The Carbon Fiber Market Is Surging, And The Competition Pattern Is Seen From The Performance Of Leading Enterprises.

The point to point visit to the downstream customers has been stagnant for some time. The delay in delivery of small orders in the European market has inevitably affected the performance in the first half of the year.

Since the beginning of this year, the outbreak of new crown pneumonia has occurred in many countries around the world. It has brought some adverse effects to the operation of China's carbon fiber industry and enterprises. Taking measures to cope with the grim situation is a pressing matter of the moment. However, it is obvious that any enterprise's upgrading and development can not only focus on the present strategy and strategic layout of any enterprise.

After all, the impact of the epidemic is only temporary. China's epidemic prevention and control has now entered a "normal" stage, and the operation order of the textile and chemical fiber industry is accelerating recovery. From the perspective of the development stage of the industry, after more than ten years of continuous accumulation and upgrading of equipment support, technological breakthroughs, scale growth and downstream application market development, China's carbon fiber industry is in a new stage of rapid development.

At this stage, how is the operation of China's carbon fiber leading enterprises? What are the differences between the thinking and performance of different enterprises? What are the new characteristics of the market as a whole? What trend should enterprises grasp to save energy for subsequent development? Recently, "China textile daily" reporter interviewed a number of domestic carbon fiber enterprises.

Enterprise military orders in hand

Stable profits are guaranteed throughout the year.

As a strategic material related to national defense industry, aerospace has always been the focus of downstream applications of carbon fiber and composite materials. Although the proportion of sports and leisure products is still the largest in the domestic market of carbon fiber applications, but in recent years, a series of breakthroughs and achievements made by several leading enterprises in the military industry market, represented by the Weihai light and prestige composite material Limited by Share Ltd (hereinafter referred to as "Guang Wei composite"), have become a bright spot in the development of domestic carbon fiber, and also become the company's sustained performance. An important driving force for growth.

According to the 2019 global carbon fiber composites market report (hereinafter referred to as the report) released by Guangzhou SEO Carbon Fiber Technology Co., Ltd., China's carbon fiber market total demand in 2019 is about 1400 tons, accounting for about 3.7%.

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　　 Especially in this complex and grim situation this year, the order of military industry has played a stabilizing role and confidence. In April 3rd this year, Guang Wei complex announced that the company's wholly owned subsidiary, Weihai development Fiber Co., Ltd. and its customer A signed two "arms and equipment matching products ordering contract", the contract is carbon fiber and fabric. The total amount of the two contracts is 997 million 726 thousand and 200 yuan, accounting for 58% of the audited business income of the company in the latest accounting year. The annual contract amount (after tax) calculated by Guang Wei complex and customer A is 24.79% higher than the same period last year. The "military revenue order" will have a positive impact on the revenue and net profit of 2020.

In recent years, Guang Wei complex has adhered to the development strategy of "two high one low" carbon fiber with high strength, high modulus and low cost, and gradually built up the supply capacity of "shelf type" carbon fiber products. At present, its main products include GQ3522 (T300 level), GQ4522 (T700 level), QZ5526 (T800 level), QZ6026 (T1000 level), QM4035 (M40J level), QM4050 (QM4050 level) and so on. In fact, Guang Wei composite material is the main supplier of carbon fiber for aerospace industry in China. Military carbon fiber and fabric sales are one of the main sources of its main revenue.

For many years, the business of CW composite carbon fiber and fabric has maintained steady growth. In 2019, the sales revenue of the company was 798 million yuan, an increase of 32.33% over the same period last year. In 2018, the company's military revenue was 603 million yuan, an increase of 21.22% over the same period last year, accounting for 44.22% of the total revenue.

