Group 1 - A new optical materials store named "Xuwei New Optical Materials" has been established in Yutang District, Xiangtan City, with a registered capital of 50,000 RMB [1] - The legal representative of the store is Lan Yan, indicating a personal ownership structure [1] - The business scope includes sales of functional glass, new optical materials, optical instruments, optical glass, non-metallic minerals and products, electronic materials, construction materials, labor services (excluding labor dispatch), and information consulting services (excluding licensed information consulting services) [1]

Core Viewpoint - The company emphasizes its commitment to a full industry chain layout as its core development path, expecting significant revenue growth in infrared optical materials by the first half of 2025 [1] Group 1: Company Strategy - The company is focusing on enhancing its supply capabilities for terminal products such as infrared lenses, detectors, core modules, and complete machines [1] - The company has reported a significant increase in shipment volume compared to the first half of the previous year [1]

Group 1: Shihua Technology - Shihua Technology achieved operating revenue of 537 million yuan in the first half of 2025, representing a year-on-year growth of 73.79% [1] - The net profit attributable to the parent company was 193 million yuan, up 86.38% year-on-year [1] - The company's gross margin was 55.62%, with high-performance optical materials gross margin at 27.36%, both showing improvement compared to the same period last year and the previous year [1] - Shihua Technology plans to invest 2.05 billion yuan in a new high-performance optical adhesive film project, indicating a significant market potential for high-end optical materials and domestic substitution opportunities [1] - The company has completed its IPO fundraising projects and the "New High-Efficiency Sealing Adhesive Project" has been fully utilized and completed [1] - The "Innovation Center Project" is expected to be completed by May 2026, with a total investment of 740 million yuan and a fundraising target of no more than 600 million yuan, projected to generate operating revenue of 1.392 billion yuan upon reaching production [1] - The future product structure will focus on high-performance optical materials, functional electronic materials, and functional adhesives, promoting healthy and sustainable growth for the company [1] Group 2: Giant Network - Giant Network reported operating revenue of 1.662 billion yuan for the first half of 2025, reflecting a year-on-year increase of 16.47% [2] - The net profit was 777 million yuan, up 8.27% year-on-year [2] - The self-developed new product "Supernatural Action Group" has shown outstanding performance, with rapid growth in user base and revenue, although the main contribution will be released in the future due to revenue deferral factors [2] - The company plans to extend the game lifecycle through enhanced content supply, optimized game performance, and collaboration with well-known IPs [2] - "Supernatural Action Group" stands out in competition due to its differentiated gameplay and strong social virality, with plans for continuous content updates and exploration of UGC directions to maintain user activity [2] - Customer acquisition mainly relies on user word-of-mouth and content dissemination, with expected stable sales expense ratio [2] - The company is optimistic about overseas markets and is exploring international expansion for "Supernatural Action Group" [2] - The increase in contract liabilities in Q1 and Q2 is attributed to revenue growth from "Original Journey" and deferred income [2] - R&D expenses in Q2 increased mainly due to rising labor costs and technical service fees [2]

Core Viewpoint - The establishment of Chang's New Materials Technology (Shanghai) Co., Ltd.'s production base in Ningbo, Zhejiang, marks a significant investment in high-end optical film manufacturing, aiming to support the development of industries such as new energy vehicles and displays in the Yangtze River Delta region [1][4]. Investment and Project Details - The total investment for the project is approximately 1 billion RMB, with a planned land area of 80 acres and a total construction area of 115,337.92 square meters, to be built in two phases [4]. - The project will feature a modern intelligent factory that integrates production, research and development, and supporting facilities [4]. Production Capacity and Revenue Projections - Upon full production, the facility is expected to achieve an annual production capacity of 13,000 tons of high-end optical functional films, generating annual sales revenue exceeding 1.3 billion RMB [4]. Product Focus and Applications - Chang's New Materials specializes in the research, production, and sales of optical and electronic nano new materials, with core products including MLCC electrode nano Ni slurry, BOPET multilayer optical films, electronic anti-peep films, and nano thermal insulation materials, which are widely used in MLCC, electronic displays, new energy, automotive, and consumer electronics sectors [4][5]. Recent Financing - In July of this year, Chang's New Materials completed a B+ round financing of nearly 200 million RMB, with funds primarily allocated for the construction of new production bases in Ningbo and Taizhou [5].

