The main products of this company are coated paper and newsprint. As the domestic economy develops well, the consumption of paper products also presents a good development trend, which provides a good premise for the company's development.
◎ The company has certain advantages in the industry. At the same time, the appreciation of RMB also reduced the company's production costs and correspondingly enhanced the company's profitability.
◎ The financing project of the company in 2004 will be put into production in 2005. It is expected that the output will be greatly improved, and the company's products have a good market in China. In this case, the author predicts that the company's net profit in 2005 will be greatly improved, so he gives it a and b shares a "buy" rating.
The competition of coated paper is intensified.
From the current products of Chenming Paper, coated paper and newsprint account for a large proportion, so its future development will also have a greater impact on the company's performance. Before 1999, the average price of coated paper was above 10000 yuan/ton. In 200 1 year, the domestic coated paper price dropped to 5739 yuan per ton. From June 5438 to October 2002 10, the anti-dumping sanctions on coated paper achieved initial results, and the import of coated paper was raised from 200 yuan to 300 yuan per ton. The successful anti-dumping case of coated paper in August 2003 won the development time of coated paper industry in China for five years. However, from the second half of 2004, prices began to fall again, and prices in some areas have fallen back to the prices before anti-dumping arbitration in 2003. In 2005, the competition in China coated paper market became more intense. Pulp, which accounts for a large proportion of the cost, showed an overall upward trend in the first half of the year, but there is a callback trend at present. Due to the influence of market factors, the market price will not rise sharply. So overall, the price of coated paper will go up a little, but not too much.
From the domestic demand for coated paper, the domestic consumption of coated paper increased from 199 to 18% on average in 2003, which is one of the fastest growing paper products, accounting for 4.7% of paper consumption. However, due to the stability of printing paper such as high-grade books, magazines and art pictures in recent two years, the demand for coated paper has slowed down, and it is expected that the demand for coated paper will increase by about 5% in 2005-2006. Judging from the supply situation, the investment of domestic production enterprises and the entry of foreign-funded enterprises since 2000 have made the output and product quality of coated paper improve rapidly, and the current production capacity is about 2.2 million tons. It is predicted that the production capacity of coated paper in China will not increase too much in 2005. Therefore, with the demand increasing by about 5%, the production and demand will basically keep balance.
At present, the development of coated paper in China is characterized by the decrease of import volume year by year, and the corresponding increase of export volume year by year. Before 2000, 80% of the domestic coated paper market was imported paper. However, in recent years, more and more international paper merchants have set up factories in China, resulting in that the main product in the coated paper market is no longer imported paper, but domestic paper. After the continuous integration of the domestic market in recent years, 80% to 90% of the domestic paper supply is concentrated in several major manufacturers, such as Jin Dong, Chenming Paper, Suzhou Zixing and Quanlin. With the improvement of production concentration and the continuous expansion of output, the market competition is more intense.
The supply and demand of newsprint are booming.
From the demand analysis of domestic newsprint, from 1990 to 2003, the average consumption of domestic newsprint increased by 12.5%, much higher than the average GDP growth rate of 9.3%, and the proportion of domestic newsprint consumption increased from 3.6% to 5%. According to this growth rate, we predict that the consumption of newsprint will continue to maintain the growth level of more than 12% in 2005, and the consumption will reach more than 3 million tons.
At present, the production capacity of major domestic newsprint enterprises is about 2 million tons, and the total production line, including the production line to be put into operation in 2004-2005, is expected to reach about 3 million tons, and the production and demand are basically balanced. Judging from the situation of newsprint, the production and sales of newsprint were booming in 2004, and the price rose sharply. According to statistics, in 2004, the domestic newsprint output reached 2,999,600 tons, up 45% year-on-year, and the consumption reached 36,543,800 tons, up nearly 30% year-on-year.
With the rising price of raw materials, the cost of newsprint will continue to run at a high level in 2005, close to the level in 2004. It is estimated that the average price of imported waste paper will increase slightly compared with 2004, while the prices of transportation, water and electricity show no signs of decreasing at present, and the unit manufacturing cost of newsprint will remain at a high level. But at the same time, the price of newsprint is also rising. It is expected that with the synchronous growth of demand, the price of newsprint will remain high. Therefore, when the whole newsprint market is improving, the newsprint of Chenming Paper should have a good development.
The company has obvious advantages.
After several years of development, Chenming Paper has also established a good sales network system, and its products occupy a large market in East China, North China, South China and Central South China. In order to reduce the dependence on international pulp, the company expanded its self-pulping capacity, strengthened the research and grasp of the market prices of major raw materials, reasonably controlled the raw material inventory, and avoided the impact of raw material price fluctuations on production and operation. At the same time, the company implements base management, establishes a perfect raw material purchasing network, establishes a forestry base by self-construction or joint venture, and improves the integration of forest and pulp. At present, Chen Ming Group and Tianjin Horticultural Engineering Research Institute have established a professional greening company. Shouguang Chenming Tianyuan Forestry Co., Ltd. has a total registered capital of 654,380+007,900 yuan. This year, 2,000 mu of seedlings have been raised and 50,000 mu of afforestation has been completed. In the future, afforestation will be completed every year/kloc-0.0 million mu, which can meet the requirement of producing 200,000 tons of chemical mechanical pulp by 2005 and 300,000 tons of chemical mechanical pulp by 2006.
As an industry with limited resources, the competition of paper products is actually the competition of raw materials. Hailar Chenming and Jilin Chenming, which are controlled by Chenming Paper, have formed an annual production capacity of 30,000 tons of reed pulp and 50,000 tons of wood pulp. This year, the project with an annual output of 50,000 tons of poplar chemimechanical pulp was put into production, and the company has started to implement the plan of 1 10,000 mu Populus tomentosa base. In addition, the company's overall technical equipment is basically at the world leading level, and the main production equipment is imported from internationally renowned manufacturers, reaching the international advanced level.
At the same time, the appreciation of RMB will have a certain impact on Chen Ming's cost. We assume that imported wood pulp accounts for 65% of the production cost of papermaking enterprises, and imported waste paper accounts for 55% of the cost of papermaking enterprises. At present, with the appreciation of RMB 2%, the cost of imported wood pulp has decreased 1.3%, and the cost of imported waste paper has decreased 1. 1%. Take the company as an example. At present, imported wood pulp accounts for 20% of Chen Ming's production cost, imported waste paper accounts for 40% of Huatai's production cost, RMB appreciated by 2%, Chen Ming's production cost decreased by 0.4%, and Huatai's production cost decreased by 0.8%. The profitability of enterprises will be increased by 4% and 5% respectively, and the performance of enterprises will be improved. In addition, the appreciation of RMB also helps to reduce the foreign debt payment of imported equipment.
Capital proposal
In 2005, the company will have two new projects put into production, which will become a new profit growth point for the company. First, the 300,000-ton white cardboard project was completed in early 2005 and entered the trial line; Second, Jiangxi Chenming Paper Co., Ltd. has put 200,000 tons of low-capacity coated paper and its supporting projects into use. In this way, the company's output in 2005 is conservatively estimated to increase by 500,000 tons, while the whole production capacity in 2004 was 6.5438+0.58 million tons, so the production capacity in 2005 increased by 30%.
The author predicts that the company's net profit will be greatly improved in 2005, which may reach 826.56 million yuan, with earnings per share of 0.6 1 yuan. Therefore, we judge that the stock is expected to return to the vicinity of 8.5 yuan in the next 3-6 months, reaching the market average P/E ratio.