Since the beginning of this year, the outbreak of new crown pneumonia has erupted in different countries around the world. During the epidemic prevention and control, we should actively take various measures to promote the resumption of work and resume production, and strive to cope with the adverse effects brought by the epidemic. A quarterly report released in April 28th showed that the company achieved a revenue of 488 million yuan, an increase of 12.31% over the same period, and a net profit attributable to shareholders of listed companies was 172 million yuan, an increase of 8.28% over the same period last year. Guang Wei complex said that in the first quarter, the company's carbon fiber business increased by 290 million yuan, an increase of 32.29% over the same period, due to the increase in the demand for key customers and the contribution of civilian products to fibers.

China and Thailand securities analyst Su Chen said that the carbon fiber industry is in the ascendant, and the military and civilian applications are broad. In the first quarter, the main industry of Guang Wei composite carbon fiber increased rapidly, and large orders ensured annual performance. In the long run, the proportion of carbon fiber used in the new generation of military aircraft has been increasing continuously in terms of military products.

The Polytron Technologies Inc also has the military orders. In May 13th, China Science and technology announced that the company signed a major sales contract with its client A, with a contract value of 264 million 658 thousand yuan. The contract is carbon fiber and carbon fiber fabric, and the contract performance period is 12 months from the date of signing.

According to the announcement, the contract amount of 264 million 658 thousand yuan has accounted for 112.88% of the audited business income of the company in the latest accounting year. With the application of high-end aerospace products, the company's ZT7 series carbon fiber and fabric products have been stable and batch applied to the domestic aerospace industry. The performance of the contract will have a positive impact on the company's performance.

In fact, in the many domestic enterprises that are currently active in the market, Changzhou science and technology in Jiangsu Changzhou is lucky. If we talk about the scale of production, there is no advantage in science and technology. According to the 2019 financial report, the high performance carbon fiber produced by China Science and technology is mainly ZT7 series, with an annual capacity of 100 tons, the actual output is 90.61 tons during the year, the actual sales volume is 79.86 tons, the production and marketing rate is 88.14%, and the utilization rate of capacity is 90.61%.

However, with a relatively stable downstream military orders, it made a profit. In 2019, the total revenue of China Science and technology reached 234 million yuan, an increase of 10.28% over the same period last year. The net profit attributable to the owners of the parent company was 137 million yuan, an increase of 13.36% over the same period last year. Science and technology, said the company's carbon fiber currently mainly to the domestic aerospace customers stable supply. In 2019, the company signed a 343 million 693 thousand and 600 yuan "product order contract" with its main customers, and the actual order amount was 223 million 905 thousand and 800 yuan.

Yang Chengxiao, an analyst at Tianfeng securities, pointed out that the products of Jian Technology are almost entirely used in the military and aerospace fields downstream, which is the main reason for its high gross profit margin. In 2019, its gross profit margin reached 82%, an increase of 2.74 percentage points over the same period last year. In 2018, sales of military products accounted for 99.77% of total revenue.

In the first quarter of this year, China Science and technology achieved 44 million 607 thousand and 900 yuan in revenue, down 19.41% from the same period last year. The company said that the decline in revenue was due to the issuance of commodity reinspection time affecting revenue recognition. During the period, the company realized a net profit of 27 million 450 thousand and 600 yuan attributable to shareholders of listed companies, an increase of 12.62% over the same period. It is worth noting that in the first quarter of the profits, of which 6 million 132 thousand and 700 yuan was VAT duty-free, an increase of 348.27% over the previous year, 1 million 558 thousand and 500 yuan was government subsidies, an increase of 2297.62% over the same period.

"Since the supply schedule of the company is mainly influenced by the purchasing plan of the customers and their end-users, the supply cycle may be extended correspondingly, and there may be uneven distribution of the delivery times. However, the long-term demand of the company's carbon fiber does not affect the sustainability of the company's sales growth. Referring to the newly signed orders this year, the technology of Zhong Jian said so.

The overall development trend is still improving.

Enterprises also have losses and integration.

　　 According to the report, in 2019, the capacity of China's carbon fiber industry was about 26650 tons, and its sales volume was about 12000 tons. Its sales and capacity ratio was 45%, compared with 33.6% in 2018. Among them, the sales volume and capacity of enterprises are even up to 77%, while the ratio of international carbon fiber enterprises is usually between 65%~85%.

