Summary of Jinfa Technology Conference Call Company Overview - **Company**: Jinfa Technology - **Industry**: Modified Plastics Key Points Sales and Profit Projections - Jinfa Technology expects modified plastic sales to reach **3 million tons** in 2025, with a net profit of approximately **3 billion yuan**, representing a year-on-year growth of nearly **20%** driven by demand from the **new energy vehicles** and **home appliance exports** sectors, as well as market share gains [2][3][5] - For 2026, modified plastic sales are projected to maintain a growth rate of **15%-20%** [2][3] Product Sales Structure - The sales structure of modified plastic products remains stable, with the automotive sector accounting for about **45%**, home appliances for **16%-17%**, and electronics for **15%**, collectively exceeding **70%** [2][6] - Emerging sectors like new energy, toys, and packaging are growing rapidly but still represent a small overall share [2][6] Competitive Advantages - Jinfa Technology is the largest modified plastic enterprise in China, with competitive advantages in **R&D investment** (3%-4% of revenue), talent acquisition, and comprehensive solutions [2][8][9] - The company has established **7 overseas bases** to enhance global operational capabilities [2][9] Financial Performance and Challenges - In the first three quarters of 2025, Jinfa Technology's overall performance met expectations, with modified plastic sales approaching **2.1 million tons** [3] - The petrochemical business is expected to incur losses of **1.4-1.5 billion yuan** in 2025, with potential improvements in 2026 if market conditions stabilize [4][15] - The company anticipates a **6-7 million yuan** impact on profits due to the stock incentive plan in 2025 [12] Future Growth and Capacity Expansion - In 2026, Jinfa Technology plans to introduce new production capacities for high-temperature nylon, LCP, and specialty nylon, expecting sales growth of over **30%**, contributing an additional **1 billion yuan** to net profit [2][13] - The company aims to double total sales from **3 million tons** to **6 million tons** over the next five years, with overseas sales reaching **1.5 to 2 million tons** [4][21] Special Materials and Innovations - The special materials segment, particularly LCP, has seen growth exceeding **50%** in the first three quarters of 2025, driven by demand from AI and high-speed connectors [11] - Jinfa Technology is developing materials for humanoid robots, focusing on high-temperature nylon and PEEK, with potential applications in joints and bearings [17][18] International Expansion - Jinfa Technology is expanding into Poland and Mexico, with production expected to start in the second quarter of 2026, targeting a total capacity of **300,000 tons** by 2030 [19][20] - The company emphasizes its competitive edge in the international market through a diverse product range and strong global supply chain capabilities [20] Collaboration and Capital Expenditure - Jinfa Technology collaborates with Siemens on material development and technology exchange, enhancing their partnership [22] - The company plans to maintain cautious capital expenditure, focusing on promising areas like new materials and biodegradable materials, with annual spending expected to remain around **3 billion yuan** [23]

Report Industry Investment Rating - Not provided in the content Core View of the Report - The polyolefin market is expected to experience weak and volatile trends in the near future [3] Summary by Relevant Catalogs Plastic and PP开工率 - Plastic开工率 dropped 2.5 percentage points to around 87%, at a neutral level, due to new maintenance devices like Zhongtianhechuang LDPE 1 line [15] - PP企业开工率 fell 0.5 percentage points to around 83%, at a neutral - low level, with new maintenance devices such as CNOOC Daxie old line [15] Plastic and PP下游开工率 - As of the week of November 14, PE下游开工率 decreased 0.36 percentage points to 44.49% week - on - week, remaining at a low level in recent years. Although the agricultural film is in the peak season with stable orders and raw material inventory, packaging film orders are slightly decreasing [21] - As of the week of November 14, PP下游开工率 increased 0.14 percentage points to 53.28% week - on - week, at a low level in the same period over the years. However, the plastic weaving开工率 of the main downstream of drawing decreased 0.12 percentage points to 44.24% week - on - week, and plastic weaving orders decreased slightly compared with last year [21] Plastic基差 - Spot prices are stable, futures prices are rising, and the 01 contract basis has dropped to 247 yuan/ton, at a neutral level [26] Plastic and PP库存 - On Friday, the early petrochemical inventory decreased 25,000 tons to 640,000 tons week - on - week, 15,000 tons lower than the same period last year. Petrochemical inventory is currently at a neutral level in recent years [30]

