Investment Rating - The report does not explicitly state an investment rating for the company Core Views - Shanghai Superconductor is the global leader in high-temperature superconducting (HTS) wire, with a unique annual shipment exceeding 1,000 kilometers. The company achieved a revenue of 240 million yuan in 2024, a year-on-year increase of 187.40%, and a net profit of 72.94 million yuan, successfully turning a profit after previous losses. The market for HTS materials is expected to exceed 10.5 billion yuan by 2030, with a CAGR of 53.91% from 2024 to 2030, particularly driven by the controllable nuclear fusion sector, which is projected to grow from 30 million yuan in 2024 to 4.9 billion yuan by 2030, with a CAGR of 59.29% [3][71]. Group 1: Company Overview - Shanghai Superconductor was established in 2011 and has developed a comprehensive production process for second-generation HTS wire, covering equipment development, raw material formulation, coating technology, cutting and packaging, and quality control monitoring [3][10]. - The company has maintained a domestic market share of over 80% for second-generation HTS wire, ranking first for three consecutive years from 2022 to 2024 [4][86]. Group 2: Financial Performance - The company's revenue increased from 36 million yuan in 2022 to 240 million yuan in 2024, with a growth rate exceeding 100% for two consecutive years [18][24]. - The net profit improved from a loss of 26 million yuan in 2022 to a profit of 72.94 million yuan in 2024, marking a successful turnaround [18][24]. - The gross margin rose from 24.28% in 2022 to 60.72% in 2024, primarily due to cost reductions driven by economies of scale [24][38]. Group 3: Market Potential - The global market for HTS materials is projected to exceed 10.5 billion yuan by 2030, with significant growth in applications such as controllable nuclear fusion and superconducting cables [71][67]. - The controllable nuclear fusion market is expected to grow significantly, with a projected increase from 30 million yuan in 2024 to 4.9 billion yuan by 2030 [71][67]. Group 4: Competitive Advantages - The company’s core competencies include technology, equipment, and delivery capabilities, with its production technology reaching international advanced levels [4][76]. - Shanghai Superconductor is one of only two companies globally capable of producing over 1,000 kilometers of HTS wire annually, highlighting its leading position in the industry [86][4].

Industry Insights - The State-owned Assets Supervision and Administration Commission (SASAC) emphasizes the need to enhance the resource security of important metal minerals and accelerate the comprehensive development of the non-ferrous metal industry chain, including exploration, investment, development, construction, smelting, and processing [1] - A new round of mineral exploration strategy is being implemented to increase reserves and production of important metal minerals, while also promoting a positive image of central enterprises in the "going out" strategy [1] - There is a focus on achieving high-quality stable growth by closely monitoring macroeconomic conditions and industry trends, adjusting business strategies, and planning major projects to support domestic demand expansion [1] Technology and Market Trends - High-temperature superconductors are expected to see increased market share due to ongoing developments in superconducting cables and controlled nuclear fusion applications [2] - The ReBCO tape is anticipated to significantly reduce production costs compared to first-generation high-temperature superconductors, presenting vast commercial prospects [2] - Controlled nuclear fusion is viewed as a potential ultimate solution for human energy needs, with commercial development prospects expected to accelerate as domestic and international projects progress [2] Company Developments - Western Superconductor is the only company in China that has achieved commercial production of superconducting wires, with products used in major scientific projects such as the International Thermonuclear Experimental Reactor (ITER) and China's fusion reactor [3] - Baile Electric has developed superconducting current limiter technology and is involved in the construction of smart grids for the State Grid, with products certified by IEC to enhance grid stability [3] - Dongfang Tantalum is recognized as the world's largest research and manufacturing base for superconducting niobium materials, achieving a stable RRR value of over 500 for high-purity superconducting niobium materials [4]

