Executive Summary

Q4 2023 revenue was $20.96M, down 1.9% YoY but up 33% QoQ; gross margin fell to 1.19% YoY while turning positive from Q3’s gross loss, and EBITDA dropped to $0.11M .
Operating loss widened to $3.80M vs $0.49M in Q4 2022 and $2.48M in Q3 2023; net loss was $3.98M (−$0.40 per share) vs $11.91M (−$1.19 per share) in Q4 2022 and $1.98M (−$0.20 per share) in Q3 2023 .
Mix: CMP volumes rose, but ASPs fell (regular CMP ASP $362/tonne; light-weight CMP $350/tonne), driving margin compression; tissue paper revenue rose QoQ but remained deeply loss-making; offset printing paper revenue was nil in Q4 .
Management highlighted supportive policies and plastic-restriction orders as potential demand tailwinds and emphasized flexible pricing, inventory management, and efficiency improvements to stabilize cash flow and profit levels .
No earnings call transcript or numeric guidance was provided; Wall Street consensus estimates via S&P Global were unavailable for Q4 2023 (S&P Global daily limit exceeded) .

What Went Well and What Went Wrong

What Went Well

QoQ recovery: revenue grew to $20.96M from $15.77M in Q3 as CMP volumes increased; overall gross margin turned positive (1.19%) vs −0.97% in Q3 .
CMP unit costs fell YoY (regular CMP $343/tonne; light-weight CMP $331/tonne), partially mitigating ASP declines; gross margins on regular and light-weight CMP remained positive at 5.32% and 5.50% .
CEO commentary points to policy support and strategic actions (new customers, cost reduction, flexible pricing, inventory management) to maintain cash flow and reasonable profit levels: “we expect a rise in domestic demand for packaging paper… implement flexible pricing and inventory management… maintain cash flow and minimize risks while achieving reasonable profit levels.” .

What Went Wrong

Pricing pressure: CMP ASPs declined materially YoY (regular CMP ASP $362 vs $412; light-weight CMP ASP $350 vs $402), compressing gross margin to 1.19% from 4.80% and slashing EBITDA to $0.11M from $3.77M .
SG&A surged to $3.38M (+123% YoY), contributing to operating loss of $3.80M (18.13% operating loss margin) .
Tissue paper remained a severe drag (−182.10% gross margin in Q4), and face masks revenue/volume fell sharply, exacerbating profitability pressures .

Financial Results

Metric	Q2 2023	Q3 2023	Q4 2023
Revenue ($USD Millions)	$30.02	$15.77	$20.96
Gross Profit ($USD Millions)	$1.18	$(0.15)	$0.25
Gross Margin (%)	3.93%	−0.97%	1.19%
Operating Income (Loss) ($USD Millions)	$(0.52)	$(2.48)	$(3.80)
Net Income (Loss) ($USD Millions)	$(1.25)	$(1.98)	$(3.98)
EBITDA ($USD Millions)	$2.83	$1.69	$0.11
Basic & Diluted EPS ($USD)	$(0.12)	$(0.20)	$(0.40)

Q4 2023 vs Prior Year (Q4 2022)	Q4 2022	Q4 2023	YoY Change
Revenue ($USD Millions)	$21.37	$20.96	−1.91%
Gross Margin (%)	4.80%	1.19%	−361 bp
Operating Income (Loss) ($USD Millions)	$(0.49)	$(3.80)	Worsened
Net Income (Loss) ($USD Millions)	$(11.91)	$(3.98)	Improved
EBITDA ($USD Millions)	$3.77	$0.11	−97.1%
EPS ($USD)	$(1.19)	$(0.40)	Improved

Segment Revenue ($USD Millions)	Q4 2022	Q4 2023
Regular CMP	$17.28	$17.02
Light-Weight CMP	$3.77	$3.45
Offset Printing Paper	$0.00	$0.00
Tissue Paper Products	$0.25	$0.47
Face Masks	$0.06	$0.01
Total Revenue	$21.37	$20.96

KPIs (Q4)	Q4 2022	Q4 2023
Total CMP Volume (tonnes)	51,306	56,805
Total CMP ASP ($/tonne)	$410	$360
Regular CMP Volume (tonnes)	41,941	46,958
Regular CMP ASP ($/tonne)	$412	$362
Light-Weight CMP Volume (tonnes)	9,365	9,847
Light-Weight CMP ASP ($/tonne)	$402	$350
Tissue Volume (tonnes)	234	480
Tissue ASP ($/tonne)	$1,083	$987
Face Masks Volume (thousand pieces)	1,330	360
Face Masks ASP ($/thousand pieces)	$43	$31

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2024	None provided	None provided	Maintained (no guidance)
Gross Margin	FY 2024	None provided	None provided	Maintained (no guidance)
OpEx (SG&A)	FY 2024	None provided	None provided	Maintained (no guidance)
Tax Rate	FY 2024	None provided	None provided	Maintained (no guidance)
Segment Guidance	FY 2024	None provided	None provided	Maintained (no guidance)
Dividends	FY 2024	None disclosed	None disclosed	Maintained (no guidance)

Note: Only qualitative commentary was provided (policy support, flexible pricing, inventory management, new customer acquisition); no numeric ranges were issued .

