SUN PAPER(SZ:002078) Guotai Junan Securities·2024-04-10 16:00Investment Rating - The report maintains a "Buy" rating for Sun Paper Industry (002078) with a target price raised to 19.20 CNY from the previous forecast of 16.38 CNY [1][2]. Core Insights - The report highlights strong earnings and a continuous expansion of core advantages, driven by deep upstream resource layout and a clear upward trend in profitability [1][2]. - The company is expected to benefit from a smooth price increase during peak seasons, with stable operations and a robust demand for its products [1][2]. Summary by Sections Financial Performance - The report projects revenue growth from 39,544 million CNY in 2023 to 50,268 million CNY by 2026, reflecting a compound annual growth rate (CAGR) of approximately 8% [2][3]. - Net profit attributable to shareholders is expected to rise from 3,086 million CNY in 2023 to 4,536 million CNY in 2026, indicating a strong growth trajectory [2][3]. - Earnings per share (EPS) forecasts are set at 1.10 CNY for 2023, increasing to 1.62 CNY by 2026 [1][2]. Market Position and Strategy - The company has established a vertically integrated supply chain, enhancing its competitive edge in the market [1][2]. - The report notes that the company’s production capacity for pulp and paper is expected to exceed 12 million tons by the end of 2023, with significant land resources allocated for pulp production in Laos [1][2]. Valuation Metrics - The report provides a price-to-earnings (PE) ratio of 15.33 for 2022, projected to decrease to 10.45 by 2026, indicating an attractive valuation relative to expected earnings growth [2][3]. - The report also highlights a dividend yield increase from 1.3% in 2022 to 3.4% by 2026, suggesting a potential for enhanced shareholder returns [2][3].