Songjing New Materials Group Co., Ltd. (688157)

Equity Research Report　|　Industry: New Functional Coating Materials　|　Report Date: September 13, 2026　|　As of the close on September 11, 2026; certain technical indicators (MACD, RSI and some Bollinger Band data) are as of September 10, 2026, and shareholder structure is as of June 30, 2026

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

The most decision-relevant fact about Songjing New Materials Group Co., Ltd. is that earnings remain at a trough. In the first half of 2026, operating revenue was RMB 332 million, down 4.49% year on year, while net profit attributable to the parent was a loss of RMB 5.0035 million, turning from profit to loss year on year. Gross margin fell to 39.51%. For full-year 2025, revenue was RMB 722 million, down 3.14% year on year, while net profit attributable to the parent was only RMB 20.1617 million, down 76.66% year on year. This indicates that although the revenue decline was limited, profitability came under significant pressure. Net profit attributable to the parent in the second quarter of 2026 was RMB 1.8349 million, returning to profit from the first quarter, but this is not yet sufficient to demonstrate that full-year profitability has stabilized.

The company’s business mix is shifting from high-end consumer electronics toward emerging applications such as passenger vehicles and new-energy batteries. In the first half of 2026, high-end consumer-electronics revenue was RMB 187 million, down 23.11% year on year and accounting for 56.42% of total revenue. Passenger-vehicle revenue was RMB 136 million, up 38.88% year on year, with its contribution rising to 40.93%. However, the automotive business still trails the mature consumer-electronics business in gross margin and economies of scale. In 2025, passenger-vehicle revenue increased 68.68% year on year, with a gross margin of 32.34%, compared with 47.87% for high-end consumer electronics. The business transition has therefore placed temporary pressure on the overall profit margin.

The company has capabilities in formulation R&D, application-process adaptation, customer certification and flexible manufacturing. In 2025, it had 268 R&D personnel, while coatings accounted for approximately 92.33% of revenue from principal operations. High-end consumer-electronics customers and automotive-industry-chain customers accounted for the main sources of revenue. At the same time, utilization at the company’s main production site was 56.17%, and direct-material costs accounted for 72.20% of total costs in the new functional coating materials business. The company has relatively limited bargaining power over basic chemical raw materials, and profitability is sensitive to raw-material prices, product mix, customer pricing and capacity utilization.

As of September 11, 2026, the share price was RMB 18.21. It had fallen approximately 8.4% over the previous five trading days and was below the MA5, MA10 and MA20. MACD and the short-term moving averages indicated technical weakness. RMB 17.60–18.00 is the recent support area to monitor, while RMB 19.10–19.35 is the concentrated resistance area formed by the moving averages. According to institutional forecasts, average net profit attributable to the parent for 2026–2028 is approximately RMB 47 million, RMB 89 million and RMB 154 million, respectively. However, the number of forecasting institutions is small, and the current valuation is highly sensitive to whether the expected earnings recovery materializes.

2. Company Overview

2.1 Basic Information

2.2 Principal Businesses and Product Mix

• High-end consumer electronics: Serving mobile phones and accessories, notebook computers and accessories, wearable devices, smart home appliances and other fields. Products include PVD coatings, soft-touch coatings, appearance coatings, AF fingerprint-resistant coatings, low-reflectivity PU coatings, low-resistance coatings, antibacterial coatings and water-based coatings, as well as protective inks, decorative inks, UV spray-printing inks and water-based inks. Revenue in 2025 was RMB 491.3407 million, accounting for approximately 69.39% of revenue from principal operations, with a gross margin of 47.87%.
• Passenger vehicles: Serving interior and exterior passenger-vehicle components and gradually expanding into whole-vehicle coating applications. Products and technologies include coatings for automotive interior and exterior components, PVD coating materials, PVD technologies for wave-transmitting automotive exteriors, sintering inks, lamp coatings, “one-piece black” inks, OEM coatings for automotive manufacturers and automotive refinishing paints. Revenue in 2025 was RMB 215.6920 million, accounting for approximately 30.46% of revenue from principal operations, up 68.68% year on year, with a gross margin of 32.34%.
• Special equipment and emerging businesses: Covering aerospace, rail transit, marine equipment, power batteries, solid-state batteries, the low-altitude economy and eVTOL applications. These businesses are currently mainly at the stages of technology reserves, project validation and market introduction, and cannot yet be regarded as mature revenue sources comparable to the consumer-electronics business.
• Product mix: Coating revenue in 2025 was RMB 653.7577 million, accounting for approximately 92.33% of revenue from principal operations, with a gross margin of 43.88%; ink revenue was RMB 36.8239 million, accounting for approximately 5.20%, with a gross margin of 43.54%; adhesive and other revenue was RMB 17.5142 million, accounting for approximately 2.47%, with a gross margin of 11.77%.
• Capacity and R&D: As of December 31, 2025, the designed finished-product capacity at the main plant was 17,000 tonnes, with capacity utilization of 56.17%. No capacity under construction was disclosed. As of the end of 2024, the company held 3 PCT international authorized patents, 123 nationally authorized invention patents, 68 utility-model patents and 1 software copyright. It had 268 full-time technical R&D personnel.

