Event: The company released the first quarter of 2025 performance forecast. It is estimated that in 2025Q1, the operating income will be 1.7-2.3 billion yuan, +82.80% to +147.32% year-on-year, and the median value will be 2 billion yuan, +115.06%/-9.24% year-on-year; The net profit attributable to the parent company was 0.22-0.3 billion yuan, a year-on-year turnaround, and the median value was 26 million yuan, a year-on-year turnaround; The net profit deducted from non-attributable to the parent company was 0.1-13.5 million yuan, turning losses into profits year-on-year, and the median value was 12 million yuan, turning losses into profits year-on-year. The company's Q1 sales orders increased, and the increase in capacity utilization led to a decrease in production costs and an increase in gross profit margin. The results were in line with expectations.

The copper foil processing fee has increased, and the industry's profitability is expected to gradually recover under the expectation of price increases. According to SMM data, as of April 11, 25, the processing fee of 4.5/6/8μm lithium battery copper foil was 2.7/1.9/18,500 yuan/ton, of which the 6/8μm processing fee was +8.57%/+12.12% year-on-year. At present, the U.S. tariff policy has disrupted the global copper supply chain, and the follow-up copper price is expected to continue to rise, and the downstream copper foil price is expected to rise strongly, and the profitability of copper foil companies is expected to gradually recover with the price recovery.

With the rapid development of downstream data centers, AI and other fields, the company has accelerated its technological breakthroughs in domestic high-end electrode circuit copper foils. With the rapid development of technologies such as big data, artificial intelligence and cloud services, the demand for high-frequency/high-speed digital lines in related industries has surged. In order to strengthen the layout in the field of high-end PCB copper foil and promote the domestic substitution process of high-end electronic circuit copper foil, the company has made technological breakthroughs in high-performance electronic circuit copper foil such as RTF, HTE, HVLP, IC packaging ultra-thin copper foil and HDI copper foil. At present, the HTE copper foil products produced by the company meet the needs of conventional CCL copper clad laminates, PCB circuit boards and HDI printed circuit boards; At the same time, we will carry out the research and development of high-end electronic copper foil products such as high-performance RTF copper foil, VLP copper foil, HVLP, etc., to meet the application of high-frequency and high-speed circuit board performance in the fields of 5G communication and automotive intelligence.

Investment suggestion: We expect the company to achieve net profit attributable to the parent company in 24-26 years of -2.21/1.05/274 million yuan, a year-on-year increase of -1261.3%/+147.7%/+159.9%, and the corresponding EPS of -0.52/0.25/0.64 yuan respectively. Maintain "Overweight" rating.

Risk warning: downstream demand is less than expected; intensified competition in the industry; Cost reduction and efficiency increase are not as expected.