Investment Rating - The report assigns a "Buy" rating for Nobon Co., Ltd. (603238.SH) with a first-time coverage [8][10]. Core Insights - The report highlights that the non-woven fabric industry in China is expected to see a production increase of 5.1% in 2024, marking the largest growth since 2020, driven by a recovery in demand and an increase in export share [3][17]. - Nobon Co., Ltd. specializes in differentiated and personalized water-jet non-woven fabric rolls and products, with a focus on high-end materials and strong technical capabilities, particularly in its core product "Sanlyzox," which meets global standards for dispersibility [5][26]. - The company is positioned for dual growth through its integrated supply chain and brand cultivation, with a projected revenue of 2.24 billion yuan and a net profit of 95 million yuan in 2024 [5][8]. Industry Overview - The non-woven fabric industry is experiencing a structural recovery, with the production of water-jet non-woven fabrics expected to grow by 8.1% in 2024, driven by increased demand for personal care products [6][54]. - The market for high-end materials, particularly in the personal care sector, is expanding, with a notable increase in the penetration of disposable cleaning products [7][50]. - The competitive landscape is characterized by a low concentration of players, with over 85% of companies being small to medium-sized, primarily competing in low-end, homogeneous products [47][48]. Company Performance - Nobon Co., Ltd. is expected to achieve a compound annual growth rate (CAGR) of 17.5% in product revenue from 2019 to 2024, supported by its strong client base and production capabilities [7][36]. - The company's roll materials are projected to contribute 31.7% of total revenue in 2024, while products will account for 67.5%, with a gross profit margin of 21.8% for rolls and 11.3% for products [5][28]. - Nobon has a clear shareholding structure, with the chairman holding 46.4% of the shares, ensuring stable management and strategic execution [5][39].

Investment Rating - The report gives a "Buy" rating for the company with a target price of 20.90 CNY, corresponding to a PE ratio of approximately 33 times for 2025 [4][14][6]. Core Viewpoints - The company is a leading player in the domestic water-jet non-woven fabric industry, demonstrating a long-term commitment to craftsmanship. The penetration rate of water-jet non-woven fabrics is on the rise, with diverse downstream applications such as wet wipes and oral nicotine pouches showing rapid growth [12][51][67]. - The company's three main business segments—roll materials, products, and proprietary brands—are developing synergistically, with strong performance in 2024 and Q1 2025. The roll material segment is expanding its capacity for differentiated and flushable materials, while the product segment, led by Guoguang, is gradually entering high-margin clients [4][12][33]. Company Overview - Founded in 2002, the company specializes in the R&D, production, and sales of differentiated and personalized water-jet non-woven materials and products. Its products are primarily used in beauty care, industrial materials, household cleaning, and medical materials [22][23]. - The company achieved a revenue of 2.24 billion CNY in 2024, representing a year-on-year growth of 16.8%, and a net profit attributable to shareholders of 95.23 million CNY, up 15.2% year-on-year. In Q1 2025, revenue and net profit grew by 39.1% and 48.6% respectively [1][4][23]. Industry Situation - The water-jet non-woven fabric market is characterized by high demand due to its breathable, soft, lightweight, and antibacterial properties, making it suitable for disposable consumer products and beauty care markets. The production of water-jet non-woven fabrics reached 151,000 tons in 2023, with a compound annual growth rate (CAGR) of 18.6% from 2018 to 2023 [2][55]. - The Chinese wet wipes market is projected to reach 12.92 billion CNY in 2024, with a CAGR of 5.0% from 2024 to 2029, indicating significant growth potential in this segment [2][68]. Business Highlights - The roll material segment has advanced production lines and strong technical innovation capabilities, with the company being the only one in China capable of mass-producing flushable materials for the U.S. market. The company is increasing the proportion of differentiated and flushable materials in its production [3][12]. - The product segment, primarily through its subsidiary Guoguang, has a comprehensive product line for wet wipes, achieving a revenue growth of 26.6% in 2024 and over 40% in Q1 2025. Guoguang is expanding its partnerships with major retailers and acquiring new clients [3][12]. - The proprietary brand "Xiaozhijia" is rapidly growing, with a revenue increase of 80.6% year-on-year in 2024, supported by the company's technical strength [3][12]. Profit Forecast and Valuation - The company is expected to achieve revenues of 2.62 billion CNY, 3.10 billion CNY, and 3.60 billion CNY in 2025, 2026, and 2027 respectively, with year-on-year growth rates of 17.31%, 18.09%, and 16.25%. Net profits are projected to be 112 million CNY, 136 million CNY, and 163 million CNY for the same years, with growth rates of 17.61%, 21.35%, and 19.80% respectively [4][14][5].