Orient Paper, Inc.,a leading manufacturer and distributor of diversified paper products in Hebei, China, Ltd. today announced its financial results for the fourth quarter and fiscal year ended December 31, 2009. Orient Paper Inc. trades on the “American Stock Exchange” under the stock symbols “ONP”. For More information regarding the “ONP”, make sure to visit the Most Exclusive and In Depth newsletter website at: http://www.wallstreetgrand.com/.
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Orient Paper, Inc. (AMEX:ONP) a leading manufacturer and distributor of diversified paper products in Hebei, China, which controls and operates Hebei Baoding Orient Paper Milling Co., Ltd. and its wholly- owned PRC subsidiary Baoding Shengde Paper Co., Ltd. today announced its financial results for the fourth quarter and fiscal year ended December 31, 2009.
Revenue for the fourth quarter of 2009 was $31.4 million compared to $15.9 million for the same period in 2008, an increase of 97.6%. The significant increase in revenue was largely attributable to an increase in demand for both corrugating medium paper and medium-grade offset printing paper and the ramp- up of the Company's production lines. These two product segments accounted for a majority of the Company's total revenue in the fourth quarter of 2009. Revenue from medium-grade offset printing paper was $19.0 million, up 699.7% from $2.4 million for the same period in 2008, as the Company converted its writing paper production line to produce more medium-grade offset printing paper to meet the strong market demand. The Company also added four new customers during the quarter, which accounted for 3.0% of the total sales revenue. Revenue from corrugating medium paper was $12.2 million compared to $7.0 million for the same period in 2008, an increase of 74.2%. Demand for corrugating medium paper was much stronger in the fourth quarter of 2009 as compared to a year ago, as a result of the recovery of regional manufacturing activity from the financial crisis of 2008 to 2009.
Gross profit for the fourth quarter of 2009 increased 21.9% to $5.6 million compared to $3.5 million for the fourth quarter of 2008. Gross margin was 17.9% compared to 21.9% in the same period last year. The temporary decrease in gross margin during the quarter was primarily due to increase an in coal prices, which generally accounts for 8.0% to 10.0% of the total cost of sales or 5.0% to 7.0% of total sales. Due to severe winter weather conditions, the cost of coal increased substantially in the fourth quarter of 2009 and accounted for 13.0% of total cost of sales and 11.0% of total sales for the quarter ended December 31, 2009
"Our strong revenue and net income growth in 2009 was largely driven by strong market demand for corrugating medium paper and medium-grade offset printing paper," commented Mr. Zhenyong Liu, Chairman and Chief Executive Officer. "Because of the skyrocketing price of pulp, demand for our medium- grade offset printing paper, which uses recycled white or printed scrap paper as a raw material substitute for pulp, exhibited tremendous growth in the fourth quarter of 2009. We converted our writing paper capacities to produce more medium-grade offset printing paper in 2009 to meet this growth in demand.
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