New stock preview | Global market share of 27%, leading photovoltaic conductive slurry Changzhou Fusion New Material (688503.SH) sprinting "A+H"

When the cost logic of the photovoltaic industry completes the structural transition from "silicon dominance" to "silver reduction", and the domestic substitution of semiconductor materials enters the stage of attack, advanced material companies are facing the dual proposition of upgrading their main business and crossing boundaries. On January 14, Changzhou Fusion New Material Co., Ltd. (referred to as "Changzhou Fusion New Material", 688503.SH), a global leader in photovoltaic conductive silver paste, officially submitted its listing application to the main board of the Hong Kong Stock Exchange, with Huatai International and Jefferies serving as joint sponsors. This company, which is already listed on the A-share market, is now aiming at the "H+A" dual capital platform. In addition to supplementing funds to consolidate its advantage in the photovoltaic industry, it also aims to accumulate momentum for the cross-border layout of semiconductor materials. Leading in the global market of photovoltaic conductive pastes, seizing the opportunity of silver reduction with technological iteration According to the prospectus, Changzhou Fusion New Material was established in 2015 and is a research-driven advanced material company. The company's products mainly include photovoltaic conductive materials and other electronic materials. In the field of photovoltaic conductive paste, Changzhou Fusion New Material has built a product matrix covering all mainstream routes such as TOPCon, PERC, HJT, and X-BC. With the current N-type cells becoming mainstream in the market, the company's product structure is highly consistent with industry trends. By September 2025, the revenue share of the company's TOPCon series paste has reached 91.5%. According to Zhoushi Consulting data, as of the nine months ended September 30, 2025, the company's sales revenue of photovoltaic conductive paste ranks first among all manufacturers globally, with a market share of 27%. Behind its leading competitiveness lies the company's research and development innovation capabilities and industrial chain integration capabilities. In terms of research and development investment, as of September 30, 2025, the company had 236 research and development personnel, accounting for 32% of the total number of employees. From 2023 to September 2025, the company has accumulated more than 2 billion yuan in research and development investment, holding 141 domestic patents and 247 international patents, forming a full-process research and development system covering organic material synthesis, formulation design, and manufacturing process. In the face of the industry cost pressure caused by the high silver price fluctuations, the company has taken the lead in deploying silver-reduced and silver-free technologies to build a differentiated competitive advantage. In March 2025, ton-scale production of silver-coated copper conductive paste was achieved and commercial shipments began. Pure copper paste for TOPCon and HJT cells has also been developed, tested, and delivered in small batches. For emerging perovskite cells, the company is developing ultra-low-temperature curing paste and silver-coated copper paste with silver content less than 40%. Through vertical integration to strengthen supply chain stability, after the acquisition of Jiangsu Juyou Silver in 2023, the company launched a thousand-ton electronic-grade silver powder industrialization project, becoming the largest silver powder producer among domestic photovoltaic conductive paste companies, realizing the independent supply of key raw materials, ensuring supply chain security, and enhancing cost control capabilities. In terms of production, the company mainly produces photovoltaic conductive paste at its production plants in Changzhou, Jiangsu Province, and Yibin, Sichuan. The annual production capacity of photovoltaic conductive paste exceeds 2500 tons, ranking the company as the world's largest. Looking at the industry space, the global market for photovoltaic conductive paste still has stable growth potential. According to Zhoushi Consulting's report, the global market size of photovoltaic conductive paste has increased from 14.7 billion yuan in 2020 to 50.4 billion yuan in 2024, with an expected increase to 114.5 billion yuan by 2029, with a compound annual growth rate of 16.2% from 2025 to 2029. In this, the overseas market, as photovoltaic capacity expands to Southeast Asia, the Middle East, India, and other regions, has become an important growth increment. The market size in 2024 is estimated to reach 3.9 billion yuan, and it is expected to increase to 17.4 billion yuan by 2029, with a compound annual growth rate as high as 36.3%, providing broad space for the global expansion of Changzhou Fusion New Material. Layout the semiconductor track, open up the second growth curve On the basis of consolidating its photovoltaic main business, Changzhou Fusion New Material is extending into the field of semiconductor materials through strategic acquisitions, attempting to build a growth pattern driven by "photovoltaic + semiconductor". In September 2025, the company announced its intention to acquire the blank mask business of South Korea's SKEnpulse Co., Ltd. (referred to as "SKE") for 68 billion Korean won (approximately 3.45 billion yuan), further penetrating into the field of semiconductor materials and responding to the strategic goal of national semiconductor self-sufficiency. According to the prospectus, the acquisition has completed the separation of the target assets and established the new company LuminaMask Co., Ltd., with the acquisition expected to be completed in the first quarter of 2026 or shortly thereafter. According to the plan, after the acquisition is completed, the company will build a new production facility in Shanghai to accelerate the industrialization of blank mask versions. Changzhou Fusion New Material pointed out in the prospectus that this acquisition