Core Viewpoint - The credit rating of Xiangtan Electric Chemical Co., Ltd. is maintained at AA/stable, reflecting its leading position in the electrolytic manganese dioxide industry and stable financial performance despite market challenges [4][6][12]. Company Overview - Xiangtan Electric Chemical is a leading enterprise in the electrolytic manganese dioxide industry, maintaining a significant market share in manganese battery business [4][6][15]. - The company has a total production capacity of 162,000 tons per year for manganese-based cathode materials as of March 2025 [15][17]. Financial Performance - Total assets for the company were reported at 4.924 billion as of March 2025, with total liabilities at 1.814 billion [8]. - The company’s net profit for the first quarter of 2025 was 470 million, showing a slight increase compared to previous periods [8]. - The operating revenue for 2024 was 2.112 billion, with a gross profit margin of 26.48% [10][8]. Market Position - The company has maintained its leading market share in the manganese battery sector, with a slight increase in operating profit during the tracking period [4][6][15]. - The competitive landscape remains challenging due to price fluctuations in raw materials and an oversupply in the industry [5][15]. Investment and Projects - The company is currently investing in a project to produce 30,000 tons of spinel-type lithium manganese battery materials, with a total planned investment of 485 million [25]. - The company has also invested in the Jingxi Aitun Manganese Mine project, which is expected to provide raw material support for production [25]. Research and Development - The company has increased its R&D investment, with a total of 1.02 billion in 2024, representing 5.33% of its operating revenue [25][24]. - The company holds 68 authorized patents, including 17 invention patents, indicating a strong commitment to innovation [24][25]. Risk Factors - The company faces risks related to the volatility of raw material prices and the overall market demand for its products, which could impact profitability [5][20]. - The industry is characterized by intense competition and potential oversupply, which may affect future growth prospects [5][15].

Group 1: Report Industry Investment Rating - No information provided Group 2: Core Views of the Report - On June 12, Xiangtan Electrochemical issued an announcement to issue convertible bonds online on June 16, 2025, with a planned total issuance of no more than 487 million yuan. 485 million yuan is intended for the "Annual Production of 30,000 Tons of Spinel Lithium Manganese Oxide Battery Materials Project", and 2 million yuan is for supplementary working capital [1][12]. - The initial target price of the convertible bond on the first day is 134 - 139 yuan, and it is recommended to actively subscribe. The conversion premium rate on the first - day of listing is expected to be in the range of [32%, 37%] [3][18]. - The expected first - day new - bond lottery winning rate is around 0.0033% - 0.0036% [4][19]. Group 3: Summary by Directory 1. Electro - Chemical Convertible Bond New - Bond Analysis and Investment Recommendations 1.1 Convertible Bond Basic Terms Analysis - The issuance methods of Electro - Chemical Convertible Bond are priority placement and online issuance. The bond and entity ratings are AA. The issuance scale is 487 million yuan, the initial conversion price is 10.1 yuan, the convertible bond parity on June 12 is 101.39 yuan, the calculated pure bond value is 99.52 yuan. The downward revision clause is relatively strict, the redemption clause and the put - back clause are normal. The bond issuance scale is low, the liquidity is poor, the rating is acceptable, and the bond floor protection is good [2][14]. 1.2 New - Bond Initial Price Analysis after Listing - The company's main businesses are battery materials and sewage treatment. The main products and services include various types of EMD, lithium manganese oxide cathode materials, etc. The raised funds are mainly used for the "Annual Production of 30,000 Tons of Spinel Lithium Manganese Oxide Battery Materials Project", which can optimize the company's capital structure and enhance its competitiveness [3][17]. 1.3 Convertible Bond New - Bond Lottery Winning Rate Analysis - Assuming the old shareholders' placement ratio is 42% - 46%, the scale left for the market is 263 million - 282 million yuan. Assuming the online effective subscription number is 7.91 million households, the lottery winning rate is around 0.0033% - 0.0036% [4][19]. 2. Underlying Stock Fundamental Analysis 2.1 Company's Main Business and Industry Up - and Downstream Situations - The company's main businesses are battery materials and sewage treatment. The main upstream industries are manganese ore, sulfuric acid, etc. The supply of upstream manganese ore restricts the supply of electrolytic manganese dioxide, and the price of lithium carbonate affects the price of lithium manganese oxide. The main downstream industries are primary and secondary battery industries. The demand of the downstream battery industry is crucial for the development of the electrolytic manganese dioxide industry [20][21]. 2.2 Company's Operating Conditions - The company's recent operating income has shown small fluctuations. From 2022 to Q1 2025, the operating income was 2.1 billion yuan, 2.163 billion yuan, 1.912 billion yuan, and 418 million yuan respectively. The comprehensive gross profit margin has also shown small fluctuations. The recent period expenses have shown small fluctuations, and the R & D expenses have gradually increased. The accounts receivable have shown small fluctuations, and the accounts receivable turnover rate has been generally stable. The recent net profit attributable to the parent company has shown a downward trend [24][28][38]. 2.3 Company's Equity Structure and Main Subsidiaries - As of March 31, 2025, the company's equity structure is relatively concentrated. The top two shareholders hold 42.23% of the shares in total, and the top ten shareholders hold 46.13% of the shares in total. The company's direct controlling shareholder is Electro - Chemical Group, the indirect controlling shareholders are Zhenxiang State - owned Investment and Industrial Investment Group, and the actual controller is the State - owned Assets Supervision and Administration Commission of Xiangtan City. The company has 10 important wholly - owned subsidiaries and 3 affiliated companies [43]. 2.4 Company's Business Characteristics and Advantages - The company has scale operation advantages, continuous innovation advantages, industrial chain advantages, core team advantages, and franchise operation advantages [45]. 2.5 Allocation of Raised Funds - The company plans to issue convertible bonds to raise no more than 487 million yuan. 485 million yuan is for the "Annual Production of 30,000 Tons of Spinel Lithium Manganese Oxide Battery Materials Project", with a planned construction period of 24 months. Due to market volatility, no specific benefit calculation is made for this project [48].