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

The company operates in a relatively technology-intensive midstream segment of the new functional coating materials value chain. Through formulation R&D, application-process adaptation, customer certification and flexible manufacturing, it provides functional coating materials and solutions to customers in high-end consumer electronics, passenger vehicles and special equipment.

• Major procurement inputs include solvents, metallic pigments, resins and additives. Procurement volumes in 2025 were 7,017.25 tonnes, 250.13 tonnes, 2,580.94 tonnes and 601.44 tonnes, respectively.
• The company adopts a procurement model combining “strategic procurement” and “procurement based on sales,” generally settling accounts monthly. In 2025, procurement prices for solvents, metallic pigments, resins and additives decreased 13.41%, 1.50%, 2.87% and 1.37% year on year, respectively.
• Direct-material costs in 2025 were RMB 291.0637 million, accounting for 72.20% of total costs in the new functional coating materials business, compared with 72.96% in 2024. Certain raw materials are petrochemical products, and their prices are strongly correlated with crude-oil prices.
• Overall, the company has relatively weak bargaining power or is a price taker with respect to basic chemical raw materials such as resins and solvents. It does not possess absolute pricing power over basic chemical raw materials. Profit elasticity mainly depends on raw-material prices, product pricing and the ability to pass through costs, the proportion of high-margin products, capacity utilization and economies of scale.
• The main value-chain relationship is “company → mold manufacturers or tier-one suppliers → end brands.” The company generally conducts business through “end-customer guidance and mold-factory implementation”: it first obtains supplier qualification from the end customer, then provides materials and process-technology services to mold manufacturers with the end customer’s authorization.
• Consumer-electronics customers include major North American consumer-electronics customers, Microsoft, Google, Amazon, Meta, Logitech, Honor, Xiaomi, VIVO and OPPO. Certain customer names are represented by customer codes or generalized descriptions for commercial confidentiality.
• The automotive customer system includes BYD, North American T Company, Geely, NIO, Li Auto, XPeng, Huawei, Xiaomi, Yanfeng, Minth Group and Xinquan, among other vehicle manufacturers and component suppliers.
• Consumer-electronics projects generally take 1–4 years to enter the cycle. Passenger-vehicle projects must undergo end-customer certification, mold-factory certification, laboratory testing, production-line validation and whole-vehicle durability testing. Certification for certain projects may take 2–3 years. The relatively high certification threshold creates a degree of customer stickiness and a technology premium.
• End brands, vehicle manufacturers and mold manufacturers continue to have significant bargaining power in pricing, delivery, quality, project validation and ongoing cost reduction. Although the company’s products affect the appearance, reliability and yield of end products, it does not yet have the strong pricing power of a branded consumer-products company.
• In 2025, high-end consumer-electronics revenue declined 19.09% year on year, while passenger-vehicle revenue increased 68.68%. The automotive business remains in an expansion and market-introduction phase, and its gross margin is lower than that of the mature high-end consumer-electronics business.
• As of December 31, 2025, the company’s accounts-receivable balance was RMB 318.7264 million, with a bad-debt provision of RMB 26.2977 million and a carrying value of RMB 292.4287 million. Accounts receivable represented approximately 44.14% of 2025 operating revenue, down from 53.68% in 2024, but the absolute amount remained substantial. At the end of 2025, the five largest accounts-receivable customers accounted for 25.45% of total accounts receivable, compared with 31.59% in 2024. Subsequent collection rates for the five largest accounts-receivable customers were 100.00%, 92.76%, 100.00%, 100.00% and 100.00%, respectively. The relatively high ratio of accounts receivable to revenue indicates that the company must provide customers with a certain credit period, meaning that the company bears most of the working-capital burden in the value chain. Existing collection data do not indicate an obvious material credit risk.
• The five largest customers’ sales as a percentage of total annual sales were 35.07% in 2025, 37.95% in 2024 and 33.32% in 2023. These figures correspond to the disclosure bases for the respective years. The minutes did not indicate that the figures could not be cross-checked; however, certain end-customer names in 2025 were represented by codes or generalized descriptions for commercial confidentiality, so sales by specific customer cannot be fully verified. Customer concentration is moderate, but the company remains relatively dependent on high-end consumer-electronics brands and automotive-industry-chain customers. The completion of major projects or delays in project introduction could affect revenue and profit.

