Guojin Securities has reiterated its "Buy" rating on GLOBAL NEW MAT (06616), citing progress in mergers and acquisitions and emerging synergies. The company's overseas acquisition of Merck's surface materials business/CQV aims to cultivate a global leader in pearlescent pigments. Capacity expansion and product mix optimization are driving volume and price growth. The pearlescent pigment industry shows promising prospects in new consumer markets like cosmetics and automotive, with synthetic mica clearly replacing natural mica as the prevailing trend.
Key points from Guojin Securities include: 1. **Recent Developments**: On December 16, 2025, the company announced differentiated pricing adjustments and plans to issue HKD 1 billion in convertible bonds. - To optimize business structure and enhance operational quality, the company has implemented phased differentiated pricing adjustments for certain product groups and applications. - The proposed convertible bonds, with a total principal of HKD 1 billion, carry a 4.25% coupon and mature on January 4, 2027. The initial conversion price is set at HKD 10.19, representing a 7.49% premium over the previous closing price.
2. **Operational Analysis**: Initial synergies from the SUSONITY integration are becoming evident. - **Organization & Governance**: The company has optimized its structure into "Group-Business Unit-Region," establishing cross-regional collaboration mechanisms to improve governance efficiency. - **Business & Supply Chain Synergies**: Cross-selling initiatives (e.g., in new energy and cosmetics) with SUSONITY are already showing collaborative benefits. - **Innovation-Driven Growth**: Joint R&D projects combine cutting-edge technology with mass production, strengthening a demand-driven R&D mechanism to accelerate medium-to-long-term growth.
3. **Pricing Adjustments for High-Quality Growth**: The differentiated pricing strategy, rolled out in phases across its three business platforms (Qicai Pearlescent, SUSONITY, and CQV), aims to align with market trends and enhance core competitiveness. Adjustments range from 3% to 30%, tailored to product features, technical complexity, applications, and customer segments. The goal is to better match product value with market demand, focusing on high-margin businesses, with results expected to materialize gradually.
4. **Convertible Bonds for Global Expansion**: Net proceeds of approximately HKD 981 million from the bond issuance will primarily fund working capital, refinancing existing debt, and general corporate purposes. This move is expected to optimize capital structure, improve cash flow stability, and support R&D upgrades, global market expansion, and supply chain integration, further solidifying its leadership in the global pearlescent materials sector.
**Risk Factors**: Cross-border acquisition risks; slower-than-expected synergy realization; delays in product mix upgrades; macroeconomic volatility.