Capchem released the Annual Report 2018 of Shenzhen Capchem Technology Co., Ltd. on cninfo.com.cn on March 19, 2019.
In 2018, Capchem achieved operating revenue of RMB 2,164,806,000, growing by 19.23% year on year, and achieved operating profits of RMB 339,607,500, growing by 4.07% year on year, with the net profit attributable to shareholders of the company of RMB 320,050,700, growing by 14.28% year on year, and earnings per share of RMB 0.86.
Main reasons for the increases of Capchem’s operating revenue and net profits in 2018 included good innovation and management advantages, timely response to situation changes of the Chinese and foreign markets, and effective control over cost fluctuations.
Overview of Main Business of Capchem in 2018
1. Capacitor chemicals
Capacitor chemicals achieved operating revenue of RMB 562,888,300, growing by 18.64% year on year. The capacitor market demands in 2018 continued the recovery growth of 2017. Under the general trend of tightened national policies for safety and environmental protection and tighter regulation, Capchem seized the market opportunities to grow its market share and achieved increases both in volume and price, upon its accumulated advantages over the long term in terms of production, quality, and environmental protection standard, etc. The capacitor chemicals contributed good business performance to Capchem in the current period.
2. Lithium-ion battery chemicals
Lithium-ion battery chemicals achieved operating revenue of RMB 1,072,498,200, growing by 11.79% year on year, which benefited from the sales growth brought by the flourishing new energy vehicle market of the country; however, in 2018, the market competition was extremely fierce, prices of upstream raw materials continued to fluctuate, and electrolyte industry prices were overall under pressure and low. During the reporting period, Capchem focused on bringing long-term value to customers through technology enhancement, winning through quality, and pursuing long-term high-quality growth of lithium-ion battery chemicals performance.
3. Organic fluorine chemicals
Organic fluorine chemicals achieved operating revenue of RMB 387,952,000, growing by 40.82% year on year, which benefited from the constant optimization of product structure, continual development and optimization of Chinese and overseas customers, and strong demands for high-end fluorine chemicals from the Chinese market. In the meantime, the subsidiary Hexafluo proceeded smoothly with new customer development in the international market, achieved mass delivery, and realized rapid growth in domestic sales, thus leading to the large increase of Capchem’s net profits year on year.
4. Semiconductor chemicals
Semiconductor chemicals achieved operating revenue of RMB 102,909,400, growing by 48.22% year on year, to become the business segment with the fastest growth. The high performance growth was due to the early technology accumulation and customer certification of the business, on the one hand; it also benefited from the rapid growth of the Chinese semiconductor/panel industry and continuous advancement of core material localization, on the other hand.
China will continue to offer substantial support to the strategic emerging industry development and has specifically proposed that China's economy should transfer from a phase of rapid growth to a stage of high-quality development, highlight key measures such as preventing risks, cutting overcapacity, making structural adjustments, and conducting rectification in environmental protection, and accelerate industrial optimization and upgrading. These stand for good opportunities for Capchem to expand markets and develop Chinese and foreign high-end customers, as it has gradually accumulated technology, quality, supply, and brand advantages.
1. Capacitor chemical industry
The capacitor market demands in areas of industrial inverters, automotive electronics, cloud servers, base stations, intelligent terminals, LED lighting, and intelligent charging piles, etc. are expected to grow slowly in the future, as China has introduced a series of policy measures that encourage real economy development; furthermore, with the increasing of technical levels of some capacitor manufacturers in the country, the competitiveness of their mid to high-end products continues to be strengthened, technology and quality of some products have already reached the international advanced levels, and they are expected to gradually substitute the imported mid to high-end products, which provides room for the future development of capacitor chemicals in the country. Product costs will continue to rise and the industry concentration will gradually increase, with the continued recovery of the capacitor chemical market.
2. Lithium-ion battery electrolyte
With the rapid development of the downstream new energy vehicles plus the policy support and maturing of technology, lithium-ion battery energy density has continued to increase, which results in higher requirements on electrolyte performance. Under the background of reduced subsidies and increased demand for cost reduction, electrolyte manufacturers need to upgrade quickly, and meeting the high energy density and high safety requirements has become an important factor that challenges the electrolyte manufacturers. Many electrolyte manufacturers have released their new capacity and the enterprises’ competition has been fierce in recent 2 years; however, the low-end repeated electrolyte capacity will be gradually eliminated, and enterprises that possess core additive and formula technologies, lay out upstream core raw material resources, and have quality customers will have the opportunity to achieve significant development. With China’s policy support to the new energy vehicle industry and the good development momentum of the Chinese and foreign markets, power lithium-ion batteries will continue to maintain high growth, and the demands for lithium-ion battery chemicals will enjoy opportunities of large growth; with abundant supply of the main upstream raw materials of lithium carbonate and lithium hexafluorophosphate, prices thereof will largely reduce at the early stage and then gradually become stable, and gross margin of the power lithium-ion battery electrolytes will gradually return to stability from the large decline in 2018.
3. Organic fluorine chemical industry
Market demands for fluorine-containing materials fluctuate greatly worldwide, as influenced by the domestic and overseas macro-economies. China, the largest producer and exporter of primary fluorine chemical products in the world and a major importer of highly processed fluorine chemical products, has been faced with the situation for a long time that low-end products are subject to severe overcapacity and fierce price competition while high-end products are mostly imported and expensive. With the application fields of fluorine-containing chemicals shifting from the traditional industries to the new fields of electronics, energy, environmental protection, information technology, and bio-medicine, etc., the fluorine chemical industry in China has entered a key period of industrial transformation and upgrading, and some organic fluorine chemicals with excellent performance such as fluorine-containing medicine, fluorine-containing pesticide, fluorine-containing rubber, and fluorine-containing surfactant will enjoy big development opportunities.
4. Semiconductor chemical industry
The Chinese semiconductor industry has ushered in the historic opportunity for rapid development as China has increased policy support to the semiconductor industry development in recent years; and the flat-panel display market has also achieved high development in recent years owing to industry transfer. In the future, with the increasing of technical levels of semiconductor chemicals in China, the cost advantage, geographical advantage, cooperation and R&D advantage, and fast delivery advantage will be demonstrated quickly, and the future development potential is promising.
All figures in the news are from the Annual Report 2018 of Shenzhen Capchem Technology Co., Ltd. The news is subject to known or unknown risks and uncertainties, and is based on the current expectations, assumptions, predictions and forecasts of Capchem and the industry in which Capchem currently engages. Unless otherwise required by the law, the company undertakes no obligation to update any forward-looking statements to reflect any subsequent events or circumstances, nor does the company bear any obligation to make any corresponding changes to its expectations. Although Capchem believes that the expectations contained in the forward-looking statements are reasonable, no assurance can be given by Capchem to you that Capchem’s expectations will prove correct in future, and investors should note that actual results could differ from those expected.