Copper Crown Copper Foil · In-Depth | Domestic HVLP Leader, Price Increases, Product Upgrades, Cost Reduction【Tianfeng Electric New】

（Source: New Energy Frontier Team）

Please contact: Sun Xiaoya / Zhang Tongtong

Abstract

Overview: Dual-business layout of PCB copper foil and lithium battery copper foil; product matrix covers high-end applications

The company is a leading domestic high-precision electronic copper foil enterprise, focusing on the dual businesses of “PCB copper foil + lithium battery copper foil.” Core products include RTF and HVLP premium PCB copper foils, as well as 4.5μm ultrathin lithium battery copper foil. On the customer side, the PCB copper foil business taps into the supply chain of leading CCL manufacturers such as TAI-CHANG and Shengyi; the lithium battery copper foil business taps into supply chains such as BYD and Gotion High-Tech. On performance, in 2020-2022, results benefited from the growth in demand for new energy and 5G, moving upward; in 2022-2025H1, due to industry overcapacity and downward pressure on processing fees, the business entered an adjustment period; from 2025 onward, as demand for high-end PCB copper foil expands driven by AI, profitability rebounds.

Industry logic: AI computing power drives volume growth in high-end copper foil demand; supply-demand gaps support pricing upside elasticity

AI server iteration drives upgrades toward high-frequency, high-speed, low-loss PCBs, making high-end copper foil a rigid demand. To meet low-loss PCB requirements for servers, technological breakthroughs are needed in copper foil—the core upstream material in the copper-clad laminate supply chain—so as to support low-loss targets for high-speed copper-clad laminates (reducing copper foil surface roughness as much as possible). High-end PCB copper foils mainly include reverse copper foil (RTF), ultra-low-profile copper foil (HVLP/VLP), and ultrathin peelable/ultra-thin copper foil.

AI demand is driving overseas manufacturers to switch production to high-end products, creating capacity squeeze and leading to comprehensive price increases for PCB copper foil. At present, high-end copper foil suppliers are mainly overseas firms. As AI development boosts HVLP demand, overseas manufacturers switching to HVLP production causes a contraction in RTF supply. For domestic mid-to-high-end electronic copper foil, because of dependence on imported core equipment, large investment scale, and long downstream certification cycles, the near-term supply-demand gap is difficult to ease; the industry has already entered a phase of comprehensive price increases.

Company competitive advantages: Strong “technology + customers + capacity” in PCB copper foil, building key competitive barriers

The company holds a leading position domestically in PCB copper foil and its competitive advantages are significant. In 2024, HVLP copper foil output increased 217% year over year; in 2025H1, the proportion of high-end output in total PCB copper foil output exceeded 30%, and RTF production and sales ranked first among domestic enterprises.

• Products: Laid out early and thoroughly. In 2019, RTF achieved mass production; it has production capacity for HVLP copper foils of generations 1-4. HVLP5 completed pilot testing and has been sent for sampling; RTF reverse copper foil production and sales capacity ranks first among domestic private enterprises.

• Customers: Cooperates with leading CCL manufacturers such as TAI-CHANG and Shengyi.

• Capacity: As of early 2026, the company’s total annual production capacity for copper foil products is 80k tons/year, including 55k tons/year for PCB copper foil.

Earnings Forecast & Investment Recommendation

We expect the company to achieve revenue of RMB 6.9, 9.0, and 10.8 billion in 2025-2027, and attributable net profits of RMB 80k, 25k, and 650 million, respectively. This corresponds to PE valuations of 67 and 46X for 2026/2027. Considering the company’s competitive advantages in high-frequency high-speed copper foils and pricing upside elasticity, this is our first coverage. We give a “Buy/Overweight” rating.

Risk Warning: High-end copper foil capacity release and certification not meeting expectations; lithium battery demand not meeting expectations; intensifying industry price competition; technical iteration and substitution; subjectivity in forecasts; and significant stock price volatility.

