Core Viewpoint - Shenzhen New Star is the largest global manufacturer of aluminum grain refiners, focusing on R&D, production, and sales, with a competitive edge in scale and technology [1] Group 1: Business Performance - In Q3 2025, Shenzhen New Star reported revenue of 2.324 billion yuan, ranking 8th in the industry, with the top competitor, Bowei Alloy, achieving 15.474 billion yuan [2] - The main business composition includes aluminum foil raw materials at 809 million yuan (53.96%) and aluminum grain refiners at 503 million yuan (33.53%) [2] - The net profit for the same period was a loss of 62.4771 million yuan, ranking last in the industry, with the top competitor achieving a net profit of 888 million yuan [2] Group 2: Financial Ratios - As of Q3 2025, the asset-liability ratio was 60.31%, higher than the industry average of 43.99%, but down from 61.82% year-on-year [3] - The gross profit margin was 3.48%, below the industry average of 15.62%, and decreased from 4.23% year-on-year [3] Group 3: Shareholder Information - As of September 30, 2025, the number of A-share shareholders increased by 3.62% to 16,500, while the average number of circulating A-shares held per shareholder decreased by 3.49% [5] - The company achieved a revenue of 1.5 billion yuan in H1 2025, a year-on-year increase of 29%, with a significant narrowing of net profit losses [5] Group 4: Future Outlook - The company is expected to enter a performance release period with the production of a 100,000-ton battery aluminum foil raw material project by the end of 2024 [5] - New production lines for 20,000 tons of boron trifluoride complexes and 10,000 tons of boron trifluoride gas are anticipated to start production in October 2025 [5] - Forecasted net profits for 2025-2027 are 51 million, 224 million, and 392 million yuan, with corresponding PE ratios of 77, 18, and 10 times [5]

Investment Rating - The report assigns a "Buy" rating for the company [2][9] Core Views - The company has shown significant revenue recovery, with a 29% year-over-year increase in revenue for the first half of 2025, reaching 1.5 billion yuan, and a notable reduction in net loss to 22 million yuan [4][5] - The recovery in lithium hexafluorophosphate prices is expected to lead to a turning point in profitability, with prices rising approximately 15% since July 21, 2025 [5] - The company is actively developing new business lines, indicating a clear growth path for the future [5] - The aluminum foil segment is entering a performance release phase, with a production capacity of 100,000 tons expected to contribute positively to profitability [6] - The company is nearing the completion of its boron trifluoride production lines, with expected production starting in October 2025, which is anticipated to have strong demand due to its applications in nuclear technology [7] Summary by Sections Financial Performance - In H1 2025, the company achieved a revenue of 1.5 billion yuan, a 29% increase year-over-year, while the net loss was reduced to 22 million yuan [4][5] - For Q2 2025, revenue was 760 million yuan, a 15% increase year-over-year, with a net loss of 25 million yuan primarily due to the lithium hexafluorophosphate business [5] Future Projections - The company forecasts net profits of 51 million yuan, 224 million yuan, and 392 million yuan for 2025, 2026, and 2027 respectively, with corresponding PE ratios of 77, 18, and 10 times [8][9] - Revenue projections for 2025 to 2027 are 3.059 billion yuan, 3.698 billion yuan, and 4.452 billion yuan, with growth rates of 19.4%, 20.9%, and 20.4% respectively [11] Business Development - The company completed a 100,000-ton battery aluminum foil project by the end of 2024, which is expected to enhance profitability [6] - The boron trifluoride production lines are set to commence operations in October 2025, with high barriers to entry and promising profit potential due to the complexity of production [7]

Core Viewpoint - The company has shown significant revenue growth and a notable reduction in losses, indicating a potential turning point in its financial performance [2][7]. Financial Performance - In H1 2025, the company achieved a revenue of 1.5 billion yuan, representing a year-on-year increase of 29% [1][2]. - The net profit attributable to shareholders for H1 2025 was -22 million yuan, reflecting a substantial narrowing of losses [1][2]. - In Q2 2025, the company reported a revenue of 760 million yuan, with a year-on-year growth of 15%, although it incurred a net loss of 25 million yuan, primarily due to the lithium hexafluorophosphate business [2]. Business Developments - The company has completed a 100,000-ton battery aluminum foil project by the end of 2024, which includes 10 casting and rolling production lines and 2 cold rolling production lines [3][4]. - The production line for 20,000 tons of boron trifluoride complex and 10,000 tons of boron trifluoride gas is nearing completion, with an expected launch in October 2025 [5][6]. Market Outlook - The price of lithium hexafluorophosphate has rebounded, with a current price of 56,500 yuan per ton, up approximately 15% since July 21, which is expected to positively impact the company's profitability [2]. - The high barriers to entry and the complex environmental assessment procedures for boron trifluoride production suggest a promising profit elasticity for the company [6]. Profit Forecast - The company is projected to achieve net profits attributable to shareholders of 51 million yuan, 224 million yuan, and 392 million yuan for the years 2025, 2026, and 2027, respectively [7].

