SUN PAPER(SZ:002078) Guoxin Securities·2025-11-03 13:24Investment Rating - The investment rating for the company is "Outperform the Market" [6][4]. Core Views - The company's Q3 earnings were under short-term pressure, confirming the profit bottom for the year. However, with new production capacity coming online in Q4, there is potential for profit growth [1][4]. - The prices of cultural paper and dissolving pulp have been under pressure, while the 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%. 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. The dissolving pulp market also saw a decline of 400 yuan/ton [2]. - In October, cultural paper prices showed signs of stabilization, with slight decreases, while boxboard prices increased due to seasonal demand and tightening upstream supply [3]. Capacity Expansion - The company has several new production lines coming online, including a 1 million ton high-end packaging paper line in Guangxi, which is expected to release profit increments in Q4 [4]. - Future projects include a 140,000 ton specialty paper project in Shandong, expected to begin trial production in Q1 2026 [4]. Financial Forecasts - The profit forecasts have been adjusted downward due to weak pulp and paper prices, with expected net profits of 3.37 billion yuan, 3.88 billion yuan, and 4.35 billion yuan for 2025, 2026, and 2027, respectively [4][5].