九龙纸业控股(2689.HK)成功提前赎回确认书

Nine Dragons Paper Holdings (2689.HK)Confirmation for Successful Early Redemption of Perpetual Bond CITI’S TAKENDP announced it has successfully received ~99.9% of the total amount of the Senior Perpetual Capital Securities to take the offer for earlyredemption, according to HKEx. We believe NDP will save net interestexpense of Rmb345m a year, implying 10.0% and 8.7% of our earningsestimates in FY27 and FY28. We will review our forecasts after theupcoming FY26 results. We believe the company likely will report apositive profit alert for FY26 results in Aug which could be a near-term Neutral Price (29 Jun 26 16:10)HK$6.58Target priceHK$8.80Expected share price return33.7%Expected dividend yield1.5%Expected total return35.3%Market CapHK$30,875M NineDragons Paper Holdings(2689.HK)–Positive from Proposed EarlyRedemption of Expensive Perpetual Bond Eric LauAC+852-2501-2726eric.h.lau@citi.com Alice Cai+852-2501-2704alice.cai@citi.com 2HFY26 results preview– NDP will release 2HFY26 results in late Sep. We project theannual core net profit of Rmb3.2bn implying an 80% increase yoy which exceeds thebenchmark by at least 30%. Thus, we believe the company will likely release a positiveprofit alert in Aug, about one month earlier than the result date. Most of the growthhas already been achieved in 1HFY26 at ~3X yoy surge to Rmb1.966bn. We estimatethe 2HFY26 core profit would be flat at around Rmb1.2bn. SeeFig 1for details. The Andy Li+852-2501-2597andy.li@citi.com Nine Dragons Paper HoldingsValuation We value NDP shares at HK$8.8 based on 0.7x FY27E PB, which is on par with mean. We roll over from prior FY26E PE due to the upcoming release of 1HFY26 results in Feb and the company has just reported the profit alert which beat the Street estimate.NDP has been increasing level of vertical integration via more in-house production of upstream pulp which is also a plus for ROE Risks Downside risks to our target price are: 1) slower-than-expected consumption amid a worsening macro due to a subduedproperty market; 2) worse-than-expected consumption downgrade; and 3) more-than-expected industry supply. Upside risks would be: 1) any positive news flow on China’s economy; 2) better-than-expected price inflation in paper products; 3) anti-involution measure on paper industry; and 4) industry tight supply. If you are visually impaired and would like to speak to a Citi representative regarding the detailsof the graphics in this document, please call USA 1-888-500-5008 (TTY: 711), from outside the Appendix A-1 ANALYST CERTIFICATIONThe research analysts primarily responsible for the preparation and content of this research report are either (i) designated by “AC” in the author block or (ii) listed in bold alongside content which is attributable to that analyst. If multiple ACanalysts are designated in the author block, each analyst is certifying with respect to the entire research report other than(a) content attributable to another AC certifying analyst listed in bold alongside the content and (b) views expressed solelywith respect to a specific issuer which are attributable to another AC certifying analyst identified in the price charts orrating history tables for that issuer shown below. Each of these analysts certify, with respect to the sections of the report IMPORTANT DISCLOSURES The Firm has made a market in the publicly traded equity securities of Nine Dragons Paper (Holdings) Ltd on at least oneoccasion since 1 Jan 2025. Citigroup Global Markets Inc. or its affiliates received compensation for products and services other than investment bankingservices from Nine Dragons Paper Holdings in the past 12 months. For financial instruments recommended in the Product in which the Firm is not a market maker, the Firm is a liquidity providerin such financial instruments (and any underlying instruments) and may act as principal in connection with transactions insuch instruments. The Firm is a regular issuer of traded financial instruments linked to securities that may have been Guide to Citi Research Fundamental Research Investment Ratings:Citi Research stock recommendations include an investment rating and an optional risk rating to highlight high risk stocks. Risk ratingtakes into account both price volatility and fundamental criteria. Stocks will either have no risk rating or a High riskrating assigned. Investment Ratings:Citi Research investment ratings are Buy, Neutral and Sell. Our ratings are a function of analystexpectations of expected total return ("ETR") and risk. ETR is the sum of the forecast price appreciation (or depreciation) plusthe dividend yield for a stock within the next 12 months. The target price is based on a 12 month time horizon. The Investmentrating definitions are: Buy (1) ETR of 15% or more or 25% or more for High risk stocks; and Sell (3) for negative ETR. Any coveredstock not assigned a Buy or a Sell is a Neutral (2). For stocks rated Neutral (2), if an analyst believes that there