Silica Aerogel demand is exploding fast
1. Dual control of energy consumption drives the demand for energy saving and environmental protection
The dual control of energy consumption will drive the demand for silica aerogels for industrial enterprises, especially those that drive energy and chemical industries to further improve energy efficiency, increase thermal insulation and energy-saving renovations.

According to the forecast of Aspen Aerogel's 19th annual report, the global market space for silica aerogels in the energy and chemical field in 2030 is about 3.1 billion US dollars.

According to the research of China Petroleum Pipeline Science and Technology Research Center, the thermal insulation performance, initial investment cost, and operation and maintenance cost of silica aerogel materials on steam pipelines and above-ground pipelines and traditional thermal insulation materials were compared with three thermal insulation schemes. Silica Aerogel materials have greater comprehensive advantages than traditional thermal insulation materials.

The energy and operation and maintenance costs saved by using silica aerogel materials (mainly referring to the material and labor costs of replacing traditional thermal insulation layers) can exceed the initial investment in 2 to 4 years. Continued savings for the pipeline operator due to energy savings and a reduction in the number of insulation replacements during subsequent utilization.

In addition, when the temperature difference between the inside and outside of the pipeline is large, the annual heating time is long, and the price of heating fuel or electricity increases, the composite use of silica aerogel materials and traditional thermal insulation materials is more effective.

Economic benefits of silica aerogel felt in long-distance steam pipelines (1km):

Silica Aerogel materials are convenient for construction and improve construction efficiency by more than 30%. After the aerogel felt is cut to a certain size, it will have a certain degree of curvature, which can be directly placed on the pipeline for installation and fixation. Silica Aerogel felt is light, firm, flexible, hard to break, and easy to cut.

Compared with traditional thermal insulation materials, the construction efficiency is increased by more than 30%. Traditional thermal insulation materials have low thermal insulation efficiency, are easy to absorb water and deform, and have a short economic service life. Silica Aerogel avoids the worry of inconvenient maintenance in the later use of traditional thermal insulation materials.

Silica Aerogel insulation requires less thickness or spacing:

At present, large-scale petrochemical companies in the world such as Exxon Mobil, Shell, Chevron, PetroChina, Huachang Chemical and other companies use aerogel materials as thermal insulation materials in large quantities.

The domestic large refining and chemical industry is rapidly rising, and the application scenarios of silica aerogel are enlarged.

According to statistics, my country's refining capacity has exceeded 850 million tons in 2019. From 2020 to 2023, my country will increase its refining capacity by 165 million tons, an increase of 19.4%. From 2020 to 2025, the world will add about 267 million tons of refining capacity. The expansion of refining capacity in China and around the world will bring a certain growth space for silica aerogel composites.

Large petrochemical companies are gradually using silica aerogel materials as insulation materials:

The energy and chemical field is currently the main application market for silica aerogel materials. According to the forecast of Aspen Aerogel's 19th annual report, the global market space of the energy and chemical field is about 3.1 billion US dollars.

2. The application of silica aerogel for automobile sound insulation and shock absorption has increased

The composite material formed by the combination of silica aerogel and ePTFE film has excellent thermal insulation support, buffering and sound insulation, and can be used in automotive thermal insulation boxes and built-in chips in consumer electronics.

At present, a SiO₂, aerogel and ePTFE membrane composite material has been used in SAIC Volkswagen Touran models as a thermal and sound insulation material.

丨‍The demand inflection point of the aerogel industry is coming to an upward development period

1. The domestic aerogel market has begun to take shape in the past five years

Silica Aerogel has been developed for nearly 90 years, and was industrialized in China in 2012. Silica Aerogel was born in 1931, but it was not industrialized until the 1990s abroad. However, due to the high cost of the drying process, early aerogels can only be used in aerospace, military and petrochemical fields. The domestic aerogel industry started in the 2010s. In 2012, the first set of 1000L supercritical carbon dioxide aerogel drying equipment in China was put into production, marking the large-scale production of aerogels. After several technical iterations, the production cost was gradually reduced.

In the past five years, the domestic aerogel market has achieved a rapid jump in production through technological progress. China's aerogel market is still in its infancy, but the technological progress in the past five years has achieved a large proportion of cost reduction. From 2015 to 2020, the average annual compound growth rate of domestic aerogel material production is 38.5%, and aerogel products The compound annual growth rate of output is 38.8%.

Silica Aerogel has very good thermal insulation properties, light transmission, sound insulation and insulation properties, but at present, the industry mainly carries out a series of applications for its thermal insulation properties. At present, the mature downstream markets mainly include petrochemical industry, industrial insulation industry, building materials industry, aerospace, lithium battery industry, etc., of which petrochemical industry accounts for 56% and industrial heat insulation accounts for 26%.

