The real cost advantage is not that one raw material is bought cheaply or a paper machine runs faster, but rather that the qualified fibres, energy vapours, equipment efficiency, logistics radius, product structure and capital are well organized at the same time, making the full cost of each ton more manageable, profitable and cashable.

Four key figures:

Note by calibre:19.41HK$100 million is based on the profit margin for ordinary shareholders; if it is “annually profitable” for a combined income statement, this increase is equal to that of the other year.43.0%. The gross profit rate and the change value are calculated on the basis of annual reports.2026Data for the first half of the year are from positive profit forecasts, which are preliminary unaudited; as at2026Year8Month9At the time of verification, a formal medium-term performance announcement had not yet been tested.

EVIDENCE LEVEL - Distinguishing three types of evidence

Results achieved: 2025Annual income, profits, segment performance, liabilities and cash flows are from the audited annual report.

Initial operating signal: 2026The profit areas for the first half of the year were from positive profit forecasts and could not be split between volume, price, cost and cash contributions.

Planning and construction trails: Technical adaptations, the Kyotao project and future technology deployment are not counted against existing capacity or performance.

One word for one.

Rather than “a lower cost point” the real strong is that it connects fibre, slurry, energy, paper machines, bases, products and funds to transform low costs from a phased result into continuous adjustment capacity; this does not mean that each species has at every stage an absolute minimum industry cost.

CORE JUDGMENT

Let's start with the conclusion: that the power of science is in “system cost capacity”

The competitiveness of paper can be broken into six combustible control surfaces:

01 • FULL COST SYSTEM

First tier: cost is not the purchase price, but the total result of one ton of eligible paper

The most common miscalculation in packaging paper enterprises is to equate low costs with cheap waste paper, lower coal prices or large paper machines. It is the total cost of selecting, slurrying, sulpting, copying, rubber-cutting, drying, recoupling and transporting raw materials into a factory that will ultimately result in delivery of qualified goods.

2025In the year, the Division of Sacking Paper received external revenue201.78Hong Kong Dollars, growth only in the same year0.4%; branching is profitable7.66Hong Kong Dollars rise12.68HK$100 million, about an increase.65.5%. On this basis, the proportion of profits from the packing paper segment equal to external income is calculated by applying3.81%Raise6.29%The “sub-section profits” here are not equal to Māori or net profits; nor is open segment data sufficient to divide improvements precisely into sales prices, raw materials, variety structures, and manufacturing efficiency. At a minimum, it suggests that profit restoration cannot be explained separately by income scale expansion, and the marginal conditions of packaging paper have changed markedly.

Corporate disclosures2025Annual tonnes of net profit is257The significance of this figure is not to be isolated or low, but rather to observe the sensitivity of profits to paper costs, prices and product structures: for millions of ton-class businesses, a continuous improvement in the amount of HK$ tens per tonne may result in hundreds of millions of HK dollars in profit differentials.

02 ..PUP OPTIONALITY

Second layer: value of paper integration, not the pursuit of maximum self-sufficiency

Press2025A simple summary of the eight production bases listed in the annual report, with R.758Tons of paper and paper products produced,95Ten thousand tons of annual woodpowder capacity and120Tens of thousands of tons of annual paper-based energy. Designed capacity is not equal to actual production, but this set of structures suggests that the wood pulp in mitts is not an isolated external sales business, but rather a major feeder for packing and living paper.

2025The slurry branch has lost its external earnings every year.32.6%to4.47Hong Kong Dollars. Inter-branch sales still reach.19.13This means that the profit from internal supply stability, slurry formulas and industrial chains is underestimated by looking at external income from wood. The strategic value of mills is often reflected in internal substitution and risk buffers rather than just selling out.

But “home-made slurry” does not automatically equal to the lowest cost of slurries. Self-produced slulpts still bear the costs of wood chips to plants, yields, chemicals, energy, depreciation, installation loads and logistics.

The annual paper also points to this balance: continuing to refine vertical integration while optimizing slurry equipment and processes, and reducing the price volatility of raw materials through internal production in conjunction with external procurement. Its moats are not closed for self-sufficiency but have more routed and powered for switching.

03 • ENERGY INFRASTRUCTURE

Third layer: energy conservation is not back-office costs, but part of the manufacturing system

Paper machines require continuous and stable electricity and steam; waste paper slurry produces plastic impurities, slags, and sludge. For large packaging companies, energy prices, crew efficiency, solid waste movements and environmental compliance are not separate from four things but rather an infrastructure network that affects both ton costs and production on a continuous basis.

Rivon.2025The annual report revealed that the group spent less per ton of paper combined energy0.34Ton of standard coal; more than a proportion of water used for production and recycling80%These data are the corporate ESG reports, but they explain why energy management is an important component of its cost system: a continuing decline in unit consumption can have a direct impact on paper-based resilience in low-cost competitive environments.

More important is the solidification of energy.1000Tons/day solidified waste burning line at2024It's a year in production, and the annual report reveals it.2025Annual power generation1.16418Billion kilowatt hours, high-pressure steam.103.9Tons of tons, while reducing primary coal consumption4.49tonnes, reduction of solid emissions12.87Ten thousand tons. This is the annual results that have been disclosed, not project planning values.

The waste energy integrated use projects at the Guangdong and Malaysia bases were disclosed separately3.5billions of dollars,3They transform waste, plastics, slags, sludge and biogas into steam and electricity, which theoretically reduces the pressure on out-sourcing energy and end-of-end disposal; but the economic nature of the project still excludes investment, depreciation, wiring, emission control and heat fluctuations in raw materials.

04 • SUPPLY RADIUS

Level 4: Eight bases are not smogs of size, but provide radius designs

The annual paper shows eight bases, to be found in the south-east, east, west-west, south-south China and south-eastern Asia.

