Assessing Nine Dragons Paper (SEHK:2689) Valuation After Half‑Year Earnings And Profitability Jump

Simply Wall St.03-04

AdvertisementEarnings jump puts Nine Dragons Paper in focus Nine Dragons Paper (Holdings) (SEHK:2689) is on investors' radar after reporting half year sales of CN¥37,220.77 million and net income of ...

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This gives shareholders fresh numbers to assess the paper maker's current profitability.\nSee our latest analysis for Nine...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"SG9999014674.SGD":"Nikko AM All China Equity A SGD","SG9999002950.SGD":"United Asian Growth Opportunities SGD","DCF":"Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc","BK1223":"纸制品","02689":"玖龙纸业","SG9999001093.SGD":"United Greater China Fund A Acc SGD","BK1514":"人民币升值概念","BK1551":"纸业股"},"translate_title":"在半年盈利和盈利能力跃升后评估玖龙纸业（SEHK：2689）的估值","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DCF":1,"02689":0.9},"content_text":"AdvertisementEarnings jump puts Nine Dragons Paper in focus Nine Dragons Paper (Holdings) (SEHK:2689) is on investors' radar after reporting half year sales of CN¥37,220.77 million and net income of CN¥2,167.76 million, both higher than the prior year period. Basic and diluted earnings per share from continuing operations came in at CN¥0.42, compared with CN¥0.10 a year earlier. This gives shareholders fresh numbers to assess the paper maker's current profitability. See our latest analysis for Nine Dragons Paper (Holdings). Even with the half year earnings jump, the share price has been volatile, with a 6.18% one day share price decline and 12.66% 7 day share price decline, set against a 30.67% 90 day share price return and 1 year total shareholder return of 154.57%. This suggests that momentum has been building over the past year despite recent weakness. If this earnings update has you thinking about where else strong momentum might show up next, it could be a good time to scan 99 top founder-led companies and see what stands out. With earnings per share at CN¥0.42 and the share price already up 154.57% over the past year, the key question now is whether Nine Dragons Paper still trades at a discount or if the market is already pricing in future growth. Price-to-earnings of 10.6x: Is it justified? Right now, Nine Dragons Paper trades on a P/E of 10.6x, which sits below both the Hong Kong market average and the wider Asian forestry peer group. The P/E ratio compares the current share price with earnings per share, so it gives you a quick sense of how much investors are paying for each unit of current earnings. For a mature manufacturer like Nine Dragons Paper, this can be a useful shorthand for how the market weighs its profitability against other listed companies. On the one hand, the stock is flagged as trading at good value versus peers and industry on this P/E basis, and its earnings growth over the past year is much stronger than both its own 5 year record and the broader forestry industry. On the other hand, the SWS DCF model suggests the current HK$8.35 share price sits above an estimated future cash flow value of HK$2.20, so the market price is well ahead of that cash flow based estimate. Compared with the Asian forestry industry average P/E of 20.6x and a peer average of 16.3x, Nine Dragons Paper on 10.6x appears clearly cheaper on earnings. It is also below an estimated fair P/E of 15.5x. This is the level the ratio could move toward if the market price converged on that fair value marker. Explore the SWS fair ratio for Nine Dragons Paper (Holdings) Result: Price-to-earnings of 10.6x (UNDERVALUED) However, the sharp 1 year total return and a P/E below peers can cut both ways if earnings momentum cools or if sentiment toward the sector reverses. Find out about the key risks to this Nine Dragons Paper (Holdings) narrative. Another view: DCF sends a different signal While the 10.6x P/E suggests Nine Dragons Paper looks inexpensive against the Hong Kong market on 12.6x, the Asian forestry group on 20.6x and a fair ratio of 15.5x, the SWS DCF model paints a different picture. On that cash flow view, the current HK$8.35 price sits well above an estimated value of HK$2.20, which raises the question of which signal you weigh more heavily. Look into how the SWS DCF model arrives at its fair value. 2689 Discounted Cash Flow as at Mar 2026Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Nine Dragons Paper (Holdings) for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 220 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. Next Steps If this mix of signals feels finely balanced, it makes sense to review the numbers yourself, consider the trade offs, and move quickly to form your own view, starting with 4 key rewards and 1 important warning sign. Looking for more investment ideas? If Nine Dragons Paper has sharpened your thinking, do not stop here, the Simply Wall St screener can quickly surface other stocks that fit what you are looking for.  Spot potential value candidates early by scanning our 220 high quality undervalued stocks, which pairs solid fundamentals with prices that may not fully reflect them yet. Prioritise resilience by checking our 308 resilient stocks with low risk scores, highlighting companies with lower risk scores that could suit a steadier approach. Hunt for under the radar opportunities with our screener containing 573 high quality undiscovered gems, where smaller, less followed companies still meet quality and fundamentals checks.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.Valuation is complex, but we're here to simplify it.Discover if Nine Dragons Paper (Holdings) might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. 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