Core Viewpoint - The company reported a net profit of 114 million yuan for the first three quarters of 2025, indicating a significant decline in profitability, but anticipates recovery as the separator industry approaches a turning point, maintaining a buy rating [1] Financial Performance - For the first three quarters of 2025, the company achieved a revenue of 2.958 billion yuan, a year-on-year increase of 13.53% - The net profit attributable to shareholders was 114 million yuan, a year-on-year decrease of 67.25% - The non-recurring net profit was 16 million yuan, a year-on-year decrease of 94.06% - In the third quarter, revenue reached 1.060 billion yuan, a year-on-year increase of 11.36%, while net profit was 14 million yuan, a year-on-year decrease of 86.96% [2] Industry Outlook - The separator industry is nearing a turning point, with dry separators experiencing a price increase of nearly 30% by the first half of 2025 - The industry is currently benefiting from high capacity utilization due to strong demand, particularly in energy storage - The company plans to enhance profitability by increasing supply to high-value customers and raising prices for low-profit or loss-making customers [2] R&D and Product Development - The company is focusing on solid-state battery research and market development, with related products being sampled to leading battery manufacturers - The company’s affiliate has achieved a production capacity of hundreds of tons for oxide electrolytes and expects to have ton-level shipments of sulfide electrolytes by 2025 - Various types of rigid skeleton membranes have been developed for different solid-state battery applications, enhancing energy density and safety [3] Valuation - The company adjusted its earnings per share forecast for 2025-2027 to 0.11, 0.37, and 0.46 yuan respectively, reflecting a decrease in separator average prices - The corresponding price-to-earnings ratios are projected at 137.4, 40.9, and 33.0 times, while maintaining a buy rating [4]

Core Viewpoint - Yunnan Enjie New Materials Co., Ltd. held a specific investor survey on October 17, 2025, discussing the supply-demand balance in the separator industry, strategies to cope with low-price competition, and the impact of solid-state battery technology on the company [1] Group 1: Industry Supply and Demand - The separator industry has seen lower new capacity additions this year compared to last year, leading to an improvement in supply conditions [1] - Demand for energy storage batteries is strong, and the demand for power batteries continues to grow, indicating an overall upward trend in downstream demand [1] Group 2: Company Strategies - The company is currently operating at a high capacity utilization rate, and the prices of separator products are influenced by supply-demand dynamics and product performance [1] - To ensure stable supply for downstream customers, the company plans to enhance product performance and optimize product structure to improve profitability [1] Group 3: Impact of Solid-State Battery Technology - Semi-solid batteries require separators similar to those used in liquid batteries, while full solid-state batteries are in the early stages of industrialization and are not yet suitable for large-scale commercial production [1] - Even with future commercialization of full solid-state batteries, liquid batteries are expected to dominate due to their superior performance and lower costs, with solid-state batteries likely to be used in niche markets [1] Group 4: Technological Advantages - The company possesses a full range of separator technologies, including wet and dry base films, heat-resistant coatings, and functional coatings, with significant capabilities in wet process technology [1] - Innovations in equipment and processes, such as integrated online coating technology, are contributing to the company's growth and market share [1]

- The report does not contain any quantitative models or factors related to the quantitative theme. The content primarily focuses on the analysis of the electric vehicle industry, the investment value of the CSI New Energy Vehicle Index, and the investment value of the Hua Xia CSI New Energy Vehicle ETF[1][3][4].

Investment Rating - The report assigns a "Buy" rating for the company [6]. Core Views - The company is a leading supplier of lithium battery separators, actively expanding its global presence and product offerings in response to the solid-state battery trend [9][20]. - The company has established a strategic partnership with Zhongke Shenlan to develop solid-state electrolyte membranes, enhancing its product portfolio [35][40]. - The company is positioned to benefit from the growing demand for solid-state batteries, with significant investments in production capacity planned for the coming years [45]. Summary by Sections 1. Traditional Separator Leader, Diversifying Future - The company has over 20 years of experience in the separator industry, being the first in China to export both dry and wet process separators [9]. - In 2024, the company achieved a market share of 17.6% in separator shipments, maintaining its position as the second-largest domestic supplier [12]. 2. Embracing the Solid-State Battery Wave - The solid-state battery trend is supported by government policies, with significant investments planned for research and development [20]. - The company has launched innovative rigid skeleton separator products and is collaborating with leading firms to accelerate industrialization [35][36]. 3. Welcoming the AI Era, Acquiring Quality Overseas Assets - The company is acquiring global semiconductor equipment leaders to enhance its capabilities in semiconductor and new material sectors [9]. 4. Forward-Looking Layout for Embodied Intelligence, Positioning in Electronic Skin - The company is investing in electronic skin technology, which is expected to have a substantial market potential as the demand for humanoid robots increases [9]. 5. Investment Recommendations - Revenue forecasts for 2025-2027 are projected at 45 billion, 54 billion, and 68 billion yuan, respectively, with net profits of 4.3 billion, 5.4 billion, and 6.5 billion yuan [9]. - The company is expected to maintain a strong growth trajectory, supported by its technological advantages and strategic partnerships [9][45].

