Baili Science and Technology signs a general contract for the project of a lithium iron phosphate plant with an annual output of 874 million yuan.

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On November 12, Bailey Science and Technology (603959) announced that the company and Anhui Hai Innovation Energy Materials Co., Ltd. signed the "Anhui Hai Innovation Energy Materials Co., Ltd., the first phase of 50, 000 tons / year lithium iron phosphate plant design, procurement, construction project (EPC integration) contract", the project content is to build an annual production capacity of 50, 000 tons of lithium iron phosphate cathode material project, the contract amount is 874.088 million yuan. Accounted for 62.25% of the company's audited operating income in the last year.

The announcement shows that Bailey Technology will provide a full set of civil design drawings by December 31, 2021, a full set of process equipment drawings for the production line by February 28, 2022, and submit all drawings for the project by April 30, 2022.

It is reported that Bailey Technology is a technical service provider dedicated to providing overall solutions for the construction of smart factories in the field of energy and materials. it mainly serves the oil and gas, petrochemical, modern coal chemical industry and new energy materials, especially lithium-ion battery positive electrode, negative electrode material, separator, electrolyte and other intelligent equipment manufacturing industry. In the first three quarters of this year, the company achieved revenue of 651 million yuan, down 39.8% from the same period last year, and realized a net profit of 48 million yuan belonging to shareholders of the parent company, down 3.2% from the same period last year. The main reason for the decline in revenue and net profit compared with the same period last year is that the completion of the general contract project is affected by the construction cycle, which leads to a decrease in revenue recognition.

According to the AVIC Securities Research report, in the first half of 2021, Bailey Technology newly signed lithium power business orders exceeded 1.5 billion yuan, existing orders exceeded 2 billion yuan, and revenue for the whole year of 2020 was 1.4 billion yuan. With the continuous promotion of the company's on-hand orders and the growth of downstream demand, benefiting from economies of scale and the industry boom, revenue growth and profitability are expected to rise further.

According to AVIC Securities, the demand for new energy vehicles broke out. When the global penetration rate of new energy vehicles is 19% in 2025, corresponding to the installed capacity of 1064GWH power batteries, the demand for NCM811/NCA cathode materials alone is expected to be about 1.06 million tons, driving lithium battery manufacturers to accelerate production expansion. The deep ploughing equipment and design link of Baili Lithium Power has successively participated in the construction of the first negative electrode production line in China and the negative electrode production line of 1500 tons in Ruixiang, Hunan Province in 1999. at present, more than 100 production lines have been built all over the country. After the merger and acquisition, it has the ability of EPC to realize the equipment production service and integrate the company's technological advantages after being acquired. The company has a high quality customer structure, such as Dangsheng Technology, Betteri, Sichuan Xinlixiang, Hunan Shanshan, Chengdu Bamo, and newly signed EPC projects such as Dangsheng Science and Technology, Hunan Shanshan, etc., with a significant increase in order volume compared with the pure equipment model. As a domestic scarce full-process service provider of lithium materials, it will fully benefit from the rapid production expansion of downstream customers.