The company released its 2023 annual report and 2024 quarterly report
24Q1 revenue was 6.76 billion yuan, up 9.8%; net profit due to mother was 0.58 billion yuan, up 121.1%, turning a loss into profit; deducted non-return to mother - 226 million yuan, up 30.9%; 24Q1 non-financial assets totaled 280 million yuan, of which non-current asset disposal profit and loss (including the cancellation portion of calculated asset impairment provisions) was 240 million yuan, mainly due to the disposal and sale of shares in Yujing Hotel.
23Q4 revenue was 6.89 billion yuan, an increase of 3.6%; net profit to mother was 5.1 billion, a decrease of 900%; deducted from non-return mother - 690 million yuan, a decrease of 33.7%. Revenue for 23 years was 26.61 billion yuan, a decrease of 16.9%; net profit to the mother - 1.28 billion yuan, a decrease of 776.9%; withheld from non-return mother - 1.94 billion yuan, the same decrease of 437.3%, and non-recurring profit and loss of 660 million yuan in 2023, of which the company's mechanical paper sales declined year-on-year during 2023 due to weak downstream demand in the paper industry; at the same time, due to weak downstream demand in the paper industry, the price of machine-made paper decreased sharply year-on-year, while the prices of raw materials such as wood chips, raw coal, and chemical materials were still operating at a high level. Squeeze the company's profit margins.
By product, revenue from double adhesive paper/white card paper/electrostatic paper/coated paper/non-stick base paper/thermal paper/ other mechanical paper was 77.02/54.78/40.06/39.26/11.28/5.54/1.10 billion yuan, respectively, with year-on-year increases of -8.9%/-40%/-1.8%/-5.4%/+15.8%/-5%/-0.3%; by region, mainland China's revenue was 20.082 billion yuan, a decrease of 15.8%, accounting for 75.5%; other countries and regions, 6.526 billion yuan, the same decrease of 19.5% Compared to 24.5%.
The gross profit margin for 23 years was 8.13%, a decrease of 6.3pct, a net profit margin of -4.99%, a decrease of 5.98pct. The company's gross profit margin for 23 years was 8.13%, a decrease of 6.3pct, a net profit margin of -4.99%, and a decrease of 5.98pct; during the year, the total rate of the company was 15.4%, an increase of 1.6 pcts. Among them, the sales rate was 0.9%, an increase of 0.1 pct; the management rate was 2.6%, an increase of 0.3 pct; the financial rate was 7.6%, an increase of 0.9 pct; and the R&D rate was 4.4%, an increase of 0.3 pct.
As a typical procyclical industry, the extent of the paper industry's boom is positively correlated with macroeconomic trends.
Currently, China's economic development is showing a positive trend. As the country's macroeconomic policy continues to gain strength, downstream demand in the paper industry will gradually pick up, short-term supply and demand conflicts will be mitigated to a certain extent, and industry sentiment is expected to improve. At the same time, the company will actively improve quality and efficiency and improve profitability through measures such as adjusting product structure, expanding exports, improving production efficiency, controlling production costs, and disposing of non-main business assets.
The company's business plan for 2024:
1) Strengthen sales management, seize the market and enhance company benefits
In 2024, the company will seize market opportunities, strengthen channel construction, increase direct sales customer development, and strengthen overseas contract management; be market-oriented, actively seek efficiency growth points, closely connect with production departments to develop and produce new products with high added value, and do a good job in promoting and increasing key products, especially liquid packs, food cards, copper cards, etc.; optimize business processes, increase risk control points, sort out the process every quarter, and strengthen risk management and control.
2) Refine financial management and take more measures to reduce the size of debt
In 2024, the company will use this as an opportunity to adjust the long-term, medium and short-term financing structure, determine the best financing plan, broaden financing channels, further deepen cooperation with large banks, implement project loans, equipment financing, debt-for-equity financing and equity financing; follow the interpretation of national macroeconomic policies in real time, carry out rational tax planning and implement policy dividends; continue to reduce the scale of financial leasing business, actively dispose of idle and inefficient assets, revitalize existing assets and increase cash inflows.
3) Optimize procurement management and stabilize supply to reduce costs and increase efficiency
The company will further enrich procurement channels for raw materials, deepen long-term cooperation for bulk materials such as wood pulp, wood chips, coal, etc., improve cooperation methods with suppliers, focus on developing suppliers with strong financial strength, innovate payment methods, and reduce financial costs; continue to learn new technologies and processes, introduce cost-effective raw materials, and optimize the raw material structure; rationally control goods and arrange procurement plans according to monthly production schedules to reduce capital consumption.
Adjust profit forecasts and give a “holding” rating
The company is a large modern enterprise group focusing on pulp and paper production, and unswervingly implements the integrated strategy of pulp and paper. Currently, the company has production bases in Shandong, Guangdong, Hubei, Jiangxi, Jilin, etc., with an annual production capacity of 11 million tons of pulp and paper, including 4.3 million tons of wood pulp. It is the first domestic paper company to achieve a basic balance between pulp and paper production capacity. Considering that the company's 23-year performance fell short of expectations, we adjusted our profit forecast. The company's 24-26 revenue is estimated to be $289.3/307.6/32.37 billion yuan respectively (367.9/38.59 billion yuan before 24-25), net profit to mother of $1.43/6.10/880 billion ($20.2/2.40 billion before 24-25, respectively), EPS of 0.05/0.21/0.30 yuan/share, and corresponding PE of 76/18/12X, respectively.
Risk warning: macroeconomic policy risks; environmental risks; raw material price fluctuation risks; increased market competition risks; financial leasing business risks, etc.