SUN PAPER(002078) 华泰证券·2025-02-27 16:05Investment Rating - The report maintains an "Overweight" rating for the company [8] Core Views - The company is expected to generate revenue of 40.74 billion RMB in 2024, reflecting a year-on-year increase of 3.0%, with a net profit of 3.13 billion RMB, up 1.3% year-on-year, slightly below expectations due to low paper prices in Q4 [1][5] - The price of cultural paper has benefited from price increases initiated by leading paper companies, which is expected to support the recovery of profitability in the sector [2] - The company has a strong integrated layout in pulp and paper, with a self-supplied pulp ratio of approximately 60%, which is higher than the industry average, helping to mitigate the impact of pulp price fluctuations on profits [4] Summary by Sections Financial Performance - The company reported a revenue of 39.77 billion RMB in 2022, with a slight decline to 39.54 billion RMB in 2023, and is projected to recover to 40.74 billion RMB in 2024 [7] - The net profit for 2022 was 2.81 billion RMB, increasing to 3.10 billion RMB in 2023, and expected to reach 3.13 billion RMB in 2024 [7] - The earnings per share (EPS) is projected to be 1.12 RMB in 2024, with a gradual increase to 1.47 RMB by 2026 [7] Market Dynamics - The cultural paper segment is seeing price increases of 200 RMB per ton from major companies, which is expected to help restore profitability in the sector as the peak bidding season approaches in March and April [2] - In the packaging paper segment, prices for boxboard and white card paper have slightly increased, while corrugated paper prices have decreased, indicating a stable market environment [2] Pulp Prices - Pulp prices have shown signs of recovery since mid-December, with needle and broadleaf pulp prices rising by 4.5% and 10.8% respectively as of February 19, driven by increased demand from downstream paper companies [3] Strategic Positioning - The company has successfully launched four production lines at its Guangxi base for household paper, enhancing its product offerings and leveraging raw material cost advantages [4] - The company plans to expand its production capacity with new projects in Nanning, including high-end boxboard and specialty paper, which are expected to drive revenue growth [4] Valuation - The report adjusts the net profit forecast for 2024-2026 to 3.13 billion RMB, 3.72 billion RMB, and 4.10 billion RMB respectively, reflecting a cautious outlook on demand recovery [5] - The target price for the company is set at 15.70 RMB, based on a price-to-earnings (PE) ratio of 11.8x for 2025 [5][13]