1H13 result preview: good sales but weak margin
We expect Nine Dragon Paper (NDP) and Lee & Man Paper (LMP) to report
stable but still weak results for 1H13 mainly due to relatively firm raw material
prices, sluggish containerboard paper price and stable sales volume growth. We
expect both companies to deliver their sales volume target, but the net dollar
margin will remain weak (close to the lower end of their guidance). We expect
RMB155/ton and HK$418/ton of net dollar margin for NDP and LMP, respectively.
NDP’s efforts to lower financial expenses should be one of the few shining points.