Xianhe(603733) GOLDEN SUN SECURITIES·2024-10-16 06:08Investment Rating - The investment rating for the company is "Buy (Maintain)" [4] Core Views - The company is expected to see a rise in costs but maintain stable pricing, leading to strong profit performance. The projected net profit for Q3 is between 242 million to 280 million yuan, representing a year-on-year increase of 20.1% to 38.9% [2] - The company benefits from the gradual implementation of projects in Guangxi and Hubei, leading to improved production and sales. The average price remains stable, although there is a slight increase in costs [2] - The integration of forest, pulp, and paper production is accelerating, which is expected to reduce the impact of cost cycles over time [2] Financial Performance Summary - The company's revenue for 2022 was 7,738 million yuan, with a projected increase to 10,065 million yuan in 2024, reflecting a year-on-year growth rate of 17.7% [3] - The net profit for 2022 was 710 million yuan, with an expected increase to 1,082 million yuan in 2024, indicating a growth rate of 63.0% [3] - The earnings per share (EPS) for 2022 was 1.01 yuan, projected to rise to 1.53 yuan in 2024 [3][10] Production and Sales Outlook - The company is expected to maintain a favorable production and sales environment, with an anticipated increase in sales volume in Q3 due to successful project implementations [2] - The company has launched new production lines in Hubei and Guangxi, which are expected to contribute significantly to production capacity, with a total of approximately 600,000 tons of paper production capacity from these projects [2] Profitability Forecast - The forecasted net profit for the company from 2024 to 2026 is 10.8 billion yuan, 14.7 billion yuan, and 18.7 billion yuan respectively, with corresponding P/E ratios of 12.1X, 8.9X, and 7.0X [2]