HONG KONG — Lee & Man Paper Manufacturing Ltd. expects its net profit for the first half of 2026 to increase significantly, supported by stronger operating margins and continued progress on several large-scale expansion projects across China.

In a profit alert released after market close on 20 July 2026, the company forecast profit attributable to shareholders for the six months ended 30 June 2026 at approximately HK$1.33 billion to HK$1.39 billion, representing an increase of 64% to 71% compared with HK$811 million in the same period of 2025.

Margin Improvement Drives Earnings Growth

Lee & Man Paper said the expected profit increase was primarily driven by improved profit margins.

The company attributed the stronger performance to:

• Better cost control
• Improved product pricing
• Product mix optimization

The earnings improvement comes despite continued volatility in raw material markets and higher energy costs affecting the paper industry.

The positive outlook was well received by investors. According to the company, its share price has risen 21.79% since the beginning of 2026, including an 11.07% increase over the past month.

Tissue Business Continues to Expand

Lee & Man’s 2025 financial results showed differing performance across its major business segments.

The company reported:

• Packaging paper revenue: HK$20.18 billion, up 0.4%
• Tissue paper revenue: HK$6.02 billion, up 15.1%
• Pulp revenue: HK$447 million, down 32.6%

Tissue paper remained the fastest-growing business segment, supported by continued investments in new production capacity.

Major Capacity Expansion Projects Advance

Alongside stronger financial performance, Lee & Man Paper continued advancing several strategic projects designed to expand production capacity over the coming years.

Guangxi Integrated Forestry-Pulp-Paper Project

The company’s integrated project in Guigang, Guangxi, represents a planned investment of RMB 27.5 billion.

Phase I includes:

• 1 million tonnes of bleached chemical pulp annually
• 800,000 tonnes of premium tissue paper and related products annually

Equipment installation began in May 2026, with selected tissue production lines expected to begin operating by the end of 2026 and full commercial operation targeted for mid-2027.

Additional Projects Across China

Lee & Man is also progressing several other investments, including:

• A bamboo pulp and paper project in Sichuan Province
• A green materials production base in Chongqing with a planned capacity of 1.1 million tonnes across two phases
• Phase II planning for its Chongzuo, Guangxi production base
• A RMB 520 million wood fiber production line in Guangdong to enhance packaging paper quality through increased use of virgin fiber

International Expansion Continues

Outside China, Lee & Man plans to further strengthen its manufacturing presence in Southeast Asia.

The company said its Vietnam operations have potential for future expansion in containerboard and corrugated medium production.

Separately, affiliated company Lee & Man Chemical is developing its first overseas manufacturing facility in Vietnam, with trial production expected by the end of 2027.

Outlook

Lee & Man Paper said future earnings growth will continue to depend on several factors, including raw material costs, demand for packaging and tissue paper products, and the successful ramp-up of newly commissioned production capacity.

Several major projects are scheduled to enter commercial operation during 2027, potentially expanding the company’s production base and supporting its long-term growth strategy.

The company is expected to release its full interim financial results before the end of August 2026.

Last Updated on 23/07/2026 by Jota Machinery