Haiyou New Materials (688680.SH): Navigating the Photovoltaic Trough; Automotive Diversification Emerges as a Strategic Pivot
Date: September 1, 2025
Ticker: 688680.SH (STAR Market)
Current Price: CNY 47.75
Rating: Outperform (Maintained)
Target Price Implied Valuation: 2026E PE 76x | 2027E PE 18x
Executive Summary
Haiyou New Materials (hereinafter referred to as "the Company" or "Haiyou"), a leading manufacturer of photovoltaic (PV) encapsulation films, released its interim financial results for the first half of 2025 on August 29, 2025. The reporting period was characterized by continued headwinds in the core PV sector, resulting in revenue contraction and sustained net losses. However, the company demonstrated resilience through strategic deleveraging, positive operating cash flows, and significant breakthroughs in its diversification strategy, particularly within the automotive materials segment.
Key Financial Highlights (1H 2025):
* Revenue: CNY 633 million, representing a year-over-year (YoY) decline of 57.47%.
* Net Profit Attributable to Shareholders: A loss of CNY 133 million, marking a narrowing of losses compared to the previous corresponding period.
* Deducted Non-recurring Net Profit: A loss of CNY 135 million, also showing a trend of narrowing losses.
* Q2 2025 Specifics: Revenue stood at CNY 318 million (YoY -48.07%, QoQ +0.66%), with a net loss of CNY 76 million.
While the traditional PV encapsulation business faces severe margin compression due to industry-wide overcapacity and aggressive price competition, Haiyou is actively transitioning from a pure-play PV supplier to a diversified advanced materials platform. The most notable development is the successful industrialization and commercial adoption of its self-developed PDCLC (Polymer Dispersed Cholesteric Liquid Crystal) dimming film in the automotive sector. In April 2025, Haiyou became the first global supplier to have its dimming skyroof technology adopted as a standard configuration in a mass-produced vehicle model. This milestone validates the company’s R&D capabilities and opens a high-value growth avenue that is less cyclical than the solar industry.
Our investment thesis rests on the inflection point expected in 2026-2027, driven by the scaling of the automotive business and the eventual stabilization of the PV market. We project revenues of CNY 1.605 billion, CNY 2.840 billion, and CNY 3.993 billion for 2025, 2026, and 2027, respectively. Although we anticipate a net loss of CNY 197 million in 2025, we forecast a return to profitability in 2026 with a net profit of CNY 53 million, accelerating to CNY 227 million in 2027. Based on these projections, the stock trades at an implied 2026E P/E of 76x and 2027E P/E of 18x. Given the strategic value of the automotive pivot and the improving risk-adjusted returns as losses narrow, we maintain our "Outperform" rating.
Key Takeaways
1. Core PV Business: Surviving the Cycle Through Conservative Management and Innovation
The first half of 2025 remained a challenging period for the global photovoltaic industry. The sector is currently undergoing a profound structural adjustment, exacerbated by policy shifts towards market-oriented electricity pricing for PV generation and persistent oversupply in the manufacturing chain. These factors have led to volatile installation volumes and intensified competition among module and component suppliers.
Financial Impact on PV Segment:
* Price War Intensification: The competition for PV encapsulation films has reached historic levels of intensity. Consequently, Haiyou’s gross margins for its core film products have compressed to historical lows. This margin erosion is the primary driver behind the continued net losses, despite the company’s efforts to control costs.
* Revenue Contraction: The 57.47% YoY decline in H1 2025 revenue reflects both lower average selling prices (ASPs) and a cautious approach to volume expansion in a low-margin environment.
Strategic Response: Safety First:
In response to the adverse industry cycle, Haiyou has adopted a conservative operational strategy focused on balance sheet health and liquidity preservation:
* Deleveraging: The company has actively reduced its financing leverage. This is evident in the financial data, where the focus has shifted from aggressive expansion to stabilizing the capital structure.
* Receivables Management: Strict control over accounts receivable has been implemented to mitigate credit risks. This discipline has resulted in positive operating cash flow throughout the period, a critical metric that ensures the company’s operational safety and ability to fund R&D without relying heavily on external debt or equity financing during a downturn.
* Asset Quality: The reduction in asset impairment losses (projected to decrease from CNY 208 million in 2024A to CNY 45 million in 2025E) suggests that the company is cleaning up its balance sheet and managing inventory and receivable risks more effectively.
