What is the reason for lithium diaphragm leading star material to return to high growth?

Xingyuan's main business is lithium battery diaphragm products. It is one of the earliest companies in China to make lithium diaphragm. It was established in 2003. In 2008, the first dry diaphragm line was mass-produced. In 2014, the first wet diaphragm line was mass-produced. In 2016, it was listed on the Shenzhen Growth Enterprise Market.

In 2017, due to insufficient production capacity of the company's wet diaphragm, the dry diaphragm industry was not good, and price wars between companies led to a 31 % decline in company performance. Although the company's net profit fell in 2017, operating income and shipments rose. In 2017, operating income was 520 million yuan, an increase of 3 %, and diaphragm shipments were 155.26 million M2, up 12 % from 138.68 million M2 in the previous year.

After experiencing a low performance in 2017, the performance rose rapidly in 18 years. Revenue in the first quarter was 170 million yuan, a year-on-year increase of 43 %. The net profit of returning mothers was 89.44 million yuan, an increase of 158 % year-on-year, and the net profit of deducting non-returning mothers was 46.3738 million yuan, an increase of 42.66 % year-on-year, which exceeded the market forecast. Shipments in the first quarter were 59.5 million M2(31 million flat in 2017), a year-on-year increase of more than 90 %. The company predicted that the net profit of the mother-in-law in the first half of the year was 127-140 million, a year-on-year increase of 79.16-96 .77 %, and non-net profit of 81-94 million, a year-on-year increase of 30-50 %. From the company's first-quarter performance, it is not difficult to reach the expected target.

The company's stock price rose sharply earlier this year, far more than other companies. In recent days, due to the impact of the trade war, the company's stock price has returned a lot. However, the company's fundamentals have not changed greatly. The company has the following advantages compared with other companies in the industry.

The diaphragm capacity, especially the wet diaphragm capacity expansion.

The diaphragm products are mainly divided into two kinds of processes: dry method and wet method. Dry diaphragm technology mature, safety, high stability, cheap, currently dry substrate 2 yuan / flat, wet substrate 3 yuan / flat, coating price 4-4 .5 yuan / flat. The wet diaphragm is lighter and thinner, which can help the battery achieve higher energy density and better infiltration with the electrolyte.

Simultaneous growth in the diaphragm industry will be sustained over the long term. After the performance improvement, the dry diaphragm can currently reach 16um(mainstream thickness is 20um), and the thickness gap with the wet diaphragm is reduced(the main thickness of the wet method is 12um +4 um coating), while the dry diaphragm porosity and other properties are all improving. The gap with the wet diaphragm is getting smaller and smaller. High energy density is required for medium and high end power batteries, and the coating diaphragm will be rapidly permeated by three-way material + wet method. With the continued withdrawal of the National subsidy policy, logistics vehicles, micro-pure electric passenger vehicles and other cost-sensitive models, more attention to cost performance, biased towards the dry method diaphragm.

Star material is dry diaphragm leading, wet diaphragm expansion. At the end of the 17th, the dry diaphragm production capacity was 180 million, and the wet diaphragm Hefei Xingyuan 80 million M2 production capacity was put into production, and the production capacity reached 110 million M2. In 18 years, Changzhou Xingyuan 180 million M2 production capacity was put into production at the end of the year, and the wet diaphragm production capacity is expected to increase to 290 million M2. Production capacity is expected to reach 1.3 billion M2 by 2020, of which 600 million M2 dry separation capacity and 700 million M2 wet separation capacity. Capacity expansion is rapid and shipments are guaranteed.

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