As the leader of the specialty paper industry, the company is expected to add momentum to the development of the application and promotion of transfer paper in the future. it is planned to absorb and merge Yuehua package to integrate the two major capital platforms of China Paper Industry, and has a good prospect in the field of white cardboard. If you consider the future consolidation, it is estimated that the combined net profits of Guanhao Hi-Tech and Yuehua package from 2020 to 2021 are 290 million yuan and 440 million yuan respectively, and the current stock price corresponds to 15x PE in 2021, giving a "prudent recommendation-A" rating for the first time.
Domestic specialty paper industry leader, Donghai Island base to ensure future production capacity expansion. The company was founded in 1993, is the first large-scale production of thermal paper professional company, the main products include carbon-free carbon paper, self-adhesive label materials, thermal sublimation transfer paper. In 2009, China Paper, a central enterprise, was introduced to become the largest shareholder of the company, and China Chengtong became the actual controller of the company. In 2020, it is proposed to absorb and merge Foshan Huaxin Packaging Co., Ltd., a subsidiary of China Paper. The company will continue to expand the main industry of special paper, Donghai Island to establish a world-class special paper base to ensure capacity expansion, at the same time continue to extend paper-related industries to promote enterprises to achieve leapfrog development.
China Paper Co., Ltd. plans to merge Yuehua Bao into the white card field with the integration of its business. In December 2020, the company announced that it intends to absorb and merge Yuehua Bao by issuing A-shares, which will realize the merger and integration of the two major papermaking platforms under China Paper. After the completion of the transaction, the company will add high-grade coated white cardboard, papermaking chemicals, color printing and other businesses to the original specialty paper business line, and formally enter the field of white cardboard. With the full implementation of environmental protection plastic restrictions in China, white cardboard products, as a representative of high quality, are expected to become one of the main substitutes for plastic bags, plastic bottles and takeout lunch boxes, and the market demand prospect is good.
Thermal transfer technology is expected to add momentum to the development, state-owned enterprise reform is expected to stimulate the vitality of enterprises. In the long run, the company's thermal transfer paper technology is ahead of the industry, and it will add more growth points with the gradual maturity of the future process. The company was selected into the list of scientific reform enterprises in 2020. As the only company in the Chengtong system selected as the "demonstration action of scientific reform", it will extensively introduce high-end scientific and technological talents, strengthen the internal incentive system, strengthen scientific and technological investment, and catalyze the transformation of achievements in the future. Further stimulate the vitality of the enterprise.
For the first time, it covers the rating of "prudent recommendation-A". Without considering the contribution of Yuehua package and table for the time being, it is estimated that the net profit of Guanhao high-tech from 2020 to 2021 is 154 million yuan and 184 million yuan respectively, which is-9% and + 19% respectively compared with the same period last year. The current stock price corresponds to 35x PE in 2021. If you consider the table, it is estimated that the combined net profits of Guanhao Hi-Tech and Yuehua Bao from 2020 to 2021 are 290 million yuan and 440 million yuan respectively, an increase of 40% and 51% respectively over the same period last year. The current stock price corresponds to 15x PE in 2021, giving a "prudent recommendation-A" rating for the first time.
Risk tips: paperless substitution risk, raw material price fluctuation risk, M & A progress is not as expected risk.