Main points of investment:
Lower the target price to 10. 37 yuan to 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 and global broad-leaf pulp in 2022, it will be reduced by 2021-2023 EPS to 1.30 (- 0.25) / 1.47 (- 0.27) / 1.61 (- 0.29) yuan, with reference to the industry giving 8 times PE in 2021, lowering the target price to 10.37 yuan to maintain the holding 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. With the improvement of the prosperity of the paper industry, the price of the company's main types of paper rose year-on-year, the cost advantage of pulp-paper integration was prominent, 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.
Risk hints: macroeconomic fluctuation risk, raw material price fluctuation risk, financial lease financial risk