Investment Rating - The report maintains an "Accumulate" rating for the company [7] Core Views - The company achieved a revenue of 3.963 billion RMB in H1 2025, representing a year-over-year increase of 63.55%, and a net profit attributable to shareholders of 36.7541 million RMB, up 134.94% year-over-year [1][2] - The copper foil production reached approximately 41,400 tons, a year-over-year increase of 72.46%, with sales of 40,700 tons, up 63.01% year-over-year [2] - The company is optimistic about the second half of the year, driven by a recovery in the lithium battery industry and an increase in demand for high-value-added products [1][2] Summary by Sections Financial Performance - In Q2 2025, the company reported a revenue of 1.982 billion RMB, a year-over-year increase of 32.75% and a quarter-over-quarter increase of 0.07% [1] - The net profit for Q2 was 12.2977 million RMB, reflecting a year-over-year increase of 121.42% but a quarter-over-quarter decrease of 49.72% [1] Production and Capacity - The company has a production capacity utilization rate exceeding 90% as of the end of H1 2025, with plans to increase production to meet a target of over 100,000 tons for the year [2] - The company is expanding its production lines for high-end electronic circuit copper foil, with a planned total capacity of 35,000 tons, of which over 10,000 tons are already in production [3] Business Diversification - The company is diversifying its business by developing high-performance precision copper wire and expanding into photovoltaic energy storage [4] - The company is also exploring new growth areas such as AI computing, semiconductors, and robotics, potentially through mergers and acquisitions [4] Profit Forecast and Valuation - The forecast for net profit attributable to shareholders for 2025-2027 is 115.26 million RMB, 258.52 million RMB, and 407.41 million RMB, respectively [5] - The target price for the company is set at 35.73 RMB, based on a price-to-book ratio of 2.17 for 2025 [5][9]

Company Overview - Guangdong Jiayuan Technology Co., Ltd. is a leading enterprise in the electrolytic copper foil industry, with a production capacity exceeding 110,000 tons per year by the end of 2024 [1] - The company has maintained stable long-term relationships with core customers, with sales to these customers accounting for 67.46%, 69.37%, and 65.81% of total sales from 2022 to 2024 [1][2] - Jiayuan Technology's main products include lithium battery copper foil and standard copper foil, with lithium battery copper foil accounting for over 90% of the revenue from copper foil business [1][13] Financial Performance - In 2024, Jiayuan Technology reported a copper foil production of 67,000 tons and sales of 67,700 tons, with total revenue of 6.522 billion yuan and a net loss of 246 million yuan [1][5] - The company's asset scale reached 13.045 billion yuan, with total debt of 4.786 billion yuan, resulting in an asset-liability ratio of 45.98% [5] - The company has experienced unstable profitability, with significant losses in 2024, although it turned a profit in the first quarter of 2025 [2][5] Industry Context - The electrolytic copper foil industry in China is experiencing overcapacity, leading to fierce competition and declining processing fees, which have resulted in widespread losses among listed companies in 2024 [2][13] - Despite the overcapacity, the demand for lithium battery copper foil is expected to grow due to the rapid development of the downstream market, particularly in the electric vehicle and energy storage sectors [13][14] - The industry is characterized by a high concentration of production capacity, with Jiayuan Technology being one of the top players alongside companies like Defu Technology and Nord New Materials [4][13] Research and Development - Jiayuan Technology has maintained a high level of R&D investment, with R&D expenses accounting for over 4% of revenue from 2022 to 2024 [1] - The company has achieved mass production of ultra-thin electrolytic copper foil products, including 5μm and 4.5μm thicknesses, and has developed the core technology for producing 3.5μm ultra-thin copper foil [1][2] Capital Structure - The company has a robust capital structure with accessible financing channels, having raised funds through convertible bonds and private placements in 2021 and 2022 [2] - By the end of 2024, Jiayuan Technology's debt capitalization ratio was 40.45%, indicating a relatively low level of debt compared to its total capital [2][5] Market Trends - The demand for lithium battery copper foil is expected to continue growing, driven by the expansion of the electric vehicle market and energy storage applications [13][14] - The overall market for electrolytic copper foil is anticipated to gradually stabilize as the supply-demand imbalance is addressed in the coming years [13]

Core Viewpoint - Guangdong Jiayuan Technology Co., Ltd. is a leading enterprise in the electrolytic copper foil industry, with significant scale advantages and stable customer relationships, but faces challenges due to industry overcapacity and fluctuating profitability [2][3][4]. Advantages - Jiayuan Technology is a top-tier player in the electrolytic copper foil industry, with production capacity exceeding 110,000 tons per year by the end of 2024, and production and sales have been growing, reaching 67,000 tons and 67,700 tons respectively in 2024 [2]. - The company maintains high R&D investment, with a focus on ultra-thin electrolytic copper foil products, achieving mass production of 5μm and 4.5μm products, and mastering the core technology for 3.5μm products [2]. - Jiayuan has established stable long-term relationships with key customers, with sales to major clients accounting for over 65% of total sales from 2022 to 2024 [2]. - The company has a robust capital structure and smooth financing channels, with a debt-to-asset ratio of 45.98% and a total debt capitalization ratio of 40.45% by the end of 2024 [2]. Concerns - The company's profitability has been unstable, with significant losses in 2024 due to declining processing fees for electrolytic copper foil; however, it turned a profit in Q1 2025, albeit at a low level [2][3]. - The electrolytic copper foil industry is experiencing overall overcapacity and intense competition, leading to a decline in processing fees and profitability across the sector [3]. - Jiayuan's diversification efforts into copper wire sales, photovoltaic energy storage, and new materials are still under observation, with only the copper wire business achieving a certain scale by the end of 2024 [3]. - The company's information disclosure and regulatory compliance have room for improvement, as it has faced multiple regulatory measures in recent years [3]. Industry Comparison - Compared to peer companies, Jiayuan Technology has higher product sales and revenue scale, but all companies in the comparison group reported losses in 2024; Jiayuan's debt ratios are lower, indicating stronger short-term solvency [4][6]. - In 2024, Jiayuan's copper foil production and sales reached 67,000 tons and 67,700 tons, ranking second among comparable companies [4]. - The company has a high customer concentration, with over 80% of sales coming from its top five customers in 2024, significantly higher than its peers [4][6]. Business Status - Jiayuan Technology is a significant player in the electrolytic copper foil industry, with a focus on R&D, manufacturing, and sales of various copper foil products, primarily lithium battery copper foil [14]. - The company has seen a recovery in the electrolytic copper foil market in Q1 2025, achieving a revenue of 1.981 billion yuan, a year-on-year increase of 113% [14][16]. - Jiayuan's copper foil products are primarily used in lithium-ion batteries, with over 90% of its copper foil business revenue coming from lithium battery copper foil from 2022 to 2024 [13][14]. Production Capacity - By the end of 2024, Jiayuan's total copper foil production capacity reached over 110,000 tons, with plans to expand to over 200,000 tons by 2029 [19][20]. - The company has multiple production bases across the country, with a significant portion of sales concentrated in East, South, and Southwest China, accounting for over 90% of copper foil sales in 2024 [18][19]. Customer Base - Jiayuan's largest customer is Ningde Times, accounting for over 60% of its copper foil sales, with total sales to this customer reaching 4.292 billion yuan in 2024 [21].