[ET Net News Agency, 5 March 2018] UBS Global Research tweaked its target price for
Nine Dragons Paper (NDP)(02689) to HK$21.29 from HK$21.03, and reiterated its "buy"
rating.
Post strong 1H results and NDR meetings, the research house remains bullish on NDP's
growth outlook with more clarity. UBS views industry's net capacity adds to remain
disciplined in 2018-20, given rising entry barriers and further small mill closures under
environmental pressures.
Thus NDP's capability to add capacity in prime locations could sustain its growth and
enhance profitability (sharing existing infrastructures). With established OCC collection
networks in overseas (which can potentially convert to pulp resources) and by far the most
OCC import quota in China, NDP gains further cost advantages amid tighter waste paper
supplies around China's stringent OCC import regulations.
UBS lifted its FY2018/19/20 EPS forecasts by 3%/1%/5%. (KL)