山鹰国际：需求修复初显，关注转债兑付进展

Investment Rating - The report maintains an "Accumulate" rating for the company [1] Core Views - The company reported a revenue of 21.6 billion RMB for the first three quarters of 2024, a year-on-year increase of 1.36%, and a net profit attributable to shareholders of 0.69 billion RMB, recovering from a net loss of 1.16 billion RMB in the same period last year. However, Q3 revenue decreased by 2.87% year-on-year, with a net loss of 0.45 billion RMB compared to a net profit of 1.55 billion RMB in the previous year. The weak performance in Q3 is attributed to the decline in raw paper prices affecting gross margins. There are signs of demand recovery, which may help improve profitability in the future [1][2][3] Summary by Sections Financial Performance - For Q3 2024, the company experienced a revenue decline of 2.87% year-on-year, with the domestic downstream demand remaining weak. The prices of corrugated paper and boxboard have dropped approximately 10% and 8% respectively since the beginning of the year. However, post-National Day holiday, there has been a marginal improvement in shipment conditions, and raw paper prices have stabilized, with prices showing a week-on-week increase for two consecutive weeks as of October 30. The upcoming Q4 peak season is expected to further release downstream stocking orders, potentially leading to a gradual recovery in profitability [2][3] Asset Management and Financial Health - The company is actively pursuing the sale of its stake in Nordic Paper to accelerate capital recovery and enhance debt repayment capabilities. On October 14, the company announced a public cash offer to Nordic Paper shareholders with a total transaction value of 1.61 billion SEK (approximately 1.1 billion RMB). Additionally, the company has successfully introduced strategic investors for its two major paper production bases in Guangdong and Central China, raising 1 billion RMB in equity financing to optimize its debt structure. The company is also repurchasing shares for convertible bond conversion, with a planned amount of 0.35 to 0.7 billion RMB, which is expected to strengthen market confidence [3] Capacity Expansion and Cost Optimization - The company is steadily advancing its construction projects and capacity expansion, currently establishing 8 million tons of capacity in key regions such as East China, South China, and Central China, ranking second in the industry. The completion of the 1.8 million tons capacity project in Suzhou is expected to provide solid support for future performance growth. By compressing circulation links and optimizing product structure, the company aims to enhance its cost control capabilities and operational quality, laying a better foundation for improving profitability [4] Profit Forecast and Valuation - The report maintains previous profit forecasts, expecting net profits attributable to shareholders to reach 0.55 billion RMB, 0.68 billion RMB, and 0.81 billion RMB for 2024, 2025, and 2026 respectively. Based on the historical average of 0.85x PB over the past five years and considering the still unrecovered industry supply-demand relationship, a valuation of 0.74x PB for 2025 (with a BPS of 2.85 RMB) is given, maintaining a target price of 2.11 RMB [5][14]