ND PAPER (ASX: 02689) shares surged more than 7% in Hong Kong trading.
At the time of writing, the stock was up 7.6% to HK$7.79, with a turnover of HK$116 million.
The upward movement follows a positive profit alert issued by sector peer LEE & MAN PAPER (ASX: 02314).
LEE & MAN PAPER anticipates its first-half profit to reach between approximately HK$1.33 billion and HK$1.39 billion, representing a year-on-year increase of 64% to 71%, primarily attributed to improved group margins.
Notably, the paper industry continued its strategy of "production halts and price hikes" in June, with containerboard and corrugated paper prices rising significantly against the typical seasonal weakness.
Early in the month, ND PAPER implemented price increases of 50 to 100 yuan per tonne across all its ten major production bases.
By mid-month, 21 other companies had followed suit with hikes ranging from 50 to 200 yuan per tonne, a move whose scale and breadth is considered rare for the off-peak season in recent years.
A recent Citigroup report highlighted that ND PAPER successfully received acceptance for its tender offer for approximately 99.9% of its perpetual capital securities.
This is expected to save the company approximately 345 million yuan in annual net interest expenses, equivalent to 10% and 8.7% of the profit forecasts for fiscal years 2027 and 2028, respectively.
The bank also suggested the company might issue a positive profit alert for its fiscal 2026 results in August, which could act as a near-term catalyst for the share price.
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