Advanced Technology & Materials Co., Ltd.: Multiple new projects to be put into operation gradually this year, and introduction of revenue and order situation in the field of controlled nuclear fusion

According to the record of a survey with specific targets accepted by Advanced Technology & Materials Co., Ltd. (AT&M) on July 2, as announced by the company:

1. Could you briefly introduce the company's industrial composition and the basic situation for 2025?

AT&M introduced: AT&M is built on a series of core material preparation technologies, including "advanced powder metallurgy technology," "rapid solidification process technology," "additive manufacturing process technology," "CIP/HIP isostatic pressing forming technology," and "advanced metallurgical process technology," as its "root technologies." It has established a complete industrial platform system that spans from materials to products, devices, and system integration development. In the field of metal materials and key components, it provides global high-end users with integrated solutions throughout the entire life cycle, forming four major business segments: high-end powder metallurgy materials and products, advanced functional materials and devices, high-speed tool steel, and energy-saving, environmental protection, and equipment materials. Among them, the high-end powder metallurgy materials and products segment mainly includes businesses such as refractory tungsten and molybdenum deep processing products, special atomized powder production, superhard materials and tools, and metal injection molding, primarily serving application fields such as aerospace, nuclear power, high-end medical devices, third-generation semiconductors and pan-semiconductors, NEVs, and consumer electronics. The advanced functional materials and devices segment mainly includes rare earth permanent magnet materials and their products, amorphous and nanocrystalline materials and devices, and precision alloys and strips, which are widely used in AI, intelligent manufacturing, electronic information, NEVs, PV, home appliances, and rail transit industries. The high-speed tool steel segment mainly provides high-quality high-speed steel materials for the manufacturing of cutting tools, measuring tools, molds, and wear-resistant tools, including high-performance traditional high-speed steel, powder high-speed steel, and spray-formed high-speed steel.

In Q1 2025, the company's operating revenue was 1.782 billion yuan, down 5.76% YoY; net profit attributable to shareholders was 82.55 million yuan, up 4.95% YoY; and net profit attributable to shareholders excluding extraordinary items was 77.52 million yuan, up 3.89% YoY. The company's total selling, administrative, and financial expenses amounted to 110 million yuan, accounting for 6.17% of operating revenue, a decrease of 13.3% YoY. Monetary funds stood at 2.552 billion yuan, up 10.90% compared to the same period last year; accounts receivable were 1.328 billion yuan, down 0.43% compared to the same period last year. Despite a slight decline in operating revenue, the company continued to strengthen cost control, with the parent company's operating revenue and profits growing steadily, and net profit attributable to shareholders and net profit attributable to shareholders excluding extraordinary items both increasing YoY. For the company's operating situation in H1 2025, please refer to the "2025 Semi-Annual Report" to be disclosed by the company on August 30, 2025.

In 2025, the company will continue to build a cluster of enterprises with unique advantages or irreplaceable positions in their respective niche markets. The company will also actively plan for its "second growth curve" by cultivating strategic emerging industries such as specialty powder and supporting materials for controlled nuclear fusion, aiming to create long-term growth engines and inject new momentum into high-quality development.

2. What does the company do in the field of controlled nuclear fusion, and what are its advantages?

Introduction by Antai Technology: Antai Zhongke is the first company in China with the capability to produce fusion tungsten-copper divertors. It possesses a complete set of technologies from raw materials to component delivery, with the research, development, and production processes forming a closed loop within the company. It has achieved the R&D and production of a full range of tungsten-related products, including tungsten-copper divertors, tungsten-copper limiters, first wall components of the blanket, and tungsten-boron neutron shielding materials. Currently, products such as the all-tungsten composite divertor components and first wall assemblies developed and produced by the company have been successfully applied in China's "artificial sun" EAST large scientific engineering device, CRAFT (Kua Fu), China Fusion Engineering Test Reactor (CFETR), and the International Thermonuclear Experimental Reactor (ITER) project.