2. The demand for silica aerogels will increase rapidly in the context of carbon neutrality

At present, the aerogel industry has begun to take shape. We believe that the current time will be the turning point for the aerogel industry to take off. The reasons are: 1) With the maturity of carbon dioxide supercritical technology and the rapid expansion of the industry, the cost of It has dropped by about 80% 10 years ago, and the economy has gradually improved; 2) Reducing the heat loss of high-temperature oil and gas pipelines and improving the thermal insulation efficiency of high-temperature reactors is in line with the general trend of carbon emission reduction. With its excellent thermal resistance, silica aerogel will gradually replace it. Traditional thermal insulation materials have a broad market space; 3) New energy vehicles and energy storage lithium battery systems have high requirements on the safety of lithium batteries, so it is necessary to use aerogel with excellent thermal resistance as the thermal insulation material for lithium batteries. The rapid rise of the aerogel will rapidly drive the demand for aerogels.

In 2019, the proportion of downstream market applications in the domestic aerogel industry:

Multi-party companies enter aerogel materials to promote large-scale aerogel cost reduction
1. Multi-party companies enter the market for aerogel materials, and the industry expansion is accelerated

A number of companies have entered the aerogel industry, which has accelerated the expansion of industry production capacity. According to the data disclosed by various companies, there are currently about 157,000 cubic meters of aerogel production capacity in China. With the rapid increase in downstream demand, companies from various backgrounds have begun to enter the aerogel industry: the background of new companies include engineering equipment company China Chemical, traditional coal chemical company Huayang New Materials, fertilizer company Huachang Chemical, automobile Product companies Pan-Asia Microtransparency, silicone companies Chenguang New Materials and Hongbai New Materials, etc. At present, the production of 10,000 cubic meters of silica aerogel requires an investment of about 160 million yuan. Most of the new entrants are listed companies, and they all have certain financial strength, which has accelerated the capacity expansion of the aerogel industry. The total production expansion is about 160,000 cubic meters. Based on the 2-year production cycle, it is expected that the production capacity of the whole industry will double on the basis of 2021 in 2023.

Due to the strong technical barriers of silica aerogel materials, most of the new entrants have entered the aerogel industry in the form of equity investment. Hualu Engineering, a subsidiary of China Chemical, has entered into a strategic cooperation agreement with Aerospace Wujiang Company of the Tenth Academy of Aerospace Science and Industry of China since 2015. As a chemical engineering EPC enterprise, China Chemical can provide customers with EPC solutions at the same time by deploying silica aerogel insulation materials and key materials. Yangmei Group (now renamed Huayang New Materials) took a stake in the aerogel company Shenzhen Zhongning in 2018, Huachang Chemical took a stake in the aerogel company Audemars Piguet in 2021, and Pan-Asia Microtransmission acquired the aerogel in 2021 A 60% stake in the plastic company Dayin Xisheng.
2. Analysis of the competitiveness of each player
(1) In the short term, breakthroughs in drying technology and competitive advantages

In the synthesis process of silica aerogel, the drying step has strong technical barriers, and the choice of drying technology route directly affects the performance of silica aerogel. Domestic silica aerogel enterprises are also divided into multiple factions according to different drying technology routes. Since most domestic enterprises started by introducing drying technology in cooperation with schools, they are also divided according to various technology sources. Nanotechnology, the earliest silica aerogel company in China, started in 2004 by introducing carbon dioxide supercritical technology from Tsinghua University, and then in 2007, it cooperated with Tongji University to develop atmospheric drying technology. At present, the technology of Guangdong Ailisheng, the largest aerogel manufacturer, comes from the National University of Defense Technology, mainly based on carbon dioxide supercritical technology. Guizhou Aerospace Wujiang, in which China Chemical has a shareholding, started with equipment. In 2011, it began to switch from aerogel equipment provider to silica aerogel production. Its carbon dioxide supercritical technology came from the Third Academy of Aerospace, and the process technology of Hualu New Materials was also provided by Aerospace Wujiang. Some small and medium-sized enterprises such as Xiamen Namate, Anhui Honghui, and Huaxia Special Materials use the alcohol supercritical technology of Xiamen University.

At present, three drying routes in China are developing in parallel. Due to the best comprehensive performance of carbon dioxide supercritical drying technology, most of the current production capacity is dominated by carbon dioxide supercritical drying. Enterprises adopting carbon dioxide supercritical drying route have certain advantages at the current stage. The three commonly used drying processes are carbon dioxide supercritical drying, ethanol supercritical drying and atmospheric drying. From the perspective of equipment investment, atmospheric drying has the lowest cost. From the perspective of safety, atmospheric drying has the highest safety. From the perspective of production efficiency, ethanol supercritical has the highest production efficiency. In terms of product performance, ethanol supercritical The performance of critical products is slightly weaker than that of carbon dioxide supercritical and atmospheric drying.