Product Innovation as a Moat:
Despite the downturn, Haiyou continues to invest in product differentiation to escape the commoditization trap:
* Zero-Migration Light-Converting Film: This innovative product addresses key durability and efficiency concerns in PV modules, offering higher value-added solutions compared to standard EVA/POE films.
* BIPV (Building-Integrated Photovoltaics) Solutions: The launch of new PVE (Photovoltaic Encapsulation) films specifically designed for BIPV applications and colored films caters to the aesthetic and functional requirements of urban solar integration. These products are gaining traction in the market, gradually contributing to the company’s technological leadership narrative.
Globalization and Localized Production:
To mitigate geopolitical risks and tap into protected markets, Haiyou is accelerating its overseas layout:
* Technology Export Model: Rather than just exporting products, Haiyou is providing comprehensive technical solutions—including equipment, formulas, and process know-to—to local partners.
* Key Markets: The company has achieved localized industrial production in the United States and Turkey. Furthermore, it is actively promoting cooperation and development of film businesses in India. This "local-for-local" strategy helps bypass trade barriers and secures market share in high-potential regions.
2. Automotive Business: The New Growth Engine Takes Shape
The most compelling aspect of Haiyou’s 2025 interim report is the tangible progress in its automotive materials division. This segment represents a strategic diversification away from the highly cyclical solar industry into the consumer-facing automotive supply chain, which offers higher margins and different demand drivers.
Breakthrough with PDCLC Dimming Film:
* Commercial Milestone: In April 2025, Haiyou’s self-developed PDCLC instant light-adjusting liquid crystal dimming film was officially installed as a standard feature in a mass-produced vehicle’s panoramic skyroof. This marks the first global instance of such technology being standardized in a vehicle, signifying a major validation of the product’s reliability, cost-effectiveness, and aesthetic appeal.
* Technological Edge: PDCLC technology allows for dynamic control of light transmission, enhancing passenger comfort and reducing the need for heavy mechanical sunshades, thereby contributing to vehicle lightweighting.
* Industrialization Success: The transition from R&D to mass production is complete. The company has established a robust manufacturing process, leading to improved yield rates. As production scales, unit costs are expected to decline further, enhancing competitiveness.
Market Expansion and Pipeline:
* Customer Acquisition: The marketing team has intensified efforts to deepen relationships with OEMs (Original Equipment Manufacturers). The successful debut in one model serves as a powerful reference case, helping to secure nominations for new vehicle models.
* Penetration Rate: With the proven success of the skyroof application, Haiyou aims to expand the penetration of dimming films into side windows and other glass areas. The scalability of the technology suggests a rapid uptake rate as consumer preference for smart glass features grows.
* Capacity Expansion: Anticipating demand, Haiyou has initiated a capacity expansion project for 2 million square meters of PDCLC dimming film annually. This proactive capacity build-out positions the company to capture market share quickly as the automotive smart glass trend accelerates.
Broader Automotive Portfolio:
Beyond dimming films, Haiyou is leveraging its polymer expertise to introduce other materials to the automotive sector:
* AXPO Lightweight Eco-Leather: This product aligns with the industry’s trend towards sustainable and lightweight interior materials. It is currently in the small-batch delivery or testing phase with various clients.
* PVE Glass Encapsulation Film: Adapted for automotive glass applications, this product is also undergoing testing and small-scale deliveries.
* Strategic Implication: These initiatives indicate that Haiyou is not merely a single-product supplier but is building a comprehensive portfolio of advanced polymer materials for the automotive industry. This diversification reduces dependency on any single product line and creates multiple revenue streams within the high-growth EV and smart car sectors.
3. Financial Analysis and Forecast
Historical Performance Review (2024A - 1H 2025):
The company’s financial trajectory reflects the severity of the PV downturn.
* 2024 Full Year: Revenue fell 46.8% to CNY 2.59 billion, with a substantial net loss of CNY 558 million. The negative gross margin (-0.44%) indicated that selling prices had fallen below production costs for certain periods or product lines, necessitating inventory write-downs and strategic adjustments.
* 1H 2025: The trend of revenue decline continued, but the rate of loss accumulation has slowed. The narrowing of the net loss suggests that cost-cutting measures and the initial contribution from higher-margin niche products (like the early stages of automotive sales) are beginning to offset the PV drag.
