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Sun Paper (002078): New Cultural Paper Project Expands Production Capacity in Laos, Deepens Distribution of Forest, Pulp and Paper Integration

Sun Paper (002078): New Cultural Paper Project Expands Production Capacity in Laos, Deepens Distribution of Forest, Pulp and Paper Integration

Event On July 18, 2019, the company announced that the budget for the proposed non-public offering of funds raised would not exceed US $ 2 billion, of which US $ 1.8 billion was used for the old white paper 120-ton papermaking project (including a 40-ton recycled fiber pulp board production line and 2 annual production40-inch high-end packaging paper production line and corresponding supporting projects), 200 million US dollars to supplement working capital.

The controlling shareholder Sun Holdings participated in the subscription of not less than 10% of the newly issued shares and the lock-up period was 36 months.

On July 11, 2019, the company announced plans to invest in self-raised funds20.

16 million new production capacity of cultural paper was invested in Shandong headquarters, with a construction period of 18 months (expected to be put into operation at the end of 2020), and the annual revenue and profit are expected to be 27 after production.

4.5 billion, 3.

20,000 yuan.

Our analysis and judgment expand the capacity of cultural paper and optimize the product structure. The proposed 45-insert cultural paper project will mainly produce high-end special offset printing papers after it is put into production. It does not use fluorescent brighteners and paper dyes, and has natural color and moderate whiteness. 80% ISO whiteness helps to protect the eyesight of readers and is more in line with the concepts of ecology, environmental protection and humanity.

The company will adopt digital, intelligent, intensive and other emerging technologies to build the project into an ecological energy-saving, low-carbon, environmentally-friendly, and intelligent technology factory.

After the implementation of the project, the company will further expand the company’s high-end cultural paper production capacity, enrich and optimize the product structure, consolidate the company above the leader of cultural paper, and increase its market share.

The 120-ton papermaking project planned for investment 南宁桑拿 in forestry, pulp and paper integration and optimization of capital structure is part of the company’s implementation of the “forestry, pulp and paper integration” project in Laos. The company relies on Laos’ abundant local forest land resources, location advantages, and human resources advantagesAnd profit concessions to build a paper and pulp industry base with market competitiveness and scale advantages.

At the same time, the company’s annual production of 30 samples of chemical pulp project in Laos base in June 2018 has been put into operation, providing good conditions for the construction of this project.

1Q19 Company assets and debt restructuring 56.

70% of the non-public offering of funds will help the company ease the pressure on funding.

Paper prices have risen, pulp prices have fallen, profitability has 杭州桑拿网 been improved, and the price of cultural paper has continued to increase after the holiday. Among them, the prices of double copper paper and double adhesive paper have experienced multiple rounds of price increases since February.As of July 12, the prices of double copper paper and double offset paper have increased compared to the earlier quotes of February 19.

42%, 3.

04% to 5833 yuan / ton, 6200 yuan / ton.

Since 2019, the price of wood pulp started to fall after reaching a high of 5,658 yuan / ton on February 27, and the price was quoted at 4,320 yuan / ton on July 12, a decline of 23.

65%.

Falling prices of raw materials have led to higher product prices and increased profitability of the company.

Investment suggestion: We expect the company’s operating income from 2019 to 2020 to be 238.

7.9 billion and 243.

81 trillion, +9 for each year.

7% and +2.

1%; net profit attributable to mothers is 21 respectively.

08 ppm and 24.

31 ppm, -5 for each year.

8% and +15.

3%; corresponding P / E is 8.

3x and 7.

2x, give “Buy” rating.

Risk factors: raw material prices fluctuate, project progress falls short of expectations, and paper prices change significantly