Fourth-quarter investment strategy paper: pulp and paper enterprise profits will
Pulp prices continue up, configure, integrated pulp and paper business: We believe that the domestic paper price increase, the United States, Japan, Europe and other regions of paper production began to recover, and domestic production continued to run high-end paper, the context of future pulp prices will continue upward, Therefore, we recommend configuration pulp-paper integration companies such as Yueyang Paper and Chenming Paper, pulp prices of such companies in the channel will increase profitability.
Paper prices continue to rise less power, pulp and paper enterprises decoupling profits will decline. We believe that separating pulp and paper enterprises in the profitability of the current high point, but export growth fell in the next paper and paper kind of high-end 2010 production run will worsen the industry supply and demand, paper prices higher downside risk, while pulp prices up birth profits will decline.
What changed? Paper fall in external demand, exports will decline. We determine the second half of this year, rising prices lead to high-end paper products because domestic demand in addition to restoration, the foreign demand growth is the main reason for easing the domestic supply and demand, foreign demand, mainly from Japan, the United Kingdom rapid increase in exports of the two developed areas, while With the domestic export price increases and appreciation of the yen over the future of continued rapid export growth will be difficult.
Stop the capacity to re-enter the supply and demand lead to deterioration in the future. We note that the 2010 APP 1.6 million tons Coated Paper Oji Paper 800,000 tons coated paper and 350,000 tons of white paper Bo Cardboard , Nine Dragons Paper 600,000 tons of white cardboard, Zhuhai Huafeng capacity of 350,000 tons of white cardboard Transferring, as these production before Financial Crisis stop the construction, now running again without a good basis for international and domestic demand, paper prices next year will pose a greater pressure, but it can stimulate Wood pulp Demand continues to pick up.
Pulp-than-expected corporate earnings decoupling type, but the outlook negative. Enterprise market that the price of paper pulp separated sharp rise, the level of future profits will exceed expectations. We believe that Papermaking Industry has experienced a sales rebound, prices and profits increase cycle, future price increases expected in the production run is not sustainable and lower costs would squeeze their profits, so we determine the current profit-oriented enterprises in the pulp separated best, a drop in the probability of large future profits.
Earnings outlook is more negative, we have reduced the industry rating to neutral, but still recommended integrated pulp and paper companies. Chenming Paper bullish short-term and long term higher proportion of pulp line brings cost advantages, and Yueyang Paper pulp-paper integration of resources, we expect earnings momentum in the growth of these enterprises will be more significant pulp and paper companies decoupling class ; In addition, we continue to recommend the fourth quarter, product demand uncertainty rebound Hengfeng Paper, Jin Ka shares trade lower rating to neutral.
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