D-Foil Technology’s third-quarter profit rises 75% quarter on quarter as HVLP4 share of shipments increases
The company’s third-quarter net profit was within its previous guidance range, while revenue growth and margin improvement together expanded gross profit. Morgan Stanley is optimistic about the ramp-up in high-end copper foil shipments, while noting uncertainty around processing fees and the pace of capacity ramp-up.
Original source：Morgan StanleyFirst published on Unhidea：Original source date：
Key takeaway
D-Foil Technology’s third-quarter profit growth came from combined improvements in its product mix, processing fees and unit costs. Morgan Stanley expects its high-end copper foil capacity to continue expanding.
How much did third-quarter results change?
D-Foil Technology’s net profit for the first three quarters of 2026 was 467 million yuan, up 602% year on year and within its previous earnings guidance range of 440 million to 480 million yuan.
For the third quarter alone, net profit was 204 million yuan, up 631% year on year and 75% quarter on quarter; net profit excluding non-recurring items was 189 million yuan. Morgan Stanley considers the overall results broadly in line with market consensus.
How did revenue growth translate into profit?
Third-quarter revenue rose 68% year on year and 11% quarter on quarter; gross margin rose to 11.4%, up 4.7 percentage points year on year and 2.2 percentage points quarter on quarter. The increases in both revenue and gross margin drove quarterly gross profit up 38% quarter on quarter to 613 million yuan.
Management attributed profit growth to an upgraded product mix, higher processing fees, and lower unit costs resulting from improved capacity utilisation and economies of scale.
How does the ramp-up in high-end copper foil shipments relate to the valuation assessment?
The report disclosed that monthly HVLP copper foil shipments rose from approximately 70 tonnes in August to 187 tonnes in September, an increase of 167% month on month. Within that total, HVLP4’s share of HVLP shipments rose from approximately 14% to 27%, indicating a greater share of higher-end products in the shipment mix.
Morgan Stanley expects D-Foil Technology to become the second-largest producer of HVLP4 copper foil by 2027 and assigns an Overweight rating and a target price of 140 yuan per share. The target price uses a 2028 forecast price-to-earnings multiple of 30 times, below the 45 times target multiple for Tongguan Copper Foil; the bank notes D-Foil’s PCB product mix and lower overall gross profit per tonne of copper foil.
This assessment is subject to demand, processing fees and the speed of the capacity ramp-up: a slowdown in AI investment could weaken demand, competition from new entrants could depress processing fees, and capacity expansion could be slower than expected.
