Company Overview - Jiujiang Defu Technology Co., Ltd. (referred to as "Defu Technology") was established in 1985 and is headquartered in Jiujiang, Jiangxi Province, China. The company was listed on the Shenzhen Stock Exchange's Growth Enterprise Market in 2023, with stock code: 301511. Defu Technology has been deeply involved in the copper foil industry for 40 years, focusing on the research, production, and sales of high-end electrolytic copper foil, with an annual production capacity of 191,000 tons, ranking first globally. The lithium battery copper foil products cover specifications from 3.5 to 10 micrometers, primarily used in downstream power batteries, energy storage, and digital fields. The electronic circuit copper foil products cover specifications from 10 to 210 micrometers, widely used in downstream printed circuit boards and terminal communications, consumer electronics, and automotive fields [1]. Energy Efficiency Initiatives - Defu Technology has implemented a copper dissolution waste heat utilization project across its production bases, modifying the copper dissolution system to utilize workshop process cooling water waste heat to produce high-temperature hot water, thereby replacing natural gas usage. The annual natural gas consumption for the copper dissolution process is approximately 2 million cubic meters, with a target to achieve zero natural gas consumption by July 2025. Additionally, the self-heat exchange modification of the copper dissolution system has improved the temperature and dissolution rate, saving approximately 60 kWh of electricity per ton of product. The waste heat generated is utilized for various purposes, including heating air conditioning and replacing municipal heating in winter, with total annual waste heat utilization exceeding 25 million kWh across different production bases [2]. - The company has also upgraded its freezing station with AI technology, allowing real-time adjustments of parameters and automated control of cooling systems. This upgrade has resulted in an annual electricity saving of approximately 650,000 kWh for a single workshop. Furthermore, by replacing traditional rectifiers with silicon carbide modules, the company has reduced power conversion losses, leading to an average decrease in electricity consumption of about 200 kWh per ton of product [3][4]. Expert Commentary - Experts have noted that through measures such as waste heat recovery and improved rectifier efficiency, Defu Technology has significantly reduced electricity consumption per unit of product. The company's focus on energy savings and resource recycling demonstrates its commitment to establishing a new benchmark for green production through refined management practices [4].

Core Viewpoint - The acquisition of Luxembourg Copper Foil by Defu Technology for €174 million is a strategic move that significantly enhances China's position in the copper foil market, particularly against Japanese competitors like Mitsui, which has dominated the industry for 30 years [1]. Group 1: Key Opportunities - **Technological Barrier**: The acquisition grants Defu access to critical technologies, specifically HVLP copper foil and DTH carrier copper foil, essential for AI chips, previously monopolized by Japan's Mitsui [3]. - **Profit Potential**: The processing fee for Luxembourg Copper Foil is €120 per kilogram, while Defu's own products are only €60. By leveraging lower domestic electricity costs, Defu aims to reduce operational costs by 20%, significantly boosting profit margins [4]. - **Client Portfolio**: Luxembourg Copper Foil has a prestigious client list, including major players like Nvidia and Doosan, positioning Defu to integrate Chinese copper foil into Nvidia's supply chain [5]. Group 2: Financial Considerations - **Profitability Concerns**: Despite a profit of €167,000 in Q1, Luxembourg Copper Foil reported a loss of €370,000 the previous year, raising questions about the sustainability of its operations and potential price adjustments post-acquisition [6]. - **Regulatory Approval**: The acquisition requires approval from both Chinese and European regulators, which could delay the process significantly, as seen in previous cases [7]. - **Competitive Response**: Mitsui holds 60% of the global removable copper foil market share and is likely to respond aggressively to Defu's acquisition, potentially escalating the technological competition [7]. Group 3: Strategic Recommendations - **Short-term Signals**: Investors should monitor the approval of the EU antitrust clearance and any announcements from Nvidia regarding the CoWoP technology, as these could trigger stock price movements [8]. - **Mid-term Financial Projections**: By 2026, Defu aims to achieve a sales target of 45,000 tons of high-end copper foil, potentially generating an additional €1.35 billion in net profit, doubling the projected profits for 2025 [9]. - **Long-term Market Share**: If CoWoP packaging technology penetration reaches 30% by 2027, Defu could capture 40% of the market, significantly increasing its market valuation [10].