After signing the first order for composite copper foil, the company made an important breakthrough in the field of composite fluid collection, which has important nodal significance. According to the announcement, since the launch of the company's ultra-thin copper film project, samples have been sent to visitors several times. The composite copper foil products have been tested and verified by customers, and recently received the customer's first order for composite copper foil products. For the company, since the release of cathode aluminum foil, composite copper foil received its first order, marking a technological breakthrough and industrialization entering a strategic industrial point. The next step is to focus on the continued commercialization of the company's composite copper foil. For the industry, from process and performance improvements to continuous development of commercialization, it is worth focusing on.
It has a first-mover advantage in equipment and membrane technology, and the industrial advantage is expected to stand out and lead the way. The company is one of the earliest companies in the industry to intervene in the R&D and production of composite copper foil. With years of technical accumulation in the functional film business and close cooperation with downstream core customers, the company's composite copper foil R&D progressed rapidly, and the sample delivery scale continued to increase and received positive feedback from downstream, making it one of the first companies to take orders in the industry.
According to publicly exchanged information, the company has multiple sets of imported magnetron sputtering equipment, electron beam coating equipment, and water plating equipment. Compared with traditional copper foil, composite copper foil has advantages such as weight reduction, low cost, high energy density, and long cycle life. At the same time, the company's existing customer resources are of high quality, which is expected to further accept multiple customer orders and open up new momentum for growth.
The margin of battery aluminum foil is expected to rise, and new production capacity will drive growth. The capacity utilization rate of cathode aluminum foil is expected to increase marginally in the second quarter, with domestic and export increasing month-on-month. Benefiting from improved overseas demand, power battery shipments have increased since May, and the operating rate of the battery foil industry has improved. According to the China Automobile Association, the production/sales volume of new energy vehicles in January-May was 300.5/2.94 million units, +45.1%/46.8% year-on-year, of which the production/sales volume of new energy vehicles in May was 71.3/717,000 units, +53%/60.2% over the same period and +11.4%/12.6% month-on-month.
As a high-end battery aluminum foil leader, the company is closely tied to core customers such as Ningde. The first phase of 40,000 tons of battery foil has now climbed to full production, the second phase of 32,000 tons is expected to be put into production one after another from August 23 and released in 2024. The third phase 100,000 tons have completed the main equipment order and will be put into production as early as 24H2. At that time, the company's battery foil production capacity will reach 172,000 tons, in the leading tier of the industry, fully benefiting from the rise in industry sentiment and the acceleration of the commercialization process of sodium-ion batteries. In addition, the company also has the advantage of being self-sufficient in upstream blanks. The planned production capacity of high-precision aluminum strip is 250,000 tons (130,000 tons in Guangyuan, Sichuan; 60,000 tons each in Anhui Zhongji and Jiangsu Zhongji), laying a solid foundation for battery foil production capacity expansion.
Investment advice. The company's main aluminum foil business is growing strongly, and production capacity has ushered in a continuous expansion cycle; high value-added businesses such as carbon foil coating and high barrier film continue to advance; composite copper foil has broken through from 0 to 1, starting a new era of growth. We expect the company's net profit to be 285/4.21/523 million yuan in 23-25, +39.6%, 47.4%, and 24.4% year-on-year. The corresponding PE is 25.18X/17.08X/13.74X, maintaining the “buy” rating.
Risks suggest that raw material prices have risen sharply, production capacity has fallen short of expectations, and competition in the industry has intensified.