Zheng Quan Zhi Xing·2025-08-24 07:21Core Viewpoint - Xianhe Co., Ltd. has shown solid revenue growth in H1 2025, with a 30.1% year-on-year increase in revenue, although net profit has declined by 13.8% due to various factors including price drops in certain paper products and ongoing losses in the Hubei base [2][3]. Financial Performance - In H1 2025, the company achieved revenue of 5.991 billion yuan, with a net profit of 474 million yuan and a non-recurring net profit of 443 million yuan [2]. - Q2 2025 revenue reached 3 billion yuan, reflecting a 25.3% year-on-year increase, while net profit decreased by 15.4% to 238 million yuan [2]. - The gross margin for Q2 2025 was 12.8%, down 4.6 percentage points year-on-year, and the net profit margin was 7.9%, down 3.8 percentage points year-on-year [4]. Production and Cost Management - The company has increased its self-produced pulp ratio, which has positively impacted cost management, despite a decrease in paper prices [2][3]. - The Hubei base reported a loss of 74 million yuan in H1 2025, while the Guangxi base contributed a profit of 117 million yuan [2][3]. Product Segmentation and Growth Potential - Revenue growth by product category in H1 2025 included: daily consumer products (+11.2%), food and medical (+22.9%), business communication (+2.9%), tobacco (+13.8%), and electrical and industrial (+3.5%) [3]. - The company is investing in new product categories and has established partnerships in the new tobacco sector, aiming to expand its product matrix [3]. Future Outlook - The company expects a production capacity increase of over 900,000 tons for both paper and pulp by the end of 2025, with a projected year-on-year production growth of 30%-40% [3]. - The company maintains a "buy" rating with projected net profits of 1.11 billion yuan, 1.62 billion yuan, and 1.93 billion yuan for 2025, 2026, and 2027 respectively [4].