Tongkun Group Co., Ltd. (Tongkun Shares) (601233)

Individual Stock Analysis Report　|　Industry: Polyester Filament Yarn and Petrochemical Integration　|　Report Date: September 13, 2026　|　As of the close on September 11, 2026; MACD, RSI, and certain major-fund-flow data are as of September 10, 2026, while shareholder-structure data are as of June 30, 2026, and therefore subject to a time lag.

This report was automatically compiled by AI based on publicly available information and is for reference only. It does not constitute investment advice.

1. Executive Summary

Tongkun Shares’ results recovered significantly in the first half of 2026: operating revenue reached RMB 52.709 billion, up 19.36% year on year; net profit attributable to the parent company reached RMB 4.222 billion, up 285.03% year on year, already exceeding the RMB 2.033 billion recorded for full-year 2025. Profit growth mainly came from improved processing spreads for polyester filament yarn and PTA, industry destocking and capacity-discipline adjustments, as well as higher investment income resulting from improved operations at Zhejiang Petroleum & Chemical, in which the company holds an equity stake. However, net cash flow from operating activities was negative RMB 718 million during the same period, indicating a divergence between profit growth and cash-flow performance. Earnings quality still needs to be assessed alongside changes in inventories, receivables, and raw-material procurement.

The company is a domestic leader in civil-use polyester filament yarn and has established a vertically integrated configuration covering refining—PX—PTA/MEG—polyester—polyester filament yarn. As of June 30, 2026, the company had approximately 10 million tonnes per year of attributable crude-oil processing capacity, 10.2 million tonnes per year of PTA capacity, 15 million tonnes per year of polymerization capacity, and 15.5 million tonnes per year of polyester filament yarn capacity. Scale, raw-material support, its equity stake in Zhejiang Petroleum & Chemical, and the geographic layout of its production bases are its principal competitive advantages. However, polyester filament yarn retains strong commodity characteristics, and the company has limited pricing power over downstream customers. Profitability remains sensitive to crude oil, PX, PTA, and MEG prices, industry supply and demand, and end-market textile demand.

In 2024, the company recorded operating revenue of approximately RMB 101.31 billion and net profit attributable to the parent company of approximately RMB 1.202 billion. Gross margin and net margin were approximately 4.64% and 1.20%, respectively, demonstrating the pronounced cyclicality of historical profitability. In the first half of 2026, polyester filament yarn revenue was approximately RMB 42.748 billion, with a gross margin of approximately 11.52%; PTA revenue was approximately RMB 6.188 billion, with a gross margin of approximately 3.80%. Industry conditions improved markedly during the period, but these levels cannot simply be extrapolated to the full year or the long term. Institutional forecasts for 2026 net profit attributable to the parent company range from RMB 3.314 billion to RMB 8.088 billion. The wide forecast dispersion reflects differing market views on the sustainability of processing spreads, refining conditions, and investment income from Zhejiang Petroleum & Chemical.

As of the close on September 11, 2026, the company’s share price was RMB 23.41, approximately 16.7% below the 52-week high of RMB 28.10. Based on the supplied methodology, the price-to-earnings ratio and price-to-book ratio were approximately 10.80x and 1.28x–1.29x, respectively, indicating that overall valuation is not high. However, recent technical momentum has been weak: the share price was below the MA5, MA10, and MA20, while MACD remained in negative territory. The stock fell 4.14% on September 11, with turnover of approximately RMB 1.204 billion, and major-fund flows had previously shown net outflows. The share price is now close to the recent low around RMB 22.8 and the Bollinger lower band around RMB 22.32. Going forward, investors should monitor both earnings conditions and changes in price, trading volume, and fund flows.

2. Company Overview

2.1 Basic Information

2.2 Main Businesses and Product Portfolio

• Polyester POY (partially oriented yarn)
• Polyester FDY (fully drawn yarn)
• Polyester DTY (drawn textured yarn)
• Polyester composite yarn
• ITY, high-strength yarn, and other differentiated polyester filament yarn
• PTA (purified terephthalic acid)
• MEG (monoethylene glycol)
• Polyester chips and other supporting products
• New-material businesses including recycled fibers, functional differentiated filament yarn, spinning additives, surfactants, and polyether polyols

2.3 Position in the Upstream and Downstream Value Chain and Cost-Profit Structure

The company occupies an upper-middle position in the “petrochemical raw materials—polyester—polyester filament yarn—textile processing” value chain. It primarily produces and sells civil-use polyester filament yarn, while extending upstream into refining and aromatics through its own PTA and MEG capacity and a 20% equity stake in Zhejiang Petroleum & Chemical. It has established a vertically integrated configuration covering “refining—PX—PTA/MEG—polyester—spinning—texturing—textiles—dyeing and printing.”

