Lee & Man Paper Manufacturing (2314) AI Stock Analysis

• Market Cap: HK$12.24B
• Dividend Yield: 3.89%
• Average Volume (3M): 5.07M
• Price to Earnings (P/E): 9.0
• Beta (1Y): 0.92
• Revenue Growth: 1.95%
• EPS Growth: -9.10%
• Country: HK
• Employees: 10,000
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): 0.19
• Shares Outstanding: 4,295,000,000
• 10 Day Avg. Volume: 4,897,849
• 30 Day Avg. Volume: 5,065,509
• PEG Ratio: 0.26
• Price to Book (P/B): 0.37
• Price to Sales (P/S): 0.40
• P/FCF Ratio: -4.54
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: HK$3.50 ▲(24.11% Upside)

The stock's overall score is driven by strong technical indicators and a favorable valuation, suggesting potential for price appreciation. However, financial performance concerns, particularly around cash flow and rising debt levels, present risks that investors should monitor.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a stable demand for products and effective market positioning, supporting long-term business sustainability.

Profitability Improvement

Improved gross margins reflect better cost management and operational efficiency, enhancing the company's profitability and competitive edge.

Strong Equity Ratio

A strong equity ratio and improved ROE indicate solid financial health and effective use of shareholder funds, supporting long-term growth.

Negative Factors

Rising Debt Levels

Increased leverage can strain financial flexibility and increase risk, potentially impacting the company's ability to invest in growth opportunities.

Cash Generation Issues

Challenges in converting income into cash flow can limit the company's ability to fund operations and investments, affecting long-term stability.

Negative Free Cash Flow

Persistent negative free cash flow indicates potential liquidity issues, constraining the company's capacity to finance growth and manage debt.

Lee & Man Paper Manufacturing Business Overview & Revenue Model

Company Description

Lee & Man Paper Manufacturing Company Limited (2314) is a leading manufacturer of paper products based in Hong Kong, specializing in the production of various types of paper including containerboard, corrugated paper, and specialty paper products. The company operates through multiple sectors, focusing on sustainable practices and innovative technologies to enhance its production capabilities. With a strong commitment to quality and environmental responsibility, Lee & Man serves a diverse range of clients across the packaging and paper industries.

How the Company Makes Money

Lee & Man Paper Manufacturing generates revenue primarily through the sale of its paper products to various industries, including packaging and printing. The company's key revenue streams include the production and distribution of containerboard, which is essential for packaging solutions, as well as corrugated paper products used in shipping and logistics. Additionally, Lee & Man benefits from strategic partnerships with suppliers and distributors, enabling it to maintain a competitive edge in pricing and delivery. Factors contributing to its earnings include demand fluctuations in the packaging market, cost management strategies, and investments in technological advancements that improve production efficiency.

Lee & Man Paper Manufacturing Financial Statement Overview

Summary

Lee & Man Paper Manufacturing exhibits stable revenue growth and profitability improvement. However, rising debt levels and cash flow challenges highlight potential risks. The company's ability to manage leverage and enhance cash flow generation will be crucial for future financial health.

Income Statement

The company shows moderate revenue growth with a 4.25% increase from 2023 to 2024. Gross profit margin improved to 11.97% in 2024 from 10.03% in 2023, indicating better cost management. However, the net profit margin of 5.22% is moderate, and the absence of EBIT in 2024 indicates potential operational challenges.

Balance Sheet

The debt-to-equity ratio increased to 0.79 in 2024, signaling higher leverage, which may pose risks. However, the equity ratio remains strong at 50.59%, and ROE improved to 4.85% in 2024, reflecting decent returns on shareholder equity amidst increased liabilities.

Cash Flow

The operating cash flow to net income ratio is low at 0.31, suggesting cash generation issues. Free cash flow remains negative, although it improved compared to 2023. The free cash flow to net income ratio indicates challenges in converting income into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	25.73B	26.00B	24.94B	29.17B	32.51B	25.87B
Gross Profit	3.22B	3.11B	2.50B	2.69B	5.70B	5.75B
EBITDA	2.14B	2.19B	1.86B	1.77B	4.04B	4.67B
Net Income	1.36B	1.36B	1.05B	1.32B	3.25B	3.65B
Balance Sheet
Total Assets	55.78B	55.35B	54.10B	50.33B	52.45B	46.80B
Cash, Cash Equivalents and Short-Term Investments	1.66B	1.52B	1.52B	1.80B	1.91B	1.18B
Total Debt	21.98B	22.05B	19.37B	16.41B	14.13B	11.40B
Total Liabilities	26.93B	27.34B	25.33B	21.72B	19.05B	16.05B
Stockholders Equity	28.84B	28.00B	27.12B	28.60B	33.39B	30.74B
Cash Flow
Free Cash Flow	-738.77M	-2.28B	-3.55B	-1.03B	-525.96M	582.93M
Operating Cash Flow	1.50B	425.93M	151.37M	3.71B	2.79B	3.92B
Investing Cash Flow	-2.19B	-2.65B	-3.67B	-4.69B	-3.51B	-3.32B
Financing Cash Flow	596.26M	2.23B	3.24B	1.06B	1.43B	-2.33B

Lee & Man Paper Manufacturing Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.82
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2314, the sentiment is Negative. The current price of 2.82 is below the 20-day moving average (MA) of 2.99, below the 50-day MA of 2.90, and above the 200-day MA of 2.53, indicating a neutral trend. The MACD of -0.02 indicates Positive momentum. The RSI at 43.64 is Neutral, neither overbought nor oversold. The STOCH value of 20.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:2314.

Lee & Man Paper Manufacturing Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1412	73 Outperform	HK$861.84M	7.58	13.31%	8.02%	7.84%	15.69%
2314	69 Neutral	HK$12.24B	8.98	4.88%	3.89%	1.95%	-9.10%
2002	64 Neutral	HK$1.60B	8.52	3.56%	3.33%	-5.66%	-56.96%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
2689	59 Neutral	HK$27.26B	14.32	3.81%	―	6.14%	134.18%
0731	50 Neutral	HK$301.31M	17.46	11.34%	―	-9.44%	―
1812	47 Neutral	HK$4.74B	-0.16	―	―	-76.55%	-966.54%

Lee & Man Paper Manufacturing Corporate Events

Lee & Man Paper Manufacturing Secures New Packaging Paper Agreement

Lee & Man Paper Manufacturing has announced a new agreement, the 2026 Packaging Paper Agreement, between its subsidiary Vantage Dragon and several purchasers. This agreement, effective from January 1, 2026, to December 31, 2028, outlines the sale of packaging paper products based on individual orders. The transactions are classified as continuing connected transactions under the Listing Rules, requiring reporting and annual review but exempt from shareholder approval. This agreement highlights the company’s ongoing efforts to secure long-term partnerships and maintain its market position in the packaging paper industry.