Core Viewpoint - The company, Zhongzi Technology, has been recognized as a supplier of exhaust purification catalysts for new energy vehicles by a state-owned automotive group, which is expected to positively impact its business expansion and future performance [1] Group 1: Business Development - Zhongzi Technology has received a notification for designated development of exhaust purification catalysts, indicating client recognition of its R&D capabilities, supply chain efficiency, and product quality [1] - The company has achieved significant sales milestones, with gasoline vehicle exhaust purification catalyst sales surpassing one million sets for the first time in 2024 [2] - The company has successfully won bids for industrial catalysts and has entered multiple overseas project orders in the energy storage sector, indicating the effectiveness of its globalization strategy [2] Group 2: Financial Performance - The internal combustion engine exhaust purification catalyst segment is projected to generate revenue of 1.453 billion yuan in 2024, accounting for approximately 93% of total revenue [1] - Other business segments, while smaller in revenue, are experiencing substantial growth, with the industrial catalyst segment expected to reach 13.88 million yuan in 2024, a year-on-year increase of 65.73% [1] - The energy storage and storage+ business is anticipated to generate 80.17 million yuan in revenue, reflecting a remarkable year-on-year growth of 309.47% [1] Group 3: Product Innovation - The company has launched seven core technologies covering various advanced fields, including environmental catalysts and hydrogen fuel cell catalysts, during its 20th anniversary celebration [2] - New products aimed at meeting the next stage of emission standards have been introduced, including catalysts for natural gas vehicles, diesel vehicles, and industrial waste gas purification [2]

Core Viewpoint - Zhongzi Technology (688737) has been recognized as a supplier of exhaust purification catalysts for a state-owned automotive group, indicating strong R&D and supply chain capabilities, which is expected to positively impact future performance [1] Group 1: Company Developments - Zhongzi Technology has received a notification for designated development of exhaust purification catalysts for new energy vehicles, although this does not constitute a formal order [1] - The company has achieved significant sales milestones in 2024, with gasoline vehicle exhaust purification catalyst sales surpassing one million sets and entering the supply chain of a joint venture brand [2] - The company has successfully won a bid for a major project involving metal honeycomb precious metal catalysts for a petrochemical facility, indicating strong performance in the industrial catalyst sector [2] Group 2: Financial Performance - The internal combustion engine exhaust purification catalyst segment is projected to generate revenue of 1.453 billion yuan in 2024, accounting for approximately 93% of total revenue [1] - Other business segments, while smaller in scale, are experiencing substantial growth, with the industrial catalyst segment expected to see a 65.73% year-on-year increase in revenue, reaching 13.88 million yuan [1] - The energy storage and related business is anticipated to grow by 309.47% year-on-year, reaching 80.17 million yuan, while hydrogen energy business revenue is expected to increase by 1273% [1] Group 3: Industry Trends - The implementation of the National VI emission standards is expected to increase the complexity of exhaust after-treatment technologies, driving the industry towards higher technology and value-added products [3] - The rapid development of new energy vehicles is anticipated to create new demand for hydrogen catalysts, indicating a shift in market needs [3]

Core Views - The report outlines the continuous supervision work conducted by Shenwan Hongyuan Securities for Zhongzi Technology Co., Ltd. after its listing, emphasizing compliance with relevant regulations and the establishment of a robust supervision system [1][2]. Continuous Supervision Work - Shenwan Hongyuan has established and effectively implemented a continuous supervision system, including a work plan [2]. - The institution has signed a rights and obligations agreement with Zhongzi Technology, which has been filed with the Shanghai Stock Exchange [2]. - Continuous supervision includes regular communication, site inspections, and due diligence to ensure compliance with laws and regulations [2][3]. Compliance and Governance - The institution supervises Zhongzi Technology's compliance with laws, regulations, and commitments made by its management [3][4]. - The company has been urged to establish effective internal control systems and governance structures [3][4]. - Information disclosure practices are closely monitored, ensuring that all documents submitted to regulatory bodies are accurate and complete [4][5]. Financial Performance - For the fiscal year 2024, Zhongzi Technology reported a revenue of CNY 1,564,932,497.13, reflecting a 1.35% increase from the previous year [12]. - The net profit attributable to shareholders was a loss of CNY 26,218,438.81, a significant decline of 161.95% compared to the previous year [12]. - The company’s cash flow from operating activities was negative at CNY -156,880,149.19, indicating financial strain [12]. Research and Development - The company increased its R&D expenditure by 26.13% to CNY 109,693,350.33, representing 7.01% of its total revenue [17]. - During the reporting period, Zhongzi Technology applied for 47 new domestic patents, enhancing its innovation capabilities [17][18]. Market Position and Risks - The environmental catalyst industry is characterized by intense competition, with significant market share held by foreign companies [9]. - The company faces risks related to core competitiveness, operational challenges, and fluctuations in precious metal prices, which are critical for its production [6][8][9]. - The transition to stricter emission standards and the growth of the new energy vehicle market may impact the demand for traditional fuel vehicle catalysts [10][11]. Use of Proceeds - The company raised CNY 1,407,189,683.51 from its IPO, with funds allocated for various projects, including the development of new catalysts and enhancing production capabilities [20][21]. - As of December 31, 2024, the company ensured compliance with regulations regarding the use of raised funds, with no violations reported [20][21].

