Core Viewpoint - The petrochemical industry is currently facing significant "involution" competition, leading to a widespread dilemma of increasing production without increasing profits, with the industry's operating revenue profit margin declining from 8.03% in 2021 to 4.85% in 2024, and remaining low in the first half of 2025 [1] Group 1: Industry Challenges - The low-quality and homogeneous competition is primarily due to excessive investment and repeated construction, resulting in product homogenization, along with local governments' blind investment promotion exacerbating overcapacity [1] - The central government has proposed comprehensive rectification requirements to address these issues, including strengthening self-discipline, promoting innovation, and eliminating non-compliant capacity based on energy efficiency and environmental standards [2] Group 2: Policy Developments - The chemical industry has seen a gradual deepening of anti-involution policies this year, with significant measures introduced such as the "National Unified Market Construction Guidelines" aimed at curbing repeated construction and market segmentation [2] - In June, a joint notice was issued by five ministries to assess old facilities in the refining and fertilizer sectors, focusing on safety, environmental protection, and energy efficiency to promote the exit of inefficient capacity [2] Group 3: Market Outlook - The industry is expected to see opportunities for supply-side reforms in areas with significant homogeneous competition, such as refining and certain pesticide varieties, as state-owned enterprises control capacity and new project approvals are restricted [3] - By August 2025, a recovery in overseas demand for certain chemical products and further domestic demand growth is anticipated, with a focus on investment in sectors with improved supply-demand dynamics and scarce resource attributes, particularly electronic resins [4] Group 4: Price Trends - As of July 2025, the China Chemical Product Price Index (CCPI) reported a decline of 5.6% from the beginning of the year, indicating a slight decrease in the prices of major chemical products [3] - International crude oil prices showed an upward trend in July, with Brent crude rising from $67.11 to $73.24 per barrel, influenced by geopolitical tensions and seasonal fuel consumption [4] Group 5: Sector-Specific Insights - The electronic resin sector is poised for growth due to increasing demand for high-frequency and high-speed copper-clad laminates, with a projected compound annual growth rate of 26% from 2024 to 2026 [5] - The phosphate fertilizer market is experiencing price increases driven by overseas agricultural recovery and supply disruptions, while the pesticide sector is expected to see price recovery due to increased demand and limited supply growth [5][6]

Group 1 - The petrochemical industry is currently facing significant "involution" competition, leading to a decline in profit margins from 8.03% in 2021 to 4.85% in 2024, with the first half of 2025 still at low levels [1][16][17] - Central authorities have proposed comprehensive rectification measures to combat this issue, focusing on self-discipline, innovation, and the elimination of non-compliant capacity [1][16] - The industry is expected to transition towards high-quality sustainable development through capacity optimization and price ecology restructuring [1][16] Group 2 - The chemical industry's anti-involution policies have deepened from institutional construction to special rectification, with measures introduced to curb redundant construction and market segmentation [2][17] - Key sectors such as refining, olefins, and certain pesticide varieties are anticipated to benefit from supply-side reforms, leading to improved profitability as inefficient capacity is phased out [2][17] - The overall supply-demand structure is expected to gradually optimize, with the potential for profit recovery in the industry [2][17] Group 3 - As of July 2025, the China Chemical Product Price Index (CCPI) reported a decline of 5.6% from the beginning of the year, indicating a slight decrease in the prices of major chemical products [3][18] - The international crude oil prices showed a fluctuating upward trend, with Brent crude rising from $67.11 to $73.24 per barrel in July, influenced by geopolitical tensions and seasonal demand [4][19] - The forecast for Brent crude oil prices is set between $65 and $70 per barrel, with WTI prices expected between $60 and $65 per barrel, highlighting the importance of geopolitical dynamics and OPEC+ policies [4][19] Group 4 - The investment portfolio for the month includes companies such as Shengquan Group, Hubei Yihua, Satellite Chemical, China Petroleum, Lier Chemical, and Yara International, focusing on sectors with growth potential [9][22] - Shengquan Group is highlighted as a leader in synthetic resins, particularly in the rapidly growing electronic specialty resin market [9][22] - Hubei Yihua is positioned to benefit from its resource advantages in the fertilizer sector, while China Petroleum is recognized for its comprehensive energy capabilities [9][22] Group 5 - The electronic resin sector is experiencing rapid growth driven by demand from AI servers, with the global high-frequency and high-speed PCB market expected to grow at a compound annual growth rate of 26% from 2024 to 2026 [7][20][33] - The phosphoric fertilizer market is seeing resilience due to overseas agricultural recovery and regional stockpiling, with global prices on the rise [8][20] - The pesticide sector is anticipated to recover as the downward cycle reaches its bottom, supported by increased demand from South America and limited export growth from India and the U.S. [8][21]

