Summary of Kanda New Materials Conference Call Company Overview - **Company**: Kanda New Materials - **Industry**: New materials and electronic technology, focusing on adhesive and specialty resin sectors, particularly in the wind power industry Key Points and Arguments Financial Performance - Kanda New Materials expects a net profit attributable to shareholders between 50 million to 55 million yuan for the first half of 2025, representing a year-on-year increase of 188.48% to 197.33% [3] - The adhesive segment generated revenue of 870 million yuan in Q1 2025, showing significant growth [3] - The wind power epoxy resin sales are projected to exceed last year's total sales, with an expected market demand for structural adhesives reaching approximately 90,000 tons in 2025 [2][7] Market Position - Kanda maintains a domestic market share of 65% to 70% and a global market share of 35% to 40% in the wind power blade structural adhesive sector [2][3] - The company has a strong competitive position in the wind power adhesive market, with plans to enhance its market share further [24] Strategic Focus - The company is focusing on two main pillars: new materials and electronic technology, with expansions into semiconductor materials, including ITO targets and CMP polishing liquids [2][4] - Kanda has acquired Chengdu Zhongke Huawai, which specializes in high-reliability integrated circuit research and development, aiming for net profits of 40 million, 50 million, and 60 million yuan from 2025 to 2027 [2][5] Product Development and Innovation - Kanda is expanding its product lines in the semiconductor materials sector, with a market space for ITO targets estimated at 100 billion yuan [16] - The company is also developing high-frequency and high-speed specialty resins, although specific details are not disclosed [21] Operational Efficiency - Kanda has optimized resource allocation and reduced management costs, contributing to significant profit recovery in 2025 [3] - The company has divested from underperforming assets, which has positively impacted financial expenses and overall performance [3] Future Outlook - Kanda plans to continue its strategic focus on innovation and upgrading its operations, aiming to capture new market opportunities in the new materials and electronic technology sectors [28] - The company is set to enhance its production capacity with an 80,000-ton resin project expected to be operational by November 2026 [15] Collaborations and Synergies - Kanda has established a collaborative relationship with Huawei, focusing on power modules and customized chips, enhancing competitiveness in the special equipment sector [19] - The acquisition of Zhongke Huawai is expected to create synergies in semiconductor materials, benefiting both companies [18][20] Challenges and Competition - The wind power adhesive market remains competitive, with Kanda striving to maintain its leading position against competitors like Daosheng Tianhe [24] - Despite the competitive landscape, Kanda is committed to providing integrated material solutions to domestic wind power blade customers [24] Additional Important Information - Kanda's gross margin for specialty resins is maintained between 25% to 30%, supported by a cost-plus pricing strategy [2][8][9] - The company has a diverse range of adhesive products, with a significant portion of raw materials sourced from Da Ren Group [10]

Financial Performance - The company achieved a turnaround with a net profit of 50 million CNY for the first half of 2025, compared to a loss of 55.51 million CNY in the same period last year, representing a year-on-year growth of 188.48% to 197.33% [2][3] - The sales volume of adhesive and specialty resin products steadily increased, driven by strong demand in the wind power sector, particularly for wind turbine blade products [2][3] Wind Power Sector - The company maintains the leading market share in the domestic wind turbine blade structural adhesive segment [3] - In 2024, sales of wind turbine blade epoxy structural adhesive reached over 40,000 tons, while epoxy infusion resin sales reached 45,000 tons, with consistent growth over the past three years [3] Acquisition of Chengdu Zhongke Huami Technology Co., Ltd. - The acquisition aims to expand into the semiconductor integrated circuit field, integrating high-quality assets in the special integrated circuit sector [6][7] - Post-acquisition, Zhongke Huami will be included in the company's consolidated financial statements, expected to provide new revenue and profit growth points [7] Strategic Development - The company plans to leverage its existing semiconductor materials industry to accelerate its strategic transformation towards the semiconductor integrated circuit industry [7] - The strategic layout aligns with national industrial policy and supports the company's long-term development goals [7] Electronic Specialty Resins - A new subsidiary, Kang Cheng Da Chuang (Shanghai) New Materials Co., Ltd., is being established to develop electronic-grade resins for applications in high-speed copper-clad laminates and BT substrates [7]

Business Overview - Kangda New Materials is a leading fine chemical enterprise in China, specializing in high-end adhesives and polymer new materials, with over 30 years of technological accumulation and innovation [2]. - The company maintains the largest market share in the domestic market for wind turbine blade structural adhesives [2][3]. Wind Power Sector Performance - In 2024, the sales volume of wind turbine blade epoxy structural adhesives exceeded 40,000 tons, while epoxy infusion resin sales reached 45,000 tons, showing steady growth over three consecutive years [3]. - In Q1 2025, the company continued to lead the industry in sales of wind turbine blade epoxy structural adhesives [3]. Core Competitiveness - The company has nearly 300 authorized patents and several industry standards, supported by a national enterprise technology center [4]. - It has established a strong customer base and received multiple industry honors and certifications, ensuring product quality recognition [4]. Financial Performance - In Q1 2025, the net profit attributable to shareholders reached 6.3718 million yuan, a 125.70% increase compared to the same period last year, driven by significant revenue growth and improved operational efficiency [5]. Acquisition Strategy - The company intends to acquire Chengdu Zhongke Huamei Electronics Co., Ltd., a high-tech enterprise specializing in integrated circuit products, to expand into the semiconductor integrated circuit field [6][7]. - This acquisition aims to enhance profitability and operational sustainability by integrating quality assets in the special integrated circuit design and testing sectors [7]. R&D and Product Development - The company is developing aluminum oxide targets and CMP (Chemical Mechanical Polishing) slurries for semiconductor manufacturing, with ongoing internal testing [7]. - Its subsidiary, Dalian Qihua, specializes in high-quality epoxy resin production, serving various industries including new energy and aerospace [7]. International Expansion - The establishment of a new adhesive materials production base in Thailand aims to meet overseas customer demands and enhance international business operations [8]. - The company is actively expanding its overseas market presence, particularly in Southeast Asia, Central Asia, and South Asia, leveraging its core product advantages [8].