Core Insights - The company reported a revenue of 545 million yuan for Q3 2025, representing a year-on-year increase of 7.78% and a quarter-on-quarter increase of 11.24%, with a net profit attributable to shareholders of 61 million yuan, up 531.22% year-on-year and 33.09% quarter-on-quarter [1] Financial Performance - The gross margin for Q3 2025 was 22.85%, reflecting a quarter-on-quarter increase of 3.48 percentage points and a year-on-year increase of 12.55 percentage points [2] - The recovery in product profitability is attributed to the company's strategic shift in sales and cost control measures, alongside a decrease in raw material and shipping costs [2] Market Trends - The sanitary hot melt adhesive industry is experiencing a trend towards product upgrades, driven by increasing performance and quality requirements in hygiene products, leading to opportunities in functional, personalized, and specialized applications [2] - New product segments such as soft adhesives, urine-visible adhesives, biodegradable hot melt adhesives, low VOC hot melt adhesives, core adhesives, hydrophilic hot melt adhesives, odorless adhesives, colored adhesives, antibacterial adhesives, and mosquito-repellent adhesives are emerging [2] Global Expansion - The company's factory in Malaysia is set to enter the commissioning phase in Q4 2025, targeting North American customers, which will help reduce overall costs and increase the share of high-value markets [2] - Future plans include leveraging the advantages of the Chinese supply chain and the company's management and R&D capabilities through global layouts in Guangzhou, Poland, and Malaysia [2] Investment Outlook - The competitive landscape for sanitary hot melt adhesives is favorable, with a gradual recovery in product profitability. The introduction of childcare subsidies may further enhance the recovery of the sanitary industry [3] - Projected net profits attributable to shareholders for 2025-2027 are estimated at 220 million, 280 million, and 330 million yuan, corresponding to PE ratios of 18, 14, and 12 times respectively [3]

Investment Rating - The report maintains a "Buy-B" rating for the company [1][6] Core Views - The company achieved a record high performance in Q3 2025, with revenue of 545 million yuan, a year-on-year increase of 7.78% and a quarter-on-quarter increase of 11.24%. The net profit attributable to the parent company reached 61 million yuan, up 531.22% year-on-year and 33.09% quarter-on-quarter, primarily due to the continuous expansion of high-value-added products and strategic sales initiatives targeting major customers in the hygiene materials sector [2][4] - The gross profit margin for Q3 2025 was 22.85%, reflecting a recovery in product profitability after three years of market competition in the hygiene hot melt adhesive industry. The company has optimized its sales strategy and deepened partnerships, leading to improved cost control and efficiency [4] - The company is set to ramp up production at its Malaysian factory in Q4 2025, targeting North American customers, which will further reduce overall costs and enhance its market share in high-value-added products [4] Financial Performance and Projections - The company’s projected net profits for 2025, 2026, and 2027 are 220 million yuan, 280 million yuan, and 330 million yuan, respectively, corresponding to P/E ratios of 18, 14, and 12 times [6] - Revenue forecasts for the years 2023 to 2027 are as follows: 1,628 million yuan in 2023, 2,006 million yuan in 2024, 2,350 million yuan in 2025, 2,760 million yuan in 2026, and 3,230 million yuan in 2027 [9][18]