This issue is the third issue of the paper industry monthly report launched in August this year. On June 5438+ 10, raw material prices continued to rise, and product prices rose and fell. Among them, the prices of cultural paper and white cardboard continued to rise, while the price index of coated paper declined. Chenming Paper and Huatai are mainly recommended.
Investment points:
From June 5438 to 2007 10, the price of raw materials in the paper industry continued to rise. Log imports decreased and prices rose slightly; The softwood pulp and broadleaf pulp increased by $65,438+00 and $29.26 per ton respectively; There is a strong demand for waste paper in Europe, America and Japan, and the price continues to rise. Among them, American waste 1 1 and No.8 increased by 3 1 yuan and 70 yuan respectively, European waste A5 increased by 38 yuan, and Japanese waste 1 1 and No.8 increased by 60 yuan and 69 yuan respectively.
On the whole, the domestic paper market is still slightly oversupply. Under the influence of policies, raw material prices and other factors, the prices of various sub-products have gone up and down. Since June 65438+ 10, the prices of imported and domestic newsprint have been stable, both of which are the same as last month; The cultural paper market is obviously in short supply, and the product price continues to rise 100 yuan/ton; As for coated paper, the US Department of Commerce announced the final ruling on countervailing and anti-dumping cases against coated paper in China, and the product price dropped sharply. The supply of cardboard market is in short supply, with a slight decline in cardboard and a rebound in corrugated paper prices; The market of white cardboard is very high, and the price is also rising.
It is predicted that in the future, with the acceleration of industry integration, the domestic paper industry will be greatly reduced from the current more than 3,000 enterprises. The process of increasing industry concentration and eliminating backward production capacity will bring about an increase in the gross profit margin of the paper industry and an increase in the market share of leading industries, which is of great benefit to the paper industry! Give the whole industry a "good" evaluation.
Highlight: Huatai and Chenming Paper.
Risk warning:
The process of eliminating backward production capacity and shutting down small paper mills directly affects the relationship between supply and demand of the industry and causes fluctuations in the gross profit margin of the industry. The fluctuation of raw material prices also directly affects the cost of the industry.
Wood is also a scarce resource to some extent. In recent years, the demand for wood in China has become more and more vigorous, and the import of wood has increased year by year. Since 2006, the price of imported logs in China has been rising continuously. In September, 2007, the volume of imported timber was 27.9 billion cubic meters, which was 3. 1% lower than the previous month. The average price reached $0.77 per cubic meter14/kloc-0, and the price increased by 0.4% year-on-year.
1.2. The prices of softwood pulp and broadleaf pulp have both gone up.
By the end of 2007 10, the American market quotation of softwood pulp reached 830 USD/ton, nearly 10 USD higher than the end of last month. The European market quoted 583.72 euros/ton, down 6.69 euros/ton from the end of last month. The price of hardwood pulp in the US market was 749.26 USD/ton, up 29.26 USD/ton from the end of last month, or about 4%. The European market quoted 520.90 euros/ton, up 8.7 1 euro from the end of last month.
1.3. There is a strong demand for waste paper in Europe, America and Japan, and the price is rising.
Since June 5438+1October, 2007, the main varieties of American waste have increased greatly, among which the prices of No.0 and No.8 American waste have reached 163 1 yuan/ton, 1570 yuan/ton, and the price per ton has continued to increase by 3 1 yuan compared with last month.
The main varieties of waste in Europe also rose slightly, among which A5 rose by 38 yuan/ton, and the price reached 1.478 yuan/ton; A2 rose by 18 yuan/ton compared with last month, and the price reached 1348 yuan/ton. The main domestic demand varieties of domestic waste have increased to varying degrees. The average daily waste price of 1 1 and No.8 increased by 60 and 69 yuan/ton respectively compared with last month, and the price reached 1500 yuan/ton and 1509 yuan/ton.
2. Price trends and market conditions of major paper products.
2. 1. The supply of newsprint exceeds demand, and the price is flat.
Since June 5438+ 10, 2007, the domestic newsprint price has been basically the same as that in September, and the average price has remained at the level of 4700 yuan/ton. The price of imported newsprint has not changed much, and the average price is around 4800 yuan/ton.
Due to the rising price of domestic newsprint, the price difference between domestic and foreign newsprint is gradually narrowing. It is expected that the situation of oversupply in the newsprint market will not change in the next few months, the gross profit margin is still hovering at a low level, and the cost is still difficult to push up the price.
