Xianhe(SH:603733) EBSCN·2024-08-15 03:36Investment Rating - The report maintains a "Buy" rating for the company [2] Core Insights - The company achieved significant profit growth in Q2 2024, driven by the launch of new production capacity and effective price increases [5][7] - The company expects to enhance its competitiveness with the upcoming release of 800,000 tons of self-supplied pulp capacity in Q4 2024, which will provide new profit growth points [7] - The report slightly adjusts revenue forecasts for 2024-2026 due to anticipated challenges in product pricing, while raising the net profit forecast for 2024 [7] Summary by Sections Revenue Performance - In H1 2024, the company reported revenue of 4.6 billion yuan, a year-on-year increase of 22.2%, and a net profit of 550 million yuan, up 204.7% year-on-year [3][5] - Q2 2024 revenue reached 2.39 billion yuan, a 24.1% increase year-on-year and an 8.4% increase quarter-on-quarter, with a net profit of 280 million yuan, up 381.3% year-on-year and 4.7% quarter-on-quarter [3][5] Production Capacity and Sales - The company’s production capacity expanded significantly, with special paper production reaching 555,000 tons in H1 2024, a 22% increase year-on-year, and sales volume hitting 514,000 tons, up 31.8% year-on-year [5] - The company successfully increased prices for certain paper products in March 2024, contributing to a 17% increase in revenue from transfer series products [5] Cost and Profitability - The gross margin for H1 2024 was 17.7%, an increase of 8.6 percentage points year-on-year, while Q2 2024 gross margin was 17.4%, up 9.1 percentage points year-on-year [6] - The company managed to maintain stable profitability despite rising costs, with Q2 2024 net profit per ton at 864 yuan, only slightly down from the previous quarter [5][6] Future Outlook - The company is well-positioned in the specialty paper sector, which has a more favorable competitive landscape compared to commodity paper [7] - The anticipated release of self-supplied pulp capacity is expected to further strengthen the company's ability to navigate market fluctuations and enhance profitability [7]