\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 966 Shandong Bohui Paper Industry Co.Ltd(600966) )
Conclusions and suggestions:
Event: the company released its annual report for 2021, and achieved a revenue of 16.276 billion yuan, a year-on-year increase of 16.41%; The net profit attributable to the parent company was 1.706 billion yuan, a year-on-year increase of 104.5%, and the net profit deducted from the non parent company was 1.713 billion yuan, a year-on-year increase of 108.37%. Among them, Q4 achieved a revenue of 4.34 billion yuan, a year-on-year decrease of 6.76%. The net profit loss attributable to the parent company was 210 million yuan, deducting a non net profit loss of 201 million yuan, which was mainly due to the weak demand, the decline of white cardboard price and the increase of raw material cost, energy cost and transportation cost.
High increase in net profit in 2021: under the combined influence of the favorable policies of “plastic ban order” and “waste ban order” and consumption upgrading, the demand for white cardboard in 2021 is strong and the industry boom is high. The production and sales of the company’s paper products are 3.14 million tons and 3.13 million tons respectively, with a year-on-year increase of 3.71% and + 2.76%. In terms of products, white cardboard, cultural paper and box board paper achieved revenue of 12.5 billion yuan, 1.57 billion yuan and 1.59 billion yuan respectively, with a year-on-year increase of 13.6%, 61.2% and 20.9%, of which white cardboard accounted for 76.8% of the overall revenue. According to the data of Zhuo Chuang information, after the price of white cardboard reached a historical high of 11000 / ton in late March 2021, it began to fall due to changes in the market environment such as weak demand. The average price of white cardboard in the whole year was 7396 yuan / ton, an increase of 23% year-on-year, and helped the company’s annual net profit increase by 104.5% year-on-year.
Q4 single quarter performance is under pressure: Quarterly, with the superposition of multiple factors such as the recurrence of the global epidemic and the rise of bulk commodities, there is a contradiction between supply and demand in the industry. Downstream manufacturers have plenty of goods and overdraw the market demand in advance. The price of 21q2 white cardboard rose and fell. 21q3 and Q4 are affected by the poor prosperity of downstream printing and packaging industry, the obstruction of export market and the decline of export orders of manufacturing industry. Both domestic demand and export sales of white cardboard market are insufficient, Paper prices continued to fluctuate and fall, and the market price of white cardboard returned to stability near the end of 2021. The average price of 21q1 Q2 Q3 Q4 white cardboard is 8420, 9100, 6169 and 6010 yuan / ton respectively, with a year-on-year change of + 42%, + 65%, + 6% and – 11% respectively in 2020. In addition, the price of raw material wood pulp rose and fell throughout the year, but it is still at a high level. The prices of 21q4 broad-leaved pulp and coniferous pulp increased by 21% and 28% year-on-year to US $605 / ton and US $770 / ton. Meanwhile, Q4 transportation costs increased significantly and commodity prices continued to rise. Taking Qinhuangdao Power Coal as an example, the average price increased by nearly 100% year-on-year and 18% month on month. On the whole, the decline in the prosperity of the industry led to the decline in the price of white cardboard and the increase in costs, which put pressure on the company’s Q4 performance. Looking forward to 2022, the price of raw material wood pulp may continue to fluctuate at a high level, as well as the increase of transportation, energy and other costs. There is a certain support on the cost side. As of April 15, the price of white cardboard increased by 9.5% compared with the beginning of 2022 and decreased by 28% year-on-year. Considering that the price of 21h1 paper is at a high point, it is expected that the performance of 22h1 company will still be under pressure, waiting for the recovery of 22h2 demand to drive the recovery of the company’s profits.
The gross profit margin is high before and low after, and the expense rate continues to be optimized: the gross profit margin in 2021 is 22.93%, up 5.87pct year-on-year. Quarterly, the gross profit margins in 2021q1 / Q2 / Q3 / Q4 are 33.42%, 34.63%, 21.81% and 3.5% respectively, especially the rising cost of raw materials in 21q4. The weak price of white cardboard drives the gross profit margin to further decline, down -11.16pct year-on-year and -18.31pct month on month. In terms of expense ratio, the expense ratio of the company in 2021 was 8.16%, a year-on-year decrease of -0.83pct, of which the expense ratios of sales, management, R & D and finance were + 0.13pct, + 0.67pct, + 1.42pct and -3.04pct to 0.39%, 3.31%, 3.42% and 1.04% respectively year-on-year.
The leading position continues to be consolidated, which is conducive to the long-term development of the company: since the Spring Festival, due to strong overseas demand, sufficient orders from paper mills, and the price of superimposed pulp and paper continues to rise, many paper enterprises frequently sent price increase letters in March, of which some manufacturers of white cardboard raised the price by 200 yuan / ton. The total capacity market share of the company and app white cardboard is about 55%. With the release of 1 million tons of white cardboard capacity in Jiangsu Bohui in the next two years and the trial operation of APP Jingui phase II expansion project with an annual output of 1.8 million tons of high-grade paperboard, the company’s revenue scale and market share will increase steadily, and its bargaining power as a leader will continue to increase. In the long run, under the “replacing gray with white” and the new “plastic restriction order”, the demand for white cardboard remains strong, the competition pattern continues to be optimized, and the price center and ton profit level of white cardboard are expected to improve.
Profit forecast: with the continuous promotion of the plastic restriction order, the company, as a leading enterprise of white cardboard, is expected to fully benefit in the medium and long term. However, affected by weak demand and slow price rebound in the short term, it is expected to realize net profits of 1.45 billion yuan and 1.65 billion yuan in 22 and 23 years, yoy – 15% and 14% respectively, EPS of 1.08 yuan and 1.24 yuan, and the current PE of A-Shares is 8 times and 7 times, giving investment suggestions for interval operation.
Risk tip: fierce price competition, weak terminal demand, expected supply of new capacity, etc
