GNMI Advances as a Global Materials Leader with CQV and SUSONITY Acquisitions... "Praised by Securities Analysts"

On December 2, it was announced that GNMI, a Hong Kong-listed global manufacturer of pearlescent pigments, is rapidly expanding its global portfolio by successively acquiring Korea's CQV and the Surface Solutions business unit (SUSONITY) of Germany's Merck. As the strategy to strengthen its high value-added product lineup in the pearlescent pigment sector becomes more apparent, securities analysts are also offering positive assessments.

According to industry sources, GNMI has established a global supply chain spanning Asia, Europe, and the United States by incorporating CQV and SUSONITY. After acquiring CQV in 2023, GNMI has continued to increase its stake, now holding a total of 5.51 million shares (a 50.75% stake).

Founded in 2000, CQV is Korea's leading manufacturer of pearl pigments and possesses strong global competitiveness in advanced application fields such as industry, cosmetics, and automotive. Since the acquisition, CQV has seen steady improvements in gross profit margin and net profit margin, even reaching a new record high in the first half of this year.

In June, GNMI completed its premium product lineup by investing 665 million euros (1.131 trillion won) to acquire 100% of SUSONITY. SUSONITY has operated a high-end pigment business for over 60 years, serving premium markets such as automotive and cosmetics as its main clientele.

Through the acquisition of these two companies, GNMI is expanding its portfolio of high-purity, high-functionality pearlescent pigments and strengthening its competitiveness in premium markets such as automotive coatings and cosmetics.

The pearlescent pigment and effect materials industry is a sector characterized by high growth potential and strong customer loyalty in the premium market. Major brands in the automotive and cosmetics industries must minimize quality risks, resulting in low price sensitivity and high switching costs for supply chains. As a result, leading companies that have established trust naturally build high entry barriers. This market has long been dominated by a handful of companies, including Merck, BASF, and CQV.

GNMI is leveraging SUSONITY's global premium distribution network, in-house synthetic mica production, and global procurement system to simultaneously enhance access to key customers in Europe and the United States and improve cost efficiency. The company has also accelerated product development with a research and development (R&D) network connecting China, Germany, Korea, Japan, and the United States.

The recently launched Iriotec® 8214 is an eco-friendly, high-performance laser marking material that can be applied to electrical, electronic, and electric vehicle components, supporting high-contrast marking and improved production efficiency. The launch of this product is seen as evidence that GNMI is expanding its scope from a simple pigment supplier to a high-performance materials company.

From 2017 to 2024, GNMI achieved a compound annual growth rate (CAGR) of 36.58%, and its gross profit margin rose from 43.99% to 53.34%, proving its transition to a structure centered on high value-added products.

The proportion of synthetic mica sales expanded to 31.4%, with the average selling price rising 16.6% year-on-year to 60,000 yuan (12.43 million won) per ton. Production capacity, currently at 12,000 tons, is planned to expand to 112,000 tons in the long term, with the 100,000-ton Tonglu facility set to begin operations in the second half of this year.

A company representative stated, "Through strategic acquisitions and integration, we have entered a cycle of global and premium growth. Profitability will be enhanced through internal synergies and improvements in our cost structure."

Local securities analysts have identified GNMI's entry into the global high-end supply chain, moving beyond a China-centric structure, as a key growth driver. They analyzed that the company has achieved both 'scale-based cost efficiency' and 'product premiumization' by integrating acquired assets with existing production bases.

In its first coverage report, Beta International evaluated GNMI as a leading global pearl materials company and issued a 'Buy' recommendation. According to the report, GNMI is the first Chinese company to integrate top-tier brands in Europe and the United States. Its subsidiaries, Qixizhu Guang and CQV, offer 2,192 products, establishing a global production and sales network across five regions. Beta International assessed that GNMI's global strategy and the sales, cost, and R&D synergies from its acquisitions are driving high-quality growth in both revenue and profit, estimating a fair price-earnings ratio (PER) of 25 times for this year, with about 59% upside potential compared to the current share price.

Huayuan Securities also highlighted the high growth potential, low price sensitivity, and strong brand barriers in the pearl pigment industry, forecasting that GNMI's global market expansion through strategic acquisitions and increased domestic production capacity will contribute to cost reduction and absorption of demand.

This content was produced with the assistance of AI translation services.