Jiayuan Technology announced that the company's gross margin for the first half of the year was 1.7%, a decrease of 4.92 percentage points year-on-year. In the future, the market share of lithium-ion copper foil will be concentrated in leading companies. The company's single crystal copper foil has achieved small-scale production capacity and is expanding to new customers. Ultra-thin copper foil (UTF) for PCB has been mass produced. A pilot line for composite copper foil with a two-step process route has been completed, samples have been sent for testing, and mass production capabilities are in place.
According to the Science and Technology Innovation Board Daily on September 4th (Reporter: Yu Jiaxin), copper prices have risen and market competition has intensified. Since the beginning of this year, copper foil companies have faced continuous performance pressure and are facing losses, and the future trends of the copper foil industry are being watched.
During the 2024 interim earnings conference held today (September 4th), Jiayuan Technology Chairman Liao Pingyuan did not give a positive response to the profit and loss issues of concern to investors. However, he mentioned that "with the escalation of market competition, processing fees for copper foil are trending downward, and the profitability of various copper foil manufacturers has declined significantly. Small and medium-sized manufacturers have poor risk resistance, and capacity clearance is the future trend. The market share of lithium-ion copper foil will be concentrated in leading companies."
In the first half of 2024, Jiayuan Technology increased its revenue but did not increase its profit. Its operating income was 2.423 billion yuan, a year-on-year increase of 16.62%; its net loss was 0.105 billion yuan, a decrease of 595.15% year-on-year.
Regarding gross margin, Jiayuan Technology's financial director Liao Guosong stated at the earnings conference that the company's gross margin for the first half of the year was 1.7%, a decrease of 4.92 percentage points year-on-year. "The main reasons for the decrease are the decrease in processing fees, the significant increase in copper prices, and the decrease in capacity utilization rate due to the impact of customer orders, resulting in an increase in unit cost."
In terms of production and sales volume, Li Henghong, the secretary of the board of directors, stated that in the first half of 2024, the company achieved a copper foil production volume of approximately 0.024 million tons and a sales volume of approximately 0.025 million tons. "Currently, the processing fee for lithium-ion copper foil is still relatively low, but there is still room for price increases for high value-added products. The company will increase research and development innovation and gradually increase the proportion of high value-added products."
In terms of research and development investment, Jiayuan Technology Chairman Liao Pingyuan mentioned that the company currently focuses on research and development in the field of lithium-ion copper foil, focusing on materials required for the "low space economy" and the iteration of different battery technologies, such as high silicon, semi-solid state, and all-solid state. It is also conducting frontier research and development on composite copper foil, micro-hole copper foil, single-crystal copper foil, and new special copper foil.
Specifically, the company's cutting-edge product, single-crystal copper foil, has achieved small-scale production capacity and is currently expanding to new customers. In the field of electronic circuit copper foil, ultra-thin copper foil (UTF) for PCB has been mass produced, and domestic alternatives have been realized in multiple high-end electrolytic copper foil areas.
In recent institutional surveys, Jiayuan Technology stated that the company mainly develops composite copper foils in the field of composite current collectors, and has built a pilot line for composite copper foils with a two-step process route. The company has mastered the production technology of composite copper foils with PET, PP, and PI as the base film, and has sent samples for testing and has the production capacity. At the same time, the company has also carried out the process design of the one-step process for composite copper foils, and has mastered the technology of new polymer film as the base film and no precious metal process formula technology.
In terms of overseas markets, Liao Pingyuan, Chairman of Jiayuan Technology, stated that in the first half of the year, the company established a wholly-owned subsidiary, Guangdong Jiayuan International Logistics Co., Ltd., to export copper foils through the "zone-port linkage" and "sea-rail intermodal" model, further promoting the international sales of copper foil products. Jiayuan Technology mentioned in a recent survey that "currently, the investment and operating costs of overseas plants are relatively high, and there are no related plans. If the overseas market has cost advantages in the future, the consideration of related plans cannot be ruled out."
According to a research report by Haitong Securities, the copper foil industry has now entered the cost support stage, and enterprise profits are under pressure. With the gradual clearing of production capacity and the improvement of supply and demand relationship, overall production capacity clearance may continue until 2025.