Investment Rating - The report gives a "Buy" rating for Nobon Co., Ltd. (603238) with a target price of 27.00 CNY over the next six months, compared to the current price of 19.86 CNY [1]. Core Views - Nobon Co., Ltd. is expected to benefit from continuous optimization of customer and product structure, with promising growth for its proprietary brands [1]. - The company has shown strong revenue growth, with a 33.3% year-on-year increase in revenue for the first half of 2025, driven by increased orders from downstream customers [7][32]. - The report highlights the company's robust performance in both domestic and international markets, despite facing temporary challenges due to tariffs [53][44]. Summary by Sections Financial Performance - In the first half of 2025, Nobon achieved revenue of 1.34 billion CNY, a 33.3% increase year-on-year, and a net profit attributable to the parent company of 65.3 million CNY, up 48.3% year-on-year [7][32]. - The company's gross margin for the first half of 2025 was 15.7%, an increase of 0.9 percentage points year-on-year, with net profit margin at 4.9%, up 0.5 percentage points [35][32]. Business Segments - The product segments include non-woven materials (rolls) and non-woven products, with the product segment showing a revenue increase of 39.4% year-on-year in the first half of 2025 [42][32]. - The company has established stable partnerships with well-known domestic supermarkets and is expanding its overseas market presence, particularly in countries along the Belt and Road Initiative [44][53]. Market Outlook - The report anticipates that Nobon will continue to grow its proprietary brand, "Xiaozhijia," which has seen a revenue increase of 70.0% year-on-year in the first half of 2025 [54][32]. - The global market for wet wipes is projected to grow, with a compound annual growth rate of 4.6% from 2025 to 2029, benefiting companies like Nobon that are positioned in this sector [27][32]. Valuation and Forecast - The earnings per share (EPS) for Nobon is projected to be 0.74 CNY in 2025, 0.90 CNY in 2026, and 1.08 CNY in 2027, with corresponding price-to-earnings (PE) ratios of 27, 22, and 18 respectively [2][62]. - The report assigns a 30x valuation for 2026, leading to a target price of 27.0 CNY, reflecting the company's strong growth potential in the non-woven materials sector [62][64].

Core Insights - The company reported strong financial results for the first half of 2025, with revenue and profit exceeding expectations [1] - The company is a leader in high-end differentiated water-jet non-woven materials, benefiting from a favorable market environment [3] Financial Performance - In H1 2025, revenue reached 1.34 billion yuan, a year-on-year increase of 33.4%, while net profit attributable to shareholders was 65 million yuan, up 48.3% [1] - Q2 2025 saw a single-quarter revenue of 730 million yuan, a year-on-year increase of 28.9%, with net profit attributable to shareholders at 35 million yuan, up 48.1% [1] - Operating cash flow for H1 2025 was 260 million yuan, a significant increase of 126% year-on-year, with cash reserves totaling 745 million yuan [1] Business Segmentation - The roll material segment contributed significantly to profit growth, with H1 2025 revenue of 390 million yuan, up 18.9%, and a gross margin of 25.8% [2] - The product segment primarily drove revenue growth, achieving H1 2025 revenue of 930 million yuan, a 39.4% increase, with a gross margin of 11.7% [2] - The company has shifted its marketing strategy to diversify its product offerings and expand into new markets, mitigating the impact of U.S. tariffs [2] Future Outlook - The company maintains a "buy" rating, with profit forecasts for 2025-2027 at 130 million, 160 million, and 190 million yuan, respectively, indicating a CAGR of 26% [3] - Expectations are high for breakthroughs in the smokeless tobacco and proprietary brand businesses [3]

Group 1 - The core viewpoint of the report is that Nobon Co., Ltd. is positioned as a leading differentiated supplier of water-jet non-woven fabrics, with a comprehensive growth strategy across materials, products, and branding, leading to a "buy" rating [1][5]. - Nobon has been focusing on the water-jet non-woven fabric sector since its establishment in 2002, holding over a hundred domestic and international patents, and offering a wide range of products across various fields including beauty materials, household cleaning, industrial materials, and medical materials [2][3]. - The company is projected to achieve a revenue of 2.24 billion yuan in 2024, with a CAGR of 15.3% from 2019 to 2024, indicating steady revenue growth [2]. Group 2 - The non-woven fabric industry in China is expected to see a supply-demand rebalancing in 2024, driven by capacity reduction and increased consumer hygiene awareness, which will lead to a recovery in profitability [3]. - The production of water-jet non-woven fabrics in China increased from 640,000 tons in 2015 to 1.51 million tons in 2023, with its share of the total non-woven fabric market rising from 13.2% to 18.5% during the same period [3]. - Nobon is leveraging its advanced production processes and R&D capabilities to maintain its leading position in the market, benefiting from strong demand in emerging consumer segments such as cotton soft towels and oral tobacco [3]. Group 3 - Nobon is focusing on three key areas for growth: 1) Roll materials, where technological upgrades are enhancing competitiveness and market share [4]. 2) Finished products, with a strong production capacity and quality control, particularly through its subsidiary, Hangzhou Guoguang [4]. 3) Own brand development, with the launch of the "Xiaozhijia" brand aimed at creating a second growth curve [4]. - The company expects net profits of 130 million yuan, 160 million yuan, and 190 million yuan for 2025, 2026, and 2027 respectively, with corresponding P/E ratios of 28X, 23X, and 20X [5].