　　 In terms of demand, the total demand of China's carbon fiber market in 2019 was 37840 tons, an increase of 22% over the same period last year. Among them, the import volume is 25840 tons, accounting for 68% of the total demand; the supply of domestic carbon fiber is 12000 tons, accounting for 31.7% of the total demand.

"In 2019, whether imported or domestic, China's carbon fiber market is in short supply. Moreover, in 2015 ~2018, the growth rate of China's carbon fiber market demand was 13.4%, 16.5%, 20% and 32% respectively. The market development in these years is quite gratifying. Lin Gang, general manager of Guangzhou SEO Carbon Fiber Technology Co., Ltd.

"Compared to the sales of 9000 tons of domestic carbon fiber in 2018, the sales volume of domestic carbon fibers increased by 33% over the past two years, and has increased by 30% over the past two years," Lin said. This shows that domestic carbon fiber has made great progress in recent two years, and the market is booming.

However, under the background of the overall good development of domestic carbon fiber, the development of different enterprises is different, and the losses and integration of enterprises are also continuing.

According to the performance report released by the new third board, in 2019, the sales revenue of Heng Shen shares reached 290 million yuan, up 73% from the sales revenue of 167 million 700 thousand yuan in 2018. Among them, the high value-added business revenue was 153 million 820 thousand yuan, an increase of 74% over the 88 million 590 thousand yuan in 2018.

But Heng Shen shares remained at a loss in 2019, losing 198 million yuan. However, compared with the deficit of 229 million 400 thousand yuan in 2018, the deficit was reduced by 31 million 519 thousand and 600 yuan. Among them, the gross profit margin in 2019 was 10.24%, which was much higher than the gross profit margin of -9.06% in 2018 and the gross profit increased by 44 million 910 thousand yuan.

For the reasons for the loss, Heng Shen shares said that there is still a gap between the actual output and the capacity of the company's carbon fiber products, and the fixed production cost of the product units is relatively high. At the same time, although the company's sales performance in defense, aviation, aerospace and other fields has improved compared with the previous two years, however, due to the longer certification time of some projects, large-scale sales still need a period of time, thus affecting the overall capacity of the company, so that the production of the unit is still higher than the selling price, and has not yet reached the profit and loss balance.

However, hang Shen shares still have confidence in the development of the joint stock. In the announcement, they said: the major equipment projects approved by the company in the early stage are continuing to expand. In 2019, the company's high value-added projects and revenues from aviation, aerospace and other fields increased significantly. Previous projects and technology accumulation in aviation and aerospace industry are continuing to contribute to the company's later revenue and profit growth. With the further release of the company's capacity and the further improvement of the application level of carbon fiber, the overall situation of the company will tend towards healthy development.

Some enterprises began to be stripped and reorganized. In May 8th, Fangda carbon announced that it intends to transfer the 70% stake and part of the creditor's rights of the Jilin subsidiary Dajiang City Carbon Fiber Co., Ltd. (hereinafter referred to as "Jiangcheng carbon fiber"). Jiangcheng carbon fiber is located in Jilin economic and Technological Development Zone, founded in late 2008. Jiangcheng carbon fiber owed large carbon debt totaled 329 million 600 thousand yuan, of which 151 million yuan was offset by the company's transfer of 70% stake in Jiangcheng carbon fiber, the remaining debt 178 million yuan and interest paid by Jiangcheng carbon fiber installments.

