Summary of Haiyou New Materials Conference Call Industry and Company Overview - **Company**: Haiyou New Materials - **Industry**: Automotive Materials and Photovoltaic Film Key Points and Arguments Expansion into Automotive Materials - Haiyou New Materials is expanding into the automotive materials sector with new products including PDCL C smart dimming film, XPO eco-friendly leather, and PVB glass encapsulation film [2][4] - The PDCL C smart dimming film is set to enter mass production, expected to significantly boost company performance [5] - The smart dimming film offers advantages such as rich colors, fast response times, and effective UV and IR blocking capabilities [2][9] Market Potential and Projections - The automotive dimming film is projected to penetrate 40% of vehicles priced over 200,000 RMB and 20% of those under 200,000 RMB by 2030, indicating a substantial market opportunity [2][10] - Market size estimates for 2025, 2026, and 2030 are 60 million RMB, 470 million RMB, and 20.4 billion RMB respectively [2][10] Competitive Position in Photovoltaic Film - Haiyou New Materials holds a market share of 10% to 15% in the photovoltaic film industry, ranking third [3] - The cost of photovoltaic encapsulation film is approximately 7.4% of the total cost of photovoltaic modules, but the company faces pressure from industry oversupply leading to declining prices and margins [11][12] Technological Innovations and Product Development - The company has made significant advancements in the PDCL C smart dimming film, which combines the strengths of previous technologies [8][9] - The company is also exploring applications in high-end construction markets and visual devices, indicating a diversification strategy [19][20] Financial Outlook and Strategic Adjustments - Despite weak demand in Q3 due to earlier stockpiling, the company anticipates improved performance in Q4 [15] - The transition to a light-asset operation model, focusing on providing equipment and services internationally, is expected to alleviate revenue pressures in the coming year [15] - The company aims for a net profit margin of 10% to 15% in the automotive sector, with revenue projections for 2025 ranging from tens of millions to hundreds of millions RMB [4][28] Future Growth and Market Trends - The company expects the smart dimming film to become a standard feature in vehicles, with increasing adoption driven by cost reductions and technological advancements [18][24] - The anticipated recovery in the photovoltaic film market is projected for late 2027 to 2028, contingent on upstream material recovery [12] Conclusion - Haiyou New Materials is positioned for growth in both the automotive and photovoltaic sectors, with a strong focus on innovation and market expansion. The company is optimistic about future profitability and market share increases, supported by strategic adjustments and technological advancements [29]

Core Viewpoint - *ST Green Kang is divesting its photovoltaic film business by selling 100% equity of three subsidiaries to Jiangxi Raoxin New Energy Materials Co., Ltd. for cash, aiming to protect shareholder interests and improve financial health [1][4]. Group 1: Company Background - *ST Green Kang, originally focused on veterinary drug development and sales, shifted to the photovoltaic film industry in 2022 due to persistent losses in its core business [2]. - The company acquired Green Kang Yushan for 95 million yuan, despite its book value being only 160,350 yuan, indicating a significant overvaluation at the time of purchase [2][4]. Group 2: Financial Performance - The company has faced substantial losses, reporting a net loss of 222 million yuan in 2023, which is expected to increase to 445 million yuan in 2024, totaling over 700 million yuan in losses within two and a half years [4][5]. - As of June 2023, *ST Green Kang's debt-to-asset ratio surged to 105.82%, indicating a state of insolvency [5]. Group 3: Industry Context - The photovoltaic film industry experienced a downturn from 2023 to 2024, with oversupply leading to declining prices for POE, EVA, and EPE films, adversely affecting *ST Green Kang's profitability [5][6]. - The company's subsidiaries reported negative gross margins in 2024, with Green Kang Yushan at -19.28%, Green Kang Haining at -35.96%, and Green Kang New Energy at 0.41% [5]. Group 4: Strategic Implications - By divesting the loss-making photovoltaic film business, *ST Green Kang aims to refocus on its core veterinary products, enhancing its profitability and sustainability [7]. - The exit from the photovoltaic sector reflects a broader trend of companies withdrawing from the industry amid significant adjustments, with several other firms also choosing to leave [7][8].

