Finance Association, December 28 (Reporter Luo Yichen) The main business continues to decline, and Heshun Technology (301237.SZ) urgently needs to find new space. Recently, the company has made frequent cross-border carbon fiber moves. Following the finalization of technical cooperation partners in November, it was announced this evening that it plans to invest 1 billion yuan to build a carbon fiber project.

This evening, Heshun Technology announced that the company and Langfang Hengshou New Material Technology Partnership (Limited Partnership) (hereinafter referred to as “Hengshou New Materials”) signed a “Project Investment Agreement” with the Hangzhou Qiantang New Area Management Committee to invest in the construction of a 350 tons/year M-grade carbon fiber project in Qiantang New Area, with a total investment of 1 billion yuan.

For Heshun Technology, which has a market capitalization of only 2.3 billion yuan, the financial pressure for new projects is self-evident. On December 20, investors asked about the company's carbon fiber capital expenditure plan during research. The management replied that project funds were raised in stages through own funds or self-financing, bank project loans, and business operation repayments.

Constrained by the continued decline in performance in recent years, it is difficult to say that Heshun Technology has sufficient capital reserves. Since its listing in 2022, the company's performance “changed its face”. Net profit to mother in 2022 shrunk by more than 47% year on year, to less than 65.35 million yuan. Entering this year, there was no improvement. Net profit to mother in the first three quarters was only around 20 million yuan, a sharp drop of more than 60% year on year. Poor performance was compounded by an increase in project expenditure, and the company's capital reserves gradually shrunk. By the end of September this year, the monetary capital was only 224 million yuan.

Or in order to dispel doubts from the outside world about project funding, the company mentioned in the announcement that out of a total investment of about 1 billion yuan, the fixed asset investment was about 457.91 million yuan. The fixed investment was accumulated over 3 years, and production was achieved within 3 years after the project was completed and put into operation.

Having been deeply involved in the polyester film industry for many years, Heshun Technology is quite aggressive in crossing the border carbon fiber. In November of this year, the company announced that it had reached a cooperation with Hengshou New Materials to take the first step in cross-border carbon fiber. According to reports, Hengshou New Materials has a carbon fiber technology team with Xiu Lei as the core. In December of this year, Hangzhou Hexing Carbon Fiber Technology Co., Ltd. was registered and established. It is owned by Heshun Technology, which accounts for 25% of Hengshou New Materials's shares.

A Finance Association reporter noticed that, driven by various types of capital, the carbon fiber industry has entered a peak period of production capacity release. This year, industry inventories are piling up, demand is weak, and prosperity has declined markedly. The industry generally expects that it will be difficult to recover in the short term.

In this context, Heshun Technology's future for this crossover is unspeakably optimistic, but it should be noted that the company chose to lay out high-end M-grade carbon fiber, which is a typical aerospace-grade carbon fiber. The listed company Guangwei Composites (300699.SZ) also has a layout.