Company Overview - Nobon Co., Ltd. was established in 2002, specializing in the R&D, production, and sales of differentiated and personalized water-jet non-woven materials and products [2] - The company's revenue and net profit attributable to shareholders are projected to have a CAGR of 17.7% and 2.8% respectively from 2015 to 2024 [2] - In 2024, the company is expected to achieve revenue of 2.24 billion yuan, a year-on-year increase of 16.8%, and a net profit of 95.23 million yuan, a year-on-year increase of 15.2% [2] - In Q1 2025, revenue and net profit are expected to grow by 39.1% and 48.6% year-on-year respectively [2] - The revenue share of water-jet non-woven materials and products in 2024 is projected to be 31.7% and 67.5% respectively, with year-on-year changes of -1.2% and +27.8% [2] Industry Situation - Water-jet non-woven products are widely used in high-demand disposable consumer goods markets such as wet wipes and beauty care products due to their breathable, soft, lightweight, and antibacterial properties [3] - The production of water-jet non-woven fabric reached 1.51 million tons in 2023, with a compound annual growth rate (CAGR) of 18.6% from 2018 to 2023 [3] - The penetration rate of non-woven fabric in the market has been gradually increasing, reaching 18.6% in 2023, an increase of 7.7 percentage points compared to 2018 [3] - The market size for wet wipes in China is projected to be 12.92 billion yuan in 2024, with a CAGR of 5.0% from 2024 to 2029, particularly for makeup wipes and wet toilet paper [3] Competitive Advantages - The company has a complete and advanced production line for roll materials, with outstanding technological innovation capabilities, being the only company in China capable of mass-producing dispersible materials for supply to the U.S. [4] - The company is steadily increasing the proportion of differentiated and dispersible material production, completing a technical transformation project for differentiated production lines in 2024 [4] - The subsidiary Guoguang is one of the most comprehensive manufacturers of wet wipe products in China, with a revenue growth of 26.6% in 2024 and over 40% in Q1 2025 [4] - Guoguang is deepening cooperation with major clients such as Walmart and actively exploring new customers, leading to steady growth in orders [4] - The self-owned brand "Xiaozhijia" is rapidly expanding, with a revenue increase of 80.6% year-on-year in 2024 [4]

Summary of Nobon Co., Ltd. Conference Call Company Overview - Nobon Co., Ltd. specializes in differentiated water-jet non-woven materials and products, established in 2002. The main business segments include water-jet non-woven materials, non-woven products, and proprietary brands. The company aims for significant growth in its proprietary brand "Xiaozhijia" from 15 million in 2023 to 60 million in 2025 [2][3][7]. Business Segments - **Conventional Materials**: Accounts for 30% of the business but is not profitable [2][4]. - **Differentiated Custom Materials**: Represents 35% of the business with varying gross margins [2][5]. - **Manufacturable Carbon Fiber Materials**: Also 35% of the business, recognized as a global leader and certified by the highest U.S. production standards [2][5]. Outsourcing and Brand Development - The outsourcing business, managed by a subsidiary of Guoguang Electric, is projected to generate approximately 1.4 billion in sales for 2024, with clients including Walmart and Sam's Club [2][6]. - The proprietary brand "Xiaozhijia" is expected to grow significantly, focusing on online and offline channels to transition towards a consumer-oriented model [2][7][19]. Future Focus and R&D - Nobon plans to concentrate on water-based non-woven materials, particularly manufacturable carbon fiber materials, and aims to launch a biodegradable material production line, targeting a 50% share [2][8][9]. - The company is committed to expanding its outsourcing business and enhancing operational quality to improve profit margins [2][9]. Industry Dynamics - The non-woven fabric industry has experienced overcapacity post-pandemic, with a projected balance of supply and demand by the end of 2024, although profit margins have decreased compared to pre-pandemic levels [2][10][11]. - The water-jet non-woven fabric capacity is estimated at 6 to 7 million tons, with water-jet accounting for about 20% of this capacity, which has more than doubled since before the pandemic [11]. Competitive Advantages - Nobon holds a competitive edge in the non-woven materials sector through technological and product differentiation, with a focus on quality and performance [4][13]. - The company invented the dispersible technology in 2013, which is now commercially applied exclusively by Nobon in China, despite several companies claiming similar capabilities [14]. Financial Performance - Nobon reported a turning point in profitability in Q3 2024, with increased orders and a full production capacity leading to better performance compared to the first half of the year [12]. - The company’s overall export ratio has decreased, with domestic outsourcing growth outpacing international sales [18]. Product Development and Market Trends - Nobon is developing a new dispersible sanitary napkin product, which has undergone multiple iterations to improve user experience and functionality [20][21]. - The company is also exploring the oral care market with promising developments in the smokeless tobacco segment, which is expected to contribute significantly to profits [23]. Consumer Insights - Nobon's disposable hygiene products, such as wet wipes and cotton soft towels, are gaining popularity due to their convenience and comfort, which aligns with consumer demand for high-quality living standards [15]. Conclusion - Nobon Co., Ltd. is strategically positioned in the non-woven materials industry with a focus on innovation, quality, and market expansion. The company is navigating post-pandemic challenges while aiming for sustainable growth through differentiated products and enhanced operational efficiency [2][10][12].

