Jinan Shengquan Group Share Holding Co., Ltd. (Shengquan Group) (605589)

Equity Research Report | Sector: Chemical New Materials, Biomass New Materials and New Energy Materials | Report Date: September 13, 2026 | As of the close on September 10, 2026; MACD reference values are from the September 11, 2026 technical page, representing a one-trading-day discrepancy; shareholder structure data is as of June 30, 2026, with an announcement disclosure date of August 15, 2026

This report is automatically compiled and generated by AI based on public information, for reference only, and does not constitute investment advice.

1. Core Summary

Shengquan Group achieved operating revenue of RMB 6.085 billion in the first half of 2026, up 13.73% year-on-year, but net profit attributable to shareholders was RMB 447 million, down 10.68% year-on-year; excluding RMB 112 million in share-based payment expenses, net profit attributable to shareholders increased 4.30% year-on-year, and non-GAAP net profit attributable to shareholders increased 8.20% year-on-year. The company currently presents a combination of revenue expansion, statutory-caliber profit under pressure, and significantly weakened operating cash flow. Net cash flow from operating activities in the first half of 2026 was -RMB 975 million, further deteriorating from the same period last year, making it the primary observation point for judging subsequent earnings quality and funding pressure.

In terms of business structure, traditional synthetic resins remain the main revenue body, with 2025 revenue of RMB 5.661 billion, accounting for approximately 52.7% of main business revenue; advanced electronic materials and battery materials generated 2025 revenue of RMB 1.660 billion and 1H2026 revenue of RMB 1.039 billion, up 22.93% year-on-year, of which Shengquan Electronics' operating revenue and net profit grew 47.62% and 63.83% respectively, indicating that electronic materials remain the main growth driver. The company raised RMB 2.5 billion through convertible bonds, of which RMB 2 billion was directed toward the green new energy battery materials industrialization project, planning to build silicon-carbon anode and porous carbon capacity; future growth realization depends on project construction, customer certification, capacity utilization, and profitability release.

In 2025, the company's operating revenue was RMB 10.936 billion, up 9.14% year-on-year, and net profit attributable to shareholders was RMB 1.007 billion, up 15.98% year-on-year; the comprehensive net margin attributable to shareholders rose from approximately 8.66% in 2024 to approximately 9.20%; among these, gross margins for synthetic resins and advanced electronic materials and battery materials rose to 23.76% and 32.21% respectively. However, the gross margin for biomass products fell from 14.34% in 2024 to 6.64% in 2025, with design capacity utilization at 61.76%, and the earnings stability of this segment still needs improvement.

As of September 10, 2026, the stock closed at RMB 38.52, with a dynamic P/E ratio of approximately 32.37x, positioned in the mid-to-low part of the 52-week price range; the technical picture shows weak recovery after a sharp decline, with the stock price above MA5 but below MA10 and MA20, and MACD still below the zero axis. The current valuation already incorporates expectations for continued volume ramp-up in advanced electronic materials, battery materials, and related high-end materials businesses, which will need to be jointly verified by earnings, cash flow, and project progress going forward.

2. Company Overview

2.1 Basic Information

2.2 Main Business and Product Layout

• Synthetic resins and foundry materials: including phenolic resins, furan resins, cold-box resins, epoxy resins, and foundry auxiliary materials. 2025 revenue was RMB 5.661 billion, accounting for approximately 52.7% of main business revenue.
• Advanced electronic materials and battery materials: including high-frequency high-speed resins, PPO resins, hydrocarbon resins, electronic-grade phenolic resins, electronic-grade epoxy resins, advanced packaging materials, porous carbon, silicon-carbon anode materials, and hard carbon anode materials. 2025 revenue was RMB 1.660 billion, accounting for approximately 15.5% of main business revenue.
• Biomass products: using corncobs, plant straw, and other agricultural and forestry waste as raw materials to produce xylose, xylitol, L-arabinose, furfural, pulp, lignin, biomass resin carbon, hard carbon, and other products. 2025 revenue was RMB 1.106 billion, accounting for approximately 10.3% of main business revenue.
• Other businesses: 2025 revenue was approximately RMB 96 million. The above proportions are calculated based on product-by-product revenue disclosed in the annual report, with total main business revenue of RMB 10.737 billion.

2.3 Industry Chain Upstream/Downstream Position and Cost-Profit Structure

Shengquan Group is positioned in midstream chemical new materials manufacturing and extends upstream into comprehensive biomass raw material utilization and downstream into high-end application materials. The traditional resin business is large in scale and sensitive to material costs; advanced electronic materials and battery materials have stronger technology and certification attributes; the biomass business relies on multi-component comprehensive utilization, facility load rates, and the ramp-up of high value-added products.

