The Zhitong Finance App learned that Nine Dragons Paper (02689) rose more than 5%. As of press release, it had risen 5.04% to HK$7.5 million, with a turnover of HK$117 million.
According to the news, Cathay Pacific Haitong Securities pointed out that at the end of June, the company's top ten bases issued price increase letters to drive the industry to collectively raise prices. Furthermore, in the first week of July, the tonnage price of boxboard/corrugated paper was +34/+51 yuan month-on-month. The increase was maintained, and the increase covered costs. This round of price increases covered the cost. The current round of price increases covered the middle of July, and the downstream followed suit at the same time, sending a strong signal of concerted increase. Looking ahead to the second half of 2026, wrapping paper will continue to be booming during the peak season in August. Export demand will rise in AI and other industries, and price increases in the industry will accelerate to extend to the vertical industrial chain, which is expected to expand the increase in paper prices and drive a recovery in profits.
Zhongtai Securities said that when Nine Dragons is buying back high-interest perpetual bonds, the capital structure will improve, and profit flexibility can be expected. Considering that the company has no plans to build paper production capacity in the future, the high capital expenditure point has passed, and depreciation pressure has been reduced. At the same time, this repurchase of high-interest perpetual bonds is beneficial to dispel market doubts, drastically reduce interest expenses, and optimize the company's capital structure. In the context of marginal improvements in the supply and demand structure, the company's profit flexibility can be expected.