Core Viewpoint - The report highlights the growth in nitrocellulose demand and the contraction in supply, establishing a performance turning point for Beihua Co., Ltd. (002246) with a "buy" rating recommended [1] Group 1: Nitrocellulose Market Performance - Nitrocellulose business achieved record high gross profit margins, indicating a performance turning point. In 2024, the company reported revenue of 1.947 billion yuan, a year-on-year decrease of 9.83%, and a net profit of -28 million yuan, a decline of 150.99% due to the return of overpaid special order products [3] - The company aims for a revenue target of 2.6 billion yuan in 2025, expecting a year-on-year growth of 34%, with a projected total profit of 140 million yuan, a year-on-year increase of 412% [3] - In Q1 2025, the company achieved revenue of 444 million yuan, a year-on-year increase of 50%, and a net profit of 30 million yuan, a year-on-year increase of 365%, primarily due to increased revenue from nitrocellulose and protective products [3] Group 2: Supply and Demand Dynamics - Global demand for nitrocellulose is increasing, driven by rising ammunition needs. The acquisition of Hagedorn-NC by Rheinmetall is expected to shift production towards military applications, addressing strategic supply shortages [4] - Nitrocellulose total production capacity is projected to decrease from 261,000 tons in 2023 to 198,000 tons in 2024, a reduction of 24%. Domestic production capacity is also significantly declining due to various incidents and the company's decision to shut down its Xi'an production line [4] - With increasing demand and reduced supply, the profitability of nitrocellulose companies is expected to improve significantly. In 2024, China's nitrocellulose exports reached 4.12 billion yuan, with an average price of 26,500 yuan per ton, reflecting a year-on-year price increase of 12% [4] Group 3: Long-term Growth Prospects - The export market for military nitrocellulose and the application of civilian nitrocellulose in the fireworks market present significant growth opportunities. The company has developed environmentally friendly nitrocellulose for fireworks, tapping into a large new market [5] - The protective equipment and industrial pump sectors are also expected to grow, driven by increased demand for activated carbon, catalysts, and environmental equipment as the domestic economy recovers [5] Group 4: Financial Position and Future Projections - As of March 31, 2025, the company had cash reserves of 1.296 billion yuan and trading financial assets of 247 million yuan, indicating a strong financial position to support strategic development [6] - The company is projected to achieve revenues of 2.610 billion, 3.212 billion, and 3.872 billion yuan from 2025 to 2027, with net profits of 137 million, 300 million, and 428 million yuan respectively, suggesting a favorable valuation with corresponding PE ratios of 58, 26, and 19 times [7]

Group 1 - The concept stocks related to nuclear pollution prevention have seen a significant rise, with Jihua Group hitting the daily limit up [1] - China Nuclear Technology previously reached the daily limit up, indicating strong market interest [1] - Other companies such as Jieqiang Equipment and China General Nuclear Power Technology have increased by over 5% [1] Group 2 - Additional stocks that experienced gains include Sandam Membrane, China Electric Environmental Protection, Construction Repair, and Beihua Co., Ltd [1]

Group 1 - The nuclear pollution prevention concept has seen a rebound, with companies like Jieqiang Equipment and Beihua Co. achieving two consecutive trading limit increases [1] - Rich Intelligence has experienced a rise of over 10%, while companies such as Hujiang Materials, CGN Technology, Puni Testing, and New Life have also shown significant gains [1] - The Israeli Defense Forces issued a warning on June 15, advising all personnel near Iranian nuclear reactors and weapon facilities to evacuate the area immediately [1]

Group 1 - The nuclear pollution prevention concept sector saw a rise of 4.35%, ranking second among concept sectors, with 36 stocks increasing in value [1][2] - Notable stocks that hit the 20% limit up include Hengguang Co., Jiekang Equipment, and Zhongjin Irradiation, while stocks like Hanwei Technology and Yingliu Co. experienced declines [1][2] - The sector attracted a net inflow of 1.26 billion yuan from main funds, with 33 stocks receiving net inflows, and 14 stocks exceeding 50 million yuan in net inflows [2][3] Group 2 - The top three stocks by net inflow ratio were Jiekang Equipment (31.53%), Jihua Group (26.72%), and Zhongguang Nuclear Technology (24.36%) [3] - The leading stocks in the nuclear pollution prevention concept based on net inflow included Jihua Group, Beihua Co., and Zhongguang Nuclear Technology, with net inflows of 174 million yuan, 151 million yuan, and 140 million yuan respectively [2][3] - The overall trading performance of the sector was strong, with several stocks showing significant increases in turnover rates and net inflow ratios [3][4]

Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for its stock performance in the coming months [6][9][12]. Core Views - The demand for nitrocellulose is increasing while supply is contracting, positioning the company as a leading global player in this market, which is expected to benefit significantly from the growing ammunition demand [7][8]. - The company's financial performance is showing signs of recovery, with a projected revenue increase of 34% in 2025, reaching 2.61 billion yuan, and a substantial profit growth forecast of 412% [6][9]. - The long-term prospects for military nitrocellulose exports and its application in environmentally friendly fireworks are promising, indicating potential new market opportunities [8][9]. Company Overview - The latest closing price of the company's stock is 13.20 yuan, with a total market capitalization of 7.2 billion yuan [4]. - The company reported a significant decline in revenue in 2024, with a total revenue of 1.947 billion yuan, down 9.83% year-on-year, and a net profit of -28.31 million yuan, a decrease of 150.99% [6][12]. - The company aims to achieve a revenue target of 2.6 billion yuan in 2025, with a net profit of 140 million yuan [6][12]. Financial Projections - Revenue projections for 2025, 2026, and 2027 are 2.61 billion yuan, 3.21 billion yuan, and 3.87 billion yuan, respectively, with corresponding net profits of 137 million yuan, 300 million yuan, and 428 million yuan [12][13]. - The company is expected to see a significant improvement in its profit margins, with EBITDA projected to rise from 39.38 million yuan in 2024 to 533.19 million yuan by 2027 [12][13].

Group 1 - The nuclear pollution prevention sector has seen significant gains, with companies like China General Nuclear Power Technology (000881) reaching the daily limit increase [1] - Other companies in the sector, such as Jieqiang Equipment (300875), Beihua Co., Ltd. (002246), and Huashengchang (002980), also experienced a surge, hitting their daily limit [1] - Zhongjin Irradiation (300962) rose nearly 19%, indicating strong market interest in nuclear-related stocks [1] Group 2 - Additional companies like China Electric Environmental Protection (300172), Rongji Software (002474), and others also followed the upward trend, reflecting a broader market movement in this sector [1] - The overall positive sentiment in the nuclear pollution prevention sector suggests potential investment opportunities as more companies join the rally [1]

Group 1 - The core viewpoint of the news is that Hongshang Asset has conducted research on a listed company, Beihua Co., detailing its operational status and strategic planning for 2024 and 2025 [1] - In 2024, Beihua Co. anticipates a decrease in the production and sales volume of nitrocellulose due to the shutdown of its Xi'an production line, alongside a decline in revenue and profit levels influenced by special orders and refund issues in the chemical and environmental protection industries [1] - For 2025, Beihua Co. expects stable market demand for nitrocellulose, growth in the high-end color printing market within the ink industry, and an increase in demand for energetic cotton [1] - The company is focusing on optimizing the product structure of nitrocellulose, maintaining a flexible pricing mechanism, and ensuring safety and environmental investments to control production line safety risks [1] - In Q1 2025, Beihua Co. reported an increase in operating revenue and total profit of 146.9 million yuan and 45.72 million yuan, respectively [1] - Beihua Co. plans to concentrate on its core business while balancing internal and external development, actively evaluating the allocation of idle raised funds [1] Group 2 - Hongshang Asset was established in October 2013, created by a team from public funds and global venture capital giant Sequoia Capital, and is the only equity securities asset management platform for Sequoia Capital in China [2] - The company has received multiple industry awards, including the Golden Sunshine, Golden Changjiang, and Golden Bull awards, establishing itself as a well-known private equity fund company in China [2] - Hongshang Asset focuses on absolute return objectives in equity investment strategies, with fundamental research-driven asset management capabilities as its core competitive advantage [2] - The investment research team includes senior professionals from large fund companies, foreign investment research supervisors, and award-winning analysts, ensuring robust investment research capabilities [2]