• Synthetic resins mainly procure phenol, formaldehyde, urea, catalysts, furfural, methanol, epichlorohydrin, and polymeric MDI, among others. In 2025, phenol procurement volume was approximately 400,000 tonnes, furfural approximately 100,000 tonnes, methanol approximately 250,000 tonnes, epichlorohydrin approximately 14,000 tonnes, and polymeric MDI approximately 10,000 tonnes.
• Biomass products mainly procure corncobs, plant straw, and other agricultural and forestry waste; costs are also affected by collection radius, transportation costs, raw material moisture content, facility load rates, and comprehensive utilization efficiency.
• In terms of energy, the company uses electricity, natural gas, coal, and lignite. In the chemical raw materials and chemical products manufacturing industry, direct materials account for approximately 82.67% of costs; for synthetic resin products, direct materials account for 88.73% of product costs, advanced electronic materials and battery materials 72.23%, and biomass products 40.83%.
• In 2025, changes in average procurement prices of major raw materials were: phenol down 13.63% year-on-year, furfural up 0.48% year-on-year, methanol down 3.64% year-on-year, epichlorohydrin up 29.75% year-on-year, and polymeric MDI down 7.62% year-on-year.
• The company is generally a price taker in the market for bulk basic chemical raw materials such as phenol and methanol, lacking absolute control over basic chemical prices; its relative advantages mainly come from procurement scale, supplier systems, process efficiency, industry chain synergy, and product mix.
• The company mainly procures raw materials such as phenol and formaldehyde from large enterprises including Lihuayi, Sinopec, and PetroChina, and reduces procurement costs through centralized procurement, bidding, long-term cooperation, and supplier management. In 2025, the top five suppliers accounted for RMB 1.906 billion in procurement, representing 23.71% of total annual procurement; the annual report did not disclose the specific names of the top five suppliers, so the degree of dependence on any single supplier cannot be determined.
• The company primarily uses direct sales, with some distribution sales in overseas markets. In 2025, direct sales revenue was RMB 10.179 billion with a gross margin of 25.01%; distribution revenue was RMB 558 million with a gross margin of 20.68%.
• Downstream customers cover industries including foundry, automotive, wind power, rail transit, aerospace, electronic manufacturing, copper-clad laminate, semiconductor packaging, power batteries, food, and pharmaceuticals; products are sold domestically and to more than fifty countries and regions including Europe, the Americas, Southeast Asia, and South America.
• In 2025, the top five customers accounted for RMB 1.176 billion in sales, representing 10.82% of total annual sales. This data corresponds to 2025; the annual report did not disclose customer names, so it is not possible to judge one by one the industries of major customers, customer quality, or single-customer bargaining power.
• The traditional synthetic resin and foundry materials markets are relatively competitive, and general-purpose products are susceptible to price competition; excess low-end capacity and homogeneous competition still exist in the foundry industry, and suppliers need to maintain customer stickiness through formulations, process services, and customer certification.
• Electronic materials and high-end specialty resins have long customer certification cycles and high customer switching costs; the company has certain technology and certification barriers, but major customers still have strong bargaining power over quality, supply stability, and price.
• Downstream applications of biomass products involve food, pharmaceuticals, chemicals, pulp, energy, and battery materials; bargaining power mainly depends on whether products can enter high value-added applications rather than simply raw material control capability.
• The company disclosed long-term cooperative relationships with customers such as FAW Foundry and Hitachi Chemical, but the specific names of the top five customers were not disclosed; the relevant customer concentration data comes from a single source, and specific details are subject to the latest annual report.
• As of December 31, 2024, accounts receivable book balance was approximately RMB 2.042 billion, representing 20.38% of 2024 operating revenue of RMB 10.020 billion, approximately 2.35x the net profit attributable to shareholders of RMB 868 million for that year; in 2024, the top five accounts receivable totaled RMB 263 million, representing 11.96% of accounts receivable and contract asset balances. As of the end of 2024, accounts payable were RMB 614 million, representing approximately 6.13% of operating revenue, of which payables for materials and finished goods were RMB 358 million and payables for equipment and construction were RMB 255 million. The scale of accounts receivable is significantly higher than accounts payable, indicating that the company needs to provide certain payment terms to downstream customers, and it cannot simply be concluded that it has a fully strong cash settlement position. The specific amount of accounts receivable at the end of 2025 needs further verification against the annual report notes tables; the research notes did not provide a directly usable amount.
• In 2025, the top five customers accounted for 10.82% of sales, and the top five suppliers accounted for 23.71% of procurement; supplier concentration is higher than customer concentration. The company did not disclose the specific names of the top five customers and suppliers, so the specific degree of dependence on any single customer or supplier cannot be determined. The above concentration data is for fiscal year 2025 and is subject to the latest annual report.

The company as a whole is positioned as "midstream chemical new materials manufacturing + partial upstream biomass raw material comprehensive utilization + downstream high-end application materials extension." The traditional resin business belongs to a midstream segment that is scale-driven, material-cost-driven, and relatively competitive; electronic materials and advanced battery materials are upgrading toward the high-technology, high-certification segment on the right side of the smile curve; the biomass business extends toward chemical materials and new energy materials through multi-component refining of straw. Future profit improvement mainly depends on the ramp-up of PPO, high-frequency high-speed resins, advanced packaging materials, and battery materials; the upgrading, customization, and greening of traditional resins; and the Daqing biomass project improving capacity utilization, reducing unit manufacturing costs, and increasing the proportion of high value-added products.

3. Financial Data and Valuation Analysis

3.1 Recent Operating Performance

Basic earnings per share for 1H2026 was RMB 0.53, down 11.67% year-on-year; weighted average return on equity was 4.18%, down 0.83 percentage points from the same period last year. Excluding share-based payment expenses, net profit attributable to shareholders was RMB 529 million, up 4.30% year-on-year; excluding share-based payment expenses, non-GAAP net profit attributable to shareholders was RMB 527 million, up 8.20% year-on-year. Net cash flow from operating activities in 1H2026 was -RMB 974.67 million, versus -RMB 283.01 million in the same period of 2025.

In 1H2026, the company presented a characteristic of revenue growth alongside a decline in statutory-caliber net profit attributable to shareholders, with increased share-based payment expenses being one factor affecting profit. Excluding share-based payments, profit still maintained growth, but share-based payments are real income statement expenses, and valuation should still primarily use statutory-caliber net profit attributable to shareholders. Advanced electronic materials and battery materials achieved operating revenue of RMB 1.039 billion in the first half, up 22.93% year-on-year; the Shengquan electronic materials subsidiary achieved operating revenue of RMB 301.61 million, up 47.62% year-on-year, and net profit of RMB 82.3908 million, up 63.83% year-on-year. At the same time, operating cash flow was significantly weaker than profit performance, requiring attention to the occupation of working capital by accounts receivable, inventory, prepayments, and project investment.

