3Q 纸企利润仍将承压：上游阔叶浆产能释放，但全球针叶浆新增产能有限，二者价格走势分化，阔叶浆明星CFR、针叶浆银星CFR 价格较8 月分别变动-12.3%、持平，但仍分别高于去年2.5%、9.5%。此外，供应端扰动并未止歇，UPM 将削减旗下两座工厂的纸浆产出，同时加拿大铁路运输也需数周时间才能从停工中恢复。因而我们认为，未来浆价以震荡走势为主，叠加纸品价格低迷，3Q 国内纸企利润仍将承压。Conclusions and recommendations:
Since September, the domestic paper market has shown a “weak peak season” trend, and most paper prices have not improved. Despite the decline in the price of broadleaf pulp, insufficient domestic demand is still the core conflict, which further tests the operational resilience of paper companies. However, as a leading domestic paper company, the company has been working in the direction of integrating forest pulp and paper for many years, and its ability to overcome cycles will be superior to similar enterprises. Considering that current demand has not been fixed, the company is temporarily given investment advice for “ranged operations”.
Currently, domestic demand is still insufficient, and the domestic paper market is “not strong during the peak season”: Judging from consumption data, the total monthly total for January-August was 31.2 trillion yuan, YOY +3.4%, and effective domestic demand is insufficient. Although many paper companies such as the company and Huatai issued price increases at the end of August, seasonal orders for Mid-Autumn Festival were not released as scheduled. Taking mooncakes, which are in high demand for wrapping paper, the China Sugar Association expects production and sales of Mid-Autumn Festival mooncakes to be about 0.3 million tons and 20 billion yuan this year, down 6% and 9%, respectively. Due to limited increases in holiday consumption, the domestic paper market showed a “poor peak season” trend. As of September 23, the prices of white cardboard, double adhesive paper, coated paper, and corrugated paper decreased by 3.8%, 2.5%, 0.2%, and 0.5%, respectively, compared with August, with year-on-year changes of -8.2%, -6.8%, +2.9%, and -3.3%, respectively.
The profits of 3Q paper companies will still be under pressure: upstream broadleaf pulp production capacity has been released, but new global softwood pulp production capacity is limited. The price trends of the two are divided. The prices of broadleaf pulp star CFR and acerola pulp silver star CFR changed -12.3% and remained flat compared to August, respectively, but they are still higher than last year's 2.5% and 9.5%, respectively. Furthermore, supply-side disruptions have not stopped. UPM will cut pulp output at two of its plants, while it will take weeks for Canadian rail transportation to recover from the shutdown. Therefore, we believe that in the future, pulp prices will be dominated by volatile trends, compounded by low paper prices, and domestic paper companies' profits will still be under pressure in the 3Q period.
The company leads the integrated layout of pulp and paper, and its operating resilience continues to be superior to that of its peers: in 2022, the company promoted the first phase of the Guangxi Nanning project. It is expected that the household paper production line (0.3 million tons) will enter the trial production stage in 2024Q3, and the high-grade wrapping paper production line will enter the trial production stage in 2025Q4. At the same time, through the Guangxi Nanning Phase II project in May, the company will build a special paper production line (0.4 million tons), a bleached chemical wood pulp production line (0.35 million tons), a mechanical wood pulp production line (0.15 million tons) and supporting facilities to further increase the self-supply rate of wood pulp while enriching the matrix. Up to now, the total production capacity of the company's three bases in Shandong, Guangxi and Laos has exceeded 12 million tons, and the self-supply rate of pulp has reached about 60%. With the further increase in forest pulp and paper production capacity in the future, we are optimistic that the company's operating resilience will continue to be superior to that of its peers.
Profit forecast and investment advice: Considering the current insufficient demand, we lowered our profit forecast. We expect the company to achieve net profit of 34, 35, and 38 in 2024-2026 (previously 3.4, 3.8, and 4.1 billion yuan, respectively), YOY of +9%, +5%, and EPS of 1.2 yuan, 1.3 yuan, and 1.4 yuan respectively. The current A share price corresponds to PE of 11 times, 10 times, and 9 times, respectively. Considering that the current demand for paper products has not been repaired, we will temporarily give the company a “range operation” investment recommendation.
Risk warning: Market competition increases risk, raw material price fluctuation risk, and demand continues to be sluggish