The company occupies a relatively technology-intensive midstream position in the new functional coating materials value chain. It is neither an upstream company with resource pricing power nor a downstream company with an end-brand premium. Current profits mainly derive from formulation technology, application processes, customer certification and flexible manufacturing capabilities. Further improvement in profitability depends on the recovery of high-margin consumer-electronics projects, the automotive business achieving economies of scale, higher capacity utilization, increased volumes of new products such as inks and adhesives, and the effective pass-through to customers of technology upgrades and changes in raw-material costs.

3. Financial Data and Valuation Analysis

3.1 Recent Operating Results

The latest formal financial report is the 2026 interim report. As of June 30, 2026, the company’s consolidated gross margin was 39.51%, down 3.12 percentage points from the same period last year. R&D investment was RMB 55.6016 million, up 9.20% year on year, representing approximately 16.75% of revenue. Operating revenue in the first quarter of 2026 was approximately RMB 124.98 million, and net profit attributable to the parent was approximately a loss of RMB 6.8384 million. Second-quarter operating revenue was approximately RMB 206.95 million, and net profit attributable to the parent was RMB 1.8349 million, returning to profit on a quarterly basis.

The company’s revenue in the first half of 2026 declined slightly year on year, while net profit attributable to the parent turned from profit to loss. The main factors were the 23.11% year-on-year decline in high-end consumer-electronics revenue, lower gross margin caused by higher raw-material prices and changes in product and business mix, and increased R&D investment. The relatively small decline in 2025 revenue but significantly larger decline in profit reflects the effects of falling gross margin, pressure on the consumer-electronics business, changes in product and customer mix, and high R&D investment on profitability. Adjusted net profit after extraordinary items in the first half of 2026 was confirmed to be negative, but the precise amount should be based on the income statement and notes in the interim report.

3.2 Earnings Forecasts

As of August 31, 2026, the Eastmoney platform indicated that two institutions had forecast 2026 results. Sell-side research expected net profit attributable to the parent of RMB 49 million, RMB 73 million and RMB 106 million for 2026–2028, respectively, and maintained an “Overweight” rating. The number of forecasting institutions is small, and the Eastmoney aggregate differs from the details of an individual institution. These figures therefore cannot be regarded entirely as a high-confidence, broad market consensus forecast.

3.3 Valuation and Institutional Ratings

As of the close on September 11, 2026, the share price was RMB 18.21, total shares outstanding were approximately 156.43 million, and total market capitalization was approximately RMB 2.849 billion. Based on net assets attributable to shareholders of the parent of RMB 1.35190 billion at the end of 2025 and basic net assets per share of approximately RMB 8.64, PB was approximately 2.11x. Based on net assets and shares outstanding at the end of the 2026 interim-report period, estimated PB was approximately 2.1x–2.2x. Based on trailing-12-month net profit attributable to the parent of approximately RMB 2.8787 million as of June 30, 2026, trailing PE was approximately 989x. This was mainly because the profit base over the latest 12 months was extremely low. Certain market-data websites displayed a PE TTM of approximately 1,200x, reflecting differences in data update timing, profit definitions or data sources. Based on the institutional-average EPS, forward PE for 2026–2028 was approximately 72.8x, 38.7x and 22.2x, respectively. Based on China Everbright Securities’ individual EPS forecast, the corresponding figures were approximately 70.0x, 46.7x and 31.9x. Current valuation is highly dependent on whether earnings recovery in 2026–2028 materializes. PB is more suitable than TTM PE as an auxiliary valuation indicator. The company remains at an earnings trough. Although it returned to quarterly profit in the second quarter of 2026, net profit attributable to the parent was only RMB 1.8349 million, which is insufficient to demonstrate that full-year earnings have stabilized. Key risks include a weaker-than-expected recovery in consumer-electronics demand, slower-than-expected growth in the passenger-vehicle business, rising raw-material prices, continued gross-margin contraction, a longer conversion cycle for R&D investment, and slower-than-expected commercialization of new businesses such as new-energy batteries, solid-state batteries, aerospace and the low-altitude economy.

