CATL Leading the Capacity Expansion of Copper Foil

SHANGHAI, Aug 16 (SMM) - CATL has announced a fixed increase plan of 58.2 billion yuan to expand production. At the same time, the copper foil industry, which is the midstream link of lithium batteries, is also booming rapidly.

On the evening of the August 13, CATL’s copper foil supplier Jiayuan Technology announced that it plans to acquire 100% of Shandong Xinliyuan's equity and all assets with 105 million yuan. Shandong Xinliyuan’s business mainly includes the research, development, production and sales of electronic copper foil.

Jiayuan Technology stated that this transaction contains strong business collaboration and is in line with the company’s long-term development plan, which has a positive impact on its operation and management. According to the development strategy, the company plans to take advantage of industry development opportunities to actively expand the scale of production capacity to meet the needs of downstream customers. After acquiring the target company, it can effectively expand the production capacity, thereby increasing market share, enhancing regional competitive advantages, and further consolidating its market position.

Jiayuan Technology has stated in March that it plans to invest approximately 1 billion yuan (the total investment of the final project is subject to actual investment) to build the "Jiayuan Science and Technology Park's new project with the annual output of 16,000 mt of high-performance electrolytic copper foil" on the basis of the "15,000 mt high-performance copper foil project" in Shaping Village, Baidu Town, Meixian District, Meizhou City, Guangdong Province. After the completion of the project, the company's total production capacity in Shaping will reach 31,000 mt/year.

The company's continued increase in production capacity is actually in line with the industry's boom. According to the company's performance forecast, the net profit in tH1 2021 increased by 258-384% year-on-year, and the growth rate of the profits excluding non-recurring gains and losses was as high as 390-563%. The company said that as the pandemic prevention and control has become normalized, market demand has resumed. At the same time, the technology transformation project of 5,000 mt/year high-performance copper foil for new energy power batteries has been completed and put into production, and the overall production capacity has been further improved.

Nuode Holding, another lithium battery copper foil company, also issued a fixed increase plan of 2.288 billion yuan in June for the Qinghai high-performance ultra-thin lithium-ion battery electrolytic copper foil project and Huizhou power battery electrolytic copper foil engineering projects, etc. The performance forecast shows that the company has turned losses into gains in the first half of the year, mainly because the demand for power battery has increased significantly year-on-year. In addition, due to tight supply of copper foil products, the product processing fees have increased to a certain extent compared with the same period last year.

The significant performance improvement also drives the stock prices to rise sharply. The short-term production capacity supply is difficult to surge, and the tight supply of copper foil will continue to intensify.