Core Viewpoint - The performance of domestic lithium battery electrolyte companies showed a divergent trend in the first half of the year, with two companies reporting profit growth while three experienced declines, including one that reported a loss [1]. Company Performance Summary - **New Zobang**: Revenue of 4.248 billion yuan, up 18.58% year-on-year; net profit of 484 million yuan, up 16.36% [2]. - **Tianqi Materials**: Revenue of 7.029 billion yuan, up 28.97% year-on-year; net profit of 268 million yuan, up 12.79% [2]. - **Ruitai New Materials**: Revenue of 975 million yuan, down 7.36% year-on-year; net profit of 82 million yuan, down 24.19% [2]. - **Duofluor**: Revenue of 4.328 billion yuan, down 6.65% year-on-year; net profit of 51 million yuan, down 16.55% [2]. - **Shida Shenghua**: Revenue of 3.011 billion yuan, up 14.87% year-on-year; net loss of 56 million yuan, a decline of 248.03% [2]. Market Dynamics - The lithium battery electrolyte industry is facing overcapacity and intense competition, leading to a significant decline in product prices and overall profitability [9][10]. - The average price of lithium iron phosphate electrolyte fluctuated between 17,600 to 23,600 yuan per ton in the first half of the year, marking a low point compared to the past three years [11]. - The market concentration of the domestic electrolyte market is increasing, with Tianqi Materials holding over 30% market share, followed by BYD and New Zobang, together accounting for 62.4% of the market [12]. Strategic Responses - Major electrolyte companies are seeking new growth points through overseas expansion and technological innovation [14]. - Tianqi Materials plans to publicly issue H-shares and apply for a listing on the Hong Kong Stock Exchange to support overseas projects [15]. - Companies are investing in the development of solid-state electrolytes and sodium-ion battery materials, with New Zobang achieving stable delivery of solid-state electrolytes and sodium-ion battery electrolytes [16].

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected investment return that will outperform the market benchmark by more than 15% over the next 6-12 months [6][15]. Core Insights - The company reported a revenue of 7.03 billion yuan for the first half of 2025, a year-on-year increase of 28.97%, and a net profit attributable to shareholders of 268 million yuan, up 12.79% year-on-year [1]. - The steady growth in electrolyte shipments and improved profitability in the first half of 2025 are attributed to enhanced capacity utilization of core raw materials, which helped maintain unit profitability despite a slight decline in market prices [2]. - The company is actively pursuing a global industrial layout, including plans for a Hong Kong IPO and partnerships for large-scale production in North America and Morocco [3][4]. Financial Performance Summary - For the first half of 2025, the company's revenue from lithium-ion battery materials reached 6.30 billion yuan, a 33.2% increase year-on-year, with a gross margin of 17.05%, down 0.06 percentage points [2]. - The company's revenue from daily chemical materials and specialty chemicals was 614 million yuan, reflecting a 12.93% year-on-year growth, with a gross margin of 30.27%, down 0.51 percentage points [2]. - The report forecasts a decline in net profit for 2025 to 795 million yuan, a 36.0% downward adjustment, with further projections for 2026 and 2027 [4][5]. Production and Capacity Expansion - The company is advancing its production capabilities in solid-state battery materials and sodium-ion battery materials, with plans to complete pilot production lines by 2026 [4]. - A joint venture with Honeywell is being established to accelerate the production of electrolytes and lithium hexafluorophosphate in North America [3]. Valuation Metrics - The report provides a summary of key financial metrics, including projected revenues and net profits for 2025 to 2027, with a notable increase in revenue expected in subsequent years [5][11]. - The company's price-to-earnings (P/E) ratio is projected to be 49 for 2025, decreasing to 20 by 2027, indicating a potential improvement in valuation as earnings recover [5][14].