1. Overview: Main focus on high-performance electrolytic copper foil; steady improvement in performance

1.1. Dual-business layout of PCB copper foil and lithium battery copper foil; product matrix covers high-end applications

A leading domestic enterprise in high-performance electronic copper foil, forming a dual-core driving pattern of “PCB copper foil + lithium battery copper foil.” The company was established in October 2010 and is one of the leading domestic enterprises producing high-performance electronic copper foil products. It has already developed a growth model driven by the dual cores of “PCB copper foil + lithium battery copper foil.”

The company’s main products are PCB copper foil and lithium battery copper foil. In 2025H1, their shares of total revenue were 57% and 38%, respectively, and their gross margins were 5.56% and 0.24%, respectively.

• Lithium battery copper foil: Major specifications include 4.5μm, 6μm, 7-8μm, and 8μm and above, used in fields such as new energy vehicles, 3C digital products, and energy storage systems.

• PCB copper foil: The PCB copper foils produced by the company mainly include high-temperature and high-stretch copper foil (HTE foil), reverse-treated copper foil (RTF foil), high-TG halogen-free laminate copper foil (HTE-W foil), and extremely low-profile copper foil (HVLP foil), among others. Major product specifications include 12um, 15um, 18um, 28um, 35um, 50um, 70um, 105um, 210um, etc., and the maximum working width is 1295mm.

1.2. Backed by Tongling Nonferrous and Gotion High-Tech; deep linkage to the industrial chain

Tongling Nonferrous is the controlling shareholder of the listed company; Gotion High-Tech is the second-largest shareholder. The company was established in 2010 by the listed company Tongling Nonferrous. In 2018, Tongling Nonferrous transferred 100% equity interest in its wholly-owned subsidiary Tongling Copper Foil and 88.75% equity interest in its controlling subsidiary Hefei Tongan 88.75% to Tongguan Copper Foil, in order to integrate equity and strengthen specialized management. As of the 2025 Q3 report, Tongling Nonferrous holds 72.38% of the company’s equity, while Gotion High-Tech is the second-largest shareholder holding 2.62% of the company’s equity. The company’s actual controller is the Anhui State-owned Assets Supervision and Administration Commission.

The company’s businesses form industrial synergy with the two major shareholders, and related-party transaction proportions are relatively high. The company’s main raw materials are cathode copper and copper wire. It mainly purchases from controlling shareholder Tongling Nonferrous and its subsidiaries. In 23/24, the purchase amounts from Tongling Nonferrous and its subsidiaries accounted for 55.18%/60.90% of total purchases from suppliers for the full year, respectively. The company’s lithium battery copper foil products enter the supply chain of Gotion High-Tech and its related parties. In 24/25H1, the revenue from selling lithium battery copper foil was RMB 45.7k / 322 million, respectively, accounting for 13.55% / 28.29% of revenue from lithium battery copper foil sales for the period.

1.3. Financial data: Profit declines in 21-24; gross margin recovery in 25 leading to improved profitability

The company’s operating revenue and attributable net profit both declined in 21-23. The company’s copper foil output in 21-23 was 41,000/41,600/45.7k tons, and its copper foil sales volume was 41,100/40,600/43.5k tons. Although production and sales increased, revenue and attributable net profit continued to decline. The main reason is that in these years the copper foil industry rapidly expanded capacity, resulting in overcapacity, oversupply and fierce price competition, which led to a significant decline in copper foil processing fees and correspondingly continued to depress the company’s gross margin. The gross margin was 15.4% in 21Q4 and 1.9% in 23Q4.

In 24, revenue increased without profit; gross margin stabilized and rebounded by year-end. The company commissioned 25k-ton capacity in two locations—Chizhou and Tongling—in 24. Capacity increased from 55k tons in 23 to 80k tons. Combined with artificial intelligence boosting demand for PCB copper foil, especially high-frequency high-speed copper foil, production and sales increased by +18%/+27% year over year, and operating revenue increased by +25% year over year. However, the company’s attributable net profit turned negative because competition in the industry intensified and processing fees continued to fall. After the gross margin bottomed out and rebounded from -1.4% in 24Q3.