Investment Rating - The report assigns a "Buy" rating to the company, with a market price of RMB 60.71 and a sector rating of outperforming the market [1]. Core Insights - The company, Hubei Feilihua Quartz Glass Co., Ltd., is positioned to benefit from the growing demand for quartz fiber electronic cloth, which is expected to become a core material in the computing era [3]. - The semiconductor and optical materials sectors are anticipated to benefit from domestic substitution trends, while the aerospace, photovoltaic, and optical communication businesses are expected to maintain a stable foundation [3]. - The report highlights the company's comprehensive industrial chain capabilities, which include quartz sand, quartz fiber, and quartz fiber electronic cloth production [3]. Summary by Sections Financial Performance - The company is projected to achieve EPS of RMB 1.16, 1.65, and 2.45 for the years 2025, 2026, and 2027 respectively, with a total market capitalization of approximately RMB 31.7 billion as of July 16, 2025 [5]. - Revenue forecasts indicate a growth trajectory with expected revenues of RMB 2,318 million in 2025, RMB 3,366 million in 2026, and RMB 5,052 million in 2027, reflecting growth rates of 33.1%, 45.2%, and 50.1% respectively [7]. Industry Positioning - The company is recognized as a leading supplier of quartz glass fiber in the aerospace sector, benefiting from the growth of China's aerospace industry [8]. - The report emphasizes the importance of low dielectric electronic cloth as a core material for printed circuit boards (PCBs), with quartz fiber expected to stand out due to its superior properties [8][30]. Market Trends - The global semiconductor quartz products market is projected to grow significantly, with the market size expected to increase from USD 3.226 billion in 2024 to USD 7.321 billion by 2031 [8]. - The demand for low dielectric electronic cloth is driven by advancements in 5G communication, automotive electronics, and aerospace applications, which require high-speed signal transmission and low energy loss [8][42]. Competitive Advantages - The company has established a full industrial chain from high-purity quartz sand to downstream applications, enhancing its competitive edge in the market [22]. - Feilihua has been actively expanding its production capacity to capture the emerging market opportunities in quartz fiber electronic cloth [8][27].

Financial Performance - In 2024, the company achieved a revenue of ¥2,101,954,593.52, a decrease of 43.47% year-on-year [3] - The net profit attributable to shareholders was ¥84,600,941.21, down 81.86% year-on-year [3] - The net profit after deducting non-recurring gains and losses was ¥81,688,257.01, a decline of 81.59% year-on-year [3] - The company recognized an investment loss of ¥81,415,451.89 due to significant goodwill impairment from a key supplier [3] Market Dynamics - The lithium-ion battery materials market is experiencing intensified competition, with prices of key products continuing to decline [3][6] - The demand for lithium-ion battery materials is expected to expand due to the growth of the new energy vehicle sector and advancements in battery technology [4][6] - The global energy storage market is witnessing substantial growth driven by renewable energy development and increasing demand for data centers [5] Future Growth Drivers - The company aims to leverage its technological and scale advantages in lithium-ion battery materials to meet the evolving needs of core customers [4] - The optical film sector is anticipated to benefit from the domestic shift in LCD production and ongoing upgrades in consumer electronics [6] - The functional silane market is projected to grow steadily, driven by demand from emerging industrial applications and the increasing entry barriers in the industry [6] Industry Outlook - The lithium-ion battery materials industry is in a deep adjustment period, with companies slowing down capacity release amid fierce competition [6] - The functional silane sector is entering a new phase of high-quality development, with China becoming the largest producer and consumer globally [6] - The company plans to expand its product range and enhance technical services to strengthen its competitive position in the market [6]