2.2. The supply of cultural paper exceeds the demand, and the market price continues to rise.
From June 5438 to October 2007 10, the domestic cultural paper market continued to be hot, and the prices of book paper and offset paper continued to rise.
Among them, the average price of low-grade cultural paper, namely book paper, rose by 100 yuan/ton, reaching 4900 yuan/ton. It is expected that the market supply will continue to be tight and product prices will continue to rise in the coming months.
2.3. The price of American arbitration coated paper fell sharply.
On June 8th, US time 10, the US Department of Commerce announced the final ruling on countervailing and anti-dumping cases against coated paper from China, and decided to impose countervailing duties of 7.40%-44.25% and anti-dumping duties of 2 1. 12%-99.65% on coated paper exported from China.
Among them, Shandong Chenming Paper Group Co., Ltd. was levied with 44.25% countervailing duty and 99.65% anti-dumping duty; 7.40% countervailing duty is imposed on Jin Dong Paper (Jiangsu) Co., Ltd. and other enterprises, and 2 1. 12% anti-dumping duty is imposed on Jin Dong Paper (Jiangsu) Co., Ltd., Jin Huasheng Paper (Suzhou Industrial Park) Co., Ltd., Shandong Yanzhou Zhang Tian Paper Co., Ltd. and Zhonglian (Macau Overseas Business) Co., Ltd., and the US Department of Commerce imports from Indonesia and South Korea.
Based on the previous analysis of coated paper market, we believe that the excess supply of coated paper will decrease in the next few months, but the market situation of oversupply will continue. In terms of price, both imported and domestic coated paper fell sharply in June 5438+ 10. Among them, imported coated paper fell by 340 yuan/ton, returning to the level in early September; The average price of domestic coated paper fell by 663 yuan/ton, even lower than the level before the last round of price increase.
2.4. Paperboard fell slightly, and the price of corrugated paper rebounded.
Carton board has developed rapidly in China in recent years, but it still can't meet the growing demand. Since 2006, the market of cardboard has been in short supply. Although there will be more new production capacity in 2007-08, it will still lag behind the growth rate of consumption, and the demand gap will expand to 4.5 million tons in 2007.
In terms of price, since June 5,438+10, the price of cardboard has slightly decreased compared with last month, and the price of imported and domestic corrugated paper has increased by 50 yuan/ton, reaching 2,550 yuan/ton and 2,300 yuan/ton respectively.
2.5. The white cardboard market is soaring, and the price is also rising.
Since 2006, the supply of China white paperboard market has slightly exceeded the demand. It is estimated that the growth rate of white cardboard production and consumption will be flat in 2007-08, and will remain at around 65,438+00%, and the market supply and demand situation will continue.
On June 5438+ 10, the domestic white cardboard market was still good, and the average price of products rose by 50 yuan/ton, reaching 7050 yuan per ton. Driven by the price increase of imported products, the price of domestic whiteboard paper rose by 80 yuan/ton, reaching 4,400 yuan per ton.
3. Investment suggestions of key companies
It is predicted that in the future, with the acceleration of industry integration, the domestic paper industry will be greatly reduced from the current more than 3,000 enterprises. The process of increasing industry concentration and eliminating backward production capacity will bring about an increase in the gross profit margin of the paper industry and an increase in the market share of leading industries, which is of great benefit to the paper industry! Give the whole industry a "good" evaluation.
3. 1 Huatai shares
Huatai Co., Ltd. achieved main business income of 4.505 billion yuan, net profit of 3.865438 billion yuan and earnings per share of 0.695 yuan in the first three quarters. Among them, the main business income in the third quarter was 65.438+55.4 million yuan, the net profit was 65.438+0.1.1billion yuan, and the earnings per share was 0.202 yuan. The performance is lower than expected, but we believe that the performance is a short-term decline, and there will be a turnaround in the fourth quarter, and the company's fundamentals remain stable.
From July to September, the company's newsprint revenue was10180,000 yuan, and the cost reached 845 million yuan. The gross profit margin dropped from 2 1.9% in the medium term to 17%, which dragged down the gross profit margin of newsprint in the first three quarters to 20.2 1%. As Huatai is the largest newsprint manufacturer in China, the decline of its gross profit margin makes the domestic newsprint market full of gloom, which also aggravates everyone's concern about the adverse impact of rising raw material prices on the newsprint market. Based on the understanding and investigation of all parties in the company, we analyze that there are two main reasons for the decline of Huatai Newsprint's gross profit margin in the third quarter:1) In late August, 250,000 tons of newsprint was converted into cultural paper, which affected the newsprint output. During the commissioning of the paper machine, the equipment was still in a state of wear and tear, and the depreciation expense accounted for 30%, which greatly affected the overall gross profit margin of newsprint; 2) The newsprint raw material 100% is waste paper, of which 90% is American waste.
