SUN PAPER(SZ:002078) Tianfeng Securities·2024-02-28 16:00Investment Rating - The report maintains a "Buy" rating for the company, with a target price indicating an expected return of over 20% within the next six months [5][14]. Core Views - The company is expected to exceed its 2023 targets, achieving a revenue of 39.7 billion and a net profit of 3.07 billion, reflecting a year-on-year growth of 9.4% [1][3]. - The company is experiencing a robust performance in Q1 2024, with expectations for continued strong profitability due to seasonal demand and price adjustments [2][3]. - The integrated business model of the company, focusing on pulp and paper production, is enhancing its competitive edge and profitability [3]. Financial Performance Summary - In 2023, the company reported a revenue of 39.7 billion, a slight decrease of 0.2% year-on-year, while net profit increased by 9.4% to 3.07 billion [1][4]. - The fourth quarter of 2023 saw a revenue of 10.5 billion, up 3.7% year-on-year, and a net profit of 0.94 billion, reflecting a significant increase of 73% year-on-year [1][4]. - The company’s EBITDA for 2023 is projected at 6.8 billion, with a net profit forecast of 3.07 billion for 2023 and 3.58 billion for 2024 [4][9]. Capacity and Expansion - As of the first half of 2023, the company’s total production capacity for paper and pulp is nearing 12 million tons, with ongoing expansions in its three major bases [2][3]. - The company is expected to reduce capital expenditures in 2024 as new production lines come online, which may lead to increased dividend payouts [2][3]. Earnings Forecast - The company’s net profit is projected to reach 3.58 billion in 2024 and 4.06 billion in 2025, with corresponding P/E ratios of 11x and 9x [3][4]. - The report adjusts the earnings forecast upwards for 2024 and 2025, reflecting improved profitability from new capacity and cost management [3][4].