Southeast China in the first half of the year: Plastic film stabilizes foundation, import substitution creates advantages

1、 Development Review and Business Operation Analysis

（1） Core business focus: research and development, production, and sales of plastic films and new materials

As a national high-tech enterprise, the company focuses on the research and development, production, and sales of plastic films and new materials. Its core products include CPP film, BOPET film, BOPP capacitor film, optical grade film, etc., which are widely used in power generation equipment, ultra-high voltage transmission and transformation, smart grids, consumer electronics, flat panel displays, photovoltaics, packaging and printing, and other fields.

From the perspective of industry background, the plastic film manufacturing industry is a core sub sector of the plastic processing industry, and has received strong support at the policy level. The 2024 Zhejiang Manufacturing High Quality Development Conference clearly proposed to promote the "high-end, intelligent, green, integrated, and clustered" development of the manufacturing industry. At the national level, a series of policies such as the "National Strategic Emerging Industry Development Plan", "New Materials Industry Development Plan", and "Made in China 2025" have also listed high-performance film materials as a key direction of the new materials industry, promoting the industry's transformation towards higher performance, lower cost, and greener.

During the reporting period, the company actively implemented its development strategy. On the one hand, it promoted its corporate culture and manufacturing strength through international exhibitions, consolidated its market share, and strengthened the production and sales coordination of differentiated products; On the other hand, the subsidiary has achieved significant operational results. The production and sales of Ningbo Wanxiang Coating and Hangzhou Gaoke PETG shrink film have both increased. The Ningbo Wanxiang Capacitor Testing Center has been operating normally and accepting orders. The company and its subsidiary Zhejiang Wanxiang have passed the annual supervision and evaluation of the ISO9000 quality management system.

In terms of research and development, Hangzhou Gaoke has applied for 2 invention patents and 2 utility model patents through its self built research and development center. Among them, "A Waterproof PET Film for Photovoltaic Backboards and Its Preparation Method" has entered the substantive examination stage; Ningbo Vientiane successfully applied for the national "double and new" super long term treasury bond project and the "key little giant" project. At the same time, the company organizes technical breakthroughs to address the difficulties of production line equipment, and coordinates summer equipment maintenance and spare parts procurement in advance to ensure stable production.

（2） Business model: "Headquarters based management+base based operation" drives efficient operation of the entire chain

The company adopts a core management structure of "headquarters based management and base based operation": the headquarters is responsible for strategic planning, resource allocation, technology research and development, salary design, performance evaluation, risk control, and capital operation; The headquarters in Zhuji, Zhejiang, Linping, Hangzhou, and Yinzhou, Ningbo are the operating entities with independent management rights in sales, technology, manufacturing, procurement, personnel, finance, and other areas.

In the specific operation process, the production mode is centered on "on-demand production", and each base formulates production plans based on the demand and delivery time of customer orders, maintaining an independent and complete production system; In terms of raw material procurement, major raw materials such as polyester chips and polypropylene, as well as auxiliary materials, are coordinated by the procurement department. Short term procurement plans are developed based on business objectives, order requirements, and material plans of each department (all raw materials are downstream products in the petrochemical industry);

The sales model focuses on direct sales. As the products are mostly industrial or consumer intermediate goods, the company has established a special marketing department based on product technical attributes and customer types. Each base seamlessly connects with customers, and achieves "full production and full sales" by deeply cultivating old customers and exploring new customers. Downstream customers mainly include printing manufacturers, packaging film manufacturers, and electronic information film material manufacturers.

（3） Performance driven: Multi dimensional efforts to promote high-quality development of enterprises

During the reporting period, the company's performance growth mainly relied on four core driving factors: firstly, deepening the field of high-end new materials, by increasing research and development investment, introducing advanced production equipment at home and abroad, and focusing on promoting the research and development, production and sales of high-performance and differentiated products; The second is to strengthen market development capabilities, optimize product layout based on market demand, focus on tapping key customer potential and cultivating advantageous customers, and simultaneously strengthen terminal market penetration; Thirdly, we will deepen internal lean production management and improve production efficiency through measures such as capacity enhancement, cost optimization, and energy conservation and consumption reduction; The fourth is to shift the development orientation from "speed oriented" to "quality oriented", with a focus on strengthening accounts receivable collection and cash flow management to ensure the sustainable and healthy operation of the enterprise.

（4） Industry pattern: Based on the new materials track, highlighting the leading industry position. 1. Industry development stage: The company's business has transformed from traditional plastic film to the field of new materials. The 13th Five Year Plan of the country has listed advanced polymer materials as a key development direction, and the 14th Five Year Plan further encourages the development of thin film products in emerging application fields. The future market size of the new materials industry can reach trillions. Under policy guidance, the technological level and industrial scale of key basic industrial materials in China have significantly improved, and the ultra-high voltage capacitor film produced by the company has achieved import substitution.
2. Cyclical characteristics: Different products exhibit differentiated cyclical characteristics - CPP film has a high demand season for concentrated supply in the second half of each year due to low investment barriers and sufficient market competition; In BOPET film, differentiated products have a relatively balanced supply and demand, while ordinary products follow an industry cycle of "peak 2-3 years, intermediate 1-2 years, and trough 3-4 years"; The new material industry to which ultra-high voltage capacitor film belongs is a sunrise industry with a wide range of applications and unclear cyclical characteristics.
3. Industry Status: As one of the earliest domestic enterprises to enter the field of thin films and new materials, our company's products have a high degree of recognition in the industry and among customers. We have accumulated 51 national invention patents, utility model patents, and design patents, and have undertaken 1 national key industry revitalization and technological transformation project. In the segmented field, BOPET film ranks among the top in the industry, with products such as optical diffusion film, new building waterproof material film, and non coating laser imprinting film leading the industry; CPP film is a leading product in the domestic segmented field; The capacitor film has been certified as a national "single champion" and its technology has reached the international advanced level.

2、 Core competitiveness: Multi dimensional advantages build industry barriers

The core competitiveness of the company is reflected in six dimensions: industrial chain, research and development, brand quality, production equipment, management team, and geographical location. During the reporting period, the core advantages were further strengthened: the subsidiary Hangzhou High tech relied on its own research and development center to establish a complete professional research and development team of "doctoral master undergraduate college", providing talent support for technological innovation; The subsidiary Ningbo Vientiane successfully applied for the national "double and new" super long term treasury bond project and the "key little giant" project, which further consolidated the company's leading position in the film industry and helped the company continue to seize the development opportunities in the field of new materials.