• Major inputs include PX, PTA, MEG, crude oil and aromatics, as well as coal, natural gas, electricity, steam, and packaging materials.
• PX is mainly used to produce PTA, while PTA and MEG are core raw materials for polyester polymerization and polyester filament yarn production. Coal and natural gas are mainly related to the Xinjiang MEG project and coal-gas-based facility upgrades.
• The company has supporting capacity in PTA and MEG and extends upstream into refining and PX through its stake in Zhejiang Petroleum & Chemical. This can increase the proportion of self-supplied raw materials and reduce transportation, warehousing, and intermediate transaction costs.
• The company remains exposed to international crude-oil, PX, and coal prices and has not fully escaped cyclical volatility. Before achieving a high degree of integration, polyester filament yarn producers were relatively sensitive to PX, PTA, and MEG prices and were essentially price takers.
• The company’s annual report states that its major raw materials and products are derivatives of petroleum-refining products. Their prices are affected by international crude-oil prices, industry supply and demand, and downstream demand, resulting in pronounced cyclicality in operating performance.
• A non-company original research source indicates that procurement from the five largest suppliers accounted for approximately 48% of total purchases in 2024, of which related-party transactions accounted for approximately 17%. The source is limited and has not been cross-verified against the directly searchable text of the company’s annual report. It is provided for reference only and should not be regarded as a confirmed official figure.
• Major customers include downstream textile and weaving companies, fabric companies, home-textile companies, and traders. End-market demand comes from apparel, home textiles, luggage and bags, automotive interiors, and certain industrial textiles.
• Polyester filament yarn products cover six major series and more than 1,000 varieties. They are mainly used in apparel fabrics and home-textile products, with some used in industrial applications such as ropes, automotive tarpaulins, and luggage fabrics.
• Downstream customers are numerous and geographically dispersed, and the products have strong commodity characteristics. However, when industry inventories rise or end-market textile demand weakens, customers may defer purchases or request price concessions.
• In the accessible materials of the company’s 2024 annual report, no latest, sufficiently cross-verified data on the sales proportion of the five largest customers were identified. Some non-company original sources describe the customer base as relatively dispersed, but this could not be cross-verified against annual-report tables. The company’s latest annual report should be taken as the authoritative reference.
• Polyester filament yarn prices are primarily affected by crude oil, PTA, MEG, inventories, and end-market textile demand. The main advantages of leading companies are scale, cost, operating rates, product mix, and cash flow, rather than absolute pricing power over downstream customers.
• The company can pass through part of changes in raw-material prices to downstream customers through product pricing, but sharp price fluctuations may still result in inventory write-downs and gross-margin volatility.
• As of December 31, 2024, the company had accounts receivable of approximately RMB 1.005 billion and 2024 operating revenue of approximately RMB 101.31 billion. Accounts receivable represented approximately 0.10% of operating revenue; days sales outstanding were approximately 3.0 days, with a turnover ratio of approximately 119x. This indicates rapid collection of sales proceeds and limited long-term use of working capital by receivables. The company’s main working-capital risk comes from inventory write-downs caused by price fluctuations in polyester filament yarn, PTA, and other products and raw materials. If products are stocked at high prices and subsequently decline in value, inventory impairment losses may arise.
• Regarding supplier concentration, a non-company original research source indicates that purchases from the five largest suppliers accounted for approximately 48% in 2024, with related-party transactions accounting for approximately 17%. However, the source is limited and was not cross-verified against the body of the company’s annual report. Regarding customer concentration, the accessible materials of the 2024 annual report did not contain sufficiently cross-verified data on the sales proportion of the five largest customers. Relevant conclusions should be based on the company’s latest annual report.

Tongkun Shares occupies an upper-middle position in the petrochemical—polyester—polyester filament yarn value chain. It is a large-scale, asset-intensive midstream processing and manufacturing company that extends upstream through PTA and MEG support and its equity stake in refining. The company does not possess strong end-market branding or significant pricing power over commodity products. Further profit improvement will depend mainly on an improved supply-demand balance for polyester filament yarn, greater raw-material self-sufficiency and integrated cost reductions, higher capacity utilization, economies of scale, and a higher proportion of differentiated products, rather than strong pricing power over downstream customers.

3. Financial Data and Valuation Analysis

3.1 Recent Operating Performance

The 2026 interim report was disclosed on August 26, 2026 and has not been audited. Second-quarter 2026 data were disaggregated based on the interim report and a third-party financial database and were not separately disclosed by the company in a quarterly report. The cumulative interim-report data should be used as the reference. First-half 2026 net profit attributable to the parent company excluding non-recurring items was RMB 4.006 billion, up 280.03% year on year; basic EPS was RMB 1.78, up 286.96% year on year. First-quarter 2026 net profit attributable to the parent company excluding non-recurring items was RMB 1.758 billion, up 193.18% year on year; basic EPS was RMB 0.80. Full-year 2025 net profit attributable to the parent company excluding non-recurring items was RMB 1.591 billion, up 70.31% year on year; basic EPS was RMB 0.86, up 68.63% year on year.

