[ET Net News Agency, 5 March 2018] UBS Global Research lifted its target price for Lee
& Man Paper Manufacturing (LMP)(02314) to HK$14.77 from HK$13.69, and reiterated its "buy"
rating.
The research house said LMP's FY2017 results were inline. Post management's NDR, UBS
reiterated its positive view on LMP, thanks to improving profitability of its tissue biz
(focusing on OEM model with rising utilization and operating leverage) and its ability to
build containerboard capacity in Vietnam to cultivate the cheaper overseas OCC. UBS
believes this could help it gain more advantages over smaller peers in the industry.
With strong cash generation and declining gearing, management may look to better utilize
its strong balance sheet by considering M&A opportunities (especially in overseas to
further arbitrage the OCC price gaps), further share buybacks and potentially higher
dividends, said the research house.
UBS revised its EPS forecasts by 5%/8%/5% in FY2018-20. (KL)
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02314 LEE & MAN PAPER
Nominal 
2.310 +0.010 (+0.435%) Others
05/03/2018 17:55
[I-bank focus]UBS lifts Lee & Man Paper (02314) to HK$14.77
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