Core Viewpoint - Defu Technology has demonstrated significant growth in revenue and profit in the first half of 2025, driven by strategic focus on high-value products and technological advancements in production efficiency [1][2]. Financial Performance - In the first half of 2025, Defu Technology achieved revenue of 5.299 billion yuan, a year-on-year increase of 66.82% - The net profit attributable to shareholders reached 38.7062 million yuan, marking a year-on-year growth of 136.71% and a turnaround from previous losses [1]. Product Development and Market Position - The company has expanded its high-value product matrix, successfully completing certifications for downstream manufacturers and achieving bulk supply [2]. - In the lithium battery copper foil segment, the company has achieved bulk shipments in the hundred-ton range for copper foil used in semi/fully solid-state batteries [2]. - Defu Technology has developed new products such as 3.5μm ultra-thin copper foil and porous structure copper foil, which are undergoing testing and supply to multiple downstream clients [2]. Technological Advancements - The company is focusing on high-frequency, high-speed, ultra-thin, and functional technology strategies, with products like RTF-3 and RTF-4 undergoing certification and bulk supply [3]. - The company has made significant progress in HVLP copper foil, with products already supplied for AI server projects and 400G/800G optical modules [3]. Acquisition Strategy - Defu Technology initiated a plan to acquire Luxembourg Copper Foil for 174 million euros to enhance its position in the global high-end electronic circuit copper foil market [4]. - Luxembourg Copper Foil is recognized as a leading non-Japanese manufacturer with core technologies in HVLP and DTH products, contributing to a significant market share [4]. Future Outlook - Post-acquisition, Defu Technology's total copper foil production capacity will increase to 191,000 tons per year, positioning it as the world's largest producer [5]. - The company aims to leverage this acquisition to penetrate international electronic information markets and establish a competitive stance against Japanese firms in the high-end electronic circuit copper foil sector [5][6].

Core Viewpoint - Defu Technology (301511.SZ) has developed self-researched embedded copper foil suitable for military applications and plans to acquire Luxembourg Copper Foil (CFL), which already has high-end products used in the aerospace sector, with end customers being a global aerospace unicorn [1] Group 1 - Defu Technology's embedded copper foil is specifically designed for military applications [1] - The acquisition target, Luxembourg Copper Foil (CFL), has existing high-end products in the aerospace industry [1] - The end customers for CFL's products include a globally recognized aerospace unicorn company [1]

Core Viewpoint - The acquisition of Circuit Foil Luxembourg (CFL) by Jiujiang Defu Technology marks a significant step in the global copper foil industry, enhancing Defu Technology's position as a leader in the lithium battery copper foil sector and expanding its strategic layout in the electronic circuit copper foil market [2][5]. Group 1: Acquisition Details - On July 29, Jiujiang Defu Technology signed a 100% equity acquisition agreement for CFL, indicating a new phase in its global copper foil strategy [2]. - The acquisition is seen as a practical example of cooperation under the "Belt and Road" initiative and RCEP, integrating Korean precision manufacturing, Chinese industrial chain capabilities, and European market resources [2][3]. Group 2: Company Background - Defu Technology, established in 1985, specializes in electrolytic copper foil and has developed core technologies such as high-end RTF reverse copper foil and HVLP ultra-low profile copper foil [3][5]. - The company has established a strong customer base, including global leaders in lithium batteries like CATL, ATL, LG Chem, and BYD, positioning itself as a leading player in the global lithium battery copper foil market [3][5]. Group 3: Market Impact - Post-acquisition, Defu Technology's total copper foil production capacity will increase from 175,000 tons per year to 191,000 tons per year, solidifying its status as the world's largest electrolytic copper foil manufacturer [5]. - The acquisition will enable Defu Technology to fill the domestic high-end electronic circuit copper foil market gap and accelerate the introduction of products to core domestic electronic terminal customers [5]. Group 4: Future Strategy - The company plans to leverage the acquisition as a springboard to penetrate the global high-end electronic circuit market and is preparing for capacity expansion in Southeast Asia [5]. - Defu Technology aims to strengthen its global development strategy, focusing on both the Asia-Pacific and European-American markets [5].

