**Steady Performance Growth with OLED Terminal Materials Continuing to Drive Results**

The company released its 2025 interim report, achieving revenue of 292 million yuan in H1 2025, up 18.84% year-over-year, and net profit attributable to shareholders of 126 million yuan, up 36.74% year-over-year. In Q2 2025, revenue reached 147 million yuan, up 11.73% year-over-year and 1.37% quarter-over-quarter, while net profit attributable to shareholders was 66 million yuan, up 33.93% year-over-year and 7.75% quarter-over-quarter. The company's 2025 interim dividend plan proposes a cash dividend of 1.8 yuan per 10 shares (pre-tax).

**Key Highlights**

**Intermediate Business Continues to Optimize with Positive New Product Development**

According to the interim report, the company's intermediate business covers two major segments: OLED intermediates and pharmaceutical intermediates. In H1 2025, the company focused on developing deuterated products in its OLED intermediate segment. On the customer front, the company actively expanded its overseas terminal materials customer market, successfully establishing partnerships with internationally renowned terminal material companies including SOLUS, P&H Tech, and SFC, launching dozens of collaborative projects. Some projects have successfully passed customer validation tests and entered mass production testing phases. In the pharmaceutical intermediate segment, the company engaged in deep cooperation with renowned pharmaceutical companies such as Sato Pharmaceutical and Chia Tai Tianqing Pharmaceutical for new drug intermediates, with all related cooperation projects progressing orderly as planned. Additionally, the company's perovskite project achieved phased results, with two additive products showing favorable test results at customer sites.

**Steady Business Growth**

The company's H1 2025 revenue and net profit attributable to shareholders both increased year-over-year, primarily due to increased OLED terminal material sales revenue and the company's continued cost reduction and efficiency improvement efforts. H1 2025 gross margin was 74.72% (up 8.52 percentage points year-over-year), net margin was 43.34% (up 5.68 percentage points year-over-year), and period expense ratio was 23.88% (down 0.29 percentage points year-over-year). Financial expense ratio was 0.13% (up 0.56 percentage points year-over-year), mainly due to reduced foreign exchange gains from USD exchange rate fluctuations and increased interest expenses from additional loans in H1 2025. In Q2 2025, both revenue and net profit attributable to shareholders achieved growth year-over-year and quarter-over-quarter, with gross margin at 76.71% (up 10.02 percentage points year-over-year and 4.00 percentage points quarter-over-quarter) and net margin at 44.66% (up 7.40 percentage points year-over-year and 2.65 percentage points quarter-over-quarter).

**OLED Panel Penetration Rate Increases, Company's OLED Terminal Materials Continue Strong Performance**

The interim report shows that in the smartphone sector, OLED panel penetration rates are steadily improving, with flexible technology driving accelerated adoption of innovative form factors like foldable screens. In the IT sector, OLED display adoption in tablets, PCs, and laptops is accelerating. In automotive displays, OLED penetration rates are also rising simultaneously. According to CINNO Research data, global AMOLED smartphone panel shipments in Q1 2025 were approximately 210 million units (up 7.5% year-over-year), with Chinese manufacturers accounting for 50.8% of shipment share. Domestic panel manufacturers like BOE continue to enhance their capacity and technology, driving growth in demand for domestic OLED terminal materials.

In H1 2025, the company's OLED organic materials revenue was 276 million yuan (up 29.95% year-over-year) with a gross margin of 77.90% (up 5.81 percentage points year-over-year), of which OLED terminal materials sales revenue was 262 million yuan (up 31.63% year-over-year). According to the interim report, for existing mass production products, Red Prime and Green Host maintained stable mass production supply with continuous upgrades and iterations, with H2 2025 shipments expected to increase further. For new products, Red Host is steadily progressing toward large-scale mass production supply, Green Prime is in the mass production testing phase and is expected to achieve batch supply within the year, and blue light series and other materials are progressing smoothly in customer validation. These new products are expected to gradually achieve economies of scale in the future.

Additionally, the company is actively developing blue phosphorescent materials, tandem device connection layer CGL materials, narrow-spectrum high-gamut MRTADF materials, and other cutting-edge technologies. In terms of customer expansion, while maintaining long-term stable cooperation with globally renowned OLED panel manufacturers including BOE, Tianma, China Star Optoelectronics, and Truly, the company is actively expanding into emerging fields such as silicon-based OLED. Currently, multiple materials have successfully passed mass production testing at customers including GVO, Guanyu, and Jade Bird Display.

**Risk Factors**

Risk of technology upgrade iterations; risk of downstream demand recovery falling short of expectations; risk of intensified market competition; risk of the company's main revenue source being concentrated with BOE.