太阳纸业：盈利一枝独秀，周期成长共舞

Investment Rating - The report maintains an "Outperform" rating for the company [5]. Core Views - The company is a leading player in the paper industry, demonstrating resilience through cycles with a compound annual growth rate (CAGR) of 15.9% in revenue and 23.3% in net profit from 2014 to 2023 [3][20]. - The paper industry is expected to see a short-term recovery in supply and demand dynamics, with a weak recovery in demand anticipated for 2024, while long-term supply-demand contradictions remain [3][40]. - The company has a diversified product portfolio, with cultural paper, corrugated box paper, and dissolving pulp accounting for 42.5%, 24.8%, and 9.3% of revenue, respectively [3][33]. Summary by Sections Company Overview - The company has been committed to the paper industry for over 40 years, focusing on horizontal and vertical integration within the pulp and paper supply chain, achieving a total production capacity exceeding 12 million tons by the end of 2023 [20][21]. Industry Analysis - The paper industry is currently at the bottom of the cycle, with supply expected to improve due to temporary production halts by leading companies, while demand is projected to recover positively in a cyclical manner [3][40]. - Cultural paper demand is characterized as rigid with limited new supply, while box paper is more sensitive to retail demand, indicating that profitability recovery will depend more on demand dynamics [3][40]. Financial Performance - The company has maintained a net profit margin between 7% and 9% over the past three years, attributed to effective management strategies, diversified product offerings, and improved cost efficiencies [3][36]. - Forecasted net profits for 2024, 2025, and 2026 are expected to be 2.89 billion, 3.29 billion, and 3.92 billion yuan, respectively, with corresponding earnings per share (EPS) of 1.03, 1.18, and 1.40 yuan [3][4]. Capacity Expansion - The company is in a phase of steady capacity expansion, with projects in Guangxi and Shandong expected to come online between 2022 and 2025, contributing to growth despite cyclical challenges [2][20]. - The production capacity is strategically distributed across three major bases in Shandong, Guangxi, and Laos, enhancing the company's operational flexibility [21][22].