[ET Net News Agency, 6 March 2020] Daiwa Research raised its target price for Lee & Man
Paper Manufacturing (L&M)(02314) to HK$6 from HK$5.5 but downgraded its rating to "hold"
from "outperform".
The research house said L&M's 2019 results both 3.8% above Daiwa's estimates. It
downgraded the stock because L&M is no longer a laggard play, and Daiwa believes the
recent run-up in paper prices is ending.
In 2020, Daiwa expects the containerboard adjusted net profit per tonne to improve to
HK$523. L&M's new 0.4m tonne pulp board facility in Malaysia has just begun operations in
March, which could now help stabilise costs.
Daiwa raised its 2020-21 EPS forecasts by 8-11% to factor in stronger pricing power and
better margins. (KL)