ENERGY TECHNOLOGY(SZ:002812)2025-11-18 09:41Investment Rating - The investment rating for Yunnan Energy New Material is "Sell" with a target price of Rmb20.4, implying a significant downside potential of -66.9% from the current price of Rmb61.72 [6][9]. Core Insights - Yunnan Energy has successfully implemented price hikes in Q4 2025, which is expected to improve unit profit slightly to around Rmb0.04-0.05 [2][3]. - The company anticipates further profit growth and steady capacity expansion in the upcoming year, with a total capacity increase of approximately 2 billion square meters expected by 2026 [3][4]. - The current monthly production capacity stands at approximately 1.1 billion square meters, with a projected total capacity of 15 billion square meters by 2026 [3][4]. - Yunnan Energy maintains a strong partnership with LG, supplying around 60% of its needs, and is expanding its overseas operations with bases in Hungary and the US [4]. Summary by Sections Price Hikes - Discussions regarding price increases began in September, with adjustments on loss-making products implemented in October and ongoing negotiations in November [2]. Profitability - Management expects a slight improvement in profitability, projecting unit profit to be around Rmb0.04-0.05 in Q4 2025 [2]. Capacity Expansion - Current capacity can be increased by approximately 1 billion square meters through optimization, with five new production lines expected to be operational in 2026 [3]. Production - The current monthly capacity is about 1.1 billion square meters, with a year-end total capacity of 13 billion square meters and a target of 14 billion square meters for production [3]. Customer Relationships - Yunnan Energy has a strong partnership with LG, being its primary supplier with a market share of approximately 60% [4]. Overseas Business - The company has established a base in Hungary with a capacity of 400 million square meters and plans to commence operations in the US in the second half of 2026, focusing on coating [4].