Core Viewpoint - The domestic PP filament market has shown a downward trend in prices since 2025, with the price gap between South China, East China, and North China narrowing from January to October, but recently widening again. Supply pressure in South China is expected to ease due to concentrated maintenance of PP filament facilities, leading to an anticipated widening of the price gap between South China and other regions [1][5]. Price Trends - Since 2025, prices across major regions have exhibited a consistent downward trend, primarily due to declining crude oil prices and increased supply from new production facilities. The operating rates remain high, contributing to supply-side pressure, while insufficient new orders from downstream factories have limited demand, further suppressing PP prices [1][3]. Regional Price Differences - The price gap between South China and North China reached a maximum of 270 CNY/ton, while the gap between South China and East China peaked at 145 CNY/ton. The minimum gaps recorded were -130 CNY/ton for both South China-North China and South China-East China, and -60 CNY/ton for East China-North China. The price differences among the three regions narrowed from January to October but have recently expanded [3][5]. Recent Market Dynamics - The recent price decline in North China has been more pronounced compared to South and East China, leading to increased price disparities. Despite new installations in South and East China, maintenance of several facilities has countered the pressure from new production, resulting in relatively stable prices in these regions. In contrast, North China continues to face significant supply pressure due to its large production capacity [5][7]. Future Outlook - In the short term, no new production facilities are expected to come online nationwide. In South China, several production lines are currently offline, and maintenance of existing facilities is scheduled, which will reduce supply pressure and strengthen price support. Conversely, the East China region has seen fewer maintenance activities, while North China faces strong supply impacts, limiting support from the supply side. It is anticipated that the price gap between South China and other regions will continue to widen, with increased allocation of resources to South China [7][8].

Report Summary 1) Report Industry Investment Rating No investment rating information is provided in the report. 2) Core View of the Report Cost increases and the Double Eleven peak season have pushed up PP prices, but the overall supply - demand pattern remains unchanged, so PP is expected to oscillate weakly [1]. 3) Summary by Relevant Catalogs Market Analysis - PP downstream开工率 increased 0.14 percentage points to 53.28% week - on - week, at a relatively low level compared to the same period in previous years. However, the开工 rate of the plastic weaving industry, the main downstream of the drawing grade, decreased 0.12 percentage points to 44.24%, and orders decreased slightly compared to the previous period and were slightly lower than the same period last year [1]. - On November 14, some maintenance devices such as the third line of Zhenhai Refining and Chemical restarted, and the PP enterprise开工率 rose to around 83%, at a moderately low level. The production ratio of the standard drawing grade dropped to around 23% [1][4]. - Petrochemical inventories are being depleted normally and are currently at a neutral level compared to the same period in recent years. The cost of crude oil has a limited increase due to the expected end of the US government shutdown and the adjustment of the global oil supply from a shortage of 400,000 barrels per day to a surplus of 500,000 barrels per day in Q3 2025 by OPEC [1]. - The new production capacity of 400,000 tons per year of PetroChina Guangxi Petrochemical was put into operation in mid - October, and there has been a slight increase in maintenance devices recently. Although the downstream is in the peak season, the follow - up of orders such as plastic weaving is limited, and there is a lack of large - scale centralized procurement in the market, so the boost to the market is limited [1]. - There is no actual anti - involution policy implemented in the PP industry. Anti - involution and the elimination of old devices to solve the problem of over - capacity in the