\u3000\u30 Shenzhen Guohua Network Security Technology Co.Ltd(000004) 88 Shandong Chenming Paper Holdings Limited(000488) )
Event:
The company released the first quarterly report of 2022: the revenue in the first quarter of 2022 was 8.515 billion yuan, a year-on-year decrease of 16.57%; The net profit attributable to the parent company was 114 million yuan, a year-on-year decrease of 90.34%; The net profit deducted from non parent company was 100 million yuan, a year-on-year decrease of 91.45%; The basic earnings per share is 0.03 yuan.
Guoyuan view:
Multiple adverse factors put pressure on performance, and Q1 operating cash flow fell sharply
Due to the periodic fluctuation of paper price and the negative impact of epidemic prevention and control on production and marketing, the performance of 2022q1 company is under pressure, realizing a revenue of 8.515 billion yuan, a year-on-year decrease of 16.57% and a month on month increase of 17.32% compared with Q4 last year; The net profit attributable to the parent company was 114 million yuan, a year-on-year decrease of 90.34% and a month on month increase of 197.52%. From the profit side, the profit side space of the company was greatly squeezed due to the year-on-year decrease in the sales volume and unit price of its machine-made paper products in the first quarter of 2022, the rise in the price of raw materials and the loss of 31 million yuan in terms of investment benefits of the company. In terms of cash flow, the net cash flow from operating activities was 223 million yuan, a decrease of 93.42% over the same period last year, which was due to the decrease in operating cash received during the reporting period. The substantial decrease in basic earnings per share was mainly due to the sharp decline in net profit and the deduction of about 22 million yuan of perpetual bond interest generated by Q1.
The gross profit margin fell to a low level in recent years, and the overall stability of the cost side was maintained
The 2022q1 market was disturbed by multiple negative factors, the marginal profitability of the company declined, and the comprehensive gross profit margin decreased by 12.89pcts to 16.19% year-on-year, down 0.02pcts month on month compared with Q4 last year, which is a low in recent years; The overall net interest rate decreased by 10.66 PCTs to 1.55%, up 2.08 PCTs month on month. In terms of expense rate during the period, the sales expense rate increased slightly from 0.20pcts to 0.88% year-on-year; The management expense ratio increased by 0.02pcts to 2.46% year on year; The financial expense ratio decreased by 0.37 PCTs to 6.48% year on year; The R & D expense ratio increased by 0.46 PCTs to 4.04%.
With the improvement of adverse factors, the profit side is expected to bottom up and recover, and the new capacity supports the long-term growth of performance
We believe that the profitability of 22q1 company has been disturbed by multiple adverse factors and reached a low level in recent years. In the future, with the stabilization and decline of raw material costs, the improvement of industry supply and demand structure, the profit side is expected to bottom up and rise, boosting the fundamental performance of the company. The company adheres to the pulp and paper integration strategy and continuously improves the self-sufficiency rate of wood pulp to strengthen the cost advantage, and its cycle attribute may be gradually weakened in the future. Huanggang Chenming phase II project has started construction. After completion, it is expected to add 1.5 million tons / year of papermaking capacity and 520000 tons / year of mechanical pulp capacity, which will consolidate the leading position of the company in pulp paper. With the gradual easing of the epidemic and the further release of the company’s production capacity, the future growth trend will be better.
Investment advice and profit forecast
The company is the leader of pulp and paper integration, with a clear rhythm of capacity expansion, and the medium and long-term market share is expected to increase steadily. We adjusted the profit forecast. It is expected that the company will achieve revenue of RMB 316.223431839065 billion from 2022 to 2024, net profit attributable to the parent company of RMB 18.6720662499 billion, EPS of RMB 0.63/0.69/0.84, corresponding to PE of 8.4/7.6/6.3 times, maintaining the “overweight” rating.
Risk tips
The price of raw materials fluctuates greatly; Less than expected demand growth; The progress of new capacity launch was less than expected.
