SDBH(SH:600966) Southwest Securities·2024-05-07 11:02Investment Rating - The report maintains a "Buy" rating for the company [1][4][25]. Core Views - The company has shown steady growth in production and sales, with improving profitability trends [14][15]. - The overall revenue for 2023 was 186.9 billion yuan, a year-on-year increase of 1.8%, while the net profit attributable to shareholders was 1.8 billion yuan, a decrease of 20.3% [1][5]. - The company is expected to see significant earnings growth in the coming years, with projected EPS of 0.58 yuan, 0.71 yuan, and 0.82 yuan for 2024, 2025, and 2026 respectively [4][5]. Performance Summary - In Q4 2023, the company achieved a revenue of 50.2 billion yuan, a year-on-year increase of 11%, and a net profit of 2.7 billion yuan, a year-on-year increase of 171.4% [1][5]. - For Q1 2024, the company reported a revenue of 44 billion yuan, a year-on-year increase of 5.7%, and a net profit of 1 billion yuan, a year-on-year increase of 120.2% [1][5]. Production and Sales - The company produced 4.188 million tons of mechanical paper in 2023, a year-on-year increase of 14.1% [2]. - Whiteboard paper revenue reached 11.94 billion yuan in 2023, with production and sales volumes increasing by 2.8% and 9.5% respectively [2]. Revenue Breakdown - Cultural paper revenue increased significantly by 105.9% to 4.25 billion yuan in 2023, driven by stable demand for educational materials [2][23]. - Boxboard paper revenue decreased by 11.2% to 1.83 billion yuan due to weak demand in the domestic real estate market [2][23]. Profitability Analysis - The overall gross margin for the company in 2023 was 10.8%, with a notable improvement in Q4 2023 gross margin to 17.1% [15]. - The gross margin for cultural paper was 12.5%, reflecting a year-on-year increase of 4.9 percentage points [15]. Future Outlook - The company is expected to benefit from a recovery in white card prices and improved margins, with projected revenue growth rates of 13.94%, 10.02%, and 8.48% for 2024, 2025, and 2026 respectively [4][6][23]. - The company has sufficient capacity planning and is expected to improve its profitability margins [4][25].