Jamei Packaging: The frenzy of a stock price soaring sixfold, is it ultimately just an illusion?

To talk about the most sensational stocks in the past two months, Jiamei Packaging (002969.SZ) is a prime example.

Market data shows that from December 17 to February 12, Jiamei Packaging’s stock price surged from 5.02 yuan per share to 33.54 yuan per share, a jump of 632.24%, with its market capitalization once surpassing 30 billion yuan; afterward, the stock experienced a rapid pullback, closing the limit down at 30.05 yuan on February 13; after a slight decline on February 24, it hit another 10% limit down on February 25.

The cause of this sharp rise and fall was an announcement of a change in control, stating that Suzhou Zhuoyue Hongzhi Technology Development Partnership (hereafter “Zhuoyue Hongzhi”) plans to acquire control of Jiamei Packaging through agreement transfer and partial tender offer.

As of now, Jiamei Packaging has been suspended twice for “abnormal stock price fluctuations” for investigation. This situation not only reflects potential operational or special circumstances within the company but also sparks widespread speculation about its future development.

Industry Cycles Impeding Growth

The ripple effect of this control change has attracted strong attention from the market and regulators, with focus on whether the company’s fundamentals can justify the current stock price.

Public information shows that Jiamei Packaging was founded in 2011, is a leading full-industry chain service provider for food and beverage packaging in China, mainly engaged in packaging containers and filling services, and was listed on the Shenzhen Stock Exchange in 2019.

Since going public, Jiamei Packaging has shown slight revenue fluctuations and significant profit volatility. Data indicates that from 2019 to 2024, the company achieved revenues of 2.624 billion, 1.992 billion, 3.452 billion, 2.981 billion, 3.152 billion, and 3.200 billion yuan, respectively, with year-over-year changes of -11.36%, -24.07%, +73.24%, -13.65%, +5.74%, and +1.52%. Net profits were 172 million, 35 million, 164 million, 17 million, 154 million, and 183 million yuan, with YoY changes of -0.69%, -79.91%, +374.61%, -89.61%, +805.92%, and +18.78%. Net profit for 2025 is projected to decline by 53.38% to 43.02%.

From these figures, it’s clear that Jiamei Packaging’s performance is unstable, mainly due to its customer structure, cost pass-through, and product mix vulnerabilities, compounded by the cyclical nature of the metal packaging industry and its sensitivity to costs.

Industry-wise, the main raw materials for metal packaging are tinplate (tinned steel sheets) and aluminum, accounting for 85-90% of total production costs. These raw materials are in the category of non-ferrous metals and steel, which are highly cyclical. During economic booms, demand for copper, aluminum, and steel surges, pushing up raw material prices and squeezing profit margins for metal packaging companies; during downturns, prices fall, but because packaging companies are often midstream in the supply chain, with limited bargaining power over downstream beverage and food manufacturers, they find it difficult to fully pass on raw material cost increases, leading to delayed profit recovery.

Furthermore, the end demand for metal packaging mainly comes from the food, beverage, pharmaceutical, and chemical industries, which are closely linked to residents’ consumption levels and economic health. During economic upswings, consumers’ willingness to buy ready-to-drink beverages and high-end foods increases, boosting demand for metal cans. Conversely, in downturns or periods of weak consumption, spending on non-essential goods is cut first, leading to a decline in orders for metal packaging.

Thus, the metal packaging industry is a typical “dual-cycle” industry: it is affected both by the super-cycle of upstream non-ferrous metals and steel, and by the economic cycle of downstream consumer markets. The volatility of raw material prices combined with fluctuations in end-user demand causes significant profit swings in the industry.

Operational Weaknesses

Even for leading listed companies with significant market share, Jiamei Packaging cannot escape the constraints of industry cycles. However, its internal operational shortcomings are a core reason for market doubts.

First, related to industry cycle costs. Jiamei Packaging admits that the prices of raw materials like tinplate, aluminum, and easy-open lids are influenced by supply and demand and cyclical industry trends, showing periodic fluctuations. Despite years of development making it a leading Chinese metal packaging manufacturer, the company’s product pricing adjustments still lag behind raw material price changes, with limited adjustment scope, leading to declining gross margins.

