅速发展中,这可能形成一个不同的(或中立的)情况。

大马当下55条瓦楞纸包装生产线已全投产。不时还有无法满足国内需求的情况。因此,所有大马纸和瓦楞纸包装公司都在扩充生产线。

尽管如此,資匯”表明大马纸和瓦楞纸包装公司必须有效地采购并转嫁高升的成本于客户。

在现实的成本转嫁的过程里,纸和瓦楞纸包装公司将面对客户流失的问题,尤其是当遇到虎视眈眈的削价竞争对手。

这意味着市场竞争力不只是关乎到(提高)平均销售价格的能力。

最重要的是如何改善复杂的交织:提高平均售价,节省客户成本,维护/提高产品和服务质量,和提高运营效。最终目的是为客户争取最好的价值。

(不)幸运的是,据我们所知,PPHB是唯一做到价值产品和服务的上市纸和瓦楞纸包装公司。如果你想知道PPHB如何出众,请浏览我们之前的管理者访问报告(click here)。

它单数的本益比比国际同行(不包裹中国,香港和台湾)还低。其股票也比当地竞争对手便宜。

PPHB在16财年使用了1360万令吉的资本支出,并在17财年前6个月投入了9,100万令吉。这些资本支出都用来扩展生产线。

相比之下,以前的年度资本支出不上500万令吉。

PPHB在17财年前6个月的累计收入和净利分别增长了8%和9.6%, 媲美前六年净利12.3%复合年增长率。

如果你想了解PPHB如何达到巴菲特的投资标准,请浏览我们之前的整理的资料(click here)。

Wining recipes for Malaysian firms

We are now highly certain that both China and Indonesia will not dump their cheap raw materials and corrugated packaging products in Malaysia.

If we follow the chronicles of Dairy Price Crisis, the rising international inventory would lead to low international prices if the demand slows behind the supply.

However, it is likely to be a different (or neutral) case since both manufacturing and online shopping segments are growing at the global landscape.

As a result, Malaysia's existing 55 production lines of corrugated packaging are fully operated and, sometimes, unable to fulfill all domestic demand. It is therefore not surprising that all paper & corrugated packaging companies are expanding their production lines.  

Nevertheless, the Busy Weekly (資匯) suggests that Malaysian paper & corrugated packaging companies will have to be efficient in sourcing and passing down any increased cost to customers.

When searching for that new equilibrium, they risk losing their customers to competitors who undercut their prices. 

In implication, it is not about charging average selling price per se.

What matters most is the intertwined ability to increase average selling price, save cost for customers, maintain/improve product & service quality, and improve operation efficiency for offering better value to customers.

(Un)fortunately, at our best knowledge, PPHB is the only listed company doing just that. Please visit our report on the management interview (click hereto learn how the company comes ahead of its peers in the industry.

The company is now selling at lower valuations than its international peers (ex-China, HK, and Taiwan) and cheaper than its local competitors.

PPHB made RM13.6 mil capital expenditure in FY16, and RM9.1 mil capital expenditure in the first 6-month of FY17 for acquiring plants.

These are so far the largest capital expenditure of PPHB. Its previous capital expenditure was consistently below RM5 mil per annum.

Its cumulative revenue and net profit have grown by 8% and 9.6% respectively at the end of H1FY17. The half yearly performance seems comparable to its 12.3% CAGR of the past 6 years.

If you wish to learn how PPHB meets all Buffett's investment criteria, please visit our compilation (click here).

温馨忏告:笔者中文笔塞,希望您读了不会有晕吐症状。祝君好。