Xianhe(603733) 东方证券·2024-11-04 13:44Investment Rating - The report maintains a "Buy" rating for the company with a DCF target valuation of 22.66 RMB [4][9] Core Views - The company reported robust Q3 2024 performance with revenue of 7.262 billion RMB, a YoY increase of 16.89%, and net profit attributable to shareholders of 817 million RMB, a YoY surge of 113.97% [2] - Q3 2024 revenue reached 2.658 billion RMB, up 8.68% YoY and 11.02% QoQ, while net profit attributable to shareholders was 267 million RMB, up 32.49% YoY but down 5.34% QoQ [2] - The company's gross margin in Q3 2024 was 14.58%, down 2.8 percentage points QoQ, and net margin was 10.03%, down 1.7 percentage points QoQ [3] - The company's upstream pulp layout is becoming more comprehensive, with the Guangxi base's 400,000-ton chemical pulp and PM4 paper machine starting production at the end of Q3, and the Hubei PM3 successfully producing paper in early October [3] Financial Performance - The company's Q3 2024 sales volume increased QoQ, with tonnage profit exceeding 750 RMB/ton, remaining at a historical median level [2] - Investment income from associates and joint ventures (mainly from Xiawang Paper) was approximately 48 million RMB in Q3 2024, down 15% QoQ [2] - The company's revenue growth for 2024-2026 is forecasted at 14.5%, 39.9%, and 18.6%, respectively, with net profit attributable to shareholders expected to be 1.079 billion RMB, 1.235 billion RMB, and 1.400 billion RMB [8][9] Industry and Market Position - The company's Guangxi and Hubei pulp and paper integration bases are gradually becoming operational, enhancing the company's upstream and downstream industrial chain and diversifying its product structure [3] - The company's comprehensive competitiveness is increasingly prominent as its pulp and paper integration capacity is realized [3] Valuation and Forecast - The report adjusts the company's sales volume and paper price assumptions, forecasting net profit attributable to shareholders for 2024-2026 at 1.079 billion RMB, 1.235 billion RMB, and 1.400 billion RMB, respectively [4][9] - The DCF target valuation is set at 22.66 RMB, maintaining the "Buy" rating [4][9]