Sun Paper (002078): Leading competitive advantage highlights waiting period to help take off

Sun Paper (002078): Leading competitive advantage highlights waiting period to help take off

Event: Sun Paper released the 2018 annual report, and the company achieved revenue of 217 in 2018.

70,000 yuan, an increase of 15 in ten years.

2%; net profit attributable to mother 22.

400 million, an increase of 10 in ten years.

5%; net profit after deduction is 22.

1 ppm, a ten-year increase of 8.

5%.

In the fourth quarter alone, the company achieved revenue of 56.

6 trillion, an increase of 9 in ten years.

1% (Q1 / Q2 / Q3 / Q4 company revenue increased by 14 respectively.

3% / 26.

8% / 12.

5% / 9.

1%); achieve net profit attributable to mother 4.

4 ‰, 32 years ago.

9% (Q1 / Q2 / Q3 / Q4 companies’ net profit attributable to their mothers increased by 40.

1% / 40.

6% / 14.

8% /-32.

9%); Realize 杭州桑拿网 net profit after deductions 4

3 ‰, an average of 36 in ten years.

3% (Q1 / Q2 / Q3 / Q4 companies deducting non-returning mother’s net profit increased by 48% / 31 respectively.

5% / 15.

6% /-36.

3%).

The volume and price of papermaking rose, and the gross profit per ton of pulp products increased slightly.

In terms of papermaking, the company’s cultural paper realized revenue 72.

10,000 yuan, an increase of 22 in ten years.

2%, gross margin 27.

3%, zero for one year.

8pct; coated paper realized revenue 39.

9 ‰, 10-year average of 10.

2%, gross margin 28.

5%, ten-year average of 4.

2pct; boxboard realized revenue 26.

400 million, an increase of 10 in ten years.

4%, gross profit margin 11.

2%, more than ten years.6 points.

Papermaking revenue totaled 155.

4 ‰, an increase of 9 in ten years.

8%, of which volume / price increase by 6 respectively.

5% / 3.

1%.

The company’s gross profit per ton of paper is 1,263 yuan, which is adjacent to 9% every year.

As for pulping, the company’s dissolving pulp revenue was 31.

7 ppm, an increase of 17 in ten years.

5%, gross profit margin 20.

3%, a decline of 0 per year.

7pct; chemical pulp revenue 15.

70,000 yuan, an increase of 32 in ten years.

1%, gross profit margin 26%, an increase of 4 in ten years.

9 points.

Total revenue of pulping sector.
47.

3 ppm, an increase of 21 per year.

9%, of which volume / price increased by 27 respectively.

2% /-4.

1%.

The company’s gross profit per ton of pulp was 1,019 yuan, a slight increase of 1 in ten years.

1%.

The marginal downward margin of the cycle is under pressure, and the cost has increased slightly.

In the second half of 2018, the papermaking industry’s cycle has declined marginally, and the prices of core paper types have been different.Down 15.

7% / 22% / 4.

7%.

Due to the higher sales volume of papermaking in the second half of the year, the downward price has put pressure on corporate income / gross profit margins.

Preliminary company’s overall gross profit margin 23.

5%, down 2 every year.

5pct (where Q1 / Q2 / Q3 / Q4 gross margins are 27.

5% / 26.

4% / 23.

1% / 17.

3%).

Company selling expenses 3.

4%, a decline of 0 per year.

1 point; the rate of management expenses (including research and development expenses).

8%, increasing by 0 every year.

7pct, we judge that it is mainly due to the increase in investment in research and development of new fiber raw materials; financial expense ratio 3.
3%, a year increase of 0.
3 points.

Company net margin 10.

3%, zero for one year.

4pct (where Q1 / Q2 / Q3 / Q4 net interest rates are 13 respectively.

6% / 12.

1% / 8.

1% / 7.

7%).

Company asset mortgage financing in 201857.

2%, down by 1 every year.

3 points.

With obvious asset structure tends to improve.

Strong growth momentum, leading in the industry in cost control capabilities, and long-term growth logic remain unchanged.

1) The industry has initially come out of a gradual downward phase, and has seen a normal return.

In the context of the return of the industry, Sun Paper, as the leader of the paper industry, still has strong growth momentum.

2) The company’s capacity expansion and optimized layout help deep development.

In 2018, the company’s initial capacity of 20 high-end cultural paper / 30 insert chemical pulp / 80 insert boxboard has been successfully put into production, and the future growth point is clear.

3) The industry-leading cost control capability will be more significant.

In terms of raw materials, the 10-inch wood chip pulp production line and the 40-inch semi-chemical pulp production line will help the company’s container board raw material source protection and reduce dependence on waste paper.

In addition, it is expected that the natural high-yield biomass fiber project will be put into production in the second half of 2019, further consolidating its upstream advantages.

4) Accelerate internationalization and build long-term competition barriers.

The construction of the Laos project is a strategic focus of Sun Paper’s future work. The company plans to strive to gradually build a 200-ton new paper industry park in Laos to consolidate its core competitive advantages and reduce production costs in 2-3 years.
Investment suggestion: We expect the company to achieve a net profit attributable to the parent company of 18-2019.

3, 22.

1,25.

4 ‰, an average of 18% over ten years, an increase of 20.

7%, an increase of 14.

5%; corresponding EPS is 0.

71, 0.

85, 0.

98 yuan.

Maintain the company’s rating as “overweight”.

Risk reminders: the risk of rising raw material prices, macroeconomic risks, overseas investment policy risks