Selen Technology's Q1 aluminum-plastic film sales increased by 150%, with sales in May approaching 2 million cubic meters

Xinlun Technology released information related to an investor survey, which revealed that the product sales volume of Xinlun Technology's aluminum-plastic film project in the first quarter of this year increased by approximately 150% year-on-year, and the sales volume in May is expected to be close to 2 million cubic meters.

As for the main reasons for the substantial year-on-year increase in shipments, Xinlun Technology said that, first, the demand for power batteries continued to grow, and new production lines of customers such as Farasis Energy, Jiewei Power, and CITIC Mengguli were put into use one after another. In addition, the advantages of soft-pack lithium batteries in terms of safety and energy density have significantly increased the market share of soft-pack batteries in the power battery market; second, after the company's Changzhou factory was put into production, the available production capacity increased significantly, and the company increased its product promotion efforts in the 3C market, and the shipment volume of aluminum-plastic film for 3C lithium batteries increased rapidly. After the Changzhou factory was put into production in the fourth quarter of last year, after nearly half a year of debugging and product introduction, the production line has now entered a stable shipment stage, with shipments exceeding 500,000 cubic meters in April, all of which are 3C products. Major customers include well-known 3C lithium battery companies such as Dongguan Weike, and power products are being actively introduced. Major customers including LG have completed the factory inspection procedures for the Changzhou factory, and it is expected that the Changzhou factory will be able to gradually supply customers such as LG in the early third quarter.

At present, lithium battery aluminum plastic film mainly includes two markets: 3C and power. 3C is a stock market, with a current market demand of about 100 million cubic meters per year, with an annual growth rate of 5%-10%. The power market is an incremental market that has emerged in recent years. Last year, the global usage was about 30 million cubic meters. Based on the following market trends, we judge that it is expected to maintain a growth rate of more than 100% in the next 3-5 years. Based on the rapid growth of new energy vehicles and the use of lamination technology for soft-pack lithium batteries, it has the advantages of good heat dissipation, high safety and long life.

In addition, since the future growth of the entire market is mainly concentrated in the power field, the company has been deeply involved in the power market in recent years. In 2018, the domestic power market share exceeded 65%, and the passenger car market share exceeded 80%. In the future, the power lithium battery market will expand rapidly. In order to meet customer needs and cooperate with the new production capacity needs of major customers, the company will continue to build new aluminum-plastic film production lines in Changzhou. By 2022, the company plans to have 5 sets of aluminum-plastic film production lines with a monthly production capacity of 3 million cubic meters in Changzhou, and the maximum annual shipment volume can reach 150 million cubic meters.

Compared with other aluminum-plastic film companies, Xinlun Technology has the following advantages compared with Japanese aluminum-plastic film manufacturers: First, localization advantage. Japanese aluminum-plastic film manufacturers have no factories in mainland China and no plans to build factories. Therefore, there is a clear gap between them and the company in terms of product delivery, quality control, technical support, and timeliness of supply. Japanese aluminum-plastic film manufacturers sell in China through agents and communicate with customers through agents. Communication is difficult and the cycle is very long; second, customized development. In the future, mainstream lithium battery manufacturers tend to have certain differentiated advantages in their products and require suppliers to provide customized development services. Japanese aluminum-plastic film manufacturers have no R&D institutions in mainland China. In addition to cultural differences, they cannot understand the needs of Chinese customers in a timely manner, nor are they willing to provide customized services to Chinese customers. Since the company's production capacity is mainly concentrated in China and it has currently occupied a leading position in the domestic power market, it has established a good strategic partnership with mainstream power lithium battery companies, can deeply understand customer needs, and cooperate on the R&D side.

Compared with domestic aluminum-plastic film manufacturers: First, patent barriers. The company and other Japanese aluminum-plastic film companies own more than 200 industry patents, forming a relatively complete patent package. The expiration date of the core patents is after 2025, which will provide good protection for the company's technology route; second, a complete process system. Toppan Printing has been expanding its lithium battery aluminum-plastic film business since 2007. The company has accumulated more than ten years of technology in the field of aluminum-plastic film through mergers and acquisitions of its projects. It has outstanding advantages in R&D capabilities and product quality stability, while most domestic aluminum-plastic film companies are just starting out, and it takes time to accumulate technology; third, brand advantage. The aluminum-plastic film products of Toppan Printing acquired by the company have many years of application cases and experience in the market and have won the trust of many customers. Most domestic aluminum-plastic film products lack a verification process for large-scale use.

It is worth mentioning that in addition to lithium battery aluminum-plastic film, Xinlun Technology invested in the construction of a soft-pack lithium battery tab factory in the new energy field last year, and it is expected to enter the mass production stage in the second half of this year. In the future, the company will pay close attention to the development of the new energy industry, relying on the established customer groups and the strategic cooperation relationship between the two parties, focusing on the upstream materials industry chain of new energy, exploring new technologies and new products in the industry in overseas countries such as Japan, and introducing them into China when the opportunity arises to provide customers with domestically produced supporting facilities.