Nine Dragons Paper Holdings (2689) AI Stock Analysis

• Market Cap: HK$20.65B
• Dividend Yield: N/A
• Average Volume (3M): 11.45M
• Price to Earnings (P/E): 20.5
• Beta (1Y): 1.16
• Revenue Growth: 9.33%
• EPS Growth: N/A
• Country: HK
• Employees: 25,410
• Sector: Basic Materials
• Sector Strength: 72
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): 0.21
• Shares Outstanding: 4,692,220,700
• 10 Day Avg. Volume: 23,950,769
• 30 Day Avg. Volume: 11,454,423
• PEG Ratio: 2.79
• Price to Book (P/B): 0.44
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 2.57
• 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: HK$6.20
• Price Target Upside: 40.93% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 59 Neutral
• Price Target: HK$4.50 ▲(2.27%Upside)

The stock's overall score is primarily influenced by its financial performance, which highlights inconsistent revenue growth and liquidity concerns. Technical analysis indicates strong momentum, but caution is warranted due to overbought signals. The valuation is fair, but the absence of a dividend yield detracts from its appeal. Continued focus on improving financial stability and managing leverage is essential for future growth.

Nine Dragons Paper Holdings Business Overview & Revenue Model

Company Description

Nine Dragons Paper Holdings Limited (2689) is a leading paper manufacturing company headquartered in Hong Kong. It specializes in the production of a wide range of paper products, primarily focusing on containerboard, including linerboard, high-performance corrugating medium, and coated duplex board. The company operates several manufacturing facilities across China, the United States, and Vietnam, catering to diverse industries such as packaging, printing, and publishing.

How the Company Makes Money

Nine Dragons Paper Holdings generates revenue primarily through the manufacturing and sale of paper products. The company's key revenue streams include the production of containerboard, which is used extensively in the packaging industry, as well as other paper products like printing and writing paper. The company benefits from strategic partnerships with suppliers and customers, ensuring a steady supply of raw materials and a robust distribution network. Additionally, Nine Dragons leverages its extensive manufacturing capabilities and economies of scale to maintain competitive pricing and high-quality products, which are crucial factors in sustaining its earnings.

Nine Dragons Paper Holdings Financial Statement Overview

Summary

Nine Dragons Paper Holdings shows mixed financials. Revenue growth is inconsistent, and profitability margins are under pressure, despite some 2024 improvements. The balance sheet reflects increased leverage, posing financial risk, while volatile cash flows and negative free cash flow indicate liquidity challenges.

Income Statement

Nine Dragons Paper Holdings has shown mixed performance in its income statement. While there is a modest increase in total revenue from 2023 to 2024, the revenue growth has been inconsistent over the years, with a decline observed from 2020 to 2023. Gross profit margin improved significantly from 2023 to 2024, indicating better cost management, but net profit margin remains low, reflecting challenges in translating revenue growth into bottom-line profitability. The EBIT and EBITDA margins have improved in 2024 from the previous year, yet they have not reached the higher levels seen in earlier years.

Balance Sheet

The balance sheet shows a robust increase in total assets over the years, signaling expansion. However, the debt-to-equity ratio has risen, indicating higher leverage risk, which could be a concern if not managed properly. The equity ratio has remained relatively stable, suggesting a consistent capital structure. Return on equity has improved in 2024 as net income turned positive, but it remains lower compared to earlier years, pointing to room for improvement in generating returns for shareholders.

Cash Flow

Cash flow statements reveal a volatile free cash flow, with significant negative free cash flow in recent years, indicating high capital expenditures and potential liquidity concerns. The operating cash flow to net income ratio turned negative in 2024, highlighting inefficiencies in converting profit to cash. While there have been significant cash inflows from financing activities, these are primarily driven by debt, potentially increasing financial risk.

Breakdown	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	59.50B	56.74B	64.54B	61.57B	51.34B
Gross Profit	5.71B	1.53B	6.99B	11.69B	9.03B
EBITDA	6.18B	2.17B	6.68B	11.31B	8.54B
Net Income	772.35M	-2.38B	3.28B	7.10B	4.17B
Balance Sheet
Total Assets	138.37B	120.65B	107.08B	92.17B	79.32B
Cash, Cash Equivalents and Short-Term Investments	10.68B	10.44B	9.78B	10.15B	5.66B
Total Debt	69.03B	56.76B	44.20B	34.14B	26.31B
Total Liabilities	89.89B	75.51B	59.58B	45.78B	38.52B
Stockholders Equity	48.01B	44.65B	47.05B	45.93B	40.37B
Cash Flow
Free Cash Flow	-13.61B	-10.77B	-9.59B	-3.54B	4.15B
Operating Cash Flow	-794.20M	6.92B	3.03B	2.52B	8.95B
Investing Cash Flow	-12.66B	-17.42B	-12.32B	-5.64B	-4.51B
Financing Cash Flow	13.67B	11.14B	8.92B	7.63B	-7.22B

Nine Dragons Paper Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2689, the sentiment is Positive. The current price of 4.4 is above the 20-day moving average (MA) of 3.55, above the 50-day MA of 3.29, and above the 200-day MA of 3.26, indicating a bullish trend. The MACD of 0.23 indicates Negative momentum. The RSI at 88.77 is Negative, neither overbought nor oversold. The STOCH value of 90.08 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:2689.

Nine Dragons Paper Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2002	75 Outperform	HK$2.07B	6.81	5.95%	1.49%	-5.61%	-34.60%
2314	71 Outperform	$12.11B	9.23	4.75%	3.79%	4.24%	25.30%
2689	59 Neutral	HK$20.65B	20.52	2.05%	―	9.33%	―
1812	47 Neutral	€4.26B	―		―	-39.09%	-895.81%
Sector *	44 Neutral	C$980.66M	-6.79	-13.68%	1.76%	17.37%	-32.98%

Nine Dragons Paper Holdings Corporate Events

Nine Dragons Paper Clarifies 2016 Share Option Scheme in 2024 Annual Report

Nine Dragons Paper Holdings Limited has released a supplemental announcement regarding its 2024 Annual Report, providing additional details on its 2016 Share Option Scheme. The company has not granted any options under this scheme for the year ended June 30, 2024, with 466,622,081 shares available for grant. This represents approximately 9.94% of the company’s total ordinary shares. The announcement clarifies the terms of the option scheme, including the exercise period and acceptance process, without affecting other information in the annual report.

The most recent analyst rating on (HK:2689) stock is a Hold with a HK$3.80 price target. To see the full list of analyst forecasts on Nine Dragons Paper Holdings stock, see the HK:2689 Stock Forecast page.

Nine Dragons Paper Announces Executive Committee Changes

Nine Dragons Paper Holdings Limited announced a change in the composition of its Executive Committee, effective April 30, 2025. Mr. Lau Chun Shun will step down due to internal job relocation, and Mr. Ken Liu, an executive director, will join the committee. This adjustment in the board’s structure may influence the company’s strategic direction and operational efficiency.