Xianhe Co.Ltd(603733) (603733)
Key investment points
It is planned to invest 8 billion yuan to build Laizhou 2 million ton pulp and paper project, and the category & scale expansion process is accelerated
According to the investment intention agreement, the company plans to invest about 8 billion yuan in Laizhou high-performance paper-based new material industrial park project, and plans to form a 2 million ton high-performance paper-based new material and fiber preparation project through technical transformation and new construction, Including: (1) 800000 tons of pulp: 400000 tons of chemical pulp + 400000 tons of chemical mechanical pulp; (2) 1.2 million tons of paper: (a) 400000 tons of production line is formed by the technical transformation of the acquisition production line, which is expected to be put into operation in the near future; (b) 150000 tons of decorative paper-based materials, which is a preparatory project for Xiawang; (c) 300000 tons of special paper; (d) 350000 tons of special food paperboard materials, including liquid beef card and 2C category. The main investment project and supporting auxiliary projects are planned to be constructed in two phases and strive to be completed within the 14th Five Year Plan period (2025) complete the investment. The new production capacity of Laizhou base promotes the continuous expansion of the company's Category & scale, effectively alleviating the growth pressure under the high base of 22h1; at the same time, the sea transportation of Laizhou base is convenient, which will strengthen the company's national location layout and improve the service efficiency of the northern market. This new project once again demonstrates Xianhe's determination to expand and continues to be optimistic about the company's future growth.
The four bases have developed together and entered a high-speed expansion period of setting production by sales
From the end of the 20th century to the beginning of the 21st century, the company successively released plans for new projects with large production capacity, Guangxi (2.5 million tons of Forest Pulp Paper), Hubei (2.5 million tons of Forest Pulp Paper) and Laizhou (2 million tons of Forest Pulp Paper) cooperate with Zhejiang and Hebei bases to improve the national layout. (1) Sanjiang, Guangxi: the total investment is 11.8 billion yuan, and the main projects include 1 million tons of chemical pulp, 500000 tons of chemical mechanical pulp and 1 million tons of paper. The first phase of 500000 tons of pulp and 200000 tons of paper will be put into operation at the end of 23. (2) Jingzhou, Hubei: with a total investment of 10 billion yuan, the main projects include 900000 tons of pulp, 1.4 million tons of paper and 200000 tons of coated paper; (3) Laizhou, Shandong Province: with a total investment of 8 billion yuan, the main projects include 800000 tons of pulp and 1.2 million tons of paper. In conclusion, the company has a total capacity of 3.2 million tons of pulp and 3.6 million tons of paper. It is the largest and fastest expanding enterprise in the special paper industry. By the end of 2021, the company has a total capacity of 100000 tons of pulp and 1.1 million tons of paper (including Xia Wang). In the first half of 22 years, Laizhou 400000 tons food card project and 300000 tons food card project in the middle of the year were put into operation. The company officially entered the high-speed expansion period of setting production by sales and continued to be optimistic about the high growth of the company's performance.
The price is strong & the pulp price is down, and the net profit per ton is expected to rise month on month
(1) Benefits: the downstream boom of specialty paper is high, the paper price is still strong during the fall cycle of Q3 pulp price, the price of Q4 paper is slightly increased under the catalysis of production restriction from September to October, and the overall paper price performance of Q4 is flat and upward compared with Q3; from the cost side, the pulp price has gradually decreased since May, the highest pressure of Q3 high price pulp has passed, the marginal cost of Q4 pulp has decreased, the energy cost is generally controllable, and the cost has decreased month on month Overall, the paper price is flat and slightly increased, the marginal cost is down, and the net profit per ton is expected to be up month on month. (2) Volume: the shipment continued to perform well under the favorable demand boom. The early inventory preparation offset the impact of dual control production restriction. It is expected that the Q4 sales volume will increase month on month, and the performance will continue to be bright.
Profit forecast and valuation
The company's card consumption is large, the expansion process continues to accelerate, and the growth is superior. We expect the company to achieve revenue of RMB 6.998 billion, RMB 10.614 billion and RMB 12.926 billion from 2021 to 2023, with a year-on-year increase of 44.49%, 51.67% and 21.79%; The net profit attributable to the parent company was RMB 1.251 billion, 1.608 billion and 1.963 billion, with a year-on-year increase of 74.40%, 28.57% and 22.06%, corresponding to PE of 22.33x, 17.37x and 14.23x respectively, maintaining the buy rating.
Risk statement
Raw material prices fluctuate, energy costs fluctuate, downstream demand fluctuates, and the production progress is less than expected
