SUN PAPER(SZ:002078)2024-05-23 09:00Investment Rating - The report assigns an "OUTPERFORM" rating to Shandong Sun Paper with a target price of RMB 18.34 [2][4]. Core Insights - The company reported annual and first-quarter results for 2023 and 2024, with revenues of RMB 39.54 billion and RMB 10.19 billion, reflecting a YoY change of -0.56% and +3.87% respectively. The net profit attributable to shareholders was RMB 3.09 billion and RMB 0.96 billion, up 9.86% and 69.04% YoY [3][9]. - The company plans to implement the Nanning Phase II project, which includes a 400,000-ton specialty paper production line and a total investment of no more than RMB 7 billion [10][11]. Financial Performance Summary - In Q1 2024, the company achieved a net profit of RMB 0.96 billion, a 69.04% increase YoY, with a gross profit margin (GPM) of 17.99% and a net profit margin (NPM) of 9.41% [3][10]. - The company sold 6.66 million tons of paper products in 2023, a 19.57% increase YoY, primarily due to new paper projects coming online [9][10]. - The forecast for net profits in 2024 and 2025 is RMB 3.67 billion and RMB 4.19 billion, with YoY growth rates of 18.9% and 14.3% respectively [4][11]. Capacity and Projects - The total pulp and paper capacity exceeded 12 million tons in 2023, with several new projects successfully commissioned [10][11]. - A 300,000-ton household paper project is expected to start trial production in Q3 2024 [10].