Report Information - Report Title: Nickel and Stainless Steel Weekly Report - Repeated Expectations of Interest Rate Cuts and "Anti - involution" Sentiment, Difficult to Form a Trend [1] - Date: August 19, 2025 [2] - Author: Wu Jinheng from Hongyuan Futures Research Institute [2] Investment Ratings - Nickel: The investment strategy is to wait and see, with an expected operating range of 116,000 - 126,000 yuan/ton [3][88] - Stainless Steel: The investment strategy is to wait and see, with an expected operating range of 12,500 - 13,500 yuan/ton [4][113] Core Views - Nickel: With high pure nickel production, loose supply - demand, and repeated expectations of Fed interest rate cuts, the nickel price is expected to fluctuate within a range [3][88] - Stainless Steel: Although production has rebounded, demand is average, and inventory pressure remains. However, with strong cost support and the influence of "anti - involution" sentiment, the stainless - steel price is expected to fluctuate within a range [4][113] Summary by Directory 1.1 Nickel Market Review - Last week, SHFE nickel fluctuated downward with a weekly decline of 0.46%, trading volume reaching 488,300 lots (+23,600), and open interest at 96,900 lots (-12,700). LME nickel rose 0.26% weekly, with trading volume at 28,400 lots (+2,700). The basis premium was 1,190 yuan/ton [10][12] 1.2 Supply Side - Nickel Ore - Last week, the prices of 0.9%, 1.5%, and 1.8% nickel ores remained flat, and the shipping price from the Philippines to China was unchanged. In June, the Philippines' nickel - ore exports increased, and China's imports reached 4.35 million tons, up 10.7% month - on - month and down 7.2% year - on - year. Last week, the arrival volume of nickel ore decreased by 100,600 tons, and port inventory increased by 60,000 wet tons [18][23][25] 1.2 Supply Side - Nickel Pig Iron - The price of 8 - 12% high - nickel pig iron rose 7 yuan/nickel point, and that of 1.5 - 1.7% nickel pig iron rose 20 yuan/ton. The negative premium of nickel pig iron compared to electrolytic nickel and scrap stainless steel narrowed. In June, China's nickel - iron imports were 1.041 million tons, up 22.8% month - on - month and 50.0% year - on - year, and imports in July were expected to decline. The loss of nickel - iron plants narrowed, and the operating rate increased. In August, the operating rate and production of domestic nickel pig iron decreased, while those in Indonesia increased slightly. Nickel iron had a slight inventory reduction [30][34][43] 1.2 Supply Side - Electrolytic Nickel - In August, the operating rate and production schedule of refined nickel increased, the export profit of electrolytic nickel decreased, and in June, both imports and exports of electrolytic nickel declined [47][51][54] 1.3 Demand Side - Stainless Steel - In August, the production schedule of stainless steel and 300 - series stainless steel increased. In June, stainless - steel exports decreased by 10.6% month - on - month and 13.9% year - on - year, and imports decreased by 12.5% month - on - month and 16.6% year - on - year. Exports and imports were expected to decline in July [58][62][102] 1.3 Demand Side - New Energy - The price of pure nickel fell, the price of nickel sulfate rose, and the premium of nickel sulfate over pure nickel widened. The proportion of pure nickel used to produce nickel sulfate was extremely small. In August, the production schedules of ternary precursors and ternary materials increased, while that of nickel sulfate decreased. In July, the production of new - energy vehicles was 1.243 million units, down 2.0% month - on - month and up 26.3% year - on - year, and sales were 1.262 million units, down 5.1% month - on - month and up 27.4% year - on - year [67][71][79] 1.4 Inventory Side - Last week, SHFE nickel inventory increased, LME nickel inventory decreased, Shanghai Free - Trade - Zone pure - nickel inventory remained flat, and the six - region social total inventory increased by 1,319 tons [80][84] 1.5 Electrowinning Nickel Cost - The cost of producing electrowinning nickel from externally purchased nickel sulfate and MHP increased, while that from externally purchased nickel matte remained flat. The cost advantage of producing electrowinning nickel from integrated MHP over integrated nickel matte was obvious [87] 2.2 Cost and Profit - The prices of high - nickel pig iron and high - carbon ferrochrome rose, providing strong cost support. The losses of 200 - series and 400 - series stainless steel narrowed, while those of 300 - series stainless steel widened [94][98] 2.3 Fundamental Aspects - In August, the production schedule of stainless steel and 300 - series stainless steel increased. In June, stainless - steel exports and imports decreased, and they were expected to decline in July [102][105] 2.4 Inventory Side - The domestic social inventory of stainless steel decreased. The inventory of 200 - series and 300 - series stainless steel decreased, while that of 400 - series stainless steel increased [111]

