Xianhe(SH:603733) Huachuang Securities·2025-08-29 11:43Investment Rating - The report maintains a "Recommended" rating for Xianhe Co., Ltd. (603733) [1] Core Views - The integrated layout of wood pulp and paper is improving, providing strong medium to long-term growth momentum for the company [1] - The company is a leader in the specialty paper industry with a diversified product system and a long-term strategy for integrated wood pulp and paper [6] Financial Performance Summary - Total revenue for 2024A is projected at 10,274 million, with a year-on-year growth rate of 20.1%. For 2025E, revenue is expected to reach 12,844 million, reflecting a growth rate of 25.0% [2][7] - The net profit attributable to the parent company for 2024A is estimated at 1,004 million, with a significant year-on-year growth of 51.2%. The forecast for 2025E is 1,130 million, with a growth rate of 12.6% [2][7] - Earnings per share (EPS) is projected to be 1.42 yuan for 2024A, increasing to 1.60 yuan for 2025E [2][7] Revenue Breakdown - In the first half of 2025, the company achieved a revenue of 59.91 billion, a year-on-year increase of 30.14%. The net profit was 4.74 billion, down 13.80% year-on-year [6] - Revenue from various product segments includes: daily consumer products (25.56 billion), food and medical packaging materials (10.34 billion), and other categories showing significant growth [6] Capacity Expansion and Profitability - The company is steadily advancing its capacity expansion, with the Guangxi and Hubei production bases contributing significantly to revenue. The Guangxi base generated 10.38 billion in revenue, while the Hubei base reported 7.83 billion but incurred a loss of 0.74 billion [6] - The gross profit margin for the first half of 2025 was 13.71%, a decrease of 4.0 percentage points year-on-year, primarily due to the ramp-up phase of production capacity [6] Investment Recommendations - The report suggests that as the company continues to release capacity, it may further enhance its performance. The target price is set at 31.3 yuan per share, with a corresponding price-to-earnings ratio (PE) of 15 for 2025 [2][6]