Shangwei New Materials’ net profit fell by 54%; with what does 'Zhijun Jun' sustain a P/E ratio of 1,100?

Regarding the sharp decline in net profit, the company attributed it to the combined impact of three pressures: First, increased R&D investment in new materials and emerging businesses—the company’s R&D expenses in 2025 reached RMB 90.75 million, an increase of RMB 21.24 million year-on-year, representing a 30.56% rise. Second, impairment losses were recognized on its 23.81% equity stake in the associate company Anhui Meijia New Materials. Third, a specific provision for credit impairment was made against accounts receivable from TPI Mexico—a subsidiary of TPI, whose parent company entered bankruptcy restructuring. Financial concerns extend beyond profitability. Financial expenses deteriorated markedly: they shifted from RMB -13.31 million in the prior-year period to RMB 6.99 million in 2025, driven largely by significantly higher foreign exchange losses—reflecting a notable escalation in foreign exchange risk associated with the company’s overseas operations. Although cash flow improved—net cash flow from operating activities rose 268.51% year-on-year—the fundamental erosion of profitability remains unchanged. Of greater concern is the company’s failure to meet its performance commitments. On the original business basis, the company’s 2025 net profit attributable to shareholders and net profit attributable to shareholders excluding non-recurring gains and losses stood at RMB 51.57 million and RMB 43.15 million, respectively—both falling short of the commitment thresholds of RMB 60 million and RMB 80 million set by the share transferor. Consequently, the performance commitment fulfillment rate was merely 53.93%. Per the signed ‘Share Transfer Agreement,’ the performance commitment party is obligated to compensate the company with RMB 36.85 million in cash. 01 Wind Power Business Drives Growth; Traditional Businesses Under Sustained Pressure As a leading domestic enterprise in high-performance resin materials, Shangwei New Materials holds a dominant position in the vinyl ester resin and wind turbine blade epoxy resin markets. In 2025, the company’s revenue growth was primarily fueled by the robust development of China’s downstream wind power industry—China’s newly installed wind power capacity reached 76.3 GW in 2025, up 28.5% year-on-year—driving sustained growth in demand for epoxy resins used in wind turbine blades. Leveraging its technological advantages and high-quality customer base, the company successfully penetrated the supply chains of major domestic and international wind turbine blade manufacturers; wind power-related business now accounts for nearly 50% of total revenue, serving as the core engine of the company’s top-line growth. In stark contrast to this strong wind power performance, the company’s traditional core businesses faced pronounced pressure. Specifically, its environmental protection-oriented high-performance corrosion-resistant materials business—which accounts for 38% of total revenue—generated RMB 682 million in revenue, down 1.24% year-on-year. This business mainly serves traditional industrial sectors such as chlor-alkali production, papermaking, and flue gas desulfurization. Affected by macroeconomic fluctuations and intensifying industry competition, market demand remained weak and product pricing continued to face downward pressure. Moreover, the company’s two emerging businesses—novel composite materials and circular economy materials—showed lackluster growth: revenues in 2025 reached RMB 85.42 million and RMB 79.54 million, respectively, rising only 0.47% and 0.36% year-on-year—failing so far to establish new pillars of growth. From an industry perspective, the epoxy resin sector is confronting dual challenges: overcapacity and global structural realignment. In 2025, China’s total epoxy resin production capacity exceeded 12 million tons, with annual output reaching approximately 9.8 million tons; capacity utilization remained above 80%, and market competition intensified further. Industry forecasts indicate that over 1.8 million tons of new capacity will come online within the next two years—further exacerbating supply-demand imbalances and exerting ongoing pressure on the company’s traditional resin businesses.