Divertors and first wall components of the blanket are core components of fusion reactors, directly facing the extreme heat of plasma at temperatures exceeding 100 million degrees Celsius. The company has accumulated profound experience in key component preparation technologies such as high-performance tungsten plate preparation, diffusion welding, vacuum brazing, and non-destructive testing. With its core advantages of excellent high-temperature resistance, high thermal conductivity, and long service life, the company's products have won widespread market acclaim and customer trust. Meanwhile, through continuous technological breakthroughs and standardization efforts in the industry, the company has not only become a benchmark product in the field of nuclear fusion key components but has also gained high recognition from industry associations and experts. Currently, Antai Zhongke holds 5 authorized patents and has 4 patents under review.

3. What is the company's revenue and order situation in the field of controlled nuclear fusion?

Introduction by Antai Technology: The company's revenue from controlled nuclear fusion varies significantly each year, depending on the construction cycle of nuclear reactors and the replacement of components. The company has been participating in the ITER project since 2008 and has continuously provided over 5,000 tungsten-copper parts of various specifications to domestic and overseas customers over the years. In 2014, the company provided all the tungsten-copper divertors for the Experimental Advanced Superconducting Tokamak (EAST). In 2018, it successfully delivered the prototype of the HL-2MCFC divertor and EAST tungsten string-type limiters for China's fusion device. In 2020, it provided a full set of tungsten-copper divertors for the French fusion device WEST, expanding China's influence in the international nuclear fusion field. In 2021, it provided a full set of through-tube tungsten-copper divertors for EAST, making significant contributions to EAST's achievement of world records of 120 million degrees Celsius for 101 seconds and 160 million degrees Celsius for 20 seconds. In 2024, it successfully won the bid for the CRAFT (Kua Fu) divertor project, which has high requirements and great difficulty and is currently the largest tungsten-copper flat component in China. In 2022, CFETR cladding components were provided for China's fusion engineering reactor. From 2022-2024, more complex tungsten string limiters were supplied in multiple batches to the Hefei Institutes of Physical Science, Chinese Academy of Sciences. In 2025, the company once again won the EAST upper divertor renovation contract.

4, What are the advantages of the company in the field of nuclear fusion? What is the R&D investment and future planning in the field of controllable nuclear fusion?

Introduction of Advanced Technology & Materials: As the first company internationally to mass-produce tungsten-copper divertors and first wall claddings, Advanced Technology & Materials relies on 70 years of R&D strength in tungsten and molybdenum deep processing from China Iron & Steel Research Institute. Since 2008, it has been involved in the ITER project. After years of development and continuous innovation, the company's product matrix of tungsten-copper divertors and claddings continues to improve, achieving a diversified expansion from basic models to customized products under the drive of technological innovation.

Advanced Technology & Materials possesses unique technological advantages, industry status, and stable production capabilities, becoming an important midstream equipment supplier in the controllable nuclear fusion industry. The company will continue to increase its research in the controllable nuclear fusion industry, continuously optimize core technologies of fusion products, accelerate the construction of R&D teams, further expand capacity, and enhance the stability of the production system, improving competitive advantages in the industry. It will fully cooperate with customers in product manufacturing and services, preparing for the commercial application and promotion of the industry, maintaining its advantageous position in industrial support in the rapidly developing wave of future commercialization of controllable nuclear fusion.

5, How does the company view the future market situation of amorphous motors?

Introduction of Advanced Technology & Materials: Amorphous motors indeed represent another major application direction for amorphous materials, with a promising outlook and clear growth prospects for the industry. Currently, the amorphous materials used in amorphous motors follow the standards for amorphous transformer strip materials. The amorphous motor industry has yet to establish overall industry standards. The industry not only involves the strip end but also includes stator and motor design and manufacturing. Issues such as compatibility, operational reliability under high and low temperatures, and other challenges need to be overcome, requiring the entire industry chain to work together to promote the development of amorphous motors. This includes early customer engagement for cooperative R&D, lean production at the manufacturing end, cost reduction, and efficiency improvement, among other comprehensive preparations. The company is actively collaborating with other enterprises, R&D institutions, and material suppliers in the amorphous motor industry to develop industry standards and jointly promote the development of the amorphous motor industry.

