Fulai Xincai (605488) issued an announcement on December 10, 2021: Jijin of Open Source Securities, Liu Kaixing and Li Hao of South China Fund, Zhang Yueyi of Kaishi Fund, Zeng Siyuan and Xu Guoyang of Shanghai Zhongqian Investment Management Co., Ltd., Zhou Ying of Guangdong Bozhi Xingyu Asset Management Co., Ltd., Lei Haodong of Shanghai Zeheng Fund Management Co., Ltd., Zhou Sijie of UBS, Hangzhou Yueyi Asset Management Co., Ltd., Yida Capital Wu Xian Dust, etc. Ling long invests Dou Junjie Zhu Le, Guotai Junan Huang Jiawei, Shanghai Shanhai all Keping Asset Management Co., Ltd., Hangzhou Qihe Ju Asset Management Co., Ltd. Wang Xiaohui, Guoyuan Securities Tao Chun, Lanting Capital Chai Shanshan, Fuhui powerful Wealth Wu Haitao, like Capital Chen Lihong, Zhongcai Merchants Investment Group Xu Wentao Xu Yuefeng, Noah Zhengxing Fund sales Co., Ltd. Wang Hongyue, Cai Wei of Jianxin Trust investigated our company on December 8, 2021.

Q: the company has dabbled in the field of flexible sensors. May I ask the research progress, application fields and related cooperation of the company's flexible sensors?

A: the company began its research on flexible sensor-related products in 2017 and has undertaken the key scientific research project of Zhejiang Province: flexible sensing materials and devices for wearable devices. The company completed the basic research and testing of materials in 2020, completed the appraisal and acceptance in 2021, and obtained the appraisal certificate. Up to now, a total of 21 invention patents have been applied for in this field, of which 5 invention patents have been approved, including 4 Chinese invention patents and 1 American invention patent, and the company is participating in drafting industry standards. The flexible sensing materials developed by our company can be applied to health care (such as pulse monitoring), auto driving (such as steering wheel sensing system), power battery safety early warning (such as pressure and temperature sensing early warning monitoring) and other fields. Dr. Yang Xiaoming, the company's chief technical expert, introduced in detail the technical working principle of the application scenarios of flexible sensing materials in the above three fields, and showed samples of related products. At present, the company's related products are still in the research and development stage, and have not yet cooperated with relevant manufacturers.

Q: could you tell me whether the company's electronic-grade materials are related to applied research in the field of flame-proof and explosion-proof lithium batteries, and what is the progress of related research and development? When will the product be introduced to the market?

A: the flexible sensing materials described in question (1) can be applied to the safety early warning monitoring of power batteries, such as timely transmission and monitoring of internal changes in the battery through pressure sensing and temperature sensing, and related products are in the stage of research and development and small-scale testing. product research and development is a long-term process, the impact of many factors, the company is continuing to promote development progress, and has obtained some patents and samples. Lithium battery safety monitoring and sensing technology has always been a technical difficulty that many enterprises at home and abroad pay attention to and want to break through. at present, Interlink in the United States and some domestic companies have related research, but according to public information, there is no large-scale application. Compared with similar products, the sample test results developed by the company have a strong competitive advantage. On the basis of the above, the follow-up company will further increase R & D investment to link technology with practical application, but the transformation of scientific and technological achievements takes time to precipitate, which is a process to remind investors to pay attention to investment risks.

Q: at present, there is a certain time gap between the research and development technology of the company's thin film materials for new energy power batteries and practical application or mass production. How does the chairman view this distance from the perspective of talent layout, and how long is it tolerant to time?

A: the company needs different talents at different stages of development. at present, the focus of the company's development is in the fields of consumer electronics, automobile and new energy. in the process of development, the company has introduced a group of young executives with rich experience in foreign management and technology, including General Manager Li Yaobang, Chief Technical expert Yang Xiaoming, Vice President Bi Lilin and Deputy General Manager Wu Hengyong. I believe that in the field of the layout of the company, I believe under their leadership. Be able to achieve breakthroughs in R & D technology and practical applications. The company does not only make a breakthrough in the sensor of new energy power battery, but also has blue film in the field of lithium battery, and the company is also actively docking some enterprises, including Ningde era; the company will also dabble in a series of solutions such as automotive sensors. As for when the management team will be able to achieve new technologies and new products to market, I choose to trust the company's management team.

Q: does the parent company take the parent company as the main body to apply for patents and industry standards for flexible sensors?

A: the patents and industry standards for flexible sensor-related products are applied by Zhejiang Ouren New Materials Co., Ltd., a wholly-owned subsidiary of the company, and the patent ownership of all related products belongs to the company.

Q: the company invests about 40 million yuan in scientific research every year. What are the areas of expertise invested, the proportion, and are there any further efforts and measures?

A: the company has invested about 40 million / year in R & D in the past three years and about 45 million in report Q3 in 2021. The company's R & D investment direction mainly includes environment-friendly functional coatings, new products to reduce plastic consumption, water-based pre-coated packaging materials, new film materials, electronic-grade functional materials (including automobiles, new energy, flexible sensing materials, functional films, etc.). With the completion of the company's R & D center building, the R & D strength will be further enhanced, and the investment in R & D will be further strengthened to provide competitive and high-tech products for the society and customers.

Q: the company went public in May. Does the company have any new measures in talent introduction and talent incentive?

