Surging demand for AI computing power copper foil, Defu Technology captures trillion-dollar market opportunity with technological edge

With the explosive growth of generative AI, the extreme demand for printed circuit boards (PCBs) and upstream copper foil from AI servers is reshaping the industry's valuation logic and growth trajectory. However, only those with deep technological barriers, who closely follow the latest industry trends to deploy high-end production capacity, while also relying on traditional businesses as a safety net, will emerge as true winners in this trillion-dollar market.

As one of the leading companies in China's copper foil industry, Defu Technology (301511.SZ) is leveraging its deep technological moat built through lithium battery copper foil and high-end copper foil for AI servers, along with a robust global production layout, to benefit from domestic substitution and the industry’s growing demand. By 2025, the company achieved significant revenue growth, successfully turning losses into profits, with high-margin premium products scaling up, optimized product mix, and notably improved overall profitability.

Profit reversal confirmed, with growth accelerating quarter by quarter

On April 25, Defu Technology simultaneously released its 2025 annual report and the first-quarter report for 2026. In 2025, driven by strong downstream demand, the company achieved robust production and sales, with capacity utilization maximized. The company produced 139,600 tons of electrolytic copper foil, a year-on-year increase of 50.33%, and sold 140,900 tons of electrolytic copper foil, a year-on-year increase of 51.99%. At the same time, the company's capacity utilization significantly improved while unit production costs dropped substantially, driving up the gross margin of copper foil products and increasing profits accordingly.

The annual report shows that in 2025, the company achieved operating revenue of 12.437 billion yuan, a significant year-on-year increase of 59.33%; net profit attributable to shareholders of the listed company was 113 million yuan, a year-on-year increase of 145.91%; net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was 83.43 million yuan, a year-on-year increase of 135.24%.

Notably, the company’s performance grew quarter by quarter throughout the year. By quarters, the company’s operating revenues were 2.5 billion yuan, 2.8 billion yuan, 3.2 billion yuan, and 3.9 billion yuan; net profits were 18.2 million yuan, 20.51 million yuan, 27.89 million yuan, and 45.93 million yuan; non-GAAP net profits were 5.87 million yuan, 5.81 million yuan, 13.64 million yuan, and 58.09 million yuan, showing clear acceleration in the fourth quarter.

This growth trend in performance continued into 2026. According to the Q1 2026 report, the company achieved operating revenue of 4.338 billion yuan in the first quarter, a year-on-year increase of 73.47%; net profit of 147 million yuan, a year-on-year increase of 708.90%; and non-GAAP net profit of 149 million yuan, a year-on-year increase of 2424.40%.

Deep technological barriers, breakthroughs in high-end capacity

The high revenue growth of Defu Technology in 2025 was due to the synergistic effect of three factors: recovery in downstream market demand, accelerated capacity release, and optimization of the high-end product mix.

Analyzing from the demand side, on one hand, as the penetration rate of new energy vehicles further increased and the energy storage industry continued to grow rapidly, the demand for lithium battery copper foil kept rising. On the other hand, the PCB industry was at a critical phase of technological innovation and market demand resonance in 2025, where structural opportunities brought by high-end transformation were reshaping the competitive landscape, leading to surging demand for high-end copper foils such as high-frequency high-speed copper foil and carrier copper foil.

Benefiting from the significant recovery in downstream market demand, the company’s main product shipments achieved significant year-on-year growth. Currently, the company’s total capacity of 195,000 tons ranks among the top in the global industry, with capacity utilization significantly improving. Public information shows that the comprehensive capacity utilization rate of the copper foil industry is approximately 65%-70%, but since the fourth quarter of 2025, the company’s capacity has consistently been running at full capacity, boosting profitability.

More importantly, the company’s product mix continued to upgrade, with the proportion of high value-added products rapidly increasing. In 2025, the company invested 200 million yuan in R&D, a year-on-year increase of 9.37%, and obtained 77 new patents, filling several industry technology gaps. The company demonstrated strong R&D capabilities in the delivery of multiple localization substitution projects.

Currently, the company has mastered the independent design and optimization control capabilities of production lines for two major product categories: lithium battery copper foil and electronic circuit copper foil. It has become one of the few domestic companies capable of mass-producing 3μm ultra-thin lithium battery copper foil and achieved several key breakthroughs in the high-end electronic circuit copper foil field, building a technological moat for domestically produced copper foil.

In addition, the company continuously seeks to establish closer cooperative relationships with key suppliers and core customers. It has successively co-invested in the Lanzhou production base with Baiyin Nonferrous Metals, introduced an industry fund participated by CATL, and reached a strategic investment and cooperation agreement with LG Chem, becoming one of the companies with the strongest industrial chain integration capabilities in the copper foil industry.

Active shareholder returns highlight long-term value

Based on the company's continuous and stable profitability, strong financial condition, and positive outlook for future development, Defu Technology plans to distribute a cash dividend of 1 RMB (including tax) per 10 shares to all shareholders in 2025, with a total cash dividend payout of 62.7575 million RMB (including tax), accounting for over 50% of the company’s net profit.

At the same time, the company also announced an interim dividend plan for 2026. Provided that the company is profitable during the period and accumulated undistributed profits are positive, and cash flow can meet the needs of normal operations and sustainable development, the total amount of cash dividends planned for distribution in the 2026 interim period will not exceed the net profit for the corresponding period.

The development prospects of the industry have become clear, with strong demand from downstream new energy sectors. Coupled with robust demand for high-end electronic circuit copper foil from emerging industries such as AI, 5G/6G communications, and low-orbit satellites, the company plans to steadily increase capacity over the next few years. The company will adhere to its dual-driven strategy of lithium battery copper foil and electronic circuit copper foil, serving downstream industries like new energy, artificial intelligence, and high-speed communications with the most advanced electrolytic copper foil materials, while collaborating with global partners to promote the development of the entire industrial chain.

Currently, the company has established three research and development platforms: Mount Everest Lab, Kuafu Lab, and Tiangong Lab. These labs oversee the R&D of lithium battery copper foil, electronic circuit copper foil, and cutting-edge technologies in high-end copper foil respectively. The academic background and practical experience of the R&D team rank among the best in the industry.

In 2026, the company will absorb high-quality production capacity through the construction of new high-end production lines and market consolidation, ensuring that its production scale and technical level remain at the forefront among domestic copper foil enterprises, while gradually advancing towards becoming a globally leading copper foil manufacturer. At the same time, it will accelerate overseas expansion, including deployment in Europe for high environmental standard premium copper foil, maintaining technological leadership. It will also expedite integration into overseas strategic customer systems in Taiwan, Japan, South Korea, and Southeast Asia.

Since 2026, the company's investment value has been increasingly recognized and explored by the capital markets, with its secondary market share price reaching a new high since listing. Going forward, the company has ample production capacity and strong internal growth momentum, coupled with a stable and generous dividend policy. With these dual core strengths, the company is expected to be recognized by the capital markets over the long term.

Disclaimer: This article is for reference only and does not constitute investment advice.

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