Investment Rating - The investment rating for the company is "Buy" and it is maintained [9] Core Views - The company reported a revenue of 6.31 billion yuan in Q1 2025, a year-on-year decrease of 5.2% and a quarter-on-quarter decrease of 3.7%. The net profit attributable to shareholders was 500 million yuan, down 26.2% year-on-year but up 145.6% quarter-on-quarter. The net profit after deducting non-recurring gains and losses was 460 million yuan, down 29.9% year-on-year but up 163.1% quarter-on-quarter [2][6] - The recovery of the adipic acid price spread supports the company's profitability improvement. In Q1 2025, the company's gross margin was 13.5%, an increase of 5.1 percentage points quarter-on-quarter, and the net profit margin was 8.0%, an increase of 4.9 percentage points quarter-on-quarter [12] - The demand for spandex is expected to maintain high growth due to the increasing concentration in the industry and the expansion of downstream applications. The company is positioned as a leader in the polyurethane products industry in China, focusing on spandex and adipic acid [12] - The profitability of adipic acid is under short-term pressure but remains promising in the long term. The industry is experiencing consolidation and increased quality demands, which may lead to a recovery in the future as economic conditions improve [12] - The major shareholder's asset injection is progressing steadily, which is expected to enhance the company's competitiveness and expand its polyurethane industry chain [12] Summary by Sections Financial Performance - In Q1 2025, the company achieved a revenue of 6.31 billion yuan, a year-on-year decrease of 5.2% and a quarter-on-quarter decrease of 3.7%. The net profit attributable to shareholders was 500 million yuan, down 26.2% year-on-year but up 145.6% quarter-on-quarter. The net profit after deducting non-recurring gains and losses was 460 million yuan, down 29.9% year-on-year but up 163.1% quarter-on-quarter [2][6] Market Dynamics - The spandex industry is seeing increasing concentration, with high growth in demand expected due to evolving consumer preferences and expanding applications. The company is well-positioned to benefit from these trends [12] - The adipic acid market is currently under pressure but is expected to recover in the long term as economic conditions improve and new production capacities are developed [12] Strategic Developments - The major shareholder's asset injection is expected to enhance the company's core competitiveness and expand its industry chain, with the transaction details involving a total consideration of 6 billion yuan [12]