Huaxin Securities: Initiates coverage on Henghui Security with a Buy rating

HuaXin Securities Co., Ltd. Lu Qian and Lin Zijian recently conducted research on Henghui Security and published a research report titled “Company Dynamics Research Report: Leading Global Security Gloves Company, Expanding into Humanoid Robot Textiles,” initiating coverage of Henghui Security with a Buy rating.

Henghui Security (300952)

Investment Highlights

Leading Security Gloves Company, Developing a New Growth Curve with Ultra-High Molecular Weight Polyethylene

Over 20 years of deep cultivation in the hand safety protection field, continuously optimizing and iterating product performance. Founded in 2004, focusing on security gloves; by 2007, production exceeded 3 million pairs, with 98% exported to Europe, America, and Japan; in 2012, successfully developed NJ506 series of washed ultra-fine foam products; launched the international brand Bestgrip in 2017; in 2020, Hengshang New Material factory was put into production; in 2021, launched the domestic independent brand “Quansheng”; in 2022, achieved major breakthroughs in the development and application of METALQ engineering yarn; in 2023, Hengshang New Material released 3,600 tons of ultra-high molecular weight polyethylene fibers. The company has long focused on hand safety protection, mainly producing multi-functional safety gloves with cut resistance, high wear resistance, puncture resistance, high/low temperature resistance, chemical resistance, oil resistance, and shock absorption, along with a small amount of general protective gloves and related protective equipment, and has laid out ultra-high molecular weight polyethylene fibers and composite materials.

Functional Safety Protective Gloves: These gloves are designed with special fibers and functional coatings. Depending on the yarn type, special fiber gloves excel in cut resistance, tear resistance, flame retardancy, high-temperature resistance, and chemical corrosion resistance, suitable for high-risk environments such as handling sharp objects, contact with blades, and heavy lifting. General fiber gloves combined with nitrile, PU, natural latex, and other functional coatings further enhance puncture resistance, abrasion resistance, acid-base resistance, oil resistance, and temperature resistance, mainly used in semi-wet and oily environments, as well as scenarios requiring slip resistance, durability, and close fit. From 2021 to the first half of 2025, revenue from functional safety gloves accounted for 98.1%, 98.9%, 96.55%, 95.99%, and 95.45% of total revenue, respectively, maintaining dominance.

Ultra-High Molecular Weight Polyethylene (UHMWPE) Fibers and Composites: With excellent properties such as low density, high breaking strength and modulus, and chemical stability, they are core materials for high-end protection and emerging fields. Relying on independent capacity, the company has formed a series of products represented by MetalQ, BT30, and BT38 to meet diverse scenario needs. Currently, products are widely used in high-strength cut-resistant gloves, body armor, stab-resistant clothing, industrial cables, and high-end textiles, and are actively expanding into wind turbine blades, aerospace, and artificial intelligence applications. Revenue from UHMWPE fibers and composites accounted for 3.00%, 3.44%, and 3.47% of total revenue in 2023-2024 and the first half of 2025.

Steady Core Business Growth, Short-term Profitability Pressure

Revenue has maintained steady growth, with overall expense ratios remaining stable. Due to exchange rate fluctuations, raw material costs, and reduced government subsidies, net profit attributable to the parent has experienced fluctuations, with short-term pressure on profitability, but overall expense ratios remain stable.

In terms of main business, revenue for 2021-2024 was 950 million, 893 million, 977 million, and 1.27 billion yuan, respectively, with YoY changes of +14.50%, -5.94%, +9.39%, and +29.95%, and a CAGR of 10.16%. Net profit attributable to the parent was 93 million, 122 million, 106 million, and 117 million yuan, with YoY changes of -12.64%, +31.49%, -13.05%, and +10.13%, CAGR of 7.95%. The lower net profit growth in 2021 was mainly due to exchange losses from RMB appreciation and rising raw material prices; the significant revenue increase in 2024 was mainly driven by overseas business growth. In Q1-Q3 2025, the company achieved revenue of 880 million yuan, up 0.97% YoY; net profit attributable to the parent was 82 million yuan, down 12.85% YoY; non-recurring net profit was 72 million yuan, down 2.52% YoY, mainly due to reduced government subsidies and uncertainties in US tariffs on Chinese products, with some customers adopting a wait-and-see attitude.

Domestic and international markets: From 2021 to the first half of 2025, overseas revenue was 890 million, 818 million, 854 million, 1.126 billion, and 527 million yuan, respectively, accounting for 93.88%, 91.54%, 87.41%, 88.71%, and 88.90%. Overseas markets remain the core revenue contributor, while domestic revenue shows an upward trend.

Profitability: Gross margins in 2021-2024 were 22.97%, 25.05%, 25.13%, and 22.03%, with YoY changes of -3.68, +2.08, +0.08, and -3.1 percentage points, indicating short-term pressure.

Expense ratios: 12.23%, 11.48%, 13.01%, and 11.11% from 2021-2024, remaining generally stable. The company leverages its security glove business as a foundation while expanding R&D and application of ultra-high molecular weight polyethylene fibers and composites, driving synergy through technological innovation and targeting high-end markets and emerging fields.

Focusing on Security Gloves and Expanding into Ultra-High Molecular Weight Polyethylene

The security glove market has broad prospects, with high-end segments still dominated by international brands. Functional gloves are classified by yarn material into special fiber and general fiber types, and by coating into nitrile, PU, natural latex, and other functional coatings, to meet diverse protection needs such as cut resistance, wear resistance, oil resistance, and acid-base resistance. The upstream industry chain includes special fibers, synthetic rubbers, and chemical auxiliaries; downstream applications cover machinery processing, automotive manufacturing, construction, petrochemical, outdoor, firefighting, military, and other professional scenarios. According to Reports and Data, the global protective glove market was about $11 billion in 2023, expected to surpass $16 billion by 2027, with a CAGR of approximately 6.4%. Currently, international brands like MCRSafety, PIP, and Grainger hold advantages in branding and channels; domestic companies such as Henghui Security, Kanglongda, and Qiangsheng Technology are catching up through material and process innovations, with some product performance nearing international levels.