petrochemical industry are still macro - policies that will affect future market trends [1]. Futures and Spot Market - Futures: The PP2601 contract oscillated with a reduction in positions. The lowest price was 6,468 yuan/ton, the highest was 6,518 yuan/ton, and it finally closed at 6,474 yuan/ton, below the 20 - day moving average, with a gain of 0.40%. The open interest decreased by 6,371 lots to 622,052 lots [2]. - Spot: Most spot prices of PP in various regions were stable. The drawing grade was reported at 6,240 - 6,580 yuan/ton [3]. Fundamental Tracking - Supply: On November 14, some maintenance devices such as the third line of Zhenhai Refining and Chemical restarted, and the PP enterprise开工率 rose to around 83%, at a moderately low level [4]. - Demand: As of the week of November 14, the PP downstream开工率 increased 0.14 percentage points to 53.28% week - on - week, at a relatively low level compared to the same period in previous years. The开工 rate of the plastic weaving industry, the main downstream of the drawing grade, decreased 0.12 percentage points to 44.24%, and orders decreased slightly compared to the previous period and were slightly lower than the same period last year [4]. - Inventory: Petrochemical early inventory on Friday decreased by 25,000 tons to 640,000 tons week - on - week, 15,000 tons lower than the same period last year. Petrochemical inventories are being depleted normally and are currently at a neutral level compared to the same period in recent years [4]. - Raw Materials: The Brent crude oil 01 contract rose to $64 per barrel, and the CFR propylene price in China increased by $5 per ton to $725 per ton week - on - week [4].

Report Industry Investment Rating - Not provided in the content Core Viewpoints - The supply-demand imbalance in the PE market persists, with high supply, limited demand, and weak cost support, resulting in significant short - term price pressure [3] - The PP market also has supply - demand contradictions, with weak cost support. It is expected to continue its weak and volatile pattern in the short term, but the downward driving force is limited [3] Summary by Relevant Catalogs Market News and Important Data - **Price and Basis**: The closing price of the L main contract is 6760 yuan/ton (-42), and that of the PP main contract is 6429 yuan/ton (-51). LL and PP spot prices in different regions have different changes, and their basis also shows corresponding fluctuations [2] - **Upstream Supply**: The PE operating rate is 82.6% (+1.7%), and the PP operating rate is 77.8% (+0.7%) [2] - **Production Profit**: The PE oil - based production profit is 183.3 yuan/ton (-100.9), the PP oil - based production profit is - 406.7 yuan/ton (-100.9), and the PDH - based PP production profit is - 107.7 yuan/ton (-16.9) [2] - **Imports and Exports**: The LL import profit is - 75.0 yuan/ton (-67.4), the PP import profit is - 168.0 yuan/ton (+131.1), and the PP export profit is - 5.4 US dollars/ton (-0.3) [2] - **Downstream Demand**: The PE downstream agricultural film operating rate is 50.0% (+0.4%), the PE downstream packaging film operating rate is 50.8% (-0.5%), the PP downstream plastic weaving operating rate is 44.5% (+0.3%), and the PP downstream BOPP film operating rate is 62.5% (+0.9%) [2] Market Analysis - **PE**: The supply - strong and demand - weak pattern continues. The decline in coking coal and coke prices drags down the cost, causing the polyethylene futures price to continue to bottom out. The supply is expected to increase, the demand support is limited, and both the oil - based and coal - based cost supports are weak [3] - **PP**: There are still supply - demand contradictions. The cost support weakens in the short term, the demand is weak, and the inventory accumulates in the upstream and middle reaches. The upward trend is suppressed by supply and demand, and it will continue the weak and volatile pattern in the short term, but the downward driving force is limited [3] Strategy - **Unilateral**: Adopt a wait - and - see strategy; the market may maintain a bottom - oscillating pattern in the short term [4] - **Inter - period**: Conduct reverse arbitrage on L01 - 05 and PP01 - 05 when the price is high [4] - **Inter - variety**: No strategy provided [4]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Polypropylene is in a phase of downward oscillation, and the price center is expected to decline in the later stage. The PP market is facing supply pressure due to new capacity coming online during the production capacity expansion period and high existing production loads. Although demand has entered the peak season, it fails to meet expectations and is unable to absorb the high output. As a result, the price of polypropylene may continue to move downward [7]. - The price of polypropylene continued to fall this week, with the PP01 contract dropping below 6,500 yuan/ton. The domestic commodity market sentiment has weakened again, putting pressure on commodity prices. The fundamentals of polyolefins have not changed significantly, with supply at a high level and demand in the peak season but lacking sufficient support [9]. 