Supply Ningde / BYD! Another lithium materials giant is about to launch IPO!

At noon on November 10, Tongling Nonferrous announced that the company had recently received notice from its holding subsidiary, Copper Crown Copper foil, that the application materials for initial public offering of shares and listing on the gem had been submitted to the CSRC for registration on November 7, 2021, and the CSRC announced the application document for registration of copper crown and copper foil on November 8, 2021.

The follow-up copper crown copper foil will also carry out relevant work in accordance with the relevant regulations and requirements of the Securities Regulatory Commission and the Shenzhen Stock Exchange, and will be issued and listed on the gem after registration and approval by the Securities Regulatory Commission.

BYD is the number one customer

According to the data, copper crown copper foil was established on October 18, 2010. it is mainly engaged in the research, development, manufacture and sales of all kinds of high-precision electronic copper foil. The main products are classified by application field, including PCB copper foil and lithium battery copper foil.

Among them, the downstream industry of PCB copper foil is mainly the electronic information industry, and the terminal application fields include communications, computer, consumer electronics and automotive electronics, etc.; the downstream industry of lithium battery copper foil is mainly the new energy industry, and the terminal application fields include new energy vehicles, electric bicycles, 3C digital products, energy storage systems and so on.

According to the prospectus (registration draft), the customers of copper crown copper foil in the field of PCB copper foil include Shengyi Technology, Taiwan Technology, Taiwan Optoelectronics, Huazheng New material, Jinan Guoji, Shanghai Power Co., Ltd., South Asia New material, etc., and customers in the field of lithium battery copper foil include BYD, Ningde Times, Guoxuan High Tech, Xing Heng shares, Tianjin Lishen, Zhuoneng New Energy and so on.

From January to June 2018 to 2021, the combined income of the top five customers of the company's lithium battery copper foil accounted for 88.17%, 75.73%, 79.95% and 86.06% of the total revenue of lithium battery copper foil, respectively, accounting for a relatively high proportion.

Among them, after years of development, BYD has become the company's largest customer of lithium battery copper foil. From 2018 to 2020 and from January to June 2021, the sales of copper crown copper foil accounted for 56.88%, 43.01%, 45.02% and 58.14% of the total revenue of lithium battery copper foil, respectively, showing an upward trend year by year.

Specifically, the top five customers of lithium battery copper foil products of copper crown copper foil from January to June 2021 are BYD (58.14%), Ningde era (10.72%), Xingheng Power supply (9.22%), Guoxuan Tech (4.14%) and Gold extracted Metal (3.85%).

It is worth pointing out that in March 2020, Hefei Guoxuan, a wholly-owned subsidiary of Guoxuan Hi-Tech, jointly signed the Capital increase Agreement and related supporting documents with Tongling Nonferrous and Bronze Crown Co., Ltd. After the completion of the capital increase, Hefei Guoxuan holds a 3.50% stake in copper crown copper foil.

In this listing, Copper Crown Copper foil plans to issue no more than 207.25 million shares, with Tongling Nonferrous holding 72.38% and Hefei Guoxuan 2.62%.

Raise nearly 1.2 billion yuan

According to the prospectus (registration draft), copper crown copper foil plans to raise about 1.19727 billion yuan for the annual production of 20, 000 tons of ultra-thin electronic copper foil for high-precision energy storage (phase II), high-performance electronic copper foil technology center project and supplementary liquidity.

In terms of performance, from 2018 to 2020, the revenue of copper crown copper foil was 2.411 billion yuan, 2.4 billion yuan and 2.46 billion yuan respectively, and the net profit was 227 million yuan, 99 million yuan and 72 million yuan respectively.

From the perspective of net profit, it has shown a trend of decreasing year by year in the past three years. Copper crown copper foil said, mainly due to the decline in the prosperity of the downstream industry, changes in the supply and demand of PCB copper foil led to a decline in unit processing income and the impact of the epidemic situation of COVID-19.

The performance of copper crown and copper foil improved significantly in 2021. According to the prospectus (registration draft), from January to September 2021, the company's operating income was 3.071 billion yuan, an increase of 77.93% over the same period last year; the net profit attributed to the owner of the parent company was 284 million yuan, an increase of 574.28% over the same period last year; after deducting non-recurring profits and losses, the net profit attributed to the owner of the parent company was 270 million yuan, an increase of 741.06% over the same period last year

Among them, from July to September this year, the operating income of copper crown and copper foil was 1.15 billion yuan, an increase of 61.04% over the same period last year; the net profit was 113 million yuan, an increase of 420.37% over the same period last year; and the net profit belonging to the owner of the parent company after deducting non-recurring profits and losses was 105 million yuan, an increase of 457.39% over the same period last year.

In other words, the net profit of copper crown and copper foil in the third quarter of 2021 is higher than that of 2020.

In terms of gross profit margin, from January to June 2018 to 2021, the gross profit margin of the company's main business was 16.85%, 11.59%, 9.71% and 16.61%, respectively.

In terms of market position, the company has a market share of 8.18% of copper foil products in 2020, ranking second in total shipments of domestic enterprises. Specifically, PCB copper foil shipments ranked first among domestic enterprises in 2020, while lithium battery copper foil shipments ranked fifth.

In terms of production capacity, copper crown copper foil has a total production capacity of 45000 tons / year, of which PCB copper foil production capacity is 25000 tons / year, lithium battery copper foil production capacity is 20 million tons / year, forming a "PCB copper foil + lithium battery copper foil" dual-core drive business development model.

In terms of product structure, in the field of 5G RTF copper foil, copper crown copper foil can currently achieve sales volume of 300t / month, ranking first among domestic enterprises in production and marketing capacity, that is, copper crown copper foil has significant advantages in the field of high-performance PCB copper foil; at the same time, the latest generation of 5G communication HVLP copper foil products have been in the last round of comprehensive verification stage, and the production line initially has quantitative production capacity.

In the field of copper foil for lithium battery, copper crown copper foil has achieved the sales income of 4.5 μ m and 5 μ m products, and realized the large-scale production of 6 μ m double-sided lithium battery copper foil in 2018, which is one of the earliest enterprises to realize the production of 6 μ m products in China. In 2020, the company sold 1887.22 tons of copper foil products for 6 μ m lithium batteries, an increase of 138.70% over the same period last year. However, due to different customer structures, the production and sales of copper foil products for 6 μ m lithium batteries are lower than those of their main competitors in the industry.

In terms of suppliers, from January to June 2018, the related purchases of copper crown copper foil from the parent company Tongling Nonferrous and its subsidiaries were 1.708 billion yuan, 1.673 billion yuan, 1.75 billion yuan and 1.333 billion yuan respectively, accounting for 84.69%, 78.45%, 77.77% and 81.98% of operating costs, respectively.

Among them, from January to June in 2021, the top five suppliers of copper crown copper foil were Nonferrous Group and its subsidiaries (93.16%), Anhui Electric Power (6.28%), Anhui Xinjia Copper Industry (3.08%), Nanjing Huaxin Nonferrous Metals (1.23%) and Mahneto Special anode (Suzhou) (0.59%).

It is worth noting that the largest supplier is the controlling shareholder of Tongling Nonferrous, that is to say, Tongling Nonferrous is actually still the largest supplier of copper crown copper foil.