Core Viewpoint - Luoyang Energy has shown a significant increase in stock price and trading activity, indicating positive market sentiment despite a decline in revenue and profit for the first half of 2025 [2][3]. Company Overview - Luoyang Energy, established on October 14, 1992, and listed on November 30, 2006, is located in Yiyuan County, Zibo City, Shandong Province. The company specializes in the research, production, and sales of refractory insulation products, including ceramic fibers, soluble fibers, alumina fibers, and lightweight mullite bricks [2]. - The main revenue sources for Luoyang Energy are ceramic fiber products (87.65%), industrial filtration products (6.47%), automotive lining products (5.54%), and other (0.34%) [2]. Stock Performance - Year-to-date, Luoyang Energy's stock price has increased by 12.59%, with a 4.65% rise in the last five trading days, 16.38% in the last 20 days, and 25.58% in the last 60 days [2]. - As of September 24, the stock price was 13.50 CNY per share, with a market capitalization of 6.927 billion CNY [1]. Financial Performance - For the first half of 2025, Luoyang Energy reported a revenue of 1.173 billion CNY, a year-on-year decrease of 27.31%, and a net profit attributable to shareholders of 76.6237 million CNY, down 62.97% year-on-year [2]. - The company has distributed a total of 2.772 billion CNY in dividends since its A-share listing, with 1.225 billion CNY distributed in the last three years [3]. Shareholder Information - As of June 30, 2025, the number of shareholders increased by 16.37% to 15,400, with an average of 32,763 circulating shares per person, a decrease of 14.03% [2]. - Among the top ten circulating shareholders, E Fund CSI Dividend ETF (515180) is the fifth largest, holding 3.2783 million shares, down by 445,000 shares from the previous period. Meanwhile, China Merchants CSI Dividend ETF (515080) is the eighth largest, with 2.6993 million shares as a new shareholder [3].

Investment Rating - The investment rating for the company is "Buy" and is maintained [6]. Core Views - The company reported a total revenue of 1.17 billion yuan for the first half of 2025, a year-on-year decrease of 27.3%, with a net profit attributable to shareholders of 76.62 million yuan, down 62.97% year-on-year [2][4]. - In Q2 2025, the company's revenue was 630 million yuan, a decline of 30.9% year-on-year, and the net profit attributable to shareholders was 16.58 million yuan, down 86.68% year-on-year [2][4]. - The company is experiencing pressure from overall weak downstream demand, particularly in traditional industries such as ceramics and petrochemicals, which has negatively impacted project sales and profit margins [10]. - The company has established a leading position in the domestic ceramic fiber industry, with a production capacity of 590,000 tons and a market share ranking first in the country [10]. - The company is expanding its business through acquisitions from its major shareholder, enhancing its product range and aiming for synergy in industrial filtration, emission control, and new energy battery sectors [10]. - Due to industry pressures and competitive environment changes, the company's earnings forecast has been adjusted downwards, with expected profits of 290 million yuan and 390 million yuan for 2025 and 2026, respectively, corresponding to PE ratios of 21 and 16 [10].

Group 1 - The company, Luyang Energy-saving (002088.SZ), primarily engages in the production and sales of ceramic fiber products, industrial filtration products, and automotive padding products [1] - The company does not involve in the research and development of PEEK materials [1]

Core Viewpoint - The sudden dismissal of three key management personnel at Luyang Energy has raised concerns about the company's stability and future performance, especially in light of its declining financial results and ongoing management turmoil [1][2][5]. Management Changes - Luyang Energy announced the dismissal of three key executives, including the financial head, vice president, and audit department head, which is unusual in the A-share market [1][2]. - The dismissed executives had recently joined the company, with their terms set to end in May 2026, indicating that their departure was not due to the completion of their terms [2][3]. - The company has not appointed successors for these roles, and the current president will temporarily assume the financial responsibilities [2][5]. Historical Context - The company has experienced frequent management changes since last year, with several long-term executives resigning for personal reasons, contrasting with the recent forced dismissals [3][4]. - The control shift to foreign shareholders has led to significant changes in the management team, with many new executives having foreign corporate backgrounds [4][5]. Financial Performance - Luyang Energy's financial outlook is concerning, with a projected net profit decline of 53.21% to 61.72% for the first half of 2025 compared to the previous year [6][7]. - The company has faced challenges due to a downturn in the real estate market, leading to reduced demand for its core ceramic fiber products [7][8]. - The introduction of new business lines has not yet significantly contributed to revenue, raising questions about their ability to offset declines in traditional business areas [8][10]. Dividend Strategy - Despite recent financial struggles, Luyang Energy has maintained a high dividend payout strategy, having distributed approximately 27.72 billion yuan since its IPO [10][11]. - The average dividend payout ratio from 2017 to 2024 has been around 76.59%, with a notable high of 117.22% in 2020 [11][12]. - Future dividend distributions will depend on the company's financial performance, with a commitment to distribute at least 20% of the annual distributable profits [14].

Investment Rating - The investment rating for the company is "Buy" and is maintained [5][7]. Core Views - The company reported a total revenue of 3.53 billion yuan for 2024, representing a year-on-year increase of 0.38%, while the net profit attributable to shareholders was 480 million yuan, a decrease of 2.42% year-on-year [3][4]. - For Q1 2025, the company disclosed a revenue of 542 million yuan, a year-on-year decline of 22.61%, and a net profit of 60.04 million yuan, down 27.19% year-on-year [3][4]. - The overall business performance in 2024 was relatively stable, with growth in emerging sectors like shipping and new energy, while traditional markets such as ceramics and cement showed no improvement due to cyclical constraints from real estate [4]. - The company plans to enhance its management and production processes by implementing advanced management concepts like Kaizen and WCM, aiming to improve product quality and market share [4][5]. Financial Summary - The revenue forecast for 2025 and 2026 is 5.4 billion yuan and 6 billion yuan, respectively, with corresponding price-to-earnings ratios (PE) of 11 and 10 times [5]. - The company reported a revenue of 3.53 billion yuan in 2024, with a gross profit of 1.08 billion yuan, resulting in a gross margin of 31% [13]. - The company’s cash dividend plan for 2024 is expected to be 410 million yuan, accounting for 85.5% of the net profit attributable to shareholders, indicating a strong commitment to shareholder returns [4].