However, the price of garbage in the United States is rising. At present, the CIF price in Qingdao is about US$ 265,438+00, and the average price in the third quarter increased by 9%, which adversely affected the cost control of newsprint. However, since the price of newsprint has increased by 200 yuan/ton since June, which has offset most of the cost increase, the change of product price and raw material price has little influence on the gross profit margin of newsprint. It is understood that Chenming Paper's newsprint business is operating normally in the third quarter, and the gross profit margin of products has not changed much.
From July to September, the company's cultural paper revenue was 3120 thousand yuan, and the cost was 260 million yuan. The gross profit margin increased from 65,438+03.4% in the medium term to 65,438+06.6%, and the overall gross profit margin in the first three quarters was 65,438+04.5%. Since June, the average price of cultural paper has increased by about 5%, but the gross profit margin has not been fully reflected. There are two main reasons:1) 250,000 tons of newsprint has produced more than 30,000 tons of cultural paper since it was put into production in late August. However, due to the late start of production (the peak season of cultural paper sales every year is before the start of the next semester), product sales missed the peak season. At the same time, because the whiteness of the converted cultural paper is not enough, it cannot be accepted by some customers. In addition, this part of the company's cultural paper uses American waste as raw material, and the cost increases with the increase of American waste price. Three factors lead to the low gross profit margin of transformed culture paper, which drags down the overall gross profit margin of culture paper; 2) Our production line of stationery paper was moved to Rizhao and Qinghe, and the expenses and production losses caused by the relocation also had a great impact on the gross profit margin of stationery paper.
In the third quarter, the profit of chemical business was stable. Thanks to the product price increase, the gross profit margin rose to 46.3% as scheduled. It is expected that it will continue to rise steadily in the fourth quarter. Considering that the factors affecting the gross profit margin of newsprint and cultural paper are all short-term factors except the rise in raw material prices, we believe that the gross profit margin of newsprint will return to 265,438+0.5% in the fourth quarter, and the gross profit margin of cultural paper will continue to increase to 20.4%, and the company's fundamentals will remain stable.
The important reference factors of our profit forecast are output, production cost, sales volume, sales price and the income generated by investment projects that will be put into production or can be determined in the next three years.
Main forecast assumptions:
Before 20 10, the trade policies of international countries on paper products and raw materials did not change greatly, and the policies of China on paper industry did not adjust greatly.
The influence of RMB exchange rate change is not considered.
There was no major accident in the company.
The profit of the company's chemical assets is recorded as income, and the thermal assets are used to reduce the cost.
At present, because Anqing project is only a framework agreement and there are still many uncertainties, the impact of this project has not been considered.
In 2008, the waste paper trading company jointly established by the company and American companies began to gain investment income.
In 2008, the company diluted according to the increase of share capital 1 100 million.
The company adopts the accelerated depreciation method of fixed assets and enjoys tax credit for state-owned equipment. The actual income tax rates in 2005 and 2006 were only 15.59% and 6.63%, and the actual income tax rate in the next three years is about 12% with reference to this level. In view of the latest understanding of the company's actual credit line and preferential policies, we will adjust the actual income tax rate for the next three years to 65,438+09%, 23% and 24%. After fully considering the impact of the relocation in the third quarter and other factors on the performance of newsprint and cultural paper, we will lower the profit forecast for 2007 to 65,438+0.00 yuan and 68+0.00 yuan. In 2008 and 2009, 509.00010000006, on the premise of stable market development, lowered the target price of 6- 12 months to 39.30 yuan according to the price-earnings ratio of 30 times in 2008, and continued to maintain the "strongly recommended" rating.
3.2 Chenming Paper
In the first three quarters of 2007, the main income was 65.438+0.0967 billion yuan, the profit was 65.438+0.74 billion yuan, a year-on-year increase of 4.397%, the net profit was 845 million yuan, a year-on-year increase of 48.27%, and the earnings per share was 0.46 yuan. Among them, the main income in the third quarter was 465.438+69 million yuan, the total profit was 456 million yuan, the net profit was 359 million yuan, and the earnings per share was 0.20 yuan. The company's performance in the first three quarters increased by 50% as scheduled.
