UBS: Maintains "Buy" rating on Nine Dragons Paper (02689.HK), target price HK$11.82, continues to expand pulp capacity and resumes dividend payments.

Zhitong Finance APP has learned that UBS issued a research report maintaining a "Buy" rating on Nine Dragons Paper (02689.HK) with a target price of HK$11.82. The company's net profit for the fiscal year 2026 ending in June rose 103% year-on-year to RMB 3.58 billion, close to the upper end of the company's profit guidance; paper product sales volume increased 14% year-on-year to 24.5 million tons, slightly above the bank's expectation of 24.4 million tons; gross profit margin expanded 3.1 percentage points year-on-year to 14.6%, above the bank's expectation of 14.1%. Profit growth was driven by average selling price increases outpacing rises in fiber and energy costs, reversing the industry's overall margin pressure. Management guides for flat paper product sales volume in fiscal year 2027, with pulp production increasing by 1 million tons year-on-year to 5.8 million tons.