Data shows that Jiamei Packaging’s gross profit margin has been declining significantly over the past five years: from 13.06% in 2020 down to 11.12% in Q3 2025, with a low point of 8.84% in 2022. The main reason is soaring costs of aluminum and tinplate, coupled with downstream clients’ strong price pressure, which raises unit fixed costs.

Second, the company’s major clients have long been criticized. It is reported that Yangyuan Beverage is Jiamei Packaging’s largest customer. Historical data shows that from 2015 to 2018, Yangyuan Beverage contributed over 54% of Jiamei Packaging’s revenue, peaking at 60.83% in 2015. When Yangyuan’s sales of “Six Walnuts” declined, Jiamei Packaging’s orders for three-piece cans dropped sharply, becoming a main factor behind performance volatility.

Currently, as Jiamei Packaging diversifies its business, the revenue contribution from Yangyuan Beverage has fallen below 40%, and this proportion continues to decline.

Additionally, as an industry leader, Jiamei Packaging’s product structure remains relatively simple, with traditional three-piece and two-piece cans accounting for nearly 80% of revenue. Newer businesses like PET aseptic cold filling are still in investment and ramp-up phases, incurring high expenses and short-term losses, which drag down overall profitability.

Is the Stock Price Bubble Outrageous?

Despite its moderate profitability and no losses, why is the market so vocal about Jiamei Packaging?

Zhuoyue Hongzhi plans to acquire control of Jiamei Packaging through agreement transfer and partial tender offer. This move fuels market speculation about the company’s future. Investors expect that new management could bring strategic changes, more resources, and more efficient management, potentially leading to a significant improvement in performance, which partly explains the stock’s rapid rise.

Based on basic valuation methods, Jiamei Packaging’s intrinsic value is roughly estimated at 3.5-5.0 yuan per share. When the stock soared to around 30 yuan, it was overvalued by 600-700%. Looking at relative valuation, its PE (TTM) has reached 195.70 times, compared to an industry average of 15-25 times; PB is 12.59 times, versus an industry average of 1.5-2.0 times. Each indicator far exceeds industry norms, with a high degree of deviation.

In comparison with peers, Jiamei Packaging’s main competitors are in the metal packaging sector, categorized into domestic first-tier, second-tier, and international giants based on scale and business overlap.

Among the domestic first-tier, companies like Aorui Jin and Shengxing Co. compete directly with Jiamei Packaging. Aorui Jin is the absolute industry leader, with revenue of 18.35 billion yuan in the first three quarters of 2025, serving major clients like Red Bull, Budweiser, and Tsingtao Beer; with full industry chain coverage for two-piece and three-piece cans, leading in capacity and cost control. Its market share for three-piece cans is about 25%, and for two-piece cans about 10%, both higher than Jiamei Packaging.

Notably, in January 2025, Aorui Jin completed a full takeover of COFCO Packaging. This transaction is the largest M&A in China’s metal packaging industry history and marks a new phase of industry consolidation and scale development. After acquisition, Aorui Jin’s domestic share of two-piece metal cans rose to about 37%, far surpassing Baosteel Packaging (around 18%), establishing it as the leading domestic metal packaging giant and reshaping the industry landscape.

Aorui Jin’s PE (TTM) is only 13.34 times, with a PB of 1.51 times.

The acquisition of COFCO Packaging pushed Baosteel Packaging into the second tier. Despite this, Baosteel Packaging benefits from backing by Baowu Group, with raw material advantages in tinplate and aluminum, and achieved revenue of 6.581 billion yuan in the first three quarters of 2025. It mainly supplies two-piece cans for beer and carbonated drinks, holding about 12% market share in two-piece cans, compared to Jiamei Packaging’s 3%. Its PE (TTM) is 40.64 times, PB 1.70 times.

Overall, Jiamei Packaging’s valuation appears significantly inflated; its stock price surge is driven more by market sentiment and capital flows than by company fundamentals. Objectively, Jiamei Packaging is a solid traditional manufacturing company with core advantages in metal packaging, stable operations, and good customer resources. With industry recovery and internal optimization, it has growth potential. However, these prospects do not justify a current market cap of 30 billion yuan or a short-term surge of 632%.

While new control may bring transformation, there is no clear evidence that such changes will quickly translate into substantial performance improvements. Therefore, market skepticism and subsequent price corrections are understandable.