Since 25, the company’s profitability has continued to improve. As HVLP copper foil demand for AI server base material is strong, copper foil for high-frequency high-speed substrates is in a tight supply situation. The competitive focus for lithium battery copper foil has also shifted to higher value-added products such as 4.5μm and 5μm. In the first three quarters, revenue increased by +47% year over year. In 25Q3, the quarterly gross margin rebounded to 4.2%, and attributable net profit turned from loss to profit.

2. Key points: High-end copper foil demand ramps up; the company’s positioning enables strong profitability upside

2.1. AIDC computing power upgrade drives PCB iteration, creating rigid demand for high-end copper foil

AI smart computing server technology iteration drives PCB upgrades toward high speed, high density, thick thickness, high-layer counts, and high reliability. The AI server transmission rate is upgraded from 16GT/s to 64GT/s+, and copper-clad laminate loss is reduced from 0.86dB/inch (8GHz) to 0.77dB/inch (16GHz), leading to a clear increase in demand for low-loss electronic copper foil. OAM accelerator card PCB layouts are denser and require 8th- or 10th-generation HDI process technology, further increasing density. The core board components of AI smart computing servers have stringent specification requirements, with backplane layer count ≥20 layers and LC motherboard layer count ≥16 layers; the next-generation AI smart computing switch board PCB will have 42-52 layers. NVIDIA NVL576 server racks as the core solution for smart computing ScaleUp achieve a per-lane rate of 200Gbps and total bandwidth of 102.4Tbps. Meanwhile, tech giants such as Google, Meta, Amazon, and Tesla accelerate the development of proprietary ASIC chips to match AI computing power needs, and advanced packaging further raises the performance bar for high-frequency high-speed PCB. By comparison, traditional 8–12 layer conventional PCBs can no longer meet the operating requirements of AI computing equipment. PCB designs need comprehensive upgrades in layer count design, material selection, and process precision.

The relationship of the PCB industrial chain is: electronic fabric + copper foil + resin -> copper-clad laminate (CCL) -> printed circuit board (PCB) -> AI servers, where copper-clad laminates have the highest cost share within PCBs.

To meet low-loss PCB requirements for smart computing servers, technological breakthroughs are needed in copper foil—the core upstream material of copper-clad laminates—to support low-loss indicators for high-speed copper-clad laminates. When the AI server transmission rate rises from 16GT/s to 64GT/s, the corresponding high-frequency copper-clad laminate loss needs to decrease from 0.86dB/inch (8GHz) to 0.77dB/inch (16GHz). Due to the skin effect, in scenarios of ultra-high-speed wired signal transmission, copper foil becomes one of the core factors restricting transmission rate. To ensure stable high-speed signal transmission, copper foil’s crystal structure, surface flatness, and roughening process must be continuously optimized, and the surface roughness (Rz) should be reduced as much as possible.

Major types of high-end PCB copper foil include reverse copper foil (RTF), ultra-low-profile copper foil (HVLP/VLP), and ultra-thin peelable/ultra-thin copper foil. High-end PCB copper foil features low signal loss, high flatness, adaptation to ultra-thin/ultra-thick specifications, excellent heat dissipation and electrical conductivity, and high compatibility with substrates. It is mainly used in high-end PCB areas such as high-frequency high-speed circuits, HDI, IC packaging substrate boards, and high-power circuits.

• RTF: By using special surface treatments to reduce roughness and improve bonding strength with the substrate; mainly used for advanced HDI and packaging substrate boards. The technology has already iterated to RTF generations 1–5.

• HVLP: Surface roughness ≤0.6μm; can significantly reduce loss from the high-frequency skin effect. It is a key material for 5G communications, AI servers, and high-speed data centers. NVIDIA’s next-generation AI chips come paired with HVLP5 products.

• Ultra-thin peelable / ultra-thin copper foil: Thickness is mainly concentrated in 3–12μm, mainly used for IC packaging substrate boards and FPC. It needs to balance strength, uniformity, and reliable peel-off performance in an ultra-thin state. Previously, the global market was long dominated by overseas companies such as Japan Mitsui.