Revenue returned to growth in the first half of 2026, while net profit attributable to the parent company increased sharply year on year and exceeded the full-year 2025 level. Profit growth was mainly driven by improved polyester filament yarn and PTA spreads and increased investment income from Zhejiang Petroleum & Chemical. Net cash flow from operating activities was negative RMB 718 million, compared with negative RMB 300 million in the same period of the prior year, representing a year-on-year decline of 139.00%. The divergence between profit growth and operating cash flow requires attention to changes in inventories, receivables, raw-material procurement, and working capital. In the first half of 2026, equity attributable to shareholders of the listed company was RMB 42.542 billion, up 11.00% from the end of 2025; total assets were RMB 122.677 billion, up 8.06% from the end of 2025; and weighted average return on equity was 10.44%, 7.48 percentage points higher than in the same period of the prior year.

3.2 Earnings Forecasts

According to TONGHUASHUN F10 data, approximately 26 institutions had issued forecasts for 2026–2028 as of around September 10, 2026. Institutional consensus forecasts for net profit attributable to the parent company range from RMB 3.314 billion to RMB 8.088 billion for 2026, RMB 3.521 billion to RMB 9.038 billion for 2027, and RMB 3.679 billion to RMB 10.084 billion for 2028. These figures are institutional forecasts rather than formal company guidance. Different brokerages have differing views on polyester filament-yarn spreads, crude-oil prices, investment income from Zhejiang Petroleum & Chemical, and the impact of industry “anti-involution” policies, resulting in substantial earnings-forecast dispersion.

3.3 Valuation and Institutional Ratings

As of the close on September 11, 2026, the company’s share price was RMB 23.41. On a TTM basis, the P/E was approximately 10.80x, placing it at a relatively low historical valuation percentile; the P/B was approximately 1.28x–1.29x, while net asset value per share at the end of June 2026 was approximately RMB 18.18. Based on approximately 2.379 billion shares outstanding, total market capitalization was approximately RMB 55.69 billion. Based on the 2026 institutional consensus EPS of RMB 2.97, the implied 2026 forward P/E is approximately 7.9x; based on Great Wall Securities’ EPS forecast of RMB 3.40, the implied 2026 forward P/E is approximately 6.9x. Institutional target prices range from approximately RMB 27.50 to RMB 36.15, with a median of approximately RMB 30.77. However, target prices are based on different report dates, valuation benchmarks, and forecast years and cannot be compared directly. Overall valuation is not high, but earnings remain sensitive to polyester filament-yarn processing spreads, industry supply constraints, crude oil, PX and PTA prices, investment income from Zhejiang Petroleum & Chemical, downstream demand, and the inventory cycle. Investment income from Zhejiang Petroleum & Chemical made a substantial contribution to first-half 2026 profit, so first-half profit should not simply be annualized. If refining spreads decline, actual net profit attributable to the parent company could fall below some optimistic forecasts. At the same time, operating cash flow was negative in the first half, requiring continued monitoring of cash flow, inventories, and accounts receivable.

4. Recent News and Announcements

4.1 Concerted-Action Party of the Controlling Shareholder Applies to Issue Exchangeable Corporate Bonds of No More Than RMB 1.180 Billion

An announcement dated September 12, 2026 stated that Zhejiang Leixin Industrial Co., Ltd., a concerted-action party of controlling shareholder Tongkun Holding Group Co., Ltd., applied to the Shanghai Stock Exchange on September 11 to privately issue exchangeable corporate bonds of no more than RMB 1.180 billion, with part of its holdings of Tongkun Shares A-shares as the underlying shares. The application was accepted by the SSE on the same day. As of the announcement date, Leixin Industrial held 172,920,181 Tongkun Shares, representing 7.27% of the company’s issued share capital. The bonds will have a term of no more than three years. Bondholders will have the right, after six months from the end of issuance and when the exchange conditions are satisfied, to exchange the bonds for Tongkun Shares. The company stated that the matter would not result in any change in the controlling shareholder or actual controller. The application has only been accepted; issuance has not been completed and no actual reduction in holdings has occurred. The final issuance plan, exchange price, exchange ratio, and whether an exchange will actually take place have not yet been determined.

4.2 Registration Application for Debt-Financing Instruments of No More Than RMB 13 Billion Approved

An announcement dated September 10, 2026 stated that the company received, on September 7, 2026, an “Acceptance of Registration Notice” from the National Association of Financial Market Institutional Investors (NAFMII) (中市协注〔2026〕DFI68号). The company had previously proposed to issue non-financial corporate debt-financing instruments with a total amount of no more than RMB 13 billion. The matter had been approved by the 16th meeting of the ninth session of the Board of Directors held on April 24, 2026 and the 2025 annual general meeting held on May 20, 2026. During the validity period of the registration, the company may issue super-short-term commercial paper, short-term commercial paper, medium-term notes, perpetual notes, asset-backed notes, green debt-financing instruments, and other products in tranches. It may also issue relevant products through private placement. Industrial Bank is the lead underwriter. The RMB 13 billion represents the upper limit of the registered quota and does not mean that the company has actually raised RMB 13 billion. The subsequent issuance size, interest rate, term, and use of proceeds have not been determined.

