Core Viewpoint - Citigroup has downgraded the earnings forecasts for Nine Dragons Paper (02689) for the fiscal years 2026, 2027, and 2028 by 9%, 12%, and 7% respectively, due to unexpected price adjustments in waste paper costs and pulp prices since the beginning of the year, reflecting a high base from Q4 2025 caused by anti-involution measures and recent price adjustments due to the Lunar New Year off-season and weak consumption [1] Group 1 - Citigroup has lowered the target price for Nine Dragons Paper from HKD 9.5 to HKD 8.8 [1] - The stock price of Nine Dragons Paper has increased by approximately 50% year-to-date, which is believed to fully reflect the strong performance in the first half of fiscal year 2026 [1] - The rating for Nine Dragons Paper has been downgraded from "Buy" to "Neutral," indicating limited upside potential [1] Group 2 - Citigroup has initiated a 30-day negative catalyst observation, anticipating a decline in the cost of old corrugated containers (OCC) in China during the second quarter off-season [1] - It is expected that the net profit for the second half of fiscal year 2026 will decrease by 7% year-on-year, with net profit per ton narrowing from RMB 129 in the same period last year to RMB 101 [1]