In November 2013, it took nearly 72 million 57 thousand and 700 years for the CFE group to take 70% stake in Jiangcheng carbon fiber and transfer it to Fangda carbon for nearly 7 years. Over the past 7 years, Jiangcheng's carbon fiber has been in deficit for many years. In 2013 ~2019, the net profit of each year was -4506.34 million yuan, -5638.57 million yuan, -4977 million yuan, -4994.35 million yuan, -4539.21 million yuan, -5992.92 million yuan, -4054.69 million yuan. In 2019, its revenue was 41 million 223 thousand and 600 yuan. As of March 31st this year, the total assets of Jiangcheng's carbon fiber were 136 million 342 thousand and 900 yuan, the total liabilities amounted to 376 million 104 thousand and 500 yuan, and the owner's equity was -23976.16 million yuan. This year 1~3 month, its revenue was 9 million 269 thousand and 100 yuan, a loss of 10 million 525 thousand and 700 yuan (Unaudited).

In fact, the integration and reshuffle of domestic carbon fiber has been more obvious in recent years. In early 2017, Zhejiang Thailand advanced materials Limited by Share Ltd filed for bankruptcy with the court. The company had not had any revenue for several years and sustained a net loss. In May 2018, the Shenyang intermediate people's court declared that Shenyang Zhong Heng new material Co., Ltd. was bankrupt. The company was founded in 2009. At that time, the audit report showed that as at the end of January 2018, the total assets amounted to 360 million yuan, the total liabilities amounted to 585 million yuan, and the owner's equity was -2.2 billion yuan, which was severely insolvent.

In 2018, Chu Jiang completed the acquisition and reorganization of Tian bird high tech, bought 1 billion 62 million stake in Tian bird high tech 90%, and completed the transfer of assets in December 2018. Tian bird hi-tech is mainly engaged in the research and development of special high-performance fibers such as carbon fiber and aramid fiber. The core products of aircraft carbon brake discs are used in aerospace, defense, military and other fields. But before takeover, Tian bird high tech was faced with bottlenecks such as insufficient financial strength and poor market development capability. In 2019, the new capital of Chu River also completed the fund raising of Tian bird high tech, introducing the national civil military integration fund and the Beijing state aero engine industrial investment fund center, which collects 747 million yuan.

In 2019, the carbon fiber industry attracted much attention. One was Shaan Coal Group's reorganization of Heng Shen shares, which realized the integration of state capital and private capital. The other was the "kangdexin debt default" incident.

In the Kang De Xin incident, the Shandong Rongcheng carbon fiber project and the Sino Anxin carbon fiber project in Langfang were all "implicated". After many competitions, Kang De Gu Gu Technology Co., Ltd. changed to Rongcheng Carbon Fiber Technology Co., Ltd., its legal representative, registered capital, shareholders list and other information also changed in December 9, 2019. The business registration data of Rongcheng Carbon Fiber Technology Co., Ltd. show that Kangde group and Kangde Xin no longer appear in the list of shareholders. The original shareholders of the project, Rongcheng state capital operation Co., Ltd. and the new shareholder Rongcheng Mu Hua equity investment fund partnership company respectively subscribed 1 billion yuan or 1 billion 500 million yuan in registered capital, holding 40% and 60% respectively.

It can be found that in the reshuffle of the current carbon fiber industry, the "zombie enterprise" which has not been produced for many years declares bankruptcy, and is out of balance; the leading enterprises with capital chain tension have been reorganized, the pressure has been relieved and new students have been reborn; there has also been a "chain reaction" of debt defaulting, which has triggered the contention of project equity; and there has been a stagnation of project stagnation.

Overall, the market concentration of domestic carbon fiber has been further improved through the reshuffle of the industry and the survival of the fittest. Some enterprises have fallen, others have become stronger. The comprehensive competitiveness of many leading enterprises, such as capacity scale, technical strength, product quality and downstream application, is further enhanced, which drives the industry to move towards the stage of high quality development.

Big tow shows a unique talent.

Capital flows into investment boom again

The global carbon fiber market mainly includes 3 fields: small tow for aerospace, small tow for industrial use and large wire bundles for industry. Among them, wind power blades, rail transportation and other industrial areas are the key civilian market of tow carbon fiber. In addition to the sustained and steady expansion of the military aerospace applications market, the application of large wire bundles carbon fiber in the wind turbine blade market has suddenly become the biggest highlight of the development of China's carbon fiber industry in recent years.

