Core Viewpoint - Tianan New Materials (603725) reported a revenue of 1.444 billion yuan for the first half of 2025, a year-on-year increase of 3.97%, and a net profit attributable to shareholders of 62.169 million yuan, up 16.59% year-on-year [1] Financial Performance - Total revenue for Q2 2025 was 863 million yuan, a slight increase of 0.1% year-on-year [1] - Q2 net profit attributable to shareholders reached 46.997 million yuan, reflecting a year-on-year growth of 14.47% [1] - Gross margin improved to 23.54%, up 7.1% year-on-year, while net margin increased to 4.84%, up 5.83% year-on-year [1] - Total expenses (selling, administrative, and financial) amounted to 186 million yuan, accounting for 12.92% of revenue, an increase of 1.71% year-on-year [1] - Earnings per share rose to 0.21 yuan, a 16.38% increase year-on-year [1] Key Financial Metrics - Cash flow per share decreased to 0.27 yuan, down 23.34% year-on-year [1] - The company’s return on invested capital (ROIC) was 8.63% last year, indicating average capital returns [3] - The company has experienced cyclical performance, with a historical median ROIC of 9.74% [4] Business Model and Strategy - The company relies on R&D and marketing to drive performance, with a focus on developing high-quality, environmentally friendly products [6] - The company is positioned as a "solution partner" rather than just a material supplier, enhancing customer collaboration [7] - In the building ceramics sector, the company is implementing a dual-track strategy of "ceramics + home furnishing" to optimize brand marketing and regional channel development [8] Product Development - The company launched over 60 new products across nine series during the spring product launch event [8] - The focus is on continuous product innovation and technology upgrades to meet changing consumer demands [8] Industry Positioning - The company is capitalizing on the rapid growth of the new energy vehicle market and the rise of domestic brands, aiming to expand its market presence [7] - The company has established a comprehensive supply chain that integrates design, construction, and material supply, enhancing operational efficiency [10][11]

Investment Rating - The investment rating for Tianan New Materials (603725) is "Buy" (maintained) [1] Core Views - The company is actively expanding its robotics electronic skin business, leveraging its supply chain advantages in reusable materials to extend its growth curve [6] - The building ceramics segment is steadily increasing its market share, with gross margins rising against the trend, benefiting from a light-asset outsourcing model and improved internal management [6] - The polymer business is steadily growing, showcasing comprehensive advantages, particularly in the context of increasing penetration of new energy vehicles [6] - The company is advancing its pan-home business development through acquisitions, enhancing its industry ecosystem [6] - Long-term strategic planning focuses on steady transformation, optimizing product innovation capabilities, and improving supply chain efficiency [6] - The acquisition of Eagle Brand Ceramics is expected to drive profit margin improvements and open up growth opportunities in the assembly-style interior decoration market [6] Financial Data and Profit Forecast - Total revenue is projected to be 3,309 million in 2025, with a year-on-year growth rate of 6.7% [5] - Net profit attributable to the parent company is expected to reach 122 million in 2025, reflecting a year-on-year increase of 21.0% [5] - Earnings per share are forecasted to be 0.40 yuan per share in 2025, with a projected PE ratio of 21 [5] - The gross margin is expected to remain stable at around 22.6% in 2025 [5]