Event: the company announced its interim results, with revenue of 17.173 billion yuan in the first half of 2021, + 26.27% compared with the same period last year, and net profit of 2.021 billion yuan, + 291.44% compared with the same period last year. Of this total, Q2 realized income of 6.967 billion yuan,-7.28% of the same period last year, and net profit of 842 million yuan, + 168.56% of the same period last year.
Income and gross profit margin increase at the same time, and the advantage of integration under the high level of pulp and paper prices is highlighted. In the first half of the year, the company's machine paper revenue was 14.899 billion yuan, + 28.90% compared with the same period last year, which mainly benefited from the sharp increase in paper prices compared with the same period last year (white cardboard / a pair of adhesive tape / coated paper market price in the first half of the year). Although the pulp price rose sharply at the same time, the company's overall gross profit margin reached 30.93% in the first half of the year, compared with the same period last year. (taking into account the impact of freight adjustment to operating costs, the same below), reflecting the company's obvious pulp-paper integration advantages and strong ability to smooth cost fluctuations (2021Q1 wood pulp self-sufficiency rate reached 80%, the cost of home-made pulp was basically the same as in 2020, and 44% lower than the price of purchased wood pulp) During the boom period of the industry, the performance was significantly improved.
Q2 sales pressure, concerned about the peak season industry bottomed out rebound. The Q2 company's revenue is-7.28% / Q1-31.73% compared with the same period last year, which is mainly due to the pressure on the sales of machine-made paper: (1) in terms of sales volume, Q1/Q2 sells machine-made paper 1.58 million / 1 million tons respectively, and the production and sales rate is 110%. On the one hand, the sales pressure is affected by the off-season, on the other hand, it may be due to high paper prices to suppress downstream demand. (2) in terms of price, the market price of the main products is still high from April to May and has been adjusted sharply since June. According to a comprehensive judgment, the average sales price of Q2 mechanism paper may still be higher than that of Q1, which makes the gross profit margin of Q2 company increase by 4.56 pct compared with the previous month. To 33.64%.
July-August is still in the off-season, paper prices are low and gradually hit bottom to stabilize, the company is expected to Q3 revenue side will still be under pressure, gross profit margin has declined. As September enters the traditional peak season, the release of downstream reserve demand will help the company digest inventory, boost sales, and is expected to push paper prices back up, and the company's Q4 may usher in an improvement in revenue and gross profit margin. In the medium and long term, we are still optimistic about the support of plastic restrictions and consumption upgrading to the demand for white cardboard, and we need to pay attention to the macroeconomic environment and the landing of industry planning capacity.
The cost control is better, and the scale of interest-bearing liabilities decreases. In the first half of the year, the expense rate of the company during the period was 15.81%, which was-2.96pct compared with the same period last year, mainly due to a large increase in revenue, while the increase in expenses during the period was limited (mainly due to the increase in R & Using abundant cash flow, the company continues to reduce the size of its debt, reducing its interest-bearing liabilities by 2.045 billion yuan and its asset-liability ratio by 1.89 pct compared with the end of 2020. To 69.94%, interest expenditure in the first half of the year decreased by 60 million yuan compared with the same period last year. Taking into account the downward impact of paper prices on the revenue side, the expense rate may rise month-on-month in the second half of the year, but continue to be optimistic that companies will reduce interest-bearing liabilities, reduce the scale of financial expenses, which account for nearly half of period expenses, and improve asset quality.
The advantages of scale and cost are solid, and the market share continues to be in the lead. As the leader of cultural paper and white cardboard industry, the company has a leading production capacity and the main production bases are basically self-sufficient in wood pulp, with obvious scale effect and cost advantages, and has the strength to continue to expand and increase market share. The company plans to build the second phase of Huanggang Chenming project, with a paper production capacity of 1.5 million tons per year (cultural paper and white cardboard) and a mechanical pulp capacity of 520,000 tons per year. After the project is put into production, the company's market share and cost advantages will be further consolidated. At the same time, it is optimistic that the company will focus on the main paper industry, further shrink the financial leasing business (about 1.4 billion yuan in the first half of the year), and the asset structure continues to improve.
Profit forecast and investment rating: the company's net profit from 2021 to 2023 is expected to be 35.63,31.34 and 3.281 billion yuan respectively, and the EPS is 1.19,1.05 and 1.10 yuan respectively. At present, the stock price corresponds to 6.65,7.56,7.22 times of PE, respectively, maintaining the "recommended" rating.
Risk hints: the macro-economy is not as expected; the fluctuation of the epidemic affects supply and demand; the industry puts in excess capacity; and the progress of project production is not as expected.