4. Recent News and Announcements

4.1 Implementation of Executive Share-Purchase Plan Completed

On September 12, 2026, the company disclosed Announcement No. 2026-035, “Announcement on the Results of Share Purchases by Certain Directors and Senior Executives.” Miao Peikai purchased a cumulative 53,709 shares for a total amount of RMB 999,900. After completion, his holdings increased to 354,755 shares. Xiong Kaikuo purchased a cumulative 44,945 shares for a total amount of RMB 809,300. After completion, his holdings increased to 56,755 shares. Both purchasers reached the lower limits of their respective purchase plans, and implementation of the purchase plans was completed. The purchases did not trigger a mandatory tender offer and will not result in a change in the company’s controlling shareholder or actual controller.

4.2 Directors and Senior Executives Continued to Purchase Shares in September

Miao Peikai purchased 10,000 shares on September 3, 2026, at an average transaction price of RMB 18.45 per share. Xiong Kaikuo purchased 10,000 shares on September 8, 2026, at an average transaction price of RMB 20.15 per share. The two executives purchased a combined amount of approximately RMB 1.8092 million, representing approximately 0.05% of the company’s total shares outstanding. This mainly reflects management’s confidence in the company’s long-term value. However, the purchase size is relatively small compared with the company’s market capitalization and cannot be directly equated with a fundamental turnaround.

4.3 Investor-Relations Event Disclosed Changes in Business Mix

On September 2, 2026, the company participated in the 2026 Hunan Province Listed Companies Online Collective Investor Reception Day and First-Half Results Presentation. In the first half of 2026, high-end consumer-electronics revenue was RMB 187 million, accounting for 56.42% of first-half operating revenue. Passenger-vehicle revenue was RMB 136 million, up 38.88% year on year, with its revenue contribution rising from 28.15% in the same period last year to 40.93%. Strategic emerging businesses such as new-energy batteries had begun to contribute revenue. The company stated that its strategy was not simply to shift from consumer electronics to automobiles, but to expand high-end functional coating materials into passenger vehicles, new-energy batteries and other advanced application scenarios. Statements regarding future market space, project progress and growth potential do not constitute earnings commitments.

4.4 First-Half 2026 Results Under Pressure

On August 29, 2026, the company disclosed its 2026 interim report. First-half operating revenue was RMB 331.9338 million, down 4.49% year on year. Net profit attributable to shareholders of the listed company was a loss of RMB 5.0035 million, down 140.75% year on year and turning from profit to loss. High-end consumer-electronics revenue declined 23.11% year on year. Consolidated gross margin was 39.51%, down 3.12 percentage points from the same period last year. R&D investment was RMB 55.6016 million, up 9.20% year on year. Growth in the passenger-vehicle business had not fully offset the effects of declining consumer-electronics revenue, higher raw-material prices and changes in product mix on profitability.

4.5 Contract for Cell Insulation UV Inkjet-Printing Equipment

Hunan Sandi, a controlled subsidiary of the company, entered into a contract for cell-insulation UV inkjet-printing equipment with an energy-technology joint-stock company. The single contract was worth approximately RMB 30 million. This is a business-development item, and publicly available information is currently insufficient to determine its actual contribution to full-year results or the timing of revenue recognition.

4.6 Shareholder and Director/Senior-Executive Selling Plans Near Expiration

On May 25, 2026, the company disclosed a plan for shareholders, directors and senior executives to sell shares. The implementation period was June 16 to September 16, 2026, and the proposed sales totaled no more than 1.23% of the company’s total shares outstanding. The plan involved shareholders including Wang Weiguo, Miao Peikai, Li Yuliang, Wang Bin and Ling Jianfang, a concerted party of the controlling shareholder. Wang Weiguo planned to sell no more than 273,383 shares, Miao Peikai no more than 62,718 shares and Li Yuliang no more than 35,130 shares.

