玖龙纸业：盈利改善超预期，浆纸协同优势放大

Investment Rating - The investment rating for Nine Dragons Paper Holdings Limited (2689.HK) is not explicitly stated in the provided documents, but the overall sentiment appears positive based on the performance forecasts and financial improvements [1]. Core Insights - The company is expected to report a profit of 2.15-2.25 billion CNY for FY26H1, representing a year-on-year increase of 216.0% to 230.7%. After excluding perpetual capital securities, the net profit attributable to shareholders is projected to be 1.95-2.05 billion CNY, reflecting a year-on-year increase of 315.2% to 336.5% and a quarter-on-quarter increase of 50.4% to 58.1% [1][2]. - The strong performance is attributed to increased sales volume, rising prices, and reduced costs leading to a significant increase in gross profit. The company anticipates achieving a sales volume of approximately 12 million tons in H2 2025, with a slight increase in average prices [2]. - The recovery in waste paper profitability and significant improvements in pulp and paper segments are noted, with expectations of moderate recovery in packaging paper profitability in H2 2025 [2]. Financial Projections - For FY2026-2028, the net profit attributable to shareholders is projected to be 3.82 billion CNY, 4.11 billion CNY, and 4.46 billion CNY, respectively, with corresponding price-to-earnings ratios of 8.2X, 7.6X, and 7.0X [3]. - The total revenue for FY2025 is reported at 63.24 billion CNY, with expected growth rates of 6% for FY2025, 10% for FY2026, and 6% for FY2027 [5]. - The company’s actual pulp and paper design capacity is reported to be 28.9 million tons, with significant investments in new capacity focused on pulp production [3][5]. Operational Highlights - The company has seen a significant increase in self-produced pulp, which is expected to enhance profitability in various product categories, including white card and cultural paper, despite price pressures [2][3]. - Capital expenditures are expected to decrease to 11 billion CNY in FY26 from 14.8 billion CNY in the previous year, indicating a potential easing of depreciation and interest expense pressures [3].