GDCH Electronic Material Technology Group focuses on high-precision electronic copper foil, printed circuit board (PCB), copper clad laminate (CCL), prepreg (PP film) and other products.
Main business tilted towards copper foil
Since its establishment in 1991, GDCH has been focusing on the PCB industry chain. In 2013, PCB revenue and gross profit accounted for more than 50%, but copper foils with higher gross profit margins are mainly used for personal use. After the company acquired Huizhou Hezheng and upgraded its technology, the production materials gradually tilted towards copper foil products, and the copper foil achieved mass production and sold externally.
As of 2019, copper foil business revenue contributed 493 million yuan, accounting for 37.31%, circuit boards contributed 447 million yuan, accounting for 33.87%, and copper clad laminates contributed 334 million yuan, accounting for only 25.29%; profits accounted for 58.86%, 15.94%, 16.36%. This shows that the copper foil business has now become the core business supporting the company.
Copper foil market opportunity
GDCH's current main copper foil products can be divided into electrolytic copper foil and rolled copper foil, but electrolytic copper foil currently accounts for 95% of the entire market. Chaohua Technology’s main product also happens to be electrolytic copper foil, so there is no need to worry about the market. Capacity issues.
Electrolytic copper foil can be divided into electronic circuit copper foil according to different applications. It is mainly used in PCB production and the other is lithium battery copper foil, which is mainly used in lithium ion batteries. The main difference between the two types of products is the thickness. Standard PCB copper foil is thicker than lithium battery copper foil, and copper foil accounts for a lower cost of lithium-ion batteries. The price insensitivity leads to better bargaining by copper foil factories, so in fact, the price and profit margin of lithium battery copper foil are better. .
Especially after 2015, the application of lithium-ion batteries ushered in great changes. China’s new energy vehicle sales reached 331,000 units, an increase of 343% from the 75,000 units in 2014, driving the demand for lithium-ion batteries to increase by 47% and the proportion of power batteries to 36%, compared to only 14.7% in the previous year. Stimulate the growth of demand for lithium battery copper foil.
At the same time, PCB copper foil is affected by the decline in the chip market's prosperity, and the demand is reduced. However, in 2020, the supply and demand inflection point will be ushered. At the same time, with the commercial landing of 5G, 5G construction requires a large number of chips to stimulate the rebound of PCB copper foil prosperity.
According to China's previously released "Communication Industry Statistics Bulletin 2019", as of the end of 2019, the number of 4G base stations reached 5.44 million, accounting for 64.7% of the total number of base stations, and the number of 5G base stations in my country exceeded 130,000. Starting in 2020, under the guidance of the high certainty of 5G infrastructure, operators are increasing and accelerating their investment in 5G.
Earlier, China Unicom and China Telecom issued a statement stating that they will jointly build 250,000 5G base stations by the third quarter. China Mobile has initiated the bidding and has completed the bidding for the wired side SPN. Therefore, it can be said that whether it is wireless communication infrastructure ( Base station) or wired communication infrastructure, both are expected to bring greater incremental demand in 2020.