Industry Reports

Deutsche Bank Reports Summaries

080411 Deutsche Bank Report - Dr. Paper's Weekly Wrap Up (4/11/08)

Deutsche Bank - Equity Research

We trimmed estimates for containerboard producers. 1Q saw input cost pressures, as wastepaper and energy were higher than expected. The bigger issue for '08 is a struggle to implement the $50/ton March price hike initiative. We think the hike will wait until late summer.

MeadWestvaco announced long-anticipated sale of its Charleston, SC linerboard and kraft paper mill. MWV will sell the mill to Kapstone Paper for $485MM, roughly 7x 2007 EBITDA. Although dilutive to near-term earnings, we think it's a reasonable outcome for shareholders.

Sino-Forest's conference call with Poyry provided us little comfort about the asset value in the company. Poyry suggests $1.25B of value based on a single rotation and $3.2B of value based on 60 years of management.