Group 1 - Core viewpoint: Defu Technology is a leader in the copper foil industry, with new opportunities arising from high-end electronic circuits and solid-state battery products. The company has been deeply involved in the copper foil sector for 40 years, starting with electronic circuit copper foil and gradually expanding into lithium battery copper foil. In Q1 2025, the company achieved revenue of 2.501 billion yuan, a year-on-year increase of 110%, and a net profit attributable to shareholders of 18 million yuan, marking a turnaround in profitability with a continuous upward trend in operations [1][2]. Group 2 - Electronic circuit copper foil: The domestic substitution of RTF (Reverse Copper Foil) and HVLP (High Voltage Low Profile Copper Foil) is expected, with carrier copper foil also likely to achieve breakthroughs. The cost of copper foil accounts for 42.10% of the cost of copper-clad laminates, which constitute 27.30% of the PCB cost. RTF and HVLP are mainstream products for high-frequency and high-speed copper-clad laminates, currently dominated by suppliers from Japan and Taiwan. The company has potential for domestic substitution, with HVLP1-2 already in small-scale supply for projects like Nvidia and 400G/800G optical modules. HVLP3 has passed certification for Japanese copper-clad laminates and is expected to be released in 2025 for domestic computing board projects. Additionally, the company plans to acquire Luxembourg Copper Foil, a global leader in high-end IT copper foil, which has long-term collaborations with top global copper-clad laminate and PCB companies, potentially accelerating breakthroughs in high-end electronic circuit copper foil [1]. Group 3 - Lithium battery copper foil: The supply-demand situation is improving from 2023 to 2025, with effective industry capacity projected at 1.18 million tons in 2023, 1.45 million tons in 2024, and 1.52 million tons in 2025, while global demand is expected to be 610,000 tons, 830,000 tons, and 1.1 million tons respectively. The supply-demand gap is narrowing from 93% in 2023 to 38% in 2025, with limited new capacity expected in 2025. The company is actively developing new solid-state battery products such as atomized copper foil, microporous copper foil, and nickel-plated copper foil, all of which have achieved mass supply [2]. Group 4 - Profit forecast and investment suggestion: The company is expected to achieve net profits attributable to shareholders of 112 million yuan, 312 million yuan, and 452 million yuan from 2025 to 2027, with year-on-year growth rates of 145.8%, 177.9%, and 44.8% respectively. Considering comparable companies and a valuation premium, a price-to-earnings ratio of 50x for the 2026 net profit is suggested, corresponding to a reasonable value of 24.77 yuan per share. The company is covered for the first time with a "buy" rating [2].

Summary of Key Points from the Conference Call of 嘉元科技 Industry and Company Overview - The conference call pertains to 嘉元科技, a company specializing in the production of copper foil for solid-state batteries and other applications in the lithium battery sector [2][3]. Core Insights and Arguments - 嘉元科技 has begun small-scale supply of porous copper foil, nickel-plated copper foil, and high specific surface area copper foil, aimed at enhancing adhesion, addressing corrosion issues, and suppressing lithium dendrite growth [2][5]. - The nickel-plated copper foil is primarily produced using electrochemical technology, with two process routes being explored: "nickel plating first" and "one-step forming" [2][6]. - The company is positioned as a leader in the all-solid-state battery cell field, having supplied copper foil to a well-known solid-state battery manufacturer whose products are used in drones [2][11]. - The expected shipment volume of nickel-plated copper foil in 2025 is projected to reach at least 100 tons, contingent on customer production line construction progress [12]. - The company has developed a production capacity of nearly 120,000 tons of copper foil, with flexible production capabilities to switch between lithium battery copper foil and electronic copper foil [4][23]. Product Development and Market Demand - The porous copper foil is designed to enhance the bonding strength between lithium metal and copper foil, while the nickel-plated copper foil addresses corrosion issues suitable for semi-solid and solid-state batteries [5]. - Current customer demand for composite current collectors is low due to a lack of cost advantage and no significant differences in safety and energy density compared to existing copper foil products [16]. - The company has not seen significant progress in the production capacity of composite current collectors, and customer demand remains unclear [15][16]. Financial and Production Insights - The average processing fee for copper foil is expected to slightly increase due to optimization in product and customer structure [27]. - 宁德时代 accounts for a significant portion of 嘉元科技's customer structure, representing approximately 60% to 70% [29]. - The company anticipates that overseas customer sales will not be high in 2025, with an estimated total shipment volume of around 2,000 to 3,000 tons [31]. Future Outlook and Expansion Plans - 嘉元科技 has limited expansion plans, with an expected increase in production capacity of 10,000 to 20,000 tons, primarily for previously ordered equipment [32]. - The company has a high-end customized copper foil production line in Jiangxi with a capacity of 15,000 tons, which may produce RTF copper foil and is currently in the planning stages for HVLP copper foil [37][38]. - The expected profit margin for RTF and HVLP copper foil is projected to be between 10,000 to 20,000 yuan per ton [48]. Technical Challenges and Innovations - The transition from nickel plating to other metal plating processes presents technical challenges, particularly in achieving effective bonding between different metals and copper [9]. - The company is one of the few suppliers offering at least two different types of alloy copper foil, which may provide a competitive edge in the market [8]. Conclusion - 嘉元科技 is actively developing innovative copper foil products for solid-state batteries, with a focus on addressing specific technical challenges and optimizing production processes. The company is well-positioned in the market, with significant production capacity and a strong customer base, particularly with 宁德时代. Future growth will depend on successful product validation and customer demand in the evolving battery technology landscape.

Core Viewpoint - The solid-state battery concept stocks have been actively rising, with several companies experiencing significant stock price increases as of June 25, 2023 [2] Group 1: Company Announcements - Longpan Technology and other companies have issued announcements regarding abnormal stock price fluctuations, clarifying their solid-state battery business situations and warning of investment risks [2][3][4] - Nord Shares reported that its copper foil business related to solid-state batteries contributes less than 1% to its total revenue, indicating limited economic scale and high market competition [2] - Xiangtan Electric's subsidiary is collaborating with solid-state battery companies on manganese oxide lithium applications, but it is still in the sample testing phase and has not generated revenue [3] - Tianji Shares has obtained a patent for lithium sulfide materials used in solid-state battery electrolytes and is advancing the industrialization of this patent, although there are risks related to commercialization [3] - Longpan Technology's subsidiary is developing solid-state battery precursors, which are still in the testing phase and have not yet generated sales revenue [4] Group 2: Industry Trends - Companies like Hailiang and Zhonggang Tianyuan are actively engaging in research and development for solid-state battery materials, with expectations for mass production by 2025 [5] - Del Shares is progressing with solid-state battery projects in collaboration with various domestic new energy vehicle manufacturers, indicating a growing interest in this technology [6] - According to Kaiyuan Securities, the period from 2025 to 2026 is critical for the pilot production of solid-state batteries, with expectations for commercialization by 2027 and industrialization by 2030 [6]

Industry Overview - The solid-state battery index (886032.TI) has shown strong performance, rising by 1.32% on June 25, and has accumulated a total increase of 15.56% since June [1] - The solid-state battery industry is expected to benefit from supportive policies and improved standards starting from 2025, with a key national standard for electric vehicle batteries set to be implemented in July 2026 [4] - The commercialization of semi-solid-state batteries is anticipated by 2027, with full solid-state batteries expected to reach a critical industrialization point by 2030 [4] Company Developments - Dongfang Electric Heating (300217.SZ) is the only supplier in China capable of mass-producing pre-plated nickel materials for power applications, and it plans to adapt its equipment for solid-state battery current collector materials [4] - Defu Technology (301511.SZ) provides solutions for semi/full solid-state battery anode current collectors, including atomized copper foil and nickel-plated copper foil, with products already in mass supply [4] - Hailiang Co., Ltd. (002203.SZ) has initiated joint R&D and trial production of new copper foil products for solid-state batteries, with mass production expected by 2025 [4] - Nord Co., Ltd. (600110.SH) reported that its copper foil business for solid-state batteries contributes less than 1% to total revenue, indicating limited economic scale and high market competition [4] - Xiangtan Electrochemical (002125.SZ) is collaborating with solid-state battery companies on manganese oxide lithium applications, currently in small batch testing with no revenue impact [4] - Longpan Technology (603906.SH) is developing solid-state battery ternary precursors, with some materials undergoing customer testing but not yet generating sales revenue [4]