Research Express | Hengdian DMEG receives over 60 institutional surveys including Bosera Fund and others; photovoltaic revenue to reach 14.3 billion yuan in 2025; all three major sectors expected to grow in 2026

Hengdian Group Dong Magnetic Co., Ltd. (hereinafter referred to as “Hengdian Dongci”) held an online performance conference via phone on March 30-31, 2026, receiving research from over 60 institutions including Bosera Fund, Caitong Fund, Sequoia China, China International Capital Corporation, and others. Company executives He Yue and Wu Xueping engaged in in-depth discussions with institutional investors on topics such as the 2025 performance, development of various business segments, and outlook for 2026.

Basic Information on Investor Relations Activities

2025 Performance: Magnetic Materials, Photovoltaic, Lithium Battery Synergy Growth, Planning to Distribute 6 Yuan per 10 Shares

In 2025, Hengdian Dongci deepened its “Magnetic Materials + New Energy” dual-driven strategy, achieving simultaneous growth in operational scale and profitability quality. The company plans to implement a profit distribution for 2025 based on mid-term dividends, distributing 6 yuan in cash dividends per 10 shares (tax included), actively rewarding shareholders.

All business segments performed well:

• Magnetic Materials Devices Segment: Achieved revenue of about 5 billion yuan, with magnetic material shipments reaching 218k tons, maintaining the industry’s top position. Through increased development of high-frequency low-loss materials and new permanent magnetic materials replacing rare earths, product structure continued to optimize, with shipments in emerging fields such as new energy vehicles and AI servers growing rapidly.
• Photovoltaic Industry Segment: Achieved revenue of 14.3 billion yuan, with module shipments up 45% year-over-year. The company launched high-power modules and high-efficiency products for special scenarios, adhering to a differentiated competitive strategy, increasing the proportion of high-quality market shipments, and leveraging supply chain management to achieve resilience against industry cycles.
• Lithium Battery Industry Segment: Achieved revenue of 2.72 billion yuan, with shipments of 620 million units, up 17% year-over-year. The small cylindrical battery shipments ranked among the top three nationwide. Launched E-type, P-type, and full tab products, focusing on small power markets, with growth in shipments for electric scooters, energy storage, and smart home applications, and introduced to leading customers in power tools.

Q&A Session: Growth Expected in Three Major Sectors in 2026; Differentiated Photovoltaic Strategy to Address Industry Challenges

2026 Sector Outlook: Photovoltaic, Lithium Battery, Magnetic Materials All Expected to Grow

The company expects revenue in all three major sectors to grow year-over-year in 2026. Although the photovoltaic sector faces challenges such as the US AD/CVD investigations and the removal of export rebates, it will respond with differentiated product strategies; the magnetic materials device segment will leverage cost optimization and overseas base advantages, with increased volume of new rare earth-free permanent magnetic materials, and expanded layout in soft magnetic and plastic magnetic materials in emerging fields like AI computing power; the lithium battery sector benefits from downstream demand growth and competitive product advantages, likely achieving both volume and profit growth.

Strategic Focus and Emerging Field Layout

The company will extend its synergy based on “Magnetic Materials + New Energy”:

• Magnetic materials devices will focus on high-frequency low-loss materials needed in AI computing and new energy vehicle sectors;
• Photovoltaics will explore a “PV+” model;
• Lithium batteries will extend into data center backup power supplies.
  The layout in emerging fields will follow the principle of strong relevance, promoted through strategic cooperation and industrial investments.

Sustainable Dividend Policy: Robust Cash Flow Supports Returns

Since listing, the company has paid out cash dividends exceeding the amount of equity financing, with steady cash flow from main operations providing a foundation for continuous dividends. When necessary capital expenditures arise, the company will balance investment needs with shareholder returns, and is expected to maintain a certain proportion of cash dividends in the future.

Photovoltaic Business Gross Margin: Supply and Demand Expected to Balance in the Second Half

Looking at the full year, material prices and tax rebate policies support rising sales prices. As the industry accelerates inventory clearing, supply and demand are expected to balance in the second half. The company is confident in seizing opportunities through differentiated competition and remains optimistic about gross margin levels.

European Market: Long-term Demand Resilience

European shipments account for about 40% of the company’s total. Short-term demand, stimulated by the energy crisis, has not fully materialized, but long-term energy independence needs support demand resilience. Differentiated products can command certain premiums, and customers’ high requirements for supply stability are advantageous for managing potential trade risks.

US “Double Anti” Investigations Response: Diversifying Risks by Shifting to Non-US Markets

In response to US anti-dumping and countervailing investigations and related legislation, the company has proactively shifted affected battery capacity to non-US markets since Q3 2025 to maintain capacity utilization, while seeking other regional existing capacities that meet relevant conditions to ensure shipments to the US market.

Magnetic Material Product Structure: Higher Proportion of High-Value-Added Products

In 2025, magnetic material shipments declined but revenue and gross profit margin increased, mainly due to actively reducing low-margin pre-mixed materials and increasing shipments of high-value products such as permanent magnets, soft magnetic, and plastic magnetic materials in AI computing power and new energy vehicle fields.

Overseas Bases Progress: Vietnam and Thailand Construction on Track

Construction of bases in Vietnam and Thailand is progressing smoothly. In the short term, due to supply chain support, material price increases, and capacity ramp-up, profitability is temporarily below that of mature domestic bases. However, their core strategic value lies in enhancing the company’s international competitiveness.

Lithium Battery Expansion Plans: Following Customer Demand

Current capacity utilization remains high. Future capacity planning will closely follow customer demand for new technologies such as full tabs and large cylindrical cells, considering these areas as key strategic growth points for forward-looking evaluation and investment.

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