Investment Rating - The report assigns an "Accumulate" investment rating for the company, indicating a potential increase of 5% to 15% relative to the CSI 300 index over the next six months [11]. Core Views - The company's performance is under short-term pressure, with a revenue of 1.898 billion yuan in the first half of 2025, reflecting a year-on-year growth of 14.78%. However, operating profit and net profit have significantly declined by 64.33% and 58.53%, respectively, due to intensified industry competition [7][10]. - The demand for lithium battery separators is expected to continue growing, driven by the increasing sales of new energy vehicles and energy storage batteries in China. The report highlights that the sales of new energy vehicles in China reached 6.935 million units in the first half of 2025, a year-on-year increase of 40.30% [7][9]. - The company is actively expanding into the solid-state battery electrolyte market, having established strategic partnerships to develop high-performance solid electrolyte membranes and related products [10][11]. Summary by Sections Financial Performance - In the first half of 2025, the company achieved a revenue of 1.898 billion yuan, with a net profit of 100 million yuan, down 58.53% year-on-year. The operating cash flow increased by 132.41% to 536 million yuan [7][10]. - The gross margin for the first half of 2025 was 25.09%, a decrease of 6.43 percentage points compared to the previous year, indicating pressure on profitability due to increased competition [9][10]. Market Demand - The report notes that the demand for lithium battery separators is expected to grow, with a projected output of 223 billion square meters in 2024, a year-on-year increase of 30.41% [9]. - The company is well-positioned in the market, with major clients including CATL and BYD, and has a significant share in the global market for lithium battery separators [10]. Strategic Initiatives - The company has signed several strategic cooperation agreements to enhance its market position and product offerings, particularly in the solid-state battery sector [10][11]. - The report emphasizes the company's commitment to innovation, with a strong patent portfolio and ongoing development of advanced separator technologies [10].