Incident: On June 20, Shuangxing New Materials announced that the company completed the installation of the first PET composite copper foil equipment in December 2022. The product was then sampled to downstream customers. After repeated testing and verification by the customer, the customer recently received the customer's first product order.
Downstream customer verification progressed smoothly, and PET composite copper foil received the first order. The company proposed the development of a PET composite copper foil material project in August 2020. In October 2020, the company proposed research and development of a polyester functional masterbatch around the raw materials of PET substrates for composite copper foils. Afterwards, the substrate sample was further tested, and metal was plated on the surface of the film layer using magnetron sputtering to achieve metallization of the surface of the substrate. In December 2022, the first composite copper foil production line equipment was installed and commissioned, and downstream customer test evaluation feedback was good. Recently, the company received its first order for PET composite copper foil products, which is a new breakthrough in the field of anode fluid collection, laying the foundation for the company to continue to maintain its technological advantages and help the company explore the new energy market.
In the future, the industrialization of PET composite copper foil, the main material for collecting fluid in anodes, will accelerate. With the continuous improvement of market requirements for copper foil performance, lithium battery copper foil has experienced iterative development from porous electrolytic copper foil, carbonized copper foil, high-performance lithium battery copper foil to ultra-thin copper foil. PET copper foil is a novel fluid collector material for power batteries in the form of a sandwich layer with PET as a conductive film and copper foil coating on both sides. Compared with traditional lithium battery copper foil, PET copper foil has advantages such as strong safety, increased battery energy density, and reduced cost. It is expected to become a new trend in the development of the industry in the future. According to statistics from the China Automotive Power Battery Industry Innovation Alliance, the cumulative production of power batteries in China reached 545.9 GWh in 2022, an increase of 148.5% over the previous year. Shuangxing New Materials expects demand for power batteries to reach 1.5 to 1.6 TWh in 2025, and the corresponding market capacity of PET composite copper foil is about 10 to 15 billion yuan.
Actively explore the new energy market, and the products have been recognized by professional organizations. The company's first PET copper foil production line has an annual production capacity of 3.5 million square meters. The product molding width is 1,300 mm, and the 1680 mm wide width product is under development. The length of a single roll is 1,200m, 2200m, and 4,200m, respectively, according to client requirements. Samples of the company's composite copper foil products have been sent to a number of lithium battery companies. Recently, new verification of battery coating was carried out. After testing and evaluation by professional institutions, the company's composite copper foil products performed well in indicators such as overall adhesion, ductility, and compactness.
Investment suggestion: The company is deeply involved in the polyester film material industry and actively extends product layout. Various new materials such as PET composite copper foil, next-generation reinforced PET, high-end composite COP/COPP film, MLCC product development, etc. have all achieved substantial breakthroughs, and production capacity will soon be released. We expect the net profit of the return mother in 23/24/25 to be 5.03/726/945 million yuan respectively, corresponding to PE 26/18/14 times. Considering the future decline in upstream raw material prices, the company's new production lines are expected to be put into operation one after another. Profit growth will accelerate and the “recommended” rating will be maintained.
Risk warning: Upstream raw material prices fluctuate; product development falls short of expectations; downstream demand falls short of expectations.