Event
The company released its mid-2021 report: the company's 2021H1 realized operating income of 17.173 billion yuan, an increase of 26.27% over the same period last year, and a net profit of 2.021 billion yuan, an increase of 291.44% over the same period last year; the corresponding company's 2021Q2 realized operating income of 6.967 billion yuan, down 7.28% from the same period last year, and its net profit was 842 million yuan, an increase of 168.56% over the same period last year.
Comment
Off-season wood pulp paper demand fell, paper prices declined month-on-month. Demand in the off-season is relatively weak in the second quarter, and mid-range traders and downstream customers are hoarding goods at low levels. Since April, they are less willing to replenish stocks at high levels. At the same time, import pulp prices have declined slightly, and it is difficult to maintain high paper prices under the operating rate in the first quarter. The price of white card paper has fallen sharply. By the end of June 2021, the price of imported coniferous pulp / broadleaf pulp was $860 / ton, respectively. The price of coniferous pulp was $40 / ton lower than that at the end of March, 2021, and $120 / ton compared with the peak in April. The price difference of coniferous broad-leaf pulp has narrowed. At the end of June 2021, the price of double-offset paper / coated paper / white cardboard was 7000 / 7500 / 7250 yuan / ton, respectively. Compared with the end of March 2021, the price of double-offset paper and white card paper decreased by 4.21% / 26.18%, and the price of coated paper increased by 2.43% compared with the end of March 2021. With the arrival of the traditional peak season in the third quarter, the de-inventory pressure of manufacturers has been reduced, the downward trend of wood pulp paper prices has slowed down, and some manufacturers have issued price increase letters for white card paper.
The gross profit margin and period expense rate increased, and the debt ratio continued to decline. The company's 2021Q2 gross profit margin / sales expense rate / management expense rate / R & D expense rate / financial expense rate is 33.64% / 1.12% / 3.49% / 5.62% / 8.90% respectively, which is 4.56pct/ 0.44pct/ 1.05pct/2.04pct/ 2.05pct higher than that of 2021Q1. The reason for the increase in the expense rate during the period is that the revenue base of 2021Q2 is lower than that of 2021Q1. 2021Q2's debt ratio fell to 69.94%, and financial expenses are expected to be further reduced.
Investment suggestion: it is estimated that the EPS of the company in 2021 / 2023 is 1.34 / 1.66 / 1.85 yuan respectively, and the current stock price is 5.9x / 4.8x / 4.3x in 2021 / 2023, respectively. It is recommended to buy.
Risk hint: the risk that price increases fall short of expectations, performance forecasts and valuations fall short of expectations.