Forward-Looking Estimates (2025E - 2027E):
| Metric (CNY Million) | 2024A | 2025E | 2026E | 2027E |
|---|---|---|---|---|
| Total Revenue | 2,591 | 1,605 | 2,840 | 3,993 |
| YoY Growth % | -46.8% | -38.1% | 76.9% | 40.6% |
| Gross Profit | -11 | 15 | 270 | 475 |
| Gross Margin % | -0.44% | 0.96% | 9.52% | 11.91% |
| EBIT | -321 | -150 | 117 | 326 |
| Net Profit (Attrib.) | -558 | -197 | 53 | 227 |
| YoY Growth % | -144.3% | 64.8% | 126.8% | 330.9% |
| EPS (CNY) | -6.65 | -2.34 | 0.63 | 2.70 |
Source: Minsheng Securities Research Institute Forecasts
Analysis of Projections:
1. 2025: The Bottoming-Out Year:
* We estimate revenue to decline further to CNY 1.605 billion. This conservative estimate accounts for the continued weakness in PV pricing and the time required for the automotive business to scale significantly.
* However, the net loss is projected to narrow significantly to CNY 197 million (from CNY 558 million in 2024). This improvement is driven by:
* Stabilization of PV margins at low but sustainable levels.
* Reduced asset impairment charges.
* Initial revenue contributions from the automotive segment, which carries higher margins.
* Strict expense control (SG&A and R&D optimization).
-
2026: The Inflection Point:
- Revenue Rebound: We forecast a sharp 76.9% revenue growth to CNY 2.84 billion. This surge is primarily attributed to the ramp-up of the 2 million sqm PDCLC capacity and wider adoption of Haiyou’s automotive materials across multiple OEM platforms.
- Return to Profitability: The company is expected to swing to a net profit of CNY 53 million. Gross margins are projected to recover to 9.52%, reflecting a healthier product mix with a higher proportion of high-value automotive and specialized PV films.
- Operating Leverage: As revenue scales, fixed costs are spread over a larger base, improving EBIT margins significantly (EBIT turning positive at CNY 117 million).
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2027: Accelerated Growth:
- Revenue is expected to grow another 40.6% to CNY 3.99 billion.
- Net profit is projected to reach CNY 227 million, with a net margin of 5.68%.
- By this stage, the automotive business should be a mature, significant contributor to earnings, reducing the company’s overall beta to the solar cycle. The ROE is expected to recover to 13.43%, indicating efficient capital utilization.
Balance Sheet and Cash Flow Health:
* Liquidity: The company maintains a healthy current ratio (projected >2.0x through 2027), ensuring short-term solvency.
* Cash Flow: Operating cash flow remains positive in 2024 and 2025 (CNY 360m and CNY 350m respectively), demonstrating strong working capital management. While capex increases in 2025 (CNY 156m) for the automotive expansion, the company’s ability to generate internal cash reduces reliance on external financing.
* Debt: The debt-to-asset ratio is managed around 54-55%, which is reasonable for a manufacturing firm undergoing expansion. The reduction in short-term borrowing needs due to positive operating cash flow is a positive credit signal.
Risks / Headwinds
Investors should carefully consider the following risks, which could materially impact the Company’s financial performance and stock price:
1. Downstream Demand Volatility
- Photovoltaic Sector: The global PV market is subject to policy changes, subsidy reductions, and grid connectivity constraints. If installation growth in key markets (China, Europe, US) slows down more than expected, the recovery in PV film demand will be delayed. The shift to market-oriented electricity pricing in China may temporarily dampen the ROI for new PV projects, affecting upstream component orders.
- Automotive Sector: The adoption of smart glass and dimming skyroofs is dependent on consumer preferences and OEM design choices. If the trend towards panoramic roofs cools, or if OEMs prioritize cost reduction over premium features in a competitive EV market, the demand for PDCLC films could fall short of forecasts.
2. Intensified Market Competition
- PV Films: The barrier to entry for standard encapsulation films is relatively low. Competitors may engage in prolonged price wars to maintain market share, potentially keeping gross margins depressed for longer than anticipated. Even with innovative products, Haiyou faces competition from other large-scale film manufacturers who are also upgrading their product portfolios.
- Automotive Materials: The automotive supply chain is highly competitive. Established players in the auto glass and interior materials space may respond to Haiyou’s entry with aggressive pricing or bundled offerings. Additionally, new entrants attracted by the high margins of smart glass could erode Haiyou’s first-mover advantage.
