IPO Preview | Best Goes to Hong Kong: N'BASS supports high gross profit, can the new business take over growth?
As a core link in the upstream high-tech industry chain, materials with enhanced electronic functions determine the upper performance limit and iterative pace of terminal products based on their physical and chemical control capabilities in terms of acoustics, heat, electricity, and optics.
Recently, Best officially submitted a prospectus to the main board of the Hong Kong Stock Exchange to be listed on the main board of the Hong Kong Stock Exchange. In recent years, Best has relied on N'BASS acoustically enhancing materials to establish strong market competitiveness, and on this basis, it has accelerated its expansion into fields such as electronic ceramics, electronic adhesives, and energy enhancing materials. The company's revenue scale continued to grow, but as the share of new businesses increased, the overall gross margin also changed markedly.
For a materials company in the process of business expansion, revenue growth is only one aspect; product structure, profitability, and the quality of growth of the new business are also worth paying attention to. So, how much of Best's current growth actually comes from the continued expansion of its core business, and how much from the expansion of new business?
From N'BASS to multi-materials, acoustic materials are still a pillar of profit
Zhitong Finance App learned that as a technology enterprise focusing on the development and industrialization of materials with enhanced electronic functions, Best currently has three core technology platforms, namely inorganic powder, polymer materials and composite material technology platforms. The products are mainly used to improve the acoustic, optical, thermal and electrical properties of components in the consumer electronics and new energy fields, and further extended to advanced packaging, computing power and semiconductor-related fields.
Among them, the company's core business is still acoustically enhancing materials, and the most representative product is N'BASS materials. The company began exploring the field of acoustic materials in 2017, then gradually established capabilities from raw material design to production and application verification. After N'BASS materials entered large-scale commercial supply, they continued to launch different series of products through cooperation with downstream customers.
According to the prospectus, in terms of revenue in 2025, the company ranked first in the global acoustic enhancement materials market, with a market share of about 20%. At the same time, N'BASS materials have entered the fields of smartphones, laptops, tablets, and smart wearables, and are expanding into AI glasses, XR devices, and new energy vehicles.
From 2023 to 2025, the company's revenue for acoustic reinforcement materials was RMB 212 million, RMB 219 million and RMB 304 million respectively, accounting for a proportion of the company's revenue falling from 66.1% to 48.6%, but gross margins reached 76.1%, 83.5% and 82.6% respectively during the same period. In other words, even though the share of acoustic materials revenue has declined, it still contributes to the company's most important source of profit. In the first half of 2026, the gross margin of the company's acoustic reinforcement materials further reached 83.4%.
Behind this high gross profit, on the one hand, it comes from the technical properties of the material itself, and on the other hand, it is also related to customer verification and supply chain entry barriers. According to information, N'BASS is a nanoscale porous ceramic material, which mainly improves the low frequency performance of micro speakers by constructing a virtual back chamber.
As smart terminals continue to be thinner, lighter, and smaller, speakers achieve higher sound quality in a limited space, placing higher demands on related materials. As of June 30, 2026, the company has a large number of patents and patent applications related to N'BASS materials. Of these, 169 patents have been authorized, and another 134 patent applications are yet to be approved, covering materials, production processes and application scenarios.
However, the advantages of the acoustic materials business are also exactly what companies need to be wary of. In the first half of 2026, revenue from acoustic enhancement materials fell 9.1% year on year to 132 million yuan, mainly due to the decline in order demand for some Android phone brands. Sales volume fell from about 19,900 kg to 18,500 kg during the same period, while the average sales price remained stable, indicating that the company currently has strong price and technical barriers in this field, but the demand side is still affected by the consumer electronics cycle.
In order to reduce dependence on a single business and a single terminal market, the company has significantly accelerated its diversified layout in recent years. Among them, electronic ceramic materials are the most noteworthy. According to the Zhitong Finance App, the company acquired Zhejiang AGCO at the end of 2024 to enter the lithium-ion battery separator coating materials and cathode additives market.
