Core Viewpoint - The company has initiated the industrialization of its aramid-coated diaphragm project, with trial production already underway and product deliveries to select customers in progress [1] Group 1 - The company confirmed that the aramid-coated diaphragm project has begun trial production [1] - The industrialization equipment is expected to undergo debugging in the first half of 2025 [1] - The company is currently delivering products to some customers as part of the trial phase [1]

Investment Rating - The report maintains a "Buy" rating for Taihe New Materials [4] Core Views - The company's performance is under short-term pressure due to low prices of spandex and aramid, but there is potential in the industrialization process of aramid-coated membranes [2][9] - The company is expected to see revenue growth from 2025 to 2027, with projected revenues of 44.16 billion, 53.44 billion, and 63.32 billion yuan respectively, reflecting year-on-year growth rates of 12.4%, 21.0%, and 18.5% [10] Financial Summary - Revenue for 2023 is projected at 39.25 billion yuan, with a slight increase to 39.29 billion yuan in 2024, followed by a significant rise to 44.16 billion yuan in 2025 [11] - The net profit attributable to the parent company is expected to decline to 0.73 billion yuan in 2025, before recovering to 2.17 billion yuan in 2026 and 3.23 billion yuan in 2027, with corresponding year-on-year changes of -18.8%, 198.9%, and 48.5% [10] - The company's return on equity (ROE) is projected to improve from 0.6% in 2025 to 2.3% in 2027 [11] Market and Product Insights - The spandex industry is experiencing continuous capacity expansion, leading to an imbalance in supply and demand, which has resulted in a price decline of approximately 17.82% for spandex in the first half of 2025 [2][3] - The aramid industry is facing increased competition due to new capacity releases and weakened demand in traditional industrial sectors, causing significant price drops and narrowing profit margins [3] - The company is making progress in the promotion of its aramid paper and aramid-coated membrane products, with successful applications in various high-value sectors such as new energy vehicles and aerospace [9]

Group 1: Solid-State Battery Development - The company has made significant progress in the solid-state battery sector, with plans to achieve ton-level shipments of electrolytes by 2025. Various types of rigid skeleton membranes have been developed, which can be used in multiple solid-state battery types, enhancing energy density and safety [1] - The company aims to increase R&D investment and market development in the solid-state battery field [1] Group 2: Business Expansion and Order Situation - In response to the rapid growth of the new energy sector, the company is actively expanding production both domestically and internationally to enhance market share. The company has received recognition from several leading clients due to its advanced technology and service capabilities [2] - Strategic cooperation agreements signed with major battery manufacturers in the last quarter of the previous year are expected to positively impact the company's operating performance, indicating a healthy order backlog [2] Group 3: Safety Performance of Lithium Battery Separators - The company's separator products, including nano-fiber coated separators, polyimide coated separators, and aramid coated separators, exhibit high-temperature resistance and strength, which are crucial for battery safety. The nano-fiber coated separator has already achieved over 100 million square meters in shipments [3] - With the acceleration of new-generation high-safety lithium battery separator production, the company is positioned to gain a competitive advantage in the market [3] Group 4: Industry Supply and Price Trends - The company opposes price competition in the separator market, believing that dry-process separator prices are likely to rise further, which will encourage companies to increase R&D investment [4] - The current high demand, especially in energy storage, has led to a favorable supply-demand situation for wet-process separators, allowing companies to optimize customer structures and enhance profits [4] - The company plans to improve operating profits by increasing supply to high-value customers and raising prices for low-profit or loss-making customers [4]

Group 1 - The company, Xingyuan Material, is currently progressing well in its collaboration with Taihe New Materials on aramid-coated separators [2] - Investors are encouraged to monitor the company's periodic reports for specific operational data [2]

Group 1 - The company is currently collaborating with Taihe New Materials on aramid-coated diaphragm orders, and the cooperation is progressing smoothly [1] - The company has not disclosed specific operational data but encourages stakeholders to refer to its periodic reports for detailed information [1] - There is no indication of any major battery manufacturers entering into large order negotiations at this time [1]

