Guotai Haitong released a research report stating that developments in powder manufacturing technology and 3D printing processes are expected to continuously drive the expansion of titanium alloy applications. With the maturation of 3D printing processes and powder manufacturing technologies in the future, the firm believes that titanium alloy is poised for rapid penetration into products with extreme requirements for lightweighting and structural strength, such as foldable phones, AR/VR headsets, and drones. Domestic companies, having deeply cultivated powder metallurgy processes and broken through bottlenecks in nuclear fusion materials, are expected to benefit from the surge in downstream demand. A relevant stock is Tiangong International (00826). Guotai Haitong's main views are as follows: Leading powder metallurgy company Tiangong International's performance assessment targets demonstrate confidence in its growth prospects. Tiangong International focuses on powder metallurgy technology and holds significant advantages in nuclear fusion materials and titanium alloys. According to an announcement on January 20th, the company granted a total of 30,000,000 share options (approximately 1.10% of the total issued shares) to directors and employees, with an exercise price of HK$3.50 per share. The options will vest over three years, with vesting each year contingent upon the company's audited comprehensive revenue for the corresponding fiscal year (2026-2028) increasing by 25% or more compared to the previous year. Powder metallurgy can be used to produce high-end nuclear fusion materials. Domestic companies are actively overcoming critical technological bottlenecks, indicating vast future growth potential. Materials for nuclear fusion reactors must withstand a composite extreme environment involving very high-energy neutron irradiation, high temperatures, intense heat flux, and strong magnetic fields, demanding exceptionally high performance. Currently, domestic companies, represented by Tiangong International, are continuously tackling these bottlenecks, developing nuclear fusion materials including advanced low-activation steels and high-boron steels for nuclear power applications. Utilizing powder metallurgy technology, Tiangong can achieve higher boron content (above 3%) and larger dimensions while maintaining a cost advantage. Presently, Tiangong International's subsidiary, Tiangong Aihe, has been approved to join the Energy Research Institute of the Hefei Comprehensive National Science Center, focusing on: achieving ton-level manufacturing of large-size powder metallurgy 304B7 high-boron steel and completing the development of a new neutron shielding steel with a boron equivalent >3.2wt%. Advancements in powder manufacturing technology and 3D printing processes are expected to continuously drive the expansion of titanium alloy applications. Domestic companies, having deeply cultivated titanium alloy technology, are expected to benefit from the surge in downstream demand. Due to their high strength, excellent corrosion resistance, and good surface texture, the usage of titanium and titanium alloys is expected to increase significantly in components like foldable screen frames and screen backing plates. Concurrently, 3D printed titanium alloys offer极高的 design freedom and are gradually being applied in aerospace and medical fields. Looking ahead, as 3D printing processes and powder manufacturing technologies mature, the firm believes titanium alloy is poised for rapid penetration into products with extreme requirements for lightweighting and structural strength, such as foldable devices, AR/VR headsets, and drones. From the midstream perspective of the titanium alloy supply chain, domestic player Tiangong International has deeply cultivated high-end titanium alloy wire, currently supplying several leading international consumer electronics companies and continuously expanding production capacity. It is well-positioned to benefit from volume demand increases from major clients, such as for foldable phones. Risk warnings include uncertainty in Sino-US trade frictions and sharp fluctuations in raw material prices.
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