Demand for Nine Dragons Paper (02689) continued to improve in the fourth quarter, mainly due to seasonal effects, such as the Double 11 e-commerce event.
The Zhitong Finance App learned that Bank of America Securities released a research report stating that it reaffirmed the “outperforming market” rating of Nine Dragons Paper (02689) and lowered the profit estimates for FY2024 and FY2025 by 8% and 3%, respectively. The target price remained at HK$4 because its profits were still weak.
According to the report, the company's net loss after tax for the 2023 fiscal year reached 2.38 billion yuan, which is generally in line with the profit warning guidelines, but the net loss is still higher than expected. The bank expects its recent performance to be weak, mainly due to continued weakness in demand, but since prices bottomed out in July to August, it has recently gradually rebounded, driven by a slight recovery in terminal demand on the eve of the National Day and Mid-Autumn Festival, as well as good cost control. It is also estimated that demand continued to improve in the fourth quarter, mainly due to seasonal effects, such as the Double 11 e-commerce event.