\u3000\u3 China Vanke Co.Ltd(000002) 078 Shandong Sun Paper Co.Ltd(002078) )
Event: the company announced its performance in 2021 and achieved an annual revenue of 31.997 billion yuan, 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%. Among them, Q4 company achieved a revenue of 8.282 billion yuan, a year-on-year increase of + 39.19% and a month on month increase of + 4.81%; The net profit attributable to the parent company was 189 million yuan, up - 66.98% year-on-year and - 64.88% month on month.
In the second half of the year, production capacity further expanded and revenue maintained rapid growth. In the first half of 2021, the company achieved a revenue of 15.813 billion yuan, a year-on-year increase of + 52%. The volume and price benefited from the investment of new production capacity and the sharp rise in pulp and paper prices respectively. In the second half of 2021, the company realized a revenue of 16.183 billion yuan, a year-on-year increase of + 45%; Among them, the main product uncoated cultural paper / coated paper / box board paper / dissolved pulp achieved revenue of RMB 40.02/18.36/55.48/1.422 billion respectively, with a year-on-year increase of + 17% / - 10% / + 121% / + 64% respectively. The revenue growth in the second half of the year mainly benefited from the expansion of production capacity. Since September 2021, 550000 tons of cultural paper (Q4 has been converted to box board paper with high scenery) and 120000 tons of household paper projects in Guangxi have been put into operation successively. With the addition of 450000 tons of cultural paper and 800000 tons of packaging paper and other projects put into operation since the end of 2020, it is estimated that the paper production capacity in the second half of the year is about + 40% in the same proportion. In the second half of the year, the product price performance was differentiated. The market prices of double offset paper / coated paper / box board / dissolved pulp were - 4.4% / + 0.5% / + 15.7% / + 33.5% year-on-year respectively.
The increase of cost pressure superimposed on the downturn of product prices, and the gross profit margin of Q4 decreased significantly. In 2021, the company's comprehensive gross profit margin was 17.37%, a year-on-year decrease of 2.07 percentage points; Among them, the gross profit margin in a single quarter was 23.44% / 22.14% / 14.42% / 9.90% respectively. In the first half of the year, it benefited from the price rise of products, while in the second half of the year, it was obviously under pressure, mainly affected by the significant increase of costs and the downturn of product prices. (1) Cost side: the price of thermal coal fluctuated sharply in the second half of 2021, with the average market price of + 105% year-on-year and + 56% month on month, resulting in a sharp increase in the company's energy cost (accounting for about 10% / 16% of the papermaking / pulping cost); At the same time, the impact of the rise in the purchase price of wood pulp in the first half of the year on the cost of papermaking may be reflected in the second half of the year. (2) Price side: in the second half of 2021, the price of cultural paper was affected by the decline of pulp price, superimposed with the "double reduction" policy and a large number of imported paper, affecting supply and demand, and the price remained depressed.
The expenses are well controlled and benefit from the preferential income tax policies. In 2021, the company's expense rate was 6.42%, a year-on-year decrease of 1.45 percentage points, and the expense control was good. In 2021, the company's effective income tax rate was 12.21%, a year-on-year decrease of 5.05 percentage points. It is judged that the Laos subsidiary enjoying the income tax exemption policy contributes a large amount of profits (the annual net profit is 1.046 billion yuan), Guangxi subsidiary obtains tax preference (the income tax rate is 9%), and some subsidiaries obtain the certification of high-tech enterprises.
The energy cost is expected to fall, the integration advantage is expected to highlight under the rise of pulp and paper price, and the Q1 performance is expected to improve month on month. (1) In terms of energy cost: the market price of Q1 thermal coal will be - 30% month on month in 2022, and the pressure on energy cost of Q1 company is expected to be alleviated marginally. (2) In terms of pulp and paper price: since Q1 of 2022, the price of wood pulp has increased significantly due to the disturbance of the supply side (average price of coniferous pulp / broad-leaved pulp + 17% / + 19% month on month), supporting the price increase of cultural paper enterprises. Meanwhile, cultural paper benefited from the downstream replenishment of inventory and the reduction of the supply of imported paper, the supply and demand improved, and the price increase was gradually implemented (the average price of double offset paper / coated paper was + 5% / + 6% month on month). The company has a high degree of pulp and paper integration, and the self-sufficiency rate of wood pulp is 50-60%. Q1 is expected to benefit from the rise of paper price while stabilizing the rise of pulp cost. In addition, the rise in the prices of dissolved pulp and chemical mechanical pulp sold abroad also helps to improve the profitability of Q1 company.
The pace of capacity expansion is clear and the cost advantage is stable. While the new capacity continues to be released in 2021, the company expects to increase 134000 tons of capacity in the second half of 2022, including 100000 tons of household paper in Guangxi phase III and 34000 tons of special paper in taiyanghonghe. At the same time, the other planned production capacity of Guangxi project phase III (1 million tons of packaging paper + 50000 tons of household paper + 610000 tons of chemical pulp) and the planned Guangxi Nanning project (2.2 million tons of packaging paper + 400000 tons of special paper + Shanghai Pudong Development Bank Co.Ltd(600000) tons of plastic substitute paper + 1.65 million tons of chemical pulp + 400000 tons of mechanical pulp) lay the foundation for the company's long-term sustainable expansion. The company's Guangxi base and Laos base are expected to form synergy in Forest Pulp paper integration and logistics transportation, so as to consolidate the company's cost advantage.
Investment suggestion: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 3.340 billion, RMB 3.519 billion and RMB 3.896 billion respectively, and the EPS will be RMB 1.24, 1.31 and 1.45 respectively. At present, the corresponding PE of the stock price is 9.83, 9.33 and 8.43 times respectively, maintaining the "recommended" rating.
Risk tip: the macro-economy is less than expected, the epidemic fluctuation affects supply and demand, the industry competition intensifies, and the production progress of the project is less than expected.
