The readings of this report are as follows:
The cost advantage of forest-pulp-paper integration continues to develop, and it is expected to benefit from the rebound in the volume and price of paper products in the traditional peak season in the second half of the year; the scale of financial leasing business continues to shrink, and financial and operational risks are reduced.
Summary:
Maintain the overweight rating. Taking into account the relatively limited boost in terminal demand for cultural paper and the increase in imported paper, and the increase in the new production capacity of some kinds of paper in the industry and the global broad-leaf pulp in the second half of the year and 2022, the EPS in 2021 will be reduced to RMB1.300.25 / 1.470.27 / 1.61 (- 0.29RMB) in 2021, and the current market capitalization will be about 3 times of PE in 2021, maintaining the overweight rating.
The performance is in line with expectations, and the profit level has improved significantly. 2021H1 completed a machine paper output of 2.83 million tons, an increase of 2.91%, a sales increase of 2.58 million tons, an increase of 4.45%, a revenue of 17.173 billion yuan, an increase of 26.27%, a net profit of 2.021 billion yuan, a year-on-year increase of 291.44%, a year-on-year increase of 5.82pct to 30.93% and a net profit rate of 7.16pct to 12.03%. Among them, Q2 was affected by the decline in paper prices in the off-season and its revenue also fell by 7.28%. The downward pulp price and the advantage of high wood pulp self-sufficiency rate led to a month-on-month increase in gross profit margin (4.56pct) to 33.64%.
The cost advantage of forest-pulp-paper integration continues to develop and is expected to benefit from the rebound in the volume and price of paper products in the traditional peak season in the second half of the year. The company's annual pulp and paper production capacity of more than 11 million tons has a significant scale advantage, with a total capacity of more than 4.3 million tons of wood pulp. the complete supply chain not only builds the cost advantage for the company, but also ensures the safety, stability and quality of the raw materials. to provide strong support for maintaining long-term competitiveness. With the improvement of the prosperity of the paper industry, the price of the company's main kinds of paper rose compared with the same period last year, the cost advantage of pulp-paper integration was prominent, new projects reached production and efficiency, and the profitability of each subdivision of paper increased. The revenue of white cardboard / a pair of adhesive tape / coated paper increased by 57.79%, 19.06% and 34.42% respectively, and the gross profit margin increased by 26.89pct, 5.28pct and 17.94pct to 45.06%, 24.46% and 36.67%, respectively. Q3 traditional peak season is expected to lead to a marginal pick-up in the demand for cultural paper, and the company's profits are still guaranteed.
The scale of financial leasing business continues to shrink, and the financial and operational risks are reduced. 2021H1's financial leasing business achieved revenue of 206 million yuan, accounting for 1.2% of the total revenue compared with the same period last year. The asset-liability ratio decreased by 1.89pct to 69.94% compared with the beginning of the year, and the asset structure continued to be optimized. In March, the company fully redeemed the first phase of preferred shares, reduced future preferred stock dividend expenses, continued to optimize the financial and financing structure, and gradually revealed multiple improvements in performance flexibility.
Risk hints: macroeconomic fluctuation risk, raw material price fluctuation risk, market fluctuation and industry competition aggravating risk, financial risk brought by financial leasing business