Xinjiang Zhonghe plans the blueprint for the development of aluminum-based new materials from a global perspective

Always focusing on non-ferrous metals, the main business is "timeless and new". This is Xinjiang Zhonghe, a company that has been rooted in Xinjiang for 65 years. It has successfully transformed resource advantages into high-tech advantages, and upgraded the traditional aluminum industry to high-tech electronic materials.

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"Since the establishment of the factory in 1958, Xinjiang Zhonghe has been working steadily and steadily, step by step. Now it has built an aluminum-based new material circular economy industry chain integrating 'energy-(primary) high-purity aluminum-high-purity aluminum/alloy products-electronic aluminum foil-electrode foil-electronic new materials'." On July 17, Xinjiang Zhonghe held an online investor exchange meeting on the issuance of convertible corporate bonds at the Shanghai Stock Exchange Roadshow Live Center. The "secret" of upgrading the industry.

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Sun Jian said that after 65 years of hard work, the driving force for Xinjiang Zhonghe's continuous advancement comes from continuous innovation. Behind the innovation is the company's business philosophy of looking at the industry from a global stand and people-oriented. Through the empowerment of systems and mechanisms, under the incentives of multiple rounds of equity and options, the company is united from top to bottom. Looking forward to the future, Xinjiang Zhonghe's chain extension and expansion in the upstream and downstream of the industrial chain will drive the company into a new growth period, and the "aluminum" innovation is expected to be high.

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Xinjiang Zhonghe takes root in Xinjiang and has become a new business card for innovation and intelligent manufacturing in Xinjiang.

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Xinjiang Zhonghe is one of the earliest non-ferrous metal smelting and processing enterprises established in China. In 1958, Urumqi Hongqi Smelter, the predecessor of Xinjiang Zhonghe, was established, and later changed its name to Urumqi Aluminum Factory. After many changes, it was reorganized into a joint-stock enterprise in 1993. In 1996, Xinjiang Zhonghe was listed on the main board of the Shanghai Stock Exchange.

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Sun Jian told reporters that Xinjiang Zhonghe mainly focused on electrolytic aluminum smelting in the 1980s, began to develop high-purity aluminum in 1988, and invested in the construction of a 5,000-ton refined aluminum production line technical transformation project in 1991.

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Xinjiang Zhonghe has made great achievements on the road of aluminum-based new materials: in 1993, it invested in the construction of high-medium-voltage and low-voltage large-volume electronic aluminum foil production lines, and achieved mass production in 2000, breaking the foreign monopoly in one fell swoop; in 1996, it started the research and development of downstream electrode foils, and in 1997, it built a mass production project. In recent years, the company has entered into new aluminum-based materials for semiconductors, and achieved mass production of target base materials, breaking the monopoly of international companies again.

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According to Sun Jian, as one of the top 100 electronic components companies in China, Xinjiang Zhonghe is already one of the largest R&D and production bases of high-purity aluminum in the world, and a leading R&D and production base of electrode foil for aluminum electrolytic capacitors and electronic aluminum foil in China. The company's various businesses are chasing after each other, showing a good momentum of development and growth.

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Seeking Innovation from a Global Perspective Empowering Operational Systems and Mechanisms

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From electrolytic aluminum to high-purity aluminum, then to electronic aluminum foil, electrode foil, and then to ultra-high-purity aluminum-based sputtering target blanks, high-strength and high-toughness aluminum alloys, Xinjiang Zhonghe not only goes through the cycle of the aluminum industry repeatedly, but also continuously breeds newer technologies and materials. What is the "password" behind its growth?

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"Innovate, keep innovating, and plan business innovation from a global perspective." Sun Jian blurted out.

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For example, Sun Jian said that with the increase of downstream electronics and new energy requirements, the development of miniaturization and thinning of aluminum capacitors requires the core positive electrode material, electrode foil, to have a higher and higher capacity, and corrosion foil is the core material that determines the electrode foil. Through continuous technological improvement and production system upgrades, in just three to four years, Xinjiang Zhonghe's corrosion foil 520VFe specification capacity has increased by 2 levels compared with the 2018 fundraising project, and the product capacity has increased by 5%.

