• Economic market knowledge
• 2024-04-27

China Carbon Fiber Freight Cars; A-shares Dyn.

China's first batch of carbon fiber composite material lightweight heavy-duty railway freight cars has officially rolled off the production line, showcasing the broad market prospects for the application of carbon fiber.

Several popular bull stocks were hit hard again

On September 11th, the A-share market showed a polarized trend. The Shanghai Composite Index closed down by 0.82%, at 2,721.8 points, with a cumulative decline of 8.51% for the year; the Shenzhen Component Index rose by 0.39%, and the ChiNext Index increased by more than 1%. Some large-cap stocks such as China Merchants Highway, China Resources Sanjiu, Huaxia Bank, China National Nuclear Corporation, China General Nuclear Power Corporation, and Nanjing Bank fell by more than 5%.

The previously hot speculative stocks were hit hard again today. The consumer electronics concept stock, New Asia Process, has hit the daily limit down for three consecutive trading days, with 417,400 shares sold at the limit today. The intelligent transportation concept stock, Da Zhong Transportation, has encountered three consecutive daily limit downs this week, with 470,000 shares sold at the limit today. Kai Sheng Technology also closed at the daily limit down today, with 101,600 shares sold at the limit.

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Others that hit the daily limit down include Shanghai Jiu Bai, Lian Chuang Electronics, Hao Shang Hao, Ke Sen Technology, Lao Bai Xing, and Cross-Border Communications, among others.

According to the Securities Times · Data Treasure statistics, compared with the weekly high, Ke Sen Technology and Da Zhong Transportation have retraced by 33.72% and 33.7% respectively. Other stocks with significant retracement include Hua Mao Technology, Jin Jiang Online, Cui Wei Shares, Hao Shang Hao, and Shenzhen Huaqiang, etc.

The ChiNext Index rose against the market today, closing up by 1.19%. This was mainly due to the counterattack in the new energy sector, with component stocks such as Defang Nano, Jinlang Technology, Beida Pharmaceutical, Tianhua New Energy, Hunan Yu Neng, and Yang Guang Power, etc., rebounding significantly.

In the market, topics such as lithium mines, PVDF, salt lake lithium extraction, solid-state batteries, sodium batteries, and new energy vehicles led the gains. Lithium mine leaders Ganfeng Lithium and Tianqi Lithium both recorded daily limit up, with transaction volumes of 2.01 billion yuan and 1.671 billion yuan respectively, and transaction volume ratios of 4.32 times and 2.44 times respectively. Solid-state battery concept stocks Lian Chuang Shares and Defu Technology both achieved a "20cm" daily limit up.

According to Data Treasure statistics, as of the close on September 11th, the stocks that have continued to hit the daily limit up are only Hainan Hai Yao and Hua Ying Technology, among which Hainan Hai Yao has recorded four consecutive daily limit ups, which is the stock with the most consecutive daily limit ups. Hua Ying Technology has achieved three consecutive daily limit ups.

Big news from carbon fiber composite materialsOn September 10th, the first batch of carbon fiber composite material lightweight heavy-haul railway freight cars jointly developed by the China National Energy Group Railway Equipment Company and other units was officially rolled off the production line. This marks a significant breakthrough for China in the research and application of heavy-haul railway mobile equipment, and it holds important demonstrative significance for promoting the green and low-carbon transformation of China's heavy-haul railway transportation.

In this instance, the China National Energy Group Railway Equipment Company, in collaboration with the Beijing Low-Carbon Clean Energy Research Institute of the China National Energy Group and CRRC Qiqihar Rolling Stock Company, has successfully developed an advanced carbon fiber reinforced resin-based composite material suitable for the heavy-haul railway freight car field. They have overcome key technical challenges such as the integrated preparation of large composite panels and for the first time applied this new type of material to the main load-bearing structure of the heavy-haul railway freight car body.

According to the introduction, the self-weight of the new type of vehicle body is reduced by more than 20% compared to the same type of aluminum alloy material body.

The potential of carbon fiber applications is expected to be further released.

Carbon fiber, known as the "king of new materials" due to its lightweight, high strength, fatigue resistance, and corrosion resistance, is an excellent material for achieving lightweighting of heavy-haul railway freight cars.

In recent years, the state has introduced a number of policies to promote the development of the carbon fiber industry. In November 2019, the Ministry of Industry and Information Technology listed high-strength, high-strength intermediate modulus, and high modulus carbon fibers used in fields such as aerospace, rail transit, offshore engineering, wind power equipment, and pressure vessels as key strategic materials. The "14th Five-Year Plan" released in March 2021 proposed to strengthen the research and application of high-performance fibers and composite materials such as carbon fiber. In January 2024, the "Implementation Opinions on Promoting the Innovative Development of Future Industries" jointly issued by seven departments including the Ministry of Industry and Information Technology, the Ministry of Science and Technology, and the State-owned Assets Supervision and Administration Commission clearly stated the development of key strategic materials such as high-performance carbon fiber.

The global carbon fiber application market is becoming increasingly diversified, with aerospace, wind power blades, and sports leisure being the three core application fields. In addition, carbon fiber is widely used in fields such as pressure vessels, mixed film molding, carbon-carbon composites, automobiles, ships, and construction. With the rapid development of new energy, intelligent transportation, and other fields, the application potential of carbon fiber in electric vehicles, drones, rail transit, and other fields will be further released, showing a broad market prospect.

In 2023, China's carbon fiber production capacity reached 138,300 tons, accounting for 47.7% of the global share, ranking first in the world. The China Business Industry Research Institute predicts that China's carbon fiber production capacity will reach 145,600 tons in 2024.

Several companies have revealed their layout situation, with 4 stocks rising against the market.

Recently, several A-share companies have revealed their layout of carbon fiber on the interactive platform. The carbon fiber structural parts produced by Lingyi Intelligent Manufacturing, as a key part of the screen support plate, have high strength, low density, good modulus, and also have the characteristics of good conductivity and heat dissipation. The industry's leading customers have adopted the company's carbon fiber structural parts for their folding screens and other high-end mobile phone models, and have achieved mass production and shipment.Zhiyuan New Energy's fundraising project, "Compressed Hydrogen Aluminum Lining Carbon Fiber Fully Wound Cylinder Project," has had part of its production line pass the inspection by the State Administration for Market Regulation. Currently, the company has obtained a special equipment production license, allowing it to engage in the production activities of pressure vessels (fiber-wound cylinders B3) as a special equipment manufacturer.

Jilin Chemical Fiber's carbon fiber process is suitable for making resin-based composite materials, with a variety of specifications that can be applied to multiple fields.

Shanghai Shenbei is actively promoting the localization of carbon fiber composite structural components and lightweight sports aircraft in accordance with its established post-merger synergy development strategy.

Zhongjian Technology has successfully developed the third-generation carbon fiber ZT9H in recent years, which, as the only third-generation carbon fiber product that has been applied in engineering in the domestic market at this stage, has been stably used in key areas in batch production.

Several products made from carbon fiber reinforced resin-based composite materials developed by Kangtaiwei, a subsidiary of Xinjinggang, have passed customer test verification.

Looking at the performance in the secondary market, the overall trend of carbon fiber concept stocks has been sluggish this year; as of the close on September 11, the average annual decline of the concept stocks was 21.98%. Within the sector, only four stocks have risen against the market, namely Wanfeng Auto, Shanghai Shenbei, Andawell, and Guangwei Composites.

In terms of valuation levels, the rolling price-to-earnings ratios of 10 stocks are below 30 times, among which Huayang Shares, TBEA, and Guoneng Shares have price-to-earnings ratios below 10 times.