Enjore shares’ Q2 results beat expectations, UBS maintains a constructive view

Overview

This report is UBS’s earnings review of Yunnan Energy New Material (002812.SZ). The company released its 2026 first-half results guidance, with recurring net profit attributable to the parent forecast at RMB 760 million to RMB 930 million; the midpoint implies 2026 Q2 net profit of about RMB 610 million, up 115% quarter-on-quarter, above UBS and market expectations. The report shows a 12-month rating of Buy and a target price of Rmb85.00.

Core views

UBS’s core view is that the company’s Q2 operating performance was stronger than expected, mainly reflected in separator shipments above prior guidance, a modest recovery in unit profitability, and a potential expectation of industry-wide price increases. Q2 separator shipments reached 4.1 billion square meters, up 58% year-on-year and up 17% quarter-on-quarter; UBS estimated unit net profit improved from Rmb0.13/sqm in Q1 to Rmb0.15/sqm in Q2. Although the company did not issue new guidance, industry price negotiations are near completion, and the market expects a possible 7% to 8% price increase, which would help improve earnings recovery expectations.

Analysis framework

The report combines splitting of earnings guidance, tracking of shipments and unit profits, observation of industry price negotiations, and a valuation framework. In the short term it focuses on Q2 outperformance versus expectations and investor reaction; in the long term it evaluates investment appeal through the 12-month target price, expected upside, dividend yield, and relative market returns.

Methodology notes

• Valuation methodP/BV

  Price-to-book valuation

  UBS states it values Yunnan Energy New Material using the P/BV approach, which is suitable for assessing the value of a battery materials company by combining balance sheet quality with earnings recovery expectations.

• Earnings analysisQuarterly earnings guidance decomposition

  Quarterly profit inferred from semi-annual guidance

  The report uses the midpoint of recurring net profit attributable to the parent for H1 2026 to infer Q2 net profit and compares it with UBS and market expectations.

• Short-term factor assessmentQuantitative Research Review

  Short-term assessments of industry structure, regulatory environment, stock trend, and earnings surprise risk

  The disclosed quantitative research questionnaire shows an industry structure score of 4 for the next six months, a regulatory environment score of 3, a stock fundamental trend score of 4 over the past 3–6 months, and a next EPS revision vs consensus score of 4.

Asset mapping & comparison

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

• 002812.SZ

  Covered stock; Chinese A-share chemical and lithium-ion battery separator company

  Strengths

  Q2 net profit and shipments exceeded expectations; separator shipments were above prior guidance; unit profit improved quarter-on-quarter; 12-month rating is Buy.

  Weaknesses

  Wet-process film accounted for 81% of total revenue in 2024 but only 54% of total gross profit, indicating profitability remains affected by price and cost pressures; the company’s battery materials business is highly cyclical and sensitive to price swings.

  Comparison

  Q2 performance was above UBS and market expectations; UBS diluted EPS estimates are Rmb2.41, Rmb3.74, and Rmb4.61 for 2026E, 2027E, and 2028E, respectively.

  Risks

  Commodity price and currency volatility, EV policy from governments, global climate policy changes, and downstream battery producers’ negotiations failing to meet pricing expectations.

Key data

• 2026 H1 recurring net profit attributable to parent guidanceRmb760m~930mThe midpoint of the range implies 2026 Q2 net profit of about Rmb610m.
• 2026 Q2 net profit QoQ+115% QoQBased on the inferred midpoint from the semi-annual guidance in the report.
• 2026 Q2 separator shipments4.1bn sqmUp 58% year-on-year and up 17% quarter-on-quarter, above the previous guidance range of 3.8bn~4.0bn sqm.
• 2026 Q2 estimated unit net profitRmb0.15/sqmA slight improvement from Rmb0.13/sqm in 2026 Q1.
• 12-month target priceRmb85.00The report lists the current price as Rmb59.33 on 2026-07-09.
• Expected price upside43.3%Expected dividend yield of 0.8%, expected total stock return of 44.1%.
• Market capitalizationRmb58.3b / US$8.58bAs disclosed in trading data and key-figures tables.
• 2026E EPS (UBS, diluted)Rmb2.412027E is Rmb3.74, and 2028E is Rmb4.61.

Impact & implications

If Q2 earnings outperformance and the expected price increase are both realized, the market may revise upward expectations for separator business earnings recovery, which could act as a positive catalyst for the stock. UBS expects investors to respond positively, and the target price versus current price indicates substantial expected upside.

Risks

• The EV battery materials industry faces commodity price and exchange-rate volatility, and actual movements may deviate significantly from expectations.
• Government EV regulations and global climate policy changes could materially affect the company and the industry.
• If separator price negotiations do not deliver the expected 7%-to-8% increase, unit profit recovery may fall short of expectations.
• The report notes that past performance is not a reliable indicator of future outcomes; investment merits may differ materially as assumptions change.

What to watch

• Whether the final outcome of separator price negotiations validates the 7% to 8% increase expectation.
• Whether the company issues new operational guidance or formal half-year results.
• Whether separator shipments, unit net profit, and capacity utilization remain stable after Q2.
• Downstream battery demand, industry competitive landscape, and EV policy changes.
• 2026E to 2028E EPS delivery and changes to P/BV valuation assumptions.