Yiwei Lithium Energy's first-half net profit rose 311.49% compared with the same period last year. Lithium battery is its main source of revenue.

SMM August 27th: on the evening of August 26th, Yiwei LiNeng released its results for the first half of 2021. According to the financial report, the company achieved a total operating income of about 6.56 billion yuan, an increase of 106.54% over the same period last year, of which the net profit belonging to shareholders of listed companies was 1.495 billion yuan, an increase of 311.49% over the same period last year.

From the perspective of its business structure, "lithium-ion battery" is the main source of revenue. The total revenue of the business is 5.71 billion, accounting for 87 per cent of the total revenue.

According to public data, Yiwei Lithium Energy is mainly engaged in the research, development, production and sales of consumer batteries, including lithium primary batteries and small lithium-ion batteries, as well as power batteries such as new energy vehicle batteries and energy storage batteries.

Among them, the most concerned by the market is undoubtedly its power battery business, it is reported that in the first half of 2021, Yiwei lithium power battery business achieved a total revenue of 3.89 billion yuan, up 185.95% compared with the same period last year. The main reason for the performance growth is the development of new energy vehicles, driving the company's soft bag ternary batteries used in the field of passenger vehicles continue to release with the new production capacity, in order to meet customer demand, the scale of battery shipments has increased greatly.

In addition, it is also mentioned in the announcement that Yiwei Lithium Energy has initially built a lithium battery manufacturing platform, fully meeting the diversified energy solution needs of new and old customers. And the company's products are also highly recognized by first-class customers at home and abroad, power battery business in passenger vehicles, special-purpose vehicles and energy storage and other business areas are growing rapidly.

It is worth mentioning that during the reporting period, due to the great fluctuation in the price of raw materials upstream of lithium battery, the company's product cost was affected to a certain extent. In this regard, the company adopted the way of improving the production process to reduce the cost of product materials, while continuing to promote the construction of the supply chain, through deepening multi-party cooperation with the industrial chain, reducing the risk caused by the price fluctuation of raw materials, and achieving a win-win situation in the industrial chain.

Take battery-grade lithium carbonate and lithium hydroxide, important raw materials for power batteries, as an example. According to the historical price of SMM, as of June 30, the average price of domestic battery-grade lithium carbonate was 87500 yuan / ton, up 34500 yuan / ton from the beginning of the year, or 65.1%. The average price of battery-grade lithium hydroxide was 94000 yuan / ton, up 44500 yuan / ton from the beginning of the year, an increase of 89.9%.

"Click to view the historical price of SMM Metals.

Such large price fluctuations put a lot of pressure on downstream enterprises. As a result, Yiwei LiNeng is also actively taking measures to cope with the impact of rising raw material prices on its power battery business. On July 22, Yiwei LiNeng issued two announcements one after another to begin the layout of the raw material end. First of all, it is planned to build a project with an annual production capacity of 30, 000 tons of lithium carbonate and lithium hydroxide with Jin Kunlun, and then it is proposed to acquire a 5% stake in Dahua Chemical Industry with 110 million yuan to speed up the development of boron and potash ore resources in Dachaidan Salt Lake to help the company further focus on lithium battery business.

By midday's close, Yiwei LiNeng had risen 7.53 per cent to 103.65 yuan per share.

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