Sun Paper (002078) Interim Report Comments: Q2 Revenue Decreases, Profits Slightly Improve, Focus on Turning Point in Second Half Results

Sun Paper (002078) Interim Report Comments: Q2 Revenue Decreases, Profits Slightly Improve, Focus on Turning Point in Second Half Results

Event: The company announced in its 2019 Interim Report that it achieved operating income of 107 in the first half of the year.

76 ppm, a ten-year increase2.

89%, net profit attributable to mother 8.

870,000 yuan, a decrease of 27 per year.

8%; deducting non-net profit decreases by 28 each year.

7%.

Comments: 1. The interim report performance was in line with expectations. In the second quarter, the revenue growth rate was broken down by product. In the first half of the year, the revenue of non-replacement cultural paper, coated paper, dissolving pulp, and kraft paperboard respectively changed -4.

64%, -29.

83%, +26.

38%, +20.

71%.

The construction of new projects is advancing steadily. The 10-ton wood chip pulp production line and the 40-ton semi-chemical pulp production line have entered a stable production period this year. The 20-ton natural high-yield biomass fiber project is expected to be put into operation in 4Q19;The initial recycled fiber pulp board production line has been trial-produced in six months, and the next two production lines with an annual output of 40 high-end high-end packaging paper are expected to gradually enter the trial production stage in the first half of 2021.

Q2 single season, income decreased by 1 every year.

97%.

Due to cash paid for purchasing goods and increase in labor costs, the net flow of operating activities increased slightly.

97%.

2. In the second quarter, the decline in profit has narrowed. It is recommended to pay attention to the 1H19 inflection point in the second half of the year.

71%, a decline of 7 per year.

21 points; Q2 gross profit margin 21.

77%, down 4 each year.

59%, up 4 from the previous quarter.

07%.

In the first half of the year, the gross profit margins of non-replacement cultural paper, coated paper, dissolving pulp, and kraft linerboard paper were shifted by -10.

07pct, -13.

66 points, +1.

2pct, +1.

2pct.

Taking into account the decline in pulp prices, the impact of the raw material inventory cycle, and the cost advantages brought by the company’s new capacity launch, we believe that the company will be in Q3?
Q4 gradually ushered in a turning point in performance.

1H19 sales, management + R & D expense ratio increased by 0.

48 pieces, 0 pieces

87pct, the financial expense rate is reduced by 0 every year.

54 points; net interest rate drops by 4 per quarter.

55pct to 8.

32%.

Q2 single season, return to mother, deducting non-net profit decreased 无锡夜网 by 17.

18%, 12.

77%.

3. The global layout is gradually getting better, and we maintain the “Highly Recommended-A” rating. We continue to be optimistic about the company’s cost advantage to open the gap. The Laos forest-pulp-paper integration project leads domestic companies to complete the layout overseas as early as 10 years.The top ceiling of raw materials has opened the way for global throughput layout and opened up future development space.Expected company 2019?
The net profit attributable to mothers will be 20 in 2021.

800 million, 24.

500 million, 29.

400 million US dollars, a year-on-year increase of 7%, 18%, 20%, currently expected to correspond to 19 years PE is 9x, maintaining the “strongly recommended-A” rating.

Risk warning: risks of raw material price fluctuations; macroeconomic and export declines cause less than expected demand