Picasso did this portrait painting in 1901, when he was 20. The subject a Catalan tailor, Mr Minguell, who it is believed Picasso was introduced to by his art dealer and friend Pedro Manach1. The style shows the training Picasso had in traditional painting, and how far his painting style developed during his career. That it's painted on paper is a sign that it was done at a time when Picasso was broke, not yet earning enough money from his art to paint on canvas.
Picasso gave Minguell the painting as a gift, but later bought it back and still had it when he died in 1973. The painting was put on canvas and likely also restored under Picasso's guidance "some time before 1969"2, when it was photographed for a book by Christian Zervos on Picasso.
Next time you're in one of those dinner-party arguments about how all non-realist painters only paint abstract/Cubist/Fauvist/Impressionist/choose-your-style because they can't make "real paintings", ask the person if they put Picasso in this category (most do), then mention this painting.
1 & 2. Bonhams Sale 17802 Lot Details Impressionist and Modern Art Sale 22 June 2010. (Accessed 3 June 2010.)