Nine Dragons Paper Holdings (2689) AI Stock Analysis

• Market Cap: $16.14B
• Dividend Yield: N/A
• Average Volume (3M): 5.08M
• Price to Earnings (P/E): 16.0
• Beta (1Y): 1.08
• Revenue Growth: 9.33%
• EPS Growth: N/A
• Country: HK
• Employees: 25,410
• Sector: Basic Materials
• Sector Strength: 71
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): 0.21
• Shares Outstanding: 4,692,220,700
• 10 Day Avg. Volume: 5,027,630
• 30 Day Avg. Volume: 5,083,194
• PEG Ratio: 0.05
• Price to Book (P/B): 0.47
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -1.94
• 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: $3.49
• Price Target Upside: 1.60% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 56 Neutral
• Price Target: HK$3.00 ▼(-12.79%Downside)

Nine Dragons Paper Holdings' overall stock score is influenced primarily by its mixed financial performance, which poses challenges to growth and stability. The technical analysis offers some short-term optimism, but the valuation suggests moderate appeal. Absence of dividend yield and the potential financial risk due to leverage and cash flow volatility are key concerns.

Nine Dragons Paper Holdings Business Overview & Revenue Model

Company Description

Nine Dragons Paper (Holdings) Limited, together with its subsidiaries, manufactures and sells packaging paper, recycled printing and writing paper, and specialty paper and pulp products in the People's Republic of China. The company offers linerboard products, including kraft, test, white top, and coated linerboards; corrugating medium containerboard products; corrugated cardboard products; carton box products; corrugated sheet products; and coated duplex boards. It also provides recycled printing and writing paper, such as uncoated wood-free paper and office paper; capacitor tissue paper; low and high voltage, ultra-high-voltage transformer coil winding, and heat-resistant insulating paper; and recycled and kraft pulp products. It also distributes its products in Vietnam, Malaysia, and the United States. The company was founded in 1995 and is headquartered in Dongguan, the People's Republic of China. Nine Dragons Paper (Holdings) Limited is a subsidiary of Best Result Holdings Limited.

How the Company Makes Money

Nine Dragons Paper Holdings generates revenue primarily through the manufacturing and sale of various paper products. The company's key revenue streams include the production and sale of containerboard, which is used extensively in packaging, and printing and writing paper. They have a vertically integrated business model that incorporates the collection and processing of recycled paper, reducing costs and enhancing sustainability. Additionally, Nine Dragons Paper benefits from strategic partnerships and joint ventures that expand its market reach and distribution capabilities. Significant factors contributing to its earnings include economies of scale in manufacturing, a strong presence in the Chinese market, and an increasing demand for eco-friendly packaging solutions.

Nine Dragons Paper Holdings Financial Statement Overview

Summary

Nine Dragons Paper Holdings has shown a mixed financial performance. While there is some improvement in revenue and profit margins in 2024, the performance remains inconsistent with previous years. The balance sheet shows expansion but with increased leverage risk, and the cash flow is volatile with negative free cash flow, indicating 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	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	62.35B	59.50B	56.74B	64.54B	61.57B	51.34B
Gross Profit	6.20B	5.71B	1.53B	6.99B	11.69B	9.03B
EBITDA	6.56B	6.18B	2.17B	6.68B	11.31B	8.54B
Net Income	1.15B	772.35M	-2.38B	3.28B	7.10B	4.17B
Balance Sheet
Total Assets	143.30B	138.37B	120.65B	107.08B	92.17B	79.32B
Cash, Cash Equivalents and Short-Term Investments	11.86B	10.68B	10.44B	9.78B	10.15B	5.66B
Total Debt	70.14B	69.03B	56.76B	44.20B	34.14B	26.31B
Total Liabilities	94.12B	89.89B	75.51B	59.58B	45.78B	38.52B
Stockholders Equity	48.68B	48.01B	44.65B	47.05B	45.93B	40.37B
Cash Flow
Free Cash Flow	5.83B	-13.61B	-10.77B	-9.59B	-3.54B	4.15B
Operating Cash Flow	5.98B	-794.20M	6.92B	3.03B	2.52B	8.95B
Investing Cash Flow	-12.87B	-12.66B	-17.42B	-12.32B	-5.64B	-4.51B
Financing Cash Flow	11.27B	13.67B	11.14B	8.92B	7.63B	-7.22B

Nine Dragons Paper Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.44
• 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 3.44 is above the 20-day moving average (MA) of 3.22, above the 50-day MA of 3.09, and above the 200-day MA of 3.23, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 72.82 is Negative, neither overbought nor oversold. The STOCH value of 90.57 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
2689	56 Neutral	$16.14B	16.04	2.05%	―	9.33%	―
Sector *	43 Neutral	AU$1.41B	-6.14	-40.62%	3.98%	-4.78%	-42.91%
LMPMF		$1.27B	7.14	4.75%	4.12%	―	―
SCD1		€451.66M	―		―	―	―
2002	64 Neutral	HK$1.84B	6.07	5.95%	2.89%	-5.61%	-34.60%

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.

Nine Dragons Paper Announces Executive Director Resignation

Nine Dragons Paper Holdings Limited announced the resignation of Mr. Zhang Yuanfu as an executive director, effective April 8, 2025, due to age-related reasons. Mr. Zhang will continue to serve as the Chief Financial Officer, and his departure is amicable with no disagreements with the board. The board expressed gratitude for Mr. Zhang’s contributions during his tenure.

Nine Dragons Paper Holdings Announces Board Composition and Governance Structure

Nine Dragons Paper Holdings has announced the composition of its board of directors and their roles within the company. This announcement provides clarity on the governance structure, which includes a mix of executive and independent non-executive directors. The board is supported by four committees, each with defined roles, ensuring robust corporate governance. This structure is likely to strengthen the company’s strategic decision-making and operational oversight, potentially enhancing its market position and stakeholder confidence.