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Performance is in line with expectations, focusing on the advantages of industrial chain integration

Westdollar.com April 15, 2019 00:00 Soochow Securities Shi Fanke, Ma Li View original PDF

Shanying Paper (600567) investment points

The company released the 19th quarterly report: During the reporting period, the company's revenue was 5.216 billion, compared with -3.74%; the net profit of the mother was 458 million, compared with -24.33%; the net profit after deducting non-recurring gains and losses was 345 million, -29.54%. Among them, non-recurring gains and losses are mainly government subsidies, and the growth in performance is in line with expectations.

 The non-ton profit was better than the previous one, and the previous lows have already appeared. The company's Q1 base paper output was 1,511,000 tons, sales volume was 1.0209 million tons, sales volume also decreased by 4.34% compared with the same period of last year. Corrugated box carton sales volume was 280 million square meters, and sales volume increased by 6.46% over the same period. According to the sales disclosed by the company, we expect that the sales volume of the original paper of the 19Q1 Shanying headquarters will be 750,000 tons, and the sales volume of Nordic Paper and Fujian Liansheng will be 80,000 tons and 200,000 tons respectively, thus measuring the internal deduction of the Ministry's non-ton profit of 260 yuan. (78 yuan more than the 182 yuan of 18Q4), the overall deduction of non-ton net profit of 335 yuan. As of now, the prices of cardboard and corrugated paper are 4,343 yuan/ton and 3,558 yuan/ton, respectively, down 4.40% and 6.12% from the beginning of the year. We judged that as the Sino-US trade war eased the US and the US dollar and the US dollar appreciated, the upward trend of the profit of the headquarters was unchanged, and the profit low point has already appeared.

 Financial expenses have fallen sharply, and gross margins are under pressure in the short term. During the reporting period, due to the year-on-year increase in raw material costs and the year-on-year decline in product sales, the company's consolidated gross profit margin was 19.78%, down 1.49pct year-on-year. During the period, the expense ratio increased slightly to 13.39% (+1.97pct), of which the sales expense ratio was 4.50% (+0.07pct), the management and R&D expense ratio was 7.36% (+3.9pct), and the financial expense ratio dropped significantly by 2.01pct to 1.53%. The main reason is that the company's monetary funds increased by 1.58 billion yuan compared with the beginning of the year, the interest income of 100 million yuan increased significantly compared with the same period last year, and the financial expenses decreased by 112 million to 80 million.

The difference in internal and external waste price increases, focusing on the company's cost advantage. As of April 13, 19, the national waste singleton price rose to 2,299 yuan, while the average external waste price was 1,208 yuan, continuing the downward trend of the year-to-date. The continuous expansion of the internal and external waste price difference has made the cost advantage of Shanying Paper with a high proportion of external waste quotas prominent. The quotas issued by the previous solid waste management center show that the first 4 batches of waste quotas of 19Q1 were approved for 655,100 tons. It is estimated that the ratio of waste to domestic waste is about 5:5, which makes the company's cost advantage higher than its peers. Taking into account the continuous restrictions on external waste quotas, the price difference between the national waste price and the external waste price is expected to continue, and the company's cost advantage will continue to be highlighted.

 The capacity continues to expand and the competitive advantage is obvious. The company's current production capacity is about 5 million tons. It is expected that the new production capacity of 1.2 million tons of packaging paper will be put into production in September 2019. The company's production capacity continues to expand and its leading position. In addition, the waste paper pulp project of Phoenix Paper will be improved and put into production in the second half of the year, which is beneficial to the company to ensure stable supply of waste paper raw materials, which is of strategic significance.

The industry chain is vertically closed and its competitiveness is further strengthened. The company's industrial chain continues to extend downstream, and through the industrial Internet to carry out vertical integration of the industry, fostering intelligent packaging, Internet-driven service capabilities, the company is now piloting the industrial Internet transformation of the packaging business in the East China region, while the company plans to rely on Maanshan and Haiyan The papermaking base further enhances the market share of the downstream industry.

Earnings Forecast and Investment Rating: It is estimated that the company's revenue in 19-21 will be 279.73/307.98/341.72 billion (+14.8%/+10.1%/+11.0%), and the net profit for returning to the mother will be 29.98/33.47/3.564 billion (-6.4%/year-on-year). +11.6%/+6.5%), corresponding to PE 6.38X/5.71X/5.36X, maintain "Buy" rating!

Risk Warning: Downstream demand continues to be weak and raw material prices fluctuate significantly.

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Shanying Paper Fundamental Data
  • Total share capital of 4.585 billion shares
  • Circulating shares of 4.585 billion shares
  • Earnings per share 0.10 yuan
  • Undistributed profit per share 1.20 yuan
  • Net assets per share 2.90 yuan
  • Return on equity 3.42%
  • Net profit of 458.1019 million
  • Net profit growth rate -24.33%
Shanying Paper Investment Rating
Overall rating within one month
Overall rating in March
Statistical period Buy Overweight neutral Reduction Sell total
Within one month9500014
Within three months9500014
Within six months1210000twenty two
Within a year201200032
Shanying Paper's profit forecast
                                index 2017A 2018E 2019E 2020E
Earnings per share (yuan) 0.44 0.70 0.69 0.79
Net profit (100 million yuan) 20.13 32.05 31.50 35.99
name Quote change Number of research reports Institutional investment rating (nearly six months)
Buy Overweight neutral Reduction Sell
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