SUN PAPER(SZ:002078) Guoxin Securities·2025-11-03 11:35Investment Rating - The investment rating for the company is "Outperform the Market" [6][4][26] Core Views - The company's Q3 earnings were under short-term pressure, confirming the profit bottom for the year, with expectations for profit growth in Q4 due to new capacity coming online [1][4] - Cultural paper and dissolving pulp prices have been under pressure, while boxboard prices have seen increases due to cost pass-through [2][3] - The company is entering a new phase of concentrated capacity release, which is expected to enhance earnings flexibility over the next two years [4][6] Summary by Sections Q3 Performance - For Q1-Q3 2025, the company achieved revenue of 28.94 billion yuan, down 6.6%, and a net profit of 2.50 billion yuan, up 1.7% [1] - In Q3 alone, revenue was 9.82 billion yuan, down 6.0%, with a net profit of 720 million yuan, up 2.7% [1] Price Trends - Cultural paper prices fell significantly in Q3, with prices for double glue paper and double copper paper dropping by 250 yuan/ton and 450 yuan/ton respectively [2] - Conversely, boxboard prices in South China increased by 150 yuan/ton for boxboard and 410 yuan/ton for high-strength corrugated paper [2] Q4 Expectations - Cultural paper prices are expected to stabilize and potentially increase, as they are currently below the industry average cost line [3] - The fourth quarter is anticipated to be a traditional sales peak for boxboard due to holiday demand, with expectations for slight price increases [3] Capacity Expansion - The company has significant new capacity coming online in Q4, including various production lines in Guangxi and Shandong, which are expected to contribute to profit growth [4] - The Guangxi base has already started production on several lines, with more expected to come online in the coming months [4] Financial Forecasts - The profit forecasts for 2025-2027 have been adjusted, with expected net profits of 3.37 billion yuan, 3.88 billion yuan, and 4.35 billion yuan respectively, reflecting year-on-year growth rates of 8.7%, 15.2%, and 12.0% [4][5] - The corresponding price-to-earnings ratios are projected to be 11.8, 10.2, and 9.1 times for the respective years [4][5]