Group 1 - The construction of Hegang Luobei Airport in Heilongjiang Province has received preliminary design approval, marking the completion of preliminary work and the transition to full construction phase [2][3] - The airport is designed to handle an annual passenger throughput of 450,000 and a cargo throughput of 1,600 tons, featuring a 2,500-meter runway and a terminal building of 5,008 square meters [2][4] - The airport project aims to support the transformation of Hegang, a resource-depleted city, by enhancing air transport connectivity and promoting tourism and diversified industries [4][3] Group 2 - The planning for Hegang Airport began in 2013, with various approvals received over the years, including a joint approval from the State Council and Central Military Commission in 2022 [3][4] - The local government aims to start construction by June 2024 and expects the airport to be operational by 2027 [4] - Heilongjiang Province currently has 14 civil transport airports, ranking fifth in the country, and the new airport will enhance the regional transportation network [4] Group 3 - The Civil Aviation Administration and China National Railway Group are promoting the development of air-rail intermodal transport, focusing on collaboration and integration [5] - A new superconductor base with an investment of 2.5 billion yuan has commenced construction in Pudong, which will be the largest project in the global superconducting field [6] - Hubei Province has established a 10 billion yuan humanoid robot investment fund, focusing on core areas of humanoid robots and artificial intelligence [8]

Core Insights - The high-temperature superconducting (HTS) materials industry is experiencing significant growth opportunities due to breakthroughs in superconducting technology across various sectors such as energy, healthcare, and transportation [3][4] - The industry faces challenges including high material costs, technological shortcomings, and an incomplete supply chain, which need to be addressed for sustainable development [8][9] Group 1: Development Opportunities - Breakthroughs in scalable production technologies for HTS materials have been achieved, with companies in China's Yangtze River Delta region capable of producing kilometer-long YBCO superconducting wires, reaching international advanced levels [4] - The application of HTS materials is becoming increasingly mature, with developments in superconducting power equipment and the establishment of the world's first superconducting substation [5] - The market demand for HTS materials is experiencing explosive growth, with a tenfold increase since 2020, driven by the potential commercialization of fusion reactors and advancements in high-energy accelerators [6] Group 2: Challenges to High-Quality Development - The cost of HTS materials remains high, limiting their large-scale application, with YBCO wire prices around $150 per kA·m, far from the target of $50 per kA·m for widespread use [8] - Key technologies for high-end superconducting magnets are still reliant on imports, hindering the industry's ability to compete globally [9] - The supply chain for HTS materials is not fully developed, with dependencies on foreign imports for critical raw materials and equipment, posing risks to self-sufficiency [9] Group 3: Strategies for Advancement - The industry should focus on core technology breakthroughs, collaborative development, and the establishment of an innovative ecosystem to enhance the rapid development of the HTS materials sector [10][11] - Strengthening the supply chain by ensuring the availability of high-purity raw materials and advanced manufacturing technologies is essential for the industry's growth [10] - Encouraging participation from local governments, leading enterprises, and research institutions in R&D efforts will foster a collaborative innovation platform, promoting resource sharing and technological standards [11]

Group 1 - Foreign enterprises continue to favor China despite international trade frictions, attracted by its status as the world's second-largest consumer market [2][4] - Otis Elevator Company highlights the significant growth potential in China, with over 11 million elevators in use, and government support for upgrading old elevators [2][4] - The report from the Ministry of Commerce indicates that profits of foreign-invested industrial enterprises in China are expected to rise from 1.6 trillion RMB to 1.8 trillion RMB from 2019 to 2024, maintaining a profit margin above the national average [4] Group 2 - China possesses a complete industrial supply chain, which is a unique advantage for foreign companies like Boeing, where 50% of production materials are sourced locally [4] - Schneider Electric has established a robust green supply chain in China, with over 1,600 suppliers and 30 factories, making it a crucial market for the company [4] - The investment in R&D in China is projected to reach 36.13 billion RMB in 2024, reflecting an 8.3% increase from the previous year, supporting foreign enterprises in building efficient supply networks [5] Group 3 - Companies like West Superconducting Materials have successfully collaborated with multinational firms, enhancing their product quality and establishing themselves as global leaders [6] - The trend of "Chinaization" in investment strategies is shifting from manufacturing to include R&D and design, as companies adapt to local market needs [8] - The Chinese government's commitment to reform and opening up is instilling confidence in foreign investments, with a reported 10.4% increase in new foreign-invested enterprises in early 2025 [9]

