HK Stock Market Move | LEE & MAN PAPER (02314) rises by over 4% again, with the company's performance last year exceeding market expectations. Citigroup believes that the industry may develop vertical integration models within the year.

LEE & MAN PAPER (02314) rose over 4% again, rising 3.68% as of the press release, reaching 3.94 Hong Kong dollars, with a trading volume of 14.5287 million Hong Kong dollars. In terms of news, recently, LEE & MAN PAPER announced its 2025 performance. Citigroup stated that the company's performance last year exceeded expectations, including revenue and net profit, also meeting the middle point guidance of 1.94 billion Hong Kong dollars in its profit announcement. Therefore, Citigroup raised the company's profit forecast for the next two years by 12% to 13%, and added a forecast for 2028. The bank stated that the main driving factors for the company in 2026 include: moderate capacity growth in China and ASEAN; expectations of domestic consumption stimulus measures in China; and the possibility of a continuous expansion of gross profit margin in 2026. Citigroup believes that more papermaking companies may set up pulp production facilities this year to develop a vertical integration model (from pulp to packaging paper) to enhance profitability. However, this may also bring potential downward risks to the industry's profit margins as a whole. In addition, if the Chinese government introduces consumption stimulus measures, it will benefit LEE & MAN PAPER's demand for packaging paper and profitability. It is also expected that with continued improvement in the competitive landscape, LEE & MAN PAPER's operating profit margin may further increase this year.