Zhongshun Jierou (002511): Promote the integration of bamboo pulp and paper to encourage employee stock ownership

Zhongshun Jierou (002511): Promote the integration of bamboo pulp and paper to encourage employee stock ownership

In the core point of view, Shun Jierou intends to invest 40.

USD 8.7 billion to build a 30-inch bamboo pulp and paper integration project, which will increase the company ‘s profit margin by reducing the middle extension; promote the dual-brand development strategy, “Sun”, as 深圳桑拿网 a bamboo pulp-based household paper brand, develops together with “Jierou” brand; launchedThe second phase of employee stock ownership plan stimulates employee motivation.

In addition, the continued decline in wood pulp prices will continue to be beneficial to corporate profitability repairs.

We estimate that the company EPS for 2019-2021 will be 0.

44, 0.

53, 0.

64 yuan, maintaining the “overweight” level.

Promote the integrated production mode of bamboo pulp and paper. The development of the two brands “Sun” and “Jierou” is expected. According to the company announcement, Zhongshun Jierou plans to invest 40%.

USD 8.7 billion to construct 30 initial bamboo pulp and paper integration projects, of which the scale of bamboo pulp construction is 31.

8 announced / year (planned investment 17.

800 million US dollars, the construction scale of tissue paper is 30 initial / year (planned investment 21).

100 million); The project is planned to be constructed in three phases, with each phase producing 10 months, and the total project cycle is expected to be 70 months.

After the successful implementation of the project, the company will realize an integrated production mode of bamboo pulp and paper. By extending the industrial chain, it will reduce the middle extension and increase the company’s profit margins. At the same time, the company will promote the dual-brand development strategy and enable “Sun” as a bamboo pulp-based household paper brand.Develop together with the “Jierou” brand to enhance the company’s sustainable development capabilities.

The second phase of the employee stock ownership plan was released to stimulate employee enthusiasm. The company announced the completion and termination of the first phase of the employee stock ownership plan on July 9, and announced the second phase of the employee stock ownership plan (budget).

The first employee shareholding plan has a maximum funding of 50 million, with “shares” as the subscription unit, and each share is 1 yuan; the company intends to acquire and hold the company’s stock through the transferee to buy back the shares repurchased by the special account, and let the share price be8.

08 yuan / share.

Participants include a total of 9 directors and senior management personnel, with a total subscription of 28 million copies, other employees are expected to not exceed 71 people, and total subscription expenditure is expected to not exceed 22 million copies.

The launch of the employee stock ownership plan helps to bind the interests of the company as a whole and stimulate employee motivation.

The price of pulp has fallen and profitability has continued to increase. The price of the company’s main raw material, wood pulp, has continued to decline since November 2018. According to Zhuochuang data, the average price of coniferous pulp and broadleaf pulp in 19H1 dropped by 21%, 9%, and decreased by 18% from 17H2.% And 11%. Through the digestion of high-priced pulp stocks in the early period, the company’s profit elasticity has gradually begun to appear since the second quarter of 2019, driving the company’s profitability to continue to repair.

Considering that the current downstream demand in the paper industry is generally weak, and the global wood pulp port inventory is still high, we expect that the price of wood pulp is expected to continue the low and volatile trend, which will help the company’s gross profit margin to rise and help corporate performance grow.

Development enters the fast track and maintains an “overweight” rating. The company promotes the integration of bamboo pulp and paper and a dual-brand strategy to improve profitability and sustainable development capabilities. The second phase of employee stock ownership plans has taken over and stimulated employee motivation.

Taking into account the profit restoration brought about by the downturn in wood pulp prices, we have raised our profit forecast. It is estimated that the company’s net profit attributable to the mother in 2019-2021 will be 5 respectively.

7,6.

9, 8.

4 trillion, the corresponding 南宁桑拿 EPS is 0.

44, 0.

53, 0.

64 yuan.

Since its listing in 2010, the company ‘s PE (TTM) hub is 44x. Considering that the company ‘s downstream demand is solid and the brand ‘s competitiveness continues to increase, it will give Zhongshun Jierou 2019 31?
32 times PE valuation, target price range is 13.

64?
14.

08 yuan, maintaining the “overweight” level.

Risk warning: Sino-US trade friction escalates, raw material prices fluctuate sharply, and market competition intensifies.