Zhejiang Huaye: HPT Series Screws and HK Bimetal Barrels Can Meet Injection Molding Requirements for PEEK Materials

Zhejiang Huaye August 13th Conference Call Content:

1. Message from Management

Zhejiang Huaye Plastic Machinery Co., Ltd. (Stock Code: 301616) was established in 1994 and has been deeply involved in the field of core components for plastic machinery for over 30 years. It will be listed on the ChiNext Market of the Shenzhen Stock Exchange on March 27, 2025. Zhejiang Huaye focuses on the research and development, production, and sales of core components for plastic molding equipment. Its main products include screws, barrels, tie bars, and related accessories, which are widely used in injection molding machines, extruders, and other plastic molding equipment.

The company adheres to the business philosophy of "Focus on professionalism, surpass excellence." After more than 30 years of hard work and progress, with rich experience and keen innovative thinking, it continuously promotes technological breakthroughs and has developed into one of the largest precision screw and barrel manufacturing enterprises in the global plastic machinery screw industry in terms of production scale. The company is one of the few domestic manufacturers capable of supplying core components for ultra-large plastic molding equipment and is also one of the earliest enterprises to grow alongside major local plastic molding equipment manufacturers. It continuously supports Chinese plastic molding equipment manufacturers in overcoming key technologies and achieving independent and controllable core components for ultra-large injection molding machines in China. For many consecutive years, the company has been recognized by the China Plastics Machinery Industry Association as one of the "Top 5 Enterprises in the Plastic Auxiliary Machinery and Supporting Parts Industry." From 2023 to 2025, the company has been consecutively rated for three years as one of the "Top 7 Enterprises in the Chinese Plastic Auxiliary Machinery and Supporting Parts Industry" by the China Plastics Machinery Industry Association, being the only enterprise in the field of plastic machinery screws and barrels to receive this honor.

Zhejiang Huaye has been deeply engaged in the plastic machinery components industry for 30 years, mastering a number of independently developed core technologies. The company holds 132 patents, including 17 invention patents, and has participated in the drafting and formulation of 5 industry and group standards. With outstanding technical strength and innovative capabilities, the company has been awarded the first batch of national "Specialized, Refined, Distinctive, and Innovative 'Little Giant'" enterprises by the Ministry of Industry and Information Technology, "Intellectual Property Advantage Enterprise" by the National Intellectual Property Administration, national-level "Green Factory", Zhejiang Province "Hidden Champion" enterprise, and Zhejiang Provincial "Zero-Waste Factory" and other honorary titles.

The company's product has been awarded the "Zhejiang Made" certification with the "Pin" symbol.

The plastic machinery industry, in which the company operates, is the "industrial mother machine" of polymer composite materials and is also an important component of advanced manufacturing. Products related to the plastic machinery industry are widely used in fields such as automotive, home appliances, 3C products, plastic packaging, and plastic building materials, offering a broad market prospect. With its accumulated process technology and excellent product quality, the company has successfully entered the supply chain system of major global equipment manufacturers, becoming a manufacturer of customized core components for plastic molding equipment with global supply capabilities. Apart from the domestic market, its products are exported to countries and regions such as Canada, the United States, Germany, India, and Japan. Major clients include renowned domestic and international plastic machine manufacturers such as Yizumi, Haitian International, Husky, Engel, and KraussMaffei. According to the China Plastics Machinery Industry Association, from 2021 to 2024, the company's market share in screws and barrels for plastic machinery in China is 10%, 12%, 12.5%, and 13.2%, respectively, consistently ranking first.

In the first half of 2025, the company achieved an operating income of 478 million yuan, a year-on-year increase of 10.56%. The net profit attributable to shareholders was 47.6692 million yuan, a year-on-year increase of 6.66%. For more detailed information, please refer to the semi-annual report disclosed by the company on August 12.

Looking ahead, Zhejiang Huaye will continue to adhere to its transformation and upgrading development strategy, striving to become a global industry leader and the business partner of choice for customers. Through technological innovation and deep integration of informatization and industrialization, the company aims to achieve the leap from “Huaye Manufacturing” to “Huaye Creation.” With even more outstanding products and services, Zhejiang Huaye will contribute to the development of the global plastic machinery industry, continue its legacy of excellence, and shape a better life.

2. Q&A Session

Question: What are the differences between PEEK material and ordinary plastic, and what is the company's technological layout in the field of PEEK material processing?

Answer: PEEK materials are a new type of engineering plastic. Compared to traditional plastics, they have a higher melting point, usually exceeding 400°C, which places higher demands on the material, wear resistance, corrosion resistance, and heat treatment process of the barrel and screw. Among the company's existing products, the HPT series screws and HK bimetal barrels can meet the injection molding requirements of PEEK materials. The company has corresponding product support for this type of material.

What specific models are included in the product line of precision injection molding machine components supporting the 3C product sector? Does the company currently provide supporting services to injection molding equipment manufacturers related to the Xiaomi supply chain?

Answer: The 3C products are one of the important end markets for injection molding machine barrels and screws. During the manufacturing process of Xiaomi products, there are numerous opportunities for the application of injection molding machines. For high-torque screw products used in fully electric injection molding machines, the company's HPT all-hard series screws and HK bimetal barrels can meet these application requirements. Especially in the precision injection molding of connectors for 3C products, the company possesses a relatively complete and mature product series.

The company's products are mainly used in supporting downstream OEMs and do not have direct business relations with Xiaomi's supply chain.