2.2. AI demand drives overseas manufacturers to switch to high-end production, creating capacity squeeze and causing comprehensive PCB copper foil price increases

With AI demand driving product upgrades, overseas manufacturers switch to high-end production, and global RTF supply contracts. This directly leads to a surge in domestic manufacturers’ RTF orders and a comprehensive round of price increases for electronic copper foil. Mitsui Kinzoku in Japan switched to producing high-end copper foil and controlled supply of conventional products. As a domestic leading electrolytic copper foil manufacturer, Defu Technology is currently operating at full capacity and high load, with strong downstream demand. Recently, it has raised processing fees for products such as HTE and RTF supplied to a certain global leading copper-clad laminate manufacturer, further confirming the industry’s tight supply-demand situation.

At the same time, capacity expansion for mid-to-high-end electronic copper foil faces multiple barriers, meaning the near-term supply-demand relationship is hard to change:

• Core equipment is highly dependent on imports, limiting overseas manufacturers’ capacity. The production process for electronic circuit copper foil consists of four parts: molten copper solution casting, thin copper foil manufacturing, surface treatment, and slitting & packaging. Compared with lithium battery copper foil, it adds a surface treatment step, so it cannot directly reuse those production lines. In addition, high-performance copper foil production has extremely high requirements for the materials, machining precision, and consistency of core equipment such as foil casting machines, surface treatment machines, and cathode rolls. Production and sales of the above core equipment are mainly concentrated among Japanese and Korean companies such as Japan Sanjiang, Japan Nippon Steel, and Korea PNT. Taking cathode rolls as an example, more than 70% of cathode rolls globally come from Japanese firms such as Nippon Steel. Orders need to be placed with advance scheduling, resulting in long delivery cycles. The annual production capacity of the surface treatment machines of Sanjiang Japan is only 6-8 units, which limits to some extent the ability of copper foil companies to build and expand production lines.

• Core equipment investment scale is large, requiring strong corporate financial capability. Imported foil casting machines, surface treatment machines, cathode rolls, and other core equipment are priced high. Based on the book value of equipment for Tongguan Copper Foil, the original value of foil casting machines is RMB 502.5063 million, the original value of surface treatment machines is RMB 260.9548 million, and the original value of cathode rolls is RMB 231.0433 million. Core equipment investment is significant. In its fund-raised investment projects, the additional equipment original value for adding 10k tons/year of high-precision electronic copper foil capacity is as high as RMB 528 million, which is far above the level of existing production lines. Moreover, as industry capacity expands, the prices of imported equipment will further increase compared with when existing lines were built, further raising equipment investment costs per unit of capacity.

• Downstream certification for mid-to-high-end electronic copper foil is stringent and takes a long time. The immediate downstream of mid-to-high-end electronic copper foil is copper-clad laminate (CCL) manufacturers. Downstream companies establish strict, full-process, multi-step certification systems for copper foil products. They need to go through a complete process of “sample testing—small-scale trial production—on-site audits—small-batch trial production—evaluation” before being included in the list of approved suppliers. For domestic customers, the certification cycle is at least six months; for overseas customers, it can be as long as one year.

2.3. The company: Positioned in the high-end track; progress in RTF/HVLP is leading; strong certainty in volume ramp-up

Unlike other companies in the same industry that mainly focus on lithium battery copper foil production, in the company’s copper foil capacity, PCB copper foil accounts for the largest share, allowing it to fully benefit from the downstream AIDC industry growth dividend. As of early 2026, the company has total annual copper foil product capacity of 80k tons/year, including 55k tons/year of PCB copper foil capacity and 25k tons/year of lithium battery copper foil capacity.

The company achieved mass production of RTF in 2019 and has the production capability for HVLP copper foils of generations 1-4, and it has entered the supply chains of multiple CCL manufacturers. The company’s RTF copper foil products achieved mass production in 2019. In addition, it set up R&D on HVLP copper foil relatively early, overcoming key core technologies and effectively substituting imported products. Currently, this product has successfully entered the supply chains of multiple leading CCL manufacturers and has production capability for 1-4 generation HVLP copper foil. HVLP5 completed pilot testing and is in the sampling stage; currently, it mainly ships 2nd generation products.