Investment Rating - The report maintains a "Buy" rating for the company [5] Core Insights - The company achieved a revenue of 1.565 billion yuan in 2024, a year-on-year increase of 1.35%, but reported a net loss of 26 million yuan. In Q1 2025, revenue reached 403 million yuan, up 7.52% year-on-year, with a net profit of 8 million yuan, down 46.91% [1][2] - The catalyst business has shown significant market expansion, with the internal combustion engine exhaust purification catalyst revenue at 1.453 billion yuan in 2024, a decline of 3.90%. However, the industrial catalyst revenue surged by 65.73% to 13.8786 million yuan. The hydrogen energy product revenue was 732.06 thousand yuan, indicating continuous breakthroughs in business development [2] - The high-end composite material business is expected to become a new growth point, with the company actively developing carbon fiber PEEK prepreg technology. The composite structure project is under construction, with a planned annual production capacity of 1 million square meters of prepreg and 80 tons of aerospace composite materials [3] Summary by Sections Financial Performance - In 2024, the company reported a revenue of 1,565 million yuan, with a growth rate of 1.35%. The net profit attributable to the parent company was -26 million yuan. For 2025, the estimated revenues are projected to be 2,270 million yuan, with a net profit of 57 million yuan [4][10] Revenue Growth - The company is expected to see significant revenue growth in the coming years, with projections of 2,906 million yuan in 2026 and 3,544 million yuan in 2027, reflecting growth rates of 27.98% and 21.96% respectively [4][10] Profitability Metrics - The report forecasts a return to profitability with net profits of 238 million yuan in 2026 and 302 million yuan in 2027, indicating a strong recovery from the current losses [4][10] Research and Development - The company has increased its R&D investment to 110 million yuan in 2024, a year-on-year increase of 26.44%, highlighting its commitment to innovation and development in new technologies [1][4] Market Positioning - The company has successfully entered new markets, including hydrogen energy and energy storage, with the latter showing a remarkable revenue increase of 309.47% in 2024 [2][3]

Core Insights - The company reported a revenue of 1.565 billion yuan for 2024, a year-on-year increase of 1.35%, but faced a net loss of 26.21 million yuan attributable to shareholders [1] - In Q1 2025, the company achieved a revenue of 403 million yuan, reflecting a year-on-year growth of 7.52%, with a net profit of 7.70 million yuan attributable to shareholders [1] - The company focuses on low-carbon and environmental protection sectors, strategically planning a business matrix of "environmental catalysts, energy storage and energy storage +, and complex high-performance composite materials" [1] Financial Performance - The company's R&D investment in 2024 totaled 110 million yuan, accounting for 7.01% of revenue, which is a 26.13% increase compared to the previous year [1] - Nearly 70% of the R&D investment was directed towards new materials and new energy [1] Market Expansion - As one of the few major domestic manufacturers in the environmental catalyst field, the company achieved a breakthrough of one million units sold in the passenger vehicle catalyst sector [2] - The company secured multiple platform project designations from major domestic clients and successfully entered the supply chain of a joint venture brand [2] - The hydrogen fuel cell electrocatalyst segment generated sales revenue of 7.32 million yuan in 2024, marking a year-on-year increase of 1273% [2] New Energy Sector Growth - The energy storage and energy storage + segment achieved a revenue of 80.17 million yuan in 2024, with a growth rate exceeding 300% [2] - The company has obtained various certifications for its products, including EU CE certification, CB certification, and CNAS certification [2] Future Outlook - The company is planning to build an annual production capacity of 500,000 square meters of prepreg and 30 tons of aerospace composite components, with the prepreg pilot line already in operation [2] - The manufacturing base is currently under construction and is expected to be operational by the end of 2025 [2] - The company aims to enhance its competitiveness in the fields of environmental protection, new energy, and high-end manufacturing through its strategic layout across three major business segments [2]