[ET Net News Agency, 25 May 2018] Citi Research noted that Lee & Man Paper (LMP)(02314)
announced that it would suspend four production lines for 7-15 days under maintenance
mainly due to the shortage of OCC input material. This altogether equals to 1.45mt or 24%
of total capacity.
Besides LMP, some smaller paper mills have recently called for temporary suspension of
production for the same reason. This a result from China customs suspending US input OCC
for one month amid the trade war between the US and China and longer-than-expected time
for inspections for the more restrictive 0.5% contaminant level of import OCC.
Nine Dragons Paper (NDP)(02689) has no impact as it secures majority of import OCC from
Chairlady private company ACN International which is a major OCC collector in the US. In
addition to keeping OCC inventory for two weeks, NDP should benefit from margin expansion
for the advantage of sourcing input material.
Citi reiterated its "buy" on NDP, with a target price of HK$25. (KL)
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02689 ND PAPER
Nominal 
3.100 -0.080 (-2.516%) Others
25/05/2018 17:12
[I-bank focus]ND Paper gains input material edge over L&M
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