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Not limited to technology and product innovation, Xinjiang Zhonghe is also working hard on "intelligent manufacturing".

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In the high-purity aluminum casting workshop of the company's Shihezi Park, the company uses digital technology to create a 3D simulation production scene. Real-time data such as temperature, aluminum liquid flow, speed, high-purity aluminum output, and natural gas energy consumption on the production site are clear at a glance, realizing "one map" control of the production site. There are fewer and fewer workers on the production site, and more and more engineers in the technology research and development department.

?The source of Xinjiang Zhonghe's continuous innovation in technology, products and intelligent manufacturing is the company's continuous innovation in systems and mechanisms and the management's global strategic vision.

?"The company adheres to the people-oriented business philosophy, encourages more creation, more sharing, and more rewards through institutional mechanisms, which stimulates the vitality of the company. More importantly, the company's management has a global perspective and plans for the company's business layout." Sun Jian introduced that in recent years, the company has implemented two rounds of equity incentives (including options) covering a wide range of options, effectively improving the enthusiasm of cadres and employees, and forming a concept and corporate culture that takes pride in the company and takes the company's development as its own responsibility.

?Upstream and downstream expansion chain extension "aluminum" new heights can be expected

?After 65 years of "thousands of tempering", Xinjiang Zhonghe has now formed a complete industrial chain of aluminum-based new materials.

?Sun Jian said that since the establishment of the factory in 1958, Xinjiang Zhonghe has been making steady progress all the way, and now it has built a circular economy industrial chain of aluminum-based new materials. The energy foundation in the upstream of the industrial chain is solid. Xinjiang Zhonghe holds 14.22% of the equity of Xinjiang Tianchi Energy; the latter has 12 billion tons of coal reserves. Calculated in terms of equity ratio, Xinjiang Zhonghe's equity reserves are 1.7 billion tons, which can effectively smooth the company's energy costs; the downstream of the industrial chain has obvious technical advantages in aluminum electronic materials, high added value of products, and has the ability to transform industrial advantages into industrial profits.

?"The complete industrial chain allows the company to continue to go through the aluminum cycle, deliver excellent performance answers to investors, and also have the strength to support the research and development of new technologies and new products." Sun Jian introduced that in 2020, 2021, 2022, and the first quarter of 2023, Xinjiang Zhonghe achieved net profits attributable to shareholders of listed companies of 351 million yuan, 853 million yuan, 1.548 billion yuan, and 426 million yuan, respectively.

?In terms of new technologies and products, Xinjiang Zhonghe is still forging ahead. Sun Jian said that Xinjiang Zhonghe is based on its main business and continues to develop incremental markets. The company’s convertible bonds raised 1.375 billion yuan, which will effectively enhance the company’s advanced production capacity of high-purity aluminum, electronic aluminum foil, corrosion foil, and recycled aluminum. After the newly raised investment projects reach production capacity, the company's production capacity and competitiveness will leap to a new level, helping the company's high-quality development.

?"Materials are an ever-changing and innovative industry. New applications and new markets are emerging downstream. For example, emerging industries such as photovoltaics, wind power, new energy vehicles, and 5G communications are in full swing. They are opening up greater market space and profit potential for the company." Sun Jian told reporters excitedly that the company's growth pattern in the fields of new energy and semiconductors has opened.

?Sun Jian said that the company will take the construction of this fundraising project as an opportunity to refine and strengthen new aluminum electronic materials; at the same time, it will focus on new energy, lightweight, aerospace and other main tracks, insist on focusing on aluminum, based on the advantages of the company's aluminum-based material industry chain, and vigorously develop high-value-added high-strength and high-toughness aluminum alloys and other new products of aluminum-based materials, and bravely climb new peaks in the aluminum-based new material industry.

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