Lee & Man Paper Reports Strong Profit Growth in FY2025, Boosts Dividend

Hong Kong, March 10, 2026 – Lee & Man Paper Manufacturing Limited (HKEX: 2314), one of China’s leading containerboard producers, reported a solid improvement in profitability for the year ended December 31, 2025, driven by operational efficiency improvements, vertical integration advantages, and ongoing technological upgrades.

Financial Performance

The company recorded total revenue of HK$26.6 billion in 2025, representing a 2.5% year-on-year increase compared with HK$26.0 billion in 2024. Profit for the year rose significantly by 43% to HK$1.9 billion, up from HK$1.4 billion in the previous year.

Earnings per share (EPS) increased to HK45.20 cents, compared with HK30.56 cents in 2024, reflecting improved operational efficiency and cost management.

Dividend

The board proposed a final dividend of HK9.3 cents per share for FY2025. Together with the interim dividend of HK6.6 cents per share, total dividends for the year reached HK15.9 cents per share, up from HK10.7 cents per share in 2024.

The payout ratio remained stable at approximately 35%.

Operational Highlights

During 2025, the group accelerated technological upgrades and intelligent transformation across its production lines to improve efficiency and reduce costs. The company leveraged its vertically integrated pulp and paper operations, allowing it to adjust production between internally produced pulp and externally sourced materials to mitigate raw material price volatility.

The company also optimized the production layout and energy structure across its Chinese manufacturing bases, helping reduce overall production costs.

Industry Outlook

According to Chairman Raymond Lee, China’s paper industry faced challenges in 2025 due to tariff barriers and industry overcapacity, which led to price competition and pressure on smaller manufacturers. However, leading producers with integrated pulp-paper operations and technological upgrades are better positioned to maintain profitability.

Strategic Priorities and Future Plans

Looking ahead, the company outlined several key strategic initiatives:

1. Expansion of Export Markets
Lee & Man Paper plans to expand export sales and broaden the regional coverage of its production bases in Southeast Asia, while also exploring investment opportunities in emerging markets along the Belt and Road initiative.

2. Digital and Intelligent Manufacturing
The group will continue deploying automation, artificial intelligence, and digital technologies to streamline production processes and improve supply-chain efficiency.

3. Packaging Paper Growth
China’s policy focus on boosting consumption in 2026 is expected to benefit packaging paper demand. The company aims to capture additional market share through cost advantages from vertical integration and intelligent manufacturing.

4. Tissue Paper Expansion
The group expects strong long-term growth in China’s tissue market as per-capita consumption remains below developed markets. It plans to introduce higher-quality, softer tissue products to meet upgrading consumer demand.

5. Pulp Business Optimization
Lee & Man Paper will continue upgrading pulp production facilities and strengthening its integrated pulp-paper system to ensure stable raw material supply and improved cost efficiency.

Capital Structure

As of December 31, 2025, the company maintained a strong financial position, with cash and bank balances of HK$1.94 billion, up from HK$1.52 billion in 2024.

The net gearing ratio improved to 0.63, compared with 0.73 a year earlier, indicating stronger balance sheet health.

Production Footprint

Lee & Man Paper currently operates six paper production plants in China located in Dongguan, Guangdong, Jiangsu, Chongqing, Jiangxi, and Guangxi, along with two overseas facilities in Vietnam and Malaysia.

Management Commentary

Chief Executive Officer Edmond Lee said the company will continue deploying automation and technology upgrades to improve efficiency, reduce emissions, and optimize its product mix. The company expects the Chinese paper industry to see moderate recovery and structural reshaping in 2026, supported by consumption stimulus policies and supply-side reforms.