Core Viewpoint - Shenzhen Xinxing Company expects a net loss attributable to shareholders of the parent company for the first half of 2025 to be between -23.5 million and -15.7 million yuan, indicating a reduction in losses compared to the previous year [2] Financial Performance - The expected net profit attributable to shareholders of the parent company for the same period last year was -57.34 million yuan, with a total profit of -55.01 million yuan [2] - The net profit attributable to shareholders of the parent company, excluding non-recurring gains and losses, is projected to be between -29.5 million and -19.7 million yuan [2] - The basic earnings per share for the previous year was -0.36 yuan [2] Reasons for Performance - The primary reasons for the expected loss include: 1. Significant fluctuations in aluminum ingot prices due to the tariff trade war, leading to increased production costs and a decrease in overall gross profit margin by approximately 10 million yuan [3] 2. Increased sales revenue from aluminum foil raw materials, resulting in higher accounts receivable and an expected credit impairment loss increase of about 5 million yuan compared to the first quarter [3] 3. The cold rolling production line for aluminum foil raw materials was in the debugging phase, causing lower than expected yield rates and a decline in gross profit margin, although the production line has since stabilized [3] Company Background - Shenzhen Xinxing Company, established on July 23, 1992, is located in the High-tech Industrial Park in Bao'an District, Shenzhen, and was listed on August 7, 2017 [5] - The company specializes in the research, production, and sales of aluminum grain refiners [5] - In 2024, the company reported an operating income of 2.563 billion yuan, a year-on-year increase of 62.32%, while the net profit attributable to the parent company was -291 million yuan, a year-on-year decrease of 105.88% [5]

Core Viewpoint - Shenzhen Xinxing Light Alloy Materials Co., Ltd. reported a significant increase in revenue for 2024, achieving 2.563 billion yuan, a year-on-year growth of 62.32%, but continued to face losses, with a net profit of -291 million yuan, an increase in losses of 105.88% compared to the previous year [1][2][10]. Group 1: Revenue and Profit Analysis - The company experienced a substantial revenue increase primarily due to the production and sales of aluminum foil blanks, despite the ongoing losses attributed to the significant decline in the gross margin of lithium hexafluorophosphate and related impairments [1][2][10]. - The gross margin for lithium hexafluorophosphate was reported at -44.89%, a decrease of 37.12 percentage points year-on-year, indicating severe profitability challenges in this segment [1][2][10]. - The net cash flow from operating activities was -206 million yuan, reflecting a 20.04% increase in outflows compared to the previous year, highlighting ongoing cash flow issues [1][2][10]. Group 2: Business Segment Performance - The revenue from aluminum grain refining agents increased by 29.06%, with a gross margin of 9.25%, up 1.56 percentage points year-on-year, benefiting from lower raw material costs [4][5][12]. - The battery aluminum foil blank segment, which began production in 2023, saw its revenue rise significantly, with the project fully operational by the end of 2024, contributing to overall revenue growth [5][6][12]. - The sales revenue from lithium hexafluorophosphate decreased to 94.34 million yuan in 2024, down from the previous year, as the company reduced production and sales in response to market conditions [6][10][12]. Group 3: Market Conditions and Future Outlook - The lithium hexafluorophosphate market is experiencing oversupply and intense competition, with prices dropping significantly from nearly 600,000 yuan per ton in early 2022 to around 49,000 yuan per ton in 2024 [7][14]. - The company plans to improve its profitability by optimizing production processes, enhancing cost control, and expanding customer orders, with a focus on stabilizing the lithium hexafluorophosphate segment [11][12][20]. - The battery aluminum foil market is expected to grow significantly, driven by the increasing demand for electric vehicles and energy storage solutions, with the company securing substantial orders for its products [28][29].

Core Viewpoint - Shenzhen New Star (603978.SZ) is enhancing its subsidiary's capital structure by introducing a local state-owned investment fund, aiming to improve competitiveness and operational support for its subsidiary, Luoyang New Star [1][7]. Group 1: Capital Increase and Structure - Luoyang New Star plans to raise 200 million yuan through a capital increase, with the registered capital increasing from 1 billion to 1.184 billion yuan, reducing Shenzhen New Star's ownership from 100% to 84.47% while maintaining control [1][3]. - The investment fund, Gongkong New Star Fund, is established with contributions from Shenzhen New Star and local state-owned assets, with a total subscription of 500 million yuan planned [4]. Group 2: Financial Performance and Commitments - Luoyang New Star achieved revenues of 2.423 billion yuan and a net profit of 6.9914 million yuan in 2024, with a performance commitment of a cumulative net profit of no less than 77 million yuan from 2025 to 2027 [2][6]. - Shenzhen New Star reported revenues of 2.563 billion yuan in 2024, but incurred a net loss of 291 million yuan, marking three consecutive years of losses totaling approximately 480 million yuan [2][9]. Group 3: Business Segments and Challenges - Shenzhen New Star operates in three main segments: aluminum grain refiners, battery aluminum foil materials, and lithium hexafluorophosphate, with Luoyang New Star being crucial for the battery aluminum foil segment [1][7]. - The lithium hexafluorophosphate segment faced significant challenges due to low market prices and increased competition, leading to a loss of 42.3482 million yuan in 2024 [8].