When facing thousands of listed company announcements every day, which ones should you read? What are the key points to take away from the dozens or hundreds of pages of material announcements? Are the many professional terms in the announcements bullish or bearish? Check out Caixin's "Quick Read Announcement" column, where our reporters across the country will provide you with accurate, fast and professional interpretations on the night of the announcement.

On December 25, the Financial Association reported (journalist Huang Lu) that the wholly-owned subsidiary Weihai Expansion has signed a procurement contract worth 3.664 billion yuan with a new customer, which is about 75% more than the previous large contract amount. Weihai Guangwei Composites (300699.SZ) stated that the fulfillment of the contract will have a significant positive impact on the company's revenue and profit.

Tonight, Weihai Guangwei Composites announced that its wholly-owned subsidiary, Weihai Expansion, has signed a "Material Procurement Contract" with Client A, with a total contract amount of 3.664 billion yuan, accounting for 145.51% of the company's audited revenue for the most recent financial year. The contract involves five types of Carbon Fiber and Carbon Fiber fabrics: A, B, C, D, and E.

The contract execution period is from July 1, 2024, to December 31, 2027. The conditions for the contract to take effect are the signatures of the legally authorized representatives of both parties and the affixing of the official seal.

Upon checking the company's past announcements, it was disclosed on December 30, 2021, that its wholly-owned subsidiary, Weihai Expansion, signed three order contracts with Client A, with a total amount of approximately 2.098 billion yuan, accounting for 99.15% of the company's audited revenue for the most recent financial year. The contract was for *** Model Carbon Fiber and fabric, with a performance period from January 1, 2022, to June 30, 2024.

The Earnings Reports show that the company's revenue changes for 2022 and 2023 were -3.69% and +0.26%, respectively; Net income changes were +23.2% and -6.54%, respectively.

In the first three quarters of 2024, the company's revenue and Net income changed by +8.9% and -1%, respectively. Among them, the revenue from Carbon Fiber in the first three quarters of 2024 was 1.147 billion yuan, an increase of 3.76% year-on-year, with a single-quarter revenue of 0.465 billion yuan, which increased by +38% year-on-year and +27% quarter-on-quarter, mainly due to the volume increase of new Carbon Fiber grades and the commissioning of Phase I of the Baotou project.

According to data from Zhongfu Shenying's annual report, the average price of Carbon Fiber has decreased from 211 yuan/kg in 2022 to 124 yuan/kg in 2023. In conjunction with Weihai Guangwei Composites' financial reports from the past three years, despite the continuous decline in Carbon Fiber prices, the execution of the last major contract has helped maintain stable revenue and Net income for the company in the corresponding year.

The market is quite concerned about the progress of Weihai Guangwei Composites' subsequent new contract signing. In April of this year, when responding to inquiries about new Orders in the equipment business, Weihai Guangwei Composites stated that they are currently executing a major contract lasting two and a half years, which will continue until the end of June this year. New contracts are currently under discussion, and unlike previous major contracts that involved only one product, the new contracts may include T300, T700, T800H grade products, which are already standardized for Aviation use. Currently, they are predicting quantities in collaboration with relevant parties based on end-user demand to facilitate planning and arrangement of production capacity and inventory for various products.

On October 27 this year, during a communication with Institutions, the company mentioned, "At this stage, no major contracts have been signed yet. The primary reason is that unlike the major contracts signed in previous years, which only involved single products, this major contract involves multiple product models and manufacturers, requiring coordination from multiple parties. Currently, negotiations are nearing completion and are progressing smoothly, with plans to sign as soon as possible in the future."

The timing window for signing the new major contract is close to that of the previous one, with the new major contract expected to be finalized by the end of December.

Previously, the company disclosed the progress of the application of Carbon Fiber in domestic Big Plane projects, where T300 grade fibers are provided by the company and processed into prepreg by client A. Looking at the third quarter report, the company's Carbon Fiber business in the Aviation sector is growing rapidly, including T300/T700G/T800H grades. Among them, T700G grade fibers are an important source of incremental growth in the company's Aviation business in the third quarter.

The company indicated that in terms of Carbon Fiber business, the variety of high-end fiber products is gradually increasing, with expectations for stable growth in Aviation equipment applications in the future. If some aerospace-related projects can resume, T700S grade and T800S grade will also contribute to incremental revenue for the company, and high-strength, high-modulus fibers are likely to grow rapidly. In addition, the application of Carbon Fiber in low-altitude economy, gas cylinders, and thermal fields will also provide supplementary contributions to the company's performance.