Profit of China's copper foil listed enterprises fall in Q3
According to the released financial reports, Q3 profit of all copper foil listed companies declined year on year. Q1-Q3 2022 year-to-date output and operating income of electrolytic copper foil in China continued to grow, but the profitability of all companies declined except Jiayuan Technology, which shows a strong growth in revenue this year.
Unit: million Yuan | ||||||||
Enterprise | Revenue Q3 |
YoY % | Net Profit to Parent Company Q3 |
YoY % | Revenue Q1-Q3 |
YoY % | Net Profit to Parent Company Q1-Q3 |
YoY % |
Jiayuan Technology | 1,347.0 | 72.28% | 150.0 | -0.21% | 3,281.0 | 65.11% | 438 | 11.03% |
Nuode | 1,237.0 | 0.74% | 77.0 | -35.87% | 329.0 | 1.68% | 280 | -12.89% |
TNMG Copper Foil | 781.0 | -31.85% | 35.0 | -68.64% | 276.0 | -10.14% | 228 | -19.69% |
Zhongyi Technology | 694.0 | 23.11% | 83.0 | -10.01% | 2,101.0 | 37.97% | 306 | -7.86% |
Chaohua Tech | 418.0 | -35.83% | 1.7 | -94.04% | 1,485.0 | -19.67% | 33 | -67.56% |
Yihao New Material | 287.0 | -12.55% | 16.0 | -49.66% | 1,041.0 | 7.74% | 71 | -44.36% |
Data Source: Results of listed enterprises, Mysteel
Low profitability due to the high copper prices, low processing fee, COVID-19, energy supply etc.
Prices of refined copper had been maintained at a high level of about Yuan 70,000/tonne in the first half of the year, but the processing fee as the key source of profit of copper foil enterprises has been in a downward trend since September 2021. The processing fees of different specifications of electronic circuit copper foil have decreased by Yuan 15,000-20,000/tonne.
In addition, affected by the Covid-19 pandemic, copper consumption in the battery and electronics industries weakened, especially in April and May. At the same time, logistics challenge increased the transportation cost and lead time of both raw materials and finished products. Copper foil companies were forced to reduce processing fees to relieve the inventory and cash flow pressure.
Finally, southern regions experienced energy supply shortages due to high temperatures in August and September. The decline in production due to policy restrictions exacerbated the decline in corporate profits in the third quarter.
Data Source: Mysteel
Data Source: Mysteel
Copper demand in traditional consumer electronics industry declines significantly
In the first nine months of 2022, China's output of integrated circuits, mobile phones, and desktop computers was 246.17 billion pieces, 1.15 billion units, and 325.58 million units respectively, decreased by 7.39%, 0.89% and 6.52% year on year.
The sluggish demand for terminal-consumer electronics has been passed on to midstream companies, ultimately depressing the raw materials demand and resulting in a consistent decline in standard copper foil processing fees.
Data Source: NBS, Mysteel
Data Source: NBS, Mysteel
Data Source: NBS, Mysteel
Outlook: Copper foil enterprises' revenues expected to increase in Q4
The slowdown in global economic growth will dampen external demand, but China's economic support policies will continue to play a positive role. Economic growth is expected to accelerate in the fourth quarter. Exports of copper-clad plates (CCL) rose 22% month on month in September, so the consumer electronics sector is expected to improve quarter-on-quarter in the fourth quarter.
Meanwhile, the production and sales of new energy vehicles in September were 758,000 units and 705,000 units respectively, with a growth of 110% and 93.9% year on year. The fourth quarter is the peak season for new energy vehicle sales, so the demand for batteries will be boosted, eventually leading to a significant increase in the demand for battery raw materials such as copper foil.
The gradual release of the capacity of new projects of copper foil, coupled with the accelerated development of battery manufacturers, will lead to bargaining procurement situations. The weak situation of standard copper foil processing fees may be difficult to change. copper foil prices will still mainly be affected by the price fluctuations of raw materials.
For queries and more information/data/reports access, please contact Paula Xu at xuzhongping@mysteel.com
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