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DBS: Lee & Man Paper Manufacturing Ltd – Profit Warning!

Posted on July 26, 2022July 26, 2022 By alanyeo No Comments on DBS: Lee & Man Paper Manufacturing Ltd – Profit Warning!
New Alert: Lee & Man Paper (2314 HK) announced profit warning for 1HFY22
What’s new
  • Lee & Man Paper’s net profit is expected to drop 59% to HK$768m in 1HFY22 due to a decrease in profit margin
  • The decrease in profit margin is due to the lower demand in industry low season with higher raw material cost during the period. 
Our view
  • This is surprising given LMP’s tissue operation is considered relatively stable business than those manufacturers with only containerboard business.
  • We expect the demand in paper market continues to be low but the worst is likely over in this 1H. 
  • We expect the peak season starting in Sep-Oct will help LMP to hike ASP where margins should recover in 2H.  
  • We recommend BUY and both recommendation and TP are currently under review. 

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Earnings Updates/ Corporate Actions, Research - Equities Tags:Lee & Man Paper

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