Shanying Paper (600567): Changed the funds raised to invest to optimize the layout of production capacity

Shanying Paper (600567): Changed the funds raised to invest to optimize the layout of production capacity

Key Investment Events: The company announced on January 10, 2020 that it originally planned to use the funds raised from the 2018 convertible bonds to invest 10 million investment projects with an annual output of 220 wholesale high-end packaging cardboard projects (phase III), in order to optimize the production capacity.To improve the company’s regional layout, the company intends to change this time to Shanying Paper (Guangdong) Co., Ltd.

US $ 9.6 billion, all the funds raised for the change will be used for new project construction, and the shortfall will be solved by the company’s self-raised funds.

  Priority to invest in the South China base to improve the national regional layout: As a key consumer area of industrial packaging paper in South China, the company’s existing production capacity has not yet formed a sufficient scale.

Guangdong Shanying, a wholly-owned subsidiary of the company, is located in Zhaoqing, in the middle of Guangdong. In the developed economy, convenient water and land transportation, and densely populated areas, the demand for containerboard and corrugated base paper in the region is strong, and the customer concentration is high. Its production capacity radiates the Pearl River DeltaThe economic zone, Central South and Southwest, has the advantages of location and transportation for building papermaking bases.

  Considering optimizing the growth of production capacity and improving the company’s regional layout, the company prioritizes the construction of a high-end containerboard expansion project at the South China Base in Zhaoqing, Guangdong. The total size of the new project is expected to be 100, including an annual output of 54 into high-end containerboard and an annual output of 46 instead of high-end containerBoard production line.

With the completion of the South China Base project, the company will improve the regional layout of South China’s production capacity. In the future, the company’s internal papermaking bases will cooperate with each other to further highlight the advantages of scale and location, and promote the company to speed up the improvement of the industrial layout, expand the national sales market, and reduce transportation costs.To increase the revenue scale and profitability of South China, Central South and Southwest China.

  Orderly production of base paper production capacity and clear future growth path: The company’s internal layout through self-construction and mergers and acquisitions is mainly concentrated in the East China region of Zhejiang, Fujian, and Anhui. With the 127 / year production capacity of the Central China base, it has been put into production in the fourth quarter of 2019 and Phoenix in North America.After the completion of the technical transformation of the paper industry, as of the end of 2019, the company’s total domestic floorboard corrugated floor production capacity reached nearly 600 tons, and the international special / nougat cardboard production capacity reached 62 inches.

The company has an orderly planning for future production capacity. After the change of the raised investment funds, it will first build 100 high-end 上海夜网论坛 containerboard paper production capacity in Guangdong, and it is expected to start production in 2021. According to the company’s plan, another 100 inches will be built in Zhejiang Haiyan / Hubei Central China Base in 2022.The capacity of container board corrugated paper will reach 800 tons by the end of the year, and the future growth path is clear.

  The scale of packaging is small, and the growth potential of the benchmarking international giants is large: the company’s release of 2019 operating data shows that the Industrial Internet (Cloud Printing) GMV has increased significantly by 396.

55% to 28.

800 million, continue to be optimistic about the company’s continuous development of packaging business.

Shanying Paper is currently a box and corrugated paper company that has successfully extended the industrial chain downstream to packaging. It has the same development path as the international giant International Paper. It has achieved 80% of its own production of box and board corrugated base paper for corporate packaging and paper industry.The overall volume of the downstream packaging segment is still going to decrease. In 2018, the packaging business revenue was about 4 billion, accounting for only 1/5 of its own containerboard production. The company ‘s production of base paper is expected to achieve more than 20 billion camp revenue if it is self-sufficient.Promote the production of downstream cartons, and the growth of the packaging sector is expected.

  Profit forecast and investment grade: Shanying Paper’s base paper and packaging extensions are clear and orderly. They are high-quality assets with long-term cumulative attributes in the papermaking cycle sector. The company’s revenue is expected to reach 225 in 19-21.

35/297.

91/316.

1.3 billion (-7).

5% / + 32.

2% / + 6.

1%), net profit attributable to mother 18.

03/21.

15/23.

1.6 billion (-43.

7% / + 17.

3% / + 9.

5%), corresponding to PE of 9.

41X / 8.

02X / 7.

32X, maintain “Buy” rating!

  Risk reminder: paper price rises more than expected, and production capacity falls short of expectations