Core Viewpoint - The rapid development of emerging technologies such as AI, 5G communication, new energy vehicles, and the Internet of Things is driving significant growth in the PCB industry, which in turn is increasing the demand for upstream PCB materials [1][7]. Group 1: Industry Trends - The PCB industry is experiencing high demand due to advancements in AI and communication technologies, leading to increased performance requirements for PCB products [1]. - High-frequency and high-speed copper-clad laminates are essential for applications in base stations, satellite communications, and automotive radar systems [1][4]. - The demand for low dielectric constant (Dk) and low dielectric loss factor (Df) materials is critical for effective signal transmission in high-frequency environments [1][9]. Group 2: Material Types and Applications - Common high-frequency materials include modified epoxy, PTFE, and PCH, each with specific applications in high-frequency and high-speed PCBs [5][6]. - PTFE is preferred for high-frequency substrates due to its superior dielectric properties, especially in applications exceeding 30GHz [3][5]. - High-speed materials focus on minimizing dielectric loss (Df), with applications in computers, servers, and communication electronics [4][6]. Group 3: Future Demand and Supply Chain - The global AI server shipment is expected to grow by 46% in 2024, driven by strong demand from major cloud service providers, which will boost the need for high-frequency and high-speed copper-clad laminates [7][9]. - The supply chain for AI servers is projected to remain stable, with an anticipated growth of nearly 28% in 2025 under basic scenarios [7]. - The shift towards low Dk/Df resin materials is essential to meet the bandwidth and transmission speed requirements of 5G and future 6G technologies [9][10]. Group 4: Environmental and Regulatory Factors - The industry is facing increasing pressure to transition to halogen-free flame retardants due to stringent environmental regulations, which will necessitate significant changes in material formulations [10][10]. - The demand for lightweight and high-performance materials is growing, particularly in the context of miniaturization and integration in consumer electronics [9][10]. Group 5: Upcoming Events and Forums - The "2025 DT New Materials Polymer Industry Annual Conference" will focus on the latest developments in electromagnetic materials, including high-frequency and high-speed PCB substrates [14][15]. - The conference will feature discussions on the integration of new materials in various applications, including 5G/6G communication and new energy vehicles [14][15].

