EBEM(SH:603002) Jin Rong Jie·2025-04-23 15:21Core Viewpoint - The company, Hongchang Electronics, reported a decline in both revenue and net profit for 2024, primarily due to poor performance in its epoxy resin business, which has been significantly impacted by a challenging external environment and weak downstream demand [1][4]. Financial Performance - The total operating revenue for 2024 was 2.144 billion yuan, a year-on-year decrease of 4.29% [1][4]. - The net profit attributable to shareholders was 50.61 million yuan, down 41.59% year-on-year [1][4]. - The non-recurring net profit was 42.49 million yuan, reflecting a decline of 47.06% compared to the previous year [1]. Business Segment Performance - The epoxy resin business generated a net profit of 28.83 million yuan, showing a significant year-on-year decline [4]. - The production and sales volumes of epoxy resin were 97,100 tons and 97,500 tons, respectively, with decreases of 1.72% and 1.45% year-on-year [4]. - The copper-clad laminate and semi-cured sheet businesses performed relatively well, with increases in production and sales, but could not offset the negative impact from the epoxy resin segment [4]. Market Challenges - The company cited a complex international political and economic environment, slow global economic recovery, and multiple challenges in domestic economic operations as factors leading to weak market demand for epoxy resin and copper-clad laminates [4]. - Weak terminal consumption has adversely affected product gross margins and profitability [4]. Fundraising and Investment - To address market challenges, the company is actively pursuing a private placement of shares, having issued 249 million shares in September 2023, raising a total of 1.168 billion yuan, with a net amount of 1.154 billion yuan after expenses [5]. - The raised funds will primarily be allocated to the Zhuhai Hongchang Phase II project, which aims to produce 140,000 tons of liquid epoxy resin annually, and the Zhuhai Hongchang Phase III project, targeting 80,000 tons of electronic-grade functional epoxy resin [5][6]. Research and Development - Despite market challenges, the company continues to invest in R&D, particularly in high-frequency and high-speed resin and copper-clad laminate materials [7]. - New products, including a next-generation polyether formulation resin and halogen-free phosphorus-containing polyether resin, have passed customer evaluations and are making progress in the ultra-5G resin sector [7]. - The company has acquired a 67GHz PNA network analyzer to meet the electrical testing requirements for the latest products from Intel and AMD, and has made advancements in high-frequency materials for Nvidia platforms [7].