3. Summary According to the Directory 3.1 Basis and Spread - **Basis**: The spot price of plastic standard products has also declined significantly, with the basis strengthening slightly. The East China basis strengthened by 20 to around -100 yuan/ton, the North China basis strengthened by 10 to around -170 yuan/ton, and the South China basis strengthened by 30 to around -100 yuan/ton. The non - standard basis of plastics has a stronger trend than the standard basis [18][19]. - **Regional and Non - standard Spread**: The North China - East China regional spread has fallen to a low level, and the South China - East China regional spread has oscillated. Among the non - standard spreads, the injection molding - drawing spread and the low - melt copolymer - drawing spread have both strengthened, indicating that non - standard products are relatively firm [33][34]. - **Disk Spread**: The 1 - 5 monthly spread has further declined to around -110, at a low level over the years. The L - PP01 spread has remained above 300, and the PP - 701 spread is at a high level, suggesting greater supply pressure for PP. The methanol market pattern is weak, with high imports leading to a record - high port inventory, and the methanol price has continued to decline [52]. 3.2 Domestic Production - end Profits and Supply - **Production Profits**: This week, the oil price has slightly oscillated downward to around $63.5 per barrel (Brent). The oil - based production end profit is at a relatively good level in recent years. In the medium to long term, the supply in North Asia from the Middle East and the United States is expected to increase, putting pressure on the PDH - based PP price, but the PDH - based profit has improved month - on - month. The power coal price has continued to rise, the CTO profit has deteriorated but remains at a high level, and the inland MTO profit has deteriorated under pressure [68]. - **Domestic Production Volume and Load**: In 2025, as of October, the new domestic PP production capacity has totaled 4.155 million tons, with a production capacity growth rate of 9.31%. The planned production capacity for 2025 is 4.905 million tons, and the estimated annual production capacity growth rate is 11%. This week, the PP production volume was 796,500 tons (+7,300 tons), the operating rate was 77.78% (+0.72%), and the supply loss volume was 228,400 tons [99][100][113]. - **Production Scheduling Ratio**: An increase in the drawing production scheduling ratio may indicate that the short - term standard product is stronger than the non - standard product, but the medium - term supply pressure may increase [124]. 3.3 US Dollar Price and Import - Export Profits - **US Dollar Price and Spread**: The prices in Northwest Europe and the Americas have fallen from high levels. The Asian price has continued to be weak. The spread between CFR China and the overseas market has rebounded [135]. - **Import - Export Profits**: Currently, overseas demand is weak, and inquiries are limited. With the increase in shipping costs, enterprises have offered discounts on exports to promote transactions. In terms of imports, although China's price is relatively low globally, the weak external demand has led to a decline in the purchasing capacity of overseas buyers, resulting in an increase in goods flowing to China [152]. 3.4 Downstream Profits and Operating Rates - **Downstream Operating Rates**: This week, the overall downstream operating rate was 53.14%, a month - on - month increase of 0.52%. The operating rate of plastic weaving increased by 0.26%, the BOPP operating rate increased by 0.88%, and the operating rate of PP pipes increased by 0.5%. In the future, the demand for terminal products will be slightly supported by the e - commerce festival and the cold weather, but the peak season is coming to an end [155]. 3.5 Inventory - Production enterprise inventories have increased by 48,000 tons to 599,900 tons, with Sinopec and PetroChina inventories increasing by 163,000 tons. Traders' inventories have increased by 15,000 tons, and port inventories have decreased by 700 tons [216].

