Market Overview - In June 2025, the stock market experienced an overall rise due to the easing of Middle Eastern tensions and multiple thematic catalysts, while bond market interest rates declined [4][7] - The average parity of convertible bonds reached a near-high level, with significant valuation increases for bond-like convertible bonds [5][7] - The China Securities Convertible Bond Index closed at 442.1 points on June 27, marking a 2.68% increase for the month [7] Convertible Bond Market Analysis - As of June 27, the arithmetic average parity of convertible bonds was 103.14 yuan, up 3.77% from the previous month, placing it in the 98th percentile since 2023 [7][23] - The average conversion premium rate for bonds in the price range of 90 to 125 yuan was 21.13%, also in the 48th percentile for 2023 [7][23] - The average yield to maturity (YTM) for bond-like convertible bonds fell below zero, indicating a shift in market sentiment [7][29] Recommended Convertible Bonds - The "Top Ten Convertible Bonds" for July 2025 include: - **Shenzhen Gas Convertible Bond (113067.SH)**: High balance and stable profitability, rated AAA [31][32] - **Hongcheng Convertible Bond (110077.SH)**: Stable operations and high dividend payout, rated AA+ [31][43] - **Weir Convertible Bond (113616.SH)**: Strong growth in consumer electronics and automotive sectors, rated AA+ [31][55] - **Jingce Convertible Bond (123176.SZ)**: Urgent need for domestic semiconductor testing equipment, rated AA- [31][66] - **Haoyuan Convertible Bond (118051.SH)**: Recovery trend in innovative drug development, rated AA- [31][79] - **Huakang Convertible Bond (111018.SH)**: Leading position in functional sugar alcohols, rated AA- [31][90] - **Bohai Convertible Bond (113069.SH)**: Steady growth in special alloy materials, rated AA [31][101] - **Dongcai Convertible Bond (113064.SH)**: Increased demand for high-frequency resin materials driven by AI server construction, rated AA [31][113] Industry Insights - The gas industry, represented by Shenzhen Gas, is experiencing steady growth in natural gas sales, with a 5.06% year-on-year increase in supply volume [36] - The environmental governance sector, led by Hongcheng Environment, shows stable revenue growth from water supply and treatment services, with a focus on expanding its business footprint [46] - The semiconductor industry, highlighted by Weir Group, is benefiting from increased demand in automotive electronics and consumer electronics, with significant revenue growth projected [58] - The healthcare sector, represented by Haoyuan Pharmaceutical, is positioned to capitalize on the recovery of innovative drug research and development [82]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for future performance [6][4]. Core Views - The company achieved a revenue of 4.47 billion yuan in 2024, representing a year-on-year increase of 19.6%, while the net profit attributable to shareholders was 181 million yuan, a decrease of 44.54% [1][2]. - In Q1 2025, the company reported a revenue of 1.13 billion yuan, up 23.23% year-on-year but down 7.37% quarter-on-quarter, with a net profit of 92 million yuan, reflecting an 81.16% increase year-on-year [1][2]. - The decline in 2024's net profit was primarily due to prolonged losses in the sales prices of epoxy resin and photovoltaic backplane films, alongside increased market penetration of dual-glass components [2]. - The company is expanding its production capacity across multiple bases, with significant projects expected to come online in late 2025 and early 2026 [3]. Summary by Sections Financial Performance - The company’s revenue for 2024 was 4.47 billion yuan, with a growth rate of 19.6%. The net profit for the same year was 181 million yuan, down 44.54% [5][4]. - For Q1 2025, the revenue was 1.13 billion yuan, showing a year-on-year increase of 23.23% and a quarter-on-quarter decrease of 7.37%. The net profit was 92 million yuan, up 81.16% year-on-year [1][2]. Capacity Expansion - The company has a strong multi-base layout with ongoing capacity construction, including projects in Mianyang, Chengdu, Jiangsu, and Shandong, expected to be operational between late 2025 and early 2026 [3]. Profitability Forecast - The profit forecast for 2025-2027 has been adjusted downwards, with expected net profits of 416 million yuan, 509 million yuan, and 612 million yuan respectively [4][5]. - The company is focusing on high-value products such as high-voltage electrical polypropylene films and ultra-thin electronic polypropylene films, which are expected to enhance brand competitiveness and overall profitability [2].

Investment Rating - The report maintains an "Outperform" rating for the company [2][6] Core Views - The company reported a revenue of 4.47 billion yuan for 2024, a year-on-year increase of 20%, but a net profit of 181 million yuan, down 45% year-on-year [6] - The first quarter of 2025 shows a revenue of 1.13 billion yuan, up 23% year-on-year, and a net profit of 92 million yuan, up 81% year-on-year, indicating a performance turnaround [6] - The company is focusing on expanding its high-frequency and high-speed resin production to capture industry opportunities, with a projected investment of 700 million yuan for new production lines [6] Financial Data Summary - For 2024, the total revenue is projected at 4.47 billion yuan, with a net profit of 181 million yuan, and an expected growth in revenue to 5.07 billion yuan in 2025 [8] - The gross profit margin for 2024 is 13.9%, with a forecasted increase to 19.1% by 2025 [6][8] - The company plans to distribute a cash dividend of 1.00 yuan per 10 shares, totaling approximately 89 million yuan, which represents 87.77% of the annual net profit [6] Segment Performance - The electronic materials segment achieved a revenue of 1.12 billion yuan in Q1 2025, a 129% increase year-on-year, driven by demand for high-speed electronic resins [6] - The optical film materials segment reported a revenue of 3.00 billion yuan in Q1 2025, a 43% increase year-on-year, with expectations for gradual improvement in product pricing and gross margins [6] - The new energy materials segment saw a revenue of 3.09 billion yuan in Q1 2025, but faced challenges due to declining demand for photovoltaic backsheet films [6]