Core Viewpoint - The article discusses the current state and future outlook of the Chinese separator industry, highlighting production growth, market dynamics, pricing trends, and the need for cost reduction amidst increasing competition [1][3][4]. Production and Market Dynamics - In the first half of 2025, China's separator production reached 13.94 billion square meters, marking a year-on-year increase of 53.2%. Wet separators accounted for 11.42 billion square meters, while dry separators contributed 2.52 billion square meters [1]. - The market is dominated by leading companies, with Enjie holding over 30% market share and the top four companies controlling 72.6% of the market. The share of dry separators has decreased to around 18% due to the transition from dry to wet methods and significant price drops in wet separators [1][3]. Capacity and Utilization - Domestic capacity expansion is slowing down, with ongoing projects from major players like Xingyuan Materials and Enjie. The overall capacity utilization rate in the separator industry is 65%, with wet separators exceeding 70% and dry separators below 50% [3]. - The industry is currently facing a price decline cycle, leading to widespread losses among companies, with less than 20% of firms remaining profitable [3]. Pricing Trends - There is a stark contrast in pricing between dry and wet separators. Despite low utilization rates, dry separator prices have increased due to high concentration in the industry, while wet separator prices continue to decline due to market fragmentation [4]. - In the first half of 2025, the price of 7 µm wet separators fell by 19.4%, and 7+2+1 µm wet separators decreased by 15.7%, while 16 µm dry separators saw a price increase of 6% [4]. Industry Trends - Cost reduction is a continuous demand from downstream sectors, with a focus on increasing the use of domestic raw materials and enhancing single-line capacity to lower manufacturing costs [7]. - The demand for dry coated separators is rising, particularly for high-performance products in mid-to-high-end power batteries, although supply remains tight due to limited coating capacity among manufacturers [7]. - The application of 5 µm ultra-thin wet separators is expanding, with leading companies accounting for about 30% of usage, but supply is still concentrated among a few manufacturers, indicating potential technological bottlenecks [7]. Market Outlook - Given the ongoing overcapacity in the separator market, there is a possibility of further price declines, with the industry nearing a bottom [9]. - The continuous price drop is making survival increasingly difficult for companies, potentially leading to a wave of industry consolidation [10]. - The current domestic expansion phase is concluding, with future capacity growth expected to shift towards overseas markets, particularly in Southeast Asia [11].

Investment Rating - The report maintains a "Buy" rating for Enjie Co., Ltd. [5] Core Views - The company's performance has significantly declined due to inventory impairment and inventory destocking, with a notable drop in both revenue and net profit for 2024 [2][3] - The company achieved a revenue of 10.2 billion yuan in 2024, down 16% year-on-year, and a net loss of 560 million yuan, a decrease of 122% year-on-year [2] - The report anticipates a recovery in the industry, with expectations for higher sales volumes and improved margins in the coming years [5] Performance Summary - In Q4 2024, the company reported a revenue of 2.7 billion yuan, down 8% year-on-year and up 1% quarter-on-quarter, with a net loss of 1 billion yuan [2] - For Q1 2025, the company achieved a revenue of 2.7 billion yuan, an increase of 17% year-on-year, while the net profit was 30 million yuan, down 84% year-on-year [2] - The report projects a total output of 9 to 10 billion square meters for 2025, with a focus on increasing market share in new technologies [3] Financial Analysis - The company’s cash and cash equivalents stood at 2.6 billion yuan at the end of 2024, a decrease of 33% year-on-year, while operating cash flow was 1.2 billion yuan, down 57% year-on-year [4] - The report forecasts net profits of 500 million yuan, 800 million yuan, and 1.2 billion yuan for 2025, 2026, and 2027 respectively, with corresponding P/E ratios of 56, 34, and 22 [5][9] - The company is expected to maintain a balance between revenue and costs, with a focus on inventory reduction and price stabilization in the domestic market [3][4]

Investment Rating - The report maintains a "Buy" rating for Enjie Co., Ltd. [5] Core Views - The company's performance has significantly declined due to inventory impairment and inventory destocking, with a notable drop in both revenue and net profit for 2024 [2][3] - The company achieved a revenue of 10.2 billion yuan in 2024, down 16% year-on-year, and a net loss of 560 million yuan, a decrease of 122% year-on-year [2] - The report anticipates a recovery in the industry, with expectations for higher sales volumes in 2025, targeting 9 to 10 billion square meters of wet-process output [3][5] Summary by Sections Performance Overview - In Q4 2024, the company reported a revenue of 2.7 billion yuan, down 8% year-on-year and up 1% quarter-on-quarter, with a net loss of 1 billion yuan [2] - Q1 2025 saw a revenue of 2.7 billion yuan, an increase of 17% year-on-year, but a net profit of only 30 million yuan, down 84% year-on-year [2] Operational Analysis - The company expects to ship 6.9 billion square meters in Q4 2024, a 40% increase year-on-year, and 2.1 billion square meters in Q1 2025, a 68% increase year-on-year [3] - The average selling price in Q4 2024 was 1.2 yuan per square meter, down 50% year-on-year, with a projected average price of 1.0 yuan per square meter in Q1 2025 [3] Inventory and Cash Flow - As of the end of 2024, the company had 1.9 billion yuan in finished goods inventory, with an inventory coefficient of 2 to 3 months, a 10% decrease from the mid-year report [4] - The company reported cash and cash equivalents of 2.6 billion yuan at the end of 2024, down 33% year-on-year, with a net operating cash flow of 1.2 billion yuan, down 57% year-on-year [4] Profit Forecast and Valuation - The report forecasts net profits of 500 million yuan, 800 million yuan, and 1.2 billion yuan for 2025, 2026, and 2027 respectively, corresponding to PE ratios of 56, 34, and 22 [5] - The report highlights the potential for growth in the 5um product segment and advancements in solid-state electrolyte membranes as key areas to watch [5]