Xianhe(SH:603733) EBSCN·2025-08-24 12:53Investment Rating - The report maintains a "Buy" rating for Xianhe Co., Ltd. (603733.SH) [1] Core Insights - The company achieved significant revenue growth driven by increased production and sales, although some product price reductions impacted profit performance in the first half of 2025 [5][6] - The company reported a revenue of 5.99 billion yuan for 1H2025, a year-on-year increase of 30.1%, while net profit attributable to shareholders decreased by 13.8% to 470 million yuan [5][6] - The production of specialty pulp paper reached 1.108 million tons in 1H2025, a 98.6% increase year-on-year, with sales volume at 833,000 tons, up 62.3% [6] - The company is expanding its production capacity with new lines in Hubei and Guangxi, which are expected to enhance revenue and profitability in the long term [6][9] Summary by Sections Revenue Performance - 1H2025 revenue was 5.99 billion yuan, up 30.1% year-on-year; 1Q2025 revenue was 2.99 billion yuan, up 35.4%, while 2Q2025 revenue was 3.00 billion yuan, up 25.3% [5][6] Production and Sales - Specialty pulp paper production reached 1.108 million tons in 1H2025, with sales of 833,000 tons; the company is increasing its market presence through international sales, which generated 420 million yuan in revenue, a 15.4% increase [6] Profitability - The gross margin for 1H2025 was 13.7%, down 4.0 percentage points year-on-year; the second quarter gross margin was 12.8%, down 4.6 percentage points year-on-year and 1.8 percentage points quarter-on-quarter [7] - The report anticipates a recovery in profitability in the second half of 2025 as prices stabilize and production efficiency improves [8][9] Financial Forecast - The forecast for net profit attributable to shareholders for 2025 is adjusted to 1.098 billion yuan, with EPS estimates of 1.55 yuan for 2025, 1.89 yuan for 2026, and 2.30 yuan for 2027 [9][10]