Name: IT TECH PACKAGING, INC. Q2 2024 Earnings Call
Start: 2024-08-13T00:00:00.000Z

Executive Summary

Q2 2024 revenue was $26.25M, down 12.56% YoY as offset printing and tissue production were suspended; CMP volumes rose but ASP fell, while lower recycled paper costs drove a sharp margin recovery to 12.44% gross margin (+8.51 pp YoY) .
Operating income turned positive at $0.55M (vs. a $0.52M loss YoY) on improved unit costs; net loss narrowed to $0.08M (EPS −$0.008), with EBITDA up to $3.93M .
Management indicated offset and tissue production are expected to resume in Q3 2024, with working capital improved to $10.51M by quarter-end, aided by higher cash and receivables .
No Q2 2024 earnings call transcript was published; Wall Street EPS/Revenue consensus from S&P Global was unavailable, limiting beat/miss assessment.

What Went Well and What Went Wrong

Gross margin expanded to 12.44% (+8.51 pp YoY) on lower recycled paper board costs and mix shift away from loss-making offset/tissue; CMP gross margins improved (regular CMP +5.41 pp, light-weight CMP +5.68 pp) .
Positive operating income of $0.55M (vs. −$0.52M YoY) and stronger EBITDA ($3.93M vs. $2.83M YoY), reflecting better unit economics and disciplined cost control in core CMP .
Management reiterated focus on optimizing raw materials and pricing: “we will continue to optimize the raw material structure… explore new products and new markets with appropriate price adjustments…” (Q1 CEO) .

Total revenue fell 12.56% YoY to $26.25M, driven by full suspension of offset printing and tissue lines; CMP ASP declined to $348/tonne (vs. $381/tonne YoY), offsetting volume gains .
SG&A jumped 105.35% YoY to $2.72M, mainly depreciation of idle fixed assets during production suspension, pressuring profitability despite better gross margin .
The quarter still posted a net loss of $0.08M, and CMP ASP headwinds persist amid macro softness in packaging paper noted earlier by management (Q1 commentary) .

Metric	Q4 2023	Q1 2024	Q2 2024
Revenue ($USD Millions)	$20.96	$6.86	$26.25
Gross Profit Margin %	1.19%	5.81%	12.44%
Operating Income ($USD Millions)	−$3.80	−$3.50	$0.55
Net Income ($USD Millions)	−$3.98	−$3.75	−$0.08
Diluted EPS ($USD)	−$0.40	−$0.37	−$0.008
EBITDA ($USD Millions)	$0.11	−$0.02	$3.93

Segment/product breakdown (revenue, volume, ASP):

Product	Q2 2023 Revenue ($’000)	Q2 2023 Volume (tonnes)	Q2 2023 ASP ($/tonne)	Q2 2024 Revenue ($’000)	Q2 2024 Volume (tonnes)	Q2 2024 ASP ($/tonne)
Regular CMP	21,931	60,063	365	21,984	62,813	350
Light-Weight CMP	4,544	12,877	353	4,229	12,552	337
Offset Printing	3,156	5,403	584	0	0	—
Tissue	344	293	1,175	0	0	—
Face Masks (thousand pieces)	44 ($’000) / 1,411 pieces / $31 ASP	—	—	0	—	—

Key KPIs:

KPI	Q2 2023	Q2 2024
CMP total volume (tonnes)	72,940	75,365
CMP ASP ($/tonne)	$363	$348
Recycled paper board cost ($/tonne, est.)	~$192	~$164
Electricity cost (% sales)	~5%	~5%
Gas cost (% sales)	~14.9%	~12.9%
Working capital ($USD Millions)	—	$10.51

Note: EPS in press release rounded to −$0.01, while 10-Q shows −$0.008 .

Metric	Period	Previous Guidance	Current Guidance	Change
Offset printing & tissue production	Q3 2024	Not provided	“Expected to resume in the third quarter of 2024”	Raised (qualitative)
Capex – PM10 tissue line commitments	Multi‑year	~$3.50M at 12/31/2023	~$3.47M outstanding at 6/30/2024; launch post trial run; financing via bank loans and operations	Maintained (timing elaborated)
Revenue/Margins/Tax/OpEx	Q3/Q4 2024	Not provided	No numerical guidance provided	Maintained (no guide)
Dividends	Ongoing	None disclosed	None disclosed	Maintained

No Q2 2024 earnings call transcript published.

Topic	Previous Mentions (Q4 2023)	Previous Mentions (Q1 2024)	Current Period (Q2 2024)	Trend
Demand/macro	Price pressure; flexible pricing and inventory management to maintain cash flow (CEO)	“Sluggish demand and prices… increased capacity, import competition, interest rate hikes” (CEO)	Volume recovery in CMP; ASP down; margin aided by lower input costs	Improving margin mix; pricing still soft
Supply chain/raw materials	Lower CMP material costs drove COGS down YoY	Focus on “optimize raw material structure”	Recycled paper board cost down ~14.6% YoY	Positive cost tailwinds
Energy costs	Tissue offset losses impacted by high energy	—	Gas cost % of sales fell to ~12.9% (from ~14.9%)	Moderating energy burden
Operations/production	Offset/tissue intermittent in 2023	CMP suspended Jan–Feb 2024; tissue suspended Q1	Offset/tissue suspended Q2; expected to resume Q3	Resumption planned
Regulatory/legal	—	—	PRC court ruling on loan dispute; joint liability for Tengsheng Paper; NY court motion denied without prejudice	Elevated legal overhang
R&D/technology	—	—	PM10 tissue line infrastructure complete; ancillary work ongoing	Execution toward capacity add

“We will continue to optimize the raw material structure and minimize the purchase price to ensure production efficiency and consistent quality. We also will explore new products and new markets with appropriate price adjustments to capture greater market share…” — Zhenyong Liu, CEO, Q1 2024 press release .
10‑Q indicates offset and tissue production are “expected to resume in the third quarter of 2024,” signaling operational normalization ahead .
PM10 launch plan reiterated: infrastructure completed; commitments financed by bank loans and operating cash flows .

No Q2 2024 earnings call transcript; no Q&A available.

S&P Global consensus EPS and revenue estimates for Q2 2024 were unavailable (request limit encountered; likely limited coverage for ITP). As such, we cannot assess beat/miss versus Wall Street at this time.
Given the absence of formal guidance and limited sell-side coverage, estimate revisions may focus on margin trajectory (material costs down, energy intensity easing) and production resumption in Q3 potentially adding offset/tissue revenue mix .

Margin inflection: gross margin expanded to 12.44% on materially lower recycled paper costs and the absence of loss‑making offset/tissue; operating income turned positive .
Revenue headwinds: CMP ASP declines and suspended lines cut top‑line; CMP volumes improved but price pressure remains .
Near‑term catalyst: resumption of offset/tissue production in Q3 could add revenue and diversify mix; monitor execution and energy costs .
Cash/working capital improved ($10.51M), but SG&A inflation (idle asset depreciation) remains a watch‑item until full production resumes .
Legal overhang: PRC court ruling and NY litigation status create headline risk; track developments and potential cash impacts .
PM10 tissue capacity: capex commitments steady; successful launch post trial could unlock incremental margins if energy/material dynamics stay favorable .
With consensus unavailable, focus on company‑reported KPIs (volume, ASP, gross margin) and operational milestones to guide trading and thesis updates.