3.2 Earnings Forecast

The above represents the consensus forecast of 13 institutions over the past 6 months, compiled by Hithink RoyalFlush F10 as of September 7, 2026, and is not official company guidance. Institutional forecast ranges: 2026 operating revenue of approximately RMB 12.227 billion to RMB 13.182 billion, net profit attributable to shareholders of approximately RMB 1.114 billion to RMB 1.475 billion, EPS of RMB 1.32 to RMB 1.74; 2027 operating revenue of approximately RMB 13.653 billion to RMB 15.407 billion, net profit attributable to shareholders of approximately RMB 1.481 billion to RMB 1.915 billion, EPS of RMB 1.75 to RMB 2.26; 2028 operating revenue of approximately RMB 15.117 billion to RMB 17.442 billion, net profit attributable to shareholders of approximately RMB 1.720 billion to RMB 2.483 billion, EPS of RMB 2.03 to RMB 2.93.

3.3 Valuation Level and Institutional Ratings

As of 11:30 on September 7, 2026, the stock price was approximately RMB 38.13, with the previous trading day's close at RMB 36.86. Intraday data corresponds to a dynamic P/E of approximately 33.86x, non-GAAP P/E of approximately 35.90x, P/B of approximately 2.83x, EPS metric of approximately RMB 1.13, and total market cap roughly calculated at approximately RMB 32.2 billion based on the stock price. Another market data source, based on the September 4, 2026 closing price of RMB 36.86, calculated a P/E of approximately 32.7x-34.2x, P/B of approximately 2.83x-2.89x, and total market cap of approximately RMB 31.2 billion; differences across platforms arise from data timing, P/E caliber, and whether non-GAAP adjustments are applied. Based on the September 7, 2026 intraday stock price and institutional consensus forecasts, the forecast P/E for 2026-2028 is approximately 24.8x, 19.5x, and 15.7x respectively; using Kaiyuan Securities' 2026 EPS forecast of RMB 1.64, the corresponding P/E is approximately 23.3x; using China Post Securities' 2026 EPS forecast of RMB 1.74, the corresponding P/E is approximately 21.9x. From the historical statutory profit caliber, the company's current valuation is at approximately 30x+ P/E and approximately 2.8x P/B, with the valuation already reflecting growth expectations for continued volume ramp-up in electronic materials, battery materials, and semiconductor materials businesses. Among publicly available target prices, the more representative range is approximately RMB 41-47; the institutional consensus 2026 target price has a minimum of RMB 41.00, a maximum of RMB 47.10, and an average of approximately RMB 43.60; there is also a recent target price of RMB 45.21 and a single institution's RMB 56.50, of which RMB 56.50 is significantly above the RMB 41-47 range previously given by most institutions and should not be directly regarded as the market consensus target price. Whether the valuation can be gradually digested depends on capacity release, product prices, customer certification, and profit realization of the advanced electronic materials and battery materials projects. The year-on-year decline in net profit attributable to shareholders in 1H2026, negative operating cash flow, and significant differences in institutional earnings forecasts for 2026-2028 all constitute important uncertainties. Going forward, key areas to track include revenue and gross margin after electronic materials project commissioning, the pace of decline in share-based payment expenses, the recovery of operating cash flow, and whether full-year 2026 net profit attributable to shareholders can meet institutional consensus forecasts.

4. Recent News and Announcements

4.1 Convertible Bond Issuance and Listing: RMB 2.5 Billion Shengquan Convertible Bond Listed on July 21, 2026

Jinan Shengquan Group Share Holding Co., Ltd. (605589.SH) issued convertible corporate bonds to unspecified objects (bond abbreviation "Shengquan Convertible Bond," code 111025). Timeline: November 5, 2025, received the Shanghai Stock Exchange's "Review Inquiry Letter"; December 27, 2025, disclosed the inquiry letter response and revised prospectus (announcement no. 2025-091); May 2026, obtained the CSRC approval for registration (CSRC Permit [2026] No. 1245); June 22, 2026, disclosed the issuance announcement; June 24, 2026, was the record date for preferential allocation to existing shareholders, June 25 was the online subscription date, and June 29 was the payment date for allotments; July 21, 2026, listed and traded on the SSE. Key terms: issuance size of RMB 2.500 billion (25 million bonds, face value of RMB 100 each, i.e., 2.5 million lots), bond term of 6 years, coupon rates of 0.10%/0.30%/0.60%/1.00%/1.50%/2.00% per annum; initial conversion price of RMB 70.80/share; China Chengxin International rated the issuer and bond credit rating at AA+sti with stable outlook; no guarantee provided. Sponsor (lead underwriter) was Sinolink Securities, with CITIC Securities as joint lead underwriter. Use of proceeds: RMB 2 billion directed toward the green new energy battery materials industrialization project (total investment of RMB 2.5 billion, which upon completion will form annual capacity of 10,000 tonnes of silicon-carbon anode and 15,000 tonnes of porous carbon), and RMB 500 million to supplement working capital. Limitations: interest rates, conversion price, and ratings are consistently confirmed by multiple sources with high credibility; however, the "July 21, 2026 listing" appears in only some sources, and a separate investor relations record (July 10, 2026) at the time stated "listing time pending SSE approval," making the timeline connection reasonable.

