Founder Securities Initiates Coverage on GLOBAL NEW MAT (06616) with "Buy" Rating, Highlights Acquisition of Merck's Surface Solutions Business

Stock News12-12

Founder Securities initiated coverage on GLOBAL NEW MAT (06616) with a "Buy" rating, citing the company's strong revenue performance in the first half of 2025 and its strategic acquisition of Merck's global surface solutions business.

In H1 2025, GLOBAL NEW MAT reported revenue of RMB 910 million, with sales of pearl luster pigments increasing by 34.5% to 15,000 tons. The company completed the acquisition of Merck's surface solutions business in July 2025, significantly enhancing its global R&D, production, and sales network. Founder Securities expects cost synergies and pricing improvements from the integration, along with growth potential from new capacity expansions.

Key highlights from the report include: 1. **Expansion into Global Surface Materials Solutions**: GLOBAL NEW MAT has evolved from a pearl luster pigment and synthetic mica producer into a global surface materials solutions provider, particularly after acquiring CQV and Merck's business. Its products are widely used in industrial coatings, plastics, textiles, cosmetics, and automotive coatings.

2. **Improved Product Mix and Margins**: Pearl luster pigments contributed 93% of H1 2025 revenue (RMB 850 million, up 21.4% YoY), while functional mica fillers grew 19.9% to RMB 49.04 million. Gross margin edged up to 52.0% due to better product mix and lower raw material costs.

3. **Strategic Acquisition of Merck’s Business**: The EUR 665 million (RMB 5.187 billion) acquisition strengthens GLOBAL NEW MAT’s presence in high-end markets, expanding its R&D and production footprint across China, Germany, South Korea, Japan, and the U.S., as well as its sales network in over 150 countries.

4. **Capacity Expansion**: The company is ramping up production at its 30,000-ton pearl luster pigment Phase II facility and installing equipment for a 100,000-ton surface performance materials project in Tonglu, reinforcing its global leadership in the sector.

**Risks**: Potential delays in capacity expansion, price volatility, and integration challenges post-acquisition.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment