Core Viewpoint - Jinfa Technology has shown significant improvement in its financial performance, with a strong growth trajectory in its core businesses, particularly in modified plastics and new materials, indicating a positive outlook for future growth opportunities [2][3][4]. Financial Performance - In 2024, Jinfa Technology achieved an operating revenue of 60.514 billion yuan, representing a year-on-year increase of 26.23%, and a net profit attributable to shareholders of 0.825 billion yuan, up 160.36% year-on-year [2][3]. - The fourth quarter of 2024 saw an operating revenue of 20.050 billion yuan, a 46.9% increase year-on-year, and a net profit of 0.142 billion yuan, marking a return to profitability [3]. - For the first quarter of 2025, the company reported a net profit of 0.247 billion yuan, reflecting a year-on-year growth of 138.20% [2]. Business Segments - The modified plastics segment remains a leader, with sales of 2.5515 million tons in 2024, a 20.78% increase, and revenue of 32.075 billion yuan, up 18.95% [3]. - The green petrochemical segment improved its performance, achieving revenue of 11.436 billion yuan, a 22.30% increase, despite a negative gross margin of -6.36% [3]. - The new materials segment, particularly in specialty engineering plastics, saw sales of 236,000 tons, a 32.51% increase, with revenue of 3.654 billion yuan, up 15.73% [3]. Growth Drivers - The new materials segment is becoming a significant profit growth point, with advancements in specialty engineering plastics such as LCP, high-temperature nylon, and PPSU/PES, which are being applied in emerging fields like AI servers and electric vehicles [4]. - The company is expanding its production capacity with new projects, including a 0.6 million ton PPSU/PES facility and a 1.5 million ton LCP project expected to commence in Q2 2025 [4]. - Jinfa Technology is also enhancing its global footprint by establishing production bases in Poland, Mexico, and Indonesia, which will help mitigate tariff risks and leverage local resources [4]. Investment Outlook - Jinfa Technology is positioned as one of the largest and most diverse modified plastics manufacturers globally, capitalizing on new opportunities in areas such as smart driving and AI [5]. - Earnings per share (EPS) forecasts for 2025, 2026, and 2027 are projected to be 0.55 yuan, 0.74 yuan, and 0.91 yuan, respectively, supporting a "buy" rating [5].

Group 1: Financial Performance - In Q1 2025, the company's revenue increased by 32.23% year-on-year, while net profit grew by 12.54%, primarily driven by the automotive sector [4] - The gross margin for modified polypropylene products decreased by 1.41 percentage points in 2024 due to rising raw material costs and competitive pricing pressures in the automotive industry [5] Group 2: Business Segmentation - Automotive business accounts for nearly 70% of total revenue, while home appliances contribute approximately 30% [6] - Major automotive clients include Geely, Volvo, Xiaomi Automotive, and others, while home appliance clients include Samsung, LG, and Whirlpool [6] Group 3: Future Projects and Capacity - The company has three ongoing projects expected to support performance in 2026, with two projects set to commence production in the second half of 2025 [8] - Planned capacity for the new projects is 30,000 tons, focusing on high-performance composite materials [8] Group 4: Competitive Advantages - Compared to competitors like Kingfa Technology, the company has doubled its capacity to nearly 200,000 tons and emphasizes customer service, product development speed, and cost-effective formulation [9] - The use of modified plastics in vehicles is about 11%-13% in China, with potential for growth driven by the rise of electric vehicles [10]

Investment Rating - Industry rating is maintained at "Outperform the Market" [5] Core Viewpoints - The new materials index experienced a decline of 0.2%, underperforming the CSI 300 index by 0.8%. Among sub-sectors, the carbon fiber index decreased by 0.4%, semiconductor materials index by 1.3%, OLED materials index by 1.6%, while membrane materials index increased by 1.8% and coatings and inks index by 1.5% [11] - In the carbon fiber sector, T300 large tow is currently at a stage of bottoming out, but potential price wars may continue due to rapid capacity release by some companies. The original tow segment has limited players, suggesting less likelihood of price drops in that area. Recommended companies include Jilin Carbon Valley [3] - In the electronic materials sector, the demand for foldable smartphones remains strong despite a downturn in consumer electronics. The continuous decline in industry price bands is expected to further stimulate downstream demand. Key recommendations include Shiming Technology and Kaisheng Technology [3] - In the renewable materials sector, the photovoltaic demand continues to grow rapidly, but the expansion across the industry chain is fast, indicating a need for market clearing. Wind power is seeing significant growth, particularly in offshore wind, with a high concentration in the wind blade segment. Recommended company is Times New Material [4] Summary by Sections Carbon Fiber - T300 large tow is at a bottoming phase, with potential for continued price competition. Limited players in the original tow segment suggest stability in pricing. Recommended to focus on Jilin Carbon Valley and Zhongfu Shenying [3][4] Electronic Materials - The foldable smartphone market is expected to see sustained growth over the next 3-5 years, with key players in the supply chain likely to maintain premium pricing. Recommendations include Shiming Technology and Kaisheng Technology [3] Renewable Materials - Photovoltaic demand is strong, but rapid expansion in the industry chain necessitates market clearing. Offshore wind power is expanding significantly, with Times New Material recommended for investment [4]