Zhejiang Rongtai Secures New Customer Appointment in New Energy Vehicle Market
Zhejiang Rongtai, a leading provider of high-temperature-resistant insulating mica products, announced that it has obtained a new customer appointment just four trading days after its listing. The company revealed that it received a designated notice from an overseas new energy vehicle customer, selecting it as the supplier of thermal runaway protection insulation for the customer’s new energy vehicles.
According to the announcement, the project consists of one fixed-point project expected to commence production in the first quarter of 2024. The contract will have a lifespan of 6 years, with an estimated total sales amount of approximately 1.223 billion yuan.
Zhejiang Rongtai clarified that the new appointment would not have a significant impact on its 2023 performance. The announcement’s total amount is merely an estimate, and the actual sales amount will depend on factors such as the customer’s production and sales volume.
The company has been actively exploring the new energy vehicle market since 2016 and has secured partnerships with renowned domestic and foreign car companies such as Tesla, Volkswagen, BMW, and Mercedes-Benz. Its products have also passed multiple international standards tests.
Over the past three years, Zhejiang Rongtai has received long-term orders for thermal runaway protection insulation parts for new energy vehicles. These orders have played a crucial role in the company’s performance. In 2020, new energy vehicle products contributed 114 million yuan to the company’s revenue, accounting for 32.51% of the overall revenue. This figure rose to 50.41% in 2021 and 70.43% in 2022.
Zhejiang Rongtai’s top five customers in 2022 were Tesla, Volvo, FAW Group, Ningde Times, and SAIC Volkswagen. These five customers contributed a cumulative sales revenue of 286 million yuan, representing 42.87% of the overall revenue.
The company noted that the market size for mica products used as thermal runaway protection materials for new energy vehicle power batteries has been rapidly growing. Currently, there are relatively few participants due to high barriers to entry, leading to limited competition. In 2022, the company’s gross profit margin for these materials stood at 42.29%, higher than its other business segments.
Looking ahead, Zhejiang Rongtai plans to allocate more resources to its new energy vehicle business sector. Its first fundraising initiative involves investing in a project with a yearly output of 2.4 million sets of new energy vehicle safety parts. The company aims to further expand the production and supply scale of thermal runaway protective insulation parts, with a total investment of 749 million yuan.
Although Zhejiang Rongtai’s main business still primarily comes from the domestic market, its proportion of overseas business has been steadily increasing. In 2022, overseas revenue accounted for 40.11% of the overall revenue, with markets such as the United States, Germany, and Belgium contributing the most.
In the first half of this year, Zhejiang Rongtai’s performance showed steady growth. The company estimates a year-on-year increase of 14%-25% in revenue, reaching 320 million to 350 million yuan, and a year-on-year increase of 10%-18% in net profit, totaling 60 million-65 million yuan.
Since its listing on August 1, Zhejiang Rongtai’s stock experienced a significant 145% rise on the first day. As of now, the stock price stands at 33 yuan per share, with a market value of 9.2 billion yuan.