3. Technological and Execution Risks
- Yield Rate Challenges: The production of PDCLC films involves complex chemical and physical processes. Achieving and maintaining high yield rates at scale is critical for profitability. Any technical glitches or quality consistency issues could lead to costly rework, customer claims, and damage to reputation.
- R&D Uncertainty: The development of new products like AXPO leather and PVE automotive films requires significant R&D investment. There is no guarantee that these products will pass stringent automotive qualification tests or achieve commercial success.
4. Raw Material Price Fluctuations
- The cost structure of Haiyou’s products is heavily influenced by the prices of upstream chemical raw materials (e.g., EVA resin, POE resin, liquid crystals, polymers). Volatility in crude oil prices or supply chain disruptions can lead to sudden cost increases. If the company cannot pass these costs onto customers due to competitive pressure, margins will suffer.
5. Geopolitical and Trade Policy Risks
- Haiyou’s international expansion strategy, particularly in the US and India, exposes it to geopolitical tensions. Changes in trade tariffs, local content requirements, or restrictions on foreign technology transfers could hinder the company’s overseas growth plans. For instance, stricter enforcement of trade barriers in the US could impact the profitability of its localized production partnerships.
Rating / Sector Outlook
Sector Context: Photovoltaic Materials
The PV materials sector is currently in the late stage of a cyclical downturn. While long-term demand for renewable energy remains robust due to global decarbonization goals, the short-term supply-demand imbalance has created a "survival of the fittest" environment.
* Consolidation Trend: We expect smaller, less efficient players to exit the market, leading to improved concentration ratios for leaders like Haiyou in the medium term.
* Technology Shift: The industry is moving towards higher-efficiency modules (N-type, HJT, BC), which require higher-performance encapsulation materials. Companies that can innovate (like Haiyou with its zero-migration and BIPV films) will capture disproportionate value.
Sector Context: Automotive Smart Materials
The automotive materials sector, specifically smart glass and lightweight interiors, is in a high-growth phase.
* Premiumization: As EVs become more commoditized, OEMs are differentiating through interior experience and smart features. Dimming skyroofs are transitioning from a luxury niche to a mainstream premium feature.
* Supply Chain Localization: Chinese suppliers are increasingly penetrating the global automotive supply chain due to their cost advantages and rapid iteration capabilities. Haiyou is well-positioned to benefit from this trend.
Investment Rating: Outperform (Maintained)
We maintain our Outperform rating on Haiyou New Materials.
* Valuation Logic: The current share price of CNY 47.75 reflects the near-term pain in the PV business but arguably underprices the optionality and growth potential of the automotive segment.
* PE Multiple Justification: While the 2026E P/E of 76x appears high, it is typical for companies transitioning from loss-making to profitability with high growth expectations. The more relevant metric is the 2027E P/E of 18x, which is reasonable for a diversified advanced materials company with a double-digit earnings growth trajectory.
* Risk-Reward Profile: The downside risk is limited by the company’s strong cash position and the fact that the PV business is already priced for distress. The upside potential is significant if the automotive business scales faster than expected or if the PV cycle turns earlier than anticipated.
Investment View
1. Strategic Pivot De-risks the Business Model
Haiyou New Materials is successfully executing a difficult strategic pivot. By leveraging its core competencies in polymer chemistry and film processing, the company is reducing its reliance on the hyper-cyclical PV industry. The automotive business provides a counter-cyclical or non-correlated revenue stream. This diversification enhances the company’s valuation multiple, as investors typically assign higher multiples to automotive tech suppliers than to commodity PV component makers. The successful commercialization of the PDCLC film is not just a product launch; it is proof of concept for Haiyou’s ability to innovate and penetrate high-barrier industries.
2. "Survival Mode" Strengthens Long-Term Competitiveness
The company’s conservative financial management during the PV downturn is a strength, not a weakness. By prioritizing cash flow and deleveraging, Haiyou is ensuring it has the financial stamina to outlast competitors who may be over-leveraged. This "war chest" allows the company to continue investing in R&D and capacity expansion for the automotive business even while the core business is unprofitable. When the PV cycle eventually turns, Haiyou will be in a stronger position to capture market share, having maintained its technological edge and customer relationships.