6, Which new projects can bring benefits to the company by 2025?

Introduction of Advanced Technology & Materials: Since the 14th Five-Year Plan, Advanced Technology & Materials has continuously invested in industrial projects based on market needs. In 2025, the company's investment projects related to performance can be divided into two parts. One is the projects that have been completed in the company's history and will gradually reach full production in 2025. The other is the new projects that have been approved for construction or are under construction in 2025 after decision-making at various authorized levels.

There are four projects that will reach full production in 2025. The first is the 1,000-mt technological transformation project for rare earth permanent magnets at Antai Aike. Through comprehensive technological transformation of 1,000 mt, Antai Aike has formed a production capacity of 3,000 mt in Zibo, Shandong, and is currently in the full production operation period. The second is the 5,000-mt high-end rare earth permanent magnet products project newly built by Antai Beifang in Baotou, which was completed at the end of 2024 and entered the operation period this year. The third is the deep processing project of high-performance tungsten and molybdenum materials at Weihai Polycrystalline of the company. This project was completed and accepted in 2024 and will reach full production in 2025. The fourth is the construction project of a 1,000-mt powder high-speed steel production line at Heye Technology, which has entered its first trial production year in 2024, performed well, and achieved a contract value exceeding 100 million yuan and sales revenue close to 100 million yuan.

There are two new projects approved for construction or under construction in 2025 after decision-making at various authorized levels. Both projects are crucial for Antai Technology to bridge the past and the future, laying the foundation for the industry in the 15th Five-Year Plan period based on the company's capacity layout in the 14th Five-Year Plan period. The first is the 2,000-mt high-performance special powder project. This project is a quick and efficient decision made by the company in response to market demand, shortening the project decision-making time. Construction is underway this year, and upon completion, the production capacity of Antai Special Powder will increase from over 5,000 mt to over 7,000 mt. The second is the 10,000-mt amorphous ribbon project at Antai Amorphous. To meet the application demand in the high-end energy-saving transformer market, upon completion, the production capacity of amorphous materials will increase from the current 40,000 mt to 50,000 mt. According to the company's feasibility study, these projects will be gradually completed and reach full production this year, contributing to the company's future performance.

Antai Technology stated on the interactive platform on June 18 that the company actively takes measures to conduct export declarations in accordance with relevant regulations, and some orders have already obtained export licenses. The selling price of the company's rare earth permanent magnets fluctuates with the price of raw materials and is adjusted according to market laws.

Antai Technology stated on the investor interactive platform on April 15 that the company's export products mainly include deep-processed tungsten and molybdenum products, diamond saw blades, high-speed tool and mold steels, high-end rare earth permanent magnet products, and nanocrystalline material products, with market applications mainly concentrated in high-end medical radiotherapy equipment, industrial products, and power transmission and distribution, among other fields.

Antai Technology previously announced its 2024 annual report, showing that in 2024, the company achieved operating revenue of 7.57 billion yuan, a year-on-year decrease of 7.5%; and net profit attributable to shareholders of the listed company was 372 million yuan, a year-on-year increase of 49.26%.

