Xianhe(603733) Guotai Junan Securities·2024-08-16 15:06Investment Rating - The report maintains an "Accumulate" rating for the company [5] Core Views - The company's performance meets expectations, and the future production of self-made pulp is expected to smooth cost fluctuations, with orderly expansion of diversified paper products [2] - The target price is raised to 22.28 yuan, based on a 15.0x PE for 2024, reflecting the company's diversified paper product layout and enhanced profitability from self-made pulp production [1][5] Financial Summary - Revenue for 2024 is projected at 10,777 million yuan, representing a 26.0% increase from 2023 [2] - Net profit attributable to the parent company is expected to reach 1,048 million yuan in 2024, a 58.0% increase compared to 2023 [2] - Earnings per share (EPS) is forecasted to be 1.49 yuan in 2024, increasing to 2.29 yuan by 2026 [2] - The net asset return rate is expected to improve from 9.1% in 2023 to 13.0% in 2024 [2] Production and Sales Performance - In the first half of 2024, the company achieved a mechanism paper output of 554,700 tons, a year-on-year increase of 32% [1] - The sales volume of specialty paper pulp reached 513,600 tons in the same period, also up 32% year-on-year [1] - The company’s brand recognition for the Xianhe brand continues to rise, with market share in specific segments steadily increasing [1] Pricing and Profitability - The gross margin for Q2 2024 was reported at 17.4%, with a net margin of 10.9%, showing resilience against cost pressures through effective price increases [1] - The company recorded a loss of 27.46 million yuan in white card paper for H1 2024, but this loss has narrowed compared to the previous year [1] Capacity Expansion and Future Outlook - New production capacities are being gradually implemented, with significant output expected from new projects in H2 2024 [1] - The self-sufficiency rate for pulp is anticipated to reach 30%-40% in the second half of 2024, which is expected to reduce costs [1]