4.2 1H2026 Semi-Annual Report: Revenue of RMB 6.085 Billion Up 13.73% YoY, Net Profit Attributable to Shareholders of RMB 447 Million Down 10.68% YoY

The 2026 semi-annual report was disclosed on August 14-15, 2026. Revenue of RMB 6.085 billion, up 13.73% year-on-year; net profit attributable to shareholders of RMB 447 million, down 10.68% year-on-year; non-GAAP net profit attributable to shareholders of RMB 446 million, down 7.35% year-on-year; basic earnings per share of RMB 0.53 (down 11.67% year-on-year). The main reason for "revenue growth without profit growth" was share-based payment expenses: total share-based payment expenses in the first half were RMB 112 million (including RMB 106 million from the 2025 employee stock ownership plan); excluding the impact of share-based payments, net profit attributable to shareholders was RMB 529 million, up 4.30% year-on-year, and non-GAAP was RMB 527 million, up 8.20% year-on-year. By business segment: synthetic resins revenue of RMB 3.226 billion (+14.81%, sales volume of 420,700 tonnes); advanced electronic materials and battery materials revenue of RMB 1.039 billion (+22.93%, sales volume of 47,000 tonnes); biomass products revenue of RMB 542 million (+5.04%). Subsidiary Shengquan Electronics revenue of RMB 302 million (+47.62%), net profit of RMB 82 million (+63.83%). Cash flow and liabilities warrant caution: net cash flow from operating activities of -RMB 975 million (same period last year -RMB 283 million, further deterioration); short-term borrowings of RMB 3.017 billion (+71.95% vs. year-end); long-term borrowings of RMB 1.564 billion (+73.07%); financial expenses surged 546.02% to RMB 42.2439 million (forex gain/loss impact); debt-to-asset ratio of 41.30% (total assets RMB 19.396 billion). Note: Revenue/net profit figures are consistent across Securities Daily (Sina reprint), Gelonghui, Economic Herald, and China Finance Online, with cross-verification passed.

4.3 Controlling Shareholder and Concerted Parties Share Pledge and Release: September 9-10, 2026, New Pledge of 11.92 Million Shares, Release of 7.45 Million Shares

On September 9-10, 2026, concerted party Tang Diyuan pledged 11.92 million shares to Guotai Haitong Securities (pledge period September 9, 2026 to September 8, 2027), representing 16.07% of their holdings and 1.41% of total share capital, for "personal funding needs." After this transaction, Tang Yilin and concerted parties (Tang Diyuan, Lü Guangqin) collectively held 215,947,045 shares (25.51%), with cumulative pledges of 68.06 million shares, representing 31.52% of their holdings and 8.04% of total share capital (announcement no. 2026-064). On September 10, 2026, Tang Diyuan released 7.45 million shares pledged to Sinolink Securities, representing 10.04% of their holdings and 0.88% of total share capital; after the release, concerted parties' total pledges decreased to 60.61 million shares, representing 28.07% of their holdings and 7.16% of total share capital, with no frozen shares. Major shareholder structure (as of March 31, 2026): Tang Yilin 140,482,995 shares (16.60%), of which 40.21 million pledged; Tang Diyuan 74,180,000 shares (8.76%); Lü Guangqin 1,284,050 shares (0.15%). Same-day net amount note: first a new pledge of 11.92 million shares, then a same-day release of 7.45 million shares; market report headlines point in opposite directions ("new pledge" vs. "release of pledge"), requiring careful distinction — these are two separate operations in the same period. As of September 11, the overall pledge ratio of concerted parties was 28.07%.

4.4 Share Buyback and Equity Incentive: 2025 Buyback of RMB 279 Million, 2025 Profit Distribution Proposed Cash Dividend of RMB 550 Million

2025 centralized bidding buyback: the annual report disclosed that the 2025 centralized bidding share buyback amount was RMB 279,225,149.50; as of December 31, 2025, the buyback special account held 1,000,089 repurchased shares. 2025 profit distribution proposal (approved at the 12th meeting of the 10th Board of Directors on April 24, 2026): cash dividend of RMB 6.50 per 10 shares (tax inclusive), with proposed cash dividend of RMB 549,502,465.85 after deducting repurchased shares; cash dividend + buyback totaled RMB 828,727,615.35, representing 82.33% of 2025 net profit attributable to shareholders. 2022 restricted stock incentive plan buyback and cancellation: June 9, 2025, completed cancellation of 54,000 shares (total share capital reduced from 846,455,998 to 846,401,998 shares); September 18, 2025, the Board approved buyback and cancellation of 13,500 shares (6 incentive recipients who voluntarily resigned, buyback price of RMB 11.00/share, of which the reserved portion was RMB 10.80/share). 2025 employee stock ownership plan: draft disclosed on May 7, 2025, legal opinion disclosed on May 8, and approved at the extraordinary general meeting on May 23.

4.5 Fundraising Project Changes: February 2025 Cancellation of Headquarters Sci-Tech Innovation Center Project, Merged into Advanced Materials Innovation Base Project

On February 24, 2025, the Board approved the "Proposal on Changing the Use of Proceeds from Certain Fundraising Projects" (announcement 2025-014): cancellation of the "Headquarters Sci-Tech Innovation Center Project" (original fundraising of RMB 145,511,400), reduction of the "Annual 1,000 Tonnes Functionalized Polyphenylene Ether Project" (surplus) and "Annual 3,000 Tonnes Functional Sugar Project" (surplus), merged into the new project "Advanced Materials Innovation Base Project."