4.7 Final Results of Selling Plan Not Yet Disclosed

As of September 13, 2026, no formal announcement had been identified disclosing completion, expiration or the final number of shares sold under the above overall selling plan. Since the selling period expires on September 16, continued attention should be paid to the announcement of final implementation results after expiry. Miao Peikai appears in both the purchase plan and the previously disclosed selling plan. Existing public information cannot establish whether his previous selling plan was cancelled or not implemented in full. The final position should be based on the company’s subsequent announcement of selling results.

4.8 No New Share-Buyback Plan Recently Disclosed

As of September 13, 2026, no new share-buyback plan, buyback-progress announcement or buyback-results announcement disclosed by the company in September 2026 had been identified. The company had previously implemented a share-buyback arrangement related to an employee share-ownership plan. The 2026 interim report disclosed that the 2025 employee share-ownership plan completed a non-trading transfer of 426,900 shares from the company’s dedicated share-buyback securities account at RMB 21.14 per share. This was not a new buyback plan in September 2026.

4.9 Regulatory Matters Mainly Concerned Annual-Report Inquiry Response

On June 11, 2026, the company disclosed a “Reply Announcement Regarding the Regulatory Inquiry Letter on Information Disclosure in the 2025 Annual Report.” The inquiry concerned the Shanghai Stock Exchange STAR Market Company Management Department’s regulatory questions regarding information disclosure in the company’s 2025 annual report. As of September 13, 2026, no announcement had been identified indicating that the company had been subject to a new regulatory investigation, administrative penalty, disciplinary sanction or regulatory measure in September.

4.10 No Major Asset Restructuring or M&A Transaction Recently Disclosed

As of September 13, 2026, no new announcement regarding a major asset restructuring, equity acquisition, M&A transaction or termination of an M&A transaction disclosed by the company in September 2026 had been identified. Previous company statements that it might conduct investment and M&A activities around the industrial chain were strategic statements. There is currently insufficient public information to demonstrate that the company has recently signed or announced a major M&A transaction.

4.11 Overall Assessment of Recent News Flow

As of September 13, 2026, the main themes in the company’s recent announcements were completion of the executive share-purchase plan, continued growth in automotive coating operations, pressure on first-half results and the selling plan approaching expiration. Positive factors include directors and senior executives completing purchases totaling approximately RMB 1.8092 million, passenger-vehicle revenue increasing 38.88% year on year, and its revenue contribution rising to 40.93%. Key pressures include year-on-year declines in first-half operating revenue and consumer-electronics revenue, the shift to a loss in net profit attributable to the parent, and the decline in consolidated gross margin. Until final results of the selling plan are disclosed, pressure from shareholder selling remains uncertain. As of that date, no new share-buyback plan, major M&A or restructuring announcement, additional regulatory penalty in September or new earnings guidance announcement had been identified.

5. Share-Price Performance and Technical Analysis

5.1 Price Overview

5.2 Technical Indicators

As of September 11, 2026, Songjing New Materials closed at RMB 18.21, down approximately 8.4% over the previous five trading days. It was below MA5, MA10 and MA20, while MACD and short-term moving averages both indicated weakness. The price was slightly below the roughly estimated lower Bollinger Band after incorporating September 11 data, but RSI6 was only near the traditional oversold threshold and had not generated an extreme oversold signal. Recent turnover value and turnover rate were lower than during the September 9 decline, and no obvious high-volume support had emerged. Major funds recorded a small cumulative net inflow over the past 10 trading days but turned to net selling on September 11, indicating insufficient continuity. The short-term technical focus is the RMB 17.60–18.00 support area and the RMB 19.10–19.35 resistance area formed by concentrated moving averages.

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

⚠️ Risk warning: The following is a subjective scenario analysis based on closing data as of September 11, 2026, historical prices and technical indicators. It does not constitute investment advice or a definitive forecast of future share prices.

