Back to the Ningde era! IPO, another lithium material company

Under the general trend of three-yuan high-nickelization, head battery companies such as Ningde era, Funeng Technology, Yiwei Lithium Energy, and AVIC Lithium Power are stepping up their efforts to "carve up" the production capacity of high-nickel materials, while many material enterprises have also stepped up the IPO process.

On August 3rd, Zhenhua New material Co., Ltd., which once relied on "Ningde era" to enter the TOP3 of ternary cathode materials market, was approved for registration. This time, IPO, Zhenhua New Materials plans to raise 1.2 billion yuan, which will be invested in the annual production line of 12000 tons of lithium-ion battery cathode materials and 20,000 tons of lithium-ion power battery ternary materials, so as to improve the production capacity of high-nickel, low-cobalt, high-nickel and low-cobalt primary single crystal ternary cathode materials in the company.

According to the understanding of Battery China, Zhenhua New Materials, which was established in 2004, has a long history, and its controlling shareholder is China Zhenhua Electronics Group Co., Ltd., which is the only enterprise specializing in the research and development, production and sales of lithium-ion battery materials under China Electronic Information Industry Group Co., Ltd. (CEC). The company's main products are lithium cobalt, composite ternary, power ternary and high manganese polycrystalline materials.

Industry data show that in 2019, Zhenhua Xinliao ranked third in domestic shipments of ternary cathode materials, accounting for about 10% of the market. The first and second companies were Rongbai Technology and long-term Lithium, respectively. According to media data, Zhenhua New Materials ranked first in the market in the output of primary granular large single crystal ternary cathode materials in 2019, and is in a leading position in the market in the field of primary granular large single crystal materials.

In terms of technical strength, according to the prospectus, Zhenhua Xinliang is the first company in the industry to launch the first generation of large single crystal NCM523 products. Because of its excellent cycle stability and safety performance at high temperature and high voltage, primary granular large single crystal ternary cathode materials have aroused widespread concern in the industry and were applied in batch in new energy vehicles for the first time in 2014.

With reliable product quality, Zhenhua new materials have entered the supply chain of domestic well-known lithium-ion battery manufacturers in recent years. At present, Zhenhua Xin material is an important supplier of cathode materials for many domestic battery production enterprises, such as Ningde era, Funeng Technology, New Energy Technology (ATL), Weihong Power, Tianjin Lishen, Zhongshan Tiantao, Polyfluorodo, Zhuhai Guanyu, Huizhou Liwei and so on.

Among them, Ningde era is the largest customer of Zhenhua Xincai. In the first quarter of 2018, 2019, 2020 and 2021, the sales amount of Zhenhua New Materials to the top five customers accounted for 85.67%, 93.55%, 89.56% and 95.39% of the current operating income, respectively. among them, the proportion of sales to Ningde era to the current operating income is 65.22%, 74.44%, 31.22% and 65.11%, respectively.

At present, the sales income of China Nickel 5 Series Ternary Materials is the main component of Zhenhua New Materials Ternary cathode material income. In 2020, the proportion of Nickel 5 Series products in the main business income is 78.55%. It is worth noting that the medium-high nickel 6 series low cobalt / cobalt-free products and ultra-high nickel 9 series products developed by Zhenhua New Materials have sent sample certification to customers such as Ningde Times, Funeng Technology and New Energy Technology, and have been supplied in batches with the completion of such product certification.

In terms of production capacity, Zhenhua Xinliao said that the company's production scale of cathode materials for lithium-ion batteries is in the forefront of the domestic industry, and has formed an annual production capacity of 30,000 tons of cathode materials for lithium-ion batteries. Among them, the production capacity of high nickel (Ni ≥ 80mol.%) ternary cathode materials is 6000 tons (fully compatible with medium and high nickel series products), medium and high nickel (50mol.% < Ni < 80mol.%), medium nickel (Ni ≤ 50mol.%) ternary cathode materials, lithium cobalt, composite ternary cathode materials, etc., with a production capacity of 24000 tons.

Zhenhua new material predicts that ternary cathode materials will still be the mainstream technology route for power batteries in the future, and the ternary cathode material industry will gradually develop in the direction of low cobalt, cobalt-free and high nickel. This time IPO Zhenhua New Materials has increased the tilt of high nickel materials.

High-nickel ternary is an important technical path to drive the mileage improvement of new energy vehicles, so it is also a must for battery companies to occupy the high-end market. At present, Tesla, the largest seller in the global electric vehicle market, uses NCM811 batteries from Panasonic NCA and LG new energy, and most European first-line car companies also prefer 811 batteries; major battery factories around the world are also speeding up the development and mass production of high-nickel and low-cobalt batteries.

At present, whether it is the domestic Ningde era, BYD, Yiwei Lithium Energy, Guoxuan Tech, Lishen Battery, Fu Energy Technology, Bike Power, Penghui Energy, or foreign LG Chemistry, Panasonic, SKI, Samsung SDI and many other power battery manufacturers are in the layout of high nickel products, including NCM811/NCA, and even nickel 90%NCMA batteries.

Research by securities institutions pointed out that the proportion of ternary high nickel in heavy new cars listed at home and abroad in 2021 is relatively high, including popular models such as Tesla Model Y/Cybertrunk, Volkswagen ID.4/ID.6, Nissan Ariya, etc., which is expected to lead to a further increase in the permeability of high nickel in ternary materials. The industry predicts that the permeability of high-nickel ternary materials will reach more than 60% and 70% by 2025.

According to Huajing industry research data, as the subsequent high-nickel process matures and technologies such as CTP begin to be commercialized, the decline curve of high-nickel ternary cost is steeper. It is expected that the ternary cost of high nickel in 2023-2024 will be lower than that of 5amp 6-series ternary, the cost in 2027-2028 will be lower than that of lithium iron phosphate battery, and the final theoretical cost will be 10-15% lower than that of lithium iron phosphate battery.

According to the forecast of the industry, the global output of high-nickel ternary materials will exceed 600000 tons by 2022, doubling the growth rate. By 2030, the output of high-nickel materials in the whole industry will be close to 3.5 million tons.

In fact, in the context of high-nickel, Zhenhua new materials shipments are increasing, combined with the company's major customer demand plans, market forecasts and careful calculations, the company's sales revenue of high-nickel 8-series NCM ternary materials is expected to rise to 1.865 billion yuan in 2021, accounting for about 40% of the company's main business income in 2021.

With the approval of IPO, Zhenhua New Materials will continue to strengthen its strength in the field of high-nickel materials.