Core Insights - The second Hainan Agarwood and Huanghuali International Trade Fair, named "Tianxiang Guose," was promoted in Riyadh, Saudi Arabia, highlighting the growing interest in Hainan agarwood in the region [1][2] - The Saudi Arabian fragrance and perfume industry has seen significant growth due to increasing local demand and expansion into regional and global markets, creating opportunities for collaboration with Chinese companies [1] - The event aims to strengthen trade and economic relations between China and Saudi Arabia, facilitating knowledge sharing and enhancing economic and investment cooperation [1] Industry Overview - China's annual production of agarwood raw materials is approximately 4,000 tons, covering four main categories: incense, cultural and artistic products, pharmaceuticals, and daily chemical products, with over 300 subcategories [2] - Hainan agarwood is renowned for its exceptional quality and medicinal value, benefiting from the unique tropical climate and soil conditions, while Huanghuali is considered a precious wood highly sought after in the market [2] - The promotion event has created a favorable international atmosphere for the second Tianxiang Guose exhibition, enhancing brand building and channel expansion for Hainan agarwood and Huanghuali in the Saudi market [2]

Group 1: Investor Relations Activity Overview - The investor relations activity was held on April 21, 2025, via an online meeting [2] - Attendees included various funds and securities firms, such as Guolian Minsheng and E Fund [2] - The company was represented by the board member and secretary, Ms. Zhao Ya [2] Group 2: Project Construction and Production - The company is working on a project with an annual production capacity of 2,600 tons of cooling agents and fragrance raw materials [3] - The first phase of the project entered trial production in October 2024, with good capacity ramp-up results for acrylonitrile products [3] - The second phase has completed equipment installation but has not yet started trial production [3] Group 3: Product Focus and Market Potential - Acrylonitrile products, including DIPPN and 2,2-DIPN, are key raw materials for the company's cooling agents [4] - The new production capacity will enhance the company's core competitiveness and cater to emerging markets, such as e-cigarettes and cosmetic ingredients [5] - The project aims to produce various fragrance products, including aldehydes and esters, primarily for the daily chemical industry [5] Group 4: Capacity Utilization and Market Expansion - The company plans to self-consume acrylonitrile products while actively exploring market opportunities through exhibitions and client meetings [6] - The natural and synthetic fragrance products do not compete due to differing customer needs and usage scenarios [8] Group 5: Financial Performance and Profitability - The company's gross margin was 33.33% in 2023, decreased to 30.50% in 2024, and slightly increased to 32.82% in Q1 2025 [9] - The decline in 2024 was attributed to price reductions, while the increase in Q1 2025 was due to self-supplied raw materials [9] - The acrylonitrile products are expected to provide a gross margin increase of 5-10 percentage points, enhancing profitability [10] Group 6: Phase Two Project Details - The second phase of the project is expected to produce 190 tons/year of alcohols, 50 tons/year of esters, 100 tons/year of ketones, 100 tons/year of aldehydes, and 150 tons/year of salts [11]

Market Overview - The A-share market shows a mixed performance with the Shanghai Composite Index closing at 3280.34, up 0.13%, while the Shenzhen Component Index fell by 0.16% to 9759.05 [2][3] - The overall market capitalization of the Shanghai Composite Index is 6322.77 billion, with a price-to-earnings (PE) ratio of 11.58 and a price-to-book (PB) ratio of 1.23 [3] Market Strategy - The market is experiencing a volume contraction with a rebound, particularly in the real estate and consumer sectors, which have shown significant gains [4][6] - The real estate sector is seeing a recovery with 24 out of 70 major cities reporting an increase in new residential sales prices in March 2025 [8][10] - The consumer sector is also active, driven by government policies aimed at boosting consumption, including subsidies and tax incentives [9][10] Industry Dynamics - TSMC reported a first-quarter revenue of 25.53 billion USD, a year-on-year increase of 35.3%, with a gross margin of 58.8% [27] - The energy storage system market saw a 55% decline in bidding scale in March 2025, attributed to the concentration of large projects in the previous months [29] - LVMH's first-quarter revenue was 20.31 billion EUR, down 3% year-on-year, with the Asia market (excluding Japan) experiencing an 11% decline [34][35] Company Tracking - Dongpeng Beverage achieved a first-quarter revenue of 4.848 billion, a year-on-year increase of 39.23%, with a net profit of 980 million, up 47.62% [39][40] - Huaye Fragrance reported a revenue of 345 million, a 28.12% increase year-on-year, and a net profit of 22.09 million, up 659.83% [42][43]