4.6 Other Announcements (2025): Restricted Share Unlocking, Release of Lock-up, Return of Raised Funds, etc.

October 14, 2025: 62,252,198 restricted shares from the targeted issuance were listed for trading (October 20, 2025), representing the unlocking of the 2024 targeted issuance (subscriber Tang Diyuan, 18-month lock-up). March 31, 2025: second tranche release of lock-up for the first grant portion of the 2022 restricted stock incentive plan (600 incentive recipients) + buyback and cancellation of certain restricted shares. April 2, 2025: early return of idle raised funds temporarily supplementing working capital, with all RMB 180 million returned. May 28, 2025: partial share pledge release and pledge by controlling shareholder and actual controller. June 5, 2025: implementation of partial restricted stock buyback and cancellation.

4.7 Uncertainty and Limitations Statement

1. Time basis: The latest announcement date retrieved in this search was September 11, 2026 (pledge-related); whether there are new announcements after late September 2026 was not covered in this search, and it is recommended to re-verify based on exchange disclosures. 2. Timeliness and single source: Convertible bond details and the "Shengquan Convertible Bond" listing date are mainly supported by Sinolink Securities' WeChat public account and Stockstar summaries; 1H2026 cash flow/liability data is only found in Stockstar's "Stock Encyclopedia" and China Finance Online, and although consistent across multiple locations, it is recommended to verify against the company's original semi-annual report. 3. Pledge headline contradiction: The September 9-10 "new pledge of 11.92 million shares" and the September 10 "release of 7.45 million shares" are two independent operations, and media headlines can easily cause confusion about the "increase/decrease" direction; this memo has broken them out separately. 4. Caliber of profit decline: Official net profit attributable to shareholders was -10.68% year-on-year, but excluding share-based payments it was +4.30% year-on-year; the two calibers cannot be mixed, and the caliber must be noted in analysis. 5. This search did not retrieve 2026 Q3 report previews/earnings forecasts, new 2026 buyback plans, or major shareholder secondary market increase/decrease plans; confirming "no such matters" still requires checking the exchange announcement board. 6. Not covered: This task focused on "recent news and announcements" and did not verify the latest 2026 stock price, valuation, institutional rating target prices, etc. (which fall under other research angles).

5. Stock Price Trend and Technical Analysis

5.1 Price Overview

5.2 Technical Indicators

As of September 10, 2026, Shengquan Group closed at RMB 38.52; the stock price rebounded above RMB 40 after a sharp decline on August 19, but fell another 5.06% on September 1, then mainly oscillated in the RMB 36.86-38.93 range. The current price is above MA5 but still below MA10 and MA20, and below the Bollinger middle band; RSI is approximately 48.4, MACD remains below the zero axis, overall showing weak recovery after a sharp decline and mid-to-low range oscillation characteristics. The RMB 39.40-40.00 area is affected by recent highs, moving averages, and prior high-volume trading areas simultaneously, with relatively obvious short-term pressure; RMB 37.60-38.00 is the lower edge of recent oscillation, and RMB 35.50-36.50 is close to the Bollinger lower band and phase lows, serving as a more important observation area below. In terms of capital, from September 7 to September 9, main capital net inflows and outflows alternated, insufficient to confirm sustained capital return.

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

⚠️ Risk Warning: The following content is solely subjective scenario analysis based on closing data as of September 10, 2026, historical prices, and technical indicators. It does not constitute investment advice and does not represent a deterministic forecast of future stock prices.

① Key Technical Levels

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

• Range-bound consolidation (relatively higher weight, approximately 60%; this is a subjective heuristic weight based on current technical and capital structure, not a statistical probability): price range approximately RMB 37.60-40.00. Trigger conditions are the stock price continuing to trade above RMB 37.60, turnover maintained at recent levels of approximately RMB 700 million to RMB 1 billion, and no sustained volume-driven break below support or volume-driven break above RMB 40. The current stock price is below MA10 and MA20 but above MA5, RSI near 48, consistent with horizontal consolidation characteristics after a sharp decline.
• Weaker downside (medium weight; this is a subjective heuristic judgment based on current technical and capital structure, not a statistical probability): price range approximately RMB 35.50-37.60. If the stock price closes below RMB 37.60 with significantly increased single-day turnover, main capital resumes continuous net outflow, or the basic chemicals sector continues to see significant capital withdrawal, it may retest around RMB 36.50 and move closer to the Bollinger lower band of RMB 35.50; the September 4 low of RMB 36.52 is an important observation level.
• Rebound strengthening (low-to-medium weight; this is a subjective heuristic judgment based on current technical and capital structure, not a statistical probability): price range approximately RMB 40.00-42.90. Trigger conditions include a volume-driven breakout above RMB 39.50-40.00 with consecutive closing holds, and turnover significantly above recent normal levels; if chemicals, new materials, or electronic materials-related sectors strengthen simultaneously, rebound sustainability may increase. After breaking above RMB 40, observe RMB 41.30-42.00, with further resistance near the Bollinger upper band of approximately RMB 42.90.

③ Capital and Liquidity Background

As of September 10, 2026, single-day turnover rate was approximately 2%-4%, with that day's turnover rate at approximately 2.35% and turnover of approximately RMB 770 million; recent turnover has generally been approximately RMB 700 million to RMB 1.3 billion, with the past 5-day turnover rate at approximately 23.65% and the past 10-day turnover rate at approximately 52.24%. Recent trading activity was mainly contributed by the sharp volatility in late August; the September 10 volume ratio of approximately 1.02 does not yet indicate significant new capital volume entering. Shareholder structure data shows that as of June 30, 2026, the top ten circulating shareholders collectively held approximately 37.61%; the top two natural person shareholders collectively held approximately 25.36%, and including the employee stock ownership plan, approximately 29.16%. Among the top ten circulating shareholders are Hong Kong Securities Clearing Company Limited, Zhongou Fund, National Social Security Fund, and chemical ETFs, but overall the structure remains dominated by the actual controller family and employee stock ownership plan. The above shareholder data was disclosed on August 15, 2026, approximately two months apart from the September 10 market data, and the structure may have changed during this period, so it cannot be directly equated with the latest shareholding structure. As of June 30, 2026, total shareholders were 152,157, up from 40,414 as of March 31, 2026, with average shares per holder decreasing from 20,873 to 5,559; however, affected by stock price volatility and share capital matters during the period, this data alone cannot determine the nature of capital or future direction. Combined with turnover and turnover rate data, the stock is not a low-liquidity small-cap stock, but recent trading activity has been volatile, and actual trading shareholding stability and capital direction still need to be observed in conjunction with real-time trading and capital flows.