4.3 Fourth Extraordinary General Meeting of Shareholders in 2026 to Be Held on September 15

The company disclosed a reminder announcement on September 9, 2026. The record date is September 9, 2026, and the in-person meeting will be held at 14:00 on September 15, 2026. Four proposals are scheduled for consideration: completion of the fund-raising investment projects and permanent replenishment of working capital with surplus proceeds; the “2026 Restricted Stock Incentive Plan (Draft)” and its summary; the “Administrative Measures for the Implementation and Assessment of the 2026 Restricted Stock Incentive Plan”; and authorization for the Board of Directors to handle matters related to the 2026 restricted stock incentive plan. The investment projects funded by the company’s 2021 private placement have all been completed and closed. As of August 25, 2026, cumulative use of the raised funds was RMB 1,810.6449 billion, with estimated surplus proceeds of RMB 177.9698 million. The final amount will be based on the actual bank balance when the dedicated fund-raising account is closed. The company plans to permanently replenish working capital with the surplus funds.

4.4 Self-Inspection of Insiders in Connection with the 2026 Restricted Stock Incentive Plan

In an announcement dated September 9, 2026, the company disclosed the results of its review of trading in company shares by insiders during the six months before the first public disclosure of the draft 2026 restricted stock incentive plan, from February 25 to August 25, 2026. Three reviewed individuals traded company shares during the self-inspection period, while the remaining reviewed individuals did not. The company explained that one reviewed individual’s trading took place before the inside information was formed, while the other two were a supervisor and an executive of the controlling shareholder. The company determined that they were not aware of the incentive plan at the time of their transactions. None of the three is an incentive recipient under the plan. The company found no leakage of inside information or profit from insider trading. As of September 13, 2026, no regulatory penalty or inquiry announcement related to the matter had been identified.

4.5 Review of the List of Participants in the 2026 Restricted Stock Incentive Plan

On September 9, 2026, the company’s Nomination and Remuneration Assessment Committee disclosed its review opinion, stating that the incentive recipients mainly include company directors, senior management, core management personnel of controlling subsidiaries, and key employees. The recipients meet the conditions required by applicable laws, regulations, and the incentive plan. Independent directors, foreign employees, shareholders individually or collectively holding more than 5% of the company’s shares, the actual controller, and the actual controller’s spouse, parents, and children are excluded. The plan remains subject to approval by the general meeting of shareholders. The final grant size, grant price, and assessment targets will be subject to subsequent company announcements.

4.6 Significant Increase in First-Half 2026 Results Essentially Realized

The company disclosed a first-half earnings preview on July 15, 2026, forecasting net profit attributable to shareholders of the listed company of RMB 4.100 billion to RMB 4.500 billion, representing year-on-year growth of 273.92% to 310.40%. Net profit excluding non-recurring items was expected to be RMB 3.880 billion to RMB 4.280 billion, up 268.12% to 306.07% year on year. Net profit excluding investment income from associates and joint ventures was expected to be RMB 2.450 billion to RMB 2.850 billion, up 264.44% to 323.94% year on year. Growth was mainly attributed to the recovery of processing spreads for PTA and polyester filament yarn, industry destocking and capacity-discipline adjustments, resilient downstream demand, and improved operating conditions at Zhejiang Petroleum & Chemical. The subsequently disclosed 2026 interim report showed first-half net profit attributable to the parent company of RMB 4.222 billion, up 285.03% year on year, within the earnings-preview range. The company cautioned that the relevant operating data for Zhejiang Petroleum & Chemical had not been audited when the earnings preview was disclosed and could be adjusted after audit. Future results will remain affected by polyester-product spreads, refining-industry conditions, and investment income from Zhejiang Petroleum & Chemical.

4.7 Shares in the Dedicated Repurchase Account Cancelled

The company completed the cancellation of 21,225,873 shares held in its dedicated share-repurchase account on March 5, 2026. Following the cancellation, total share capital decreased from 2,400,227,363 shares to 2,379,001,490 shares. The shares originated from repurchases conducted by the company during 2022–2023 and had originally been intended for employee shareholding plans, equity incentive plans, or convertible corporate bonds. The company subsequently decided to cancel part of the treasury shares.

4.8 Proposed Repurchase and Cancellation of 4.32927 Million Shares Under the 2023 Restricted Stock Incentive Plan

On August 6, 2026, the company disclosed its plan to repurchase and cancel 4,329,270 restricted shares under the 2023 restricted stock incentive plan. The reasons include the departure of 10 incentive recipients and the failure to meet the company-level performance assessment target for the third release period. After completion, the company’s registered capital is expected to decrease from RMB 2,379,001,490 to RMB 2,374,672,220, and the total number of shares is expected to decrease from 2,379,001,490 to 2,374,672,220. The matter was approved by the third extraordinary general meeting of shareholders in 2026 held on August 5, 2026. The period for creditors to file claims is August 6 to September 20, 2026. This is a repurchase and cancellation resulting from failure to satisfy conditions under an equity incentive plan, rather than a new market-based share-repurchase program.

