[ET Net News Agency, 6 November 2018] Citi Research lowered its target price for Lee &
Man Paper (LMP)(02314) to HK$9.5 from HK$10.5, and maintained its "buy" rating.
The research house said Nine Dragons Paper (NPD)(02689)/LMP have lowered old corrugated
containers (OCC) cost by Rmb50-100/t in early November, which is unusual, even though it
is the peak season of demand from Double 11 sales. This translates into
softer-than-expected consumption demand in China. The demand growth of double 11 sales may
miss expectation, which can't be ruled out.
Citi believes LMP's net dollar margin of containerboard in September-October could be
sequentially lower than HK$900-1,000 /t in July-August. It thus reduced its net dollar
margin assumption and cut earnings by 7/10/10% in FY2018/19/20. (KL)