UBS: ND PAPER (02689) exceeds expectations for FY25 results, raises target price to 7 Hong Kong dollars.

UBS released a research report stating that ND PAPER's net profit for the 2025 fiscal year is expected to increase by 135% to 1.8 billion RMB, exceeding market expectations. This is due to the decrease in coal prices leading to an increase in the profit margin of paper products, as well as vertical integration driving product structure upgrades. The bank maintains a "buy" rating on the company and has raised the target price from 4.58 Hong Kong dollars to 7 Hong Kong dollars. The management is confident in the profit outlook and predicts a 10% increase in sales volume for the 2026 fiscal year. Based on industry discipline, sales expected growth, and profit margin improvements, the bank has raised its profit forecast for ND PAPER for the fiscal years 2026 to 2028 by 61% to 78%; the profit forecast for the 2026 fiscal year has been raised from 1.6 billion RMB to 2.9 billion RMB, mainly due to increased sales volume and improved profit capability.