\u3000\u3000 Shandong Sun Paper Co.Ltd(002078) (002078)
Event overview
Recently, the market of cultural paper and household paper is relatively hot. After the new year, the overall market price of paper industry has increased to a certain extent. We believe that the profitability of the company is expected to be improved when the price of paper rises and Shandong Sun Paper Co.Ltd(002078) there are new paper and wood pulp production capacity.
Cost side: the self owned pulp production capacity is released one after another, and the cost advantage of the company is prominent.
As of February 18, the average spot price of Chinese commodity coniferous pulp was 6400 yuan / ton, an increase of 6.67% since the beginning of the year. Affected by the rise of coniferous pulp, the spot price of China's broad-leaved pulp also rose from 5125 yuan / ton at the beginning of the year to 5450 yuan / ton, an increase of 6.34%. The company's own pulp production capacity was also put into operation at the end of 2021 and the beginning of 2022: 200000 tons of chemical mechanical pulp in Guangxi base was put into operation in November 2021, and 800000 tons of chemical pulp in Guangxi base was put into operation in January 2022. In the context of the continuous rise of commercial pulp, the production of the company's own pulp production capacity will reduce costs and improve efficiency, effectively ensure the smooth operation of the company's Guangxi base, enhance the market competitiveness of the company's cultural paper and expand the company's development space.
Sales side: the company's new production capacity has been put into operation one after another, the prices of cultural paper and household paper have increased, and the enterprise inventory has continued to decline.
In terms of production capacity, the cultural paper machine in Guangxi base of the company was officially put into operation in September 2021, with an annual production capacity of 500000 tons. In October and December 2021, the company put two household paper machines into operation, with an annual production capacity of 120000 tons. The launch of new production capacity can increase the company's market share and increase the company's product sales. In terms of market price, as of February 18, the average market price of double offset paper increased by 3.79% from 5216.5 yuan / ton at the beginning of the year to 5825 yuan / ton, while the average market price of household paper reached 6450 yuan / ton, an increase of 0.65% compared with the beginning of the year. At the same time, because the price of wood pulp is still in the rising cycle, the cost still plays a supporting role in the rising price of cultural paper and household paper. From the inventory situation: in January 2022, the inventory days of double offset paper enterprises decreased by 5.97% compared with that in December 2021. Last week, the enterprise inventory of double offset paper also decreased significantly, down 2.23% from last week. Through the continuous decline of cultural paper enterprise inventory, it can also be seen that the current sales situation of cultural paper is relatively hot, and the order receiving situation of paper mills is good. When the paper mill inventory continues to decline and the channel inventory is also relatively low, we expect the moderate rise of paper price to continue.
The newly established Nanning subsidiary is expected to further enrich the raw material supply system and strengthen the advantages of Forest Pulp paper integration.
On February 10, 2022, the company issued the announcement on the establishment of Nanning Shandong Sun Paper Co.Ltd(002078) Co., Ltd., which plans to set up a subsidiary in Nanning and build a second base in Guangxi except Beihai. Guangxi Zhuang Autonomous Region is the province with the largest planting area of artificial forest and fast-growing forest in China. It has the natural geographical advantage of building "Forest Pulp paper integration", and its forest coverage rate is as high as 62.5%, ranking third in the country; The timber output is 36 million cubic meters, ranking first in China for many consecutive years. The implementation of the proposed investment project of the company's new company in Nanning will further complement and form synergy with the Beihai project of Guangxi base and the "Forest Pulp paper integration" project of Laos base, which will help the company build a complete raw material supply system, realize enterprise transformation and upgrading, and continuously improve the company's core competitiveness.
Investment advice
We believe that the continuous launch of the company's own wood pulp production capacity can effectively reduce the pulp cost of the company's paper products, while the rebound in the price of cultural paper and the launch of the company's new production capacity can also increase the company's revenue, and the company's profitability is expected to continue to improve month on month. Considering the latest performance forecast released by the company and the lower than expected increase in paper price in the fourth quarter of last year, we lowered the company's forecast of revenue of RMB 323.55/370.88/40.299 billion in the year 21-23 to RMB 30.858/363.75/38.523 billion, and lowered eps1.00 in the year 21-23 The forecast of 36 / 1.54/1.71 yuan is 1.11/1.20/1.27 yuan, corresponding to the closing price of 12.15 yuan / share on February 22, 2022, and PE is 11 / 10 / 9.5 times respectively, maintaining the "buy" rating of the company.
Risk tips
1) the demand for cultural paper fell sharply. 2) Too much new capacity in the industry has led to a decline in the price of the company's products.
