Research Express | Zhejiang Weixing New Materials Receives Visits from Citi and 7 Other Institutions for Research 2026 Revenue Target of 5.7 Billion Yuan, Growth of 6%

On the afternoon of April 3rd, Zhejiang Weixing New Building Materials Co., Ltd. (hereinafter referred to as “Weixing New Materials”) held a teleconference to receive research from seven institutions including Citi, Harding Loevner Management, Temasek Holdings, and others. Company directors, Secretary of the Board and Deputy General Manager Tan Mei and other senior executives engaged in in-depth discussions with the institutions on industry development, operational performance in 2025, strategic goals for 2026, and market concerns.

Basic Information on Investor Activities

Industry and Company Fundamentals: Structural Optimization Period, Performance Under Pressure in 2025 but Showing Resilience

Tan Mei introduced during the research that the plastic pipe industry currently faces increased external uncertainties, economic slowdown, urbanization transformation, and other pressures. The overall volume is trending downward, but the scale remains considerable. The industry is shifting from scale expansion to a stage of high-quality development focused on stock optimization and efficiency improvement.

In 2025, Weixing New Materials adhered to the positioning of “high-end brand,” focusing on core pipe business and cultivating new productive forces. Although affected by declining market demand and intensified competition, operational performance did not meet the initial goals, but the overall development trend remains positive: healthy operating cash flow, stable gross profit margin of 41.14%, asset-liability ratio of 23.06%, current ratio of 2.85, and quick ratio of 2.23. Financial data shows that the company’s operating revenue in 2025 decreased by 22.24% year-on-year, with total profit and net profit attributable to the parent mainly impacted by revenue decline, gross margin compression, rigid management expenses, and reduced interest and financial income.

On the operational front, in 2025, the company focused on strengthening retail business, transforming engineering operations, international expansion, R&D innovation, brand renewal, and digital intelligence upgrades, laying a solid foundation for long-term development.

2026 Strategy: Revenue Target of 5.7 Billion Yuan, Leading Overseas Business Growth

For the development plan in 2026, Weixing New Materials clearly follows the guideline of “sustainable development,” focusing on the pipe main business, promoting waterproofing and other concentric circle businesses, and advancing “Weixing Water Ecology.” The company aims to drive retail transformation through innovation, enhance engineering quality, accelerate international expansion, and deepen digital manufacturing to cultivate new productive forces.

Regarding performance goals, the company aims for operating revenue of approximately 5.7 billion yuan in 2026, with costs and expenses controlled around 4.72 billion yuan, corresponding to an approximate growth rate of 6%. Notably, the company expects overseas revenue growth to surpass domestic growth.

Interactive Exchange: Core Issues on Demand, Raw Materials, Dividends, etc., Responded

During the interactive session, institutions focused on market demand, performance targets, raw material costs, dividend policies, and other issues. The company responded as follows:

• Q1 Demand: Market demand in Q1 2026 remains generally weak.
• Revenue Growth Structure: Of the 5.7 billion yuan revenue target, overseas business is expected to grow faster than domestic, mainly due to the international expansion and the technological and marketing synergy in ball valves after the Songtian Cheng acquisition.
• Raw Material Price Response: Currently, the prices of main raw materials are rising. The company adopts a “cost-plus” approach, utilizing internal efficiency improvements and partial product price increases to absorb cost pressures.
• Dividend Policy: Since listing, the company has implemented cash dividends annually, with an average dividend payout ratio of 70%-80%. Future dividend plans will continue to follow the company’s articles of association and shareholder return plans.
• Capital Expenditure: In recent years, capital expenditure has stabilized around 300 million yuan annually, mainly for expanding production bases and upgrading automation.
• Business Structure: In 2025, retail and engineering business revenues accounted for approximately 69% to 31%.
• Inventory Write-downs: In 2025, due to the launch of new products, inventory write-down provisions were made based on prudence to strengthen risk control.
• Q4 Revenue Decline: Mainly due to high base in engineering business in 2024, project delays in 2025, strengthened risk management, and decreased retail consumption demand.

Weixing New Materials stated it will continue to drive transformation and upgrading through innovation and efficiency to meet industry challenges and achieve long-term steady development.

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