'That the company is able to redeem the bonds is meant to show that it has no cash-flow problems,' said Kenny Tang Sing-hing, a general manager at AMTD Financial Planning.

The past week has been a roller-coaster ride for Nine Dragons, founded by Zhang Yin, the world's richest self-made woman billionaire.

The company's shares plunged up to 22 per cent on June 14, when Standard & Poor's Rating said it had not been able to access Nine Dragon management, leading to a withdrawal of its BB corporate and BB bond rating.

On June 15, Nine Dragon rejected the rating agency's claims, saying that it 'had not received any written request from S&P to which it had not responded' and that it was in a sound financial position. It added that it would consider Moody's Investor Services for a rating.

To demonstrate her confidence in the company, Zhang and two directors forked out a total of HK$62.1 million to buy a combined 5.81 million shares, helping send the stock up 14 per cent to HK$6.43.

Some analysts criticised S&P's decision to withdraw its rating. Another rater, Fitch Ratings, has maintained a BB long-term corporate credit rating on Nine Dragons and a BB rating on its bond.

But AMTD's Tang said investors had already been questioning Nine Dragons's falling profit margins and its ability to control rising costs even before S&P's removal of its rating.

Nine Dragons shares have plummeted 44 per cent from September to the end of May, underperforming the Hang Seng Index's 7.54 per cent gain over the same period.

The gross profit margin of Asia'slargest containerboard maker fell to 18 per cent in that time from 21.1 per cent in the same period last year, despite a 45 per cent rise in revenue.

'Nine Dragons shares have been falling since last year. Investors are worried its profit margin will continue to be squeezed,' said Tang.