In recent years, sales and revenue of copper foil for high-frequency high-speed use have increased rapidly. In 25H1, the share of output of copper foil for high-frequency high-speed substrates in total PCB copper foil total production exceeded 30%. In 2025, the company purchased multiple additional surface treatment machines to expand HVLP copper foil production. In 2024, the company’s monthly orders for HVLP copper foil exceeded 100 tons; the full-year output grew by 217% year over year, and it successfully achieved exports. In the first half of 2025, the growth rate of high-end HVLP copper foil output was faster than in 2024 for the full year. In terms of RTF products, the company’s production and sales capacity is also ranked first among domestic enterprises. Overall, copper foil for high-frequency high-speed substrates shows a tight supply situation, and its share of total PCB copper foil production has already exceeded 30%.

As the proportion of high-end copper foil (RTF/HVLP) increases and prices rise, the company’s gross margin for the PCB copper foil business is expected to be significantly restored, and the profitability upside will gradually be realized.

3. Earnings Forecast

We expect the company to achieve revenue of RMB 6.9, 9.0, and 10.8 billion in 2025-2027 and attributable net profits of RMB 43.5k, 55k, and 650 million, respectively. Core assumptions are as follows:

• PCB copper foil: For 2025, we refer to the growth rate of 25H1 plus copper price increases. For 2026, we consider that revenue will grow driven by an increase in the share of high-end copper foil (RTF/HVLP) and price increases. For 2027, the trend continues. Gross margin for 2025 refers to 25H1; for 2026/2027, we consider gross margin uplift driven by increases in high-end copper foil prices. The specific magnitude is based on expectations that Mitsui Kinzoku’s return on invested capital for its PCB copper foil business will rise significantly.

• Lithium battery copper foil: For 2025, we refer to the growth rate of 25H1 plus copper price increases. For 2026, we consider copper price increases year over year plus an increased share of high-end products (5 microns and below).

4. Risk Warning

Underperformance in the release of high-end copper foil capacity and certification: The company’s HVLP5-generation copper foil is in the sampling stage. Expansion of high-end capacity depends on imported equipment delivery and commissioning. Downstream CCL manufacturers have long certification cycles, and the company may miss industry pricing increase windows.

Lithium battery demand not meeting expectations: The company’s lithium battery copper foil downstream relies on power batteries and energy storage batteries. If growth in new energy vehicle sales or energy storage installed capacity slows down, it will directly affect revenue from the lithium battery copper foil business and capacity utilization.

Intensifying industry price competition: As capacity in the copper foil industry is gradually released, if competition intensifies and leads to further declines in processing fees or narrowing premiums for high-end products, it may create pressure on the company’s gross margin recovery timeline.

Technological iteration and substitution: AI server PCBs’ requirements for copper foil indicators such as surface roughness and signal loss will continue to improve. If the company cannot keep up with R&D on higher-generation HVLP products in time, it may face technology substitution risk. In addition, advancements in research and development of new materials may also potentially impact industry demand.

Subjectivity in forecasts: This report’s earnings forecasts are based on assumptions such as industry growth, product price increases, and capacity utilization. If the actual situation—such as the deployment timeline of AI computing power, adjustments in overseas manufacturers’ capacity, and downstream customers’ capacity expansion plans—deviates from the assumptions, it may lead to deviations in earnings forecasts and valuation judgments.

Significant stock price volatility: The company’s stock price has seen a relatively high cumulative increase in the short term. Current valuation has already reflected industry conditions and expectations for the company’s performance to a large degree. If subsequent factors such as market sentiment, capital flows, and industry policies change, it may trigger significant stock price volatility and there is a risk of a staged pullback.

Securities Research Report: “Tongguan Copper Foil: A domestic HVLP leader, continually upgrading in step with AI servers”

Date of external release: 2026-04-05

Report issuing institution: Tahnfeng Securities (Rights Protection) Co., Ltd. (approved qualification for securities investment consulting business by the CSRC of China)

Report authors

Sun Xiaoya SAC practitioner license certificate no.: S1110520080009

Zhang Tongtong SAC practitioner license certificate no.: S1110524060005

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