Net profit grew more than twofold in the first three quarters, with Shenzhen Senior Technology Material (06067) achieving high performance growth driven by both "domestic + overseas" markets.

As the "third pole" of batteries, separators are the most competitive segment of the lithium battery supply chain. In 2026, energy storage took over from power batteries as the largest source of incremental demand in the lithium battery supply chain. SNE data shows that in the first half of the year, global energy storage lithium battery shipments reached 461.3GWh, up 71% year-on-year, with China accounting for nearly half at 202.5GWh, up 49% year-on-year. Upstream separators are one of the beneficiary segments, and China Securities Co.,Ltd. expects industry wet-process separator capacity utilization to rise to 88% and 98% in the third and fourth quarters, respectively. It is understood that Shenzhen Senior Technology Material (06067), a leading lithium-ion battery separator company, recently released its 2026 third-quarter report, with revenue and net profit attributable to shareholders growing 73.57% and 972.41%, respectively, a marked acceleration from the first half; revenue for the first three quarters was RMB4.492 billion, up 51.85% year-on-year, net profit attributable to shareholders was RMB354 million, up 209.28% year-on-year, net profit excluding non-recurring items was RMB317 million, up 1,900.22% year-on-year, and net margin was 7.06%. The company's return on assets is relatively low, with annualized ROA and ROE of 1.63% and 4.32%, respectively, in the first three quarters, but its cash flow is ample, with monetary funds of RMB4.257 billion as of September 2026. Revenue maintains double-digit growth, overseas market volume ramps up It is understood that the separators produced by Shenzhen Senior Technology Material mainly include wet-process separators, dry-process separators, coated separators and various functional films, with products widely used in new energy vehicles, energy storage stations, electric bicycles, power tools, aerospace, 3C digital and medical environments and other fields. The company's performance is eye-catching, with revenue maintaining double-digit growth every year, while net profit began to reverse its declining trend this year. The company's high revenue growth is thanks to the "domestic + overseas" dual-wheel drive. In the first half of this year, domestic revenue grew 39.9%, while overseas revenue grew 233.3%, with revenue shares of 68.8% and 31.2%, respectively, showing that overseas markets have become the core growth engine. The company's products are supplied in volume to first-tier overseas customers such as LG Energy Solution, Samsung SDI, Envision AESC, SK On, Murata, and the power battery subsidiary of Volkswagen Group. Data source: company financial reports Strong demand from overseas customers is thanks to Shenzhen Senior Technology Material's in-house R&D strength. In the first three quarters of 2026, its R&D expenses were RMB267 million, up 32.64% year-on-year, with an R&D expense ratio of 5.94%. The company has also mastered key equipment technologies for dry-process, wet-process and coating production, and related supporting equipment such as raw material processing equipment, extrusion casting equipment, stretching equipment, extraction equipment, recovery systems, slitting equipment, coating equipment and testing and analysis equipment used in separator production lines are all independently developed and designed. Its globally first-launched fifth-generation super wet-process line has a width of more than 8 meters and a single-line capacity of 250 million square meters, more than doubling single-line capacity compared with the fourth-generation wet-process line, setting a new industry standard for production efficiency. In addition, its products have won customer recognition, for example, repeatedly receiving LG Energy Solution's "Quality Excellence Award" from top-tier customers. In terms of profitability, Shenzhen Senior Technology Material's gross profit grew in line with revenue, with gross profit accelerating in the first three quarters of 2026 and gross margin rising 6 percentage points to 28.72%. Net profit attributable to shareholders improved significantly. On a quarterly basis, in Q1-Q3 2026, the company's net profit attributable to shareholders was RMB29 million, RMB175 million and RMB150 million, respectively. The first quarter still carried the industry chill from last year, and from the second quarter it reversed and grew substantially. The net margin attributable to shareholders in the first three quarters was 7.88%, up 4.03 percentage points year-on-year. Industry leadership solid, valuation retreated but performance still has expectations From an industry perspective, structural changes in demand bring opportunities to the industry. With the rising penetration of large-capacity energy storage cells, which place higher requirements on separator strength and consistency, the wet-process share rose from 76.9% in 2024 to 80.7% in 2025. Leading battery makers have begun large-scale procurement of 5-micron ultra-thin base films, and only a few manufacturers such as Senior, Senior Technology, Sinoma and Jinli have stable supply capability; coating has changed from "optional" to "standard," driving this year's "volume and price rise together." In addition, separators account for about 10% of battery costs, yet they are the segment with the highest technical barriers and the longest certification cycle among the four main materials: a wet-process production line typically takes more than two years from equipment ordering to stable mass production, and from sample submission to entering a leading battery maker's qualified supplier list takes another year and a half. The other side of the barrier is stickiness: once customers complete verification, they are reluctant to change suppliers, which is also the confidence behind Shenzhen Senior Technology Material covering more than 100 battery makers globally and cooperating with all of the top ten manufacturers such as Contemporary Amperex Technology, BYD Company Limited, LG Energy Solution and Samsung SDI. According to Frost & Sullivan, in 2025 the company had an 11.6% global battery separator share, ranking second; a 21.5% dry-process separator market share, ranking first globally; and a 9% wet-process separator market share, ranking fourth globally. With its scale advantage, It is worth noting that battery solid-state development has spawned new categories such as rigid skeleton films and solid electrolyte films. The company's "Gurui" series rigid skeleton films were the first in the world to enter mass production in 2025, compatible with multiple routes including semi-solid, quasi-solid and all-solid-state. In addition to its core business, the company has entered the semiconductor materials business. In February 2026, it acquired a 13.5% stake in Bangci Electronics, and in August announced it would further increase its stake to 73.48% through a transfer, building a second growth curve. As one of the few domestic companies with mass production capability for multilayer piezoelectric ceramics, Bangci is expected to accelerate the domestic substitution process. Shenzhen Senior Technology Material's strong performance has also been recognized by major investment banks. For example, a Guolian Minsheng Securities research report believes that with the recovery in power battery and energy storage demand and the improvement in separator prices and profitability, the company's core business is ushering in a repair window, and as a leading company in the global lithium battery separator industry, considering the profit improvement in the core separator business and the semiconductor materials layout, it maintains a "Recommended" rating; a Soochow research report believes that with the company's price increases implemented and product mix improved, the unit profit inflection point has appeared, and semiconductor materials empower a second growth curve, maintaining a "Buy" rating. Overall, Shenzhen Senior Technology Material's performance accelerated this year, with all three quarters performing well. On the one hand, revenue maintained a high growth trend, with "volume and price rise together" + overseas revenue volume driving performance growth; on the other hand, profitability was significantly optimized, with both gross margin and net margin improved, though return on assets is relatively low. The company's industry leadership is solid, structural opportunities in the industry bring growth space, and the acquisition of Bangci is expected to build a second growth curve. Affected by the market environment, the company's share price has retreated significantly, but performance still has expectations. After the high growth in the first three quarters, whether the fourth-quarter gross margin can move up with the structure of newly signed orders, and whether the overseas premium can be captured after the Malaysia base is put into production, still require further attention to the company's development trends.