4.9 No New Market-Based Repurchase Program Identified as of September 13

As of September 13, 2026, no new market-based share-repurchase plan or new implementation announcement for a share repurchase by Tongkun Shares in September 2026 had been identified. This conclusion is based on a search of public announcements available as of that date and does not mean that no undisclosed or not-yet-public matter exists.

4.10 No Major Mergers, Acquisitions, Restructurings, or Regulatory Penalty Announcements Identified

As of September 13, 2026, no announcements had been identified showing that Tongkun Shares disclosed a major asset restructuring, major acquisition, asset sale, or regulatory penalty in September 2026. No public information had been identified indicating that the SSE issued a regulatory work letter, disciplinary action, or inquiry letter to the company. This conclusion is based on a search of public announcements and cannot exclude subsequent announcements or matters that have not yet been made public.

5. Share-Price Trend and Technical Analysis

5.1 Price Overview

5.2 Technical Indicators

As of September 11, 2026, Tongkun Shares closed at RMB 23.41, down 4.14% for the day. The share price was below MA5, MA10, and MA20, MACD was in negative territory, and RSI6 was 34, indicating weak short-term technical momentum. The share price was close to the Bollinger lower band of approximately RMB 22.32 and the recent low area of RMB 22.55–22.69. Short-term support and a technical recovery are possible, but the September 11 decline was accompanied by turnover rising to approximately RMB 1.204 billion, while recent major-fund flows showed net outflows. The weak structure has not yet been reversed. If the stock subsequently recovers the RMB 24.4–24.9 resistance zone with corresponding turnover, the technical picture may recover toward the RMB 25.0–25.6 area. If support around RMB 22.8 is lost, attention should turn to the Bollinger lower band around RMB 22.3 and the lower area around RMB 21.98.

5.3 Short-Term Outlook (Next Week, Scenario Analysis for Reference Only)

⚠️ Risk warning: The following content is only a subjective scenario analysis based on the closing data, historical prices, and technical indicators as of September 11, 2026. It does not constitute investment advice or a buy/sell instruction.

① Key Technical Levels

② Scenarios for the Next Week (Subjective Weights, Not Statistical Probabilities)

• Range-bound consolidation (relatively high subjective weight, approximately 50%–60%; this is a subjective judgment based on current technical conditions and fund flows, not a statistical probability): The observed price range is RMB 22.8–24.6. Trigger conditions include stabilization around RMB 22.8, turnover declining into the recent normal range of approximately RMB 800 million–RMB 1.2 billion, MACD’s negative value continuing to narrow without a clear golden cross, and no significant systemic decline in the broader market or chemical-fiber sector. In this scenario, the share price may fluctuate repeatedly around RMB 23, with RMB 24.4–24.6 representing the first confirmation zone for a short-term rebound.
• Weak decline (medium subjective weight, approximately 30%; this is a subjective judgment based on current technical conditions and fund flows, not a statistical probability): The observed price range is RMB 21.98–22.8. Trigger conditions include an effective break below support around RMB 22.8, daily turnover significantly exceeding recent average levels while the closing price remains low, continued net outflows of major funds, and simultaneous weakness in chemical fibers, polyester, or the broader market. If the Bollinger lower band around RMB 22.3 is also broken on heavy volume, the weak structure may extend toward RMB 21.98. If the price falls below support intraday but closes back above it, the signal would be relatively weak.
• Stronger rebound (low subjective weight, approximately 20%; this is a subjective judgment based on current technical conditions and fund flows, not a statistical probability): The observed price range is RMB 24.6–26.0. Trigger conditions include reclaiming the MA5 area around RMB 24.6, followed by a break above short-term resistance at RMB 24.9, daily turnover increasing to more than RMB 1.3 billion and remaining high for several sessions, major-fund flows turning from net outflows to sustained net inflows, and a simultaneous rebound in the chemical-fiber or polyester value chain. If RMB 24.9 is effectively breached, the MA20 area around RMB 25.0–25.6 may be observed. Further movement toward RMB 26.0 would still require confirmation from trading volume and sector performance.

