Executive Summary

Q3 revenue rose 59.0% year over year to $25.08M on sharply higher corrugating medium paper (CMP) volumes, though average selling prices (ASP) declined; gross margin turned positive to 7.64% from a loss in Q3’23, but contracted sequentially from Q2’s 12.44% as ASP fell and SG&A increased .
Profitability mixed: EBITDA positive at $2.03M, but net loss was $1.97M (–$0.20/sh), both roughly flat YoY and worse vs Q2 on margin compression and higher SG&A .
Product mix concentrated in CMP (99.85% of Q3 revenue); offset printing and tissue products contributed $0, reflecting continued suspension/reduced activity outside of CMP .
No formal guidance or earnings call transcript identified; near-term stock narrative likely hinges on ASP trajectory, cost inputs, and any restart/diversification of non‑CMP lines to sustain margins achieved in Q2 .

What Went Well and What Went Wrong

What Went Well

Strong volume-led top line: Q3 revenue +59.0% YoY to $25.08M, driven by CMP tonnage up to 74,884 tonnes (vs. 44,807), partially offset by ASP decline ($334/tonne vs. $352) .
Material cost relief supported profitability: management cited lower unit material costs aiding gross profit improvement YoY; Q3 gross profit was $1.92M (vs. $(0.15)M) and margin 7.64% (vs. –0.97%) .
EBITDA positive: Q3 EBITDA was $2.03M, up from $1.69M YoY, reflecting operating improvement despite net losses .

What Went Wrong

Sequential margin compression: gross margin fell to 7.64% in Q3 from 12.44% in Q2 amid lower ASPs; SG&A rose to $3.38M from $2.72M in Q2 .
Persistent net losses: Q3 net loss of $1.97M (–$0.20/sh) vs. near-breakeven in Q2 (–$0.08M), indicating sequential profitability deterioration .
Continued concentration risk: offset printing and tissue paper revenues were $0 in Q3 as in Q2, leaving results highly dependent on CMP pricing/volume dynamics .

Financial Results

Headline metrics: Q1–Q3 2024 (chronological order)

Metric	Q1 2024	Q2 2024	Q3 2024
Revenue ($USD)	$6,863,841	$26,249,788	$25,081,500
Gross Profit ($USD)	$399,113	$3,265,300	$1,917,381
Gross Margin (%)	5.81%	12.44%	7.64%
Operating Income (Loss) ($USD)	$(3,501,670)	$547,752	$(1,464,121)
Net Income (Loss) ($USD)	$(3,746,536)	$(77,747)	$(1,973,946)
Diluted EPS ($)	$(0.37)	$(0.008)	$(0.20)
EBITDA ($USD)	$(20,000)	$3,930,000	$2,030,000

Notes: EBITDA is non‑GAAP; see reconciliations in company materials .

Segment/product mix – Q3 2024 detail

Product	Revenue ($USD ‘000)	Volume (tonnes)	ASP ($/tonne)
Regular CMP	20,910	62,121	337
Light-Weight CMP	4,134	12,763	324
Offset Printing Paper	0	0	n/a
Tissue Paper Products	0	0	n/a
Total CMP	25,044	74,884	334
Face Masks	0	n/a	n/a

Key operating KPIs – CMP volumes and ASPs

KPI	Q1 2024	Q2 2024	Q3 2024
Total CMP Volume (tonnes)	18,670	75,365	74,884
Total CMP ASP ($/tonne)	$366	$348	$334

Balance sheet and cash flow highlights

Cash and bank balances: $4.41M at 9/30/24; short‑term debt (incl. current portion/related party) $5.95M; long‑term debt (incl. related party) $4.57M .
Working capital improved to $12.22M at 9/30/24 from $6.94M at 12/31/23; operating cash flow for 9M’24 was $2.83M (vs. $7.49M in 9M’23) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	n/a	n/a	n/a	n/a
Gross Margin	n/a	n/a	n/a	n/a
EBITDA/Operating Income	n/a	n/a	n/a	n/a
Capex/OpEx/Tax/Segments/Dividend	n/a	n/a	n/a	n/a

Note: The company did not provide formal financial guidance in the Q3 2024 materials reviewed .

