SUN PAPER(SZ:002078) ZHESHANG SECURITIES·2025-11-06 12:28Investment Rating - The investment rating for the company is "Buy" (maintained) [8] Core Views - The company is expected to see improved performance in Q4 2025, with a focus on price increases in the paper market as demand recovers and raw material prices stabilize [2][5] - The company has a strong integrated business model in the forestry and paper industry, which helps mitigate cyclical fluctuations [4][5] - Revenue and profit forecasts for 2025-2027 indicate steady growth, with expected revenues of 429.4 billion, 490.8 billion, and 520.1 billion respectively, and net profits of 34.0 billion, 38.9 billion, and 43.9 billion [6] Summary by Sections Financial Performance - In Q3 2025, the company reported revenues of 9.823 billion yuan, a year-on-year decrease of 6.01% but a quarter-on-quarter increase of 6.6%. The net profit attributable to shareholders was 720 million yuan, up 2.7% year-on-year but down 19.5% quarter-on-quarter [1] - The gross margin for Q3 2025 was 14.07%, showing a slight year-on-year increase of 0.1 percentage points but a decrease of 3.2 percentage points from the previous quarter [4] Product Segmentation - Cultural paper prices decreased in Q3 2025, with average prices for double glue paper at 4,944 yuan/ton, down 5.7% quarter-on-quarter and 9.2% year-on-year. Price increases are anticipated in Q4 due to seasonal demand [2] - Dissolving pulp prices fell significantly in Q3 2025, averaging 6,517 yuan/ton, down 16.8% year-on-year and 8.5% quarter-on-quarter, but are expected to stabilize as costs decrease [2] - Boxboard prices showed mixed trends, with average prices for boxboard at 3,502 yuan/ton (down 0.5% quarter-on-quarter) and corrugated paper at 2,644 yuan/ton (up 3.7% quarter-on-quarter) [3] Strategic Developments - The company is optimizing its pulp and paper industry layout, with several new projects in progress that are expected to contribute to revenue in Q4 2025 [5] - The integration of forestry and pulp production is expected to enhance profitability and reduce the impact of market fluctuations [5] Earnings Forecast and Valuation - The company is projected to achieve revenues of 429.4 billion, 490.8 billion, and 520.1 billion from 2025 to 2027, with corresponding net profits of 34.0 billion, 38.9 billion, and 43.9 billion [6] - The price-to-earnings (P/E) ratios for the next three years are forecasted to be 12X, 10X, and 9X respectively, indicating a favorable valuation [6]