3. Automotive Scaling is the Key Catalyst
Investors should closely monitor the following catalysts in the coming 12-18 months:
* New Model Nominations: Announcements of additional OEM contracts for the PDCLC film. Each new model win validates the technology and adds visibility to future revenue.
* Capacity Utilization: Progress on the 2 million sqm expansion project. High utilization rates will drive economies of scale and margin expansion.
* Margin Trajectory: Quarterly improvements in gross margin, driven by the changing product mix. A steady increase in gross margin towards the 10-12% range would confirm the success of the high-value product strategy.
4. Valuation and Entry Point
At the current price of CNY 47.75, the market is essentially valuing the PV business at a distressed level and giving limited credit to the automotive business. As the automotive revenue becomes material in 2026 and 2027, the market will likely re-rate the stock based on consolidated earnings power.
* Long-Term Investors: For investors with a 2-3 year horizon, the current weakness offers an attractive entry point to buy into a company with a proven R&D engine and a clear path to profitability in a new, high-growth sector.
* Short-Term Traders: Expect volatility as the market digests the ongoing PV losses. However, any positive news regarding automotive orders or PV price stabilization could trigger significant upward momentum.
Conclusion
Haiyou New Materials is at a critical juncture. The pain of the PV cycle is real and reflected in the 2025 financials, but the seeds of future growth have been sown in the automotive sector. The company’s ability to innovate, manage its balance sheet prudently, and execute its diversification strategy sets it apart from many peers. We believe the market is underestimating the speed and magnitude of the automotive business’s contribution to earnings. Therefore, we recommend accumulating shares on weakness, with a target horizon extending to 2027 when the full benefits of the strategic pivot are realized.
Appendix: Detailed Financial Analysis & Data Tables
A. Income Statement Analysis (Deep Dive)
| Item (CNY Million) | 2024A | 2025E | 2026E | 2027E | Commentary |
|---|---|---|---|---|---|
| Total Revenue | 2,591 | 1,605 | 2,840 | 3,993 | Sharp decline in '25 due to PV price/volume drop; strong rebound in '26/'27 driven by Auto. |
| Cost of Goods Sold | 2,603 | 1,589 | 2,569 | 3,518 | COGS drops in '25 in line with revenue; margin improvement in '26/'27 due to mix shift. |
| Gross Profit | -11 | 15 | 270 | 475 | Return to positive gross profit in '25E; significant expansion thereafter. |
| Sales Expenses | 12 | 13 | 8 | 10 | Controlled spending; efficiency gains in marketing. |
| Admin Expenses | 72 | 80 | 57 | 40 | Streamlining operations; cost discipline. |
| R&D Expenses | 118 | 80 | 99 | 112 | Sustained R&D investment crucial for Auto/PV innovation. |
| EBIT | -321 | -150 | 117 | 326 | Operational turnaround begins in 2026. |
| Financial Expenses | 66 | 39 | 38 | 40 | Reduction in interest expense due to deleveraging. |
| Asset Impairment | -208 | -45 | -15 | -15 | Significant reduction in impairments indicates cleaner balance sheet. |
| Net Profit | -558 | -197 | 53 | 227 | Narrowing losses in '25, profitability in '26. |
B. Balance Sheet Strength
| Item (CNY Million) | 2024A | 2025E | 2026E | 2027E | Commentary |
|---|---|---|---|---|---|
| Total Assets | 3,225 | 3,067 | 3,324 | 3,754 | Asset base stabilizes then grows with Auto capex. |
| Cash & Equivalents | 352 | 533 | 429 | 352 | Strong cash position maintained despite losses. |
| Accounts Receivable | 1,234 | 989 | 1,188 | 1,558 | AR management improves in '25; grows with revenue later. |
| Inventory | 193 | 160 | 290 | 400 | Inventory levels optimized; slight build-up for Auto production. |
| Total Liabilities | 1,618 | 1,657 | 1,861 | 2,064 | Liabilities grow moderately to fund expansion. |
| Short-term Debt | 321 | 321 | 321 | 321 | Stable short-term debt profile. |
| Shareholders' Equity | 1,607 | 1,410 | 1,463 | 1,690 | Equity dips in '25 due to losses, recovers with profitability. |
C. Cash Flow Dynamics
| Item (CNY Million) | 2024A | 2025E | 2026E | 2027E | Commentary |
|---|---|---|---|---|---|
| Operating CF | 360 | 350 | 6 | 30 | Strong OCF in '24/'25 due to working capital management. Dip in '26 due to growth investments. |
