TANG SHIHUA

20 Dec 2021

(Yicai Global) Dec. 20 – Shares of Chinese aluminum behemoth Dingsheng New Energy Materials surged after the firm penned a long-term supply agreement with battery manufacturer Contemporary Amperex Technology.

Dingsheng’s stock price [SHA: 603876] soared as much as 10 percent to CNY43.66 (USD6.80) intraday. The shares are still more than 10 percent down from an all-time high of CNY50.79 reached in September.

A unit of Dingsheng will supply the new energy vehicle battery giant with aluminum foil for four years till December 2025, the Zhenjiang-based supplier said in a statement yesterday. The tally should involve 512,000 tons of such material. The pair will agree on pricing later.

Dingsheng is the world’s biggest battery aluminum foil producer, it said. The firm makes 94,000 tons of such foil per year, making up 40 percent of the global total, it added. The company counts BYD and Volkswagen’s Chinese battery partner Gotion High-Tech as some of its major customers.

The supplier has been having a great sales year. In the first three quarters, Dingsheng’s net profit jumped almost 24 times to CNY260 million (USD40.8 million) from a year ago, according to its earnings report. Revenue surged 43 percent to CNY12.9 billion (USD2 billion). 

However, the company is having some regulatory troubles. Early this month it said that Zhou Xianhai, president of the firm, was being investigated by the China Securities Regulatory Commission on suspicion of illegal information disclosure.

Dingsheng’s earnings show that products used in batteries have a higher profit margin than those applied to air-conditioners. Air-con aluminum foil had a lower than 10-percent gross profit margin while that of battery aluminum foil was nearly 30 percent as of last December.

Editor: Emmi Laine, Xiao Yi