Xianhe(SH:603733) Tianfeng Securities·2025-08-27 08:43Investment Rating - The report maintains a "Buy" rating for the company with an expected relative return of over 20% within the next six months [5][15]. Core Views - The company's integrated "wood-pulp-paper" business model is showing significant results, with major projects in Guangxi and Hubei gradually coming into production, contributing to the overall development of the company's supply chain [2][3]. - The company reported a revenue of 3 billion yuan in Q2 2025, a 25% year-on-year increase, while the net profit attributable to the parent company was 240 million yuan, a 15% decrease [1]. - For the first half of 2025, the company achieved a revenue of 6 billion yuan, a 30% year-on-year increase, with a net profit of 470 million yuan, down 14% [1]. Financial Performance Summary - In H1 2025, the company produced 1.1079 million tons of specialty pulp and paper, a 98.55% increase year-on-year, with sales volume reaching 833,400 tons, up 62.25% [1]. - The production of food and medical consumer products reached 170,000 tons, with sales of 147,000 tons, reflecting a growth of 35.7% [1]. - The sales of electrolytic capacitor paper base materials increased by 14.6%, while daily consumer series paper base materials sales rose by 24.94% [1]. - The company has adjusted its revenue forecasts for 2025-2027, expecting revenues of 12.5 billion, 14.6 billion, and 16.5 billion yuan respectively, with net profits of 970 million, 1.22 billion, and 1.45 billion yuan [3][4]. Production Capacity and Projects - The Guangxi and Hubei projects are expected to significantly enhance the company's production capacity, with a total of 7 pulp production lines and 8 specialty paper production lines now operational [2]. - The self-produced pulp from these projects has reached a level that can replace imported wood pulp, addressing a long-standing industry dependency on imports [2]. Valuation Metrics - The company's earnings per share (EPS) is projected to be 1.4, 1.7, and 2.1 yuan for 2025, 2026, and 2027 respectively, with corresponding price-to-earnings (P/E) ratios of 19, 15, and 12 [3][4]. - The company’s total assets are expected to grow from 18.87 billion yuan in 2023 to 33.22 billion yuan by 2027 [10]. Market Position - The company operates in the light industry manufacturing and paper-making sector, with a current market capitalization of approximately 17.94 billion yuan [6]. - The stock price is currently at 25.41 yuan, with a target price yet to be specified [5].