The hottest paper industry benefited from the appr

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Paper industry: the valuation of RMB appreciation is lower than that of international peers

as about 80% of China's paper-making raw materials rely on imports of wood pulp and waste paper, the recent market has continued to rise under the expectation of RMB appreciation, making the paper industry another recognized beneficiary of the market after aviation, real estate and other sectors

import costs have fallen significantly

insiders pointed out that the appreciation of the RMB will reduce the import costs of wood pulp and waste paper, and benefit enterprises using imported wood pulp and waste paper as raw materials significantly. In the composition of papermaking production costs, the proportion of wood pulp in the production costs of enterprises with wood pulp as the main raw material is about 65% to 75%

"with the appreciation of RMB, enterprises in this industry will also benefit significantly." China Merchants Securities estimates that for every 1% appreciation of the RMB, the cost of the whole industry can be reduced by 200million to 300million yuan

according to the data, the per capita consumption of paper products in China was 45 kg in 2005, which is far behind the global average consumption of 57 kg. From January to September this year, domestic enterprises above Designated Size produced 18.58 million tons of pulp, a year-on-year increase of 22.4%, and 49.42 million tons of paper and paperboard, a year-on-year increase of 22.52%. Analysts believe that the consumption of the paper industry in recent years. 4. Textile tensile testing machine: the textile industry needs to test that the demand for peeling, puncture and tearing of fabric fabrics will not be lower than the growth rate of GDP

China Merchants Securities predicts that the centralized release of new production capacity in 2004 and 2005 in 2006 will make China a net exporter of paper products, and the demand gap will continue to expand in 2007 and 2008

at present, there are 24 listed companies in the paper industry in the A-share market. Among them, there are 6 listed companies in paper, cultural paper and packaging paper respectively, 4 in special paper industry, and another 2 are suspended from listing. In terms of sales revenue, Chenming Paper (000488), Sun Paper (002078), Huatai Co., Ltd. (600308), Bohui paper (600966) and Yueyang Paper (600963) rank among the top five listed companies

the valuation is lower than that of international peers

Ye Yunyan, an analyst at Galaxy Securities, believes that the valuation level of key A-share companies in the paper industry is lower than that of similar international companies, especially Huatai, Chenming and other output companies: the P/E valuation multiples of leading companies with built-in printers are not only far lower than the international average level, but also lower than the domestic average level, so there are conditions and requirements for revaluation

According to Ye Yunyan's analysis, Huatai's paper export volume in the first half of this year has exceeded 50000 tons, and the export earned foreign exchange of more than 27 million US dollars, an increase of 53.47 times and 336.15 times respectively year-on-year. Its main revenue and net profit increased by 29.77% and 15.87% respectively in the first three quarters of 2006. It is estimated that the net earnings per share of the company from 2006 to 2008 will reach 0.86 yuan, 1.07 yuan and 1.2 yuan respectively

through acquisition, Chenming Paper (000488) has continuously expanded its asset scale and maintained rapid growth in revenue and profit. The future growth and value of the company are promising. It is expected that the earnings per share will reach 0.64 yuan in 2007

sun paper has certain advantages in equipment, technology and raw materials. As a private paper company, the high consistency of the interests of its managers and shareholders makes the company in the industry in terms of management level. 5. Check whether the performance of the whole machine is in the normal leading position. It is predicted that the reasonable P/E ratio of the company is between 15 and 18 times. (sunxiaoxu)

reprinted from: Oriental Morning Post

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