③ Fund-Flow and Liquidity Background

Tongkun Shares has a total market capitalization of approximately RMB 55.69 billion and approximately 2.375 billion tradable A-shares. Its recent turnover rate was approximately 1.60%–2.28%, with turnover of approximately RMB 942 million–RMB 1.361 billion. Turnover on September 11 was approximately RMB 1.204 billion and the turnover rate was 2.18%. Overall liquidity is adequate, and the stock is not an extremely illiquid small-cap stock. Shareholder data as of June 30, 2026 showed that the ten largest tradable shareholders held approximately 48.67% of shares and institutions collectively held approximately 58.78%. Funds, insurance companies, and basic pension insurance funds held approximately 16.04%, 2.12%, and 0.73% of tradable A-shares, respectively. The ten largest shareholders also included Hong Kong Securities Clearing Company, China Life, the National Social Security Fund, and the Basic Pension Insurance Fund. This shareholder-structure data is as of June 30, 2026 and lags the September 11 market conditions by more than two months; actual holdings may have changed. In conjunction with recent turnover and turnover rates, day-to-day trading liquidity remains adequate. However, the 4.14% decline on September 11 occurred alongside turnover rising to approximately RMB 1.204 billion, while major funds recorded net outflows of approximately RMB 87.03 million as of September 10, indicating continued short-term selling pressure. Actual liquidity and transaction prices will remain affected by market conditions and order-book depth.

One observable volume-confirmation signal would be that if daily turnover subsequently remains above RMB 1.3 billion while the closing price reclaims the RMB 24.6–24.9 resistance zone, this could indicate renewed short-term fund participation and improve confidence in the validity of a rebound. If turnover rises but the share price continues to close below RMB 22.8, the move would be more consistent with heavy-volume exit selling rather than active fund entry.

④ Key Points to Monitor (Observation Framework Only, Not Trading Instructions)

• Observe whether the RMB 22.8–23.4 area can stabilize, focusing on closing-price performance rather than merely intraday lows; this is an observation framework, not a trading instruction.
• Observe the effectiveness of support near the Bollinger lower band and previous lows in the RMB 22.2–22.6 area; this is an observation framework, not a trading instruction.
• Observe whether the RMB 24.4–24.9 resistance zone can be reclaimed, and then monitor the RMB 25.0–25.6 area; this is an observation framework, not a trading instruction.
• Observe whether turnover can expand above RMB 1.3 billion for several consecutive sessions and coincide with the share price reclaiming the resistance zone; this is an observation framework, not a trading instruction.

The above scenario analysis is based on the closing data, historical prices, and technical-indicator calculations as of September 11, 2026. Short-term share prices will also be affected by news, fund flows, broader-market conditions, chemical-fiber prices, commodity-market volatility, and many other factors. Technical indicators themselves have lagging effects and limitations. This analysis does not guarantee future actual performance and does not constitute a buy or sell recommendation. Investors should independently assess the situation based on the latest market information and bear the investment risks themselves.

6. Industry Landscape and Competitor Analysis

6.1 Industry Status

Polyester filament yarn is a large and relatively mature subsector of China’s chemical-fiber industry, primarily serving the apparel, textile, and home-textile sectors. Both industry raw materials and products are linked to commodities such as crude oil, coal, and natural gas, resulting in pronounced cyclicality. China has a large domestic capacity base and a relatively high export share, while demand is affected by domestic consumption, textile exports, and overseas restocking. General-purpose products such as POY and FDY are highly homogeneous, and competition focuses on scale, cost, operating rates, product mix, and cash flow.

6.2 Competitive Landscape

• PTA, polyester, and polyester filament yarn capacity is gradually concentrating among large companies. Industry competition is shifting from fragmented, fully competitive participation by numerous small and medium-sized companies toward scale-based, base-based, and integrated competition led by large enterprises.
• Large companies have greater advantages in raw-material support, financing, technological upgrades, and low-cost capacity expansion, while old, high-cost, and small-scale facilities face pressure to exit.
• Higher industry concentration does not mean that companies possess strong product pricing power. Polyester filament yarn prices remain primarily affected by crude oil, PTA, MEG, inventories, and end-market textile demand.
• Differentiated fibers, recycled fibers, green and low-carbon manufacturing, and intelligent manufacturing are long-term competitive directions.
• According to data from the China Chemical Fibers Association cited by Forward Industry Research Institute, the top three Chinese producers of civil-use polyester filament yarn by output in 2024 were Tongkun Group, Hengyi Group, and Xinfengming. The institute estimated that the CR5 of China’s polyester filament yarn industry by capacity was approximately 53% in 2025. This CR5 is a third-party industry estimate, and its statistical methodology and sample coverage may differ from the market-share disclosures in the company’s annual report. It is provided only as a reference for industry trends.
• The company’s 2024 annual report disclosed that Tongkun’s share of the domestic polyester filament yarn market exceeded 28%, while its international market share exceeded 18%. These market-share figures, cited by the company from China Chemical Fiber Association data, do not use the same statistical methodology as the third-party CR5 estimate and cannot be directly added or compared.
• As of June 30, 2026, the company’s polyester filament yarn capacity had reached 15.5 million tonnes per year, and its product output and sales had long ranked among the global industry leaders. In 2024, POY, FDY, DTY, and PTA sales were approximately 9.682 million tonnes, 2.141 million tonnes, 1.120 million tonnes, and 1.268 million tonnes, respectively. Overall polyester filament yarn sales increased by approximately 25.6% year on year.
• In the first half of 2026, polyester filament yarn revenue was approximately RMB 42.748 billion, with a gross margin of approximately 11.52%; PTA revenue was approximately RMB 6.188 billion, with a gross margin of approximately 3.80%. These are period-specific industry-condition figures and cannot simply be extrapolated to the full year or the long term.

