Core Viewpoint - Fangyuan Co., Ltd. (688148.SH) has reported continuous losses for three consecutive years, with significant shareholder sell-offs, high inventory levels consuming cash flow, and a soaring debt-to-asset ratio reaching 84%. The company, a key player in the lithium battery ternary precursor materials sector, has failed to reverse its loss trajectory amid industry cycle fluctuations and operational issues, resulting in a cycle of "slight revenue growth but profit decline" and "ineffective transformation leading to increased risks" [1][14][25]. Financial Performance - For the first three quarters of 2025, the company reported revenue of 1.49 billion yuan, a year-on-year increase of 5.29%, but a net loss attributable to shareholders of 121 million yuan, a decline of 2% year-on-year. Cumulatively, the company has incurred losses exceeding 1 billion yuan since 2023, with losses of 455 million yuan in 2023 and 427 million yuan in 2024 [2][16]. - The company's gross profit margin has deteriorated, with a margin of 2.63% in 2023, dropping to -5.17% in 2024, and slightly recovering to 3.05% in the first three quarters of 2025, still among the lowest in the industry [2][16]. Market Dynamics - Fangyuan's core products, including ternary precursors and battery-grade lithium carbonate, are closely tied to the electric vehicle industry. In the first half of 2025, China's output of ternary precursors fell by 7.3% year-on-year, while the overall market for ternary materials is being squeezed by the rising penetration of lithium iron phosphate batteries [4][18]. - The domestic lithium carbonate output increased by 44% in the first half of 2025, but Fangyuan's sales did not meet expectations due to price pressures and production challenges related to the use of recycled materials [5][19]. Operational Challenges - The company faces high fixed costs due to the commissioning of fundraising projects, which have led to increased depreciation, labor, and amortization expenses. The mismatch between capacity expansion and demand contraction has further eroded profit margins [7][21]. - As of September 30, 2025, Fangyuan's inventory reached 496 million yuan, exceeding its net assets of 454 million yuan, indicating severe liquidity issues. The high inventory levels pose risks of significant write-downs if raw material prices decline [7][21][23]. Cash Flow and Debt - The company's operating cash flow for the first three quarters of 2025 was a net outflow of 59.83 million yuan, a decline of 114% year-on-year, indicating that the core business is consuming cash rather than generating it [9][23]. - The debt pressure is significant, with a debt-to-asset ratio of 84.32% and liquidity ratios below the safety line, indicating an inability to cover short-term liabilities with short-term assets [9][24]. Shareholder Actions - In light of ongoing losses and increasing operational pressures, major shareholders have begun to sell off their stakes, with three significant shareholders planning to reduce their holdings by a total of 25.51 million shares, representing 5% of the company's total equity [11][26]. - The sell-off by shareholders, including the largest shareholder reducing their stake by 3%, raises concerns about the company's future prospects and may lead to further stock price suppression [12][27].

Core Viewpoint - Zhejiang Pava New Energy Co., Ltd. has filed an appeal against the first-instance judgment regarding a contract dispute with Zhejiang Gepai Cobalt Industry New Materials Co., Ltd. The case involves the return of specific goods or compensation for their value, with the financial impact on the company remaining uncertain pending the court's decision [2][6]. Group 1: Litigation Details - The company is the appellant in the case, having filed an appeal against the first-instance judgment [2][6]. - The amount in dispute includes a request for the return of 230 tons of PW508 and 162 tons of PW302 goods, or compensation if the goods cannot be returned [2][5]. - The appeal has been accepted by the court, and the company seeks to overturn the previous judgment and have its original claims supported [6]. Group 2: Background of the Case - The original contract was signed on December 5, 2024, where the company provided raw materials for processing, which the defendant failed to return or process as agreed [3][10]. - The defendant confirmed the existence of the goods as of December 31, 2024, but did not fulfill its contractual obligations [3][10]. Group 3: Financial Implications - The impact of the ongoing litigation on the company's profits remains uncertain, as the appeal process is still in its early stages and the final outcome will depend on the court's ruling [2][6][13]. - The company will continue to monitor the situation and fulfill its disclosure obligations as required by law [6][13].

