Founder: Shouyu GLOBAL NEW MAT (06616) "recommended" rating, leading pearl pigment manufacturer acquires Merck's surface solutions business in Germany.

Founder released a research report, covering for the first time, giving GLOBAL NEW MAT (06616) a "buy" rating. In the first half of 2025, the company achieved a revenue of 910 million yuan, with sales of pearl pigments increasing by 34.5% to 15,000 tons. In July 2025, the company completed the acquisition of Merck's global surface solutions business in Germany, significantly strengthening its global research and development, production, and sales network. Taking into account the cost reduction and price increase measures after integrating the original Merck business and channel network, as well as the growth space brought by new production capacity expansion. Key points from Founder: The company has gradually become a global surface material solutions provider. The company focuses on the core business of pearl materials, mainly engaged in the research, production, and sales of pearl materials and synthetic mica. Its pearl pigment products are widely used as colorants in various industries such as industrial coatings, plastics, textiles, leather, cosmetics, and automotive coatings. With the completion of the CQV and Merck acquisitions, as well as the upgrade of its product structure, the company is gradually moving towards high-end development and becoming a global surface material solutions provider. The increase in sales of pearl pigment products, combined with improved product structure, led to a slight increase in gross profit margin. In the first half of 2025, the company achieved operating income of 910 million yuan, a year-on-year increase of 17.7%; achieving a net profit attributable to the parent company of 62.2 million yuan, a year-on-year decrease of 41.9%. Among them, pearl pigment products dominate the company, with revenue from pearl pigment products reaching 850 million yuan in the first half of 2025, a year-on-year increase of 21.4%, accounting for 93% of revenue. Mica functional fillers achieved operating income of 49.04 million yuan, a year-on-year increase of 19.9%, accounting for 5% of revenue. The increase in revenue from pearl materials is mainly due to the further increase in sales volume, with pearl pigment products achieving sales of 15,000 tons in the first half of 2025, a year-on-year increase of 34.5%. At the same time, with the improvement of product structure and the decrease in raw material costs, the company's gross profit margin in the first half of the year increased slightly year-on-year to 52.0%. Acquisition of Merck's global surface solutions business. In July 2024, the company announced its intention to acquire Merck's global surface solutions business for 665 million euros (approximately 5.187 billion yuan). By the end of July 2025, the company completed the business acquisition. This strategic integration will help accelerate the company's internationalization process, promote the company's external expansion, and enhance its global brand influence. At the same time, the company has established global research and production bases covering China, Germany, South Korea, Japan, and the United States, as well as a sales network covering more than 150 countries and regions, enhancing the company's competitive position in the high-end pearl pigment field. Actively promote capacity expansion. The second phase of the seven-color pearl project will gradually start production of 30,000 tons of pearl materials annually, and the Tonglu 100,000-ton surface performance material project has entered the equipment installation stage. With the commissioning of new production capacity, the company's leading position in global pearl materials will be further consolidated. Risk factors: Capacity construction falling short of expectations; significant fluctuations in product prices; business integration falling short of expectations, etc.