\u3000\u3 China Vanke Co.Ltd(000002) 078 Shandong Sun Paper Co.Ltd(002078) )
Event: Shandong Sun Paper Co.Ltd(002078) issued the annual report for 2021. The company achieved a revenue of 31.997 billion yuan in 2021, a year-on-year increase of 48.21%; The net profit attributable to the parent company was 2.957 billion yuan, a year-on-year increase of 51.39%; The non net profit deducted was 2.932 billion yuan, a year-on-year increase of 52.44%. In a single quarter, 21q4 achieved a revenue of 8.282 billion yuan, a year-on-year increase of 39.19%; The net profit attributable to the parent company was 189 million yuan, a year-on-year decrease of 66.98%; The non net profit deducted was 211 million yuan, a year-on-year decrease of 64.62%.
21h2 profit is under pressure in the short term and is expected to improve marginally in 22 years. 1) In terms of profitability, the company achieved a gross profit margin of 17.37% (- 2.07 PCT.) in 2021, The net interest rate attributable to the parent company is 9.24% (+ 0.19pct.). The gross profit margin of 21q4 in a single quarter is 9.90% (+ 0.70pct.), The net interest rate attributable to the parent company is 2.28% (-9.60pct.), The rise in Q4 pulp price is superimposed with the rise in the cost of energy and chemical auxiliary materials, and the profitability decreases month on month (the rise in apparent gross profit margin in a single quarter is a change in the caliber of accounting treatment). 2) In terms of period expenses, the rates of sales, management, R & D and financial expenses in 2021 were 0.43% / 4.22% / 1.68% / 1.77% respectively, with a year-on-year increase of -0.05 / – 0.71 / – 0.22 / – 0.70pct, The scale effect is prominent and the operation efficiency is significantly improved.
Cultural paper: the rise of pulp price is superimposed on the improvement of supply and demand, and the profit is expected to hit the bottom and reverse. In 2021, the company’s uncoated cultural paper achieved a revenue of 8.671 billion yuan (+ 20.29%) and a gross profit margin of 15.96% (- 6.54 PCT.); Coated paper achieved a revenue of 4.099 billion yuan (+ 16.80%) and a gross profit margin of 19.73% (- 5.68 PCT.). 21h2, affected by the high price of Chinese wood pulp paper and the sluggish demand of overseas epidemic, a large number of overseas low-cost paper were imported into China, superimposed with the impact of the double reduction policy of education, and the supply, demand and price of cultural paper weakened. Looking forward to 2022, the overseas supply of pulp is disturbed, and the pulp price fluctuates at a high level in the first half of the second half, forming cost support; At the same time, the marginal contradiction between supply and demand of finished paper has slowed down, and paper enterprises have a strong willingness to support prices. The company’s 550000 ton cultural paper production line in Guangxi base has been converted back to cultural paper at the beginning of the year. We expect that the sun cultural paper business is expected to usher in a profit reversal and a month on month rebound in volume and price.
Packaging paper: the production capacity is fully released, and the dissolved pulp contributes to the main profit of 21q4. In 2021, the company realized revenue of 9.87 billion yuan (+ 136.59%) and gross profit margin of 15.43% (- 0.93 PCT.). The high increase in the revenue performance of packaging paper in 2021 is due to the full release of the production capacity of 800000 tons of high-grade packaging paper in Laos, the elimination of foreign waste imports and the dual control of energy consumption. The price of packaging paper has increased steadily, especially the high-end box board paper, with an obvious premium supported by high-quality fiber resources. Looking forward to 2022, the plastic limit order is expected to boost terminal demand and improve the pattern of high-end carton board.
Other products: 1) dissolved pulp: in 2021, the company’s dissolved pulp realized a revenue of 3.255 billion yuan (+ 10.17%) and a gross profit margin of 22.97% (+ 26.5pct.). Dissolved pulp has a high prosperity throughout the year and its profitability has been greatly improved. Looking forward to the future, the downstream textile and garment demand is stable, and the high cotton price is expected to support the price of dissolved pulp. 2) Coated base paper: in 2021, the company achieved a revenue of 1.610 billion yuan (+ 94.98%) and a gross profit margin of 22.31% (- 4.43 PCT.). The coated base paper used in food, labeling and other fields has a high bearing. At the beginning of 2021, the company’s Yanzhou 70000 ton special paper production line was put into operation, and the production capacity and product quality of special paper have been continuously improved. 3) Chemical mechanical pulp: in 2021, the company realized a revenue of 1.827 billion yuan (+ 2.25%) and a gross profit margin of 21.16% (+ 0.72 PCT.).
The integration of industrial chain has been continuously promoted, and the growth path is clear. With the full production of Guangxi base, the total production capacity of pulp and paper of the company has reached 10 million tons, and the layout of three bases in Shandong, Laos and Guangxi has taken shape. In March 2022, the company completed the acquisition of Liujing Chengquan in Guangxi and officially launched the “Forest Pulp integration and supporting industrial park project with an annual output of 5.25 million tons” in Nanning, Guangxi base. The integration of Forest Pulp and paper is further strengthened, with stable front and rear advantages and clear growth path in the future.
Investment suggestion: we expect the company to achieve revenue of 34.59 billion yuan, 37.04 billion yuan and 38.6 billion yuan from 2022 to 2024, with an increase of 8.1%, 7.1% and 4.2% at the same time, and realize net profit attributable to parent company of 3.03 billion yuan, 3.22 billion yuan and 3.35 billion yuan (the cost rises, the profit forecast is lowered, and the previous forecast from 2022 to 2023 is 3.575 billion yuan and 4.20 billion yuan), with an increase of 2.6%, 6.0% and 4.0% at the same time, and EPS is 113, 120 and 1.25 yuan, maintaining the “buy” rating.
Risk tips: risks of sharp rise in raw material prices, macroeconomic fluctuations and overseas investment policies