The UHMWPE market continues to expand, with domestic companies accelerating into high-end fields. Its high strength, high modulus, lightweight, and excellent wear and impact resistance are widely used in safety protection, military ballistic protection, marine engineering, and high-end textiles. According to QY Research, the global UHMWPE market is projected to grow from about $1.8 billion in 2024 to $3.1 billion in 2031, with a CAGR of about 7.8% from 2025-2031. China’s production and demand are also rapidly increasing: in 2022, China produced approximately 80,200 tons of UHMWPE, with a CAGR of 14.33% from 2015-2022; demand reached 105,100 tons, with a CAGR of 10%. Currently, about 20 domestic UHMWPE fiber producers have a total capacity exceeding that of foreign producers, with 91% of capacity using wet process technology, many also producing downstream products like ballistic materials and coated yarns. Overall, China’s UHMWPE fiber quality ranks among the top globally. Among them, Jiuzhou Xingji has a capacity of 30,000 tons, ranking first worldwide with a 48% domestic share; other key players include Tongyi Zhong, Millennium Dragon Fiber, Nanshan Zhishang, Yizheng Chemical Fiber, Changqing Vine, and Henghui Security, with a combined capacity share of 35.79%, indicating high industry concentration.

Synergistic Development of Security Gloves and UHMWPE Accelerates Growth

From the security glove perspective, the company mainly exports ODM/OEM branded products to markets with strict security standards such as Europe, America, and Japan, establishing stable cooperation with brands like Bunzl, MCRSafety, and PIP. It is estimated that in 2023, the company’s global market share of security gloves was about 1.24%. By leveraging the dual drive of “functional security gloves + UHMWPE fibers,” the company has built an integrated industry chain from fiber R&D to glove manufacturing, forming core advantages in product performance, cost control, and customization, continuously expanding high-end clients in automotive, new energy, and other industries, promoting domestic substitution and market penetration. In UHMWPE business, the company has achieved multiple breakthroughs through continuous R&D: MetalQ engineering yarn performance has reached international leading levels; 800D ballistic fiber has achieved critical improvements with breaking strength ≥42 cN/dtex and modulus ≥1600 cN/dtex; successfully addressed technical challenges such as fiber coloring and creep resistance, significantly improving color fastness and long-term stability. Relying on material innovation and industrial synergy, the company is expanding from traditional protection to robotics, wind power, and other emerging scenarios.

Core Competitiveness Built on Technology, Robotics Components Enter Productization Stage

As the core transmission component of humanoid robots, tendon cords determine the precision and reliability of motion control. Mainstream solutions focus on steel wire ropes and high-molecular fibers, meeting requirements for high specific strength, low elongation, high bending fatigue resistance, low friction coefficient, and creep resistance. Steel wire ropes include tungsten steel and stainless steel ropes, which have no internal friction, low friction with sliding surfaces, and high strength, making them traditional options. UHMWPE tendon cords, with high strength, low density, and fatigue resistance, are advantageous in lightweight, high-precision bionic robots, medical rehabilitation robots, and service robots. Compared to steel ropes, UHMWPE fibers are about one-third the price but still need further improvements in creep resistance and wear resistance.

Flexible outer layers are becoming key components for human-machine interaction as humanoid robots move from labs to factories and homes. Metal shells protect internal structures but pose safety risks; thus, adding flexible cushioning protective layers is a rigid requirement. These layers provide basic protection such as foreign object resistance, wear resistance, and water resistance, and serve as ideal carriers for flexible sensors, integrating sensors into easily replaceable clothing. This greatly reduces maintenance costs and replacement complexity compared to attaching sensors directly to the robot body. Companies like Xiaopeng, 1X, and Figure have already applied such solutions in humanoid robots; Tesla is also recruiting for soft covering materials, confirming that flexible outer layers are becoming an indispensable part of robot commercialization.

Leveraging core technology accumulation, the company is entering the robotics track. Based on its experience in precision knitting and elastomer coating in security gloves, and proprietary fiber material technology, it has developed autonomous capabilities from material R&D, process design, to core component manufacturing. Currently, protective flexible joints, protective gloves, and other protective products have been delivered in small batches; UHMWPE fiber transmission tendon cords have been tested by multiple domestic and international robot companies; and integrated solutions of “tendon + sleeve + clamp + sensor” are under development. Skin suits and gloves have undergone multiple sample deliveries and are being iteratively optimized based on feedback; development of electronic skin suits and gloves is progressing steadily, focusing on integration and testing of flexible elastomers and sensors.

Profit Forecast

The company is projected to achieve revenues of 1.51, 1.88, and 2.27 billion yuan in 2025-2027, with net profits attributable to the parent of 134 million, 171 million, and 218 million yuan, respectively. With over 20 years of focus on hand safety, expanding into high-end markets with ultra-high molecular weight polyethylene, and actively developing robotics and biodegradable polyester rubber, the company is expected to maintain steady growth, maintaining a “Buy” rating.

Risk Warning

Risks include raw material price increases, weaker-than-expected downstream demand, geopolitical risks, project delays, and exchange rate fluctuations.

Latest profit forecast details:

In the past 90 days, one institution has issued a rating, with a Buy rating; the average target price among institutions is 31.12.

This content is compiled from public information by Securities Star, generated by AI algorithm (Network Credit Number 310104345710301240019), and does not constitute investment advice.