Dashengda: Shares Fall 9.8% Over Rising Cardboard Costs

Cardboard packaging manufacturer Dashengda faces a growing margin-squeeze problem. Prices for corrugated cardboard (the company's main raw material) are rising, but contracts with customers contain fixed prices with long validity periods. Result: growing production costs absorb profit. On July 12, 2026, the market responded with a 9.8% stock decline—price fell to 15.18 yuan per share, reflecting investor concerns about the company's margins.

What's Happening in the Cardboard Market

Corrugated cardboard (wavy multilayer cardboard) is a key raw material for Dashengda. The company purchases cardboard in rolls, processes it in production, and produces finished packaging for food, beverages, spirits, and electronics. Dashengda's packaging ranges from standard boxes to premium packaging with branded design for luxury goods.

In the cellulose-paper product market, prices move cyclically. They rise when demand is high, supplies are limited, and logistics become more expensive; they fall when the market becomes saturated. Recently, corrugated cardboard prices have moved upward—demand has increased, supplies are not keeping pace, transportation is becoming more expensive. For manufacturers who purchase cardboard by the ton weekly, this means serious increases in production costs.

Why the Company Can't Quickly Pass Along Price Increases

Here's the core trap. Dashengda's contracts with major buyers (beverage manufacturers, brewers, spirits makers, electronics manufacturers, FMCG) often involve fixed prices for 6–12 months or even longer. Large customers insist on this to protect their own cost structures and profit plans.

But when raw material prices rise between contract renegotiations, the packaging producer gets squeezed. Production costs jump 10–20%, revenue remains unchanged (contract is locked in), margin shrinks by the corresponding percentage. Even if the contract contains a clause for periodic price adjustment—it's a slow negotiation process requiring customer approval and their financial planning.

Moreover, if demand in the consumer sector weakens, the customer may simply refuse a price increase, threatening to switch to a competitor or reduce order volume.

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

How the Company Is Responding to the Crisis

Dashengda management directly acknowledged that rising cardboard prices are impacting profitability. The company stated that it is forced to seek ways to pass rising raw material costs to customers, but this happens with a delay—more slowly than costs are rising, and requires buyer consent.

The company also emphasized that its results depend on general market conditions in consumer industries. When demand for packaging is weak (for example, during economic slowdown), attempts to renegotiate prices face even greater resistance.

What This Means

The Dashengda story illustrates a classic vulnerability of manufacturers in the supply chain. When raw material prices rise quickly and the customer base is protected by long-term contracts, the manufacturer becomes trapped: revenue is frozen by the contract, costs are rising, margin is evaporating.

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