New Material Classification and Investment Focus

　　New materials cover a wide range of fields. Generally speaking, they refer to new materials produced or synthesized using a series of research methods such as physical research, material design, material processing, and experimental evaluation, which have superior properties to traditional materials, or materials whose properties have been significantly improved or new functions have been created after modification of traditional materials. They mainly include new functional materials, high-performance structural materials, and advanced composite materials. The new materials industry refers to the collection of industries related to the research and development, production, processing, sales, and application of new materials. It plays a leading, supporting, and mutually promoting role in the development of many other fields, and has broad application prospects in many downstream sectors such as energy, information, equipment manufacturing, and transportation. It is the most powerful common basic industry.
　　New materials include tens of thousands of sub-categories of materials. Currently, common classification methods include classification by composition and classification by function. First, according to the composition, they can be divided into four major categories: metal new materials, inorganic non-metal new materials, organic new materials, and composite new materials.

　　Secondly, according to the structure, they can be divided into three categories: new structural materials (used for their excellent mechanical properties to manufacture tools, vehicles, machinery, or to build houses and infrastructure), new functional materials, and integrated structural and functional materials.

　　The new materials industry has numerous sub-sectors, with rapid technological and product development. Compared with traditional industries, it has greater uncertainty. The downstream demand, competitive landscape among enterprises, and technological development trends vary greatly among different materials. Therefore, investment in the new materials industry needs to consider the following points:
　　1. Focus on the attributes of downstream demand. New materials corresponding to energy saving and emission reduction, environmental protection, new energy, medical and health, rail transit, high-end equipment manufacturing, and national defense and military industries will develop rapidly.
　　2. Focus on the matching of heavy asset investment and objective market demand: Whether the real market demand can match the high depreciation, high management, and financial expenses brought about by heavy asset investment.
　　3. Whether the formula and preparation process can meet the trend of "multi-variety and small-batch" in the new materials industry.
　　4. Product technology barriers and customer certification barriers are very important. On the one hand, they affect the net profit margin, and on the other hand, they are also important for preventing overcapacity, which can greatly affect the sustainability of growth.
　　5. Whether it has a multi-variety continuous R&D system.