Sinoma Science & Technology: The leader of lithium battery diaphragms emerges

Sinoma Science & Technology Co., Ltd. is a joint-stock enterprise registered with the State Administration for Industry and Commerce on December 28, 2001, approved by the former State Economic and Trade Commission and initiated by the former China National Materials Group Corporation. On November 20, 2006, Sinoma Science & Technology Co., Ltd.'s A shares were listed on the Shenzhen Stock Exchange. After the reorganization in 2016, it is affiliated to China National Building Material Group Co., Ltd.

Sinoma Science & Technology has inherited more than 50 years of core technology resources and talent advantages from the three former research institutes, namely Nanjing Fiberglass Research and Design Institute, Beijing Fiberglass Research and Design Institute and Suzhou Non-metallic Mineral Industrial Design Institute. It has a complete technology industry chain of non-metallic mineral materials, glass fibers and fiber composite materials. It is the only high-tech enterprise in my country's special fiber composite materials field that integrates R&D, design, product manufacturing and sales, and technical equipment integration.

Sinoma Science & Technology holds controlling or equity stakes in a number of companies, and its business products are closely linked to application areas such as new energy, aerospace, energy conservation and emission reduction.

From the above introduction, it can be seen that Sinoma Science & Technology is a leading enterprise with technological advantages in the field of special materials. Sinoma Science & Technology's wind power blades and glass fiber businesses are already globally competitive and will benefit from the marginal improvement in the industry's prosperity in the future: wind power will usher in a rush to install in 2020, and blade demand is expected to rise; the glass fiber industry is expected to bottom out. At present, Sinoma Science & Technology's lithium battery diaphragm business has begun to take shape and has huge development potential. The asset-heavy and technology-intensive nature of the diaphragm industry determines that the strong will always be strong. At present, domestic capacity expansion is concentrated in Shanghai Enjie, Sinoma Science & Technology and Xingyuan Materials, and industry concentration will continue to increase; in the future, it is also expected to form an oligopolistic pattern in the world, and Sinoma Science & Technology's diaphragm business is expected to go global and become a global giant.

Acquisition of Hunan Zhongli, diaphragm business ushered in a strategic opportunity period

In August 2019, Sinoma Technology increased its capital by RMB 997 million to acquire 60% of the equity of Hunan Zhongli. Currently, Sinoma Technology's diaphragm production capacity has reached 960 million square meters, forming a good scale effect and growth foundation. Sinoma Technology has high-quality customer resources and has basically completed the coverage of mainstream battery manufacturers at home and abroad. In the short term, benefiting from the increase in downstream customers, Sinoma Technology's diaphragm shipments are expected to grow rapidly; in the medium and long term, we are optimistic about the integration and synergy of resources between Sinoma Lithium Membrane and Hunan Zhongli.

The leader in wind turbine blades directly benefits from the recovery of the industry's prosperity

Benefiting from the decline in wind power subsidies and the continuous improvement of wind power abandonment rates in the three northern regions, domestic installed capacity will usher in a certain high growth in 2020. We expect domestic wind power installed capacity to be 32-35GW in 2020. The trend of large-scale wind turbine blades is firm, and the industry concentration is expected to continue to increase. As the leader of domestic wind turbine blades, Sinoma Blades will directly benefit from the upward trend of the industry's prosperity and the upgrade of product structure.

The glass fiber industry is expected to gradually bottom out, and the profitability of Sinoma Technology is expected to recover

It is expected that there will be no significant incremental supply in the industry in the first three quarters of 2020, and downstream demand will gradually recover, and the price of glass fiber is expected to see a phased turning point. Sinoma Technology's glass fiber production capacity ranks second in China. In recent years, it has adjusted its product structure and increased the proportion of high-end products to improve profitability; it has also reduced production costs by locking in raw materials and energy upstream, optimizing production processes, and replacing old and new production capacities, further enhancing its core competitiveness.