Zhongjin: Maintains Kingboard Paper Products (02689.HK) Outperform Rating, Raises Price Target to 6 Hong Kong Dollars

According to the Wisdom Financial News App, Zhongjin released a research report stating that considering the cost advantage of self-made pulp by Nine Dragons Paper (02689.HK) exceeding expectations, it has raised the FY25-26 performance by 25% and 49% to 1.8 billion yuan and 2.5 billion yuan respectively, introducing 2.5 billion yuan for FY27, corresponding to P/B ratios of 0.5x, 0.4x, and 0.4x. The bank maintains an outperform rating and raises the target price by 33% to 6.0 Hong Kong dollars, corresponding to P/B ratios of 0.5x, 0.5x, and 0.5x, implying an upside of 11%. The company released a profit forecast, expecting a profit of 21-23 billion yuan in FY25, a year-on-year increase of 165% to 190%. Deducting perpetual bond interest of around 4 billion yuan, the net profit attributable to the parent company is expected to be 17-19 billion yuan, a year-on-year increase of 126% to 153%, exceeding the bank's and market expectations. The bank believes that this is mainly due to the better-than-expected control of self-made pulp costs and the decline in coal prices.