Summary of Conference Call on Electronic Grade High-End Resins Industry Overview - The electronic resin industry is experiencing a significant increase in domestic demand for localization, with a current localization rate of approximately 40% and foreign manufacturers holding 60% of the market share [2][26][27]. Key Company Insights - **Monthly Shipment Volumes**: The monthly shipment volume of PPO is approximately 60-70 tons, with total shipments including OPE around 80 tons. Major customers include Shengyi (40% share), Nanya, Taiko, and Hongsheng, each with a 10% share [1][4][7]. - **Core Customers**: Key customers are Huawei, Shengyi, Nanya, Taiko, and others, with Huawei utilizing both direct and indirect procurement methods. Direct procurement accounts for 20%-30% of total supply [5][6]. - **Pricing Structure**: The unit price for large agents ranges from 700,000 to 1,200,000 yuan, while small customers pay between 800,000 and 1,200,000 yuan. Shengyi's M6 high-speed board is priced at 500,000 to 600,000 yuan, which is lower than Taiko's M8 products [8][9]. Future Demand and Production Plans - **Projected Demand**: Shengyi plans to jointly develop M8 products with Huawei, expecting demand to reach 800-1,000 tons in 2025 and 1,500 tons in 2026, with 200-300 tons allocated for M8 products [10][11]. - **Production Capacity Expansion**: The company aims to increase total PPO production capacity to 700-800 tons by the end of this year, with plans to expand to 2,000-2,300 tons next year and 3,000 tons by the end of 2027 [13][24]. Pricing and Profitability - **Profit Margins**: The overall gross margin is estimated to be around 45%-50%. For M6 products, the margin is expected to remain above 35% despite potential price drops below 500,000 yuan due to increased competition [14][12]. - **Market Competition**: The entry of new competitors producing M6 products may lead to price reductions, but the company maintains a competitive edge through technological advantages and stable supply relationships [23]. Market Trends and Product Development - **Emerging Products**: The company is focusing on increasing the market share of M6 products through OEM partnerships, targeting a 70% domestic market share by 2026 [15]. - **ODV Product Outlook**: ODV products are expected to maintain stable demand, with a projected output of 200 tons in 2026, as the industry is still in the experimental phase [19][24]. Strategic Positioning - **Market Share Goals**: The company aims to increase its market share in key clients like Shengyi, with a ceiling of 55%-60% due to competitive bidding mechanisms [31]. Current market shares are approximately 10% for Taiko, 3% for Taiyao, and close to 20% for Nanya, with plans to double Taiko's share to 20% next year [32]. Conclusion - The electronic resin industry is poised for growth, driven by increasing domestic demand and competitive pricing strategies. The company is strategically positioned to capitalize on these trends through capacity expansion, product development, and strong customer relationships.

Core Viewpoint - Tongyu New Materials successfully listed on the Shenzhen Stock Exchange on July 10, 2025, marking a significant milestone for the company [2]. Group 1: Company Overview - Tongyu New Materials specializes in the research, production, and sales of electronic resins, which are essential materials in the electronic information industry, particularly for copper-clad laminates and printed circuit boards [6]. - The company has developed five product categories and possesses high-efficiency production capabilities, having mastered several core technologies through independent research and development [6]. Group 2: IPO Details - The company issued 10 million A-shares at a price of 84.00 yuan per share, increasing the total share capital to 40 million shares post-IPO [3]. - The funds raised from the IPO will be allocated to a project for producing 200,000 tons of electronic resin and for supplementing working capital [16]. Group 3: Financial Performance - Tongyu New Materials reported revenues of 1.193 billion yuan, 886 million yuan, and 952 million yuan for the years 2022, 2023, and 2024, respectively, with net profits of 188 million yuan, 164 million yuan, and 143 million yuan during the same period [14]. - For the first half of 2025, the company anticipates a revenue increase of 29.09% and a net profit increase of 4.11% compared to the same period in the previous year [14]. Group 4: R&D and Market Position - The company has a compound annual growth rate of 20.28% in R&D investment from 2022 to 2024, focusing on enhancing domestic production capabilities in the electronic resin sector [14]. - Tongyu New Materials has successfully broken the monopoly of international leaders in the lead-free and halogen-free copper-clad laminate resin market, reducing reliance on foreign suppliers [14][16].

