岳阳林纸：静待业绩改善

Investment Rating - The report assigns a rating of "Increase" (downgraded) for the company, with a target price of 3.69 CNY [1]. Core Views - The company is experiencing significant declines in revenue and net profit due to weak demand in the cultural paper industry, intense market competition, and adverse weather conditions affecting its forestry assets [1]. - The company is focusing on optimizing its industrial structure and organizational framework, ceasing control over its chemical subsidiary, and enhancing operational efficiency [1]. - The report anticipates a gradual recovery in the cultural paper sector and adjusts profit forecasts for 2024-2026, expecting net profits of 0.5 billion, 3.4 billion, and 5.4 billion CNY respectively [2]. Financial Performance Summary - For the first half of 2024, the company reported revenues of 1.61 billion CNY, a year-on-year decrease of 25.8%, and a net profit attributable to shareholders of -0.13 billion CNY, a decline of 939.3% [1]. - The company's revenue for the first half of 2024 was 3.57 billion CNY, down 23.9% year-on-year, with a net profit of -0.05 billion CNY, a decrease of 147.2% [1]. - The gross margin for the first half of 2024 was 7.8%, down 2.6 percentage points year-on-year [1]. Business Segment Performance - Revenue from the pulp and paper segment for the first half of 2024 was 2.54 billion CNY, down 15.4% year-on-year, while forestry revenue was 0.04 billion CNY, down 94.3% [1]. - The chemical segment generated 0.035 billion CNY, a decrease of 58%, while real estate revenue increased by 78.4% to 0.014 billion CNY [1]. - The construction and installation segment reported revenue of 0.14 billion CNY, down 15.7%, and municipal landscaping revenue was 0.25 billion CNY, down 6.4% [1]. Cost and Expense Analysis - The company’s management expenses for the first half of 2024 were 0.09 billion CNY, a decrease of 40.6% year-on-year, primarily due to reduced labor costs and share-based payment expenses [1]. - The report highlights that the company is implementing a comprehensive technical upgrade project with a planned annual output of 450,000 tons of cultural paper, which is progressing according to schedule [1]. Valuation Metrics - The report provides financial projections, estimating revenues of 8.91 billion CNY for 2024, with a growth rate of 3.12%, and a net profit of 0.05 billion CNY [3]. - The projected P/E ratios for 2024, 2025, and 2026 are 132, 19, and 12 respectively [2].