① Key Technical Levels

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

• Range-bound consolidation (relatively higher weight, approximately 60%; this is a subjective heuristic judgment based on the current technical pattern, trading volume and capital flows, not a statistical probability): Approximate price range of RMB 17.60–19.20. Trigger conditions include support near RMB 17.60–18.00, no sustained high-volume decline, turnover value remaining within the recent normal range of approximately RMB 45 million–RMB 60 million, and major funds not recording consecutive net outflows. If the stock rebounds to RMB 19.10–19.30 but fails to break out on higher volume, it may continue to fluctuate around the short-term moving averages
• Weak decline (medium weight; a subjective heuristic judgment based on the current technical pattern and price-volume conditions, not a statistical probability): Approximate price range of RMB 15.70–17.60. Trigger conditions include a decisive closing break below RMB 17.60, daily turnover value remaining above recent normal levels, and consecutive net outflows from major funds during the decline. If support near RMB 17.60 fails, the next area to monitor is around RMB 16.00, followed potentially by the 52-week low of RMB 15.71
• Strengthening rebound (low weight but not impossible; a subjective heuristic judgment based on the current technical pattern and price-volume conditions, not a statistical probability): Approximate price range of RMB 19.20–20.40. Trigger conditions include reclaiming the MA20 and middle Bollinger Band near RMB 19.20, daily turnover value clearly exceeding the recent average of approximately RMB 57 million, preferably reaching more than approximately RMB 70 million–RMB 80 million for two consecutive trading days, and major funds turning to consecutive net inflows. Only a further breakout above RMB 20.00–20.40 could shift the short-term technical pattern from a weak rebound toward a stronger recovery

③ Capital and Liquidity Background

As of September 11, 2026, the turnover rate was 1.53% and turnover value was approximately RMB 51.83 million. Over the previous five trading days, average turnover rate was approximately 1.59% and average turnover value was approximately RMB 56.90 million. The daily turnover rate was slightly below the median turnover rate of approximately 1.83% for STAR Market stocks over the same period. Trading activity was average and did not indicate a high-turnover trading environment. As of June 30, 2026, the top 10 shareholders held approximately 70.66%, and the largest shareholder held approximately 48.22%. Institutional holders among the top 10 shareholders included Gao Yi Asset Management, insurance funds, Hong Kong Securities Clearing Company and private-equity funds. However, the shareholder structure is a quarter-end snapshot and is subject to a data lag; it cannot directly establish whether institutions continued to hold the stock or adjusted their positions during September 2026. High concentration indicates a relatively limited free float, making the price potentially sensitive to limited incremental capital. Daily trading depth and order-book support may therefore be uneven.

If daily turnover value exceeds approximately RMB 70 million for two consecutive days in the coming week and the share price reclaims RMB 19.20–19.35, short-term participation by capital could be considered to have improved from current levels. If higher volume occurs together with a break below RMB 17.60, this should be interpreted as increased downside pressure rather than simply as bullish high-volume trading.

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

• Monitor whether the share price can hold the RMB 17.60–18.00 support area. If it fails, the next area to monitor is RMB 15.70–16.00.
• Monitor whether the share price can reclaim the RMB 19.10–19.35 resistance area formed by concentrated moving averages, and then assess the breakout situation at the RMB 19.90–20.40 resistance area.
• Monitor whether turnover value can exceed approximately RMB 70 million on a sustained basis during a breakout, rather than showing a single-day volume spike.
• Monitor whether major funds shift from net outflows on September 11 to consecutive net inflows, but do not equate one-day capital flows with actual changes in institutional holdings. These are observation guidelines only, not instructions to buy, sell or hold.

The above scenario analysis is based on closing data as of September 11, 2026, historical prices and technical-indicator estimates. Short-term share prices may also be affected by news flow, capital flows, broader market conditions and other factors. Technical indicators are inherently lagging and limited, and the analysis does not guarantee actual future performance or constitute a trading recommendation. Investors should independently assess the situation based on the latest market information and bear their own investment risks.

6. Industry Structure and Competitor Analysis

6.1 Industry Status

The new functional coating materials industry is characterized by a structure in which “international diversified chemical giants hold advantages in high-end applications and scale, while specialized companies compete in niche applications.” Key industry barriers include R&D capabilities, product customization, customer certification, application-process services and supply-chain capabilities.

