C&S(SZ:002511) Guotai Junan Securities·2024-04-26 12:32Investment Rating - The report maintains an "Accumulate" rating for the company, with a target price adjusted to 10.24 yuan from the previous 12.55 yuan [5][23]. Core Views - The company is recognized as a leading player in the domestic household paper industry, with a strong brand presence and a focus on optimizing product structure and expanding new sales channels to drive profit growth [5][12]. - The financial performance for 2023 is in line with expectations, with a slight pressure on net profit due to increased expenses, but overall profitability is expected to improve as scale advantages dilute costs [12][5]. - The company is accelerating the introduction of high-end products, with significant growth in its premium product lines, which is anticipated to continue driving revenue and margin improvements [12][5]. Financial Forecast Summary - Income Statement: - Total revenue is projected to grow from 9,801 million yuan in 2023 to 13,689 million yuan by 2026, reflecting a compound annual growth rate (CAGR) of approximately 11.8% [2]. - Net profit is expected to increase from 333 million yuan in 2023 to 553 million yuan in 2026, with a net profit growth rate of 27.5% in 2024 [2]. - Balance Sheet: - Total assets are forecasted to rise from 9,558 million yuan in 2023 to 12,663 million yuan in 2026, indicating a healthy growth trajectory [2]. - Shareholder equity is expected to grow from 5,481 million yuan in 2023 to 6,613 million yuan in 2026 [2]. - Cash Flow Statement: - Free cash flow is projected to turn positive in 2024, reaching 113 million yuan, and is expected to grow significantly to 800 million yuan by 2026 [2]. - Operating cash flow is anticipated to increase from 1,242 million yuan in 2023 to 1,152 million yuan in 2026 [2]. Profitability and Valuation Metrics - The gross margin is expected to improve from 33.2% in 2023 to 34.0% in 2026, driven by cost reductions and product mix optimization [2]. - The price-to-earnings (P/E) ratio is projected to decrease from 34.21 in 2023 to 20.57 in 2026, indicating a more attractive valuation over time [2]. - The return on equity (ROE) is expected to rise from 6.1% in 2023 to 8.4% in 2026, reflecting improved profitability [2].