Investment Rating - The report maintains a "Buy" rating for the company [6] Core Views - The company achieved record performance in the first half of 2025, with revenue of 37.2 billion yuan, a year-on-year increase of 23.8%, and a net profit attributable to shareholders of 2.71 billion yuan, up 62.3% year-on-year [1] - Nickel product shipments increased by 84% year-on-year, supported by the addition of two new nickel mines and a strong performance in the wet process projects [2] - The resource volume of the Arcadia lithium mine increased from 1.5 million tons to 2.45 million tons, with production costs continuously declining [3] - Cobalt prices surged due to supply constraints from the Democratic Republic of Congo, although cobalt product shipments saw a slight decline of 9.89% year-on-year [4] - The company’s positive material shipments grew against the trend, with a 17.68% increase in ternary cathode materials [5] - Future profit forecasts indicate a net profit of 5.73 billion yuan in 2025, with significant growth expected in the following years [6] Financial Summary - The company reported a revenue of 60.946 billion yuan for 2024, with projections of 67.584 billion yuan for 2025, reflecting a growth of 10.89% [8] - The net profit attributable to shareholders is expected to reach 5.729 billion yuan in 2025, representing a year-on-year increase of 37.89% [8] - Earnings per share (EPS) is projected to grow from 2.44 yuan in 2024 to 3.37 yuan in 2025 [8]

Core Insights - Indonesia's nickel-related product export value is projected to reach $33.9 billion in 2024, significantly higher than $3.3 billion in 2017, driven by downstream policies in the nickel industry [1] Group 1: Government Policies - The substantial increase in export value is attributed to the nickel ore export ban implemented by the Indonesian government on January 1, 2020 [1] - The Indonesian government’s downstream policy has positively influenced global perceptions of Indonesia in the nickel sector [1] Group 2: Industry Potential - Indonesia holds approximately 43% of the world's nickel reserves, positioning itself as a key player in the global nickel market [1] - The value added from processing nickel ore into nickel sulfate can increase by 11.4 times, while further processing into precursors can enhance value by 19.4 times, and producing battery products can increase value by 67.7 times [1]

Group 1 - SK Hynix is supplying its HBM4 12-Hi stacked memory to NVIDIA at a price approximately 70% higher than the fifth generation HBM (HBM3E) [1] - SK Hynix announced significant technological changes in HBM4, including increased IO counts and improved designs to enhance bandwidth, while also aiming to reflect cost increases in pricing strategies [1] - The current bump bonding method used in HBM limits the vertical spacing between chips, making it difficult to reduce below 40μm, which hinders memory capacity and bandwidth improvements [1] Group 2 - The hybrid bonding technology is expected to be used for next-generation HBM products, allowing for higher interconnect density, smaller pitch, and lower energy consumption, with pitches reaching 10μm or less [1] - HBM4 is set to utilize direct-to-chip liquid cooling (D2C) technology for direct liquid cooling of the chips, as per a roadmap published by KAIST [1] - Yak Technology supplies precursors to major companies including TSMC, SK Hynix, and SMIC [2] - Taiji Industry provides semiconductor backend services to SK Hynix and its affiliates [3]

Core Viewpoint - Rongbai Technology (688005) reported a decline in revenue and a net loss for the first half of 2025, primarily due to fluctuations in raw material prices and increased R&D investments [1] Financial Performance - The company achieved operating revenue of 6.248 billion yuan in the first half of 2025, a year-on-year decrease of 9.28% [1] - The net profit for the period was a loss of 68.3946 million yuan, compared to a profit of 10.2779 million yuan in the same period last year, indicating a significant year-on-year decline [1] Factors Affecting Performance - Revenue decline was mainly attributed to significant fluctuations in the prices of key raw materials, which led to adjustments in product pricing [1] - The net profit decrease was also influenced by temporary impairment issues during the reporting period [1] Investment and R&D - The company continued to invest in new industries such as sodium batteries, precursors, and manganese iron lithium, which had a certain impact on current profits [1] - To maintain a technological edge, the company increased its R&D expenditure compared to the previous year [1]

Group 1 - The core focus of the article is the delayed IPO of Xiamen Hengkang New Materials Technology Co., Ltd. due to complex issues related to its business model, accounting practices, and potential legal risks stemming from its ownership structure [3][4][10] - The company has faced challenges in profitability despite revenue growth, with a significant decline in gross margins for self-produced products, raising doubts about its core research and development capabilities [3][5][7] - The company's revenue recognition method for its "imported business" has been questioned, as it shifted to a net method that may misrepresent its financial health and reliance on self-developed products [4][6] Group 2 - The historical ownership structure of Hengkang New Materials is complicated by shareholding proxies and connections to individuals involved in illegal activities, which raises compliance concerns [8][9] - The second-largest shareholder, Lv Junqin, has a history of involvement in illegal gambling, leading to serious implications for the company's governance and investor confidence [9][10] - There are suspicions of insider trading related to abnormal trading activities by associated parties around significant announcements, further damaging the company's reputation in the capital market [10]

