Sun Paper (002078): 18Q4 profitability pressure usher in a significant improvement
Paper and pulp prices are under pressure in both directions, compressing the gross profit space.
The company’s gross sales margin in 2018 was 34.
07%, a decrease of 0 from 2017.
85pct, 18Q4 gross profit margin is only 17 quarterly.
33%, the lowest in the past 5 years.
The highest limit, the wood pulp price in 2018 reached a new high of nearly five years, especially in the 18Q4 outer disk wood pulp price and the average value of the RMB exchange rate reached the highest point, the wooden paddle downstream industry under pressure; until 2018, the economic downturn led to continuous decline in paper prices,At the end of the year, the average price of coated paper fell below 6,000 yuan / ton, and the average price of double offset paper fell below 6,500 yuan / ton. Due to the two-way squeeze of prices and costs, the company’s gross profit margin changed.
The company’s net margin is 7.
17%, a decrease of 0 from 2017.
36pct, whose decline is narrower than the gross profit margin initially is that the company’s sales expense ratio in 2018 was significantly reduced by 1.
26pct, while the management expense ratio has remained basically stable, which has led to a decrease in the period expense ratio and contributed to the stability of the net interest rate.
The forestry-pulp-paper integration strategy was implemented, and major projects were steadily advanced.
The company’s product structure has been adjusted to continue to consolidate the advantages of the upstream industry chain of papermaking. The headquarters 20 selected high-end special paper projects, Laos 30 inserted chemical pulp project, Zoucheng 80 high-end board paper reconstruction and supporting engineering projects, all of which were successfully completed and put into operation during the year;The company launched an old papermaking project with an annual output of 120 millimeters. Some of the project’s work is progressing steadily. The gradual implementation of the 120 tons annual papermaking project can replace the company’s “forest-paper integration” project in Laos.A paper and pulp industrial base with market competition and scale advantages, in order to effectively solve the problem of sustainable development of Sun Paper.
The coordination of the entire industry chain further highlights the company’s cost advantage and its ability to grow further.
The overseas Laos dissolved sulfuric acid pulp started production at the end of the year (30 tons), and the gross profit per ton of pulp was more than 3,000 yuan; expanding the domestic capacity of 50 tons of dissolved sulfuric acid pulp contributed a total profit of more than 1.4 billion yuan.
The bottom of the stage has passed, and short-term performance improvement is determined, and long-term bullishness is expected.
The initial pulp price dropped rapidly from the high level in 2018. The stock of wood pulp by paper companies is generally about 3 months. Therefore, the optimization of the cost of wood pulp on the report side was gradually realized in the late 19Q1 and continued to Q2; wood pulp paper companies 4 / 1 overall price increase, from the perspective of the landing situation, copper board, double glue and other wood pulp paper types landing better, generally rising 200 yuan / ton, including Chenming, Bohui, APP, etc. recently released one after the end of April roseThe price letter is raised by a maximum of 500 yuan / ton. The peak season for cultural paper consumption in March-May may promote continued growth in paper prices, and Q2 performance is determined to be explosive.
From a medium and long-term perspective, the economic recovery has led to a rebound in market demand. In the first quarter of 2019, the integration of social integration and retail sales of consumer goods will increase the demand for paper products, thereby promoting the recovery of the industry.Gradually put 厦门夜网 into production, the company’s “forest-paper integration” strategy was achieved, the cost advantage was further highlighted, and the company’s core competitiveness was enhanced.
Generally speaking, the business of the company in Q4 and Q1 of 2019 is at the bottom of the stage. The economic recovery has driven the market to pick up. The decline in pulp prices and the rise in paper prices have brought about a double increase in revenue and gross profit.The pulp and paper integration strategy highlights the cost advantage. Under the dual effects, the company has a strong future growth ability. In the future, it is expected that the leader will further increase and consolidate.
The company released the 2018 annual report, and we adjusted our profit forecast. It is expected that the EPS for 2019/2020/2021 will be 0.
3 yuan, corresponding to PE8.
1x (based on closing price on April 16, 2019).
Risk warning: industry competition intensifies; raw material price fluctuation risk