Earnings Call Themes & Trends

Note: No Q3 2024 earnings call transcript was identified in our document set.

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Demand/ASP	Q1: “Domestic packaging paper suffered sluggish demand and prices” (CEO comment) . Q2: CMP ASP lower; offset/tissue suspended .	Volume up strongly; ASP down further; gross margin positive but below Q2 .	Stable-to-weak ASP, volume recovery.
Production/Operations	Q1: CMP production suspended Jan–Feb; tissue suspended . Q2: offset/tissue suspended .	No revenue from offset/tissue; CMP only .	Non‑CMP remains offline; mix concentrated.
Cost Inputs	Q2: Lower unit material costs improved margins .	Lower unit material costs aided YoY gross profit .	Favorable input cost vs 2023.
Product Mix	CMP ~100% of revenue in Q1–Q3 .	CMP 99.85% of Q3 revenue .	High concentration persists.
Liquidity/Working Capital	Q1: WC $5.44M ; Q2: WC $10.51M .	WC $12.22M .	Improving working capital.
Macro/Policy	Q1: Management cited policy support to stimulate economy/demand .	No additional commentary in Q3 PR .	Watching demand/policy backdrop.

Management Commentary

CEO commentary (Q1 2024): “Domestic packaging paper suffered sluggish demand and prices… increase in production capacity of the industry peers, more intense competition from import of finished products and interest rate hikes had posed persistent pressure on the industry… we will continue to optimize the raw material structure… explore new products and new markets… better control of the inventory and working capital as well as cash flow” — Zhenyong Liu, CEO .
Q2/Q3 press releases emphasized operational drivers (CMP volumes, ASP, material costs) and the absence of offset/tissue production/revenue in the period .

Q&A Highlights

No Q3 2024 earnings call transcript was available in the reviewed filings/press releases; therefore, Q&A themes and guidance clarifications are not assessable from primary sources.

Estimates Context

Wall Street consensus (S&P Global) for EPS/revenue/EBITDA and target price was unavailable at the time of query due to data provider limits; as a result, we cannot benchmark Q3 results vs. estimates here. We will update when access resumes.
Given sequential margin compression from Q2 to Q3 and YoY improvement, estimate revisions (when available) will likely focus on the sustainability of ASPs, normalization of SG&A, and any resumption of non‑CMP lines .

Key Takeaways for Investors

Volume recovery but pricing headwinds: CMP tonnage remained high in Q3 (74,884 tonnes) but ASP fell to $334/tonne, pressuring sequential gross margin; watch ASP trends into Q4 .
Profitability fragile: Q3 EBITDA was positive at $2.03M, but net loss widened vs Q2 as gross margin contracted and SG&A rose; visibility on sustained profitability hinges on pricing and cost control .
Concentration risk: With offset and tissue at $0 revenue, CMP comprised ~100% of sales, increasing sensitivity to containerboard cycle dynamics .
Cost tailwinds vs 2023: Lower unit material costs supported YoY gross margin improvement; monitor pulp/recycled fiber inputs for potential reversal .
Liquidity adequate but modest: Cash $4.41M vs short‑term debt ~$5.95M and long‑term ~$4.57M; working capital improved to $12.22M, but cash generation slowed vs 9M’23 .
Catalysts: Any stabilization/improvement in ASPs, resumption of offset/tissue lines, and normalization of SG&A (including depreciation effects) could support margins; absence of formal guidance elevates the importance of monthly/quarterly operational updates .

Appendix: Additional context

Q2 2024 saw the strongest gross margin (12.44%) of the year on reduced material costs and better mix, but was aided by low non‑CMP activity; Q3 highlights the sensitivity of margins to ASPs despite high volumes .
Non‑GAAP usage: The company highlights EBITDA; reconciliations are provided in exhibits/press releases .

Sources: Q3 Form 8‑K and Exhibit 99.1 press release (Nov 15, 2024) ; PRNewswire Q3 release ; Q2 Form 8‑K and Exhibit 99.1 (Aug 13, 2024) ; Q1 Form 8‑K and Exhibit 99.1 (May 13, 2024) .

IT TECH PACKAGING, INC. (ITP)·Q3 2024 Earnings Summary