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UBS: ND PAPER Keeps Expanding Pulp Capacity; Div. Resumed
2026-09-25 11:32:12
ND PAPER (02689.HK)'s net profit for FY2026 ended June shot up 103% YoY to RMB3.58 billion, close to the upper end of the company's profit guidance, UBS said in a research report.

Paper product sales volume lifted 14% YoY to 24.5 million tonnes, slightly above the broker's forecast of 24.4 million tonnes; gross margin widened 3.1 ppts YoY to 14.6%, higher than the broker's estimate of 14.1%. Earnings growth was juiced by hikes in ASP outpacing rises in fiber and energy costs, reversing the industry-wide margin pressure.

The company resumed dividend distribution, declaring a FY2026 DPS of RMB0.1 (payout ratio of 13%), and targeted resuming regular dividends from FY2027 ending June next year with a payout ratio above 20%. FY2026 gearing ratio stood at 67.6%, with management targeting a reduction to 50% in FY2027 and 30% over the long term.

The broker maintained its Buy rating with a TP of HKD11.82.
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