The main reasons for the company's performance growth include: 654.38+0) The company's 300,000-ton overpressure project (actually producing 400,000 tons of newsprint) was put into production in June 2007, and the Jilin 654.38+0.8 million-ton lightweight coated paper project was put into production in July 2007, and the production capacity was further expanded to 26.65438+0 million tons; 2) The company strengthened sales management and increased sales; 3) The prices of main products rose, and the gross profit margin of the company from July to September continued to increase by 65,438+0.29% compared with the second quarter, reaching 265,438+0.58%. Since June, the price increase of corporate culture paper is the main driving force to promote performance improvement; The price of newsprint rose to 4800 yuan/ton, which offset the cost increase caused by the rising price of raw materials and contributed to the improvement of gross profit margin in the third quarter; The white cardboard market continued to improve, and product prices also rose slightly in the third quarter.
It is expected that the company will continue to develop steadily in the fourth quarter, with annual earnings per share of 0.58 yuan and earnings per share of 0.73 yuan in 2008. Continue to maintain the "strongly recommended" rating with a target price of 6- 18-2 1 yuan for two months.
3.3 Bohui Paper Industry
The company's strategic goal during the 11th Five-Year Plan period: 1) The production capacity will be developed to 1.2 million tons, with white cardboard as the main direction; 2) Broaden raw material resources, integrate upstream and downstream, and take the road of forestry-paper integration.
The company's main business is outstanding, and its ability of sustainable development is enhanced. In recent years, the main products have maintained a high production and sales rate of more than 94%, and in mid-2007, cultural paper, cardboard and corrugated paper realized zero inventory.
The company's white cardboard production capacity is 200,000 tons, of which the tobacco card production capacity is 6.5438+0.5 million tons, making it the leading tobacco card in China.
The prosperity of the white cardboard industry has been greatly improved. In the first half of 2007, it contributed 590 million yuan in sales revenue, which nearly dragged down half of the company. In 2008, 95,000 tons of chemical mechanical pulp was put into production, which will greatly reduce the cost of white cardboard and increase the gross profit margin of products, and become an absolutely stable profit growth point for the company in the past two years.
The company's cultural paper production capacity is 250,000 tons, mainly low-grade cultural paper. At present, it has fully benefited from the small wave of papermaking that shut down sewage in China. Bohui, located in Shandong Province, which has the strictest environmental protection, is also facing the pressure of gradually reducing or replacing the straw pulp production line. It is expected that the gross profit margin of writing paper will continue to increase, but it should be lower than that of pure straw pulp products.
The performance in the third quarter was almost the same as that in the first half. From June 5438 to September, the company's main income was 23 1 billion yuan, net profit was10.2 billion yuan, and earnings per share was 0.43 yuan. Among them, the main income in the third quarter was 890 million yuan, a year-on-year increase of 33.8% and a quarter-on-quarter increase of 65,438+07.9%; Realized a net profit of 58.97 million yuan, a year-on-year increase of 53.9% and a quarter-on-quarter increase of 37.8%; Earnings per share was 0.2 1 yuan, up 50% year-on-year and 90.9% quarter-on-quarter. The return on equity is 7.9%. The performance growth is in line with expectations.
The biggest highlight in the third quarter was that the profit margin of the main business reached 19.4%, an increase of 3.4% over the first half of the year.
The main reasons are as follows: 1) The increase in the price of the main product, stationery paper, has greatly promoted the gross profit margin of the products, which is fully reflected in the third quarter results; 2) The supply of white cardboard market slightly exceeds the demand, and the average price of products rose slightly in the third quarter to promote the gross profit margin.
The situation continued to improve in the fourth quarter. It is estimated that the main situation is as follows: 1) In the wave of small papermaking where the national sewage discharge is not up to standard, the company's cultural paper products will continue to enjoy the profit growth brought by price increase and cost stability; 2) The supply and demand situation of white cardboard market remains unchanged, and the gross profit margin of products is relatively stable.
According to the issued share capital of the company, the earnings per share in 2007, 2008 and 2009 were 0.6 1 yuan, 0.96 yuan and 1.27 yuan respectively. According to 26 times PE in 2008 and 20 times PE in 2009, the target price 25 yuan is obtained and the recommended rating is maintained.
Risk warning:
The company is located in Shandong Province, with a large total pollutant discharge and a small environmental capacity. With the improvement of national and provincial environmental protection standards and the implementation of energy conservation and emission reduction policies, the company will also face environmental protection pressure and even the risk of affecting normal production and operation. (CIC Securities)