Earnings Call Themes & Trends

No Q4 2023 earnings call transcript was available; themes below reflect press release commentary across recent quarters.

Topic	Previous Mentions (Q2 2023)	Previous Mentions (Q3 2023)	Current Period (Q4 2023)	Trend
ASP/Price Pressure	ASPs significantly lower; CMP ASP fell; strategy to adjust asset utilization; expected profitability recovery in H2	CMP ASP down; pricing and demand weakness drove −0.97% gross margin	CMP ASPs further down; gross margin 1.19%; focus on flexible pricing	Worsening YoY, modest QoQ improvement
Demand/Policy Support	Weak domestic demand; expectation of H2 improvement	Opportunities and challenges; long-term positive fundamentals	Expects rise in domestic demand aided by plastic-restriction orders	Improving narrative
Cost Optimization	Continues to optimize costs; raw material inventory impacted profitability	Efficiency and decreased cost focus	Reduce costs, improve efficiency, manage inventory to maintain cash flow	Ongoing focus
Product Mix	Offset printing resumed (Q2: $3.16M)	Offset printing small ($0.07M)	Offset printing $0.00M in Q4; tissue revenue up QoQ but deeply negative margin	Mixed
Supply Chain/Materials	CMP material costs decreased QoQ	CMP unit material costs decreased; volumes down	Unit costs per tonne lower YoY; ASP declines dominate	Cost tailwind, price headwind
Face Masks	Continued decline in revenue and ASP	Decline continued	Decline persisted (revenue ~$0.01M)	Declining

Management Commentary

“In 2023, the company achieved a revenue of $86.55 million and a gross profit of $1.00 million… we expect a rise in domestic demand for packaging paper… implement flexible pricing and inventory management… maintain cash flow and minimize risks while achieving reasonable profit levels.” — Zhenyong Liu, Chairman & CEO .
Q3 tone: “opportunities and challenges coexist… increased policy support for the private economy… we will… optimize overall products, develop new customers and increase efficiency with a decreased cost.” .
Q2 tone: “weak domestic market demand… price of paper products kept falling… average selling price… significantly lower… anticipate… improving profit efficiency by adjusting utilization rate of assets, developing new market channels… profitability… effectively recovered in the second half of the year.” .

Q&A Highlights

No Q4 2023 earnings call transcript or Q&A session was available to review; the company furnished results via press release attached to the Form 8-K .

Estimates Context

Wall Street consensus estimates via S&P Global for Q4 2023 were unavailable due to request limits (S&P Global daily limit exceeded). As a result, we cannot compare actuals to consensus for revenue or EPS at this time [GetEstimates error].
Given no published numeric guidance and unavailable consensus, near-term estimate revisions will likely focus on margin trajectory (CMP ASP vs unit cost) and SG&A normalization potential .

Key Takeaways for Investors

Price vs volume: CMP volumes rose QoQ, but ASP declines pressured margins; the mix yielded a modest gross margin recovery QoQ yet substantial YoY compression and a sharp EBITDA decline .
Cost tailwinds insufficient: Lower unit costs per tonne helped, but SG&A spiked (+123% YoY to $3.38M), widening operating losses; watch cost discipline and SG&A normalization .
Tissue drag persists: Despite higher tissue revenue QoQ, margins remain deeply negative, requiring strategic remediation or rationalization to reduce losses .
Liquidity/work-capital: Year-end working capital was ~$6.94M, down from ~$29.53M in 2022; cash fell to ~$3.92M with $8.03M short-term and $4.50M long-term debt — monitor cash generation and financing flexibility .
Policy catalyst: Management cites supportive policies/plastic restrictions as potential demand tailwinds; near-term stock reaction likely hinges on evidence of ASP stabilization and policy-driven demand uplift .
Near-term trading setup: Focus on monthly/quarterly ASP trends and CMP volumes; any signs of ASP stabilization or SG&A reduction could drive positive revisions to profitability expectations .
Medium-term thesis: Execution on flexible pricing, inventory management, and customer acquisition could restore margins; offset printing revenue variability and tissue losses are key risks to address .

IT TECH PACKAGING, INC. (ITP)·Q4 2023 Earnings Summary