Transform carbon fiber, the future space can be expected

In terms of expense rates, the company's expense rates have shown a downward trend in recent years. Previously, the company required to optimize the allocation of resources, vigorously control costs and reduce costs, and strive to transform and tap the potential of internal efficiency. In the first three quarters of 2022, the Company's expense rates were as follows: period expense rate (7.92%), financial expense rate (4.83%), management expense rate (2.14%), sales expense rate (0.78%) and research and development expense rate (0.18%).

2022H1 The net cash flow generated by the company's operating activities was RMB 0.096 million, which was mainly due to the increase in the price of raw materials and energy, resulting in an increase in the purchase of goods and a decrease in the net cash inflow. In terms of asset-liability ratio, in Q3 2022, the company's asset-liability ratio was 56.14%, and at the end of 2021, the company's asset-liability ratio was 66.28%, which decreased significantly, mainly due to the impact of the company's non-public offering of funds.

2. Carbon fiber business is ready for development and optimistic about the future development prospects

2.1 Carbon fiber materials have a wide range of application scenarios

Carbon fiber has obvious advantages in all aspects and has a strong weight reduction and reinforcement effect: carbon fiber is a high-strength and high-modulus fiber with a carbon content of more than 90%, with a diameter of about 5 to 10 microns, mainly composed of carbon protones. Carbon fiber is popular in wind power blades, aerospace, civil engineering, military and motorsports, and other competitive sports applications. As a raw material in the manufacturing process of various industries, carbon fiber has the following characteristics: 1) high strength: tensile strength above 3,500MPa; 2) High modulus: elastic modulus above 230GPa; 3) Small density: the density is 1/4 of steel, is 1/2 of aluminum alloy; 4) High specific strength: 16 times larger than steel, 12 times larger than aluminum alloy; 5) Ultra-high temperature resistance: under the condition of non-oxidizing atmosphere, it can be used at 2,000 ° C and melted and softened at 3,000 ° C; 6) Low temperature resistance: at a low temperature of -180℃, steel becomes more brittle than glass, while carbon fiber is still elastic; 7) Acid resistance, oil resistance, corrosion resistance: resistance to concentrated hydrochloric acid, phosphoric acid and other media erosion, its corrosion resistance exceeds gold and platinum, while having good oil resistance, corrosion resistance and small thermal expansion coefficient; 8) Large thermal conductivity: it can withstand acute cooling and acute heat, even if the high temperature of 3,000 ° C suddenly drops to room temperature, it will not burst.

Downstream applications of carbon fiber composite materials mainly include aerospace, sports facilities, industry and wind power equipment industry and other fields, driven by the development of green energy and new materials, China's downstream application of carbon fiber composite materials gradually expanded, began to layout in automobile manufacturing, construction transportation and other aspects, and further increased the industrial application in the field of wind power equipment.

The carbon fiber industry has been highly valued by the government, and the state has issued a series of industrial support policies on carbon fiber and carbon fiber composite materials in the past 10 years, which continue to guide and further improve the key production and application technologies of key varieties of carbon fiber materials. Among them, the "Made in China 2025" issued by The State Council in May 2015 set future development index requirements for the national carbon fiber and composite material technology development; In August 2016, the "Outline of the 13th Five-Year Development Plan of the Chinese Academy of Sciences" proposed by the Chinese Academy of Sciences included the core key technologies of carbon fiber and its composite materials in the science and technology Innovation 2030 major project; In October 2019, the National Development and Reform Commission issued the "Industrial Structure Adjustment Guidance Catalogue (2019 edition)", which listed the development, application and production of high-performance fibers and products such as carbon fiber as encouraged projects in the national industrial structure adjustment guidance catalogue to promote the development of carbon fiber industry. In March 2021, the 14th Five-Year Plan for National Economic and Social Development of the People's Republic of China and the Outline of 2035 Vision Goals proposed to strengthen the research and development and application of high-performance fibers such as carbon fiber and their composites to provide a good policy environment for the technological progress of the future carbon fiber industry.

The strong support of the state and the continuous updating of technology provide a good environment for the scientific research of the carbon fiber industry, and highly affirm the production and sales of relevant companies and the development of various application scenarios. At present, after long-term technology accumulation, China's carbon fiber leading enterprises are gradually breaking foreign technology monopoly, production capacity continues to expand, domestic carbon fiber models have successfully covered T300 to T1100, M35 to M65, to achieve the main carbon fiber model of Japan Toray benchmarking. Some models of tensile strength, tensile modulus, elongation and other performance indicators are even better.