6.3 Main Competitors

Tongkun Shares’ core competitive strengths include its scale in polyester filament yarn, supporting raw-material capacity in PTA and MEG, upstream integration through its stake in Zhejiang Petroleum & Chemical, a nationwide production-base network, melt-direct-spinning and intelligent-manufacturing capabilities, and a relatively short customer collection cycle. Compared with Xinfengming, Tongkun has strong competitiveness in filament-yarn scale and vertical value-chain extension. Compared with Hengyi Petrochemical, Hengli Petrochemical, Eastern Shenghong, and Rongsheng Petrochemical, Tongkun is more focused on civil-use polyester filament yarn, while its overall refining-business weighting is relatively low. The company’s main weaknesses are limited pricing power in commodity chemical-fiber products and earnings sensitivity to crude-oil and energy prices, industry supply and demand, inventories, and downstream textile demand. Upstream refining, PX, PTA, coal-gas resources, and new-material projects require substantial capital expenditure, while the future profit contribution from new materials, coal chemicals, and overseas projects remains uncertain.

7. Risk Factors

• Polyester filament yarn and PTA processing spreads face the risk of cyclical decline. The company’s gross margin and net margin were approximately 4.64% and 1.20% in 2024, respectively, while net margin was approximately 0.22% in 2022. If industry supply increases, downstream demand weakens, or inventories rise, profitability could decline substantially from the first-half 2026 level.
• Fluctuations in crude oil, PX, PTA, MEG, coal, and natural-gas prices could compress profit or cause inventory write-downs. The company’s products and major raw materials are linked to petroleum-refining and energy products. Even with some supporting raw-material capacity, the company has not fully escaped commodity-price volatility.
• Net cash flow from operating activities was negative RMB 718 million in the first half of 2026, below negative RMB 300 million in the same period of the prior year, creating a risk that profit growth may not translate into synchronized cash collection. If high-priced raw materials or product inventories tie up funds and subsequently decline in value, working-capital pressure and inventory impairment could increase.
• Investment income from Zhejiang Petroleum & Chemical made a substantial contribution to first-half 2026 earnings growth, but its operating data had not been audited at the earnings-preview stage, and refining-industry conditions are cyclical. If Zhejiang Petroleum & Chemical’s operations or refining spreads deteriorate, the company’s net profit attributable to the parent company could fall below some optimistic institutional forecasts.
• The company’s expansion and its refining, PX, PTA, coal-gas resources, new-materials, and overseas projects require substantial capital investment. Although the company has obtained a registration quota of no more than RMB 13 billion for debt-financing instruments, the actual subsequent issuance size, interest rate, term, and use of proceeds have not been determined. Financing costs and capital expenditure could affect financial flexibility.
• General-purpose polyester filament yarn products such as POY and FDY are highly homogeneous, and the company lacks absolute pricing power over downstream customers. If demand from apparel, home textiles, luggage and bags, or automotive interiors recovers less than expected, downstream customers may defer purchases or request price concessions.
• Zhejiang Leixin Industrial, a concerted-action party of the controlling shareholder, has applied to issue exchangeable corporate bonds of no more than RMB 1.180 billion, backed by its holdings of Tongkun Shares. Issuance has not yet been completed and no actual reduction in holdings has occurred, but the future exchange price, exchange ratio, and whether an exchange will actually take place remain undetermined. The matter may affect expectations regarding market supply and shareholder structure.
• The company plans to repurchase and cancel 4.32927 million shares under the 2023 restricted stock incentive plan because certain incentive recipients departed and the performance assessment target for the third release period was not met. This indicates that the existing incentive plan failed to meet its assessment target. The grant size, price, and assessment targets of the 2026 restricted stock incentive plan have also not yet been finalized.
• As of September 11, 2026, the share price was below MA5, MA10, and MA20, MACD was in negative territory, and the September 11 decline of 4.14% was accompanied by increased turnover. Major-fund net outflows were approximately RMB 87.03 million as of September 10. If support around RMB 22.8 is lost, technical weakness could extend toward the Bollinger lower band around RMB 22.3 and lower areas. This technical assessment is affected by market conditions and data lags and does not represent a certain price trend.

8. Conclusion and Outlook

Tongkun Shares’ growth drivers mainly comprise the recovery of polyester filament yarn and PTA spreads, industry supply constraints and destocking, improved downstream demand, higher capacity utilization, and the raw-material security and cost synergies provided by its integrated configuration. The company has substantial filament-yarn, polymerization, and PTA capacity, while its stake in Zhejiang Petroleum & Chemical enables it to benefit from improved conditions in the upstream refining segment. If product spreads and the industry supply-demand environment remain favorable, economies of scale, product-mix optimization, and improved investment income could continue to support relatively high profitability.

