subject: Paper Stock Fundamentals Warming Beat The Market [print this page] The industry fundamentals is a difference, Paper An occasion to increase, coupled with factors such as raw material prices are still low, so that Papermaking Industry gross margin is expected to rebound more strongly. Recently, the major agencies promote the good image Paper Shares on the Hong Kong stock market to stimulate paper stock has been strong since July Outperform, several paper stocks extended yesterday's strong across the board up there.
Strengthening industry fundamentals The recent rally, Paper Sing praises by brokerage firms, the trend is very eye-catching. Yesterday Nine Dragons Paper, Lee & Man Paper and Chenming Paper are significantly up early, or 7.6%, respectively, 5.5% and 4.8%, Chenming Paper A shares surged 10% to the daily limit level. To close the entire block EADS were mixed even in the situation: Nine Dragons Paper closed at 9.13 Hong Kong dollars or 8.3%; Lee & Man Paper closed at 1.36 Hong Kong dollars or 5.92%; Chenming Paper rose 4.46 percent to 6.79 Hong Kong dollars; In addition, paper stars industry and the performance results are expected back in the sun paper sharp rise 0.22%, respectively, and 2.19%.
In the industry, degree of recovery in the economy at this stage the paper industry, mainly in two aspects: First, to better promote the supply and demand needs to improve, and the resulting product prices resume upward trend; second, lower costs prices and raise margin repair. Ministry of Industry said that the first 6 months of this year, paper and Paper products Industry output remained stable, industry output rise or fall, the paper industry improve profitability.
The expected profit is expected to rebound, to stimulate the Nine Dragons Paper, Lee & Man Paper Genesis recent share price high of the year. Since July, the two share increases 78.2% respectively, 77.1%, far outperforming the broader market; Chenming Paper H shares, an increase of the stars Paper in July, respectively 22.7% and 20.1%. Hang Seng Index over the same period, China Enterprises Index increase of 13.2% and 11.4%.
Short-term there is still room for growth
Although the paper shares has risen to a certain price, but the institutions and the industry is still optimistic about the performance of the sector, especially Nine Dragons and Lee & Man Paper.
Ago, Citi Nine Dragons Paper 2009-2011 earnings forecast of 25% -128%, target price increased to 11.5 from 3.7 HK dollar large, mainly due to the gross return to growth. Citigroup will also Lee & Man Paper rating from "sell" big rise "buy," target price raised to 16.5 from 7.3 HK dollar, reflecting the improved business environment. Citigroup said more than optimistic about Nine Dragons Paper Man Paper Manufacturing, because the former scale and large scale growth in the next few years high.
BOCOM said the international paper industry analyst Jiang Weisong, paper prices will rise in the space. He believes this year's profit will be better than last year papermaking, even a sharp rebound. He particularly bullish Man Paper Manufacturing, because the expected profits will rebound this year, up more than twice the current level of more attractive valuations; and Nine Dragons Paper is the industry leader, but the relative bias in your valuation.
Paper industry there has always been the biggest problem is debt, the market worried about the future fund-raising pressure on the two companies. This, DBS said the two companies believe that the current financial year's profit may increase more than doubled, with more than 70% reduction in capital expenditure, working capital management efficiency and strengthening measures such as the balance between the level should be improved.