is a core part of the company's long-term strategic goal of building a global leading advanced material technology company. It is expected that this acquisition will accelerate the company's strategic layout in the semiconductor field, further expanding its business scope from conductive paste to semiconductor materials. To address the increasing importance of autonomous and resilient supply chains, this acquisition is expected to promote the domestic substitution process of high-end semiconductor materials such as blank mask versions, thereby breaking through the key bottlenecks in the industrial value chain. In addition, based on the scarcity and verified technical advantages of the target business, the company intends to tap into the semiconductor field's customer base, forming a strong business synergy with the company's existing business and product portfolio. The prospectus shows that the photomask version is a core material in the lithography process, accounting for 13% of semiconductor material costs, ranking third after silicon wafers and electronic special gases. In the manufacturing process of the photomask version, the blank mask version serves as the cornerstone of the upstream of the industry chain, with both concentrated value and high technological barriers. Its key indicators such as substrate flatness, film layer uniformity, and surface defect density directly determine the accuracy of downstream lithography pattern transfer, thereby affecting chip process yield and performance. In terms of market space, the Chinese photomask version market size reached 2.9 billion yuan in 2024, and is expected to increase to 7.6 billion yuan by 2029, with a compound annual growth rate of 25.1% from 2025 to 2029. Business growth is steady but profits are under pressure, with liquidity and profit balance to be resolved In addition to the dual focus of business layout, the company's financial fundamentals show characteristics of steady revenue growth but increasing profit pressure. In terms of revenue, in the fiscal years 2023, 2024, and the nine months ended September 30, 2025, the company's revenue was approximately 10.23 billion yuan, 12.39 billion yuan, and 10.607 billion yuan, respectively. The main driver of growth comes from the increased demand for TOPCon paste and the rise in product prices driven by the increase in the price of silver. Profitability shows a gradually increasing pressure. The company's gross profit margin was 9.2%, 7.8%, and 6.5% during the same period, and the net profit margin decreased from 4.3% in 2023 to 2.2% in the nine months ended September 2025, with a profit of 2.34 billion yuan during that period, a 44% decrease from the same period last year. The decline in profitability is mainly influenced by two factors: a significant increase in the price of silver, leading to an increase in core raw material costs, and intensified price competition in the industry, with cost pressure from the photovoltaic industry downward transmission squeezing the profit space of the paste segment. However, thanks to the "cost-plus" pricing mechanism and hedging measures such as silver self-supply and silver-reduced technology breakthroughs, the core product competitiveness of the company remains stable. In terms of cash flow and debt structure, due to the special settlement mode of the photovoltaic industry, the company's operating cash flow has been continuously negative. The net cash flow from operating activities during the nine months from 2023 to 2025 was -2.67 billion yuan, -900 million yuan, and -3.46 billion yuan, respectively. The main reason is that cash must be paid in advance for raw material purchases, while customer payments are mostly made with bank acceptance bills and enjoy a 30-60 day credit period. To cover the working capital gap, the company mainly supplements its liquidity through financing methods such as discounting bank acceptance bills, with a net cash flow from financing activities of 3.477 billion yuan in the nine months ended 2025. As of the end of September 2025, the company's total debt amounted to 6.81 billion yuan, with a debt-to-capital ratio rising to 58.5%. Liquidity pressure needs to be monitored. Additionally, the high concentration of customers and suppliers is a common issue in the industry, and Changzhou Fusion New Material is no exception. From 2023 to September 2025, the revenue from the top five customers accounted for more than 53%, while the procurement from the top five suppliers accounted for between 60.4% and 86.5%, with major customers including the top ten photovoltaic cell manufacturers globally. Although the company has stabilized the supply chain through "sale-driven procurement" and long-term cooperation, the loss of a single customer, interruption of silver powder supply, or significant fluctuation in silver prices could still have a significant impact on performance. Overall, Changzhou Fusion New Material's listing on the Hong Kong Stock Exchange this time is a strategic choice for the global leader in photovoltaic conductive paste in the industry transformation and domestic substitution wave. After the "A+H" listing, the expansion of financing channels will provide financial support for business expansion and promote global layout progress. For investors, the focus in the future can be on three core variables: the commercialization progress and customer certification of silver-reduced products such as pure copper paste, which directly affects cost control and profit improvement; the delivery progress and integration effects of the acquisition of SKE blank mask version business, especially the domestic capacity construction and customer expansion of leading wafer factories; and the ability to improve cash flow conditions, whether it can alleviate liquidity pressure through business structure optimization and widening of financing channels. If the above core variables can be successfully implemented, Changzhou Fusion New Material is expected to achieve synergistic development in dual tracks and grow into a diversified leader in advanced materials.