Group 1 - The Ministry of Industry and Information Technology, along with several other government bodies, has issued an implementation opinion to accelerate the high-quality development of the technology service industry, emphasizing the importance of technology transfer and industrialization to support innovation [1] - Technology transfer is identified as a crucial link between innovation and industry, necessary for realizing the value of innovations and contributing to the development of a modern industrial system [1][2] - Various regions are implementing measures to facilitate technology transfer, such as establishing parks and promoting innovative application scenarios [1] Group 2 - Universities are recognized as significant sources of technological breakthroughs, with a high percentage of national science awards attributed to them, yet many innovations remain uncommercialized [2][3] - Jiangsu Province's Yixing City has developed a model leveraging top talent to drive industrial development, with new provincial academician workstations established to enhance collaboration between academia and industry [3] Group 3 - Shanghai Jiao Tong University has created a technology transfer service team to assist faculty in commercializing research, while Zhejiang University collaborates with local governments to establish dedicated teams for technology transfer [4] - The University of Science and Technology of China has introduced a new model for technology transfer that simplifies approval processes and attracts more social capital, resulting in significant increases in technology transfer outcomes [5] Group 4 - The government is actively working to improve technology transfer efficiency, as outlined in the "Education Strong Nation Construction Plan Outline (2024-2035)" [6] - A collaborative model involving government coordination, technical contributions from universities, and implementation by enterprises is emerging as a new approach to facilitate technology transfer [6] Group 5 - The establishment of the Yixing Food and Biotechnology Research Institute has revitalized an innovation park, focusing on developing future food and biotechnology industries [7][8] - The research institute has attracted significant investment and aims to create a comprehensive support system for technology transfer from research to application [8] Group 6 - DeRong Technology has achieved a breakthrough in flexible thin-film solar cell efficiency, marking a significant advancement in high-efficiency photovoltaic technology [9][10] - The company has successfully reduced production costs and improved yield rates through innovative manufacturing techniques, positioning itself as a leader in the renewable energy sector [9][10] Group 7 - The integration of academic research and industry practices has been crucial for companies like Zhongchao Aerospace Precision Casting Technology Co., which has achieved significant advancements in high-temperature alloy precision casting through collaboration with Shanghai Jiao Tong University [10]

Core Viewpoint - The precursor market in the semiconductor industry is experiencing significant growth driven by increasing demand for high-purity and high-stability materials essential for advanced chip manufacturing processes [1][5]. Group 1: Current Status of the Precursor Industry - The production of semiconductor precursors requires highly specialized technology and knowledge across chemical synthesis, materials science, and semiconductor processes [3]. - Rapid innovation is necessary as the semiconductor industry evolves quickly, necessitating close collaboration between precursor manufacturers and semiconductor producers to meet new demands [3]. - Quality control is critical, with manufacturers needing to establish strict systems to ensure the purity, stability, and consistency of precursors [3]. - There is a growing demand for customized precursors tailored to specific processes and applications, requiring manufacturers to work closely with clients [3]. Group 2: Development Trends of Precursors - There is an increasing requirement for high purity and stability in precursors due to the shrinking size and enhanced performance of semiconductor devices [4]. - New types of precursors are being developed to meet the needs of next-generation semiconductor devices, including those for two-dimensional materials and novel memory applications [4]. - The trend towards atomic layer deposition (ALD) necessitates the development of more precise precursors to achieve higher atomic layer control and film uniformity [4]. - Precursors must be adaptable to both high-temperature and low-temperature applications, with a focus on developing suitable low-temperature precursors for film growth [4]. Group 3: Global Precursor Market Analysis - The global precursor market is projected to reach $1.786 billion in sales by 2024 and $3.056 billion by 2031, with a compound annual growth rate (CAGR) of 8.15% from 2025 to 2031 [7]. - The Chinese precursor market is expected to grow from $380.21 million in 2024 (21.28% of the global market) to $812.66 million by 2031 (26.59% of the global market) [7]. - Taiwan is currently the largest consumer market for precursors, with a projected market share of 28.58% in 2024, followed by South Korea and mainland China [7]. - Europe is the largest production region for precursors, holding a 50.32% market share in 2024, while mainland China is expected to experience the fastest growth [7]. Group 4: Product and Application Insights - High-k precursors are expected to hold a significant market share, projected to reach 38.62% of revenue by 2031 [10]. - The PVD/CVD/ALD applications are anticipated to account for approximately 91.99% of revenue in 2024, with a CAGR of about 8.34% in the coming years [10]. Group 5: Key Manufacturers - Major global precursor manufacturers include Merck, UP Chemical, Air Liquide, SK Materials, DNF, SoulBrain, and others [13][17]. - The report provides insights into the production capacity, sales volume, revenue, and market share of these key players [15].

