Core Viewpoint - The company is optimistic about the development prospects of biodegradable plastics, currently having an annual production capacity of 210,000 tons, covering products such as PBAT, PBS, and PLA [2][10]. Group 1: Production and Capacity Expansion - The company is accelerating the construction of a 150,000-ton PP modification integrated project in Ningbo, expected to be operational by the end of 2025 [3]. - The company has partially launched a 200,000-ton modified ABS integrated project in Liaoning, with steady progress on remaining capacity [3]. - The green petrochemical segment has seen a 36.67% year-on-year reduction in gross loss, indicating improved profitability [3]. Group 2: Market Demand and Growth Planning - The modified plastics market is expanding due to increasing demand for lightweight and high-strength materials across various industries, including automotive and electronics [4][5]. - The company’s modified plastics sales have a compound annual growth rate of approximately 15% over the past five years, reaching 1,308,800 tons in the first half of 2025, a historical high for the same period [6]. - The growth strategy focuses on high-end product transformation, global expansion, and deepening industry chain collaboration [6]. Group 3: International Market Expansion - The company has made significant progress in internationalization, with overseas sales of modified plastics reaching 161,000 tons in the first half of 2025, a year-on-year increase of 33.17% [7]. - The company aims for overseas market revenue to exceed 30% in the future, with ongoing construction of bases in Poland, Mexico, and South Africa [7]. Group 4: Special Engineering Plastics - The company’s special engineering plastics have a total capacity of nearly 34,000 tons per year, with significant growth in high-temperature nylon and LCP materials [8][9]. - The sales volume of special engineering plastics reached 14,800 tons in the first half of 2025, a year-on-year increase of 60.87% [8]. Group 5: Biodegradable Plastics Outlook - The company is committed to the development of biodegradable plastics, with a production capacity of 210,000 tons and a focus on meeting specific industry needs [10][11]. - The sales volume of biodegradable plastic products was 102,700 tons in the first half of 2025, reflecting a year-on-year growth of 38.41% [11].

Investment Rating - The investment rating for the company is "Outperform the Market" [5][19][20] Core Views - The company has shown significant growth in revenue and net profit, with a 35.50% year-on-year increase in revenue and a 54.12% increase in net profit for the first half of 2025 [1][8] - The modified plastics business is experiencing stable growth, with sales volume increasing by 19.74% and revenue growing by 18.62% in the same period [1][9] - The green petrochemical sector is accelerating its integrated construction, optimizing product structure, and reducing production costs [2][9] - The medical health segment is actively expanding its market presence, with a remarkable 185.37% increase in sales revenue [3][15] Summary by Sections Financial Performance - In the first half of 2025, the company achieved operating revenue of 316.36 billion yuan and a net profit attributable to shareholders of 5.85 billion yuan [1][8] - The gross profit margin for the first half of 2025 was 12.29%, with the second quarter showing a revenue of 159.70 billion yuan, a 24.41% increase year-on-year [1][8] Modified Plastics Business - The sales volume of modified plastics reached 1.3088 million tons, with revenue of 164.73 billion yuan, reflecting a year-on-year growth of 19.74% and 18.62% respectively [1][9] - The company is enhancing its global competitiveness by deepening cooperation with leading enterprises in various industries [1][9] Green Petrochemical Sector - The main product revenue from the Ningbo plant was 37.61 billion yuan, up 43.17%, while the ABS product sales from the Liaoning plant increased by 40.65% [2][9] - The company is focusing on the integration of green petrochemicals and modified plastics to improve product value and competitiveness [2][9] New Materials Segment - The new materials segment saw a sales volume of 12.85 million tons, a 31.39% increase year-on-year [2][12] - The company has successfully launched production of bio-based products, expanding applications in various fields [2][12] Medical Health Segment - The medical health segment reported sales revenue of 4.68 billion yuan, a staggering 185.37% increase, with significant growth in nitrile glove sales [3][15]