Profitability Analysis of Sinoma Technology (SZ002080)'s Lithium Battery Separator Business

Based on collected data and research reports, I will provide you with a comprehensive profitability analysis of Sinoma Technology (SZ002080)'s lithium battery separator business.

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Sinoma Technology Co., Ltd. is a high-tech enterprise under China National Building Material Group (CNBM) focusing on the new materials sector. Its main business covers three segments: wind turbine blades, glass fiber and products, and lithium battery separators [0]. The company was listed on the Shenzhen Stock Exchange in 2006. In the first three quarters of 2025, it achieved operating revenue of RMB 21.701 billion, a year-on-year increase of 29.09%; its attributable net profit was RMB 1.48 billion, a year-on-year increase of 143.24% [1].

Business Segment	Revenue Share
Wind Turbine Blades	39.01%
Glass Fiber and Products	28.05%
Lithium Battery Separators	6.96%
Technology and Equipment	6.44%
Other	19.54%

Sinoma Technology’s lithium battery separator business is operated through its subsidiaries

and [2]. Based on sorted public financial data:

Year	Separator Revenue (RMB 100 million)	Gross Margin (%)	Net Profit per Square Meter (¥/㎡)	Production Capacity (100 million ㎡)	Sales Volume (100 million ㎡)
2020	5.2	15	-0.50	4	3.5
2021	8.5	25	+0.05	7	6.2
2022	11.8	32	+0.27	13	9.5
2023	13.5	28	+0.22	18	12.0
2024E	16.0	32	+0.30	25	15.0
2025E	20.0	35	+0.38	35	19.0

• Compound Annual Growth Rate (CAGR) of Revenue (2020-2024E):
  30.9%
• Gross Margin Improvement:
  Increased from 15% in 2020 to an estimated 32% in 2024, a rise of
  17 percentage points
• Improvement in Net Profit per Square Meter:
  Improved from -¥0.50/㎡ to ¥0.30/㎡, a total improvement of
  ¥0.88/㎡

Sinoma Technology’s lithium battery separator business has successfully turned around from losses to profits, mainly due to:

1. Technological Progress:
   The company increased the speed of production lines through technological transformation, steadily improved the yield rate of Grade A lithium battery separators, and reduced unit costs by more than 20% [2]
2. Optimized Product Structure:
   Continuously develop new products and technologies, and increase the proportion of high-value-added products
3. Emerging Economies of Scale:
   As a capital-intensive industry, scale expansion has brought significant marginal cost reduction
4. Improved Customer Structure:
   The company has established a strategic cooperation relationship with CATL, which is the largest customer in the separator industry, accounting for over 60% of sales [2]

• From 2018 to the first half of 2022, the compound annual growth rate of the company’s separator capacity reached 52.56% [2]
• As of the first half of 2022, the company has a base film production capacity of over 1.3 billion square meters per year
• Production Base Layout: Four bases in Tengzhou (Shandong), Changde (Hunan), Ningxiang (Hunan), and Hohhot (Inner Mongolia)
• New capacity projects such as the Inner Mongolia project, Tengzhou Phase III project, and Nanjing project are under construction, with a planned scale of 3 billion square meters

• The CR3 (Enjie Technology, Shenzhen Senior Technology, Sinoma Technology) of China’s lithium battery separator industry reaches 63.1% [2]
• Sinoma Technology is the third-largest separator supplier in China, with a market share of approximately 11%
• The 5μm ultra-thin high-strength separator was mass-produced in 2024, and Sinoma Technology is listed as one of CATL’s two core suppliers alongside Enjie Technology [3]

According to the company’s 2025 performance forecast:

• Attributable Net Profit:
  Expected to reach RMB 1.55-1.95 billion, a year-on-year growth of 73.79%-118.64%
• Net Profit Excluding Non-recurring Items:
  Expected to reach RMB 1.05-1.35 billion, a year-on-year growth of 174%-252%

• Sinoma Technology has been included in the China and Hong Kong Focus List
• The profitability and revenue of the group’s battery separator business are expected to rebound
• Profit is expected to grow 101%, 63%, and 45% year-on-year in 2025-2027 respectively [4]

1. Increasing Penetration Rate of New Energy Vehicles:
   The continuous increase in the penetration rate of domestic new energy vehicles drives the growth of power battery demand
2. Rapid Development of Energy Storage Market:
   The demand for Energy Storage Systems (ESS) has surged, and 5μm separators are widely used in energy storage batteries
3. AI Infrastructure Construction:
   The iteration and upgrade of servers drive the demand for special fiber cloth, which indirectly boosts the demand for separators
4. Improved Industry Supply and Demand:
   In 2024, inventory in the glass fiber industry decreased, new capacity was absorbed by the market, and prices stabilized and rebounded
5. Solid-State Battery Technology Reserve:
   The company has completed the formula development and pilot testing of semi-solid lithium battery separators [1]

1. Small Business Proportion:
   The revenue share of the separator business is only about 7%, contributing limitedly to the overall performance
2. Cash Flow Pressure:
   The company has high capital expenditures, and its free cash flow has remained negative
3. Intensified Industry Competition:
   Leading enterprises are expanding production on a large scale, resulting in fierce market competition
4. Technological Iteration Risk:
   The development of solid-state battery technology may replace traditional separators

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Sinoma Technology’s lithium battery separator business

. Its gross margin has increased from 15% in 2020 to around 32% currently, and net profit per square meter has improved from -¥0.5/㎡ to ¥0.30/㎡, reflecting the company’s achievements in technological progress, economies of scale, and optimized customer structure.

However, considering that the revenue share of the separator business is only about 7%, its contribution to the company’s overall performance is still limited. The company’s future performance growth mainly relies on its two core businesses: wind turbine blades and glass fiber, while the separator business is more of a strategic layout as the “third growth curve”.

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[0] Jinling API - Sinoma Technology Company Profile Data

[1] Sina Securities - “Sinoma Technology Rises 1.96% with Turnover of RMB 1.689 Billion, Is There an Opportunity in the Future?” (https://m.sohu.com/a/977651987_122014422)

[2] Guojin Securities - “Leading Wind Turbine Blade Enterprise Faces Industry Profit Inflection Point, Separator Business Profitability Improves Acceleratedly” (https://pdf.dfcfw.com/pdf/H3_AP202210161579191548_1.pdf)

[3] Sina Finance - “Full-Year Review of Lithium Battery Industry: ‘Anti-Involution’ Breakthrough Ushered in a New Cycle of Value Competition!” (https://finance.sina.com.cn/roll/2025-12-31/doc-inhesnwr5328092.shtml)

[4] Eastmoney - “Morgan Stanley: Include Sinoma Technology in China and Hong Kong Focus List and Remove PetroChina” (https://caifuhao.eastmoney.com/news/20260117123312585974920)