Dongwu Securities: Grant a Buy rating to Xinde New Materials

Soochow Securities Co., Ltd. research team—Zeng Duohong, Ruan Qiaoyan, and Yue Siyao—recently conducted research on Xinde New Materials and released a research report titled “2025 Annual Report Review: Strong Fast-Charging Demand, Full Production and Full Sales, Unit Profit Recovery Imminent,” granting Xinde New Materials a “Buy” rating.

Xinde New Materials (301349)

Key Investment Points

Non-recurring profit slightly below market expectations: The company’s 2025 revenue was 1.16 billion yuan, up 43.3%; its attributable net profit was 40M yuan, up 216.9%; its non-recurring net profit was 10M yuan, up 116.7%; gross margin was 11.3%, up 6.4 pct. Of this, 25Q4 revenue was 0.32 billion yuan, up 30.2% QoQ/-4.2% YoY; attributable net profit was 0.1 billion yuan, down 165.7% QoQ/-62.2% YoY; non-recurring net profit was 0 yuan, down 89% QoQ/-109.6% YoY; gross margin was 12.4%, up 3.5/2.1 pct QoQ/YoY. The non-recurring profit falling below the lower bound of the guidance was mainly due to provisions for credit impairment losses related to litigation contract(s).

Full production and full sales; 110k tons of shipments expected in 2026: The company’s 2025 shipments were 84k tons, up 40%. Of this, Q4 shipments are expected to be 24,000–25k tons, up 40% sequentially. The company currently has 70k tons of production capacity operating at full production and full sales. Combined with the acquisition of 20k tons of capacity from Fujian China Carbon, as well as the subsequent capacity expansion plans, we expect full-year shipments of 110k tons, up 30%+.

Prices of byproducts rebound and transmit raw material price increases; the turning point for net profit per ton is approaching: In 2025, the company’s revenue from coated materials was 480 million yuan, corresponding to a unit price of 0.64 ten-thousand yuan, up slightly year over year. Starting from the second half of 2025, the company raises prices gradually, with full-year gross margin of 10.8 pct, up 6 pct year over year; gross profit per ton was 0.06 ten-thousand yuan, a significant improvement versus 2024. Looking at 2026, product prices have already begun to rebound, and the share of mid-to-high-end products will gradually rise to 30%–35%. Byproduct prices will follow the increase in oil prices, which can smoothly transmit the higher raw material costs. We expect the company’s unit profitability to recover significantly in 2026, with net profit per ton improving to 0.1 ten-thousand yuan+.

Good expense control, operating cash flow under pressure: In 2025, the company’s period expenses were 100 million yuan, up 15.4%; expense ratio was 8.7%, down 2.1 pct. Of this, Q4 period expenses were 30 million yuan, up 8.6%/54.7% QoQ/YoY; expense ratio was 10.3%, down 2/3.9 pct QoQ/YoY. In 2025, operating net cash flow was -230 million yuan, up 2129.8%. Of this, Q4 operating cash flow was -30 million yuan, down 204.1%/-67.2% QoQ/YoY. In 2025, capital expenditures were 40 million yuan, down 26.9%. Of this, Q4 capital expenditures were 20 million yuan, down 5.2%/up 160.4% QoQ/YoY. Inventories at year-end 2025 were 290 million yuan, 37.5% higher than at the beginning of the year

Earnings forecasts and investment rating: Considering that the rebound in byproduct prices transmits raw material price increases and that unit profitability is expected to recover, we forecast attributable net profits of 1.2/10M yuan for 2026–2027 (previous forecast: 0.9/0 yuan). We forecast attributable net profit for 2028 to be 110k yuan, up 214%/24%/13% year over year. Based on the closing price as of March 31, 2026, the stock’s PE is 43x/35x/31x. Maintain the “Buy” rating.

Risk Warning: Sales fall short of expectations; profitability falls short of expectations.

The latest breakdown of earnings forecasts is as follows:

Within the past 90 days, there were 2 institutional firms providing ratings for this stock, with 2 “Buy” ratings.

The above content has been compiled based on publicly available information by Securities Star and generated by an AI algorithm (Network Information Security Record No. 310104345710301240019). It does not constitute investment advice.