Weak 2H21 results; waiting for recovery in sentiment
? Lee & Man Paper’s (LMP) 2021 results were weaker than expected, with lower profitability in 2H21.
? Revenue growth in 2021 w as driven by average selling prices (ASPs), but volume shipments were up only slightly yoy.
? We still believe that the tissue paper division is a long-term growth driver for the Company, but its performance was weaker than expected.
? Shares of LMP were under pressure after its weak 2021 results and concerns about the growth outlook
? We maintain our ADD rating with a lower target price (TP) of HK$6.12, based on 8x FY22F P/E (target P/E multiple reduced from 10x to 8x, given lower growth). The cut in our TP is due mainly to a dow nw ard revision in our net profit forecast and lower target P/E multiple.