6.2 Competitive Landscape

• Diversified international companies include Akzo Nobel, PPG, BASF Coatings, Nippon Paint, Seiko, Imperial and BASF. They generally have long operating histories, broad product portfolios and strong R&D and financial resources, covering automotive, industrial, consumer-electronics and other coating applications.
• Specialized companies include Axalta, Xiangjiang Kansai, Keshow and Songjing New Materials. They generally focus on one or a limited number of segments such as high-end consumer electronics, automobiles, industrial coatings, inks or adhesives, and build competitive barriers through customized R&D, customer certification and application services.
• International brands continue to hold strong advantages in the automotive-coatings market. The company’s 2025 annual report cited data from Coatings World indicating that foreign brands have long held more than 80% of China’s passenger-vehicle coatings market and more than 90% of the body-coatings market. This is third-party data cited by the company’s annual report. The minutes did not identify independent official statistics using the same definition for cross-checking, so the figures should be regarded as data cited by the company’s annual report.
• New-energy vehicles, smart cockpits, personalized appearance and environmental regulations are driving coating materials toward water-based, low-VOC, high-weatherability, personalized and functional products. This provides entry opportunities for domestic companies but also raises validation periods and technology barriers.
• The company’s capacity utilization was 56.17% in 2025. This figure was disclosed based on total designed finished-product capacity at the main plant and cannot be directly equated with the actual utilization rate of each product line.

6.3 Major Competitors

Songjing New Materials has strong customer-certification, customized-R&D and application-service capabilities in high-end consumer-electronics functional coatings and is expanding into passenger vehicles and special equipment. Compared with diversified international companies such as PPG, Akzo Nobel and BASF, it is smaller and has narrower product lines and weaker globalization capabilities. Compared with specialized or regional companies such as Axalta and Xiangjiang Kansai, Songjing places greater emphasis on the combination of high-end consumer-electronics and automotive functional coatings. There is no single A-share company with a business mix exactly the same as Songjing. Product-classification definitions among peers are not fully consistent with Songjing’s “passenger-vehicle business” category.

7. Risk Factors

• Risk of continued weakness in high-end consumer electronics: Revenue in this segment declined 23.11% year on year in the first half of 2026 and 19.09% for full-year 2025. If new projects are introduced more slowly than expected after the completion of key consumer-electronics projects, the company’s high-margin revenue sources may continue to contract.
• Risk that passenger-vehicle profitability falls short of expectations: Passenger-vehicle revenue increased 38.88% year on year in the first half of 2026, but the business had a gross margin of only 32.34% in 2025, below that of high-end consumer electronics. If automotive project certification, production ramp-up or customer cost-reduction requirements slow volume growth, revenue growth may not translate into profit growth.
• Gross-margin and raw-material-cost risks: Direct-material costs accounted for 72.20% of total costs in the new functional coating materials business in 2025. The company has relatively limited pricing power over basic chemical raw materials such as resins and solvents. If raw-material prices rise and product pricing, customer mix or cost-pass-through capabilities do not improve in tandem, consolidated gross margin may continue to decline.
• Risk that R&D investment does not convert into results: R&D investment in the first half of 2026 was RMB 55.6016 million, up 9.20% year on year and accounting for approximately 16.75% of revenue. If validation cycles for consumer electronics, automobiles, new-energy batteries, solid-state batteries and other specialty applications are extended, or commercialization falls short of expectations, continued R&D spending could further depress profits without generating corresponding revenue.
• Commercialization risk for emerging businesses: Strategic emerging businesses such as new-energy batteries have begun to contribute revenue, but aerospace, rail transit, marine equipment, solid-state batteries, the low-altitude economy and eVTOL remain mainly at the stages of technology reserves, project validation or market introduction. They cannot be regarded as mature revenue sources comparable to consumer electronics. The timing of revenue recognition and actual profit contribution from the cell-insulation UV inkjet-printing equipment contract is also uncertain.
• Risk of insufficient capacity utilization: At the end of 2025, designed finished-product capacity at the main plant was 17,000 tonnes, while capacity utilization was only 56.17%. The automotive business remains in an expansion and introduction phase. If order growth is insufficient or product-mix adjustments fall short of expectations, inadequate fixed-cost absorption could continue to pressure profitability.
• Accounts-receivable and customer-concentration risks: At the end of 2025, accounts receivable totaled RMB 319 million, representing approximately 44.14% of full-year operating revenue. The company bears a relatively large working-capital burden in the value chain. The five largest customers accounted for 35.07% of sales, and the company remains dependent on high-end consumer-electronics brands and automotive-industry-chain customers. Delays in projects by major customers, changes in orders or longer collection periods could affect cash flow.
• Shareholder-selling and share-price volatility risks: The previously disclosed selling plan for shareholders, directors and senior executives involved proposed sales of no more than 1.23% of total shares outstanding. As of September 13, 2026, the final results of the overall plan had not been disclosed. With the executive purchase plan completed but the selling results still unclear, the related changes in holdings could increase short-term supply pressure. Technically, the share price is below multiple short-term moving averages, and no obvious high-volume support has emerged after the recent decline. If the RMB 17.60–18.00 area is lost, price volatility could increase further.

