Gon Tech taps high-grade industrial gases to accelerate growth

The producer of modified plastics has flagged up rising earnings from its core business and is also betting on specialty gases as a new source of income

Key Takeaways:

• Gon Technology has forecast a profit rise of 54% to 79% for the first three quarters after a pick-up in its modified materials business 
• The company is broadening its reach with the $224 million acquisition of a firm that makes high-purity gases used in the chip and power sectors 

By Lee Shih Ta

One of China’s leading suppliers of modified plastics is riding a wave of earnings growth in its mainstay business while also expanding into the processing of high-purity gases for advanced electronics.

Qingdao Gon Technology Co. Ltd. (002768.SZ; 2768.HK), which supplies an array of materials from polystyrene to eco-friendly bioplastics, issued a positive profit alert on Oct. 14, citing an optimized product mix as well as operational efficiencies and improved competitiveness.

The company projected a net profit for the nine months ended Sept. 30 of between 950 million yuan and 1.1 billion yuan ($142 million and $164 million), a rise of 54.45% to 78.84% from the year-earlier period. After deducting non-recurring items, the adjusted rise ranges from 54.14% to 79.27%, based on preliminary, unaudited figures.

Modified plastics, the firm’s core business, are primarily used in sectors such as home appliances and automobiles. Polypropylene, polyethylene, polyvinyl chloride and acrylonitrile butadiene styrene serve as base materials, combined with resins, fibers or other additives to provide extra strength, heat resistance and flame-retardant properties. Gon Tech’s materials are produced in granular form for downstream processing into finished components.

The company’s biggest single revenue segment is organic polymer modified materials, which includes modified plastics. The company also supplies organic polymer composite materials, green petrochemicals and other new materials.

Starting out in plastics, the business was founded in 2000 by entrepreneurs Wang Aiguo and Ding Xibang with a joint investment of 1 million yuan, before expanding into upstream and downstream processing. The company listed in Shenzhen in 2015 and then in Hong Kong in February this year. 

In the first half of 2026, Gon Tech’s revenue increased 18% but its profit rose at a quicker pace of nearly 90%, led by rapid growth in green petrochemical materials and other new materials and bolstered by higher income from its core business. Gross margins increased across the major materials segment in the first half, showing that the product mix as well as increased sales were driving profits.

The modified materials business accelerated from growth of just 0.31% in 2025 to a robust rate of 11.57% in the first half of 2026. However, without a more detailed breakdown at this stage, it is hard to evaluate how each segment is feeding into overall earnings in the second half of this year.

Expanding into industrial gases

Gon Tech’s industrial chain stretches from raw chemicals and synthetic resins to modified materials, composites and finished products. Now it is extending its footprint further, with the acquisition of a company supplying gas mixtures used in the manufacture of semiconductors and display panels.

Gon Tech bought an 80% stake in Sichuan Zhongfuneng New Material Technology Co. Ltd. for 1.5 billion yuan in a cash deal that formally completed on Oct.14. The acquired company produces specialized gases used in fields such as electrical power, advanced manufacturing and semiconductors.

High-purity carbon tetrafluoride and nitrogen trifluoride are used for etching and cleaning in chip manufacturing, while sulfur hexafluoride is widely utilized in high-voltage power equipment. China’s electronic specialty gas market is projected to reach 42 billion yuan by 2030, driven by the expansion of wafer fabs, manufacturing upgrades and a state push for technological self-sufficiency, according to research by Northeast Securities.

By adding gases to its industrial ecosystem, Gon Tech aims to strengthen its high-end materials business while reducing its dependence on sectors such as home appliances and automobiles. The success of the strategy will depend on whether the unit can make inroads into the highly sought-after supply chains of semiconductor clients, to generate sustained orders and profits.

Signs are that Sichuan Zhongfuneng is in expansion mode. In 2025 it logged revenue of 377 million yuan and net profit of 71.21 million yuan. Over seven months of this year its revenue already reached around 90% of last year’s total, while net profit was 93% of the last annual tally. 

Nevertheless, the acquisition announcement cited risks including excess capacity, potential goodwill impairment and the possibility that post-merger integration efforts may disappoint.

Investors will pay close attention to whether subsequent earnings can justify the steep purchase price. Extrapolating from the 1.5 billion yuan price tag for an 80% stake, the valuation for the entirety of Sichuan Zhongfuneng’s equity is around 1.88 billion yuan, representing a premium of roughly 200% over its 628 million yuan in net book assets.

Gon Tech’s Hong Kong-listed shares trade at a trailing price-to-earnings ratio of about 9 times, well below the 21 times for U.S. specialty polymer materials manufacturer Avient Corp. (AVNT.US), highlighting market doubts about the earnings outlook for the Chinese company and the value of the recent acquisition.

Still, the purchase could serve as a new growth engine for Gon Tech, if the incorporated business can translate its expanded production capacity into new orders from a growing number of customers.

To subscribe to Bamboo Works free weekly newsletter, click here