Core Viewpoint - Guojin Securities initiates coverage on Global New Materials International (06616) with a "Buy" rating, projecting net profits for 2025-2027 at 275 million, 467 million, and 576 million CNY respectively, corresponding to dynamic PEs of 21x, 12x, and 10x, with a target price of 6.19 HKD for 2026 at a 16x valuation [1] Group 1: Industry Outlook - The pearlescent pigment industry shows promising prospects in cosmetics and automotive sectors, both of which are experiencing double-digit growth rates, driven by domestic substitution trends [1][2] - The combined market share of the two leading domestic pearlescent pigment companies (Global New Materials and Kuncai) exceeds 30%, indicating strong competitive positioning [1] Group 2: Strategic Acquisitions - In January 2023, the company acquired a 42.45% stake in CQV, South Korea's largest pearlescent pigment manufacturer, for 500 million CNY, with CQV projected to generate 297 million CNY in revenue and 46 million CNY in net profit in 2024, reflecting significant growth [2] - The acquisition of Merck's global surface solutions business in July 2025 is expected to enhance the company's supply chain capabilities, addressing key procurement challenges [2] Group 3: Capacity Expansion and Product Optimization - The company currently has a pearlescent pigment production capacity of 33,000 tons, with plans to expand to 48,000 tons, while CQV's production capacity stands at 2,600 tons [3] - The Tonglu factory's synthetic mica production capacity of 100,000 tons is expected to be operational by the second half of 2025, with further expansions anticipated to lower costs and improve margins [3]