Core Viewpoint - The article highlights how Tongyu New Materials, under the leadership of Zhang Chi, has transformed from a domestic player in the electronic resin sector to a key contributor in the core materials of the electronic industry, focusing on lead-free and halogen-free copper-clad laminates [1][2]. Company Development - Tongyu New Materials was established in 2015, targeting the domestic electronic industry's reliance on foreign materials, and quickly gained certifications from major clients like Kingboard, Nanya, and Shantou Ultrasound [2][3]. - The company has developed a comprehensive team covering the entire supply chain, allowing for rapid response to customer needs, distinguishing itself from foreign competitors [2][3]. Technological Advancements - The company has overcome several technical challenges in producing modified epoxy resins, achieving 17 authorized invention patents, thus turning its previous weaknesses into strengths [3][6]. - Tongyu New Materials is one of the few domestic companies mastering multiple series of lead-free and halogen-free electronic resin technologies, actively promoting the localization of high-end applications [6][7]. Market Potential - Electronic resins account for 20% of the cost of copper-clad laminates, which are essential for printed circuit boards (PCBs) used in various industries, including smart appliances and automotive electronics [4][5]. - The global PCB substrate market was valued at $81.742 billion in 2022 and is expected to reach $101.56 billion by 2026, indicating significant growth potential for the electronic resin industry [4][5]. Future Outlook - The company plans to leverage its upcoming IPO to attract talent and enhance its production capacity, addressing current bottlenecks in meeting customer demand [7][8]. - The proposed investment project aims to produce 20,000 tons of electronic resin annually, which will help alleviate capacity constraints and strengthen the company's market position [7][8].

Core Viewpoint - The demand for high-end electronic resins is increasing due to the global PCB industry shifting to China, with the company Tongyu New Materials planning to raise funds for expanding production capacity to meet this demand [1][3]. Company Summary - Tongyu New Materials is set to be listed on the Shenzhen Stock Exchange on July 10, primarily to raise funds for its subsidiary's project to produce 200,000 tons of electronic resin annually, addressing capacity constraints [1]. - The company has a production capacity utilization rate projected at 100.04%, 105.93%, and 116.37% for the years 2022 to 2024 [1]. - The chairman of Tongyu New Materials emphasized that the fundraising project will effectively expand the company's production capacity and enhance its competitive and profitability capabilities [1]. Industry Summary - China is currently the largest producer of copper-clad laminates globally, but the high-performance electronic resins used in these laminates are still dominated by companies from the US, South Korea, Japan, and Taiwan, indicating a significant domestic supply gap [2]. - The electronic resin market is crucial for the production of copper-clad laminates, semiconductor packaging materials, and other electronic components, which are essential for high-tech industries [1][2]. - The demand for electronic resins is expected to rise with the development of high-density interconnect printed circuit boards, driven by trends in miniaturization and lightweight electronic products [2]. - The company is focusing on R&D, with a compound annual growth rate of 20.28% in R&D investment from 2022 to 2024, aiming to reduce reliance on foreign suppliers and increase the domestic production rate of high-performance electronic resins [2][3]. - The market for high-performance electronic resins is anticipated to grow significantly due to the ongoing advancements in 5G and 6G communication technologies, AI computing power, and automotive intelligence [5].