Core Viewpoint - The company, Double Star New Materials, stated that its current operational situation is normal and it will continue to enhance its management practices to improve performance and intrinsic value [1] Group 1 - The company responded to investor inquiries on November 7, indicating that it is considering its actual development situation and overall strategic planning [1] - The company emphasized its commitment to ongoing operational management efforts [1] - The focus is on enhancing both performance and intrinsic value [1]

Report Summary 1) Report Industry Investment Rating No investment rating is provided in the report. 2) Core View of the Report The report predicts that plastics will likely experience weak and volatile trends in the near term. The increase in plastic production due to the restart of maintenance - related devices and new capacity, combined with the lackluster downstream demand and inventory at a neutral level, as well as the fluctuating cost of crude oil, contribute to this outlook. The absence of practical anti - involution policies also affects the market trend [1]. 3) Summary According to the Catalog **行情分析** - On November 5, the restart of maintenance devices such as Zhenhai Refining & Chemical's HDPE 3 - line increased the plastic operating rate to about 89.5%, which is at a neutral level. The downstream operating rate of PE decreased by 0.38 percentage points to 45.37%. Although the agricultural film is in the peak season, the overall downstream operating rate of PE is still at a relatively low level compared to the same period in previous years. The petrochemical inventory is currently at a neutral level compared to the same period in previous years. The crude oil price fluctuates slightly, and new plastic production capacity has been added. The downstream procurement willingness is insufficient, and there are no practical anti - involution policies. [1] **期现行情** - **Futures**: The plastic 2601 contract showed an increasing - position and volatile operation, closing at 6814 yuan/ton with a decline of 0.97%. The trading volume increased by 20,008 lots to 553,147 lots [2]. - **Spot**: Most PE spot markets declined, with price changes ranging from - 100 to + 0 yuan/ton. LLDPE was reported at 6790 - 7370 yuan/ton, LDPE at 8970 - 9780 yuan/ton, and HDPE at 7060 - 8090 yuan/ton [3]. **基本面跟踪** - **Supply**: On November 5, the restart of maintenance devices increased the plastic operating rate to about 89.5% [4]. - **Demand**: As of the week ending October 31, the downstream operating rate of PE decreased by 0.38 percentage points to 45.37%. The agricultural film is in the peak season, but the overall downstream operating rate of PE is at a relatively low level compared to the same period in previous years [4]. - **Inventory**: On Wednesday, the petrochemical early - morning inventory decreased by 25,000 tons to 710,000 tons, 30,000 tons higher than the same period last year. Currently, the petrochemical inventory is at a neutral level compared to the same period in previous years [4]. - **Raw Material**: Brent crude oil's 01 contract fluctuated around $65/barrel. The price of Northeast Asian ethylene remained unchanged at $730/ton, and that of Southeast Asian ethylene remained unchanged at $740/ton [4].

