The stock of IT Tech Packaging Inc. (NYSE American: ITP) dropped after the company's financial report revealed a two-digit revenue decline in the second quarter on Tuesday.
The Baoding-based company, formerly known as Orient Paper Inc., reported that its revenues in the second quarter reached $26.4 million, down 22% year-over-year. Its net loss in the three months through June hit $900,000, or 4 cents per share, compared with a net income of $500,000, or 2 cents per share, a year ago.
The manufacturer and distributor of paper products said in the statement that the decrease in average selling prices and sales volume in all of its paper products categories reached up to 21%, resulting in the declined financial results.
“We made significant improvements in the second quarter and resumed full capacity tissue paper production and CMP production,” Zhenyong Liu, the chief executive officer of ITP, emphasized a relatively better situation in comparison with that in the coronavirus-hit first quarter.
The company turned to face mask business at the end of April during the coronavirus outbreak and sold over six million pieces of non-medical single-use face masks in the second quarter. The single-use face masks business generated $0.8 million for the company.
Going forwards, ITP said it has received orders to stabilize its production during the post-pandemic economy picking up.
“We expect that this trend to carry over into the remainder of 2020,” Liu added in the statement.
ITP produces and distributes three paper products including corrugating medium paper, offset printing paper and tissue paper products. The manufacturer’s major market is the Beijing and Tianjin region-centered North China.
China's overall economy started to grow with a 3.2% year-over-year increase in the second quarter as official data showed, after a record-low contraction of 6.8% year-over-year drop in the first quarter since 1992.
The GDP for the industrial enterprises above designated size jumped 4.4% year-over-year in the second trimester. Itemized GDP number hasn’t been released for the paper and paper products industry.
Additionally, the leading indicator of the Purchasing Managers Index hit 50.9% in June, marking an expanding economy.
Shares in ITP were trading at 55 cents per share, down 2% intraday Tuesday.