Lee & Man Paper reported a solid rebound for the six months ended 30 June 2026, as export momentum and disciplined cost management drove a sharp earnings recovery.

Revenue and Earnings • Interim revenue rose 21.30% year on year to HK$14.84 billion, propelled mainly by stronger sales in the core packaging paper division (HK$11.16 billion; +22% YoY) and a 25% rise in tissue paper revenue to HK$3.50 billion. • Net profit advanced 69.30% to HK$1.37 billion, lifting net margin to 9.25% from 6.63% a year earlier. Earnings per share increased to HK31.97 cents (1H25: HK18.88 cents).

Segment Performance • Packaging Paper: Segment profit jumped to HK$824.38 million (1H25: HK$463.26 million), benefiting from export demand and stable raw-material costs. • Tissue Paper: Profit climbed 45% to HK$738.72 million, supported by a recovery in domestic consumption. • Pulp: Profit slipped to HK$57.38 million (1H25: HK$72.34 million) as average selling prices stayed soft amid ample global pulp supply.

Margins and Cost Control • Gross profit improved 37.8% to HK$2.39 billion; gross margin expanded to 16.09% (1H25: 14.16%). • Finance costs fell 22% to HK$90.49 million, reflecting lower average borrowing rates and capitalised interest of HK$245.05 million. • Distribution and selling expenses were HK$373.86 million, 2.5% of revenue (1H25: 2.5%). General and administrative expenses represented 4.7% of sales, marginally lower than 4.8% a year earlier.

Balance Sheet and Cash Flow • Net debt-to-equity ratio improved to 0.60 (31 Dec 2025: 0.63) as shareholders’ equity grew to HK$33.13 billion. • Bank borrowings edged up to HK$21.86 billion, partly offset by HK$1.90 billion in cash. • Current ratio stood at 1.11 (31 Dec 2025: 1.14).

Operational Metrics • Raw-material inventory days shortened to 55 (FY25: 60); finished-goods days fell to 11 (FY25: 18). • Debtors’ turnover lengthened to 46 days (FY25: 41), in line with standard credit terms; creditors’ turnover reduced to 50 days (FY25: 61).

Capital Expenditure and Capacity Initiatives • The Group invested HK$1.23 billion in property, plant and equipment during the period. • Three existing pulp bases in Chongqing, Jiangxi and Chongzuo continue to underpin raw-material security. Construction of a new pulp mill in Guigang, Guangxi is under way, with commissioning targeted for 2027.

Dividend • The Board declared an interim dividend of HK11.2 cents per share, up 69.7% from HK6.6 cents a year earlier. The record date is 19 August 2026, and payment is expected on or around 3 September 2026.

Outlook Management expects China’s “moderate recovery” in paper demand, policy measures to support consumption and exports, and ongoing efficiency initiatives to underpin second-half performance. The company will maintain its focus on pulp-paper integration, capacity optimisation and overseas market development to enhance competitiveness and shareholder returns.