Grace Fabric Technology Co.,Ltd. has emerged as a standout performer in the A-share market since the second quarter of 2024. As of September 23, 2025, the stock has delivered a remarkable cumulative gain of 348.20% since April 1st, with particularly volatile trading patterns including three consecutive daily limit-ups from August 13-15, during which main capital inflows reached 356 million yuan in a single day.
On September 24th, the stock retreated, closing down approximately 6.5% at 36.01 yuan, with a market capitalization of 31.68 billion yuan.
According to the latest fund holdings disclosure, as of June 30, 2025, eight funds have included Grace Fabric Technology among their top ten holdings. These funds include Noah Hengxin Fund, China Life Asset Management Jingrui 6-Month Holding Fund A, Noah High-end Manufacturing Fund A, and others, demonstrating institutional confidence in the company's future prospects.
**Performance Surge of 105x: Product Upgrades Meet Industry Opportunities**
The company's interim report released on August 27th evening provided solid fundamentals backing its stock performance. The report showed that Grace Fabric Technology achieved operating revenue of 550 million yuan in the first half, up 35% year-over-year, while net profit attributable to shareholders reached 87.38 million yuan, representing a staggering 10,587.74% year-over-year increase.
The significant performance improvement stemmed from two key factors: first, the price increase of ordinary E-glass electronic-grade fiberglass cloth compared to the same period last year; second, the company's high-performance low dielectric cloth and low thermal expansion coefficient electronic cloth achieved mass production and delivery in the first half with favorable added value.
A materials science expert explained that Grace Fabric Technology's flagship high-performance low dielectric constant electronic cloth serves as crucial material for AI servers and 5G base station signal transmission, significantly reducing signal attenuation. "Current AI chips demand extremely high transmission rates, and traditional fiberglass cloth can no longer meet requirements. Grace Fabric Technology's mass production capability fills the gap in domestic substitution," the expert emphasized.
Previously, the global high-end electronic cloth market was dominated by Japanese and Taiwanese companies. Grace Fabric Technology's technological breakthrough has positioned it among the few mainland Chinese enterprises capable of global competition.
Postal Securities electronic analyst Wu Wenji noted that Grace Fabric Technology's core advantage lies in its integrated electronic yarn and electronic cloth production capacity. Through self-developed high-end raw material electronic yarn, the company has reduced import dependence and significantly enhanced cost control capabilities. Data shows that Grace Fabric Technology's gross margin reached 17.37% in 2024, up 8.54 percentage points year-over-year, demonstrating significant cost optimization effects.
Grace Fabric Technology's subsidiary Huangshi Honghe is among the few manufacturers in the industry with ultra-thin cloth production capabilities, possessing the ability to produce 4-micron ultra-fine electronic-grade glass fiber yarn.
To further strengthen supply chain stability, Grace Fabric Technology announced on September 19th its plan to inject 300 million yuan into wholly-owned subsidiary Huangshi Honghe through debt-to-equity conversion, increasing registered capital from 700 million yuan to 1 billion yuan. The company stated that this capital injection will help the subsidiary expand production capacity and improve operational efficiency, thereby consolidating the company's competitive advantage in the high-end electronic cloth sector.
**Sustained Industry Demand Growth Amid Risk Warnings**
Currently, emerging industries such as 5G equipment, AI computing power, and new energy vehicles are developing rapidly, driving strong demand growth for electronic cloth, particularly mid-to-high-end products. Analyst Wu Wenji believes the electronic cloth industry is evolving toward thinning and functionalization, with high-end varieties like ultra-thin and extremely thin cloth showing significantly higher market growth rates than traditional products.
However, risks cannot be ignored. Analysts warn that Grace Fabric Technology faces relatively high customer concentration, and any reduction in major customer orders or changes in cooperative relationships could directly impact revenue stability. Wu Wenji further pointed out that as industry players accelerate capacity expansion, competition in the mid-to-high-end electronic cloth market may intensify, creating downward pressure on product prices.
Some market observers believe that in the ultra-thin electronic cloth segment, Grace Fabric Technology has transformed from a "follower" to one of only two global players capable of both mass production and aggressive capacity expansion. The period from 2025-2026 represents a critical window for splitting the high-end market with Nitto Denko.
Golden Eagle Core Resources Fund Manager Chen Ying noted: "We believe that with the development of the artificial intelligence industry, the second half of the year will see continuous new product launches on the edge side. AI edge-related new products (such as smart glasses, AI phones, AI PCs, robots, autonomous driving, etc.) are gradually being introduced, with penetration rates slowly improving. We will focus on investment opportunities in related 2C applications driven by terminal product penetration rate improvements."
Noah High-end Manufacturing Fund Manager Tong Yu stated that since April, A-shares have shown strong momentum with technology growth themes performing prominently. AI computing power and hardware have been driven by policy support and rising demand, with segments like computing power leasing showing impressive performance. Semiconductors and consumer electronics have risen under domestic substitution and industry recovery.
**Multiple Funds Including Noah Hengxin Hold Heavy Positions, Northbound Capital Also Increases Holdings**
According to the latest Wind data disclosure, eight funds included Grace Fabric Technology in their heavy holdings list in the second quarter of 2025, demonstrating market attention and confidence in the company.
Among funds heavily positioned in Grace Fabric Technology, Noah Hengxin Fund performed particularly well, listing Grace Fabric Technology as its second-largest holding in the second quarter. Additionally, China Life Asset Management Jingrui 6-Month Holding Fund A, Noah High-end Manufacturing Fund A, China Life Asset Management Low Carbon Economy Fund A, and other funds have all included Grace Fabric Technology among their top ten holdings, showing widespread market optimism toward the company.
From Grace Fabric Technology's interim report data on top ten tradable shareholders, new shareholders including Hwabao WP Advantaged Industry Flexible Allocation Hybrid Securities Investment Fund, Golden Eagle Technology Innovation Stock Securities Investment Fund, E Fund Information Industry Hybrid Securities Investment Fund, and Golden Eagle Core Resources Hybrid Securities Investment Fund all increased or newly established positions in Grace Fabric Technology during the second quarter.
Notably, Hong Kong Securities Clearing Company Limited (Northbound Stock Connect) also increased its holdings in Grace Fabric Technology, demonstrating foreign investor interest in the company.
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