Investment Rating - The report maintains a "Positive" investment rating for the industry [3]. Core Insights - The high-performance copper foil industry is transitioning from quantity to quality, with a clear trend towards high-end products driven by technological advancements and increasing demand from downstream applications [8][30]. - The domestic copper foil market is experiencing a trade deficit, with imports of electronic copper foil expected to decrease slightly in 2024, while import prices are rising [15]. - The demand for AI infrastructure is robust, leading to an increase in both volume and price for PCB and CCL products, with a projected compound annual growth rate of approximately 40.2% for AI server-related PCB products from 2023 to 2028 [16]. Summary by Sections High-Performance Copper Foil - The report highlights the technological upgrade paths for electrolytic copper foil, categorizing them into lithium battery copper foil and electronic circuit foil, with increasing performance requirements due to growing downstream demand [8]. - High-value-added copper foil is expected to enhance profitability by 2025, particularly in applications such as AI servers and IC packaging [8]. Supply and Demand Dynamics - The report notes that the high-end copper foil market is still reliant on imports, with major suppliers from Japan and Taiwan dominating the market [36]. - Domestic manufacturers are focusing on high-end copper foil products, with ongoing developments in new product lines that support profitability [39]. Market Trends - The report indicates that the copper foil industry is undergoing a transformation, with a shift towards high-end products and increasing competition from domestic manufacturers [39]. - The demand for high-frequency and high-speed applications is driving the need for advanced copper foil technologies, which are characterized by lower surface roughness and higher peel strength [30][39]. Future Outlook - The report anticipates that the domestic market will see a gradual increase in the production of high-performance copper foil, with several manufacturers already in the process of product validation and small-scale production [39][40].

Core Insights - The company, Defu Technology, is leading the high-end copper foil industry in China through technological innovation and product breakthroughs, supporting the development of global new energy batteries, 5G communications, and artificial intelligence [1][3] Group 1: Technological Advancements - In 2024, Defu Technology's R&D investment reached 183 million yuan, a year-on-year increase of 30.45%, with 17 new invention patents added, covering next-generation battery technologies [1] - The company has achieved significant milestones in ultra-thin and functional copper foil, with products like 3.5μm ultra-thin copper foil and porous structure copper foil meeting the demands of all-solid-state battery technology [1] - The R&D team of 377 people has successfully tackled several critical technologies, leading to industry-leading capabilities in high-end copper foil localization [1] Group 2: Product Development and Market Position - In the electronic circuit copper foil sector, the HVLP1-2 ultra-low profile copper foil has completed small batch supply for applications in NVIDIA AI computing chips and 400G/800G high-speed optical modules [2] - The company has established long-term partnerships with leading global manufacturers, with high-end electronic circuit copper foil shipments increasing to 10.86% of total output [2] - The HVLP series copper foil features low signal loss characteristics, effectively supporting the transmission efficiency upgrades in data centers and AI computing infrastructure [2] Group 3: Strategic Focus and Future Outlook - Defu Technology is committed to a technology-driven market approach, utilizing its national-level R&D platforms to continuously push the boundaries of high-end copper foil technology [3] - The company is actively developing solutions for solid-state batteries and 6G communications, addressing challenges such as lithium metal anode dendrite growth and providing material solutions for high-frequency circuits [2][3]

Core Viewpoint - The demand for high-end electronic circuit copper foil is surging due to the explosion of artificial intelligence server needs and accelerated 5G base station construction, presenting a historic opportunity for domestic substitution in this sector [1][2]. Group 1: Company Overview - Defu Technology is breaking the long-standing monopoly of foreign companies in the high-end copper foil market, establishing itself as a technological benchmark and market leader in China [1]. - The company has formed stable partnerships with leading global manufacturers such as Shengyi Technology and Taisuo Electronics, with its products covering AI servers, 5G base stations, and consumer electronics [2]. Group 2: Technological Advancements - Defu Technology has invested 183 million yuan in R&D for 2024, marking a 30.45% increase year-on-year, and has added 17 new invention patents, focusing on cutting-edge fields like AI servers, 6G communication, and automotive radar [1]. - The company has successfully developed two major product series, RTF and HVLP copper foil, with HVLP achieving a roughness of less than 1.0μm and a 30% reduction in signal loss compared to traditional products [1]. Group 3: Market Position and Strategy - In 2024, the domestic sales volume of electrolytic copper foil is expected to reach 1.09 million tons, with Defu Technology's high-end electronic circuit copper foil shipment ratio increasing to 10.86% [2]. - The company is focusing on a technology strategy of "high frequency, high speed, and ultra-thin," with plans to develop ultra-low profile copper foil for 6G terahertz communication and materials for solid-state batteries [2].