Dashengda shares fall 9.8% as cardboard prices rise

Cardboard packaging maker Dashengda is facing a growing margin squeeze. Prices for corrugated board, the company's main raw material, are climbing, but its customer contracts lock in fixed prices for long periods. The result: rising production costs are eating into profits. On July 12, 2026, the market responded by sending the stock down 9.8% to 15.18 yuan per share, reflecting investor concern about the company's margins.

What's happening in the cardboard market

Corrugated board (fluted multi-layer cardboard) is Dashengda's key raw material. The company buys board in rolls, processes it in its plants, and turns out finished packaging for food, beverages, spirits, and electronics. Dashengda's products range from standard boxes to premium branded packaging for luxury goods.

Prices in the pulp and paper market move in cycles. They rise when demand is high, supply is tight, and logistics get more expensive; they fall when the market is saturated. Recently, corrugated board prices have moved higher: demand has picked up, supply can't keep pace, and shipping costs are rising. For manufacturers that buy board by the ton every week, that means a significant jump in production costs.

Why can't the company pass on the price increase quickly?

This is the core trap. Dashengda's contracts with large buyers (makers of beverages, beer, spirits, electronics, and FMCG) often set a fixed price for 6–12 months or even longer. Big customers insist on this to protect their own costs and profit plans.

But when raw material prices rise between contract renegotiations, the packaging maker gets squeezed. Costs jump 10–20%, revenue stays flat (the contract is locked), and margins shrink by a corresponding percentage. Even when a contract includes a clause for periodic price adjustments, it's a slow negotiation that requires the customer's approval and fits into the customer's financial planning.

On top of that, if consumer-sector demand weakens, a customer can simply refuse to reprice, threatening to switch to a competitor or cut its order volumes.

• Share price drop: 9.8% (15.18 yuan/share at close, July 12, 2026)
• Core products: cardboard boxes and premium packaging
• Customer segments: beverages, alcohol, electronics, fast-moving consumer goods (FMCG)
• Typical price-lock period in contracts: 6–12 months or more
• Expected cost increase: 10–20% when cardboard prices spike

How is the company responding to the crisis?

Dashengda's management openly acknowledged that rising cardboard prices are hurting profitability. The company said it is being forced to find ways to pass higher raw material costs on to customers, but this happens with a lag — more slowly than costs are rising — and requires buyers' consent.

The company also stressed that its results depend on overall conditions in consumer industries. When demand for packaging is weak (for example, during an economic slowdown), attempts to renegotiate prices meet even stiffer resistance.

What this means

Dashengda's story illustrates a classic vulnerability for manufacturers in the supply chain. When raw material prices rise quickly and the customer base is protected by long-term contracts, the manufacturer is trapped: revenue is frozen by contract, costs climb, and margins melt away.

There are several ways out: renegotiate contracts (if customers agree), optimize production (cut waste, improve efficiency), diversify the customer portfolio (find more flexible partners with shorter price-lock periods), or simply pause expansion until cardboard prices fall and the supply chain stabilizes.