(2) Looking at the division of labor in the industrial chain in the medium term

After most players in the whole industry break through the barriers in the drying process and produce relatively homogeneous products, we believe that the division of labor in the industry chain will determine the competitiveness of enterprises. Silica Aerogel subdivision links are divided into production enterprises, processing enterprises and integrated production and processing enterprises. At present, in addition to Nano Technology and Audemars Piguet, which can both produce and process aerogel products, Elison and other enterprises only Provide aerogel materials to processing plants, and further process them into products through processing enterprises. Processing companies usually purchase silica aerogel materials, and then process them into specific shapes according to the customized needs of downstream customers. In the early stage of the development of the aerogel industry, the products of various manufacturers are quite different, and the right to speak in the industry chain is in the hands of the manufacturers, which is the current status of the aerogel industry. After a breakthrough in production technology, that is, most companies in the industry produce relatively homogeneous products, customer resources will become the focus of competition among companies. Enterprises with an integrated layout of production and processing links master the production link on the one hand, and directly connect with downstream customers on the other hand, and have strong channel barriers. Such enterprises will have the most advantages in the mid-term development of the aerogel industry.

(3) Long-term view of raw material self-sufficiency advantages

Since the cost of raw materials accounts for more than 50%, when the aerogel industry begins to overcapacity, the self-sufficiency of raw materials becomes an important consideration for the competitiveness of aerogel enterprises. We split the synthesis cost of silica aerogel according to Nanotech's 10,000-square-meter aerogel super-insulation material project. The project adopts ethanol supercritical drying technology. According to our calculations, the total unilateral cost is 9,067 yuan, of which raw material cost accounts for 66%, energy cost accounts for 11%, labor cost accounts for 5%, and depreciation cost accounts for 19%. It can be seen from the cost structure of silica aerogel that raw materials account for a large proportion. For silica aerogel, the raw materials are generally inorganic silicon sources and organic silicon sources. The cost advantage of silicon chemical companies at this stage is prominent.

丨‍Analysis of key companies

Chenguang New Materials: The company is mainly engaged in functional silanes, and has an industrial chain of "trichlorosilane-chlorosilane-intermediate-functional silane". In November 2021, the company announced the construction of a project with an annual output of 23,000 tons of special silicone materials, including 2,000 tons of aerogel, which is expected to be put into production in 2022.

Hongbai New Materials: The company is mainly engaged in functional silanes, with a complete industrial chain layout of "silicon block-chlorosilane-intermediate-functional silane". When the company went public in 2020, one of the fund-raising projects was a 10,000-square-meter functional aerogel project. The project construction period is 18 months and is expected to be put into production in 2022.

Pan-Asia Micro Permeability: The company is a supplier of automotive products. Its main products include vent plugs and vent membranes, water pressure-resistant sound-transmitting membranes, ePTFE membrane composite sound-absorbing cotton, and gas management products. In 2021, it will acquire a 60% stake in Dayin Xisheng and begin to enter the aerogel industry. Currently, it plans to build a 16.04 million cubic aerogel project. Dayin Xisheng has been deeply involved in the field of military aerogels for many years, and the company may quickly enter the aerogel market with its mature technology.

China Chemical: The company is an EPC general contractor for chemical construction projects. Its subsidiary Hualu Engineering holds 51% of Hualu New Materials and 6.8% of Aerospace Wujiang. Since the company is an EPC contractor for chemical projects and needs to use aerogel in some construction projects, most of the 50,000-square-meter aerogel projects under construction by Hualu New Materials are expected to be for self-use. Aerospace Wujiang started with supercritical equipment and currently has a production capacity of 12,000 cubic meters and 12,000 cubic meters of aerogels under construction.

Huachang Chemical: The company is a fertilizer company, and Audemars Piguet, which holds 7% of the shares, is the leader in the aerogel industry, with a production capacity of 10,000 cubic meters and 25,000 cubic meters of aerogel under construction. Audemars Piguet has entered the supply chain of leading lithium battery companies, and has a complete layout from production to processing, and its competitiveness is relatively prominent.

Huayang New Material: The company is the leading coal chemical company in Shanxi Province. It entered the aerogel field by cooperating with Shenzhen Zhongning to establish Ziyang Zhongxin (Shenzhen Zhongning currently holds a 51% stake in Yangzhong New Material). The new material currently has a production capacity of 20,000 cubic meters and has been put into production in 2019, and its process route is atmospheric pressure drying.