Core Viewpoint - DuPont has reached a final agreement to sell its aramid business (Kevlar® and Nomex®) to Arclin for approximately $1.8 billion, which will optimize its product portfolio and provide significant cash for reinvestment while maintaining equity participation in Arclin [2][3] Group 1: Transaction Details - The transaction is valued at approximately $1.8 billion (about 128 billion RMB) and is expected to close in the first quarter of 2026, subject to customary closing conditions and regulatory approvals [2] - Upon completion, DuPont will receive about $1.2 billion in pre-tax cash proceeds, $300 million in receivables, and a non-controlling equity interest in Arclin valued at approximately $325 million, representing about 17.5% of the company [2] Group 2: Strategic Implications for DuPont - This divestiture aligns with DuPont's strategy to focus on high-growth areas such as semiconductors, healthcare, and water treatment [3] - The planned spin-off of DuPont's electronics business is expected to be completed by November 1, with the remaining industrial segment being integrated back into DuPont [3] Group 3: Industry Context - Teijin, a major player in the aramid market, is also restructuring its business by transferring its shares in DuPont Teijin Advanced Papers to DuPont or its affiliates, with an expected delivery in February 2026 [3] - Teijin's decision to streamline its business aligns with its strategic focus and follows its announcement to close its aramid fiber production facility in Arnhem, Netherlands, due to competitive pressures in Asia [4] Group 4: Domestic Market Developments - In contrast to foreign companies reducing their aramid business, several domestic companies are entering the market, with significant expansions announced in 2023 [4][5] - Notable domestic players include Sinochem International, which has successfully expanded its production capacity, and other companies like Taihe New Materials and Jiangsu Shengbang New Materials, which have also initiated new projects [5] Group 5: Competitive Landscape - The domestic aramid market is characterized by oversupply in the low-end segment and a lack of high-end products, leading to intense competition [5] - Taihe New Materials has faced declining profits in recent years but has seen a recovery in sales and profitability for its para-aramid products in the first half of 2023 [5][7] Group 6: Future Growth Areas - Taihe New Materials is focusing on emerging sectors such as new energy vehicles, smart wearables, and green manufacturing, with a notable gross margin of 32.63% in its security and information products [7] - The performance of Minshida, a subsidiary of Taihe New Materials, reflects strong growth, achieving a revenue increase of 27.91% in the first half of 2025, driven by demand in high-growth sectors [8]

Core Viewpoint - The company reported a significant decline in performance for 1H25, with revenue of 1.903 billion yuan, down 2.48% year-on-year, and a net profit attributable to shareholders of 26 million yuan, down 77.58% year-on-year, primarily due to a sluggish spandex industry and intensified competition in the aramid business [1] Industry Trends - The spandex industry remains in a downturn, with average prices at 23,700 yuan per ton in 1H25, reflecting a 15% year-on-year decrease and a 4.4% decline from the previous half [2] - As of the end of 1H25, China's spandex production capacity reached 1.43 million tons, with an increase of 76,000 tons compared to the end of 2024, and an additional 100,000 tons expected to come online in 2H25, leading to a total capacity exceeding 1.5 million tons by year-end [2] - The overall weak demand suggests that spandex industry profitability may continue to remain at low levels in the short term, although gradual improvements could occur in the medium to long term due to environmental policies and capacity reductions [2] Company Developments - The company is focusing on new energy products, particularly aramid paper and aramid-coated separators, with significant growth expected in aramid paper sales driven by the demand from the new energy vehicle and aerospace sectors [3] - The company has begun trial production of aramid-coated separators, which have passed audits from several battery clients, and is expected to enter a ramp-up phase in 2026, with potential shipments exceeding 1 billion square meters per year [3] Profit Forecast and Valuation - Due to ongoing pressure on spandex and aramid profitability, the company has revised its net profit forecasts for 2025 and 2026 down by 71.3% and 31.3% to 60 million yuan and 260 million yuan, respectively [4] - The current stock price corresponds to a 36.2 times price-to-earnings ratio for 2026, with a target price adjustment down by 7.7% to 12 yuan, reflecting a 39.5 times price-to-earnings ratio for 2026, indicating a potential upside of 9.2% from the current stock price [4]

