Key takeaway

In 2025, the company focused on its adhesives and specialty resin new materials segment as the main line, seizing the opportunity of rising wind power industry prosperity. Wind power structural adhesives and infusion resin production and sales volumes reached record highs, firmly maintaining the top market share position. Meanwhile, it accelerated breakthroughs into the semiconductor materials field, building a cluster of specialized and sophisticated "little giant" enterprises to address market competition, achieving an overall turnaround to profitability. We are optimistic about the company's active expansion into overseas markets, steady progress in major project construction, and continuous optimization of its industrial landscape under three growth curves: adhesives and specialty resin new materials, electronic information materials, and semiconductor integrated circuits, fully developing domestic and international markets to achieve steady improvement in performance and the profit center.

Event

1) The company released its 2025 annual report, achieving fullyear revenue of RMB5.237bn, YoY+68.87%; net profit attributable to shareholders of the parent company of RMB125mn, YoY+150.96%; and recurring net profit of RMB17mn, YoY+105.43%.

2) The company also announced its 2025 profit distribution plan, proposing a cash dividend of RMB1 per 10 shares (tax inclusive). Combined with the share repurchase amount of RMB101mn already implemented during the year, the total cash dividend and share repurchase amount accounted for 103.49% of the current year's net profit attributable to shareholders of the parent company.

3) The company released its 1Q26 report, achieving 1Q26 revenue of RMB1.156bn, YoY+31.78%, QoQ-22.28%; net profit attributable to shareholders of the parent company of RMB7mn, YoY+7.73%, QoQ-83.42%.

Risks:

(1) Risk of product and raw material price fluctuations exceeding expectations: The main raw materials for adhesive products are basic petrochemical raw materials such as epoxy resins and amine curing agents. Their prices are affected by multiple factors including international crude oil prices, downstream wind power demand, and industry capacity. Price fluctuations exceeding expectations will directly impact the company's profit center.

(2) Goodwill impairment risk: The company has a large goodwill book balance. In 2025, it recognized a goodwill impairment loss of RMB30.24mn. If the macro economy declines in the future, market demand changes, or the operating performance of acquired subsidiaries falls short of expectations, the company faces the risk of continuing to recognize goodwill impairments, which will directly impact net profit for the period.

(3) Risk of new business development falling short of expectations: the company's semiconductor materials businesses, including LTCC materials, CMP polishing fluids, and ITO targets, are still in the customer verification or capacity ramp-up phase. They face uncertainties such as long technology certification cycles, slow customer onboarding, and intense market competition. If market expansion progress falls short of expectations, it will affect the strategic implementation of the company's second growth curve and the overall profit improvement process.