Core Viewpoint - The recent announcement by *ST Lvkang to "sell three wholly-owned subsidiaries for 0 yuan" has raised concerns from the Shenzhen Stock Exchange, highlighting the company's deepening operational crisis and strategic missteps [1][2]. Group 1: Asset Acquisition and Disposal - In January 2023, *ST Lvkang acquired Lvkang Yushan for 95 million yuan, viewing it as a key step into the photovoltaic film sector. However, less than two years later, this and two other subsidiaries were sold for 0 yuan to an affiliated party, Jiangxi Raoxin New Energy [2]. - The acquisition of Lvkang Yushan was based on a valuation of 95.7 million yuan, despite its book value being only 1.6035 million yuan, indicating a nearly 60-fold premium. The company claimed it had a technological advantage and stable orders as a core supplier for JinkoSolar [2]. - Following the acquisition, Lvkang Yushan reported continuous losses, with a projected loss of 203 million yuan in 2024, leading to a total book value of the three subsidiaries being negative 100 million yuan [2][3]. Group 2: Financial Performance and Strategic Failures - Originally focused on veterinary medicine, *ST Lvkang's performance declined, prompting a high-profile pivot to the photovoltaic film sector in 2023, including a 290 million yuan investment in a new production project [3]. - The company's net profit attributable to shareholders showed a downward trend with losses of 122 million yuan in 2022, 222 million yuan in 2023, and an expected 445 million yuan in 2024, totaling nearly 700 million yuan in losses [3]. - The rapid expansion in the photovoltaic sector led to oversupply, and the company failed to adapt, resulting in negative net assets and a warning of delisting risk [3]. Group 3: Related Party Transactions and Shareholder Impact - The 0 yuan transaction with Raoxin New Energy, controlled by the company's major shareholder, has been interpreted as an asset stripping maneuver to offload burdens and avoid delisting [4]. - Although the company claims that the transaction does not harm minority shareholders, the transfer of significant loss-making assets raises questions about whether it genuinely resolves underlying issues or merely conceals risks off-balance sheet [4]. Group 4: Future Challenges and Lessons - Even after shedding photovoltaic assets, *ST Lvkang faces ongoing challenges, including a shrinking core business, insufficient profitability, and tight cash flow [5]. - The company has warned of risks related to changes in its main business structure and potential underperformance in profitability following the transaction [5]. - The case of *ST Lvkang serves as a cautionary tale for companies considering cross-industry ventures, emphasizing the need for careful assessment of industry cycles and internal capabilities to avoid resource misallocation and financial crises [5].

Core Viewpoint - Green Kang Biochemical Co., Ltd. plans to sell 100% equity of three subsidiaries to Jiangxi Raoxin New Energy Materials Co., Ltd. for a transaction price of 0 yuan, which constitutes a related party transaction [1][2]. Group 1: Transaction Details - The transaction involves the sale of Green Kang (Yushan) Film Material Co., Ltd., Green Kang (Haining) Film Material Co., Ltd., and Green Kang New Energy (Shanghai) Import and Export Trade Co., Ltd. [1] - As of December 31, 2024, the combined book value of the three subsidiaries is -100.05 million yuan, with an assessed value of -20.84 million yuan, resulting in a value increase rate of 79.17% [1][2]. - The assessment methods used include the asset-based approach and income approach for Green Kang Yushan, while only the asset-based approach was used for Green Kang Haining and Green Kang New Energy [1][4]. Group 2: Financial Performance - Green Kang Yushan's revenue for 2024 is projected at 28.52 million yuan, a year-on-year increase of 82.77%, but it is expected to incur a net loss of 20.33 million yuan [2]. - Green Kang Haining is expected to generate revenue of 8.89 million yuan with a net loss of 15.07 million yuan, while Green Kang New Energy is projected to have revenue of 11.64 million yuan and a net loss of 0.35 million yuan [2]. - The assessment agency noted that the subsidiaries are facing intense competition in the photovoltaic film industry, leading to declining product prices and significant uncertainty regarding their future profitability [2]. Group 3: Valuation Adjustments - Revenue forecasts for Green Kang Yushan were adjusted downward due to ongoing challenges, with expected revenue from 2025 to 2029 revised from 17.43 million yuan to 81.99 million yuan [3]. - Following the adjustments, the assessed value for Green Kang Yushan decreased from -12 million yuan to -40 million yuan, and the overall assessed value for the three subsidiaries changed from -18.74 million yuan to -20.84 million yuan [3]. - Despite the valuation adjustments, the transaction price remains at 0 yuan as agreed upon by both parties [3]. Group 4: Compliance with Valuation Methods - The use of only the asset-based approach for Green Kang Haining and Green Kang New Energy was justified due to their loss-making and suspended operational status, making future income predictions challenging [4]. - The assessment agency confirmed that the approach complies with relevant regulations and industry practices, as there are precedents for using a single valuation method in similar transactions [4].

