Hexing Packaging Production Bases: Which Generates the Most Revenue, Which Earns the Highest Profit

In the first half of this year, Hexing Packaging's various businesses flourished and its revenue grew rapidly. According to its 2021 Semi-Annual Report, the company achieved revenue of 8.214 billion yuan during the reporting period, up 72.39% year on year; and net profit attributable to the parent company of 151 million yuan, up 9.17% year on year.

(Hexing Packaging's financial data for the first half of the year, unit: yuan)

Which companies had the highest revenue and profit respectively?

In the semi-annual report, Hexing Packaging disclosed information on its major subsidiaries and equity-participation companies whose impact on the company's net profit reached 10% or more, involving four companies in total: Hubei Hexing Packaging & Printing Co., Ltd., Hefei Hexin Packaging Co., Ltd., Fujian Hexin Packaging Co., Ltd., and Xiamen Shikaiwei Packaging Industry Co., Ltd. Therefore, the author uses the data as the basis to see which company has the largest revenue and which has the highest profit.

(Subsidiaries whose impact on Hexing Packaging's net profit reached 10% or more, unit: yuan)

In terms of revenue, Hubei Hexing Packaging & Printing Co., Ltd. ranked first with revenue of 484 million yuan; Hefei Hexin Packaging Co., Ltd. came second with revenue of 419 million yuan; Fujian Hexin Packaging Co., Ltd. and Xiamen Shikaiwei Packaging Industry Co., Ltd. ranked third and fourth respectively, with revenue of 331 million yuan and 250 million yuan.

In terms of net profit, Hefei Hexin Packaging Co., Ltd. ranked first, with net profit of nearly 30 million yuan; Fujian Hexin Packaging Co., Ltd. ranked second with net profit of 22.2987 million yuan; the net profits of Hubei Hexing Packaging & Printing Co., Ltd. and Xiamen Shikaiwei Packaging Industry Co., Ltd. were relatively close, ranking third and fourth with 18.6425 million yuan and 16.5216 million yuan respectively.

Overall, the four packaging companies are relatively large in scale, each with revenue of more than 200 million yuan in the first half of the year, and their full-year revenue is likely to at least double. Among them, Hubei Hexing Packaging & Printing Co., Ltd., as a leading paper packaging company in Hubei, is very likely to see its full-year revenue exceed 1 billion yuan, followed closely by Hefei Hexin Packaging Co., Ltd., whose full-year revenue should be not far from 1 billion yuan.

Net profit margins in the packaging industry are generally low

Owing to the nature of traditional manufacturing, as well as factors such as rising raw material prices and intensifying industry competition in the first half of the year, the net profit margins of the four Hexing Packaging subsidiaries whose main products are corrugated board and cartons were not high, all below 10%. Even so, this figure is still a decent level across the entire carton packaging industry.

Previously, at an industry symposium, the author heard the head of a packaging company in Hunan mention that its plant's revenue increased in the first half of the year, but its net profit fell sharply. A paperboard manufacturer in Zhejiang had a similar situation, with its person in charge revealing: "The full-year profit margin is estimated to be only three to five points; we posted losses in some months of the first half, and it remains to be seen whether we can earn it back in the second half."

It can be seen that in 2021, when the pandemic is basically under control, although packaging companies have generally recovered to their 2019 revenue levels or even grown, their net profits are still being eaten away by sharply rising paper prices and by end customers to whom price pressure is difficult to pass on.

This is the hardship of the packaging industry, and even more so the hardship of the real manufacturing sector. It is hoped that as the fourth quarter arrives, end-consumer demand can pick up quickly and the industry's peak season can be a little stronger, so that packaging companies, which already invest heavily for small returns, can taste some sweetness.

——This article is reprinted from China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-378182.html