\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 963 Yueyang Forest & Paper Co.Ltd(600963) )
Event:
On March 18, the company released the annual report of 2021: the annual revenue of 2021 was 7.838 billion yuan, a year-on-year increase of 10.15%; The net profit attributable to the parent company was 298 million yuan, a year-on-year decrease of 28.05%; The net profit deducted from non parent company was 210 million yuan, a year-on-year decrease of 44.27%; The basic earnings per share is 0.17 yuan.
Guoyuan view:
The cultural paper landscape has further declined, and the performance is under pressure under the influence of policies and costs
Quarter by quarter, the company’s 2021q1-4 achieved revenue of RMB 1.963/19.47/18.662062 billion respectively, a year-on-year increase of + 55.79% / + 9.04% / + 1.31% / – 7.47%; The net profit attributable to the parent company was RMB 167 / 1.43/0.47 / – 59 million, with a year-on-year increase of + 91.35% / + 169.35% / – 63.03% / – 140.47% and a month on month increase of + 14.08% / – 14.28% / – 67.10% / – 225.79%. In the context of the centenary of the founding of the party, with the boost of Party and government demand and the rise of cultural paper price, the revenue and net profit of 2021h1 company have achieved strong growth; In the second half of the year, the industry entered the off-season, the introduction of the “double reduction” policy of education further weakened the market demand for relevant products, and the paper price and ton profit level gradually fell; The company’s performance is under short-term pressure due to the increase of raw material costs. Looking forward to 2022, under the background of “double control” of carbon emissions, the industry concentration will continue to improve, and the supply side will shrink or accelerate the inventory removal; The downward space of price and ton profit level is limited. The improvement of supply-demand relationship pattern + price increase in peak season may lead to the recovery and upward of the prosperity of the paper industry, and the company’s performance is expected to improve marginally.
The margin of gross profit margin is declining, and it is expected to hit the bottom and rebound under the improvement of supply and demand pattern
In 2021, the company’s comprehensive gross profit margin decreased by 3.86pcts to 15.11% compared with 2020, of which the gross profit margin of 21q1-4 was 21.10% / 19.60% / 12.86% / 7.18%, which was -0.79pcts / + 2.08pcts / – 5.60pcts / – 11.72pcts respectively compared with q1-4 in 20 years, mainly due to the adjustment of accounting standards, the rise of raw material and energy consumption costs and the fluctuation of pulp price. On the expense side, the annual sales expense ratio decreased by 2.81 PCTs to 1.52%, mainly due to the adjustment of accounting standards; The management expense ratio increased by 0.48pcts to 3.73% year-on-year, which was due to the government subsidies in the previous period and the waiting period expenses for the incentive of new restricted stocks in the current period; Financial expenses increased by 1.4pcts to 2.31% year-on-year, mainly due to the year-on-year increase of about 114 million yuan in interest expenses. In terms of net interest rate, the net interest rate in 2021 decreased by 1.97pcts to 3.85% year-on-year, of which the net interest rate of q3-4 decreased by 4.35pcts/9.40pcts to 2.57% / – 2.83% year-on-year respectively. In terms of cash flow, the net operating cash flow of the whole year was 342 million yuan, a year-on-year decrease of 645 million yuan, which was released from the operating structure deposit of 240 million yuan in the same period last year, superimposed with the increase in raw materials and labor costs.
CCER is expected to restart and help implement the “double carbon” goal, and the company’s carbon sequestration business is in the ascendant
The CCER primary market may restart in the near future after a four-and-a-half-year suspension. The general office of the Beijing Municipal People’s government issued the implementation plan of Beijing on building a modern environmental governance system in March 21, indicating that Beijing will undertake to build a national voluntary greenhouse gas emission reduction management and trading center. The company has nearly 2 million mu of forest resources. At the same time, it strategically deploys the forest sea carbon sequestration plan by taking advantage of multiple advantages such as resource endowment, technical experience and enterprise background. It is expected to develop 50 million mu of forest carbon sequestration in 2025. The layout of the company’s forestry carbon sequestration project has been expanded to 18 provinces, covering 58 cities, counties and districts. The follow-up is expected to drive the continuous growth of the company’s performance.
Investment advice and profit forecast
Considering the subsequent marginal improvement in the supply and demand of cultural paper and the recovery of the industry prosperity, but the policy and cost pressure are still large, we adjust the profit forecast. It is expected that the company will achieve a revenue of 9.023105.52/122254 billion yuan, a net profit attributable to the parent company of 382516/693 million yuan, an EPS of 0.21/0.29/0.38 yuan, and a PE of 29.54/21.86/16.27 times, maintaining the “overweight” rating.
Risk tips
Price fluctuation of raw materials; Demand growth is less than expected; The expansion of forestry carbon sequestration business was less than expected.
