A research report indicates that GLOBAL NEW MAT (06616) has received its first coverage with a "buy" rating. The company is expected to achieve net profits attributable to shareholders of RMB275 million, RMB467 million, and RMB576 million for 2025-2027 respectively. At current prices, the corresponding dynamic PE ratios are 21x, 12x, and 10x. Based on a 16x valuation for 2026, the target price is set at HK$6.19.

The bullish outlook is based on: ①Overseas acquisitions of German Merck's surface materials business/CQV, fostering a global pearl pigment leader, ②Capacity deployment + product structure optimization with both volume and price growth underway, ③Promising prospects for pearl pigment industry in new consumer markets such as cosmetics + automotive, with synthetic mica replacing natural mica being a clear trend.

Main investment thesis:

**Pearl Pigment Industry: Promising Prospects in New Consumer Markets like Cosmetics + Automotive** According to company announcements, the combined domestic market share of the pearl pigment dual leaders (Global + Kuncai) exceeds 30%. High-end consumer-grade cosmetics + automotive sectors (both new consumption areas with double-digit growth rates in cosmetics + automotive industries) will become the main drivers of future industry growth. Coupled with the import substitution trend, domestic cosmetics/automotive manufacturers have greater incentive to prioritize procurement from domestic supply chains.

**Overseas Acquisitions Creating Global Pearl Pigment Leader** ①In January 2023, the company acquired a 42.45% stake in CQV, South Korea's largest pearl pigment manufacturer, for RMB500 million. In 2024, CQV achieved revenue of RMB297 million (+18% YoY) and net profit of RMB46 million (+170% YoY). ②In July 2025, the company completed the acquisition of Merck's global surface solutions business. Natural mica procurement is the core issue troubling Merck's surface solutions business, and the company is expected to empower Merck through supply chain capabilities.

**Capacity Deployment + Product Structure Optimization, Volume and Price Growth Expected** The company's domestic operating entity Qise has capacity planning with current pearl pigment capacity of 33,000 tons and long-term planning for 48,000 tons of pearl pigment capacity. CQV's South Korean base has a combined capacity of 2,600 tons. Capacity deployment supports sales volume growth. The Tonglu factory's synthetic mica capacity of 100,000 tons is planned to be completed and put into production in H2 2025. We look forward to Guangxi Phase II expansion + acquisitions of CQV/Merck providing consumption channels for synthetic mica, and expect that while current domestic synthetic mica-based costs remain higher than natural mica-based costs, capacity expansion and cost reduction may bring a cost inflection point.

**Risk Factors** Cross-border acquisition risks; cross-border business synergy falling short of expectations; product structure upgrade falling short of expectations; macroeconomic fluctuations.