Core Viewpoint - Zhejiang Securities acts as an independent financial advisor for the major asset sale of Green Kang Biochemical Co., Ltd, responding to inquiries from the Shenzhen Stock Exchange regarding the transaction's details and implications [1]. Group 1: Transaction Overview - Green Kang Biochemical plans to sell 100% equity of three subsidiaries, including Green Kang (Yushan) Film Materials Co., Ltd, Green Kang (Haining) Film Materials Co., Ltd, and Green Kang New Energy (Shanghai) Import and Export Trade Co., Ltd, to Jiangxi Raoxin New Energy Materials Co., Ltd for a cash price of 0 yuan [1]. - As of December 31, 2024, the total book value of the three subsidiaries is -100.05 million yuan, with an assessed value of -18.74 million yuan, resulting in an appreciation rate of 81.27% [1]. Group 2: Financial Analysis - The subsidiaries are experiencing negative gross margins due to changes in supply and demand in the photovoltaic industry, leading to indications of long-term asset impairment [2]. - Revenue forecasts for Green Kang Yushan were adjusted from an original projection of 276.93 million yuan in 2025 to 819.99 million yuan due to declining product prices and insufficient financial support [2]. - The assessment method for Green Kang Haining and Green Kang New Energy was based solely on the asset-based approach due to their operational status, aligning with industry practices [2]. Group 3: Historical Context - In January 2023, Green Kang Biochemical acquired 100% equity of Green Kang Yushan amid a booming photovoltaic industry, establishing a dual business model of veterinary products and photovoltaic film products [3]. - Subsequent capital increases of 70 million yuan in June 2023 and 150 million yuan in December 2024 were aimed at supporting operational needs and improving financial conditions [3]. - The verification by Zhejiang Securities supports the rationality and compliance of the major asset sale, safeguarding the interests of the listed company and minority shareholders [3].

Core Viewpoint - A significant acquisition worth 488 million yuan is pushing a well-known private entrepreneur and his son in Changzhou closer to their dream of going public, as they aim to resolve a pressing "bet agreement" and avoid severe financial repercussions [1][7]. Group 1: Acquisition Context - The acquisition is seen as a necessary step to fulfill a "bet agreement" that requires the core company to go public, following a previous withdrawal of an IPO application due to complex agreements and financing commitments [1][7]. - The target company has faced severe financial difficulties, including failed expansion plans and significant profit declines, leading to consecutive years of losses projected for 2023 and 2024 [3][5]. Group 2: Financial Performance and Challenges - The target company's solar film business, once expected to rank among the top three in the industry, now suffers from negative gross margins and low capacity utilization, with several expansion projects stalled or delayed [5][6]. - The financial struggles are attributed to inventory accumulation, plummeting market prices, and underperforming production capacity, resulting in a gross margin drop from nearly double digits to 3.85% in 2022, and further into negative territory in subsequent years [11]. Group 3: Integration and Synergy Potential - The buyer possesses a well-performing peer company, which has shown rapid revenue and profit growth from 2019 to 2021, suggesting potential for operational synergies through integrated production lines and shared sales channels [6][7]. - However, achieving true synergy is complicated by differing product positioning, customer relationships, and cost structures between the two companies, posing a significant challenge for the buyer [7][9]. Group 4: Financial and Operational Risks - The acquisition may serve as a financial remedy to alleviate the buyer's obligations under previous bet agreements, raising concerns about whether the merger is genuinely aimed at industrial integration or merely a financial maneuver to mitigate risks [7][14]. - The integration process will require patience and a realistic operational roadmap, focusing on supply chain optimization, capacity complementarity, and extending product lines into higher value-added areas [12][14]. Group 5: Future Outlook - The success of the acquisition will depend on the next 12 to 24 months of operations, determining whether it can transition from a financial solution to a tangible industrial entity [14]. - Stakeholders will closely monitor the outcomes, with supporters looking for cost improvements and critics focusing on unresolved capacity issues, while the broader market will assess whether the acquisition fulfills the long-held dream of going public or merely shifts financial risks [14].