Report Industry Investment Rating - No specific industry investment rating is provided in the report. Core Viewpoints - PE is under pressure due to prominent supply - demand contradictions. High supply, limited demand from sectors like agricultural films, and weak cost - end support lead to continued weak and volatile trends [2]. - PP also faces supply - demand contradictions. Supply is in excess, demand support is limited, and cost - end support is weak. It will continue the weak and volatile pattern in the short term [2]. Summary by Directory 1. Market News and Important Data - **Price and Basis**: L主力合约收盘价为6879元/吨（-9）, PP主力合约收盘价为6560元/吨（-16）. LL华北现货为6870元/吨（-20）, LL华东现货为6950元/吨（-50）, PP华东现货为6530元/吨（-50）. LL华北基差为 - 9元/吨（-11）, LL华东基差为71元/吨（-41）, PP华东基差为 - 30元/吨（-34） [1]. - **Upstream Supply**: PE开工率为80.9%（-0.6%）, PP开工率为77.1%（+1.1%） [1]. - **Production Profit**: PE油制生产利润为272.7元/吨（-10.7）, PP油制生产利润为 - 387.3元/吨（-10.7）, PDH制PP生产利润为 - 109.5元/吨（+42.6） [1]. - **Imports and Exports**: LL进口利润为 - 7.0元/吨（-25.8）, PP进口利润为 - 255.7元/吨（+37.1）, PP出口利润为 - 15.8美元/吨（+0.7） [1]. - **Downstream Demand**: PE下游农膜开工率为49.5%（+2.4%）, PE下游包装膜开工率为51.3%（-1.3%）, PP下游塑编开工率为44.2%（-0.2%）, PP下游BOPP膜开工率为61.6%（+0.2%） [1]. 2. Market Analysis - **PE**: Supply - side pressure is high due to reduced maintenance losses of domestic production facilities and the release of new production capacities. Demand growth may slow down, and cost - end support is expected to weaken. PE will continue weak and volatile [2]. - **PP**: Supply - demand contradictions exist. Supply is in excess, demand support is limited, and cost - end support is weak. It will continue the weak and volatile pattern in the short term [2]. 3. Strategy - **Single - side**: LLDPE is neutral; PP is recommended to be cautiously shorted at high prices [3]. - **Inter - term**: L01 - 05 is recommended to be shorted at high prices; PP01 - 05 is recommended to be shorted at high prices [3]. - **Inter - variety**: No strategy is provided [3].

Core Viewpoint - The polypropylene (PP) prices have declined unexpectedly after the traditional peak demand season, primarily due to weaker-than-expected demand and falling oil prices, leading the industry into a state of overall losses [1][5][11] Demand and Supply Analysis - The traditional peak demand season, known as "Golden September and Silver October," did not exhibit significant characteristics this year, with the global economic downturn impacting PP's essential demand [1][9] - In September, domestic plastic product output was 7.303 million tons, a year-on-year decrease of 2.54%, marking two consecutive months of decline [1] - BOPP demand has shown limited improvement, with downstream sectors such as e-commerce, food packaging, and clothing packaging underperforming expectations, resulting in a 15% year-on-year decrease in orders for injection molding enterprises [3] - The PP industry is experiencing severe oversupply, with many companies, particularly PDH enterprises, reducing production or shutting down due to losses, which may help alleviate inventory pressure [9][11] Price and Profitability Trends - Oil prices have significantly dropped, with WTI crude oil falling from $78 per barrel to $55 per barrel, a nearly 30% decline, which has negatively impacted chemical products, including PP [5] - As of early November, the losses for various PP production methods are as follows: oil-based PP at 550 yuan/ton, coal-based PP at 300 yuan/ton, methanol-based PP at 1000 yuan/ton, propylene-based PP at 250 yuan/ton, and PDH-based PP at 800 yuan/ton [5] - The overall profitability of PP has been compressed, with the industry entering a comprehensive loss state [5][11] Production and Operational Insights - The PP maintenance season primarily occurs from April to July, with a notable increase in operating rates post-August, reaching over 85%. However, unplanned maintenance has led to a decline in operating rates below 85% in September and further down to 80% by the end of October, nearing historical lows [6][9] - The expansion of PP production capacity has mainly occurred in the first half of the year, resulting in limited market impact from new capacities in the second half, thus alleviating supply pressure [9][10] Trade Dynamics - In September, China's polypropylene imports reached 290,200 tons, a month-on-month increase of 17.49%, while cumulative imports from January to September totaled 2.4578 million tons, a year-on-year decrease of 9.01% [10] - Conversely, September's polypropylene exports were 237,600 tons, a month-on-month decrease of 13.88%, with cumulative exports from January to September amounting to 2.3411 million tons, a year-on-year increase of 28.27% [10] - The changing import-export dynamics have somewhat alleviated domestic supply-demand imbalances, with some months seeing higher export volumes than imports, indicating a potential shift from a net importer to a net exporter of PP [10]