yyfp(SH:600963) Minsheng Securities·2024-09-02 07:30Investment Rating - The report maintains a "Recommended" rating for the company, with an expected net profit of 0.9 billion, 5.0 billion, and 5.8 billion for the years 2024 to 2026, corresponding to PE ratios of 72, 13, and 11 respectively [3][5]. Core Views - The company's main business is currently under pressure, but the carbon sink business is expected to have significant potential in the future. The company has prepared well for the CCER (China Certified Emission Reduction) approval process, aiming for early profit conversion [3][5]. - The company reported a revenue of 35.74 billion in the first half of 2024, a year-on-year increase of 23.91%, but a net profit loss of 0.49 billion, a decline of 147.24% [3][4]. - The report highlights that the main business is facing supply and demand pressures, along with asset impairment losses due to uncontrollable factors [3][4]. Financial Performance Summary - In the first half of 2024, the revenue from various paper products showed mixed results: printing paper revenue decreased by 20.98% to 19.52 billion, while packaging paper revenue increased by 18.67% to 5.34 billion. Industrial paper and office paper revenues saw significant declines of 79.08% and a slight increase of 0.73%, respectively [3]. - The gross profit margin for the first half of 2024 decreased by 2.57 percentage points to 7.77%, with specific margins for printing paper, packaging paper, industrial paper, and office paper at 9.54%, 6.7%, 8.86%, and 5.5%, respectively [3]. - The company’s operating cash flow for the second quarter of 2024 was 2.32 billion, an increase of 88.94% year-on-year, primarily due to reduced procurement [3][4]. Future Outlook - The company is expected to stabilize its main business in the third quarter of 2024, with the reopening of CCER providing potential for profit elasticity. The company aims to sign contracts for 50 million mu of forestry carbon sinks by the end of 2025 [3][5].