Core Viewpoint - The company is experiencing accelerated growth in its main business, driven by the expansion of major clients and the rapid growth of its own brand, maintaining a "Buy" rating [1] Group 1: Financial Performance - In 2024, the company achieved revenue of 2.237 billion yuan, a year-on-year increase of 16.8%, with net profit attributable to shareholders of 95 million yuan, up 15.2% [1] - In Q1 2025, the company reported revenue of 608 million yuan, a year-on-year increase of 39.1%, with net profit attributable to shareholders of 30 million yuan, up 48.6% [1] - The company has revised its net profit forecasts for 2025-2027 to 133 million, 160 million, and 187 million yuan, respectively, with corresponding EPS of 0.75, 0.90, and 1.05 yuan [1] Group 2: Business Segments - The product business continues to grow, with revenue from rolled materials and products in 2024 at 709 million and 1.509 billion yuan, respectively, showing a decline of 1.2% and an increase of 27.8% [1] - The subsidiary Hangzhou Guoguang generated revenue of 1.393 billion yuan in 2024, a year-on-year increase of 26.6%, due to the company's efforts to expand into the domestic market [1] - The own brand "Xiaozhijia" saw significant growth, with revenue of 30 million yuan in 2024, up 80.6% [1] Group 3: Operational Efficiency - In 2024, the company's gross margin and net profit margin were 14.80% and 4.26%, respectively, showing a slight decline due to an increase in low-margin client revenue [2] - In Q1 2025, the gross margin and net profit margin improved to 15.73% and 5.00%, respectively, with a decrease in the expense ratio to 7.51% [2] - The company's inventory at the end of Q1 2025 was 311 million yuan, up 21.7%, with inventory turnover days reduced to 48.8 days [2]

Core Viewpoint - Nobon Co., Ltd. (603238) reported significant growth in its 2024 annual report and 2025 Q1 report, with a goal to double revenue for its self-owned brand "Xiaozhijia" by 2025 and plans for a new factory in Malaysia to commence production by mid-2025 [1] Financial Performance - In 2024, Nobon achieved operating revenue of 2.236 billion yuan and net profit of 95.23 million yuan, representing year-on-year growth of 16.80% and 15.22% respectively [1] - In Q1 2025, the company reported total operating revenue of 608 million yuan, a year-on-year increase of 39.14%, and a net profit attributable to shareholders of 30.43 million yuan, up 48.56% year-on-year [1] Market Position and Brand Development - Nobon has established a high-end product image in both domestic and international markets, receiving accolades such as "Famous Trademark of Zhejiang Province" and "Zhejiang Brand Product" [1] - The self-owned brand "Xiaozhijia" saw revenue of 29.85 million yuan in 2024, marking an 80.62% increase, with a notable 116% growth during the Double 11 shopping festival [3] Strategic Initiatives - The company has focused on high-end product development to navigate industry price wars, successfully securing large orders from overseas clients [2] - Nobon invested 77.73 million yuan in R&D in 2024, resulting in 150 technical documents and a total of 274 authorized patents, including 72 invention patents, positioning it as a leader in the industry [2] Production and Capacity Expansion - Nobon is upgrading its production lines to enhance efficiency and sustainability, with plans for a new wet production line expected to be the largest in the country [2] - To meet increasing order demands, the company has improved production efficiency by over 30% and added more than 20 new production lines for dry and wet wipes [4] Future Outlook - Nobon aims to expand its OEM business and strengthen R&D capabilities at its subsidiaries, ensuring a diverse range of high-performance, eco-friendly wipe products [4]