Zheshang: By 2025, composite aluminum foil may move towards larger scale production. We are paying attention to breakthroughs in the terminal application market.

Zheshang released a research report stating that composite electrolyte fluid is a new type of lithium battery material with a "metal conductive layer - PET/PP and other high molecular material support layer - metal conductive layer" sandwich structure, aiming to improve battery safety, energy density, etc. According to the Jinmei New Materials public account, in 2015, it began the development of new materials and achieved overseas installation for the first time in 2018; as for Contemporary Amperex Technology, in recent years, it has successively laid out multiple patents for the composite electrolyte. Since 2021, many battery, material, and equipment-related companies have entered the composite electrolyte track, with the material testing and commercialization process further accelerating, and by 2025, composite aluminum foil may move towards larger-scale production, while composite copper foil may achieve breakthroughs in the end-use market. Composite aluminum foil has been adopted by end-user car companies and may see further growth by 2025. 1) In terms of technology and equipment, composite aluminum foil mainly uses vapor deposition technology. Currently, vapor deposition equipment manufacturers mainly include Japanese companies like IHI Corporation as well as a group of domestic film coating manufacturers. On the side of domestic material manufacturers, companies like Guangdong Enpack Packaging have reached strategic cooperation with IHI to purchase their composite aluminum foil production lines. In addition, domestic production of vapor deposition equipment will help further reduce the cost of composite aluminum foil; 2) In terms of applications, according to high-frequency lithium power public account, composite aluminum foil has been used in different models and batteries such as ExtremeVacuum 009, Wenjie M9, and Clip 2.0. We believe that with cost reduction and capacity expansion, the penetration rate of composite aluminum foil will further increase. Composite copper foil is expected to reach an important window period for mass production by 2025. 1) In terms of technology and equipment, the process of composite copper foil is relatively complex, with the mainstream industry adopting a "magnetron sputtering + electroplating" two-step process, forming a group of domestic equipment manufacturers represented by Kunshan Dongwei Technology, Teng Sheng Technology, Guangdong Huicheng Vacuum Technology, etc., with a certain scale of equipment capacity. 2) In terms of material testing and capacity, in recent years, many manufacturers such as Shanghai Putailai New Energy Technology, Shenzhen Baoming Technology, Guangdong Enpack Packaging have entered the industry, actively researching and sending products to downstream customers for testing. The industry has also transitioned from the original PET route to PP. In terms of capacity layout, including Shanghai Putailai New Energy Technology, Shenzhen Baoming Technology, Guangdong Enpack Packaging have all announced the construction of new composite copper foil related capacity. 3) Copper price, since the copper price entered an upward channel in 2024, it is currently at a relatively high historical level. In summary, considering the high cost reduction potential of composite copper foil and the continuous improvement in industry capacity and product maturity, by 2025, it may achieve breakthroughs in the end-use market. Investment recommendation Currently, the overall penetration rate of the composite electrolyte fluid industry is low, and is expected to benefit from the rapid increase in penetration rate in the future. It is recommended to pay attention to leading composite electrolyte material manufacturers Shanghai Putailai New Energy Technology (603659.SH) (power equipment), Shenzhen Baoming Technology (002992.SZ) (electronics), leading water electroplating equipment manufacturer Kunshan Dongwei Technology (688700.SH) (mechanical equipment), leading battery welding head manufacturer SBT Ultrasonic Technology (688392.SH) (power equipment), and leading magnetron sputtering equipment manufacturer Guangdong Huicheng Vacuum Technology (301392.SZ) (mechanical equipment). Risk Warning Unexpectedly slow promotion of composite electrolyte fluid products, and downstream demand falls short of expectations.