Antai Technology outlined its 2025 operational plan in the 2024 annual report:

The year 2025 marks a pivotal transition between the conclusion of the 14th Five-Year Plan and the formulation of the 15th Five-Year Plan. The company will adhere to strategic guidance, strengthen innovation-driven approaches, conduct research with a problem-solving orientation, deploy tasks with goal-oriented focus, and ensure implementation with results-oriented rigor. It aims to fully accomplish the strategic objectives and key tasks of the 14th Five-Year Plan, driving sustainable high-quality development. Key work plans include:

1. Enhancing Value Creation and Accumulating Momentum for High-Quality Development

The company will uphold its "market-first" philosophy, concentrating on sustainable high-quality development by deepening quality and efficiency improvements to achieve both qualitative enhancements and reasonable quantitative growth. It will intensify market expansion and service upgrades, refine lean management and risk prevention, and strengthen business and management synergies to elevate asset quality and operational standards. Antai Technology will continue building an enterprise cluster with unique advantages or irreplaceable positions in respective niche sectors. Antai Tianlong will consolidate its leadership in high-end medical equipment, expand into emerging markets such as semiconductors and aerospace, and advance the industrialisation of thermal sink materials and flat panel display targets to unlock core industrial value. Antai Magnetic Material will deepen its presence in the NEV and consumer electronics markets, focus on emerging fields like humanoid robots and the low-altitude economy, and continuously improve smart manufacturing capabilities. Antai Amorphous will concentrate on 3D wound core transformers and the international power distribution market, accelerating the extension of nanocrystalline products into high-value sectors such as PV+ESS and automotive. Heye Technology will prioritize the promotion of high-end products like powder high-speed steel and spray-formed high-speed steel, accelerate localisation substitution, and expand into international markets. Antai Superhard will focus on both traditional and emerging markets, driving product structure transformation and upgrading. The company will also actively explore a "second growth curve," cultivating strategic emerging industries such as special powders and materials for controlled nuclear fusion, creating long-term growth engines to inject new momentum into high-quality development.

2. Advancing Systemic Reforms to Stimulate High-Quality Development Vitality

2025 is the final year of the company’s 14th Five-Year strategic plan and a preparatory phase for the 15th Five-Year strategic layout. Strengthening strategic planning, coordinating the formulation of the 15th Five-Year Plan, and clarifying development directions, implementation pathways, key tasks, and resource allocation are among the priorities for 2025. The company will design next-step reform measures from a high starting point to enhance core functionalities and competitiveness. It will further implement modern enterprise systems with Chinese characteristics, optimize layouts and structural adjustments, refine market-oriented operational mechanisms, explore incentive methods, improve governance frameworks, and establish organizational structures and control models aligned with its strategy. Continuous progress in process and organizational development will enhance systemic capabilities. Larger-scale industries should achieve "strong despite their size," while relatively small industries must develop "indispensable" core competitiveness, comprehensively enhancing the company's influence and sustainable development capabilities in the new materials sector.

3. Enhancing Technological Innovation Capabilities to Shape High-Quality Development Advantages

The company will seize the opportunity of the new round of scientific and technological revolution and industrial transformation to lead the development of new quality productive forces, creating new momentum and advantages for high-quality corporate development. By 2025, the company will more proactively track national and local science and technology policies, participate in the construction of national-level R&D platforms, undertake major national scientific and technological tasks, and actively deploy key company projects. It will ensure the high-quality completion of national science and technology projects and supporting initiatives. The company will fully leverage the roles of the Expert Advisory Committee, Industrial Technology Committee, and Technological Innovation Committee, strengthening market-oriented technological foresight and multi-line deployment to break through and master more "root technologies." This will further drive the company's transformation into a pioneering and leading entity, providing professional consultation and guidance for industrial development strategies, technological innovation planning, major investment project deployment, and the transformation and incubation of scientific and technological achievements. Focusing on cutting-edge technologies and future-oriented development, the company will create high-end academic exchange and talent cultivation brand activities, continuing to plan and host forums for young scientists, technological innovation forums, and industry conferences to build high-level platforms for technological innovation and talent growth, supporting the company in achieving technological breakthroughs and industrial upgrades.

