Sun Paper (002078): Profit margin improvement in Q2 expects demand recovery in peak season

Event: The company released the semi-annual report for the first half of the year.

8 ppm, a ten-year increase2.

9%, realizing net profit attributable to mother 8.

9 trillion, a decrease of 27 a year.

8%, realized deduction of non-net profit 8.

600 million, a decrease of 28 a year.


In 19H1, the business climate of papermaking dropped, and the profit improvement of Q2 paper mills resumed: the company achieved revenue of 53 in Q2 alone.

$ 300 million twice a year.

0%, net profit attributable to mother in a single quarter5.

1 ‰, an average of 17 in ten years.

2%, compared to 38 in Q1 return to net profit.

3% increased and narrowed; we judge that the company’s overall revenue and profit decline are mainly affected by the prosperity of the paper industry. The price of paper fell significantly last year. At the same time, the business climate of Q2 has recovered compared to Q1, and the price of raw materials has increased.Q2 continued to weaken, and the profitability of the paper mill Q2 improved.

The paper price is obviously more obvious than the same period of last year: after the paper industry experienced a bull market from the end of 16 to 18 years, the prosperity has deviated significantly since the second half of 18 years. Packaging paper and cultural paper have gradually entered the downward price channel. According to the paper industry newsData, the average price of coated paper, double offset paper, corrugated paper in July 19 and the same period last year fell by 15 respectively.

2%, 11.

5%, 26.

0%; meanwhile, benefiting from the March tender season, the price of cultural paper increased in April, and the prosperity has improved.

Raw material prices continue to weaken: According to the paper’s Lianxun data, the price of wood pulp futures bids decreased during the period of November-December 18 and May-June 19, with the decrease generally in the range of 100-150 US dollars / ton. We believe thatThe decline in raw material prices in the second quarter contributed in part to the company’s profits.

Revenue increase contributed by increased production capacity of kraft linerboard and dissolving pulp: In terms of products, 19H1 revenue accounted for a relatively large category of non-replaceable cultural paper, and coated paper revenue replaced 4 respectively.

6%, 29.

8%, mainly due to the decline in paper prices, kraft paper and dissolving pulp revenue increased by 20 respectively.

7% vs. 26.

4%, which is related to the company’s supplementary production capacity (the kraft box board 80 to high-end board project was gradually put into operation at the end of 18 years, and the 40-ton semi-chemical pulp production line entered a stable 杭州夜网论坛 production period in 2019).

The decline in the industry’s prosperity led to a decline in gross profit margin and a slight increase in expense ratio: in terms of gross profit margin, the overall gross profit margin of pulp and paper products fell.

4pct, in which non-replacement of cultural paper, coated paper gross margin replaced 10 respectively.

1, 13.

7pct, the change in gross profit margin of chemical pulp and dissolving pulp is -2.

6, 1.

2 points, the gross profit margin of kraft linerboard paper increased by 1.

2pct, although the industry’s paper price has dropped significantly, the company’s kraft paperboard is still in the cumulative release stage. We believe that the gross margin of production capacity can still improve the space; in terms of expenses, the company’s sales expense ratio is 3.

5% (decade +0.合肥夜网

48pct), management expense ratio 3.

9% (including research and development costs, ten years +0.

87pct), financial expense ratio 2.

8% (one year-0.

54pct), the overall cost rate has increased slightly.

Traditional peak season may rebound: In the short term, we believe that cultural paper is expected to stop falling and stabilize, and the restructuring of the gold, silver and ten traditional peak seasons has boosted demand. Overcoming the previous decline has been transmitted. At present, the price of paper has always been at the historical price center.In the medium-term supply and demand perspective, coated paper is affected by real estate and other related industries. The demand for commercial printing and periodical printing has grown slowly, and the demand for books, teaching aids, and manuals for double-offset terminals has increased.The demand for cultural paper is generally stable; the supply-side industry has increased capacity replacement in 19 years, and the stability of the supply and demand pattern has a certain supporting effect on paper prices.

Medium- and long-term growth is expected, and profitability continues to improve: the company’s expanding production capacity in the next few years will include the release of 120 paper mills in Laos, Luzhou 45 involved in special cultural paper projects, 20 alternative natural high-yield biomass fiber projects, and Northwest GuangxiThe steady expansion of the integrated forest-pulp-paper project will ensure the company’s long-term growth. Production cost distribution of old projects, resulting in cost advantages: due to environmental protection and other factors, the proliferation of new domestic production capacity products, the company’s forward-looking layout in the old layout, the first to achieve the distribution of raw materials and volume; while the old cardboard box board is still in volumePhase (two production lines with an annual output of 40 tons of high-grade packaging paper are expected to gradually enter the trial production phase in the first half of 2021), we believe that the company has its own cost-side advantages and is expected to continue to profit in the next few years; self-producing pulp projects will increase profitCapacity: The company’s 10-inch wood chip pulp production line and 40-inch semi-chemical pulp production line will enter a stable production period in 2019. The 20 to natural high-yield biomass fiber project is expected to start production in the fourth quarter of 2019. The Laos 40 recycled fiber pulp board production line hasTrial production in June 2019; profit forecast and rating: As a domestic leader in cultural paper, the company has outstanding profitability, long-term steady growth in performance, reasonable product structure, and strong anti-cycle capacity. We expect net profit for the years 19-20 to be 22, respectively.

0 billion, 26.

2ppm, an increase of -1 in ten years.

7%, 19.

2%, on August 30, 2019, the daily corresponding 19-20 years PE is 9 times, 8 times, we give the company 9 years 19?
10 times PE estimate, the reasonable value range is 7.


5 yuan, given “Excellent” rating.

Risk warning: the risk of fluctuations in raw material costs; the risk of falling paper prices.