The domestic base is close to Chinese customers in packaging consumption, cardboard processing and manufacturing; Chongqing, Jiangxi and Guangxi provide different support points for slurry, paper for living and regional markets. Viet Nam and Malaysia aggregates about the same amount.195The annual production of tons of paper and paper products makes it necessary to obtain a second supply radius from Chinese factories that does not only serve South-East Asia, but also from different raw materials, trade and market environments.

2025Yearly, Rivin earned income from Chinese external clients84%Last year's appointment89%The rest come mainly from Malaysian and Vietnamese clients. The rise in the weight of overseas revenues is a signal that regional bases are beginning to turn into market structures; but it also brings administrative complexities such as cross-border procurement, exchange rates, quality consistency, synergies of production and sales and local policies.

The key to networking is the ability of each base to obtain suitable raw materials, stabilize its openings, cover effective customers, and reduce duplicate stockpiles and trans-regional reverses. Only when market responses and logistics save more than organizational complexity can a network truly create a cost-aside river.

05 • PROFIT MIX

Fifth layer: Packaging paper is the chassis, and living paper is changing profit structures

2025Year, wrapper contribution to syntax75.7%External income, which remains the absolute core; living paper income60.17HK$100 million, year-on-year growth15.1%Foreign income22.6%; the share of external income from wood1.7%. By income structure, Rwen is still a company that uses the original paper as a base plate for packaging such as boxboards and waffles.

But the profit structure is not exactly the same.10.63HK$100 million, year-on-year growth12.9%, calculated at a profit sum for the three branches, as per43.7%; about paper wrapping52.2%. Life is a profit for less than one quarter of the income, contributing more than 40% of the branch, which means it is not marginal sub-sectors but rather an important pillar of the intellectual profit mix.

Unlike industrial paper, the demand rhythm, brand channels and price formation mechanisms for living paper can reduce exposure to single-packaging paper cycles; they provide chassis for size manufacturing, customer networks and cash flow; and wood slurry is used to supply internal fibres.

However, the combination does not amount to automatic hedges.2025The annual profit growth rate for the paper-based segment of life is less than that of income, and its earnings as a proportion of external revenue are estimated by the annual report18.01%Small drop.17.66%Consumer goods business also has to assume branding, access, promotion, stock of finished products and quality stability requirements, which cannot be interpreted solely by expanding production capacity.

06 · CAPITAL DISCIPLINE

Sixth floor: Technology change and capital discipline, with a higher return per ton

2026Yearly public filing and environmental evaluation information show that Guangdong Rii will invest7.2The project period for the technical adaptation of the PM7 production line in situ is planned to be completed by a million yuan.2026Year6to2027Year6Month. According to the industry summary of published information, reviewed by the EXPERIMENTAL, pre-reform and post-renovation capacity is maintained30Ton/year, product re-loading proposed120I'm not sure.250G/m2 adjusted to60I'm not sure.160g/m2 and upgrades systems such as paper banding, speed of work, slurry screening, lumber box and membrane transfer glue. The above elements are project programmes and not technologically modified.

The most interesting aspect of such projects is “capacity-neutral”, which does not increase by adding a nominal number of tons, but rather attempts to improve the product fit and asset output per ton of paper with low-gwret, high quality, efficiency and energy consumption. If customers can reduce the weight of paper for packaging while meeting pressure resistance, breakability, cycling and processing requirements, it may shift value from “ton prices” to “single material costs and performance”.

The capital end has also been repaired.2025Total financial cost of annualized amounts9.35Hong Kong Dollars down7.36Hong Kong Dollars. Bank loans from219.82Hong Kong Dollars down210.06HK$100 million, net liability ratio (annual report)0.73Down0.63; net operating cash from4.26Hong Kong Dollars rise35.20HK$100 million.

However, the improvement in cash flows cannot be seen as a single total.2025Operating cash flows before the change in operating funds are26.73HK$100 million, year-on-year increase24.8%; final operating cash flow also suffered from a reduction in inventory as shown in the statement of cash flows9.52Hong Kong Dollars, receivables and advances reduced1.62HK$100 million and increase in accounts payable6.74The return payment is improved and the number of days that you can turn accounts into receivables is increased by HK$ 1 million.47Days are shortened to41Jesus.

Special distinction is required: “Deduction of inventories” as shown in the statement of cash flows9.52HK$100 million, which cannot be understood directly as a decline in the balance sheet stock at the end of the period; the balance of inventory on the balance sheets is actually due to44.19Hong Kong Dollars rise48.22The public statements do not fully dismantle the bridge-link factor between two calibres.54God,14The sky rises to60God,18Days of turnover in accounts payable by43_Other Organiser61On a day basis, it was indicated that some of the improvements in cash flow were accompanied by slow stock-week shifts and longer periods for suppliers.

2026 CHANGE SIGNALS

Six latest clues. Rewrite the cost boundary of the script.

CONCLUSION

The cost is the purpose.
System control is the power.

The real strength of paper is not to have a constant minimum cost, but to divide it into manageable variables: how fibres are selected, where slurry comes from, how energy is recycled, how far the base covers, how products are combined, how paper machines are modified and how money is working.

When these variables are synergized, a small shift in income may also release greater profit elasticity; when one of the links is unbalanced, the loads of mills, energy installations, offshore bases, paper-based channels and stock capital can be compounded simultaneously. This is the real border between “system advantage” and “heavy asset risk.”

The next thing you can judge is whether the law will continue to be strong.

NEXT ISSUE . Series pre-ensure

Next: Why is Eagle International strong? It actually operates a circular network.

The China Paper Industry Sample Study does not provide simple business presentations and continuously dismantles the resources, costs, products, management and industry chain capabilities of head paper companies.