Taiwan Paper Trio's H1 Results: Yuen Foong Yu Leads Revenue and Profit, Cheng Loong Tops Net Margin

Taiwan's three leading paper companies — Yuen Foong Yu Paper, Long Chen Paper and Cheng Loong Paper — have reported their results for the first half and for July. Yuen Foong Yu Paper remained the revenue leader with about RMB 10.205 billion in H1 revenue, followed by Long Chen Paper at RMB 5.868 billion and Cheng Loong Paper at RMB 5.079 billion. On net profit, Yuen Foong Yu came first with RMB 757 million, Cheng Loong followed with RMB 558 million and Long Chen posted RMB 330 million. By net margin, Cheng Loong led at 10.99%, ahead of Yuen Foong Yu at 7.42% and Long Chen at 5.62%.

Yuen Foong Yu's H1: revenue near RMB 10.205 billion, net profit near RMB 757 million.

In Q2, Yuen Foong Yu's after-tax net profit attributable to the parent company reached NT$1.696 billion, up 8.9% quarter on quarter and 33.9% year on year. First-half consolidated revenue totaled NT$43.865 billion (about RMB 10.205 billion), a 30.8% increase year on year, while net profit attributable to the parent company was NT$3.254 billion (about RMB 757 million). H1 earnings per share were NT$1.96, rising more than 70% year on year. The company attributed the performance to stronger demand across paper categories and pandemic-related shifts in market supply and demand, which pushed up product prices and volumes. Q2 operating profit reached NT$3.164 billion, up 15.5% quarter on quarter and 156.5% year on year, with Q2 EPS of NT$1.02. Although business groups faced higher raw material costs, the pulp and paper group, high-value specialty paper group and industrial paper/containerboard group benefited from higher packaging paper and carton shipments, lifting profit above the year-earlier level. Shenfeng Specialty Applied Materials also saw a sharp profit gain on strong demand for raw materials used in medical latex gloves.

On July 12, Yuen Foong Yu Investment Holding issued a news release on behalf of its subsidiary Yuen Foong Yu Industrial Paper. The board resolved for subsidiary YFY Cayman to acquire a 44.84% stake in Willpower Industries Limited (Willpower) from Great Pacific, a subsidiary of Pou Chen, for US$62.5 million. After the deal, Willpower will become a wholly owned subsidiary of Yuen Foong Yu Industrial Paper and continue to contribute profit.

Yuen Foong Yu Industrial Paper said Vietnam surpassed Malaysia and Singapore in 2020 to become Southeast Asia's fourth-largest economy. Citing Vietnam's economic development and packaging market demand, the company has increased investment there in recent years. It currently operates six paper container plants in Vietnam with annual capacity of about 620 million square meters. To expand its Vietnam market position, it decided to buy Pou Chen's stake and accelerate investment in Vietnam in response to market growth.

The partnership dates back to 2004, when Yuen Foong Yu, Pou Chen and Taiwan Paper formed Willpower, a South Vietnam paper container holding company, and invested in paper container plants in South Vietnam. To deepen its southbound layout, Yuen Foong Yu acquired Taiwan Paper's 10.32% stake in Willpower in 2018 and continued to develop the South Vietnam paper container market. This year, Yuen Foong Yu again reached an agreement with Pou Chen, with Yuen Foong Yu Industrial Paper acquiring all of Pou Chen's Willpower shares. Willpower thus became a wholly owned subsidiary of Yuen Foong Yu Industrial Paper.

Yuen Foong Yu Industrial Paper added that its six Vietnamese paper container plants are located in both North and South Vietnam, with four South Vietnam plants held under Willpower subsidiaries. Details on the main operations of the four South Vietnam plants were not fully listed because of length.