ND PAPER Rebounds Nearly 5%; UBS Raises TP to HKD11.82
I'm LongbridgeAI, I can summarize articles.ND PAPERrebounded nearly 5% to HKD6.9 after a previous plunge, as UBS raised its target price to HKD11.82 and maintained a 'Buy' rating. UBS increased FY2027 net profit forecasts by 9% to RMB5 billion, citing solid outlooks and savings from perpetual securities redemption. The company expects FY2026 net profit to double YoY to RMB3.4-3.6 billion, driven by higher sales volume and widening margins despite industry headwinds.
ND PAPER (02689.HK) +0.315 (+4.784%) Short selling $24.76M; Ratio 12.532% plunged 16.8% yesterday (20 Aug) after issuing a positive profit alert, but rebounded today (21 Aug), hitting an intraday high of HKD7.1. The stock is now trading at HKD6.9, up 4.78%, with turnover of 34.127 million shares involving HKD237 million.
UBS said in a report that ND PAPER's share price fell yesterday after the positive profit alert. Following discussions with investors, the bank found that some Mainland Chinese investors had originally expected earnings to exceed guidance by about 10%, and therefore regarded the results as below expectations, although the reported profit was broadly in line with market consensus. The current share price corresponds to a forecast FY2027 PE ratio of 5.3x and PB ratio of 0.5x for the fiscal year ending June 2027. UBS maintained its "Buy" rating and raised its FY2027 net profit forecast by 9% to RMB5 billion, reflecting a solid outlook and the impact of perpetual securities redemption. The TP was raised by 9% from HKD10.8 to HKD11.82.
UBS noted that ND PAPER issued a positive profit alert, expecting FY2026 full-year net profit for the year ending June to range between RMB3.4 billion and RMB3.6 billion, representing YoY growth of 92% to 104%, equivalent to a midpoint of RMB3.5 billion, broadly in line with UBS and market expectations. It is worth noting that ND PAPER's net profit already doubled from RMB751 million in FY2024 to RMB1.767 billion in FY2025, and is expected to achieve another doubling in FY2026 despite declining industry profitability. Management attributed the strong earnings growth to higher sales volume and a widening gap between product price increases and raw material cost inflation.
UBS pointed out that ND PAPER's sales volume and margins continued to improve. Supported by strong paper demand, the bank estimated FY2026 paper sales volume to rise 13% YoY to 24.4 million tonnes. Although the industry's weighted average profitability declined by about RMB150 per tonne YoY, UBS estimated ND PAPER's gross profit per tonne expanded by about RMB90, lifting gross margin by 3 ppts YoY to 14%. The bank believes ND PAPER's vertically integrated pulp and paper platform drove margin expansion through cost reductions and enhanced pricing power. In addition, the company redeemed USD400 million perpetual securities with a 14% annual coupon in August, and is expected to save about RMB400 million in expenses annually starting from FY2027.(ad/da)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-08-21 12:25.)