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(Original title: Downstream demand drives the price of packaging paper)
Since August 2016, domestic paper products such as packaging boxes have ushered in price increases, and the increase reached a high point in December. According to the data of the business society, the average price of domestic waste paper increased by 31.28% in 2016, and the increase in some areas even nearly doubled. The price increase has prompted the improvement of the supply and demand pattern of the packaging paper industry, and the profit recovery can be expected.
It is recommended to pay attention to the upstream industrial packaging base paper manufacturers Jingxing Paper and Chenming Paper; in addition, the increase in packaging paper prices will put pressure on small and medium-sized packaging enterprises with relatively weak downstream bargaining power, and the industry concentration may increase. You can pay attention to the leaders of the packaging industry Hexing Packaging.
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Chenming Paper: Strong Profit Growth, Prominent Safety Margin
Recently, the price of paper products has risen, and the inventory of mainstream companies is low. At the same time, the prices of raw materials such as coal and waste paper have also risen significantly, and the market analysis of the paper industry has increased. But continue to be optimistic about industry trends and leading companies.
Demand recovery and business transformation drive profit improvement: As a leading enterprise in the paper industry, the company's profit growth in 2016 was still strong, not only because of the company's early deployment in the financial leasing industry, but its profitability is much higher than that of the paper business. At the same time, the company also benefited from the improvement of the profitability of the paper industry, the decline in wood pulp costs and the rise in paper prices, which led to the rapid increase in the company's gross profit margin from 21.5% in the first quarter of 2015 to 30.5% in the 3Q of 2016, resulting in a substantial increase in profit by 200% about.
A high dividend rate constitutes a margin of safety: while the company's performance has grown steadily, the historical dividend distribution is also quite impressive. Since 2009, the company's dividend payout rate has continued to exceed 50%, and the average dividend rate in the past three years has been 4.6%. It is believed that with the steady development of the company's papermaking and leasing business, it is expected that the dividend rate will continue to be high in the future. In addition, the company has completed the issuance of 4.5 billion yuan of preferred shares, further optimizing the company's asset-liability structure, broadening financing channels, reducing financing costs, and further improving the company's overall profitability.
Pay attention to the current low inventory level & saturated production capacity in the paper industry, and sufficient transfer capacity: It is understood that the current inventory of large papermaking enterprises is only between 7 days and 20 days, which is far lower than the industry standard inventory of about 1 month. It is believed that the lack of demand growth and production capacity has caused inventory to decline, so the cost increase can be passed on. When the upstream is regulated and prices are stable, the paper industry can still raise prices, and there is still room for corporate gross profit expansion. At the same time, the capacity utilization rate of mainstream papermaking enterprises has reached more than 90%. The overall new capacity of the industry is very limited, and the tight supply and demand pattern continues. This is the main logic to be optimistic about the company and the industry.
The low valuation shows the value of investment. We are firmly optimistic about the trend of the paper industry. The inventory is low and the production capacity is saturated. At the same time, the price increase of paper products is expected to be implemented in December. It is recommended to continue to pay attention to the spring offensive in the first quarter of 2017. In the context of the current overall upward trend in the industry, at the same time, the company's performance continues to exceed expectations, with stable and high dividends. The current stock price corresponds to only 9 times the PE in 2017, and the investment value is outstanding. It is estimated that the EPS in 2016 to 2018 will be 0.93 yuan, 1.18 yuan, and 1.41 yuan. .
Hexing Packaging: Industry integration continues to advance, and the market environment squeezes profits
The revenue in the first three quarters increased steadily, and the market environment squeezed the company's profits: the company's operating income from January to September was 2.48 billion yuan, a year-on-year increase of 17.93%; the net profit attributable to shareholders of the listed company was 70 million yuan (in line with the performance forecast disclosed in the interim report), A year-on-year decrease of 24.75%, the net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was 61.68 million yuan, a year-on-year decrease of 30.13%; among which, the operating income in the third quarter of this year was 869 million yuan, a year-on-year increase of 21.54%; net profit attributable to shareholders of listed companies 19.06 million yuan, a year-on-year decrease of 29.19%; the net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was 18.86 million yuan, a year-on-year decrease of 25.06%. Affected by the macro economy and market competition, the gross profit margin of the company's products has declined; at the same time, the intelligent packaging integration service (IPS) and packaging industry supply chain cloud platform (PSCP) businesses are in the investment period, and their profitability is gradually improving.
