HK Stock Market Move | ND PAPER (02689) falls more than 5% as domestic OCC costs are expected to decline during the off-peak season. Citigroup believes that there is limited upside potential for the company's stock price.

ND PAPER (02689) fell more than 5%, as of press time, the drop was 5.62%, trading at 8.4 Hong Kong dollars, with a turnover of 58.0163 million Hong Kong dollars. Citi released a research report stating that based on recent waste paper costs and higher-than-expected price adjustments in pulp prices from early 2026 to present compared to the fourth quarter of 2025, they have lowered ND PAPER's profit forecasts for the fiscal years 2026, 2027, and 2028 by 9%, 12%, and 7% respectively. This reflects that the high base in the fourth quarter of 2025 was due to anti-cyclical measures, while the recent price adjustments were caused by the Lunar New Year off-season and weak consumption. The bank believes that ND PAPER's stock price has risen by about 50% since the beginning of the year and should already fully reflect the impressive performance in the first half of the fiscal year 2026. Therefore, the bank has downgraded the company's rating from "buy" to "neutral," believing that there is limited upside potential. Citi has also initiated a negative catalyst watch for 30 days, based on expectations that the cost of Chinese Old Corrugated Containers (OCC) will decline in the second quarter off-season, and anticipates a 7% year-on-year decline in net profit in the second half of fiscal year 2026, with net profit per ton narrowing from 129 yuan to 101 yuan compared to the same period last year.