Zhitong Finance was informed that UBS issued a research report recently that Nine Dragons Paper (02689) had strong sales in December and the company’s pricing strategy was appropriate. The performance will recover further in the second quarter of fiscal year 2017. The report mentioned that, despite the increase in paper prices, Nine Dragons Paper's sales and profit innovation in December proved its strong pricing power. The company has a high profile at the end of 2016. The company’s management guides that the second quarter of 2017 will see a strong recovery from the first quarter.
UBS believes that the strong price increase in December 2016 indicates that Xiaolong successfully passed higher raw material costs to downstream companies. Its strong performance also freed the market from concerns about pricing rights. Due to weak performance in the first quarter of FY2017, the bank reiterated its positive view on supply-side reforms, and the leading company, Nine Dragons Paper, will benefit. UBS maintained its net asset income of the company for the fiscal year 2017 of 250-260 yuan/ton.
1
Short-term performance is only weak to ensure long-term customer loyalty
UBS said that in the second half of 2016, the old corrugated cartons (OCCs) rose significantly. Among them, California corrugated paper prices rose by 28% and Chinese corrugated papers rose by 35%. Although peer competitors sharply raised paper prices in the third quarter of 2016 to cope with rising costs, Xiaolong's price hikes were moderate to ease downstream costs.
The bank stated that as the company's pricing strategy is relatively moderate, its profitability in FY2017 will suffer a certain loss (net profit is RMB 200/tonne). UBS believes this will ensure long-term customer loyalty to ensure future market share. increase.
2
Corrugated paper prices soaring lack of fundamental support is a temporary phenomenon
UBS said that both the bank and the company believe that the current high-price corrugated paper may lack basic support and it is a temporary phenomenon. According to the upstream and downstream observations, the company believes that the major increase in corrugated paper prices is sentiment and speculative buying.
The bank said that as China's waste paper recycling rate is still significantly lower than the developed countries (China is currently 50%, the United States is 70%), with the increase in the recovery rate, China's long-term supply of corrugated paper will show an upward trend. In view of UBS’s global paper team’s negative views on pulp prices, the industry believes that the current high corrugated box prices may lack fundamental support.
UBS continued that although the company’s first quarter 2017 financial results were weak, the company’s guidance will recover strongly in the second quarter and its long-term outlook is good. In addition, the company is undergoing debt restructuring while maintaining a 30% dividend guideline.
Information Processing: Carton Street
If you want to know more about carton information, search for the public number [Carton Street]
A pet leash (also called a lead, lead line or tether) is a rope or similar material used to control an animal by attaching it to a collar, harness, or halter. In British English, a leash is generally for a larger (possibly dangerous or aggressive) animal, with lead being more commonly used when walking a dog.
Pet Leash,Dog Leash,Retractable Dog Leash,Leather Dog Leash
Yangzhou Pet's Products CO.,LTD , https://www.paiqipets.com