What specific measures does the company have for consolidating its existing areas? In terms of exploring new application scenarios beyond automobiles, home appliances, and 3C products, does the company have any concrete plans or timelines for entering fields such as aerospace or medical devices?

The company's future development will primarily focus on the personalized needs of the plastics industry, continuously pursuing technological innovation in specialized segments. The aerospace sector, for example, requires lightweight products with high structural strength. In response to this, the company already has relevant product reserves. For instance, we offer products applicable to the semi-solid metal injection molding (MIM) of magnesium alloy materials. Such products are expected to have broad applications in the lightweight components of both the aerospace and new energy vehicle industries in the future.

Can the company further increase its dividend payout ratio in the future?

The company formulates its dividend plan based on the principle of rewarding shareholders and considering its cash capabilities. We aim to give back to our investors through dividends. The increase in the dividend payout ratio depends on a comprehensive consideration of the company’s profitability, the cash required for future investment plans, and compliance with relevant laws and regulations.

Question: How does the company view the sustainability of demand driven by the "trade-in" policy in the future? Will there be a marginal decline that could lead to reduced demand for the company's plastic molding?

The "trade-in" policy has a continuous promotional effect on consumption in fields such as home appliances, 3C electronics, and automobiles. There is no marginal decline in demand in the near term, and the impact on downstream demand is evident. China's current level of plastic material substitution is still some distance behind that of developed countries, and there is room for market growth in the future. As demand increases, the company's products currently primarily provide support for injection molding machine manufacturers, and there remains significant potential for the terminal market development of injection molding machine screws and barrels. Therefore, in the foreseeable future, the demand for injection molding machine barrels and screws will continue to grow steadily.

Do you have any plans to enter the humanoid robot field in the future?

The company’s main products are core components of plastic molding equipment, such as barrels and screws. Adhering to the business philosophy of “focus and professionalism, surpassing excellence,” the company will continue to deepen its presence in the current field. The humanoid robot sector has a substantial demand for plastic parts. In the future, the company will prudently study this market demand. If the company makes relevant plans and arrangements in related businesses in the future and such matters reach the standard for information disclosure, the company will strictly comply with relevant laws, regulations, and regulatory rules, and fulfill its information disclosure obligations in a timely, accurate, and complete manner.

Usage of raised funds?

Answer: The company's fund-raising investment projects mainly include the construction of the production base (Phase I), the intelligent technological transformation project, the construction of the technology research and development center, as well as the supplementation of working capital and repayment of bank loans. Currently, the fund-raising projects are under construction and have not yet reached the intended usable status. As of the end of June 2025, the company has actually used RMB 116.7426 million of the raised funds. The highest balance of temporarily idle raised funds used by the company for cash management amounted to RMB 90 million. Except for the portion of idle raised funds approved for use in cash management, the unused raised funds are managed separately in designated accounts in accordance with the fund-raising project plans.

In the first half of the year, capacity utilization was relatively high. How will the structure of capacity release develop going forward?

Currently, in the market, there is a noticeable trend towards the development of larger, two-platen, and all-electric injection molding machines. In the past two years, the company's production capacity has been limited by the initial equipment investments. The increase in orders for large screws and alloy barrels has resulted in a capacity utilization rate exceeding 100%. One of the projects funded by the company's fundraising is the construction of a production base, which, once operational, will effectively release the corresponding capacity and meet customer order requirements.

Question: What is the impact of large-scale and full electrification development on the company's gross profit margin and net profit margin?

The development of injection molding machines towards larger sizes and full electrification will drive the barrel and screw towards larger sizes, fully hardened screws, and alloyed barrels. This type of product has higher added value, and it is expected that both gross profit margin and net profit margin will increase in the future.

Question: What is the company's 3-5 year strategic plan? What market position and goals do you hope to achieve?

In the next three years, the company will actively promote the implementation of projects funded by raised capital. The first phase of the new production base will achieve approximately a 50% increase in production capacity, which will help consolidate and enhance the company’s market share in the plastic machinery screw and barrel sector. In the future, the company will continue to focus on niche markets and, according to the specific requirements for screws and barrels in these segments, will continuously launch innovative products.

Question: Zhoushan has existing industrial clusters. Is there any consideration for industry consolidation in the future, such as acquiring other companies?

Answer: Although Jintang has the world's largest industrial cluster area for plastic molding equipment supporting parts such as screw barrels, the company will continue to focus on the construction of the projects funded by the raised capital and currently has no plans for acquisitions or mergers.

Question: Who are the competitors of companies in the field of plastic machinery barrel and screw? Has the company's market share increased this year?

The company's international competitors are mainly Nordson Xaloy in the United States and Reiloy Metall GmbH in Germany. Domestically, the company's main competitors are Zhejiang Jinxing Screw Manufacturing Co., Ltd., Zhejiang Guangming Plastic Machinery Co., Ltd., Zhoushan Tongda Plastic Machinery Co., Ltd., Ningbo Tianxing Precision Machinery Co., Ltd., and Zhejiang Jinhu Machinery Group Co., Ltd. According to statistics from the China Plastic Machinery Industry Association, in 2024, the company's market share in the domestic injection molding machine barrel screw sector is 13.2%, an increase of 0.7 percentage points compared to 2023.

What are the potential areas for future business growth for the company?

Answer: Currently, the injection molding machine industry is developing towards larger sizes and full electrification. Changes in product structure will lead to simultaneous growth in revenue and gross profit margin. In the future, the company will enrich its product series to align with this development trend, strive to expand market space, and further enlarge its business scale.