SUN PAPER(002078) Minsheng Securities·2024-10-29 07:30Investment Rating - The report maintains a "Recommended" rating for the company [2][4]. Core Views - The company reported a revenue of 10.451 billion yuan in Q3 2024, a year-on-year increase of 5.99%, while the net profit attributable to shareholders decreased by 20.84% to 0.701 billion yuan [2]. - The company's production capacity is steadily increasing, with a good supply-demand balance in dissolving pulp and coated paper, which is expected to drive revenue growth [2]. - The company is focusing on enhancing its market presence in South China through the development of its Guangxi base and aims to strengthen its integrated supply chain [2]. - The projected net profit for 2024-2026 is estimated at 3.2 billion, 3.7 billion, and 4.2 billion yuan, respectively, with corresponding PE valuations of 12X, 10X, and 9X [2]. Financial Performance Summary - In Q3 2024, the company achieved a revenue of 10.451 billion yuan, with a net profit of 0.701 billion yuan, reflecting a year-on-year growth of 5.99% in revenue but a decline of 20.84% in net profit [2]. - For the first three quarters of 2024, the company reported a total revenue of 30.975 billion yuan, a 6.07% increase year-on-year, and a net profit of 2.459 billion yuan, which is a 15.08% increase [2]. - The gross margin and net margin for Q3 2024 were 13.96% and 6.74%, respectively, showing a decline of 2.78 and 2.29 percentage points compared to the previous year [2]. Capacity and Production Insights - The company has achieved full production capacity of 1 million tons of boxboard paper in Guangxi and has increased its production capacity of household paper by 150,000 tons [2]. - The company is advancing its integrated production projects in Nanning, which include high-end boxboard paper and various types of pulp [2]. Cash Flow and Financial Health - The operating cash flow for Q3 2024 increased by 76.40% year-on-year to 2.781 billion yuan, primarily due to increased tax refunds [2]. - The company’s accounts receivable increased by 12.15% to 3.579 billion yuan, attributed to contractual payment terms [2].