Company Overview - Tongyu New Materials has been deeply engaged in the electronic resin field for nearly 10 years, breaking the monopoly of international leading companies in the lead-free and halogen-free copper-clad laminate applicable electronic resin sector [2] - The company specializes in the research, production, and sales of electronic resins, primarily used in the production of copper-clad laminates, with products including MDI modified epoxy resin, DOPO modified epoxy resin, high-bromine epoxy resin, BPA-type phenolic epoxy resin, and phosphorus-containing phenolic resin curing agents [2] Industry Insights - The electronic resin industry is crucial as it is one of the three main raw materials for producing copper-clad laminates, which are fundamental materials for processing printed circuit boards (PCBs) [2] - The copper-clad laminate industry in mainland China has seen rapid growth, with the output value increasing from $6.1 billion in 2014 to $9.3 billion in 2023, benefiting from the global PCB industry shifting to mainland China [2] Financial Performance - The company achieved operating revenues of 1.193 billion yuan, 886 million yuan, and 952 million yuan for the years 2022, 2023, and 2024, with year-on-year growth rates of 25.95%, -25.70%, and 7.47% respectively [2] - The net profit attributable to the parent company for the same years was 188 million yuan, 164 million yuan, and 143 million yuan, with year-on-year growth rates of 38.98%, -12.51%, and -12.87% respectively [2] - In Q1 2025, the company reported operating revenue of 276 million yuan, a year-on-year increase of 25.60%, while the net profit attributable to the parent company was 33 million yuan, a decrease of 4.43% year-on-year [2] IPO Details - The company plans to issue 10 million new shares in its IPO, raising 840 million yuan, with the funds intended for a 200,000-ton electronic resin project and to supplement working capital [3] - The company is currently experiencing tight production capacity, with utilization rates exceeding 100% during the reporting period [3] Valuation and Market Performance - Tongyu New Materials has a certain valuation advantage, with an issuance price-to-earnings ratio of 23.7 times, compared to an average dynamic P/E ratio of 36.88 times for comparable companies [5] - If the company achieves the average valuation of comparable companies on its first trading day, it would require a 55.6% increase from its issuance price [5] - The issuance price of 84 yuan is relatively high, and similar new stocks with prices around this level have shown an average first-day increase of 85.36%, significantly lower than the average first-day increase of 291.59% for new stocks over the past year [5]

Group 1 - The copper-clad laminate industry in China is experiencing a trend of product structure upgrades, with lead-free, halogen-free, high-frequency, high-speed, and IC packaging becoming mainstream, leading to an expanding market size and promising industry prospects [1] - Tongyu New Materials (Guangdong) Co., Ltd. has gained attention as its IPO review status has changed to "registration effective" on the Shenzhen Stock Exchange's Growth Enterprise Market, reflecting its progress in line with industry trends [1][4] Group 2 - Tongyu New Materials focuses on the electronic resin sector, providing systematic resin solutions for the mid-to-high-end copper-clad laminate industry, meeting strict requirements for purity, performance, and stability [2] - The company has received several honors, including being recognized as a national-level "specialized and innovative" small giant enterprise and a champion demonstration enterprise in Guangdong's manufacturing sector, showcasing its strong capabilities in technology research and product quality [3] - With an experienced core management team, Tongyu New Materials is preparing for future development by mastering core technologies in lead-free, halogen-free, and high-speed electronic resins, aiming to enhance domestic production in high-end application areas [4]

Core Viewpoint - Tongyu New Materials (301630.SZ) has initiated its IPO with a price of 84 CNY per share and a price-to-earnings ratio of 23.94 times, focusing on the development, production, and sales of electronic resins primarily used in copper-clad laminate production [1] Group 1: Company Overview - Tongyu New Materials specializes in electronic resin products, including MDI modified epoxy resin, DOPO modified epoxy resin, high-bromine epoxy resin, BPA-type phenolic epoxy resin, and phosphorus-containing phenolic resin curing agents [1] - The company has established long-term partnerships with well-known manufacturers in the copper-clad laminate industry, such as Kingboard Group, Shengyi Technology, Nanya New Material, Huazheng New Material, Jinbao Electronics, and Ultrasonic Electronics [1] Group 2: Financial Performance - For the fiscal years 2022, 2023, and 2024, the company reported revenues of approximately 1.193 billion CNY, 886 million CNY, and 952 million CNY, respectively, with net profits of about 188 million CNY, 164 million CNY, and 143 million CNY [1] - As of December 31, 2024, the total assets are projected to be approximately 1.506 billion CNY, with equity attributable to the parent company at around 798 million CNY and a debt-to-asset ratio of 33.65% [2] - The projected net profit for 2024 is approximately 143 million CNY, with a basic and diluted earnings per share of 4.78 CNY and a return on equity of 19.87% [2] Group 3: Risks - The company has indicated potential risks related to its wholly-owned subsidiary, Jiangxi Tongyu, which has incurred losses during its construction and trial production phases, amounting to 3.49 million CNY, 7.05 million CNY, and 14.44 million CNY over the reporting periods [2]