Nine Dragons Paper

Hong Kong, China, 17 March 2008 -- The board of directors of Nine Dragons Paper (Holdings) Limited is pleased to announce the unaudited consolidated results of the company and its subsidiaries (the Group or ND Paper) for the six months ended 31 December 2007. During the period under review, the Group’s total revenue amounted to RMB 6690.4 million, representing an increase of 44.2% over the same period of the previous year.

Gross profit rose by 30.9% over the same period in the previous year to approximately RMB 1576.2 million. Operating profit was approximately
RMB 1269.7 million, representing a year-on-year increase of 13.8%. Profit attributable to shareholders was RMB 1056.2 million, 11.4% more than the same period of previous year.

The board resolved to pay an interim dividend of RMB 1.68 cents (equivalent to approximately HKD 1.84 cents) per share for the six months ended 31 December 2007.

Cheung Yan, chairman of ND Paper said, "Nine Dragons is the only packaging paperboard manufacturer in China with comprehensive geographical coverage comprising a network of four production bases. We offer a one-stop product range to our customers, including high performance corrugating medium and coated duplex board. Hence we can maintain our financial performance despite the difficult operating environment.”

During the period under review, construction of new paper machines PM 12 and PM 13 at Dongguan and upgrading of PM 8 at Taicang were completed and commenced operations in August 2007, bringing the Group’s total annual designed capacity to 5.35 million metric tons. PM 18 to PM 21 at Dongguan and Taicang will commence production in June 2008, as scheduled, further expanding the Group’s capacity scale. PM 18 and PM 21 will be the only high-speed, lightweight corrugating medium paper machines in Asia (including Japan), further reflecting the Group’s position as the market leader.

To achieve a comprehensive and balanced geographical coverage, the Chongqing base is being constructed as planned, with two paper machines (PM 22 and PM 23) commencing production by mid-2008. As for Tianjin, the paper machines and ancillary facilities are expected to commence operations in 2009.
Furthermore, the Group plans to invest in a paper mill in Vietnam, to enter the ASEAN markets, including Vietnam, Laos, and Cambodia.

Under the Group’s diversification plans, ND Paper also will expand its product lines to high value products. These include the production of high value special paper products via the acquisition of projects in Sichuan for producing electric insulating paper and capacitor tissue paper, wood pulp, and bamboo pulp. The Group also plans to build a liquid packaging board production line in Taicang.

Looking ahead on the Group’s future business development, Cheung said “Regarding future business directions, we have a well-defined roadmap for diversification. We plan to increase our annual designed capacity from 5.35 million [metric] tons at present to 7.75 million [metric] tons by June 2008, and 10.55 million [metric] tons in 2009. We are now the largest packaging paperboard manufacturer in Asia, and we shall become the largest in the world. We shall continue our planning and negotiation on Chinese, Asian, and international upstream projects, developing upstream into resource business so as to support our current expansion pace. Ultimately, we shall evolve to become a fully integrated enterprise from forestry, pulp to paper, thus maximizing the value for our shareholders.”

Background of ND Paper

Nine Dragons Paper (Holdings) Limited is the largest producer of packaging paperboard products in China and Asia (including Japan), and one of the largest producers in the world, with an aggregate annual production capacity of 5.35 million metric tons. The company serves as a one-stop shop for a variety of packaging paperboard products: linerboard (kraftlinerboard, testlinerboard, and white top linerboard), high performance corrugating medium, and coated duplex board. The Group also produces unbleached kraft pulp. ND Paper was listed on the main board of the Hong Kong Stock Exchange on 03 March 2006, and is currently a constituent stock of Hang Seng Composite Index Series, MSCI Standard Index Series and MSCI Global Value and Growth Index Series.