If in the coming week single-day turnover reaches approximately RMB 1 billion or more for two consecutive days, with the stock price simultaneously holding above the RMB 39.50-40.00 range, this can be viewed as a confirmation signal of improved short-term capital participation; if volume occurs after breaking below RMB 37.60, it more likely represents selling pressure release rather than active participation.

④ Key Points to Watch (Observation Ideas Only, Not Trading Instructions)

• Observe whether the stock price can hold the RMB 37.60-38.00 area, and whether the September 4 low of approximately RMB 36.52 is tested again.
• Observe whether the RMB 39.40-40.00 resistance area can be effectively broken with increased turnover.
• Observe whether MACD can continue to converge from negative values, whether RSI can re-cross above 50, and whether turnover can consecutively reach approximately RMB 1 billion or more.
• Observe whether the basic chemicals sector continues to see net capital outflow, and whether Shengquan Group's main capital can shift from single-day inflows to continuous net inflows. All of the above are observation ideas, not trading instructions.

The above scenario analysis is based on September 10, 2026 closing data and historical prices and technical indicator calculations. Short-term stock prices will also be affected by multiple factors including news, capital flows, and the broader market environment. Technical indicators themselves have lag and limitations, do not guarantee actual future movements, and do not constitute buy or sell recommendations. Please independently judge based on the latest market information and bear investment risks yourself.

6. Industry Landscape and Competitor Analysis

6.1 Industry Status

Shengquan Group's business spans traditional synthetic resins, foundry materials, electronic materials, battery materials, and biomass products; there is no single comparable company that can fully cover all of its businesses, and industry comparison needs to be conducted by sub-sector.

6.2 Competitive Landscape

• Synthetic resin industry: China is an important global phenolic resin consumer market, and the industry as a whole is developing from general-purpose products toward refined, functional, and high-performance products. Competition is intense in traditional abrasives, molding compounds, and some building materials areas; sub-markets such as electronic materials, aerospace, nuclear power, new energy, and high-end foundry rely more on technology, certification, and long-term customer relationships.
• Foundry auxiliary materials industry: The market is relatively fragmented, with excess capacity and homogeneous competition in low-end general-purpose materials; competition is gradually shifting from single-product price competition to comprehensive competition in material formulations, process services, delivery assurance, and environmental performance.
• Electronic materials industry: The ordinary epoxy resin market has relatively ample supply and intense competition; high-frequency high-speed resins, PPO, and advanced packaging materials rely more on technology, customer certification, and product reliability. Shengquan Group's gross margin for this segment in 2025 was 32.21%, but internal product differences are significant, and the entire segment cannot be equated with high-margin electronic chemicals business.
• Biomass industry: Core competition lies in multi-component comprehensive utilization of cellulose, hemicellulose, and lignin, as well as unit cost dilution through large-scale facilities. The industry is upgrading from low-value fuels, pulp, and furfural to functional sugars, bio-based materials, hard carbon, green fuels, and high value-added chemicals.
• Shengquan Group's Daqing biomass refining integration project Phase I can process approximately 500,000 tonnes/year of straw; in 2025, biomass product design capacity was 523,000 tonnes, with capacity utilization of 61.76% and 30,000 tonnes of capacity under construction. This segment's gross margin declined in 2025, indicating that large-scale profitability has not yet fully stabilized.
• Industry competitive landscape and market share have uncertainties: the company's disclosed statements about industry position in phenolic resin and furan resin production and sales lack cross-verifiable third-party unified market share data; there are many non-listed enterprises in the traditional foundry resin sector, and industry concentration and actual market shares of individual players are difficult to fully verify through public information.

6.3 Major Competitors

Shengquan Group's comparative advantage lies in its comprehensive layout across traditional resins, foundry materials, electronic materials, and biomass products, as well as a relatively complete product matrix and industry chain synergy. Tongcheng New Materials, Hongchang Electronic, and Tongyu New Materials are respectively more focused in sub-sectors such as rubber and electronic materials; Shandong Yushiju Chemical and Kao-affiliated enterprises mainly compete in traditional phenolic resins and foundry materials. Because Shengquan Group's business spans multiple sub-markets, a single comparable company cannot fully reflect its competitive position; future valuation and profitability comparisons should be conducted separately for traditional resins, electronic materials, and biomass businesses.

