The growth rate of 16Q1 home net profit has increased significantly. In the first quarter of 16 years, the income was 328 million yuan, an increase of 8.8% over the same period last year, and the net profit of returning home was 24.5824 million yuan, an increase of 36.2% over the same period last year, which was in line with our expectations.

Pulp price decline + company wood pulp imports mainly provide performance flexibility, convertible debt to equity to complete the savings in financial costs, the profit level has been significantly improved. Since 15 years, coniferous pulp continued to decline, broad-leaf pulp first rose and then fell, domestic coniferous pulp 16Q1 end decreased by 6.6% compared with 15Q3 end; broad-leaf pulp 16Q1 end decreased by 11.0% compared with 15Q3 end. The company mainly produces paper for the tobacco industry, and the raw materials are mainly imported pulp, which needs 60,000 tons of broad-leaf pulp and 40,000 tons of coniferous pulp every year. The raw materials account for 53.6% of the company's papermaking cost in 15 years, down 2.9 percentage points from 14 years. Pulp price decline and the company's wood pulp outsourcing mainly provide performance flexibility. In addition, the company completed the convertible debt-to-equity conversion at the end of April 15, of which 116 million yuan was converted during the 15Q1 period, with a total of 450 million yuan by the end of April, resulting in a financial expense rate of 1.75% for 16Q1, down 2.8% from the same period last year. The profit level of 16Q1 increased, with gross profit margin rising 0.06 percentage points year-on-year to 28.1% and net profit margin rising 1.38 percentage points year-on-year to 7.4%.

Improve the domestic market coverage and product optimization, and actively open up overseas markets. The company's main products are tobacco industrial paper (production capacity: 40, 000 tons of cigarette paper, 50, 000 tons of filter stick paper, 40, 000 tons of aluminum foil lining paper), mechanical glossy paper, thin printing paper (17000 tons of Bible paper). The domestic market has achieved 100% coverage of all large and medium tobacco markets. Through actively promoting R & D projects and the promotion of new technology, the company has successfully completed customer brand development and brand replacement of other manufacturers. The domestic market coverage of large and medium-sized tobacco has reached 100%, and all 114 bidding projects have been successful in the past 15 years. British American Tobacco PLC in the overseas market has entered the stage of substantial supply. In the past 15 years, the company achieved overseas revenue of 134 million yuan, an increase of 35.3% over the same period last year. Since the company launched overseas business for 10 years, the company's overseas business revenue performance has continued to grow high. By participating in the World Tobacco North America Expo and the London International Tobacco Fair, LIP cigarette paper has been patented by the Republic of South Africa, South Korea, Japan and Russia, which has strongly promoted the sales of the company's products in the international market.

Mudanjiang SASAC's only listing platform, "opinions on comprehensively Revitalizing the Northeast Old Industrial Base" is good for the reform of state-owned enterprises, and low market capitalization provides room for transformation imagination. The paper industry as a whole is in the natural clearing stage, and the continuous strengthening of tobacco control and the oversupply of cigarette paper put short-term pressure on the main industry. according to statistics, the demand for cigarette paper in China is about 100000 tons, and the annual production capacity is about 300000 tons. The domestic cigarette matching series paper market as a whole has a situation of oversupply. Except for some high-end products, including high-permeability filter stick paper, the production capacity of low-end products has exceeded the market demand. The actual control of the company is Mudanjiang SASAC (indirect holding 31.6%), and it is the only listing platform among the companies under SASAC, with a market capitalization of only 3.48 billion yuan. The company suspended trading in July 15 to acquire the Bohai Commodity Exchange to plan a major asset restructuring in order to enter the information technology service industry, which was terminated due to failure to agree on the transaction consideration, transaction mode and some terms of cooperation, but the transformation is expected to continue in the future. On April 26, the CPC Central Committee and the State Council issued some opinions on comprehensively revitalizing the Northeast and other old industrial bases, suggesting that we should further promote the reform of state-owned enterprises, take industrial transformation and upgrading as the guide, reorganize and set up state-owned capital investment and operation companies, solidly promote the strategic adjustment of the layout of the state-owned economy, and explore specific models and ways for employee stock ownership pilot projects and the development of mixed ownership economy.

The main industry benefits from the high flexibility of pulp price decline, small market capitalization + SASAC's only listed platform to provide transformation expectations, maintain holdings! The company strives to increase its market share, optimize its product structure, and actively explore overseas markets. The outsourcing of wood pulp raw materials mainly enjoys the performance flexibility brought about by the decline in pulp prices. The company's market capitalization is only 3.48 billion, which is the only listing platform under Mudanjiang State-owned assets Supervision and Administration Commission, and there has been a major attempt of asset restructuring in the early stage, which can continue to transform in the future. Raise the company's 16-17 profit forecast to 0.36 yuan and 0.42 yuan (originally 0.34 yuan and 0.39 yuan), the current stock price (11.66 yuan / share) corresponding to 16-17 years PE is 32 times and 28 times, maintain the increase!