According to the report, in 2019, the main driving force for the rapid growth of China's carbon fiber market is still the wind turbine blade market. During the year, China's wind turbine leaf Market consumed about 13800 tons of carbon fiber, a significant increase of 72.5% over the amount of about 8000 tons in 2108.

Our company continues to pry up the domestic market of wind power blade carbon fiber. In 2019, Guang Wei composite wind power carbon beam business achieved sales revenue of 673 million yuan, an increase of 29.24% over the same period, accounting for 39.26% of total revenue. During the period, in the top 5 customers of the company, the sales volume of the second major customers, Vestas wind technology company, reached 388 million yuan, accounting for 22.61% of the total sales. The sales volume of the third largest customer, di peel wind turbine blade Co., was 231 million 500 thousand yuan, accounting for 13.50% of the total sales volume.

In fact, its performance in this field has been increasing rapidly for 3 years. In 2016, Guang Wei composite materials pioneered the development of wind power carbon beam products in the global market. Since 2017, Vestas, the global wind power giant, has rapidly increased the demand for light wind carbon carbon beams.

　　 According to the financial report, the sales volume of light wind composite carbon beam in 2017 was 261 million yuan, up 697.86% over the same period last year, and its revenue in 2018 was 521 million yuan, up 99.89% from the same period, accounting for 38.2% of the total revenue. Even in the first quarter of this year affected by the global epidemic, sales revenue reached 154 million yuan, down 1.95% from the same period last year. In this way, Guang Wei complex has opened another important business development space outside the military industry: a wider industrial market, making its profitability further enhanced.

It is worth noting that the report pointed out that in 2019, the consumption of carbon fibers in China's wind turbine leaf market appeared in the form of mainland enterprises, with a dosage of about 1000 tons, while in 2018 it was all imported. At the same time, there are about 5000 tons of products across the boundaries of large and small tow, are also products of mainland enterprises, the typical representative is Jilin Jinggong 25K products.

According to the report, Jilin Jinggong Carbon Fiber Co., Ltd. (hereinafter referred to as "Jilin Jinggong") appeared in the supplier list of Guang Wei complex in 2019. It is the third largest supplier in the year, and its purchase amount is about 90 million yuan. The Jilin chemical fiber Limited by Share Ltd currently holds 18% stake in Jilin Jinggong, which uses Jilin carbon Valley's raw silk to be carbonized by Jilin Jinggong to produce and sell carbon filaments.

In 2019, Jilin Jinggong's carbon fiber sales reached 2800 tons, an increase of 120% over the same period last year. The sales of raw carbon in Jilin carbon Valley reached 13 thousand tons, an increase of 62% over the same period last year, which achieved 315 million 500 thousand yuan of main revenue, an increase of 106 million 700 thousand yuan compared with 2018, an increase of 51.06% over the same period last year.

Jilin carbon Valley said that in the past two years, the company has invested a lot of strategic investment in the field of big tow, general-purpose and high quality raw silk. In 2019, the large tow carbon fiber developed by the company was widely recognized by the market and gradually expanded. The company has also carried out four projects of "upgrading quality, speeding up production, improving production and improving efficiency". Taking the homogenization research as the breakthrough point, the technology optimization and equipment transformation have been carried out drastically to improve the quality and stability of the raw silk, so that the capacity of the original single wire can reach the original 4 line design capacity. At the same time, the downstream customers, Jilin Jinggong, have been increasing the consumption of the company's products every year in recent years, and gradually expanding the production line capacity. The cooperation between the two sides is conducive to the continuous upgrading and perfection of the company's raw silk technology. At present, the company is building an annual output of 40 thousand tons of carbon fiber precursor project. It is foreseeable that as the business is developing more and more healthy, Jilin carbon valley will not be far away from "seeing the bright moon" and realizing the profit.