Core Viewpoint - Shanghai Superconductor's IPO application has been accepted, aiming to raise funds for the production of second-generation high-temperature superconducting tapes and its headquarters project, with significant growth in revenue and profitability expected in the coming years [1][4]. Company Overview - Shanghai Superconductor is a high-tech enterprise focused on the research, production, and sales of high-temperature superconducting materials, recognized as one of the global leaders in this field [2]. - The company has established strong partnerships with numerous well-known domestic and international enterprises and research institutions, covering a wide range of applications including controlled nuclear fusion and advanced medical technologies [2]. Financial Performance - The company has shown rapid revenue growth, with total revenues of approximately 35.78 million yuan in 2022, 83.34 million yuan in 2023, and an expected 239.53 million yuan in 2024, reflecting a compound annual growth rate of 158.74% [4]. - The company is projected to achieve profitability in 2024, with a net profit of approximately 72.95 million yuan, after experiencing losses in the previous two years [4]. Product and Market Dynamics - The second-generation high-temperature superconducting tape is the primary revenue source, with its revenue share increasing from 69.84% in 2022 to 97.8% in 2024, driven by increased production and sales [1]. - The sales volume of the second-generation high-temperature superconducting tape is expected to rise significantly from 68.72 kilometers in 2022 to 955.47 kilometers in 2024, while the unit production cost is projected to decrease from 262 yuan per meter to 92.91 yuan per meter [9]. Customer Concentration and Competition - The company has a high customer concentration, with the top five customers accounting for over 70% of total revenue, raising concerns about dependency on a limited customer base [1][12]. - The high-temperature superconducting materials industry is characterized by high technical barriers and limited suppliers, but increasing competition is anticipated as several manufacturers, including Shanghai Superconductor, are planning to expand production capacity [10][12].

Core Viewpoint - China's superconducting technology is advancing rapidly, with Shanghai Superconductor Technology Co., Ltd. being the only company globally to produce over 1,000 kilometers of superconducting materials annually, indicating a significant competitive edge in the industry [1] Company Summary - Shanghai Superconductor Technology Co., Ltd. plans to expand its production capacity significantly, aiming to reach 20,000 kilometers within three years [2] - The company has established itself as a global leader in high-temperature superconducting materials, holding over 80% market share domestically and serving more than 180 clients worldwide [1] - The company has moved its operations to a new industrial area to facilitate a production increase from 200 kilometers to 2,000 kilometers annually [1] Industry Summary - The superconducting materials industry is expected to experience explosive growth over the next decade, prompting the need for rapid capacity expansion [1] - The Zhangjiang area has become a preferred location for new factories due to recent land price reductions, making it more accessible for companies like Shanghai Superconductor [2] - The establishment of a dedicated approval service team in Zhangjiang has streamlined the process for new projects, allowing for faster construction and operational readiness [3][4]

