Basic events
The company released the 2021 interim report: 21H1 company achieved revenue of 15.199 billion yuan (+54.68%), net profit attributable to the mother of 1.004 billion yuan (+100.40%), deduction of non-attributable net profit of 719 million yuan (+50.46%); 21Q2 achieved revenue of 8.371 billion yuan (+39.73%), net profit attributable to the mother of 531 million yuan (+96.03%), deduction of non-attributable net profit of 290 million yuan (+40.27%), of which 1.79% was government subsidies 100 million yuan, non-current asset disposal gains of 170 million yuan.
Investment essentials
Off-season prices were solid, and ton earnings were slightly compressed
Quarterly, 21Q1/Q2 achieved sales of 126, 1.55 million tons, the estimated ton price of 5416, 5397 yuan / ton, year-on-year -2.65% / 16.89%, this round of off-season due to the high price of raw materials (Q2 waste / coal average price of 2225, 860 yuan / ton, year-on-year +16.17%, 64.97%; US waste 11# quotation of 300-350 US dollars / ton, an increase of 30+%), the price performance is relatively firm. In terms of profitability, the net profit of 21Q1/21Q2 tons was 376 and 342 yuan / ton, an increase of 42, 134 yuan / ton over the same period last year; the net profit of deducting non-tons was 340 and 187 yuan / ton, respectively, of which Q2 due to the high cost of raw materials and energy, the profit compression of high-end container boards and other factors led to slight pressure on the performance of non-ton profits, with the arrival of the peak season demand turned better, small and medium-sized enterprises continued to withdraw under high costs, and the profit of tons is expected to stabilize upwards.
Waiting for inventory digestion and demand to improve, looking forward to peak season performance
In July, Shanying achieved sales of 489,500 tons (+0.85% year-on-year, -3.89% month-on-month) and a ton price of 3928 yuan / ton (+14.27% year-on-year, -1.38% month-on-month), and the impact of the off-season continued. In terms of the average price of the industry, the current average price of containerboard/corrugated factory is 5137/4248 yuan / ton, up 7.92% and 10.83% from the April low; as of the end of July, the social inventory of containerboard paper is 1.964 million tons (+14,000 tons month-on-month) and the social inventory of corrugated paper is 1.207 million tons (+13,000 tons). Considering that the demand is expected to turn better in the peak season, we look forward to the volume price performance after the inventory is gradually dematerialized.
The supply pattern is optimized, and the profitability of tons is optimistic about the upward trend of the previous month
From the supply side, (1) the amount of imported paper has shrunk, and the supply gap has emerged: the 18-year ban on scrap has been issued, the national waste price has gone high, imported finished paper has poured into the country, squeezing the share of small and medium-sized manufacturers, and the total import volume of containerboard paper and corrugated paper in 16-20 years is 103/211/322/376/8 million tons; 21 years of overseas demand is repaired month-on-month, the price of US waste recycling is higher, and the average price of imported paper is rising month by month under the high sea freight, and the import volume is lower month by month, and the total import volume of 1-6 months in 21 years is 351 10,000 tons, it is expected that the import volume in the second half of the year will continue to maintain a contraction trend. (2) Dongguan coal to gas to clear and withdraw small and medium-sized production capacity: in July coal to gas landing, small and medium-sized production capacity took the lead in withdrawing, corresponding to the recent national waste price of 2358 yuan / ton, has dropped 32 yuan / ton compared with the Low point in June, is conducive to the supply pattern to concentrate on large plants. Considering the gradual destocking of channel inventories and the good demand for the arrival of the peak season, it is judged that paper prices are stable and rising in the later period, and the company's tonnage profit is expected to rise month-on-month.
Earnings forecasts and valuations
The company's industrial chain integration strength is outstanding (subsidiary WPT supplements the waste paper recycling industry chain), overseas waste pulp layout is perfect (21 years of recycled pulp production capacity is expected to reach 1.5 million tons), and orderly expansion of production capacity opens up medium- and long-term growth space (20-22 years of papermaking capacity of more than 600, 700, 8 million tons). It is estimated that the company's revenue in 21-23 years will be 31.892 / 364.54 / 40.324 billion yuan, an increase of 27.73% / 14.30% / 10.62%; the net profit attributable to the mother is 20.57 / 25.22 / 2.709 billion yuan, an increase of 48.91% / 22.62% / 7.43% year-on-year, corresponding to PE of 7.58X / 6.18X / 5.75X, the current valuation is low, maintaining the buy rating.
Risk Warning
Downstream demand is less than expected, raw material prices have risen sharply, and price increases have fallen short of expectations
Chief Analyst of Light Industry Manufacturing Industry
Master of Engineering, Columbia University, USA. From April 2015 to March 2017, he worked in the research department of China Galaxy Securities, where he was engaged in the research of agriculture, forestry, animal husbandry and fishery industry, and joined soochow Securities Research Institute in April 2017 to engage in light industry manufacturing industry research, and has served as the chief of light industry manufacturing industry since 2018. In 2017, It ranked 5th in the manufacturing industry of New Fortune Light Industry and 3rd place in 2019. In July 2020, he joined the Zheshang Securities Research Institute.
Mobile/WeChat: 18811064824
Ma Li Deputy Director of Zheshang Securities, Head of Large Consumption, Chief Analyst of Textile and Apparel Industry
He holds a bachelor's degree from Nanjing University and a ph.D. in economics from the Chinese Academy of Social Sciences, and currently works at the Zhejiang Securities Research Institute, and has worked for the China Textile Industry Association, China Galaxy Securities Research Department, and soochow Securities Research Institute. In 2019, New Fortune Light Industry and Textile and Garment ranked 3rd, Crystal Ball Textile and Garment Industry Ranked 1st; 2018 Textile and Garment Industry Crystal Ball Ranked 1st; 2016-2017 New Fortune Textile and Garment Industry Ranked 1st; 2015 New Fortune Textile and Garment Industry Ranked 2nd; 2014 New Fortune Textile and Garment Industry Ranked 4th; 2013 New Fortune Textile and Garment Industry Ranked 2nd; 2012 New Fortune Textile and Garment Industry Ranked 4th
Mobile/WeChat: 15601975988
Fu Jiacheng is a researcher in the light industry manufacturing industry
Bachelor of Investment, Master of Central University of Finance and Economics, worked at Soochow Securities Research Institute from July 2019 to May 2020, covering the light industry manufacturing industry, and joined Zhejiang Securities Research Institute in June 2020.
Shuyan Yang, researcher in the light industry manufacturing industry
With a bachelor's degree from Shanghai Jiao Tong University and a master's degree from the Hong Kong University of Science and Technology, he joined the Zheshang Securities Research Institute in March 2021, covering the light industry manufacturing industry.
Mobile/WeChat: 13611883185
Dushan, researcher of light industry manufacturing industry
With a bachelor's degree from Zhejiang University, a master's degree from the University of Illinois and the University of Chinese of Hong Kong, Shenzhen, he joined the Zheshang Securities Research Institute in May 2021, covering the light industry manufacturing industry.
Mobile/WeChat: 15306560432
Disclaimer: The above content is for the reference of institutional investors only and does not constitute investment advice, and the company's value judgment shall be subject to the official report.
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