Yunnan Energy New Material (002812) Report Interpretation

Overview

This earnings review covers Yunnan Energy New Material’s 1H26 results and Nomura’s upgraded outlook for lithium-ion battery separators. The institution argues that rising shipment volumes, utilization and separator ASPs should drive a sustained earnings recovery through FY28F.

Core views

Yunnan Energy’s 1H26 results were broadly in line with its profit alert, according to Nomura. Revenue rose 50.5% year on year to CNY8.67bn, including CNY4.76bn in 2Q26, up 57% year on year and 22% quarter on quarter. Net income was CNY820mn in 1H26, compared with a CNY93mn loss in 1H25; 2Q26 net income reached CNY560mn, up 115% quarter on quarter. Nomura attributes the improvement mainly to higher sales volume and a sequential recovery in average selling prices. Blended gross margin increased 14.4 percentage points year on year to 29.9% in 1H26 and reached 31.4% in 2Q26, supported by better capacity utilization and ongoing cost optimization. It estimates 2Q26 separator shipments of about 4.2bn sqm, up 20% quarter on quarter, with unit net profit improving to CNY0.15 per sqm from CNY0.09 per sqm in 1Q26. The central thesis is that global battery-separator demand should grow at a 20–30% CAGR over 2026–28F, driven by electric-vehicle and energy-storage-system demand. Nomura also expects China’s separator capacity expansion to remain relatively disciplined and believes the sector could consolidate, citing Yunnan Energy’s acquisition of a Changzhou facility from SKIET as an example. The institution estimates the company was operating near full monthly capacity by the end of 1H26, with additional output from new-capacity ramp-up and rollout expected in 2H26F and FY27F. It forecasts sales volume growth of 41% year on year to more than 16bn sqm in FY26F, followed by 25% growth to 20bn sqm in FY27F and 21% growth to 24.5bn sqm in FY28F. Nomura expects separator supply-demand dynamics to improve further in 2H26F, enabling additional ASP recovery. It forecasts normalized unit net profit of CNY0.14–0.20 per sqm in FY26–28F, versus losses in FY25. The report considers concerns over new capacity to be overstated: separator-facility construction normally takes more than 18 months, and higher industry concentration means new capacity additions should largely match demand growth. On this basis, Nomura raises FY26F and FY27F normalized net-profit estimates to CNY2.11bn and CNY3.373bn, respectively. Its forecasts imply normalized EPS of CNY2.15 in FY26F, CNY3.43 in FY27F and CNY4.97 in FY28F, while revenue is projected to rise from CNY13.633bn in FY25 to CNY19.649bn, CNY25.764bn and CNY32.774bn over FY26F–FY28F. Nomura upgrades the stock to Buy from Neutral and raises the target price to CNY69. The report cites a CNY3.43 FY27F EPS basis and states that the stock traded at 16x FY27F P/E. Its valuation sections describe the CNY69 target as based on 18x 2027F EPS, equivalent to one standard deviation below the historical mean, while the main text refers to 20x rolled-forward FY27F EPS. The benchmark index is CSI 300.

Analysis framework

Nomura starts with the 1H26 earnings outcome, decomposing the recovery into shipment volume, ASP, capacity utilization and cost optimization. It then projects separator demand and capacity additions through FY28F, translates those assumptions into shipment, unit-profit and earnings forecasts, and values the shares using a forward P/E multiple on FY27F EPS.

Methodology notes

• Industry AnalysisSupply-demand framework

  Battery-separator supply-demand analysis

  The report assesses global EV and ESS-driven demand against the pace, timing and concentration of China capacity expansion to support its view on ASP and profitability recovery.

• Industry AnalysisVolume-price decomposition

  Shipment volume and ASP analysis

  Nomura explains revenue and earnings changes through separator shipment growth, sequential ASP recovery and per-square-metre unit net profit.

• Valuation methodsP/E and PEG Valuation

  Forward P/E valuation

  The target price is based on a forward multiple applied to FY27F EPS; the report’s valuation references contain 18x and 20x formulations.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Yunnan Energy New Material (002812.SZ)

  Primary covered company and beneficiary of improving battery-separator supply-demand dynamics.

  Strengths

  Near-full capacity utilization by end-1H26, expanding shipment volumes, recovering ASPs, improved gross margin and continued cost optimization.

  Weaknesses

  FY25 was loss-making at the unit-profit level.

  Comparison

  Nomura views the company’s acquisition of a Changzhou facility owned by SKIET as evidence of potential industry consolidation.

  Risks

  Slower-than-expected separator ASP increases, faster industry capacity expansion and weaker downstream EV and ESS battery demand.

Key data

• 1H26 revenueCNY8.67bnUp 50.5% year on year.
• 1H26 net incomeCNY820mnVersus a CNY93mn loss in 1H25; broadly in line with the CNY736–900mn profit-alert range.
• 1H26 blended gross margin29.9%Up 14.4 percentage points year on year.
• 2Q26 separator shipments~4.2bn sqmUp 20% quarter on quarter.
• 2Q26 unit net profitCNY0.15/sqmVersus CNY0.09/sqm in 1Q26.
• FY26F/FY27F normalized net profitCNY2.11bn/CNY3.373bnNomura’s revised earnings forecasts.
• FY26F–FY28F separator shipmentsover 16bn sqm / 20bn sqm / 24.5bn sqmForecast year-on-year growth of 41%, 25% and 21%, respectively.
• Target priceCNY69Raised alongside the upgrade to Buy from Neutral.

Impact & implications

Nomura’s view is that stronger separator demand, high utilization, gradual ASP recovery and cost optimization can move Yunnan Energy from FY25 losses in unit profitability to CNY0.14–0.20 per sqm in FY26–28F. The institution therefore expects a material earnings recovery and sees sector capacity concerns as less severe than the market may assume.

Risks

• Battery-separator ASP increases may be slower than expected.
• Separator-industry capacity may expand faster than expected.
• Downstream EV and ESS battery demand may be lower than expected.