Recently, the development asset company of Zhejiang State-owned Capital Operation Co., Ltd. (hereinafter referred to as "Zhejiang Capital Operation") actively extended its business chain, continuously deepened the cooperation opportunities with high-quality industries, completed the investment of the equity project of Global New Materials International Holdings Co., Ltd. (hereinafter referred to as "Global New Materials International"), a leading pearlescent pigment enterprise, and successfully laid out projects with stable cash flow in the medium and long term. The deeper equity cooperation between Zhejiang Capital Operation and Global New Materials International (6616.HK) not only responded to the call of the 14th Five-Year Plan of China to promote the high-quality development of new materials industry, but also brought into play the steady investment and resource amplification role of state-owned capital, and enabled the state-owned operation platform to effectively increase the capitalization rate and deepen the reform of mixed ownership by leveraging the capital market.

Generally speaking, there are three reasons why state-owned capital invests in private listed companies: First, it strongly supports the operation of private listed companies, promotes listed companies to make their brands bigger and stronger through the blessing of state-owned assets, and makes them more flexible and more convenient in financing needs; Second, in order to further expand the field and scope of SASAC's operation and make investment more diversified; Third, due to the demand for investment, state-owned assets tend to invest in high-quality assets, so as to increase the value and preserve the value of assets. The further deepening of equity investment cooperation between Zhejiang Capital Operation and Global New Materials International not only enriches the diversified investment of Zhejiang Capital Operation in the field of new materials, but also helps to further strengthen the brand awareness of Global New Materials International on the pearlescent pigment track and in the new materials industry chain. In addition, the new material industry, which was accelerated and developed with high quality during the "14th Five-Year Plan" period in China, has now entered a new stage of development, and naturally it has become a field where state-owned assets compete for investment. As a leading manufacturer of pearlescent materials in China, Global Materials has been committed to the research and development, production, trade and sales of pearlescent pigment products, coatings, mica and related products, raw materials and semi-finished products for more than ten years. The products are exported to more than 30 countries and regions such as Asia, Europe, Africa and South America.Up to now, Global New Materials International has become the largest producer of pearlescent pigments and synthetic mica-based pearlescent pigments in China, and also the largest producer of synthetic mica-based pearlescent materials in the world. According to the 2022 interim results, Global New Materials International achieved revenue of 382 million yuan in the first half of the year, a year-on-year increase of 24.4%; Gross profit was 196 million yuan, up 20.8% year-on-year, with a gross profit margin of 51.2%, which has maintained a high gross profit margin level for many years; The net profit attributable to the mother was 106 million yuan, up 12.9% year-on-year and 56.5% from the second half of 2021. In the past three years (based on the interim results of the past three years), the net profit of Global New Materials International has increased rapidly, with a compound annual growth rate of over 32%, which is mainly due to the company's continuous optimization and adjustment of product structure, among which the proportion of high-end pearlescent pigment products has increased and the proportion of synthetic mica-based pearlescent pigment products has increased rapidly;The revenue of synthetic mica-based pearlescent pigment products increased rapidly from 21.5% in 2018 to 39.1% in the middle of 2022, and it is expected that it will continue to increase steadily in the future. As for revenue, due to the continuous saturation of production capacity in recent years, the compound growth rate of revenue in the past three years is not as good as that of net profit of returning home. However, because the global pearlescent pigment products have been in a hot-selling and short-supply market environment for a long time, the company has raised the price of pearlescent pigment products reasonably, so the compound growth rate of revenue in the past three years has also reached a growth rate of nearly 25%. Starting from the third quarter of this year, with the gradual landing of new production capacity, the future revenue is expected to achieve further rapid improvement.In addition, we noticed that the sales revenue of synthetic mica powder of Global New Materials International increased by 774.01% in the first half of the year, and the proportion of revenue increased rapidly from 0.3% in the middle of 2021 to 2.1%, with a very obvious increase. The substantial increase in sales revenue of synthetic mica powder is mainly due to the company's production of functional fillers, insulating materials, refractories and raw materials for nickel-hydrogen batteries according to customer demand. This further confirms from the side that the company has begun to realize the benefits gradually in the new energy battery insulation materials products, and the diaphragm materials products have also entered the testing stage smoothly.With the continuous development of industrial economy, private enterprises are also growing rapidly, and state-owned capital is continuously injected into private enterprises, which not only promotes the high-quality development of private enterprises, but also makes state-owned capital grow rapidly, driving it to realize the preservation and appreciation. In the future, state-owned capital will be more active in the layout of private listed enterprises. Similar to Zhejiang-owned operation and Global New Materials International, cooperation in more high-quality projects will be deepened and strengthened. By continuously improving the breadth and depth of industrial chain resources, the high-quality development of new materials industry will be promoted with more diversified investment methods. While realizing the goal of maintaining and increasing the value of state-owned assets, it will also provide more support for the healthy development of industrial economy.