| Capital Expenditure | -74 | -156 | -96 | -91 | Peak capex in '25 for Auto expansion; normalizes thereafter. |
| Investing CF | 50 | -158 | -98 | -93 | Net outflow for capacity building. |
| Financing CF | -500 | -12 | -13 | -14 | Significant deleveraging in '24; minimal financing needs later. |
| Net Cash Flow | -92 | 181 | -104 | -77 | Positive net cash flow in '25 supports liquidity. |
D. Key Financial Ratios & Valuation Metrics
| Metric | 2024A | 2025E | 2026E | 2027E | Interpretation |
|---|---|---|---|---|---|
| Gross Margin % | -0.44% | 0.96% | 9.52% | 11.91% | Critical recovery trajectory. |
| Net Margin % | -21.55% | -12.26% | 1.85% | 5.68% | Path to sustainable profitability. |
| ROE % | -34.75% | -13.96% | 3.60% | 13.43% | Return on equity turns positive in '26. |
| ROA % | -17.32% | -6.42% | 1.58% | 6.05% | Asset efficiency improves. |
| Debt-to-Asset % | 50.16% | 54.03% | 55.99% | 54.98% | Leverage remains manageable. |
| Current Ratio | 2.36 | 2.14 | 2.05 | 2.14 | Strong liquidity position. |
| P/E (x) | N/A | N/A | 76 | 18 | High '26 P/E reflects low base; '27 P/E is attractive. |
| P/B (x) | 2.5 | 2.8 | 2.7 | 2.4 | Valuation supported by asset base and growth options. |
| EV/EBITDA (x) | N/A | N/A | 20.51 | 10.97 | Reasonable enterprise value multiple for growth phase. |
Analyst Notes & Methodology
Forecast Assumptions:
1. PV Market: We assume the PV encapsulation film market remains highly competitive in 2025, with ASPs stabilizing at low levels. Volume growth is assumed to be modest, aligned with global installation trends. Margins are assumed to remain near break-even until 2026.
2. Automotive Market: We assume the PDCLC dimming film achieves a penetration rate of 5-10% in the premium EV segment by 2026, growing to 15-20% by 2027. The 2 million sqm capacity is assumed to be fully utilized by 2027. Pricing for automotive films is assumed to remain stable with slight downward pressure due to scale, offset by cost reductions.
3. Expenses: R&D expenses are assumed to remain elevated relative to revenue in the short term to support new product development, then normalize as a percentage of sales as revenue scales. SG&A expenses are assumed to grow slower than revenue, indicating operating leverage.
4. Taxation: Tax benefits from loss carryforwards are considered in the 2026-2027 projections, leading to a lower effective tax rate initially.
Valuation Methodology:
We primarily use a Price-to-Earnings (P/E) valuation method for the target period of 2026-2027, as the company is expected to return to profitability. Given the high growth nature of the automotive segment, a PEG (Price/Earnings-to-Growth) analysis also supports the current valuation. The 2027E P/E of 18x is in line with or below the average for diversified advanced materials companies with similar growth profiles, suggesting the stock is undervalued relative to its long-term earnings potential. We also cross-checked with EV/EBITDA, which shows a reasonable 10.97x multiple for 2027, further supporting the Outperform rating.
Disclaimer on Forward-Looking Statements:
This report contains forward-looking statements based on current expectations and assumptions. These statements are subject to risks and uncertainties that could cause actual results to differ materially. Investors should not place undue reliance on these forward-looking statements.
Final Investment Recommendation
Action: BUY / ACCUMULATE
Time Horizon: 12-24 Months
Key Trigger: Confirmation of additional automotive OEM contracts and quarterly evidence of gross margin expansion in 2H 2025.
Haiyou New Materials represents a classic "turnaround and transformation" play. The market has punished the stock for the sins of the PV cycle, but it has yet to fully price in the value creation potential of the automotive pivot. For institutional investors seeking exposure to the smart automotive supply chain with a margin of safety provided by a depressed PV valuation, Haiyou offers a compelling risk-reward profile. The company’s disciplined financial management ensures survival, while its technological innovation drives future growth. We recommend initiating or adding to positions at current levels, with a view to holding through the 2026 profitability inflection point.