Core Insights - Fangyuan Co., Ltd. is a leading domestic producer of lithium battery cathode material precursors, specializing in high-end ternary precursor production from recycled batteries [1] Financial Performance - For Q3 2025, Fangyuan's revenue was 1.49 billion yuan, ranking 31st among 44 companies in the industry, with the top company, Zhongwei Co., Ltd., reporting revenue of 33.297 billion yuan [2] - The company's net profit was -121 million yuan, placing it 32nd in the industry, while the leading company, Putailai, reported a net profit of 1.872 billion yuan [2] Profitability and Debt - As of Q3 2025, Fangyuan's debt-to-asset ratio was 84.32%, significantly higher than the industry average of 51.96% [3] - The gross profit margin for Q3 2025 was 3.05%, lower than the industry average of 10.89% [3] Executive Compensation - The chairman and CEO, Luo Aiping, received a salary of 1.29 million yuan in 2024, a decrease of 315,700 yuan from 2023 [4] Shareholder Information - As of September 30, 2025, the number of A-share shareholders increased by 26.42% to 15,900, while the average number of shares held per shareholder decreased by 20.90% to 32,100 shares [5]

Report Information - Report Title: Nickel Stainless Steel Industry Chain Weekly Report - Report Date: October 24, 2025 - Author: Xu Liang (Z0002220) - Reviewer: Tang Yun (Z0002422) [2] Investment Rating - Not provided in the given content Core Viewpoints - **Positive Factors**: Macro interest rate cut expectations have a positive supporting effect on market sentiment, and there are signs of marginal improvement in demand on the demand side, such as the demand for sulfate [3]. - **Negative Factors**: Refined nickel inventories continue to increase, resulting in significant supply pressure, and the inventories in the stainless steel industry chain are rising while terminal demand is relatively sluggish [3]. - **Trading Advisory Viewpoint**: The market as a whole tends to operate in a wide - range oscillation [3]. Market Data Summary Nickel Futures - **Prices**: The latest value of the main contract of Shanghai Nickel is 121,380 yuan/ton, with a weekly increase of 670 yuan and a weekly increase rate of 0.56%. The LME nickel 3M is 15,335 dollars/ton, with a change of 228 dollars and a rate of - 0.16% [4]. - **Trading Volume and Open Interest**: The trading volume is 93,921 lots, with a weekly increase of 25,077 lots and a weekly increase rate of 36.43%. The open interest is 127,005 lots, with a weekly increase of 68,347 lots and a weekly increase rate of 116.5% [4]. - **Warehouse Receipts**: The number of warehouse receipts is 26,881 tons, with a weekly decrease of 161 tons and a weekly decrease rate of 0.60% [4]. Stainless Steel Futures - **Prices**: The latest value of the main contract of stainless steel is 12,765 yuan/ton, with a weekly increase of 170 yuan and a weekly increase rate of 1%. - **Trading Volume and Open Interest**: The trading volume is 151,385 lots, with a weekly increase of 26,605 lots and a weekly increase rate of 21.32%. The open interest is 166,411 lots, with a weekly decrease of 31,783 lots and a weekly decrease rate of - 16.04% [5]. - **Warehouse Receipts**: The number of warehouse receipts is 74,376 tons, with a weekly decrease of 8,372 tons and a weekly decrease rate of - 10.12% [5]. Spot Prices of Nickel - The latest price of Jinchuan Nickel is 123,350 yuan/ton, with a daily decrease of 400 yuan and a decrease rate of - 0.32%. The price of imported nickel is 121,250 yuan/ton, with a daily decrease of 450 yuan and a decrease rate of - 0.37% [5]. Inventory Data - **Nickel Inventory**: The domestic social inventory of nickel is 47,708 tons, with no change. The LME nickel inventory is 250,854 tons, with a decrease of 24 tons [7]. - **Stainless Steel Inventory**: The stainless steel social inventory is 952.6 thousand tons, with an increase of 47 thousand tons [7]. - **Nickel Pig Iron Inventory**: The nickel pig iron inventory is 29,062 tons, with a decrease of 174 tons [7]. Industry Chain Data Upstream Nickel Ore - **Nickel Ore Price**: The average price of Philippine laterite nickel ore with 1.5% (FOB) is presented in the report, showing historical price trends [15]. - **Nickel Ore Inventory**: The inventory of nickel ore at Chinese ports shows seasonal changes [15]. Nickel Iron - **Nickel Iron Price**: The average ex - factory price of 8 - 12% nickel pig iron in China and the average price of Ni≥14% Indonesian high - nickel pig iron (arrival port, tax - included) are presented [16]. - **Nickel Iron Production**: The monthly production of nickel iron in China and Indonesia shows seasonal characteristics [17][18]. Downstream Sulfuric Acid Nickel - **Sulfuric Acid Nickel Price**: The average price of battery - grade sulfuric acid nickel is presented, showing price trends from February 2024 to August 2025 [20]. - **Sulfuric Acid Nickel Premium**: The premium of battery - grade sulfuric acid nickel over primary nickel (plate) is shown [22]. - **Profit Margins**: The profit margins of producing sulfuric acid nickel from nickel beans and producing electrowon nickel from externally purchased sulfuric acid nickel show seasonal changes [23]. - **Production Volume**: The monthly production volume of sulfuric acid nickel in China shows historical data [24]. Stainless Steel - **Profit Margin**: The profit margin of Chinese 304 stainless steel cold - rolled coils shows seasonal characteristics [26]. - **Production Volume**: The monthly production volume of stainless steel shows seasonal changes [28]. - **Inventory**: The stainless steel inventory shows seasonal changes [29].

