“反内卷”共同维护市场健康，积极拓展资源循环和再生材料

⚫⚫⚫⚫ Seethe last page for disclaimerAPPENDIX 1Summary➢For many years, the company has been deeply involved in the polyester industry, carefully planning theindustrial structure and integrated layout around the 'PTA-bottle-grade polyester-slicing' industry chain.Through technological transformation and the advantages of new production capacity, our aim is to achievethe comprehensive development and efficient utilisation of resources and energy, reduce the energyconsumption and product costs, improve the operational efficiency of equipment, enhance the company'sbusiness competitiveness and comprehensive management capabilities, and promote the company's high-quality development. The company's two bottle chip fundraising projects, the 1.5 million tonne greenpackaging new materials project at Xingjia New Materials and the 1.5 million tonne green multifunctionalbottle chip project at Xingye Plastics, will be put into operation in July 2023 and May 2025 respectively.➢In 2024, the downstream consumption of polyester bottle flakes showed a moderate growth trend. Accordingto CCF data, annual production was 15.56 million tonnes, an 18.80% year-on-year increase, while annualconsumption was 14.97 million tonnes, a 20.63% year-on-year increase. The soft drinks sector remains thelargest application area for polyester bottle flakes, accounting for 73.25% of the market. In 2024, domesticsoft drinks manufacturers will increase production at new factories, accelerating the growth rate andaccounting for around 39% of total PET demand—the main component in the downstream consumption ofpolyester bottle flakes. Although the operating rate of the sheet industry remains low, demand for the year asa whole is still significantly higher than last year, with continued growth in demand for packaging for freshproduce, milk tea, coffee and other products.➢In 2024, processing fees will remain under pressure, with 'anti-rat race' measures working together to maintainmarket health. By the end of 2024, domestic industry concentration (CR4) will have increased further to over80%. The short-term expansion of domestic production capacity has put pressure on capacity utilisation, andprocessing fees will remain under pressure. Due to industry factors and the rapid deployment of newproduction capacity in the polyester industry chain, there was a mismatch between market supply and demandin 2024, leading to fierce market competition. Prices of the company's main products decreased, the processinggap narrowed and gross profit margins and profitability levels declined. The company will continue to monitormarket trends and industry developments closely, strengthening communication and exchange with industryassociations and leading enterprises to maintain market health.➢Accelerate progress on the PTA technological transformation project and actively expand into the fields ofresource recycling and recycled materials. The company is speeding up construction of the 3.2 million tonnePTA technological transformation and expansion project at Hailun Petrochemical. It is also enhancing itsmarketdominance and industry competitiveness by combining production capacity and cost controlcapabilities. It is currently expanding into the fields of resource recycling and recycled materials by renovatingproduction facilities and developing functional recycled PET products, thereby enhancing its competitiveadvantage.➢Risk warning. Market risk; Exchange rate fluctuation risk; Risk on the raw material side. 2 Seethe last page for disclaimer分析师介绍分析师庄怀超，本科毕业于北京航空航天大学，硕士毕业于香港大学金融学专业，主要覆盖化工和新材料行业。该分析师2022-2024年曾任职于海通国际研究部，团队2022年获得过亚洲货币第一名，该分析师2025年加入环球富盛理财有限公司，继续覆盖化工和新材料行业。环球富盛理财有限公司是一家香港的持牌券商机构，成立于2014年。该分析师曾在wind发布报告超过500篇，主要覆盖行业包括化肥、农药、气体、炸药、氟化工、分子筛、电解液和合成生物学等行业。覆盖的公司包括:东岳集团、环球新材国际、中国心连心化肥、中化化肥、阜丰集团、中国三江化工、中国联塑、浦林成山、米高集团、中国石油化学、中国旭阳集团、彩客新能源、天德化工、理文化工等。邮箱:charles.zhuang@gpf.com.hk电话:(852)97487114; (86) 188 01353 3537 3 SECTOR RATING DEFINITIONThe Benchmark: Hong Kong Hang Seng IndexTime Horizon: 6 to 18 monthsRatingOutperform跑赢大市Neutral中性Underperform跑输大市DISCLOSURE OF INTERESTS(1) The Analysts and their associates do not serve as an officer of the issuer mentioned in this Research Report.(2) The Analysts and their associates do not have any financial interests in relation to the issuer mentioned in this Research Report.(3) Global Prosperity Financial Company Limited and/or its subsidiaries do not hold equal to or more than 1% of the market capitalization of the issuermentioned in this Research Report.(4)Global Prosperity Financial Company Limitedand/or its subsidiaries have not had investment banking relationships with the issuer mentioned in thisResearch Report within the preceding 12 months.(5) Global Prosperity Financial Company Limitedand/or its subsidiaries are not making a market in the securities in respect of the issuermentioned in thisResearch Report.(6) Global Prosperity Financial Company Limitedand/or its subsidiaries have not employed an individual serving as