7. Risk Warnings

• The growth of advanced electronic materials and battery materials depends on customer certification, capacity release, and profit realization for products such as high-frequency high-speed resins, PPO, advanced packaging materials, silicon-carbon anodes, and porous carbon; if project commissioning progress, customer introduction, or product prices fall short of expectations, the growth expectations embedded in the current valuation may be difficult to realize.
• Net cash flow from operating activities in 1H2026 was -RMB 975 million, further deteriorating from -RMB 283 million in the same period last year; meanwhile, short-term borrowings were RMB 3.017 billion and long-term borrowings were RMB 1.564 billion, both significantly increased from year-end, requiring attention to the continued impact of working capital occupation, debt pressure, and project investment on cash flow.
• The company incurred RMB 112 million in share-based payment expenses in 1H2026, causing operating revenue growth while statutory net profit attributable to shareholders declined 10.68% year-on-year; if significant share-based payments or other non-operating expenses persist, profit growth may continue to lag revenue growth.
• Synthetic resins and foundry materials accounted for approximately 52.7% of main business revenue in 2025, with direct materials accounting for 88.73% of product costs; the company lacks absolute price control over basic chemical raw materials such as phenol and methanol, and epichlorohydrin procurement prices rose 29.75% year-on-year in 2025, with raw material price fluctuations potentially compressing traditional business profits.
• Although biomass product revenue grew in 2025, gross margin fell from 14.34% in 2024 to 6.64%, design capacity utilization was 61.76%, and manufacturing expenses increased 48.51% year-on-year; if the Daqing biomass project's capacity utilization improves slowly or high value-added product ramp-up is insufficient, this segment may continue to drag on comprehensive profitability.
• The company mainly sells to downstream customers through direct sales and needs to provide certain payment terms to customers; as of the end of 2024, accounts receivable were approximately RMB 2.042 billion, significantly higher than accounts payable of RMB 614 million. The top five customers accounted for 10.82% of sales in 2025, but specific customer names were not disclosed, and collection quality, customer bargaining power, and single-customer dependence remain uncertain.
• Of the RMB 2.5 billion convertible bonds, RMB 2 billion is used for the green new energy battery materials industrialization project, with a bond term of 6 years and no guarantee provided; project construction and subsequent operations will increase capital expenditure and debt-related constraints, and if project returns fall short of expectations, it may affect capital returns and cash flow safety margins.
• As of September 10, 2026, the stock price remains below MA10 and MA20, MACD is below the zero axis, and there is pressure around RMB 39.40-40.00; if it breaks below RMB 37.60 with increased volume, the technical picture may weaken. Technical indicators only reflect historical price and capital behavior and cannot replace judgment on the company's fundamentals and valuation.

8. Conclusion and Outlook

Shengquan Group's growth logic mainly comes from business structure upgrading and capacity expansion: the traditional resin business provides a scale foundation, advanced electronic materials, high-frequency high-speed resins, PPO, advanced packaging materials, and battery materials are expected to improve product mix and profitability, and the biomass business has a foundation for multi-component comprehensive utilization and extension into high value-added materials. In 1H2026, electronic materials and battery materials maintained rapid growth, combined with RMB 2.5 billion in convertible bond support for new energy battery materials industrialization, constituting important support for medium-term revenue growth.

Short-term performance remains subject to strong disturbances. Share-based payment expenses caused a decline in statutory net profit attributable to shareholders in 1H2026, and short-term borrowings, long-term borrowings, and financial expenses all increased significantly; negative operating cash flow also reflects that accounts receivable, inventory, prepayments, and project investment may occupy working capital. Institutional earnings forecasts for 2026-2028 vary across ranges, and whether higher growth can be achieved in the future requires observation of revenue and gross margin after electronic materials project commissioning, changes in share-based payment expenses, biomass project capacity utilization, and operating cash flow recovery.

From a market performance perspective, the stock price has not yet re-established above the RMB 39.40-40.00 resistance area, with RMB 37.60-38.00 and RMB 35.50-36.50 being important recent observation ranges. Technical indicators and capital flows have not yet formed a clear signal of sustained strengthening; against the backdrop of fundamental improvement still needing to be realized and a valuation at 30x+ P/E on the historical statutory profit caliber, the market remains highly sensitive to growth expectations.