Core Viewpoint - Zhejiang Pava New Energy Co., Ltd. has initiated legal proceedings against Zhejiang Gepai Cobalt Industry New Materials Co., Ltd. and Zhejiang Lujia New Materials Co., Ltd. regarding contract disputes related to processing agreements and the return of goods [1][3][4]. Group 1: Lawsuit Details - The lawsuit has been accepted by the court but has not yet been heard [1][3]. - Zhejiang Pava New Energy Co., Ltd. is the plaintiff in the case against Zhejiang Gepai Cobalt Industry New Materials Co., Ltd., seeking the return of 230 tons of PW508 and 162 tons of PW302 goods, or compensation if the goods cannot be returned [1][7]. - The company is also seeking the return of a total of 1,228,379.66 kg of goods from Zhejiang Lujia New Materials Co., Ltd., with similar compensation terms if the goods cannot be returned [1][7]. Group 2: Financial Claims - Zhejiang Pava Supply Chain Management Co., Ltd., a wholly-owned subsidiary of Zhejiang Pava, is requesting the return of a prepaid processing fee of 13 million RMB from Zhejiang Gepai Cobalt Industry New Materials Co., Ltd., along with interest calculated based on the Loan Prime Rate (LPR) from July 31, 2025, until full payment is made [2][6][7]. - The total amount involved in the lawsuits includes the return of goods and the processing fee, highlighting significant financial stakes for the company [1][2][7]. Group 3: Impact on Operations - The company asserts that the lawsuits will not affect its normal production and operations, emphasizing that the legal actions are aimed at protecting its and its shareholders' rights [2][8]. - The actual impact on the company's profits remains uncertain until the court's decisions are made and executed [2][8].

Core Viewpoint - The performance briefing of the new energy sector on the Sci-Tech Innovation Board highlighted the growth and strategic developments of key companies in the industry, showcasing a complete ecosystem from upstream materials to downstream applications, with a focus on intelligent and global advancements [1][2]. Group 1: Company Performance and Strategies - Seven listed companies participated in the performance briefing, including leading firms like Shanghai Pylon Energy Technology Co., Ltd. and Guangdong Liyuanheng Intelligent Equipment Co., Ltd. [1] - Pylon Technology, a leader in energy storage systems, expressed confidence in the growth of its performance supported by the expansion of energy storage applications, with plans to enhance home storage product performance by 2025 [2]. - Guangdong Fangyuan New Materials Group Co., Ltd. has successfully industrialized a new lithium extraction process in 2024, gaining recognition from major clients in the lithium battery supply chain [2]. Group 2: Technological Innovations - Guangdong Lair New Materials Technology Co., Ltd. reported a revenue of 526 million yuan in 2024, a year-on-year increase of 19.95%, with significant contributions from new energy materials [3]. - The company has expanded its functional coating film business into emerging fields such as automotive electronics and new energy batteries, achieving breakthroughs in various market segments [3]. Group 3: International Expansion - Dalian Haosen Intelligent Manufacturing Co., Ltd. has seen a rapid increase in European orders since 2023, with overseas orders expected to exceed 50% of total new orders in 2023 and 2024 [4]. - The company is also targeting emerging markets in ASEAN and Latin America, where countries like Indonesia, Thailand, and Brazil have set ambitious transformation goals [4]. Group 4: Smart Applications in New Energy - Hangzhou Hongquan Internet of Things Technology Co., Ltd. reported a revenue of 523 million yuan in 2024, a year-on-year increase of 27.81%, with significant growth in its T-BOX product line for new energy logistics vehicles [5]. - The company is actively expanding its overseas business, aligning products with international market standards and participating in global exhibitions to engage with potential clients [5].