Group 1: Beihua Co., Ltd. - Beihua Co., Ltd. expects a decline in operating income and profit levels in 2024 due to the shutdown of its Xi'an production line and impacts from special orders and refund adjustments in the chemical and environmental protection industries [1] - In 2025, the company anticipates stable demand for nitrocellulose, growth in the high-end color printing market, and an increase in demand for energetic cotton [1] - The company reported an increase in operating income and total profit of 146.9 million yuan and 45.72 million yuan respectively in Q1 2025 [1] Group 2: Haiguang Information - Haiguang Information's merger with Zhongke Shuguang aims to enhance competitiveness in the computing power industry through a share swap absorption merger [2] - The share swap ratio is set at 1 share of Zhongke Shuguang for 0.5525 shares of Haiguang Information, based on the average stock price over the previous 120 trading days [2] - The integration will create a closed-loop layout from high-end chip design to complete high-end computer systems, enhancing technology and application synergy [2]

Group 1: Safety and Production Capacity - The company is closely monitoring market demand and will assess production capacity based on operational needs following recent safety incidents in the industry [3] - The utilization rate of the company's nitrocellulose production capacity was approximately 85% in 2024 [3] - The company has implemented safety measures to enhance the inherent safety level of its nitrocellulose production line, including online monitoring and alarm systems [3] Group 2: Market and Pricing Strategy - The company employs a flexible pricing strategy for its nitrocellulose products, adapting to market conditions and customer needs [3] - The export of traditional nitrocellulose products is primarily directed towards Southeast Asia, while high-end ink products are mainly exported to Europe [4] - The overall market demand for nitrocellulose is expected to remain stable in 2025, with growth anticipated in the high-end ink market [3][4] Group 3: Financial Performance - In Q1 2025, the company's operating revenue increased by CNY 146.9 million, a growth rate of 49.50%, primarily due to higher sales of nitrocellulose and defense products [6] - The total profit increased by CNY 45.72 million, attributed to the rise in revenue and corresponding gross profit [6] - The company’s cash balance at the end of 2024 was CNY 1.383 billion, with plans to focus on core business development and upgrading existing production lines [6] Group 4: Future Development and Investments - The company is currently constructing a 7,500 tons/year green intelligent casting production line, expected to support the pump industry’s transition towards greener and smarter production [6] - The company is exploring solutions for environmentally friendly fireworks, leveraging its nitrocellulose products [4] - The company is actively seeking more orders in the defense and environmental protection sectors as domestic economic conditions improve in 2025 [5]

Market Overview - As of June 4, the Shanghai Composite Index closed at 3376.20 points, with a change of +0.42%. The Shenzhen Component Index closed at 10144.58 points, with a change of +0.87%. The ChiNext Index closed at 2024.93 points, with a change of +1.11% [1]. Trading Volume Analysis - A total of 2921 stocks saw an increase in average transaction volume on a month-over-month basis, with 116 stocks experiencing an increase of over 50%. Conversely, 1614 stocks saw a decrease in average transaction volume [1]. - Notable stocks with significant increases in average transaction volume include Jia Mei Packaging, Cai Xin Development, and Ke Heng Co., Ltd. [1]. Active Stocks - The stocks with the highest increase in transaction volume include: - Jia Mei Packaging (10.12% increase, average transaction volume of 4445 shares, +217.85% month-over-month) [2]. - Cai Xin Development (9.84% increase, average transaction volume of 5747 shares, +205.50% month-over-month) [2]. - Ke Heng Co., Ltd. (20.02% increase, average transaction volume of 1503 shares, +204.07% month-over-month) [2]. Transaction Count Analysis - The stocks with the highest increase in transaction count include: - Yu Yin Co., Ltd. (10.04% increase, 256,996 transactions, +6188.13% month-over-month) [3]. - Cui Wei Co., Ltd. (4.12% increase, 180,909 transactions, +5440.86% month-over-month) [3]. - Bei Hua Co., Ltd. (-1.02% decrease, 88,876 transactions, +2059.28% month-over-month) [3]. Stocks with Significant Increases in Both Volume and Count - Ke Heng Co., Ltd. shows a notable increase with a 20.02% rise, an average transaction volume of 1503 shares (+204.07% month-over-month), and a transaction count of 21,708 (+189.09% month-over-month) [4]. - Other stocks with similar trends include: - Hars Co., Ltd. (10.03% increase, average transaction volume of 1760 shares, +151.66% month-over-month, and 20,583 transactions, +186.15% month-over-month) [5]. - Bai He Hua (10.00% increase, average transaction volume of 1456 shares, +149.00% month-over-month, and 13,553 transactions, +83.64% month-over-month) [5].