Lee & Man Paper Manufacturing (2314) H1 2025 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2025 was HK$12,236 million, down 2.2% year-over-year, while net profit rose 0.7% to HK$811 million and EPS increased to HK18.88 cents from HK17.69 cents.

• The Group maintained stable profitability despite industry challenges, leveraging pulp-paper integration, global presence, and digital transformation.

• Interim dividend declared at HK6.6 cents per share, up from HK6.2 cents last year.

• Total sales volume reached 3.49 million tons, with net profit per ton at HK$232.

Financial highlights

• Gross profit increased to HK$1,733 million from HK$1,628 million year-over-year.

• Operating profit before tax was HK$959 million, up from HK$908 million year-over-year.

• Distribution and selling expenses were HK$307 million (2.5% of revenue), and general/admin expenses HK$590 million (4.8% of revenue), both stable year-over-year.

• Finance costs decreased to HK$389 million from HK$462 million due to lower average interest rates.

• Net cash from operating activities was HK$1,238 million, up from HK$161 million year-over-year.

Outlook and guidance

• The Group expects moderate recovery in the paper industry, with government stimulus anticipated to boost demand.

• Focus remains on strengthening vertical integration, digital transformation, and expanding into Belt and Road and European markets.

• Packaging paper to benefit from green policies and e-commerce growth; tissue paper business poised for further expansion as per capita consumption in China rises.

• Ongoing investment in automation, AI, and energy efficiency to lower costs and improve competitiveness.