This acquisition rapidly changed the company's revenue structure. In 2025, the company's electronic ceramic materials achieved revenue of 134 million yuan, accounting for 21.4% of annual revenue, and gross margin of 21.6%. In the first half of 2026, the business's revenue further increased by 46.6% year-on-year to 88.85 million yuan, and sales increased from about 3 million kg to about 4.1 million kg, mainly driven by increased demand for lithium-ion batteries.
According to Frost & Sullivan data, based on 2025 revenue, the company ranked second among global suppliers of alumina ceramic materials in the LIB diaphragm coating field, with a market share of about 14.3%.
Therefore, the greatest significance of the electronic ceramics business is not to contribute much profit in the short term, but to help the company obtain a second growth curve in the field of new energy materials. However, it is also important to note that there is a clear gap between the current profit level of this business and N'BASS. If the company's revenue continues to shift from high-margin acoustic materials to medium-margin electronic ceramics in the future, even if revenue grows rapidly, this may not mean that profits can grow at the same time.
In addition to this, electronic adhesives are another business with potential but still expanding. Among them, the company entered the field of electronic adhesives in 2021, first moving from acoustic adhesives, and launched optical adhesives in 2024. Revenue from electronic adhesives increased to 22.36 million yuan in 2025, up 142.4% year on year, mainly driven by sales growth, but the average selling price dropped from 776 yuan/kg to 276 yuan/kg due to the increase in the proportion of lower-priced products after the expansion of the product structure.
In the first half of 2026, sales of electronic adhesives increased from about 162,000 kg to 83,000 kg, of which sales of optical adhesives increased from 7,500 kg to 75,000 kg, but the average price dropped sharply from 536 yuan/kg to 137 yuan/kg, and the trend is even more obvious. At the same time, the gross margin of the business fell from 57.6% to 24.9%. On the one hand, it was affected by increased manufacturing costs due to capacity expansion, new equipment and site modifications, and on the other hand, it was related to low gross margin optical adhesive production.
In contrast, revenue from energy-enhancing materials reached 165 million yuan in 2025, accounting for 26.4%, but gross margin was only 0.8%; in the first half of 2026, revenue increased further by 93.4% to 132 million yuan, accounting for 36.3%, but gross margin fell further to 0.6%. The main reason for this was the rise in the price of silver powder in photovoltaic conductive paste.
Looking at the overall performance in the first half of 2026, the company's revenue increased 28.8% year over year to 365 million yuan, but gross profit fell from 136 million yuan to 132 million yuan, and overall gross margin dropped significantly from 48.2% to 36.1%. Among them, the share of revenue from high-margin acoustic-enhancing materials fell from 51.4% to 36.3%, while the share of low-margin energy enhancement materials increased from 24.1% to 36.3%. In other words, the company is currently undergoing a structural transformation where “revenue is growing faster than profit growth.”
Betting on AI and advanced packaging, how to capitalize on growth after the IPO?
If we look at Best's development over the past few years in a longer industrial chain cycle, the company has completed the first stage from a single product breakthrough to multiple business layouts, and what is more noteworthy after listing is whether this kind of business expansion can be further transformed into stable operating returns.
For functional materials companies, being able to enter the supply chain of leading customers is only the first step. What really determines long-term competitiveness is iterative R&D, mass production delivery, cost control, and the ability to continuously obtain new projects. Judging from the information disclosed in the prospectus, what Best is strengthening is this system of competencies from R&D to industrialization.
As of June 30, 2026, the company's R&D investment was not limited to improving existing products. As of June 30, 2026, the company had an internal R&D team of more than 68 people. The research direction covered inorganic powders, polymers, composites, electronic ceramics, semiconductors, advanced packaging, etc.
For materials companies, the significance of this platform-based R&D capability is that once new performance requirements appear in downstream terminals, companies can rely on existing material systems for rapid iteration of formulations, processes, and applications, rather than completely relying on the life cycle of a product. In 2025, the company also launched N'BASS powder products jointly developed with terminal customers, and achieved mass production and application to multiple AI terminal devices, which also shows that the company is trying to find increments from traditional consumer electronics needs to new smart terminals.