　　     From the point of view of the province, "2019 global carbon fiber composite materials market report" shows that in 2019, due to the large increase in consumption of carbon fiber in the wind power market, the demand for carbon fiber in Jiangsu increased by 34% over the same period last year, to 12559.25 tons, and jumped to the first place, becoming the first batch of provinces to exceed 10000 tons in the history of China's carbon fiber market development, while Guangdong, which was ranked first in the long term, was the first in the world. Fell to second; Shandong's carbon fiber demand increased by 20% compared to the same period last year, to 7740.53 tons, ranking third.

Main carbon fiber composite materials and carbon fiber products, located in Wujiang District of Suzhou, Jiangsu, Australia, Mstar Technology Ltd successfully seized the opportunity for the rapid rise of the market. Yan Jun, chief technology officer of the company, said: "in 2019, the sales volume of the company doubled, of which the proportion used in the wind power market accounted for about eight or nine. In the total consumption of more than 12000 tons of carbon fiber in the whole province, our company used more than 7000 tons.

Lin Gang said: "obviously, the amount of wind power blades that has leaped up in recent years has brought rare opportunities for development to China's carbon fiber enterprises."

It is precisely because of the outstanding performance of the large wire bundle carbon fiber in the wind power market, driven by the "invisible hand" of the market, the domestic carbon fiber market is ushering in a new wave of investment.

In July 19, 2019, Guang Wei complex announced that it would sign an agreement with Party A, Inner Mongolia Baotou's nine yuan District People's government, the nine yuan industrial park management committee, and the party's Vestas wind technology (China) Co., Ltd., to build "10000 ton carbon fiber industrialization project" in Baotou in three phases.

In March this year, Shanghai Petrochemical announced that it planned to invest 3 billion 500 million yuan to build 24 thousand tons / year carbon fiber precursor and 12 thousand tons / year 48K tow carbon fiber project. Lanzhou LAN-STAR Fiber Co., Ltd. also announced in March that it will build a two phase project in Yiyuan, Zibo, Shandong, with the goal of producing 50 thousand tons of raw silk per year and 25 thousand tons of carbon wire. In addition, Zhangjiakou Xingke carbon Dingxin material, Gansu Zhangye carbon Valley and many other enterprises and regions also announced the new carbon fiber project.

"Since 2019, the overall style of China's carbon fiber industry is" heavy expansion "and" capital restructuring ". Judging from the global carbon fiber market, the share of China's carbon fiber market increased from 22.8% in 2018 to 31.7% in 2019. It is gratifying to note that this is closely related to the efforts made by enterprises for years of hard work and quality improvement. From the price point of view, in 2019, due to the shortage of tow in the international market and the continuous upgrading of the cost control level of China's carbon fiber industry, China's carbon fiber prices and international product prices have basically been in a state of equilibrium, making it possible for China's carbon fiber and its products to bulk export. In addition, China's export tax rebate rate adjustment, carbon fiber enterprises can seize the opportunity to increase overseas market development. We expect that domestic carbon fiber sales will exceed imports by 2025. " Lin Gang said.

Talking about how China's carbon fiber industry and enterprises can further enhance their competitiveness, Lin Gang said: "the key is to grasp the 4 words of" stabilizing quality and reducing the cost ". At this stage, the industry has solved the problem of "from scratch", but under the condition of industrial scale production, the problem of product performance and quality stability needs to be improved, and the cost is generally higher than the international level. Therefore, reducing the cost and increasing efficiency will become the main task facing the industry in the next period. It can be divided into three steps: developing low-cost tow, developing low-cost and high-performance small tow, and developing low-cost and high-performance tow. At the grand strategic level, the next stage of China's carbon fiber industry should not blindly follow the path of product development of international enterprises, but rather need to independently layout the next generation of carbon fiber technology, carry out research and breakthroughs in the underlying technology, strengthen basic scientific research, and contribute to the further development of the world's carbon fiber industry civilization.

The source of this paper is "2019 global carbon fiber composites market report".