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Nine Dragons Paper (Holdings) Ltd. UPDATE: Hold on tight to this Chinese green stock

Posted April 23, 2008

Back on February 21, 2008, I recommended a buy on Nine Dragons (Holdings) Ltd. below $1.90: http://www.todaysfinancialnews.com/hot-stock-pick-of-the-week/green-stocks-2/

Well, below $1.90 it certainly is now.

The stock took a nosedive in mid-March when an aggressive capital expenditure program partnered with escalating raw material costs and supply risk hit the company hard.

To offset the losses, the company announced yesterday a $300 million bond offering through Merrill Lynch.  (Read the official announcement here.)

The five-year bonds are dollar-denominated and should yield approximately 8%.  

Both Standard & Poor’s and Fitch have rated this bond “BBB–.” Both seem confident that Nine Dragons can weather this storm.

As am I.

I recommend you continue to hold your shares of Nine Dragons Paper (Holdings) Ltd. (2689:HKG or NDGPF.PK).

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