Seen from this perspective, AI terminals may be an incremental variable worth continuing to track in the future. Currently, AI phones, AI glasses, and XR devices are still evolving in product form, and intelligent terminals usually bring more complex human-computer interaction requirements, and the importance of sound, optics, heat dissipation, and other functional materials may also increase.
For Best, its advantage is not to bet on a specific terminal, but rather that its material technology can cover multiple functional dimensions. If AI terminals enter a larger commercialization stage in the future, the company's existing customer resources and material development capabilities will have the opportunity to be further transformed into new order opportunities.
However, at the same time, while expanding rapidly, Best is also facing some hidden business concerns and industry risks. First, there is an extremely prominent risk of customer concentration: during the track record period, the company's revenue from the top five customers reached 88.2%, 82.3%, 78.4% and 75.7%, respectively, and the revenue share of the largest single customer rose to 33.3% in the first half of 2026.
Second, cyclical fluctuations in the downstream consumer electronics industry have brought short-term pressure on performance. As rising memory chip prices drive up terminal sales prices, global Android smartphone shipments in 2026 are expected to fall 10.7% year on year. The company has clearly warned that net profit for the full year of 2026 may decline year on year.
Third, there is the risk of sharp fluctuations in raw material prices. As the main raw material for conductive paste, the price of precious metal silver powder soared from 5855.2 yuan per kilogram in 2023 to 20,380.7 yuan per kilogram in the first half of 2026. Although the company carried out economic hedging through commodity futures contracts, the high raw material base still had a diluting effect on gross margin.
Aiming at the use of capital raised and future performance catalysts, Best's current Hong Kong stock IPO will mainly invest in three major production capacity expansion projects: it plans to add 60 tons of acoustically enhancing materials, 16,000 tons of electronic ceramic materials, and 300 tons of electronic adhesives per year by 2031. At the same time, the company plans to use large funds to build a comprehensive R&D center including an incubation center for ceramic powders, polymer materials and new technologies, and recruit professional R&D and application engineers.
In addition, the company is also actively developing next-generation high-growth application scenarios: in the field of AI smart terminals, the ultimate pursuit of lightness and high sound quality in generative AI phones and folding screen phones will accelerate the increase in stand-alone usage and penetration rate of high-end models; in the field of new energy and semiconductors, along with the increase in safety and energy density requirements for lithium battery power and energy storage cells, the demand for ultra-thin diaphragm ceramic coating materials is ushering in the release cycle; in the field of advanced packaging and computing power materials, the company is accelerating the release cycle; in the field of advanced packaging and computing power materials, the company is accelerating the promotion of alumina and silicon dioxide powder in the field of advanced packaging and computing power materials Epoxy encapsulants Application development in underfill adhesives and thermal interface materials to break the import monopoly of high-end semiconductor packaging materials.
Summarize
Taken together, Best's core focus in the next phase is not to search for new products, but to verify whether it can rely on the established R&D, customer, and industrialization base to bring more products to large-scale markets. Core business provides cash flow and profit base, listing financing further supplements production capacity and R&D resources, and new products provide room for future growth. If this cycle continues, the ceiling of the company's business is expected to rise further as application scenarios expand.
Of course, industry risks cannot be ignored. Demand for consumer electronics fluctuates cyclically, and the new energy industry chain also has strong price competition and cost transmission characteristics, while emerging fields such as AI terminals and advanced packaging still require time from technological breakthroughs to large-scale commercialization. Therefore, the company's future performance depends not only on its own R&D and customer development capabilities, but also on changes in downstream demand and the industrial cycle.
Therefore, what is more important than short-term revenue growth is to observe whether a reasonable profit margin can be gradually formed after the expansion of new business, and whether the company can maintain its core technical advantages and operating efficiency while expanding its business. If these indicators can be verified, then Best's growth logic may gradually shift from being “core product driven” in the past to “technology platform driven”. This is also the most observable change in the company after this IPO.