Xianhe(SH:603733) Tianfeng Securities·2025-05-06 06:23Investment Rating - The report maintains a "Buy" rating for the company, with a target price yet to be specified [5]. Core Views - The company has shown significant revenue growth, with a 35.4% year-on-year increase in Q1 2025, reaching 2.99 billion yuan, although net profit decreased by 12.1% to 236 million yuan [1]. - For the year 2024, the company is projected to achieve a revenue of 10.27 billion yuan, a 20.1% increase, and a net profit of 1.00 billion yuan, reflecting a 51.2% growth [1]. - The company is expanding its production capacity with new projects in Guangxi and Hubei, which are expected to enhance its market share and profitability [4]. Summary by Sections Financial Performance - In Q1 2025, the company reported a revenue of 2.99 billion yuan, up 35.4% year-on-year, while net profit was 236 million yuan, down 12.1% [1]. - For 2024, the company expects a revenue of 10.27 billion yuan, a 20.1% increase, and a net profit of 1.00 billion yuan, a 51.2% increase [1]. - The gross margin for 2024 is projected at 15.46%, an increase of 3.8 percentage points, with a net profit margin of 9.77%, up 2.0 percentage points [1]. Product Diversification - Daily consumer products generated a revenue of 4.83 billion yuan in 2024, a 17.68% increase, with a gross margin of 16.50% [2]. - The food and medical packaging materials segment achieved a revenue of 1.86 billion yuan, a 7.32% increase, with a gross margin of 10.28% [2]. - The tobacco industry support segment reported a revenue of 907 million yuan, an 11.63% increase, with a gross margin of 22.81% [3]. Capacity Expansion - The company has initiated two major projects in Guangxi and Hubei, each with an annual production capacity of 2.5 million tons, which are expected to significantly boost production and market share [4]. - The Guangxi project has already produced 100,000 tons of wood pulp and 29,000 tons of specialty paper in 2024 [4]. - The Hubei project commenced operations in January 2024, with three paper production lines and four pulp production lines currently running [4]. Profitability Forecast - The company has adjusted its profit forecasts, expecting net profits of 1.16 billion yuan in 2025, 1.38 billion yuan in 2026, and 1.58 billion yuan in 2027 [9]. - The projected P/E ratios for the next three years are 13X for 2025, 11X for 2026, and 9X for 2027 [9].