2022–2027 Market Operation Status and Investment Strategy Research Report on China’s Wenzhou City New Materials Industry

[Report Type] Industrial Research [Report Format] Electronic and Printed Versions [Publisher] Hua Jing Industry Research Institute This report, published by Hua Jing Industry Research Institute, provides a detailed analysis of the current development status, competitive landscape, and market supply-demand dynamics of Wenzhou City’s new materials industry in China. It also examines the opportunities and challenges facing the industry from perspectives including policy environment, economic conditions, social factors, and technological developments. Furthermore, the report highlights the operational status and development patterns of key enterprises, and offers professional forecasts on the industry’s development trends over the coming years. Designed to serve enterprises, research institutions, and investment organizations, the report delivers expert guidance and recommendations to help stakeholders understand the latest industry developments and competitive landscape, and to grasp future industry directions. The report’s data are primarily drawn from national statistical databases, the General Administration of Customs, questionnaire surveys, data collected by the Ministry of Commerce, and other authoritative sources. Macroeconomic data mainly originate from the National Bureau of Statistics; certain industry-specific statistics derive from the National Bureau of Statistics and market research reports; enterprise-level data are sourced from the National Bureau of Statistics’ database of large- and medium-sized enterprises and stock exchanges; and price data are obtained from various market monitoring databases. Table of Contents: Chapter 1: Overview of the New Materials Industry Section I: General Overview of the New Materials Industry I. Definition of New Materials II. Classification of New Materials III. Characteristics of New Materials Section II: Analysis of Business Models in the New Materials Industry I. Production Model II. Procurement Model III. Sales Model Section III: Analysis of Policy-Prioritized New Materials Fields I. Special Functional Metallic Materials II. High-End Metallic Structural Materials III. Novel Inorganic Non-Metallic Materials IV. Advanced Polymeric Materials V. High-Performance Composite Materials VI. Frontier New Materials Chapter 2: Analysis of the Development Environment for Wenzhou’s New Materials Industry Section I: Economic Environment Analysis of Wenzhou City I. Analysis of Wenzhou’s GDP Growth II. Analysis of Industrial Economic Development Trends III. Analysis of Fixed Asset Investment Across Society IV. Total Retail Sales of Consumer Goods Across Society V. Analysis of Urban and Rural Resident Income Growth VI. Analysis of Changes in Resident Consumer Prices Section II: Policy Environment Analysis for Wenzhou’s New Materials Industry I. New Materials Designated as a Strategic Emerging Industry in China II. Policy Support Positions the New Materials Industry for Growth III. Six Key Measures to Promote New Materials Industry Development IV. Industrial Policies Accelerate the New Materials Industry into a Growth Phase Section III: Technological Environment Analysis for Wenzhou’s New Materials Industry I. Brief History of Human Materials Development II. Current Status of New Materials Technology Development III. Future Trends in New Materials Technology Development Section IV: Raw Materials Industry Environment Analysis I. Operational Status of the Raw Materials Industry II. Policy Environment of the Raw Materials Industry Chapter 3: Comprehensive Analysis of Zhejiang Province’s New Materials Industry Development Section I: Analysis of Zhejiang Province’s New Materials Industry Development Section II: Competitive Landscape Analysis of Zhejiang Province’s New Materials Industry I. Key Development Areas for Zhejiang’s New Materials Industry II. Regional Clusters and Development Models of Zhejiang’s New Materials Industry III. Competitive Advantages of Zhejiang’s New Materials Industry IV. Strategic Analysis of Ningbo New Materials Science & Technology City Section III: Analysis of Ningbo’s New Materials Industry Development I. Current Status of Ningbo’s New Materials Industry II. Analysis of Ningbo’s New Materials Industry Advantages III. Analysis of Ningbo’s New Materials Industry Bases IV. Planning of Ningbo’s New Materials Industry Bases V. Development Strategies for Ningbo’s New Materials Industry

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Rayonier Advanced Materials reported a wider-than-expected quarterly loss of $0.49 per share despite revenue exceeding expectations at $376 million. Stock dropped 2.9% following the announcement amidst ongoing profitability challenges.

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