Core Viewpoint - The article discusses the strategic move of Shengquan Group to issue up to 2.5 billion yuan in convertible bonds, with 2 billion yuan allocated for the industrialization of green energy battery materials, particularly silicon-carbon anodes, indicating a significant commitment to the new energy sector [4][5]. Group 1: Company Strategy and Financials - Shengquan Group plans to produce 10,000 tons of silicon-carbon anodes and 15,000 tons of porous carbon annually, with production expected to start in the third year after a two-year construction period, projecting an average annual sales revenue of 3.948 billion yuan and a net profit of 756 million yuan [4]. - In the first half of the year, Shengquan Group achieved a revenue of 5.351 billion yuan, a year-on-year increase of 15.67%, and a net profit of 501 million yuan, up 51.19% year-on-year [5]. - The company has developed two technical routes for porous carbon materials, utilizing phenolic resin and restructured resin, to penetrate the mainstream battery supply chain [5][6]. Group 2: Industry Context and Competitive Landscape - The silicon-carbon anode is a key direction for enhancing lithium battery energy density, but its industrialization faces challenges related to process stability and cost [6][7]. - Shengquan Group's strategy includes a vertical integration approach, ensuring a stable supply of porous carbon, which is crucial for the production of silicon-carbon anodes, potentially giving it a competitive edge in the market [6][7]. - The industry is expected to see a significant increase in silicon-carbon anode production capacity between 2025 and 2026, with several leading companies, including Bettery and Putailai, also advancing their projects [7]. Group 3: Technological Advancements - Shengquan Group's unique biomass refining technology and resin preparation process have led to the development of competitive porous carbon materials, which enhance the uniformity of silicon deposition and improve the energy density of silicon-carbon anodes [8]. - The company’s spherical porous carbon technology is globally leading, featuring uniform and controllable pore structure, making it suitable for high energy density applications such as semi-solid and solid-state batteries [8].

Investment Rating - The investment rating for the company is "Buy" and is maintained [8] Core Views - The company reported a significant increase in performance, with H1 2025 revenue reaching 5.35 billion yuan, a year-on-year increase of 15.7%, and a net profit attributable to shareholders of 500 million yuan, up 51.2% year-on-year [5][11] - In Q2 2025, the company achieved revenue of 2.89 billion yuan, reflecting a year-on-year increase of 16.1% and a quarter-on-quarter increase of 17.6% [5][11] - The advanced electronic materials and battery materials sectors are experiencing substantial growth, with revenue from these segments reaching 850 million yuan in H1 2025, a 32.4% increase compared to the previous year [11] Summary by Sections Financial Performance - In H1 2025, the company achieved a revenue of 5.35 billion yuan, with a net profit of 500 million yuan, marking a 51.2% increase year-on-year [5][11] - The gross margin for H1 2025 was 24.8%, an increase of 1.66 percentage points year-on-year, driven by a higher proportion of high-end products [11] Product Development - The company has successfully replaced imported materials in the electronic materials sector, increasing its market share [11] - The company is advancing its development of ultra-low loss materials and has plans to issue convertible bonds to fund the "Green New Energy Battery Material Industrialization Project" [11] Market Position - The company is a leader in synthetic resin, with stable profit contributions from this segment, while the electronic chemicals and biomass chemical sectors present significant growth opportunities [11] - The Daqing biomass project is operating stably, achieving a production balance across its products [11] Future Outlook - The company is expected to see significant performance contributions from its PPO, porous carbon, and biomass projects, with projected revenues of 1.34 billion yuan, 1.74 billion yuan, and 2.25 billion yuan for the years 2025 to 2027 respectively [11]