In this briefing:
- China’s Coal Conundrum
- Notes from the Silk Road: Nine Dragons Paper Holdings (2689.HK) – Potential Volatility Risk
1. China’s Coal Conundrum
Last Friday China torpedoed Australia’s coal imports after announcing that the middle kingdom would no longer accept coal imports from Australia. This leads us to consider some of the energy issues related to China. We write often about coal and the importance it has on China’s energy consumption.
2. Notes from the Silk Road: Nine Dragons Paper Holdings (2689.HK) – Potential Volatility Risk
On the eve of the Chinese New Year holiday Nine Dragon Paper (NDP) released a profit warning regarding their H1 FY19 fiscal earnings. This warning came ahead of the 26th February 2019 Board Meeting.
Management guidance calls for a decrease for H1-2019 of approximately 45% YoY and revenue line of not less than RMB2.4bn. NDP cites an increase in raw materials and a decrease in the selling price of the products.
Despite the negative news, the share price has rallied 15% since the announcement. We examine the implications.
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