Shares of ND PAPER (HKEX: 02689) surged over 7% during the trading session. At the time of writing, the stock is up 6.08%, trading at HK$6.98, with a turnover of HK$724.515 million.

Shenwan Hongyuan Group Co., Ltd. released a research note stating that ND PAPER (HKEX: 02689) has announced a cash repurchase of US$400 million in perpetual bonds, funded by cross-border RMB loans and internal capital, which is ahead of the previous three-year schedule. The buyback is divided into an early-bird period and a regular period. During the early-bird period, each US$1,000 principal amount can be repurchased for US$1,070 (a 7% premium), while the regular period only pays the face value principal. The company's executive directors, Zhang Yin, Liu Mingzhong, Zhang Chengfei, and their related entities collectively hold approximately 81% of the unredeemed principal of these perpetual bonds and have committed to participating only in the regular repurchase, forgoing the early-bird 7% premium, amounting to approximately US$23 million in waived benefits, thereby helping the company bolster its profits. These perpetual bonds carry a coupon rate of 14%, with annual interest expenses exceeding RMB 400 million. After swapping for lower-interest loans, the interest expenses are expected to decrease significantly.

The company's paper production capacity exceeds 25 million tons, demonstrating significant economies of scale, and the "Buy" rating is maintained. Shenwan Hongyuan Group Co., Ltd. forecasts net profit attributable to the parent company for FY2026/FY2027/FY2028 to be RMB 3.789 billion, RMB 5.075 billion, and RMB 5.702 billion, respectively, representing year-on-year growth of 114.4%, 33.9%, and 12.4%, corresponding to P/E ratios of 7.6x, 5.7x, and 5.0x.