On December 2, Financial Association reported (Reporter Xiao Lianghua) that there is an oversupply of domestic carbon fiber, especially in mid-to-low-end carbon fiber products, and the new wave of capital expenditure in the industry is uncertain; carbon fiber equipment manufacturer zhejiang jinggong integration technology (002006.SZ) is targeting overseas markets.

This evening, zhejiang jinggong integration technology announced that it has signed a sales contract with Saudi GIM company, with a total contract amount of nearly 0.172 billion USD.

According to the contract agreement, zhejiang jinggong integration technology will provide six production lines to Saudi GIM company in installments. Among them, the first production line will be executed after the signing of this contract, the second production line will begin execution in the third quarter of 2025, the third production line will begin execution in the fourth quarter of 2025, and the remaining three will begin execution in 2026.

At the same time, both parties agreed that after this contract is signed, the buyer guarantees to purchase three production lines from the seller each year, with a total production line quantity of no less than 18 lines (including the aforementioned six lines), and a total procurement amount of approximately 0.5 billion USD. The specifications and prices of the new production lines will be agreed upon separately.

Market participants told Financial Association reporters that based on the contract amount for a single production line and the company's previous overseas projects, the production lines referred to in this contract are very likely to be carbon fiber equipment production lines.

On November 19, zhejiang jinggong integration technology stated that currently, its core carbon fiber equipment has been exported to South Korea’s Xiaoxing and Xiaoxing’s Vietnam base, and negotiations are ongoing with clients in Eastern Europe, the Middle East, Central Asia, and other overseas regions for the sale of complete line equipment, with overseas complete line equipment orders expected to break through.

The announcement stated that this trade is primarily for the company to further accelerate the market development efforts for new materials equipment, where the total sales amount of the equipment is 0.164 billion USD, accounting for approximately 76.76% of the company's audited total revenue for 2023. If the contract is carried out smoothly, it will expand the production and sales scale of the company's new materials equipment and have a significant positive impact on the company's future operation performance.

Zhejiang Jinggong Integration Technology, as a leading domestic carbon fiber equipment supplier, holds over 50% of the domestic market share. In the past two years, domestic carbon fiber production capacity has rapidly increased, leading to an oversupply of products, and industry capital expenditure has contracted, putting pressure on Zhejiang Jinggong's performance. Therefore, expanding overseas has become the company's focus of development.

According to financial report data, in the first three quarters, the company achieved revenue of 1.181 billion yuan, slightly up year-on-year, but less than the 1.308 billion yuan in the same period of 2022, with net income shrinking year by year. In the first three quarters of this year, the net income attributable to the parent company was 0.073 billion yuan, a decline of 47.96% year-on-year; the net income attributable to the parent company, excluding non-recurring items, was 0.062 billion yuan, a decline of 50.31% year-on-year.