Core Viewpoint - He Sheng New Materials (002290.SZ) is expected to achieve a net profit of approximately 137 million to 154 million yuan for the first three quarters of 2025, representing a year-on-year growth of 60% to 80% due to improved supply chain management and increased product gross margins [1][2][3] Financial Performance - The company reported steady growth in its main business of household appliance composite materials, with revenue figures from 2020 to 2024 being 1.822 billion, 2.269 billion, 2.133 billion, 2.34 billion, and 2.526 billion yuan, respectively, and net profits of 55.08 million, 81.98 million, 65.93 million, 82.77 million, and 97.91 million yuan [4] - As of the first half of 2025, the company had a net operating cash flow of 68.05 million yuan and cash on hand of 494 million yuan, a year-on-year increase of 43.3% [4] Stock Performance - The stock price of He Sheng New Materials increased significantly from a low of 14.41 yuan per share in mid-January 2025 to a closing price of 39.13 yuan per share on October 16, 2025, marking a rise of 171% and a total market capitalization of 9.709 billion yuan [1][4] Strategic Initiatives - The company is actively expanding into the AI sector, having established Shanghai Haixi Technology Co., Ltd. in March 2024, focusing on AI-related hardware and software design, development, sales, and operations [5] - In August 2025, the company invested 250 million yuan in Yizhi Electronics, acquiring a 10% stake, which is seen as a strategic move to enhance its presence in the chip and computing power market [6] Research and Development - He Sheng New Materials has been increasing its R&D investment, with expenditures from 2020 to the first half of 2025 totaling 416 million yuan [6] - The company holds 87 patents, including 8 invention patents, and has made significant advancements in PCM/VCM manufacturing processes [6]

Core Viewpoint - He Sheng New Materials is expected to report a net profit of between 137 million and 154 million yuan for the first three quarters of 2025, representing a year-on-year increase of 60% to 80% driven by improved supply chain management and increased product gross margins [1] Financial Performance - The company's revenue from 2020 to 2024 was 1.822 billion, 2.269 billion, 2.133 billion, 2.34 billion, and 2.526 billion yuan respectively, with net profits of 55.08 million, 81.98 million, 65.93 million, 82.77 million, and 97.91 million yuan [1] - The stock price of He Sheng New Materials has increased by 134.68% year-to-date as of October 15, reflecting a strong correlation between performance and market valuation [1] Business Expansion - He Sheng New Materials is diversifying into the artificial intelligence sector, having established Shanghai Haixi Technology Co., Ltd. in partnership with Shanghai Chaopan Enterprise Management Partnership in March 2024 [2] - The new subsidiary focuses on AI chips and related services, holding one invention patent and 13 software copyrights, indicating a growing technological foundation [2] - The company plans to invest 250 million yuan in Yizhi Electronics to acquire a 10% stake, enhancing its capabilities in high-end processors for computing and storage devices [2]

Core Viewpoint - He Sheng New Materials (002290.SZ) is expanding its layout in the AI field by investing 250 million yuan in Shanghai Yizhi Electronic Technology Co., Ltd, which is seen as a significant move to enhance its presence in the chip and computing power market [1][2]. Investment Details - The investment will result in He Sheng New Materials holding a 10% stake in Yizhi Electronic, which has an estimated pre-investment valuation of 2.25 billion yuan [2]. - The capital structure of the investment includes 4.7669 million yuan for subscribing to newly registered capital, with the remaining 245.33 million yuan allocated to capital reserves [3]. Company Performance - He Sheng New Materials anticipates a net profit of 91.9 million to 104 million yuan for the first half of 2025, representing a year-on-year growth of 50% to 70% [1][6]. - The company reported a significant increase in operating cash flow, with a net cash flow of 59.92 million yuan in the first quarter of 2025, up 448.44% year-on-year [6]. Financial Health - As of the end of the first quarter of 2025, He Sheng New Materials had 424 million yuan in cash, marking a 34.55% increase year-on-year, indicating strong liquidity for business expansion [6]. - The company has reduced short-term borrowings by 51.61% to 45.03 million yuan and non-current liabilities due within one year by 82.43% to 2.971 million yuan [6]. R&D and Innovation - He Sheng New Materials has been actively enhancing its R&D capabilities, with total R&D expenditures from 2020 to 2024 amounting to 369 million yuan [6]. - The company holds 83 patents as of the end of 2024, including 8 invention patents and 75 utility model patents, showcasing its commitment to innovation [7]. Strategic Partnerships - The collaboration between He Sheng New Materials and Yizhi Electronic is expected to leverage their respective strengths in R&D to provide customized product development services [4].