Key takeaway

In 2025, anode product shipments reached 343,500 tonnes, +59% YoY, with 4Q25 shipments estimated at approximately 109,000 tonnes, +59% YoY, exceeding market expectations. In 1Q26, anode product shipments are estimated at approximately 96,000 tonnes, +38% YoY, with production exceeding capacity and full sales achieved, with the main increment coming from energy storage demand. In 4Q25, the company's operating net profit per tonne for anode products (including graphitization coke and other businesses) is estimated at RMB2,100, remaining roughly flat QoQ. In 1Q26, this figure is estimated at RMB2,900, an increase of approximately RMB800 QoQ, mainly driven by the company's cost reduction efforts. The company's technical renovation and cost reduction efforts have yielded significant results, placing it at an industry-leading level. Industry profitability is expected to show upward elasticity in 2026-2027, with the company's shipments projected at 450,000/600,000 tonnes and earnings at RMB1.18bn/1.89bn in 2026/2027.

Event

In 2025, the company achieved revenue/net profit attributable to shareholders of the parent company/net profit after deducting non-recurring items of RMB7.94bn/0.95bn/0.96bn, representing YoY changes of +52%/ +13%/+19%; of which, 4Q25 revenue/net profit attributable to shareholders of the parent company/net profit after deducting non-recurring items were RMB2.44bn/0.23bn/0.23bn, +51%/-10%/-1% YoY and +15%/+1%/- 2% QoQ. In 1Q26, the company achieved revenue/net profit attributable to shareholders of the parent company/net profit after deducting non-recurring items of RMB2.20bn/0.18bn/0.19bn, representing YoY changes of +35%/- 24%/-22% and QoQ changes of -10%/ -23%/-18%.

Quick Take

Anode: Shipments maintain high growth amid strong industry prosperity

1) Sales volume: In 2025, the company's anode product shipments reached 343,500 tonnes, +59% YoY. 4Q25 anode product shipments are estimated at approximately 109,000 tonnes, +59% YoY and +19% QoQ, exceeding market expectations, mainly due to a rising proportion of outsourced processing. In 1Q26, the company's anode product shipments are estimated at approximately 96,000 tonnes, +38% YoY and -11% QoQ, with production exceeding capacity and full sales achieved, with the main increment coming from high growth in energy storage demand.

2) Profitability: In 4Q25, the company's operating net profit per tonne for anode products (including graphitization coke and other businesses) is estimated at RMB2,100, remaining roughly flat QoQ. In 1Q26, this figure is estimated at RMB2,900, an increase of approximately RMB800 QoQ, mainly driven by the company's cost reduction efforts.

3) Construction in progress: At the end of 2025, the company's construction in progress was RMB292mn, an increase of RMB215mn QoQ from 3Q25; at the end of 1Q26, it was RMB371mn, an increase of RMB77mn QoQ. The high growth in construction in progress is mainly due to the advancement of the company's Shanxi Phase 3-5 projects (with an estimated total capacity of 400,000 tonnes) and the Malaysia project.

Impairment losses: The company's credit impairment loss in 4Q25 was RMB35mn, up RMB29mn QoQ, mainly due to a decline in bad debt provision losses from credit portfolios. Asset impairment loss was -RMB10mn, down RMB13mn QoQ, primarily due to rising raw material prices and a larger provision for inventory writedowns at period-end. The company's credit impairment loss in 1Q26 was -RMB58mn, down RMB93mn QoQ, mainly due to revenue growth and accounts receivable factoring at the end of the prior quarter, which led to an increase in accounts receivable balances. Asset impairment loss was -RMB36mn, down RMB26mn QoQ, primarily due to ① the expansion of outsourced processing scale, and ② the planned disposal of certain fixed assets resulting from technical upgrades and equipment renewal..

Other income: The company's other income in 4Q25 was RMB13mn, down RMB43mn YoY and down RMB24mn QoQ. In 1Q26, other income was RMB16mn, up RMB9mn YoY and up RMB3mn QoQ. The company's other income declined sharply YoY and QoQ in 4Q25, mainly because government grants fell by RMB42mn YoY to RMB9mn in 4Q25.

Inventories: The company's inventories at the end of 2025 were RMB1.77bn, up RMB65mn QoQ from 3Q25. Inventories at the end of 1Q26 were RMB2.11bn, up RMB340mn QoQ. The significant QoQ increase was mainly due to the company's advance stockpiling of needle coke raw materials.

Investment recommendation: Shipments are expected to reach 450,000/600,000 tons in 2026/27, with net profit attributable to shareholders of the parent company of RMB1.18bn/RMB1.89bn. Based on the current share price, the corresponding PE is 19/12x.

Risks

1) Lower-than-expected production and sales of downstream new energy vehicles: Lower-than-expected sales due to impacts like sluggish demand; lower-than-expected production due to sharp fluctuations in upstream raw material prices, power cuts, etc., which will further affect the shipment and profitability of the company's related business.

2) Raw material price increases exceeding expectations: Since 2021, raw material prices have continued to rise. High and volatile prices have had a certain impact on downstream demand, while also causing short-term disturbances to the company’s performance.

3) Slower-than-expected progress of the company's key projects: For the company as a participant in the new energy sector, the progress of major projects is the key to supporting the revenue and profits, and is also a reflection of the company's growth potential. The slower-than-expected progress of major projects will affect its current and long-term performance.