Hanchang Paper Reports 5.6 Billion Won Operating Profit in First Half, Profitability Surges 135% Year-on-Year
HANCHANG PAPER Co., Ltd. significantly improved its profitability in the first half of the year, driven by increased prices of standard white paperboard and the positive effects of facility investments. The expansion of demand for packaging materials in sectors such as cosmetics, information technology (IT), and tobacco, along with rising product sales, is expected to further drive improved earnings in the second half of the year.
On August 14, HANCHANG PAPER Co., Ltd. announced that its operating profit for the first half of the year reached 5.6 billion won. This marks a roughly 135% increase in operating profit compared to the previous period. Both operating profit and net profit transitioned into the black compared to the same period last year.
The improvement in performance was influenced by increased selling prices and the effects of facility investments made last year. In particular, after raising the price of the No. 5 machine that produces standard white paperboard, both domestic and international sales rose, expanding the profit structure—which had previously centered on premium white paperboard from the No. 3 machine—to include standard white paperboard as well.
HANCHANG PAPER Co., Ltd. expects that the benefits of standard white paperboard price hikes and increased sales will continue into the second half of the year. The company also anticipates that process efficiency improvements resulting from facility investments will further aid profitability.
Rising demand in downstream industries is another positive factor. As K-beauty exports increase, packaging materials based on white paperboard—such as folding cartons for cosmetic containers—are emerging as a new growth engine. HANCHANG PAPER Co., Ltd. supplies packaging for IT products like phone cases, cosmetics, and tobacco, with sales related to cosmetics accounting for approximately 10% of total revenue.
The company’s financial structure has also improved. Thanks to asset revaluation and a turnaround to an operating profit, the debt ratio dropped by 90 percentage points from 247% at the end of last year to 157% at the end of the first half of this year. With the simultaneous improvement in profitability and strengthening of financial soundness, the foundation for business expansion has become even more stable.
A representative from HANCHANG PAPER Co., Ltd. said, “Profit is now being generated not only from premium white paperboard but also from standard white paperboard, leading to improved profitability across our entire product portfolio. We expect the price increase effect and expanded domestic and international sales of standard white paperboard to continue in the second half.”
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The representative added, “We also view the increase in demand for cosmetic packaging materials—driven by rising K-beauty exports—as a positive factor.”
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