Core Viewpoint - The company is actively advancing its capacity construction and strategic asset restructuring, focusing on the development of new materials and cost control advantages in production. Group 1: Capacity Construction and Release - The company is fully promoting the construction of 200,000 tons of integrated anode materials and a 580,000 kW source-network-load-storage project. The first phase of 50,000 tons of front-end production line has been completed and is gradually entering the debugging production stage. Collaborating parties have formed a total of 68,000 tons of front-end and 68,000 tons of graphitization capacity. The construction of the first phase of 283,000 kW wind-solar power and transmission lines, as well as the second phase of 50,000 tons of front-end capacity and 82,000 tons of graphitization capacity, has also started, with completion expected by the end of this year, resulting in a total of 140,000 tons of anode capacity [2]. Group 2: Cost Control Advantages - The new production capacity has significant cost control advantages. The Inner Mongolia region has low electricity costs, abundant wind and solar resources, and a low-temperature environment, which creates a resource synergy effect for anode material production. The 580,000 kW source-network-load-storage green electricity supply is expected to increase the green electricity coverage ratio to over 50%, significantly reducing electricity costs. Additionally, the new production capacity is designed to be highly intensive, intelligent, and scientific, effectively improving management efficiency and output levels [2]. Group 3: Major Asset Restructuring Progress - Based on future strategic planning, the company initiated a major asset restructuring in the first half of the year, intending to issue shares to acquire the chemical new materials business assets of Xuyang Group and raise matching funds. Upon completion of the transaction, the company will add a nylon new materials business, forming a dual main business structure of "anode materials + nylon new materials." The board of directors approved the relevant proposals on May 16, 2025, and due diligence, auditing, and evaluation work are still in progress. The board will convene again to review the formal plan and submit it for shareholder meeting approval [2]. Group 4: New Materials Product R&D - The company has made significant achievements in new materials research and development. Relying on its own technology and the raw material advantages of Xuyang Group, the asphalt-based silicon-carbon anode product has completed pilot testing and sample delivery. This product has higher capacity, first-time efficiency, and compressive strength compared to resin-based and biomass-based silicon-carbon anodes. In terms of hard carbon anodes, the company has completed the process development of biomass hard carbon and is also conducting research on coal-based and asphalt-based products [2].

Investment Rating - The investment rating for the company is maintained as "Buy" [1] Core Views - The company reported a Q2 revenue of 1.76 billion RMB, with a year-on-year increase of 42.8% and a quarter-on-quarter increase of 8.1%. The net profit attributable to the parent company for Q2 was 240 million RMB, reflecting a year-on-year increase of 15.4% and a quarter-on-quarter increase of 0.3% [5] - The revenue growth is primarily driven by the production launch of the 100,000-ton negative electrode integration project in North Su [5] - The company is expected to benefit from the increasing penetration of fast charging and the expansion of energy storage [5] - The company has plans to build a 50,000-ton lithium battery negative material project in Malaysia and a 200,000-ton integrated project in Shanxi, with production expected to start in Q3 2025 [8] Financial Projections - Projected revenue for 2024 is 5.23 billion RMB, with a growth rate of 19.1%. By 2025, revenue is expected to reach 7.47 billion RMB, reflecting a growth rate of 42.9% [4] - The net profit attributable to the parent company is projected to be 838.33 million RMB in 2024, increasing to 1.016 billion RMB in 2025, representing a growth rate of 21.15% [4] - The earnings per share (EPS) is expected to be 3.21 RMB in 2024 and 3.89 RMB in 2025 [4] Valuation - The target price for the company is set at 73.91 RMB, based on a projected PE ratio of 19 times for 2025 [9] - The company’s market capitalization is approximately 14.21 billion RMB, with a closing price of 54.48 RMB as of August 19 [1]