4. Continuously Advancing Digital Transformation and Green Development to Drive the Engine of High-Quality Growth

Currently, the company is in a critical phase of "new-type industrialization," requiring accelerated upgrades through digital and green technological transformations. It will holistically advance equipment renewal, technological upgrades, and process improvements, deeply implement the "AI+" special initiative, and accelerate the transition toward high-end, intelligent, and green operations to establish competitive advantages and lead industry trends. By 2025, the company will solidify the construction of smart manufacturing scenarios and promote the digital workshop development of industrial units. It will continue to strengthen the construction of the Digital Intelligence Academy, constantly improving digital intelligence talent cultivation. In accordance with the "1+3" special initiatives outlined in the "Advanced Technology & Materials Co., Ltd. Green Development Master Plan," the company will comprehensively elevate the green transformation level of its industries. It will resolutely implement the "Advanced Technology & Materials Co., Ltd. Carbon Peak Action Plan," develop and promote the Green Management Plan (2024 Edition), enhance research on carbon peaking and carbon footprint topics, reduce energy costs, and ensure the company achieves its carbon peak goals.

5. Strengthening Party Leadership to Solidify the Foundation for High-Quality Development

By 2025, the company will consistently uphold and strengthen the Party's overall leadership, effectively leveraging the company's Party Committee to oversee the broader picture and coordinate all stakeholders. We will integrate the comprehensive leadership of the Party into the entire process of formulating the company's "15th Five-Year Plan" strategy, continuously promoting the organic integration of Party leadership and corporate governance, deepening and refining the "Three Foundations Construction" and "Comprehensive Supervision" projects, continuously strengthening the construction and capability enhancement of the cadre team, enhancing the cohesion of all cadres and employees, guiding the entire company to work together, and devoting more energy to enterprise operation and development, so as to better leverage the leading and safeguarding role of high-quality Party building.

Guojin Securities commented in its research report on Antai Technology: The performance met expectations, with an overall upward trend in product prices. Considering that the average prices of products such as Pr-Nd oxide, tungsten, and molybdenum increased by +3.13%/+0.55%/-5.02% MoM respectively in 1Q25, and with the good prosperity of major downstream industries, the company's gross profit and gross profit margin in 1Q25 increased by +4.96% MoM and +0.22 percentage points MoM to 296 million yuan and 16.61% respectively; as a result, the company's net profit excluding non-recurring gains and losses in 1Q25 achieved significant MoM growth. Cost reduction and efficiency enhancement efforts were advanced, and the capital structure was maintained at a good level. Attention should be paid to the rapid growth of the amorphous business. In 2024, Antai's amorphous business demonstrated strong growth momentum, with newly signed contract amounts reaching 1.17 billion yuan, breaking through the 1 billion yuan mark for the first time, up 33% YoY; operating revenue reached 974 million yuan, and net profit reached 51.35 million yuan, up 31.63% and 60.79% YoY respectively; production and sales volume exceeded 33,000 mt, up 65% YoY; in 2024, the company achieved production and sales volume of nanocrystalline products exceeding 7,000 mt, up 46% YoY. Attention should be paid to the company's controllable nuclear fusion-related businesses. The company is the first in China to possess the production capacity of fusion tungsten-copper divertors, with a complete set of technologies from raw materials to component delivery. The research, development, and production processes form a closed loop within the company, and it has achieved the R&D and production of a full range of tungsten-related products, including tungsten-copper divertors, tungsten-copper limiters, blanket first walls, and tungsten-boron neutron shielding materials. Relying on Antai Technology's innovative spirit, the company's various technologies involved in divertors, such as high-performance tungsten plate preparation, diffusion welding and vacuum brazing, and non-destructive testing, have continuously improved and excelled, not only meeting domestic usage requirements but also gaining high recognition from international customers, providing multiple batches of tungsten-copper products for the French WEST device and the International Thermonuclear Experimental Reactor (ITER). Risk warnings: Fluctuations in raw material prices; demand falling short of expectations; project advancement falling short of expectations.