Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 4.57, indicating a potential upside of 25.9% from the current price of HKD 3.63 [2][6][18]. Core Insights - The company has achieved a turnaround to profitability, reporting a net profit of RMB 2.92 billion in 1HFY24, compared to a net loss of RMB 13.89 billion in the same period last year. This aligns with previous profit forecasts [3][10]. - The successful commissioning of new plants in Beihai and Malaysia has led to a double-digit growth in sales volume, which increased by 16.3% year-on-year to 10 million tons in 1HFY24 [4][13]. - Capital expenditures are expected to gradually decline as the company continues to advance its integrated pulp and paper strategy, enhancing its vertical supply chain advantages [5][17]. Financial Performance Summary - For 1HFY24, the company recorded operating revenue of RMB 30.611 billion, a slight decrease of 1.9% year-on-year. However, gross profit surged by 294.4% to RMB 2.706 billion, with a gross margin improvement of approximately 6.6 percentage points to 8.8% [3][10]. - The company’s annual paper production capacity reached 21.12 million tons by the end of 2023, an increase of 2.35 million tons year-on-year [4][13]. - The projected earnings per share (EPS) for the fiscal years 2024, 2025, and 2026 are expected to be RMB 0.21, RMB 0.52, and RMB 0.70, respectively [6][18].
4Q23实现扭亏，盈利望持续修复