Nine Dragons Paper (2689) H2 25/26 earnings summary

Executive summary

• Sales volume reached 24.5 million tonnes, up 14.0% year-over-year, setting a new record for the fourth consecutive year.

• Revenue rose 18.6% to RMB75,000.5 million, driven by higher sales volume and a 4.0% increase in average selling price.

• Net profit surged 83.8% to RMB4,047.0 million, with profit attributable to equity holders up 102.6% to RMB3,580.6 million.

• Gross profit increased 50.8% to RMB10,924.8 million, with gross margin improving from 11.5% to 14.6%.

• Strategic focus on high-end products and vertical integration of raw materials enhanced profitability and operational resilience.

Financial highlights

• Revenue: RMB75,000.5 million (+18.6% YoY); gross profit: RMB10,924.8 million (+50.8% YoY).

• Net profit: RMB4,047.0 million (+83.8% YoY); profit attributable to equity holders: RMB3,580.6 million (+102.6% YoY).

• Basic EPS: RMB0.76 (+100.0% YoY); final dividend proposed: RMB10.0 cents per share.

• Gross margin improved to 14.6% from 11.5% last year.

• Operating profit rose 67.2% to RMB6,580.6 million.

Outlook and guidance

• Cautiously optimistic outlook, supported by Chinese government policies to boost demand and environmental initiatives.

• Focus on cost control, lean management, and product transformation toward high-end and differentiated segments.

• Ongoing capacity expansion projects to increase wood pulp and paper production, targeting over 8.5 million tonnes of pulp and 26.1 million tonnes of paper annually.