Jiaao Enprotech Anchoring Two Core Clients, Leading the SAF Track
1) On August 22, 2025, the company released its semi-annual report for 2025. In the first half of the year, the company achieved operating revenue of RMB 1.298 billion, a year-on-year increase of 71.00%; net profit attributable to shareholders was -RMB 78 million, a year-on-year decrease of 4.73%; and net profit attributable to shareholders after deducting non-recurring gains and losses was -RMB 79 million, a year-on-year decrease of 12.03%. In the second quarter alone, the company achieved operating revenue of RMB 831 million, a year-on-year increase of 220.66% and a quarter-on-quarter increase of 78.00%; net profit attributable to shareholders was -RMB 31 million, a year-on-year increase of 25.82% and a quarter-on-quarter increase of 33.68%; net profit attributable to shareholders after deducting non-recurring gains and losses was -RMB 31 million, a year-on-year increase of 18.14% and a quarter-on-quarter increase of 35.32%.
2) On August 21, 2025, China National Aviation Fuel Group and Zhejiang Jiaao Environmental Protection held a signing ceremony in Lianyungang for the capital increase and equity expansion agreement of their SAF cooperation project. The two parties will effectively integrate their respective advantages in technology, production, market, and channels to jointly build an internationally competitive SAF production base and supply chain system.
Leading in Technology and Production Scale, Significant Achievements in Strategic Transition to SAF
The company's subsidiary, Lianyungang Jiaao, currently operates an SAF facility with an annual processing capacity of 500,000 tons, making it the largest SAF enterprise in operation in China. The second phase will further expand the capacity to 1 million tons per year. In November 2024, the first phase of Lianyungang Jiaao's 500,000-ton SAF project successfully produced qualified products. In May 2025, Lianyungang Jiaao obtained China's first bio-jet fuel export license and achieved its first SAF export in the same month. As of the first half of 2025, environmentally friendly plasticizers accounted for 26.19% of the company's main business revenue, environmentally friendly stabilizers accounted for 1.95%, and biomass energy (primarily SAF) accounted for 71.86%, making it the company's dominant business. The strategic transition of its core business has yielded significant results.
Global Procurement Drives SAF Price Increase, Strong Market Conditions in the First Year of SAF
2025 marks the first year of the European Union's transition from recommended to mandatory SAF blending, requiring a 2% SAF blending ratio for flights. This is expected to correspond to an SAF consumption of 1.37 million tons, a significant year-on-year increase of approximately 760,000 tons. According to the Boston Consulting Group, less than 30% of SAF projects have reached final investment decisions. Given that production facilities typically take 3-5 years to achieve large-scale production, the risk of a supply gap is increasingly severe. This has led to improved SAF procurement conditions in the European market and a significant rise in SAF valuation prices. We believe that the EU's mandatory SAF blending ratio will likely remain rigid in the future. Meanwhile, the industry standard for quantifying the carbon footprint of aviation fuel recently released by the Civil Aviation Administration of China provides an authoritative tool for quantifying SAF's emission reduction effects. This is expected to serve as a strong reference for domestic SAF blending ratio requirements and, from a medium- to long-term perspective, could become a key catalyst for unlocking domestic demand. With strong external demand and gradually approaching domestic demand catalysts, China's SAF production enterprises are expected to enter a phase of simultaneous volume and price increases, significantly improving profitability.
Anchoring Two Core Clients, Paving the Way in the Global SAF Track
Following the introduction of global energy giant BP as a strategic shareholder of Lianyungang Jiaao in 2024, the company announced in August 2025 the introduction of China National Aviation Fuel, a leading domestic aviation fuel company, as a shareholder of Lianyungang Jiaao. We believe that through equity partnerships with BP and China National Aviation Fuel, the company has secured two major international and domestic SAF distribution channels, effectively ensuring the absorption of future production capacity. Additionally, we believe that in the early stages of the SAF industry, the dual endorsement from BP and China National Aviation Fuel highlights the company's leading position in technology, cost, and compliance, which is expected to significantly aid market expansion. Currently, the company possesses all necessary qualifications and certifications and is the first enterprise included in the "Exporter White List," allowing it to legally export SAF products. Leveraging its first-mover advantage, the company can flexibly allocate domestic and international resources, adjust supply based on international carbon tax policies and market demand, and take the lead in expanding into the global SAF market.