Data Sources

• Announcement on the Listing and Trading of RMB Ordinary Shares of Jinan Shengquan Group Share Holding Co., Ltd. | Shanghai Stock Exchange
• Jinan Shengquan Group Share Holding Co., Ltd. 2025 Annual Report
• Co., Ltd. 2024 Annual Report
• Jinan Shengquan Group Share Holding Co., Ltd. | Phenolic Resins | Furan Resins | Epoxy Resins | World-Leading Bio-Manufacturing and Chemical New Materials Solutions Provider
• Securities Code: 605589 Stock Abbreviation: Shengquan Group Announcement No.: 2025-015
• Jinan Shengquan Group Share Holding Co., Ltd. 2024 Annual Report
• Tongcheng New Materials Group Co., Ltd. 2024 Annual Report
• Hongchang Electronic Materials Co., Ltd. 2024 Annual Report
• Tongyu New Materials (301630)_Company Announcements_2 Accounting Firm's Reply to Second Round Feedback Opinions Sina Finance_Sina
• Shengquan Group (605589)_Company Announcements_Shengquan Group: Prospectus for Targeted Issuance of A-Shares to Specific Objects Sina Finance_Sina
• Shengquan Group (605589) Latest Updates_F10_Hithink RoyalFlush Financial Services Network
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• Jinan Shengquan Group Share Holding Co., Ltd. 2025 Annual Report
• Shengquan Group (605589) Earnings Forecast_F10_Hithink RoyalFlush Financial Services Network
• Institutional Ratings | 3 Institutions Update Shengquan Group Ratings
• Shengquan Group (605589)_Stock Quotes, Quotes Homepage_China Finance Online
• 605589 Shengquan Group
• Shengquan Group (sh605589)
• Shengquan Group (605589)_Stock Overview_Stock Price_Real-Time Quotes_Charts_News_Stock Commentary_Financial Reports_FinScope-AI Makes Investing Simpler
• China Securities Journal - Jinan Shengquan Group Share Holding Co., Ltd. - Company Code: 605589 Company Abbreviation: Shengquan Group
• Shengquan Group (605589) - Shengquan Group (605589)
• Securities Daily - Jinan Shengquan Group Share Holding Co., Ltd. 2025 Semi-Annual Report Summary - Company Code: 605589 Company Abbreviation: Shengquan Group
• China Securities Journal - Jinan Shengquan Group Share Holding Co., Ltd. - | Page B085: Information Disclosure | Previous Next
• Jinan Shengquan Group Share Holding Co., Ltd. 2025 Semi-Annual Report Summary - 2025
• Shengquan Group (605589) September 9 Main Capital Net Buying of RMB 49.1241 Million - Stockstar
• Shengquan Group Listed Company Information - Shengquan Group Listed Company Information
• Securities Code: 605589
• China Securities Journal - Jinan Shengquan Group Share Holding Co., Ltd. Announcement on the Reply to the Review Inquiry Letter and Update of Application Documents for the Issuance of Convertible Corporate Bonds to Unspecified Objects
• Jinan Shengquan Group Share Holding Co., Ltd. Announcement on the Reply to the Review Inquiry Letter and Update of Application Documents for the Issuance of Convertible Corporate Bonds to Unspecified Objects
• Shengquan Group: Shengquan Group 2025 Annual General Meeting Resolution Announcement_Jiufang Zhitou - Global Index
• Shengquan Group (605589)_Full Announcement Text_China Finance Online
• Jinan Shengquan Group Share Holding Co., Ltd. Announcement on the Listing and Trading of Restricted Shares from Targeted Issuance
• Jinan Shengquan Group Share Holding Co., Ltd. 2025 Annual General Meeting Resolution Announcement
• <table><tr><td>Project Name Before Change</td><td>Change Time<br>(First Announcement Disclosure Date)</td><td>Change Type</td><td>Total Raised Funds Invested in Project Before Change/Termination</td><td>Total Raised Funds Already Invested in Project Before Change/Termination</td><td>Project Name After Change...
• Shengquan Group: Shengquan Group 2025 Annual Report Summary_Jiufang Zhitou - Global Index
• Jinan Shengquan Group Share Holding Co., Ltd. 10th Board of Directors 7th Meeting Resolution Announcement - Article Search
• Shengquan Group (605589): Shengquan Group Announcement on Partial Share Pledge by Concerted Parties of Controlling Shareholder and One of the Actual Controllers
• Shengquan Group
• Shengquan Group: Concerted Party Tang Diyuan Releases Pledge of 7.45 Million Shares
• Shengquan Group: Concerted Party Tang Diyuan Releases Pledge of 7.45 Million Shares
• Shengquan Group: Controlling Shareholder's Concerted Party Adds Pledge of 119 Million Shares
• Shengquan Group: Summary of Shengquan Group Announcement on Partial Share Pledge by Concerted Parties of Controlling Shareholder and One of the Actual Controllers - Stockstar
• Shengquan Group Announces Release of Pledge on 7.45 Million Shares by Actual Controller's Concerted Party, Overall Pledge Ratio of Related Entities Falls to 28.07%
• Shengquan Group: Announcement on Partial Share Pledge Release by Concerted Parties of Controlling Shareholder and One of the Actual Controllers
• Shengquan Group Discloses Progress on Share Pledge by Controlling Shareholder's Concerted Party: Cumulative Pledges Total 68.06 Million Shares, Representing 8.04% of Total Share Capital
• [[Flash News] Shengquan Group Issues Pledge Announcement, One Shareholder Cumulatively Pledges 68.06 Million Shares](https://vipwt1.cfi.net.cn/p20260910001470.html)
• Shengquan Group (605589) Commentary: Equity Payment Expenses Affect Profit Release, Advanced Electronics and Battery Materials Growth Expected to Continue Accelerating
• New Quality Shandong Stocks | Semi-Annual Report Shengquan Group: New Materials Track Opens Growth Space, Future Cash Flow Quality is Key Observation Point --- Economic Herald Shandong Finance News - Economic Herald >> Eagle Eye IPO
• Shengquan Group New Materials Track Opens Growth Space
• Semi-Annual Report Shengquan Group: New Materials Track Opens Growth Space, Future Cash Flow Quality is Key Observation Point - Semi-Annual Report Shengquan Group: New Materials Track Opens Growth Space, Future Cash Flow Quality is Key Observation Point
• Shengquan Group: 1H2026 Operating Revenue Up 13.73% Year-on-Year
• Shengquan Group (605589): Advanced Electronic Materials Growing Rapidly, Capacity Expansion Advancing Steadily
• Shengquan Group (605589)_Operating Summary_China Finance Online
• Shengquan Group (605589): Share-Based Payment Expenses Affect Profit, Electronic Chemicals Ramp-Up Evident
• Earnings Express | Shengquan Group 1H2026 Revenue Growth Without Profit Growth, Net Profit Down 10.68%, Dragged by Share-Based Payments - Stockstar
• Shengquan Group (605589.SH): 1H Net Profit RMB 447 Million, Down 10.68% Year-on-Year
• Sinolink Securities Assists Shengquan Group's RMB 2.5 Billion Convertible Bond in Successful Issuance and Listing, Deepening New Materials Track, Capital Empowerment Reshaping Benchmark
• Shengquan Group: Summary of Shengquan Group's Listing Announcement for Issuance of Convertible Corporate Bonds to Unspecified Objects - Stockstar
• Shengquan Group Prospectus for Issuance of Convertible Corporate Bonds to Unspecified Objects _ Shengquan Convertible Bond (111025) _ Announcement Text - Shengquan Group Prospectus for Issuance of Convertible Corporate Bonds to Unspecified Objects Download Attachment
• China Stock Research Activity Table - Jinan Shengquan Group Share Holding Co., Ltd. - July 10, 2026 - Hithink RoyalFlush