On the evening of February 28, Jilin Carbon Valley released its 2024 performance report, which is expected to achieve operating income of 1.603 billion yuan, a year-on-year decrease of 21.76%; The net profit attributable to the parent company was 93.5792 million yuan, a year-on-year decrease of 59.56%. The company said that the decline in performance was mainly affected by the phased adjustment of the carbon fiber industry. The carbon fiber industry has entered a period of adjustment since 2023, with demand falling short of expectations and prices falling significantly. A number of companies in the industry, such as Zhongfu Shenying and Guangwei Composites, have also experienced a decline in profits.

Every reporter Zhang Mingshuang and every editor Liang Xiao

On the evening of February 28, Jilin Carbon Valley (BJ836077, share price 12.93 yuan, market value 7.599 billion yuan) released its 2024 performance report. The company expects to achieve operating income of 1.603 billion yuan last year, a decrease of 21.76% over the same period last year; The net profit attributable to the parent company was 93.5792 million yuan, down 59.56% from the same period last year.

Jilin Carbon Valley said that the main reason for the decline in the company's performance was that the company lowered the sales price of some products due to the phased adjustment of the carbon fiber industry, resulting in a decline in the scale of operating income and the level of product gross profit.

The reporter of "Daily Economic News" noticed that a number of listed companies in the carbon fiber industry are also expected to decline in profitability last year, but including Jilin Carbon Valley, the industry as a whole is still expanding.

The price of carbon fiber products has decreased

According to Jilin Carbon Valley, the domestic carbon fiber industry has been adjusted in stages since 2023. In 2023, the company's operating income and net profit attributable to the parent company will decrease by 1.65% and 63.25% year-on-year respectively, mainly due to the complex internal and external environment, the demand for carbon fiber is less than expected, and the price of carbon fiber has dropped significantly.

Jilin Carbon Valley said that although the carbon fiber industry has entered a relatively stable stage at the end of 2024, the phased adjustment still affects the performance in 2024, and the company has lowered the sales price of some products in response to the impact.

Not only Jilin Carbon Valley, the reporter noticed that a number of listed companies in the carbon fiber industry are expected to decline in 2024.

Zhongfu Shenying (688295. SH, share price 21.13 yuan, market value 19.017 billion yuan) 2024 annual performance express report shows that the company expects to achieve operating income of 1.557 billion yuan in 2024, a year-on-year decrease of 31.08%; The net profit attributable to the parent company was -119 million yuan, a year-on-year change from profit to loss, mainly due to the impact of the imbalance between supply and demand in the carbon fiber industry in 2024, the decline in product sales prices, and the provision for impairment of some assets with signs of impairment.

Guangwei Composites(300699. SZ, share price 32.04 yuan, market value 26.637 billion yuan) is expected to 2024 operating income and net profit attributable to the parent company will decrease by 2.69% and 14.43% year-on-year respectively, one of the factors affecting performance is the decline in the price of high-performance carbon fiber products for industrial use and the demand rhythm of carbon fiber for equipment affected by the demand rhythm factors of individual application scenarios.

There is also a growth in the performance of the company. Zhongjian Technology (300777. SZ, share price 30.3 yuan, market value 13.323 billion yuan) is expected to be 317 million yuan ~ 370 million yuan net profit attributable to the parent company in 2024, a year-on-year increase of 9.62% ~ 27.95%, the main reason is that the company has worked hard to overcome the short-term impact of market cyclical fluctuations, and the market performance and demand of a new generation of carbon fiber products represented by ZT9H have exceeded expectations and created a new growth range.

So, when will the price of carbon fiber products bottom out? Jilin Carbon Valley said in the performance express report that the carbon fiber industry will enter a relatively stable stage by the end of 2024; Zhongfu Shenying said in the record table of investor relations activities in December 2024 that from the current point of view, carbon fiber prices are still at the bottom of the shock, and it is believed that as the industry gradually moves towards healthy and sustainable development, carbon fiber prices will also enter a stage of benign development.

Listed companies in the industry are still expanding production

For the factors influencing the performance in 2024, the above-mentioned listed companies mostly mentioned the imbalance between supply and demand in the carbon fiber industry and the decline in product prices. However, the reporter noted that under this circumstance, listed companies in the industry are still continuing to expand production.

Jilin Carbon Valley said in the performance express report that by the end of 2024, the company's total assets are expected to be 5.932 billion yuan, an increase of 13.04% over the same period, mainly due to the increase in the company's investment in the construction of carbon fiber precursor-related projects during the reporting period. According to the 2024 semi-annual report, the company's annual output of 150,000 tons of carbon fiber precursor project has completed more than 80% of the construction, and the first phase of the project with an annual output of 30,000 tons of high-performance carbon fiber precursor will be put into trial operation in July 2024.

One of the influencing factors for the decline in the performance of Zhongfu Shenying in 2024 is that the projects of the company's Xining subsidiary and Shanghai subsidiary are fully put into operation, and the capitalization of project loan interest is converted to expense. In addition, Zhongfu Shenying replied to investors in December 2024 that at present, the construction progress of the 30,000-ton carbon fiber project of Shenying Lianyungang is progressing in an orderly manner, and by the end of 2025, it will ensure that some production lines will have the ability to put into production.

In June 2024, Guangwei Composite Materials announced that the first phase of the Inner Mongolia Guangwei Carbon Fiber Industrialization Project was completed and put into operation, forming an annual production capacity of 4,000 tons of high-performance carbon fiber. A month earlier, a wholly-owned subsidiary of Guangwei Composite Materials won the land use right in Weihai, which was intended to be used to build a polyacrylonitrile-based carbon fiber precursor production line with an annual output of 2,600 tons.

When a number of listed companies expand production when there is an imbalance between supply and demand in the industry, will there be a problem of capacity digestion?

On May 29, 2024, at the online performance briefing held by Jilin Carbon Valley, some investors asked whether there was a risk of digestion if the company's capacity expansion was too large. In response, the company said that from the perspective of industry development, the carbon fiber industry has broad prospects, but in a certain period, market demand will also fluctuate and fluctuate; The layout of the company's relevant production capacity will be arranged from the perspective of industry development trends and the company's global layout, and will not be affected by short-term factors; The company's products cover a full range of carbon fiber precursor products, which are widely used in military, civilian and industrial fields, and the company's production capacity will be effectively digested.

Zhongfu Shenying said in the record of investor relations activities that based on the expansion of carbon fiber industry as a whole in recent years, and there is also a stage of surplus in individual areas of the downstream market, the production capacity of the entire carbon fiber industry is still relatively rich in the case of demand and supply is still in the unbalanced stage. However, the optimistic thing is that as the cost of carbon fiber declines, other emerging applications have been added downstream, and the overall demand for carbon fiber is still growing.

For the planning of the follow-up production capacity of 6,000 tons of Guangwei project in Inner Mongolia, in October 2024, Guangwei Composites said in the record sheet of investor relations activities that the company has not seen the rapid growth of downstream market demand, and the company chooses to maintain a relatively stable investment.