SUN PAPER(SZ:002078) EBSCN·2025-04-10 07:44Investment Rating - The report maintains a "Buy" rating for the company [1]. Core Views - The company reported a steady performance in 2024, with revenue and net profit reaching CNY 40.73 billion and CNY 3.11 billion, respectively, representing a year-on-year increase of 3.0% and 0.5% [5][10]. - The fourth quarter of 2024 saw a decline in revenue and net profit, with figures of CNY 9.75 billion and CNY 640 million, reflecting a year-on-year decrease of 5.7% and 32.3% [5]. - The company is expected to benefit from the synergistic effects of its three major bases, with several new production lines set to commence trial production and operation in 2025 [9][10]. Revenue Performance - The company's revenue from various segments in 2024 includes non-coated cultural paper (CNY 13.0 billion, -2.3%), coated paper (CNY 4.13 billion, +17.9%), household paper (CNY 2.02 billion, -1.3%), laminated base paper (CNY 994 million, -21.3%), and corrugated box paper (CNY 10.93 billion, +11.5%) [6]. - The pulp business generated revenue of CNY 1.6 billion from chemical pulp, CNY 4.1 billion from dissolving pulp, and CNY 1.42 billion from chemical pulp, with year-on-year changes of -13.1%, +11.8%, and -18.9%, respectively [6]. Profitability and Margins - The overall gross margin for 2024 was stable at 16.0%, with a fourth-quarter gross margin of 14.9%, showing a year-on-year decrease of 2.2 percentage points [6][7]. - The gross margins for specific products in 2024 were 13.4% for non-coated cultural paper, 14.8% for coated paper, 11.9% for household paper, and 15.2% for corrugated box paper, with notable changes in margins due to market pressures and cost efficiencies [7]. Expense Ratios - The company's expense ratio for 2024 was 6.5%, a decrease of 0.6 percentage points year-on-year, with specific rates for sales, management, R&D, and financial expenses being 0.4%, 2.4%, 1.9%, and 1.8%, respectively [8]. Future Outlook - The company plans to enhance its production capabilities with new projects in 2025, including a special paper base material project and several production lines across its three major bases, which are expected to improve operational efficiency and product offerings [9][10]. - Revenue forecasts for 2025 and 2026 have been slightly adjusted downwards to CNY 44.87 billion and CNY 51.28 billion, respectively, with net profit estimates of CNY 3.50 billion and CNY 4.12 billion [10].