Kingfa Sci. & Tech.: Biodegradable Plastic Business Developing Well, New Project Set to Go into Production, Will Actively Expand Into 3D Printing Materials And More

On June 16, Kingfa Sci. & Tech. (600143) released the Record of Investor Relations Activities (Early June 2026).

After, the main content of the investors’ questions and the company’s responses is as follows:

：How is the company's recent development in the biodegradable plastics business?

The company’s biodegradable plastics business is currently developing well. In 2025, sales of biodegradable plastic products reached 226,300 tons, up 25.37% year on year. Among them, PBAT sales ranked first globally, and the company continued to hold the top market share in Asia for biodegradable film and bag products. The company has continued to advance technological upgrades and capacity expansion, further consolidating its leading position in the industry.

In terms of industrial chain layout, the company has established a full industrial chain system covering “bio-based monomers–polymerization–modification.” At present, the company has an annual polymerization capacity of 210,000 tons for biodegradable plastics, covering products such as PBAT, PBS, and PLA. The company’s 80,000-ton-per-year biodegradable polyester project is scheduled to commence production in late June 2026. Together with technical upgrades and efficiency improvements to existing facilities, the company’s total polymerization capacity for biodegradable plastics will increase to 300,000 tons per year. Meanwhile, the company has built annual capacities of 50,000 tons of bio-based succinic acid and 10,000 tons of bio-based BDO, effectively increasing the proportion of bio-based raw materials in biodegradable plastics and significantly enhancing the green premium and market competitiveness of its products.

In 2026, the company will actively explore new products and applications such as 3D printing materials, and will further increase its development in overseas markets including Europe, America, South Asia, and Southeast Asia, thereby enhancing the company's market share in the global bioplastics market.

：What are the company’s current product sales and business conditions in the fields of AI computing power and servers?

A: The company has a well-developed presence in the AI computing power and server sectors for its specialty engineering plastics business, with significant results in business expansion. In 2025, the company’s sales volume of major specialty engineering plastics products reached 34,100 tons, up 42.68% year on year, with sales from emerging fields such as AI computing power accounting for nearly 30%.

In terms of product portfolio, for high-speed connectors used in AI servers, the company has launched ultra-thin halogen-free flame-retardant PPA and high-flow, low-warpage LCP, meeting the stringent requirements for dielectric performance and transmission efficiency. For ultra-high-speed cooling fans, it provides high-strength, low-noise halogen-free flame-retardant materials such as PPA, LCP, PES, and PEI, providing critical material support for the stable operation of AI servers. In addition, the company’s halogen-free flame-retardant semi-aromatic polyamide resistant to electronic fluorinated fluids and next-generation LCP with low dielectric constant and low dielectric loss have been applied respectively in storage connectors for immersion-cooled servers and high-speed connectors for AI servers.

In the future, the Company will deeply expand the innovative applications of PPA, LCP, and PPSU/PES and other specialty engineering plastics in emerging fields such as AI computing power. As high-speed connector technologies continue to advance, demand for specialty engineering plastics such as LCP and PPA will increase.

：Is the company considering divesting its green petrochemical segment?

Based on long-term strategic considerations for integrated industry chain collaboration, the Company has no plans to spin off its green petrochemical segment.

In terms of strategic value, the Company is currently making further progress in the integrated upstream and downstream collaboration of its green petrochemical and modified plastics segments, and is steadily advancing the integrated production of synthesis and modification. By adopting a continuous production model for ABS and PP resin synthesis and modification, the Company reduces the warehousing, logistics, and packaging processes for intermediate products, effectively lowering production expenses such as storage costs and freight charges, improving production efficiency, and further enhancing formulation stability and product consistency, thereby better securing the stable supply of key raw materials. The strategic value of the petrochemical segment has become evident in stages. Going forward, as the proportion of specialty materials and modified materials increases and the product mix continues to optimize, the synergy effects of the segment and its resilience against market risks are expected to be further strengthened.

In terms of operational improvement, the Company has comprehensively enhanced capacity utilization through measures such as systematically implementing process energy-efficiency upgrading projects, reducing manufacturing costs, improving the comprehensive utilization efficiency of by-products, and dynamically optimizing the product mix. The Company is also focusing on leveraging its core strengths in synthesis and modification technologies to շարունակously develop customized specialty grades of PP and ABS, thereby building differentiated competitiveness. The quality of operations has steadily improved. In 2025, the Company’s green petrochemical segment achieved operating revenue of RMB 12.463 billion, up 8.98% year on year, while gross profit reduced its loss by 9.15% year on year. In 2026, the Company will focus on achieving full production and full sales of its 150,000-ton PP and 200,000-ton ABS integrated polymerization-modification facilities, further optimize its product structure, and strive to enhance differentiated competitiveness and profitability.

：What is the company's future industrial planning?

In terms of its medium- to long-term strategic vision, the company will adhere to the strategic development guideline of “strengthening the middle, consolidating both ends, innovation-driven leadership, and leapfrog development,” with the “1438” goal of reaching RMB 100 billion in output value (achieving annual output value of RMB 10 billion in the healthcare segment, RMB 40 billion in the green petrochemicals segment, RMB 30 billion in the new materials segment, and RMB 80 billion in the modified plastics segment), and is committed to becoming a globally respected new materials enterprise.

In terms of the company’s 2026 business plan, this year marks the first year of the company’s new five-year development plan. The company will continue to focus on innovation-driven development and, centered on the three strategic directions of internationalization, digitalization, and refined management, will the following work:

(1) Modified Plastics Segment: Deeply tap into advantageous sectors such as automobiles, smart home appliances, and electronics/electrical engineering, seize opportunities in emerging fields including the low-altitude economy, AI computing power, and high-frequency communications, increase the share of engineering plastics, and accelerate capacity expansion at overseas bases such as Poland and Mexico, striving to achieve sustained growth in annual sales of modified plastics.

(2) New Materials Segment: Continue to strengthen our technological leadership across the entire “synthesis–modification–application” industry chain, accelerate the construction of new production capacity for LCP, high-temperature semi-aromatic polyamides, thermoplastic polyimides, and other advanced materials, and further expand the application of specialty engineering plastics in fields such as new energy vehicles and AI computing power.

(3) Green petrochemical segment: focusing on the integrated polymerization-modification unit for PP and ABS to achieve full-capacity production and sales, develop customized specialty materials, optimize the product mix, continuously improve operating performance, and actively address cyclical industry fluctuations.

(4) Healthcare Sector: Continuously achieve cost reduction and efficiency enhancement through energy optimization, process flow improvement, and production line technological upgrades, gradually strengthening profitability.