Core Viewpoint - Tianyang New Materials (SH:603330) is undergoing a significant ownership change as Li Zhelong steps down and Baixing Group takes control, marking a notable merger in the photovoltaic film industry [1][4]. Company Summary - Li Zhelong has resigned from all positions at Tianyang New Materials, including Chairman and General Manager, with Feng Yanzhao also stepping down from his director role [2][3]. - The new nominees for the board include Ru Zhengwei and Mao Qubo, both associated with Baixing Group, which has a strong presence in the photovoltaic film sector [2][3]. - Tianyang New Materials, founded in 1993, has diversified into four main business segments, with photovoltaic encapsulation films being the largest, accounting for approximately 50% of its revenue since 2022 [3][4]. Industry Context - The acquisition represents a strategic move in the photovoltaic film industry, with Baixing Group aiming to consolidate its position in the market [2][3]. - Tianyang New Materials has faced significant financial challenges, reporting losses for three consecutive years, with a notable loss of 2.13 billion yuan expected in 2024 [9][10]. - The photovoltaic film market has become increasingly competitive, leading to declining profit margins for companies like Tianyang New Materials, which saw its gross margin for photovoltaic films drop to negative figures in recent years [9][10][11]. Financial Overview - Baixing Group, which has a diverse portfolio including industrial manufacturing and real estate, reported a revenue of 25.5 billion yuan in 2020 and ranks 371st among China's top private enterprises [6]. - Tianyang New Materials has been struggling with its photovoltaic film business, which has seen a drastic decline in gross margins, falling to -3.94% in 2023 [9][10]. - The merger is seen as a potential pathway for Baixing Group to achieve a public listing, integrating its assets in the photovoltaic sector [6][14].

Investment Rating - The investment rating for the company is "Buy" and is maintained [7] Core Views - The company reported a revenue of 7.959 billion yuan for the first half of 2025, a year-on-year decrease of 26.06%, with a net profit attributable to shareholders of 496 million yuan, down 46.6% year-on-year. In Q2 2025, revenue was 4.334 billion yuan, a year-on-year decrease of 20.36%, but a quarter-on-quarter increase of 19.58%. The net profit for Q2 was 95 million yuan, down 76.75% year-on-year and down 76.41% quarter-on-quarter. The net profit for the first half of the year was better than the performance forecast [2][5] Summary by Sections Business Performance - In the first half of 2025, the sales volume of film products was nearly 1.4 billion square meters, remaining stable year-on-year, with a gross margin of 11%, down 5 percentage points year-on-year due to a decline in film prices compared to last year. In Q2, both sales volume and gross margin are expected to increase quarter-on-quarter, although the gross margin is expected to decline due to a drop in film prices after the domestic rush to install [11] - The sales volume of photosensitive dry film in the first half of 2025 was nearly 90 million square meters, a year-on-year increase of 22%, with corresponding revenue growth of 18% and a gross margin of 25%, remaining stable year-on-year. In Q2, both sales volume and profitability are expected to grow [11] - The sales volume of aluminum-plastic film in the first half of 2025 was 6.66 million square meters, a year-on-year increase of 19%. The company is focusing on the aluminum-plastic film business as part of its functional film materials division. The sales volume of photovoltaic backsheet was 33.7 million square meters, down about 50% year-on-year due to an increase in the proportion of double-glass components, leading to a decrease in demand for backsheets [11] Financial Indicators - As of the end of Q2, the company's asset-liability ratio was 21%, maintaining an excellent level in the industry. The cash and cash equivalents plus trading financial assets were nearly 6 billion yuan, indicating ample cash reserves. The net cash flow from operating activities for the first half of the year was approximately -900 million yuan, mainly due to a timing difference between sales revenue and actual cash receipts [11] - The company expects an increase in film shipments in the second half of the year, with overseas production capacity gradually contributing to revenue. The profitability of film products is expected to recover, and the photosensitive dry film business is anticipated to benefit from the acceleration of AI applications [11] Future Outlook - The company forecasts a net profit attributable to shareholders of 2.3 billion yuan for 2026, corresponding to a price-to-earnings ratio of 18 times, maintaining the "Buy" rating [11]

