Profit and deficit in most of enterprises in paper industry began to get balanced since Mar, 2009. Besides, they begin to get profitable gradually month by month, and the problems of bad running conditions of this industry we were all worried about did not come up although there was still a certain difference in profit achievement between this year and last year. The price of raw material and finished products began to recover after a long-time fall, and start-rate and sales market of the enterprises are prominently improved, the gross profit rate will be more greatly improved in next half year.  

   The accumulated productivity of domestic paper and paper board from JAN to APR , 2009 was 26,744 thousand tons indicated in statistics data, and the increase rate was 2.1% compared to the same period in last year,  and 4.4% in APR. month compared to the same. month in last year, and the increase rate was 1.46% compared to last period. The commercial stock productivity including raw pulp and waste paper pulp was 5,466 thousand tons in last four months, both accumulated productivity and monthly productivity falls compared to the productivity during the same period in last year, however, it was increased by 8.08% comparing to productivity in March in this year.  

In terms of import and export, the accumulated imported stock was 4,280 thousand tons, and the increase was 26.3% compared to the same period in last year, and the imported paper and paper board was 910 thousand tons, and the decrease was 23.5% compared to the same period in last year, and the exported paper and paper board was 990 thousand tons, and the decrease was 31.7% compared to the same period in last year. However, the monthly imported paper stock in APR. was 1,190 tons, and the increase was 25% compared to the same period in last year, and 9% compared to last period,  And the monthly imported paper and paper board in APR. was 280 thousand tons, and the decrease is 20% compared to the same month in last year, and increase was 12% compared to last period. The monthly exported paper and paper board was 290 thousand tons, and decrease was 6% compared to the same period in last year, and increase was 7% compared to last period.

In terms of investment, the accumulated fixed assets investment was 24.89 billon RMB from JAN. to APR. 2009, and the increase was 11.5% compared to the same period in last year, however, it is 20 percent lower than the averaged increase 30.5% of the whole domestics industries at the same period, it is also much lower than the increase 31.6% at the same period in the year of 2008, and this can help to recover the whole paper&pulp industry in some degree.

We think the price of the stock has already reached the lowest point. Although inventory change and price change of raw material and finished products in international market was prominently less than domestic market, The change was very prominent since MAY. 2009, especially stock inventory greatly decreased to a normal level, this was also the main reason why the price of wood stock has risen in these days.

 Obviously, the price of the finished products has already reached to its lowest point. The price rising of paper and white card paper in small range ended its continuous fall in last three quarters. We think the price can not rise in large range if inventory and productivity can not be reduced in large range, and this is also the reason why the profit of the companies has not been improved much more accordingly although their sales quantity has been prominently increased. We think the price of the raw material and the finished product will rise, besides, the profit will be prominently improved.

In terms of investment suggestions, we predict that the market of this industry will get better and better in next half year, on the other hands, the market in paper industry is weaker than many periodic industries.