Xianhe(SH:603733) Xinda Securities·2025-04-09 14:17Investment Rating - The investment rating for the company is "Buy" [1] Core Insights - The controlling shareholder, Xianhe Group, plans to increase its shareholding by 300-500 million yuan over the next six months, demonstrating confidence in the company's development and investment value [1] - The price of pulp paper has slightly increased, leading to improved cost structures. The company is expected to see stable or slightly improved profits in Q1, with Q2 potentially reaching new highs, and annual profits expected to exceed forecasts [2][3] Summary by Sections Pulp Price and Cost Improvement - Pulp prices are expected to rise due to price increases in various paper types, with further price hikes anticipated in April. The company is expected to benefit from improved profitability as pulp prices stabilize [2] - The integration of the new bases in Guangxi and Hubei is expected to enhance cost efficiency, with profitability expected to trend upwards as production ramps up [2] Growth Path and Expansion - The company is expanding its production capacity with new bases in Guangxi and Hubei, projected to produce over 900,000 tons of paper and pulp. This is expected to drive a paper production growth rate of over 30% in 2025 [3] - Continuous development of differentiated products, including various specialized papers, is underway, which will enhance the product portfolio [3] - The company aims to expand its overseas business, gradually increasing the proportion of overseas revenue and leveraging international production capacity for accelerated growth [3] Financial Projections - The projected net profits for 2024-2026 are 1.06 billion, 1.44 billion, and 1.79 billion yuan, respectively, with corresponding PE ratios of 13.5X, 10.0X, and 8.0X, maintaining a "Buy" rating [3][4]