In the first half of 2026, the share price of Anhui Tongguan Copper Foil Group Co.,Ltd. (ASX: 301217) experienced a steep climb. As an early significant shareholder, Hefei Gotion High-Tech Power Energy Co., Ltd., a subsidiary, chose to reduce part of its holdings at an opportune moment, securing substantial returns.
On the evening of July 3, Gotion High-Tech Co.,Ltd. (ASX: 002074) disclosed that its wholly-owned subsidiary, Hefei Gotion, sold a total of 8.3995 million shares of Tongguan Copper Foil via centralized bidding during the first half of the year, with total proceeds of approximately 8.29 billion yuan (including transaction fees). Preliminary calculations indicate the profit from this transaction exceeds 10% of the company's audited net profit attributable to the parent company from the most recent fiscal year. Gotion High-Tech stated this move aims to optimize its asset structure and enhance capital utilization efficiency to meet funding needs for its core business development.
Looking back to March 2020, Hefei Gotion participated in Tongguan Copper Foil's capital increase and share expansion as a strategic investor. It subscribed for a 3.50% stake, corresponding to 21.7616 million shares, using its 11.25% equity in Tongguan Guoxuan valued at 96.075 million yuan plus an additional 6.795 million yuan in cash, totaling approximately 103 million yuan. Based on this, the entry cost per share is estimated at around 4.73 yuan. Subsequently, Hefei Gotion reduced its holdings in Tongguan Copper Foil multiple times. As of December 31, 2025, Hefei Gotion's remaining stake was 18.9312 million shares. The average selling price for this recent reduction was approximately 98.72 yuan per share, translating to a roughly 20-fold return on investment.
It is worth noting that industrial investments have previously delivered considerable gains for Gotion High-Tech. In 2025, the company achieved revenue of 45.07 billion yuan, a year-on-year increase of 27.35%. Net profit attributable to the parent company was 2.383 billion yuan, surging 97.49% year-on-year. This included fair value change gains of 1.922 billion yuan, primarily from valuation changes following the Hong Kong listing of its held shares in Chery Automobile. However, such income is not stable. In the first quarter of 2026, despite revenue growing 29.30% year-on-year to 11.708 billion yuan, net profit attributable to the parent company fell 79.04% year-on-year to 21 million yuan, impacted by factors including a 294 million yuan loss from fair value changes.
Turning to Tongguan Copper Foil, the company primarily operates in PCB copper foil and lithium battery copper foil. By the end of 2025, its annual production capacity reached 80,000 tons. At the beginning of 2026, its share price was around 35 yuan, after which it climbed steadily. On June 18, the stock price briefly exceeded 200 yuan intraday, reaching a historical high with a peak market capitalization of 165.8 billion yuan. As of July 3, Tongguan Copper Foil closed at 154.63 yuan per share, with a total market capitalization of 128.2 billion yuan.
The core driver behind the market rally is the explosive growth in AI computing power infrastructure construction. As AI servers upgrade to higher-performance platforms, the demand for HVLP (Very Low Profile) copper foil for high-frequency, high-speed signal transmission has expanded dramatically. According to calculations by Soochow Securities, the global demand for high-end copper foil used in AI servers in 2026 is approximately 24,000 tons, a year-on-year increase of 260%. As one of the earlier domestic companies to achieve full-series mass production of HVLP copper foil, Tongguan Copper Foil's high-end products are operating at full capacity and sales.
Improvements in fundamentals have also provided strong support for its valuation. In the first quarter of 2026, Tongguan Copper Foil achieved revenue of 1.842 billion yuan, a year-on-year increase of 32.04%. Net profit attributable to the parent company reached 106 million yuan, a staggering year-on-year increase of 2,138.17%. The combination of an earnings surge and high industry prosperity has led the market to assign a significant premium to its medium- to long-term growth prospects.
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