Investment Rating - The investment rating for the company is "Buy" and is maintained [7] Core Views - The company reported a revenue of 633 million yuan for H1 2025, a year-on-year decline of 57.47%. The net profit attributable to the parent company was -133 million yuan, showing a reduction in losses [2][5] - In Q2 2025, the company achieved a revenue of 318 million yuan, down 48.07% year-on-year but up 0.66% quarter-on-quarter, with a net profit of -76 million yuan, also indicating a reduction in losses [2][5] - The company is experiencing significant challenges in its film business, with expected sales volume declines and increased costs due to depreciation and labor [10] - The automotive business, particularly the PDCLC dimming film, has made substantial progress, securing partnerships with major automotive manufacturers and initiating a production expansion project [10] - Financial risks have been alleviated, with the debt-to-asset ratio dropping below 50% and inventory decreasing by 40% [10] Summary by Sections Financial Performance - For H1 2025, the company reported a revenue of 633 million yuan, a decrease of 57.47% year-on-year, and a net profit of -133 million yuan, indicating a reduction in losses [2][5] - Q2 2025 revenue was 318 million yuan, down 48.07% year-on-year but up 0.66% from the previous quarter, with a net profit of -76 million yuan [2][5] Business Outlook - The film business is expected to face challenges with declining sales volumes and increased costs, while the automotive business is poised for growth with ongoing partnerships and production expansion [10] - The company is optimistic about the profitability recovery in its film business due to rising EVA particle prices and ongoing collaborations with local enterprises in various countries [10]

Investment - The article discusses various investment opportunities in new materials, semiconductors, and renewable energy sectors, highlighting the growing demand and technological advancements in these areas [1][3][4]. Semiconductor - It emphasizes the importance of semiconductor materials such as photolithography, electronic special gases, and silicon wafers, which are critical for the production of advanced electronic devices [1][3]. - The report outlines the trends in third-generation semiconductors, including silicon carbide and gallium nitride, which are expected to drive future growth [1][3]. New Energy - The article covers the advancements in new energy technologies, particularly lithium batteries and solid-state batteries, which are pivotal for electric vehicles and energy storage solutions [1][3]. - It also mentions the significance of hydrogen energy and wind power as part of the broader renewable energy landscape [1][3]. Photovoltaics - The report highlights the growth in the photovoltaic sector, focusing on materials such as solar glass and photovoltaic back sheets, which are essential for solar panel manufacturing [1][3]. New Display Technologies - The article discusses innovations in display technologies, including OLED, MiniLED, and MicroLED, which are transforming consumer electronics and display applications [3]. Fibers and Composite Materials - It addresses the development of advanced fiber materials like carbon fiber and aramid fiber, which are crucial for lightweight and high-strength applications in various industries [3]. Notable Companies - The article lists key players in the materials sector, including ASML, TSMC, and Tesla, emphasizing their roles in driving innovation and market growth [4]. Investment Strategies - The report outlines different investment stages, from seed rounds to pre-IPO, detailing the associated risks and characteristics of companies at each stage, which is essential for potential investors [6].