Macro Strategy - The report highlights that the Chinese technology industry is injecting stability into global assets, transitioning from "point breakthroughs" to "system evolution" in its innovation system, which is crucial for transforming into an innovation-driven economy [1][18] - The capital market is expected to continuously provide stable liquidity support for the technology industry, with "KOT estimates" likely to inject further stability into the revaluation of China's economic transformation [1][19] Fixed Income - The report analyzes the investment value of technology bonds, noting that despite increased trading sentiment, the market's growth rate is more significant, indicating ample trading space for technology bonds [3] - Technology bonds generally have a credit spread slightly higher than ordinary credit bonds of the same rating, with a notable advantage in the 3-5 year maturity range, suggesting a larger capital gain potential compared to ordinary credit bonds [3] - The valuation yield of technology bonds predominantly falls within the 2%-2.5% range, with longer maturities showing a significant upward trend, making them attractive for investors seeking stable returns [3] Industry Insights - The report emphasizes the potential for revaluation in various industries, particularly in high-tech, consumer, and emerging service sectors, suggesting that investors should explore valuation discrepancies in technology bonds from an industry perspective [5] - The computer industry is highlighted as a significant area for growth, driven by policy support and the emergence of a trillion-dollar market, indicating a multi-dimensional value opportunity [6] Environmental Industry - The report discusses the renewable energy subsidy projects released by the State Grid, focusing on the importance of stable operations and self-control in the environmental sector [7] - It suggests that defensive assets driven by domestic demand, such as solid waste and water services, are expected to see significant cash flow improvements and dividend increases [7] Company-Specific Analysis - The report provides a detailed analysis of Zhongwei Co., predicting a net profit of 18.6 billion yuan for 2025, with a target price of 44 yuan, maintaining a "buy" rating [8] - For Qianhe Flavor Industry, the report adjusts revenue expectations downward due to strategic adjustments but anticipates profit growth driven by cost advantages [9] - China XD Electric is projected to achieve a net profit of 17.0 billion yuan by 2025, with a "buy" rating maintained due to strong performance in its transformer and switch businesses [11]

Core Viewpoint - The company has shown significant growth in revenue and profit for the year 2024, indicating a strong performance in its core business areas [2][3]. Financial Performance - In 2024, the company achieved revenue of 2.352 billion yuan, a year-on-year increase of 38.08% - The net profit attributable to shareholders reached 271 million yuan, up 28.15% year-on-year - The net profit after deducting non-recurring items was 193 million yuan, reflecting a growth of 53.19% year-on-year - In Q4 2024, the company reported a single-quarter revenue of 588 million yuan, a year-on-year increase of 39.12% but a quarter-on-quarter decrease of 8.30% - The net profit for Q4 2024 was 5.37 million yuan, marking a return to profitability compared to the previous year, but a significant quarter-on-quarter decline of 93.82% [2]. Business Segment Performance - The precursor business (including MO source) generated revenue of 578 million yuan in 2024, a substantial year-on-year growth of 70.3%, with a corresponding gross margin increase of 8.7 percentage points to 48.6% - The precursor sales volume reached 383 tons, representing an 83.4% increase year-on-year - The specialty gas business achieved revenue of 1.506 billion yuan, a year-on-year increase of 22.3%, but the gross margin decreased by 6.2 percentage points to 39.9% - Specialty gas sales volume was 11,800 tons, up 25.1% year-on-year - The company recorded an asset impairment loss of 127 million yuan for the year, with Q4 2024 accounting for 103 million yuan of this loss, impacting the quarterly performance [3]. Strategic Development - The company has evolved from a single product (MO source) and single sector (LED) to a comprehensive electronic materials supplier with multiple products (precursors, specialty gases, photoresists) and industries (IC, LCD, LED, new energy) - In 2024, revenue from the IC sector exceeded 30% of total revenue, growing by 106% year-on-year - The company is accelerating the application of phosphine mixtures in the new energy sector and has gained a first-mover advantage in the domestic IC application of ARC products - The company is actively exploring high-end applications in compound semiconductors and optical coatings, alongside achieving over 10 million yuan in revenue from ArF photoresists in 2024 [4].