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UBS pointed out that in the current down cycle, small paper mills may be close to the breakeven point if they do not lose money, which effectively helps industry leaders avoid further serious deterioration in earnings.
UBS believes that the reduction in input costs and the potential increase in inventory will help the paper and Lee & Man Paper to gradually increase their profit margins in the next half-year.
On January 3, UBS said that China's corrugated paper prices rebounded in December last year, among which the performance of linerboard was outstanding, which will benefit the industry leaders such as Nine Dragons Paper (02689) and Lee & Man Paper.