Core Viewpoint - Shanghai Superconductor Technology Co., Ltd. has initiated its IPO process on the Sci-Tech Innovation Board, aiming to raise 1.2 billion yuan, with China International Capital Corporation (CICC) as the sponsor [1][3]. Group 1: IPO Journey - The company was established on October 18, 2011, with a registered capital of 520 million yuan, focusing on high-temperature superconducting materials [3]. - Key milestones include the start of IPO counseling on November 28, 2024, and the acceptance of the IPO application on June 18, 2025 [3]. Group 2: Business and Governance Risks - The company faces high customer concentration, with the top five clients contributing over 70% of revenue. A 30% decline in the State Grid's procurement volume in 2024 has led to an increase in inventory turnover days to 287 days, compared to 180 days in 2022 [5][6]. - The commercial viability of its technology is questioned, as claims of entering fields like controlled nuclear fusion and medical devices remain unproven, with large-scale applications expected to take 5-10 years to develop [7]. - The chairman, Ma Tao, has limited public information available, and his past associations raise concerns about governance and transparency [8][10]. Group 3: Financial Data Analysis - The company reported revenues of 0.35 billion yuan in 2022, increasing to 0.83 billion yuan in 2023, and projected to reach 2.39 billion yuan in 2024. However, it also faced net losses of 0.28 billion yuan in 2022 and 0.04 billion yuan in 2023, with a projected profit of 0.72 billion yuan in 2024 [12]. - The high accounts receivable, which accounted for 52% of revenue, raises concerns about the quality of earnings, especially given that some major clients are relatively new companies [12]. - The company plans to expand its production capacity significantly, aiming for an annual output of 6,000 kilometers, while the global market for high-temperature superconducting materials is only about 50 kilometers in 2024, indicating a severe supply-demand mismatch [12]. Group 4: Regulatory Inquiry Anticipation - The company may face inquiries regarding its technology commercialization capabilities, governance structure without a controlling shareholder, and high accounts receivable potentially indicating bad debt risks [13]. - Investors are advised to monitor three critical signals: the ability to diversify the customer base, the potential for positive cash flow, and the feasibility of capacity utilization [13].

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the **high-temperature superconductors (HTS)** industry, focusing on the classification, applications, and advancements in superconducting materials [1][2][3]. Core Insights and Arguments - **Superconducting Materials Classification**: Superconductors are divided into two categories: Type I and Type II, with Type II being more practical due to its ability to form mixed states. They are further classified into low-temperature superconductors (LTS) and high-temperature superconductors (HTS) [1][3]. - **HTS Materials**: HTS materials can operate under liquid nitrogen conditions, making them more advantageous compared to LTS, which require liquid helium. HTS materials include copper-based (e.g., bismuth and yttrium barium copper oxide) and iron-based superconductors [1][5]. - **Performance Metrics**: The critical current density (JC) for HTS can reach the order of megaamperes per square centimeter, allowing for more compact magnet designs and higher magnetic field strengths [1][10]. - **Market Dynamics**: Shanghai Superconductor Company holds an 80% market share due to completed equipment depreciation, government support, and early expansion. However, increased competition may lead to price pressures [3][30][31]. Important but Overlooked Content - **Technological Advancements**: China has made significant breakthroughs in iron-based superconductors, achieving important applications such as full iron-based magnets and producing 100-meter-long iron-based tapes [7][8]. - **Cost Reduction Potential**: The cost of second-generation HTS tape has decreased from 260 RMB per meter in 2022 to 92 RMB per meter in 2024, indicating potential for further cost reductions depending on specifications and market demand [29]. - **Applications in Fusion Energy**: HTS materials are crucial in fusion energy applications, including current leads and magnetic coils, allowing for higher magnetic field strengths and reduced equipment sizes [24][25]. - **Future Price Stability**: The future price levels of HTS materials may be influenced by performance, pricing competition, and urgent project demands, with a potential downward trend due to low-price competition in the Chinese market [32]. This summary encapsulates the essential points discussed in the conference call, providing insights into the HTS industry, its current state, and future prospects.

Core Viewpoint - Shanghai Superconductor Technology Co., Ltd. (Shanghai Superconductor) has successfully submitted its IPO application on the STAR Market, backed by Shanghai Kechuang Group, which has played a crucial role in its development and growth since 2014 [1][3]. Company Development - Shanghai Kechuang Group has been a significant shareholder of Shanghai Superconductor, providing strategic investment and support during critical phases of its development, particularly during its technological challenges in 2014 [3]. - The company has achieved a leading position in the global high-temperature superconducting materials market, with its products being utilized in various advanced applications, including controlled nuclear fusion and high-end manufacturing [4]. Market Position - Shanghai Superconductor is recognized as one of the world's leading manufacturers of high-temperature superconducting materials, with a domestic market share exceeding 80% for its second-generation high-temperature superconducting tapes, ranking first for three consecutive years from 2022 to 2024 [4]. - The company has established strong partnerships with numerous well-known domestic and international enterprises and research institutions, enhancing its market presence and technological capabilities [4].