8. Conclusion and Outlook

The company’s medium- to long-term growth drivers mainly include continued introduction of passenger-vehicle coating products, certification and volume ramp-up among automotive customers, and commercialization expansion in emerging applications such as new-energy batteries, solid-state batteries, aerospace and the low-altitude economy. The rising contribution of passenger-vehicle revenue and the initial revenue contribution from strategic emerging businesses such as new-energy batteries in the first half of 2026 indicate some progress in business diversification. The RMB 30 million cell-insulation UV inkjet-printing equipment contract also provides a concrete project lead for new-business expansion, but its timing of revenue recognition and full-year contribution cannot be determined from the available information.

Earnings recovery still requires multiple conditions to be achieved simultaneously, including recovery in consumer-electronics demand and high-margin projects, economies of scale in the automotive business, higher capacity utilization, easing raw-material cost pressures, and the conversion of R&D investment into orders and revenue. R&D investment increased 9.20% year on year to RMB 55.6016 million in the first half of 2026, further compressing current-period profit against a backdrop of declining revenue and gross margin. Although the automotive business maintained rapid growth, it had not fully offset the impact of the decline in consumer electronics and higher costs.

Overall, the company is in a period of business-mix adjustment and validation of earnings recovery. Future earnings elasticity is relatively high, but visibility remains limited. Investors should closely monitor whether consumer-electronics revenue stabilizes, whether automotive gross margin and economies of scale improve, the actual revenue recognition of emerging-business orders, and the final implementation results of the selling plan. Management’s purchases totaling approximately RMB 1.8092 million indicate a degree of confidence, but the amount is small relative to the company’s scale and cannot be directly equated with a fundamental turnaround.

Data Sources

• https://m.hx168.com.cn/stock/F10/688157.html?utm_source=openai
• Songjing New Materials Group Co., Ltd. 2025 Annual Report
• Songjing New Materials (688157)_Company Announcements_Songjing New Materials: 2024 Annual Report_Sina Finance_Sina.com
• Songjing New Materials (688157)_Company Announcements_Songjing New Materials: Tianjian Certified Public Accountants (Special General Partnership) Audit Report on Songjing New Materials Group Co., Ltd. for 2025_Sina Finance_Sina.com
• Stock abbreviation: Songjing New Materials　　　　　　　　　　　　　　　Stock code: 688157
• Songjing New Materials (688157)_Company Announcements_Songjing New Materials: 2023 Annual Report_Sina Finance_Sina.com
• Songjing New Materials Group Co., Ltd. 2024 Annual Report
• Songjing New Materials (688157)_Company Announcements_Songjing New Materials: Special Explanation by Tianjian Certified Public Accountants (Special General Partnership) Regarding the Regulatory Inquiry Letter on Information Disclosure in Songjing New Materials Group Co., Ltd.’s 2025 Annual Report_Sina Finance_Sina.com
• Songjing New Materials (688157)_Company Announcements_Songjing New Materials: 2026 Interim Report_Sina Finance_Sina.com
• Songjing New Materials (688157) - Historical Trading Data | Daban Ke
• Songjing New Materials (688157) Latest Developments_F10_Tonghuashun Financial Services
• 688157 Stock Price and Chart - SSE:688157 — TradingView
• Songjing New Materials (688157.SH) Stock Quotes_Historical Data_Major Funds - Dabolang Data

This report was automatically retrieved, compiled and generated by AI based on publicly available information. Information is as of the close on September 11, 2026; certain technical indicators (MACD, RSI and some Bollinger Band data) are as of September 10, 2026, and shareholder structure is as of June 30, 2026. Timing differences may exist. Specific data should be based on the company’s formal announcements and authoritative data terminals. This report is for information compilation and research reference only and does not constitute investment advice of any kind. Investors should make independent judgments and bear their own investment risks.