Core Viewpoint - The company is facing significant challenges in the textile and chemical industries due to a complex global economic environment characterized by low growth, increased differentiation, and intertwined risks, leading to a substantial decline in product prices and profitability compared to the previous year [3][5][16]. Company Overview - The company operates across various sectors including green chemicals, high-end textiles, high-performance fibers, and new energy materials, being the first in China to produce several specialized fibers and the first globally to produce smart fibers [3][4]. Financial Performance - In the first half of 2025, the company reported a significant drop in product prices and profitability due to cyclical downturns and weak demand, with the overall operating load in the industry decreasing compared to previous years [3][5][9]. Industry Trends - The global textile and apparel export from China showed resilience with a total export of $144 billion in the first half of 2025, marking a 0.8% year-on-year increase, although this was accompanied by a decrease in prices [3]. - The spandex industry continued to expand its production capacity, reaching 1.43 million tons by mid-2025, an increase of 76,000 tons from the end of 2024, while demand growth remained limited, exacerbating supply-demand imbalances [5][8]. Product Development - The company has focused on enhancing product quality and reducing production costs through various strategies, including management optimization and marketing efforts, which have led to improved sales rates despite ongoing losses in the spandex business [9][10]. - The company is advancing its green dyeing technology, which aligns with national environmental regulations, and has seen increased orders for its innovative dyeing and digital printing services [10]. Market Outlook - The spandex market is expected to remain under pressure due to an oversupply situation, with approximately 100,000 tons of new capacity expected to come online in the second half of 2025, maintaining a trend of price adjustments [8][9]. - The aramid fiber market is projected to grow significantly, driven by increasing demand in safety, environmental protection, and energy-saving applications, with a compound annual growth rate of 5%-10% anticipated [18][19]. Strategic Initiatives - The company is acquiring 100% of the Yantai Taida Industrial Park Development Co., Ltd. to enhance its production capabilities and streamline its supply chain, which is expected to facilitate the development of downstream applications in special fibers [40][60].

Core Viewpoint - The establishment of the Xingyuan Material's factory in Malaysia marks a significant milestone in the global high-end separator manufacturing sector, aiming to escape domestic market competition and establish an independent overseas pricing system to enhance profitability [1][6][12] Group 1: Investment and Production Capacity - The total investment for the Malaysian factory is nearly 5 billion RMB, with an annual production capacity planned to reach 2 billion square meters, making it the largest production base for lithium-ion battery separators and solid-state battery rigid skeletons globally [1][6] - The factory has already received a substantial number of order intentions, indicating a strong market demand driven by battery manufacturers' capacity expansion in Southeast Asia [1][2] Group 2: Pricing Power and Market Strategy - The core strategic value of the overseas expansion is the acquisition of "independent pricing power," allowing the company to set prices based on international market supply and demand, certification barriers, service costs, and product technological added value [3][6] - The company anticipates a structural supply shortage in the overseas high-end separator market by the end of 2026, which will provide significant bargaining advantages for firms with localized advanced production capacity [6][12] Group 3: Technological Foundation - The company's confidence in seeking independent pricing power stems from its undisputed technological strength in the high-end separator field, with a product matrix that meets global market demands for higher safety, efficiency, and longevity [7][9] - The high-performance coated separator series, including nano-fiber coated, polyimide coated, and aramid coated separators, are key tools for penetrating overseas markets, providing essential safety guarantees for lithium batteries [9][12] Group 4: Industry Collaboration and Globalization - The establishment of the Malaysian factory is part of a broader trend of systematic overseas expansion of China's lithium battery industry, with a localized lithium battery industry collaboration model emerging in Southeast Asia [11][12] - The company’s strategic layout extends beyond Southeast Asia, with investments in Europe and North America, indicating a proactive approach to global supply chain security and market entry [12]

Core Viewpoint - The newly released national standard for electric vehicle batteries, known as the "strictest battery safety regulation in history," emphasizes safety over energy density, marking a shift in the industry towards prioritizing safety technology and quality over mere performance metrics [2][4][12]. Summary by Sections New National Standard - The "Safety Requirements for Power Batteries for Electric Vehicles" (GB38031-2025) will be implemented on July 1, 2026, introducing mandatory standards for batteries to not catch fire or explode after thermal runaway [4][11]. - The new standard includes 7 individual tests and 17 battery pack/system tests, enhancing safety measures compared to the 2020 version [4][5]. Industry Impact - The introduction of the new standard is expected to raise industry entry barriers, accelerate the exit of low-end production capacity, and concentrate market resources among leading companies [2][12]. - Companies like CATL, BYD, and others have already announced compliance with the new standards, indicating a proactive approach to safety [7][12]. Technological Advancements - The new standard requires improvements in battery design to reduce the likelihood of self-ignition, including new tests for rapid charging cycles and impact resistance [5][8]. - Solid-state batteries are anticipated to benefit from the new safety requirements, as they offer better thermal stability and safety features compared to traditional lithium batteries [9][12]. Market Dynamics - The shift towards safety as a core competitive advantage is expected to reshape the industry landscape, favoring companies that invest in research and development and prioritize product quality [12]. - The new regulations may lead to increased costs for companies as they upgrade technology and production processes to meet the new standards [11][12]. Future Outlook - The industry is likely to see a consolidation trend, with larger firms gaining a competitive edge due to their ability to meet the new safety standards and invest in advanced technologies [12]. - The transition from a price-driven market to one focused on quality and safety is expected to enhance the overall stability and reliability of electric vehicle batteries [11][12].