Key variables to monitor include polyester filament yarn and PTA processing spreads, crude-oil and PX prices, new industry capacity additions and the effectiveness of capacity discipline, downstream textile demand and the inventory cycle, and changes in Zhejiang Petroleum & Chemical’s operations and investment income. First-half 2026 profit increased sharply, but operating cash flow was negative and investment income from Zhejiang Petroleum & Chemical made a substantial contribution. Therefore, first-half profit should not simply be annualized. Investors should also monitor inventory-price risk, capital expenditure, and debt-financing arrangements and their impact on cash flow and financial flexibility.

The company recently obtained a registration quota of no more than RMB 13 billion for debt-financing instruments, but this quota does not mean that the funds have actually been raised. The concerted-action party of the controlling shareholder has also applied to issue exchangeable corporate bonds of no more than RMB 1.180 billion, but issuance has not yet been completed and no actual reduction in holdings has occurred. The restricted stock incentive plan remains subject to approval by the general meeting of shareholders, and its subsequent grant size, price, and assessment targets remain to be determined. These matters may affect the company’s financing arrangements, shareholder structure, and market expectations and should be assessed continuously in light of subsequent announcements.

Data Sources

• Shanghai Stock Exchange Main Board Listed Companies
• Tongkun Shares (601233) Operating Analysis_F10_TONGHUASHUN Financial Services
• Tongkun Shares: 2026 Interim Report - Financial Report | FXBaogao
• Tongkun Shares (601233)_Company Announcements_Tongkun Shares: 2024 Annual Report_Sina Finance
• Tongkun Shares (601233): Higher Production and Sales Scale, Awaiting Industry Recovery_Company Research_Sina Finance
• Tongkun Group Co., Ltd. 2024 Annual Report
• Tongkun Shares | Initiation Report
• Tongkun Shares (601233): Historical P/E, Historical P/B, Historical Dividend Yield, News, Financial Reports, Research Reports, Data - Lixinger
• Tongkun Shares (601233) 2026 Interim Report Review: PTA and Filament-Yarn Conditions Improve, Interim Results Rise Sharply_Sina Finance
• 〖Industry Deep Dive〗Insights 2026: China’s Polyester Fiber Industry Competitive Landscape and Market Shares (Including Market Concentration and Company Competitiveness)_Industry Research Report - Forward
• 2022 Comparison of Key Chinese Polyester Filament Yarn Companies: Tongkun Shares vs. Xinfengming vs. Hengyi Petrochemical_Huajing Intelligence
• Tongkun Shares (601233)_Company Announcements_Tongkun Shares: 2026 Interim Report Summary_Sina Finance
• Stock Market News Flash: Tongkun Shares (601233) Major-Fund Net Selling of RMB 88.017 Million on September 10_Stock Star
• Tongkun Shares (601233) Earnings Forecast_F10_TONGHUASHUN Financial Services
• Tongkun Shares (601233)_Company Announcements_Tongkun Shares: 2025 Annual Report_Sina Finance
• Tongkun Shares (601233) Earnings Forecast_F10_TONGHUASHUN Financial Services
• Earnings Forecast
• Ping An Securities Initiates Coverage of Tongkun Shares with a Recommended Rating, Forecasting 2026 Net Profit Attributable to the Parent Company of RMB 8.013 Billion - Guan Dian
• Earnings Forecast
• Tongkun Shares (601233.SH) Stock Quotes_Historical Data_Major Funds - Dalang Data
• Tongkun Shares (601233) P/E | Valuation | Fundamentals - Lixinger
• Tongkun Shares (601233)_Stock Quotes, Market Homepage_China Financial Online
• Tongkun Shares (601233) - Historical Trading Data | Dabanke
• Tongkun Shares (601233)_Stock Quotes_Stock Star
• Tongkun Shares Major-Fund Net Outflows on September 10; Current Valuation in Historically High Range - Economic Observer
• SH.601233 Tongkun Shares TONGKUN GROUP - Quote - A-Shares - etnet Hong Kong
• Tongkun Shares (601233) Historical Stock Data: Historical Quotes, Prices, Charts_Investing.com
• Tongkun Shares (601233.SH) Stock Quotes_Historical Data_Major Funds - Dalang Data
• Tongkun Shares (601233) Individual Stock Analysis_Niucha Stock Diagnosis_TONGHUASHUN Finance
• Tongkun Shares (601233) Latest Developments_F10_TONGHUASHUN Financial Services

This report was automatically searched, compiled, and generated by AI based on publicly available information. The information is as of the close on September 11, 2026; MACD, RSI, and certain major-fund-flow data are as of September 10, 2026, while shareholder-structure data are as of June 30, 2026, and therefore subject to a time lag. Differences in timeliness may exist. Specific data should be based on the company’s official announcements and authoritative data terminals. This report is for information compilation and research reference only and does not constitute investment advice. Investors should make independent judgments and bear the investment risks themselves.