Core Viewpoint - CICC has raised the net profit estimates for Nine Dragons Paper Holdings Limited (02689) for FY26-27 by 10% and 12% to 4 billion and 4.5 billion HKD respectively, due to the gradual release of cost benefits from self-produced pulp [1] - The target price has been increased by 33% to 12 HKD, implying a 31% upside potential [1] Group 1: Financial Performance - For 1HFY26, the company reported a net profit of 2.21 billion HKD, with a net profit attributable to shareholders of 1.97 billion HKD after deducting perpetual bond interest, representing a year-on-year increase of 319% [2] - The company achieved a sales volume of approximately 12.4 million tons, an increase of 1 million tons year-on-year, primarily driven by increases in white card paper and cultural paper [3] Group 2: Cost and Capital Expenditure - The company has slightly adjusted its capital expenditure for FY26 to 12.5 billion HKD from the previous guidance of 11 billion HKD, with remaining capital expenditure expected to be within 10 billion HKD [4] - The asset-liability ratio has decreased for the first time in five years to 64.7%, down by 1 percentage point year-on-year [4] Group 3: Market Outlook - The company is expected to benefit from a stable recovery in the box board and corrugated paper market, with an estimated net profit of approximately 1,000 HKD per ton during the period [5] - The company is projected to have a paper pulp production of over 2 million tons in 1HFY26, which is a key driver for the better-than-expected performance [6]
中金：维持玖龙纸业跑赢行业评级 上调目标价至12港币