A: the company will introduce more than 20 researchers in 2021, including 5 PhDs. The company will continue to introduce professionals in accordance with the development plan to speed up the realization of the company's strategy. With regard to talent incentives, the company recently launched an equity incentive plan to attract and retain outstanding talents and fully mobilize the enthusiasm of the company's directors, senior managers, middle management team and core technical (business) backbones. Effectively combine the interests of shareholders, the interests of the company and the personal interests of the core team, so that all parties pay attention to the long-term development of the company.

Q: the wide printing and labeling business accounts for more than 90% of the revenue, which is the company's main revenue module. The market has completed import substitution. What is the development of the wide printing and labeling market in the future? What is the company's strategy?

A: advertising and labeling business is a high proportion of the company's main business module, this module business and national consumption level, population size is highly related, belongs to the eyeball economy. With the acceleration of urbanization, the growth of Guangzhou printing materials business will be more obvious. At present, the international market share of the company's advertising consumables products is less than 4%, and the domestic market share is about 30%; the international market share of label marking materials is less than 0.4%, and the domestic market share is about 16%; the company's electronic functional materials are in the initial stage of development, and the market share is even less, so the company has a huge space for business development. For example, advertising materials, the company's products are a small part of the advertising production process, there are many supporting materials we can layout. In view of the above actual situation, the company has made certain strategic arrangements, mainly in the following aspects: first, wide printing materials to expand capacity, improve the company's large-scale advantages, and further increase market share. Second, the establishment of the Packaging Division, our company recently announced the change of industrial and commercial license, joined the business scope of food-grade materials; the company participated in the IPIF International Packaging Innovation Conference, and international well-known manufacturers jointly discussed the application of non-plastic coating products; was invited to participate in the establishment meeting of China working Group to promote self-adhesive label circular economy to jointly explore plastic recycling solutions. The company makes great efforts to lay out and develop the packaging material industry with broader market space. Third, increase the layout of the marketing network, enrich the product categories, move the warehouse and after-sale forward, and make use of the advantages of the marketing network to improve the market competitiveness.

Q: after Yantai Fuli invested, the stock price was flat and investors were more worried. Please describe the situation of Yantai Fuli in detail.

A: Yantai Fuli is a company invested and controlled by Yantai Fuli in September 2021 to develop, produce and sell new film materials. In the future, the company will make efforts in the field of new functional films such as BOPP film, PETG and heat-shrinkable film, BOPS film used in the field of high-end cosmetics, and will lay out new application areas, such as R & D and sales of membrane materials. Mr. Chi Fuyi, general manager of Yantai Fuli, has many years of experience in film production, R & D and sales, has rich customer resources and production technology advantages, and has a good reputation in the industry; at the same time, Yantai Fuli has a complete, excellent production and management team with many years of industry experience. Prior to this investment, the company has worked with Mr. Chi Fuyi and his team for many years, and the company has hired a professional audit and legal team to conduct a full due diligence on Yantai Fuli, and the two sides have established a solid foundation of cooperation and mutual trust. Before cooperating with us, Mr. Chi Fuyi operates five original membrane production lines through light assets, with annual sales of more than 1 billion yuan, and has high-quality customer resources, such as NONGFU SPRING CO., LTD., Master Kang, Wa, Yuanqi Forest, Coca-Cola Company and so on. These advantages have laid a good foundation for Yantai Fuli to carry out business smoothly. At present, Yantai Fuli also took advantage of its advantages to start light asset operation before it was put into operation. in the long run, if this investment project can be implemented smoothly, it will have a greater positive impact on the company. The new functional film project involved in the company is an important development direction of the company and an important support for the expansion and implementation of other application fields in the future. For the progress of Yantai Fuli project, please follow the follow-up official announcement of the company.

Q: the China News shows that in the company's sales structure, the ratio of foreign trade to domestic trade is about 16. What kind of plans will there be in the future?

A: one of the company's core competencies is its strong marketing and resource advantages. the company will continue to give full play to its marketing advantages and actively lay out its marketing network in China. In the second half of 2021, the company has set up three new sales companies in Shenzhen, Wuhan and Chongqing. It is believed that through the layout of the new sales outlets, it will have an important impact on our company's market share. Our company's printing and labeling business are consumer goods that belong to the eyeball economy, which are highly related to the local level of urbanization and consumption. Through research and analysis, we have considered the trade policy and have a certain plan in the field of international foreign trade. If we go to the ten ASEAN countries, the shipping time is about 7 days. On the basis of zero tariff, we will give full play to our advantages in domestic marketing and move our sales, warehousing and logistics forward. Europe and the United States and other developed regions have a strong demand for advertising and label products, and the market space is huge. Therefore, the company is more inclined to lay out in these developed areas in the future.

Folai New Materials main business: research, development, production and sales of functional coated composites

According to the third quarterly report of Fulai Xincai 2021, the company's main income was 1.256 billion yuan, up 49.07% from the same period last year; the net profit was 109 million yuan, up 79.79% from the same period last year; deducting 95.5046 million yuan from non-net profit, of which in the third quarter of 2021, the company's main income in a single quarter was 462 million yuan, up 37.9% from the same period last year; and the net profit in a single quarter was 34.9134 million yuan, up 32.17% from the same period last year. In a single quarter, the non-net profit is 23.9319 million yuan, the debt ratio is 27.44%, the investment income is 2.1271 million yuan, the financial expenses are-108900 yuan, and the gross profit margin is 18.67%.

The stock has no agency rating in the last 90 days. According to the Securities Star valuation analysis tool, Folai Xincai (605488) has a good company rating of 3 stars, a good price rating of 2 stars, and a comprehensive valuation rating of 2.5 stars. (rating range: 1-5 stars, up to 5 stars)