On the evening of December 19, Dingsheng New Materials (603876) announced that its wholly-owned subsidiary, Five-Star Aluminum, had signed a framework cooperation agreement with Ningde Times (300750). During the period from November 1, 2021 to December 31, 2025, the company and its subsidiary Wuxing Aluminum promised to supply power battery aluminum foil to Ningde Times, with a total minimum supply of 512000 tons. The final supply and price shall be subject to the subsequent specific orders of both parties.
Dingsheng New Material said that the signing of the Cooperation Agreement marked the recognition of the quality and production capacity of the company’s power battery foil by Ningde Times, further verified the company’s competitiveness in the field of aluminum foil for power battery of new energy vehicles, and provided guarantee for the company’s medium and long-term sustainable development, which is in line with the interests of the company and shareholders.
According to the data, Dingsheng New Materials is mainly engaged in the R&D, production and sales of aluminum sheet, strip and foil. Since its establishment in 2003, it has been deeply involved in the field of aluminum sheet, strip and foil, and the company has rapidly become the leader of the battery foil industry. With the explosive growth of the demand for new energy electric vehicles, the company’s battery aluminum foil business is developing rapidly and has become the leading enterprise of aluminum foil for lithium batteries in China, accounting for about 45% of the domestic market.
According to the calculation of Zhongtai Securities, the global demand for lithium aluminum foil in 2020 is about 78000 tons, and Dingsheng’s new material shipment is about 24000 tons, with a global market share of about 30%. Considering that the industry’s new capacity is relatively limited, the company’s market share is expected to further increase, and the company’s performance in 2021 is expected to be reversed.
According to the analysis of Zhongtai Securities, on the one hand, lithium aluminum foil, as a positive collector, benefits from the acceleration of the global electrification process of new energy vehicles. Power battery foil is an emerging field with rapid growth in the industrial chain. The overall demand for battery aluminum foil may reach about 378000 tons in 2025, with a compound growth rate of 32% from 2021 to 2025; On the other hand, as a high value-added product, the power lithium aluminum foil manufacturers are mainly concentrated in Japan and South Korea. There are only a few domestic manufacturers that can enter the core supply chain system. Dingsheng New Material is expected to continue to benefit from the global electrification process with its deep accumulation and continuous expansion capacity.
In addition, a few days ago, Dingsheng New Materials said in response to the investors’ questions that the company’s battery foil products currently have an annual production capacity of 94000 tons, and the company has successively converted and debugged the existing equipment to produce battery foil according to the order situation, so as to continuously optimize the company’s product structure. At present, the thinnest aluminum foil produced by the company is 0.009mm thick, which is mainly used in the field of digital batteries. Such downstream customers mainly include ATL, Zhuhai Guanyu, etc.