Business orders have grown steadily, and industry integration has continued to expand: the company's packaging business and IPS business are progressing well. In the third quarter, it announced that it signed a cooperation agreement with Swick Electronics (Suzhou) Co., Ltd. for intelligent packaging integration services to provide integrated integration services. Take the opportunity to carry out comprehensive cooperation. In addition, the company signed a purchase agreement with Gujia Home Furnishing to provide packaged products for Gujia Home Furnishing in combination with the supply chain model. In September, the company reviewed and approved the "Proposal on the Acquisition of 70% Equity Interests of Daqing Huayang and Baotou Huayang", and signed an equity transfer agreement with the original shareholders to acquire 70% of the equity of Daqing Huayang Digital Color Printing Co., Ltd. for 92.4 million yuan And Baotou Huayang Digital Color Printing Co., Ltd. 70% equity. This move will help the company integrate production capacity in the Northeast region and expand its brand influence. Continue to be optimistic about Hexing Packaging as a leading enterprise using capital advantages to carry out industrial integration.
Profit forecast and investment advice: It is estimated that the company's net profit in 2016-2018 will be 1.08/1.43/209 million yuan respectively, and the EPS will be 0.10/0.14/0.20 yuan respectively, corresponding to 56/42/29 times PE respectively. In view of the company's new business model in the future The effect of integration with the industrial chain will gradually be reflected.
Sun Paper: "Four Three Three" Strategy Shows Dominance
The paper boom has rebounded significantly, and the company's nearly 1.9 million tons of traditional paper has great growth potential; the wood pulp business in Laos is about to be released in 2018. From the perspective of the sustainability of the current profit point and the company's future development strategy, it is indeed one of the few high-quality companies in the paper sector.
1.9 million tons of coated and double-coated paper enjoy the dividend of rising paper prices: the inventory of the traditional paper industry has reached a historical low, the supply has no new production capacity, the demand is growing slowly, the supply and demand pattern has been completely reversed, and the price continues to rise with sufficient momentum. It is expected that the conservative price will rise by 200 yuan / ton in 2017, and the production capacity of 1.9 million tons will increase by 190 million profit, which will further increase the flexibility of performance in 2017.
The 800,000-ton high-end kraft cardboard has a large market space: the newly added 800,000-ton high-end kraft cardboard will replace the import market with its most advanced technical advantages, quality advantages and significant regional advantages in the industry. According to the current order situation, the conservative net profit per ton is 200 yuan, and the production capacity of 800,000 tons ensures the continuous high growth of performance in 2017.
500,000 tons of high-prosperity dissolving pulp + Lao base's performance is about to explode. The high prosperity of dissolving pulp will add impetus to the 17-year performance. The Lao wood pulp base, which has been deeply cultivated for 8 years, ensures the company's 18-year performance. The Lao base is expected to contribute a larger profit per ton, and the converted 250,000 tons of dissolving pulp will be a new highlight in 2018.
"Quality + channel", the fast-moving consumer goods business will accelerate the company's first-class quality tissue and diapers. There is huge market space. With the help of the rich channel resources of Fosun Group, its business will grow steadily and enter the fast track, which is worth looking forward to in the future.
Profit forecast and valuation: It is estimated that the company will achieve operating income of 14.03 billion yuan, 18.6 billion yuan and 20.7 billion yuan respectively in 2016-2018. Year-on-year growth of 29.3%, 32.9% and 11.3%. The net profit attributable to shareholders of the parent company was 1.013 billion yuan, 1.508 billion yuan and 2.012 billion yuan, a year-on-year increase of 35.2%, 49.2% and 33.3%. The corresponding EPS are 0.35 yuan, 0.52 yuan and 0.69 yuan respectively.
