Lithium material track is hot: net profit of more than 60 billion yuan in 2021!

According to the Ministry of Industry and Information Technology, China's sales of new energy vehicles reached 3.521 million in 2021, an increase of 160 percent over the same period last year, ranking first in the world for seven consecutive years. Under the goal vision of "carbon peak carbon neutralization", not only the electrification of the new energy vehicle market is accelerated, but also markets such as energy storage, electric two-wheelers and power tools also show varying degrees of volume trends, leading to a substantial increase in the production and sales of power lithium batteries as a whole. in turn, it also promotes a substantial increase in shipments from upstream enterprises of lithium batteries.

In 2021, in order to meet the supply demand of downstream power lithium batteries, mineral resources utilization, ternary precursors, positive and negative electrodes, foil, electrolytes, diaphragms and other lithium battery mineral and material enterprises have expanded production. However, limited to a longer production expansion cycle, although the production capacity of enterprises in various fields has been expanded to a certain extent, the above raw material products as a whole are still in the stage of supply less than demand and relatively shortage. as a result, the production and sales of raw materials are booming, and the volume and price of raw materials are rising one after another, which can be confirmed in the 2021 performance reports recently disclosed by relevant enterprises.

Through the carding of the 2021 performance reports of more than 50 lithium battery upstream mineral and material enterprises, after rough statistics, the total net profit of the above-mentioned enterprises in 2021 exceeded 60 billion yuan, and the enterprises generally achieved a year-on-year increase in revenue, and the vast majority of enterprises achieved a year-on-year increase in net profit. This also means that the upstream enterprises of lithium batteries have achieved remarkable results as a whole, benefiting from the continued growth in demand for lithium batteries.

On the demand side, in 2021, battery orders for power battery heads such as Ningde Times, BYD, Guoxuan Tech, Yiwei Lithium Energy, Honeycomb Energy and Jiewei Power soared. In order to ensure a stable supply of raw materials, they have reached strategic cooperation with mineral enterprises and materials enterprises in various fields by means of equity participation and joint ventures to build factories, and signed long orders to lock in the supply of mineral and lithium battery raw materials. This also provides a favorable guarantee for the performance growth of upstream enterprises.

On the supply side, the net profit growth rate of mineral enterprises and positive and negative material enterprises is stronger than that of the same period last year. The main reason is the sharp increase in demand in the downstream market and the soaring price of upstream raw materials such as lithium carbonate, thus improving and increasing the profitability of these companies.

The price of battery-grade lithium carbonate rose by more than 400% in 2021, leading the rise in mineral resources products. In the lithium mining field, Ganfeng Lithium Industry firmly occupies the top spot among lithium salt enterprises with a net profit of 5.68 billion yuan, with a year-on-year increase of 410.26%. Although Shengxin Lithium Energy, Jiangte Motor and Mount Qomolangma in Tibet are relatively small, the net profit is only 3.5-850 million yuan, but all have achieved a rapid increase in net profit of more than 20 times compared with the same period last year. Tianqi Lithium Industry has achieved a turnaround in net profit. Within the statistical scope, the net profit of lithium listed companies increased by more than 100% compared with the same period last year.

In the field of cobalt mining, Luoyang Cobalt and Huayou Cobalt are expected to lead the way in net profit; Shengtun Mining expects its net profit to increase by 17-22 times year-on-year; and the highest pre-increase in net profit of other enterprises in the statistical range is also more than 100%.

The supply of the four main materials and some auxiliary materials for lithium electricity will continue to be tight in 2021. In the field of cathode materials, the prices of cathode materials such as lithium iron phosphate continue to rise due to the influence of insufficient exploitation and utilization of lithium mineral resources, long refining cycle and short shipping plates, and it is difficult for new production capacity of superimposed materials enterprises to expand in a short period of time. And maintain high levels. Among the beneficiary enterprises, the net profits of German Nano and Shanshan shares have both increased by more than 20 times compared with the same period last year, and the former is close to 30 times, with the highest increase.

In the field of negative materials, among the listed companies that have disclosed their performance reports, the net profit of Shanshan shares has increased by more than 3.1 billion yuan, which is expected to increase by more than 21 times over the same period last year, and the national technology net profit has increased nearly 19 times compared with the same period last year. In addition, Pu Tailai and Betteri have also performed well.

It is worth mentioning that the upstream lithium battery companies in 2021, the highest year-on-year increase in net profit is from one of the foil head companies Nord shares, an increase of more than 74 times, can be described as explosive growth.

In addition to the positive and negative materials, the performance of material enterprises such as electrolyte, diaphragm and aluminum-plastic film also rose due to the growth of market demand. except for the slight decline in the net profit of Zijiang enterprises compared with the same period last year, the net profits of enterprises in Zijiang all increased in varying degrees.

Among them, in the field of electrolyte, due to the high prices of lithium hexafluorophosphate, VC solvent and PVDF, the net profit of Tianci materials exceeded 2.2 billion yuan, an increase of 314% over the same period last year. It is worth mentioning that some enterprises have benefited from the soaring price of lithium hexafluorophosphate and their net profit has increased by more than 20 times. For example, the net profit of Tianji shares increased by 70 times over the same period last year, and the net profit of polyfluorine increased by nearly 25 times compared with the same period last year.

In the diaphragm field, among the enterprises in the statistics, Sinopec had the highest revenue and net profit, while Enjie shares had the highest year-on-year increase in net profit, reaching 143.6%. In the field of aluminum and plastic film, the development of new materials in Mingguan has accelerated, and revenue has increased by more than 40% compared with the same period last year.

Furthermore, benefiting from the general trend of electrification, after passing through the initial breakthrough period of electric vehicle market penetration from 2019 to 2020, the lithium battery industry has become one of the strongest growth tracks in the world since 2021. At this stage, track enterprises show the following characteristics:

First, the high profits of upstream companies continue to attract more players to this track. In the fields of cathode materials and electrolytes, more and more enterprises cross the border or increase the output of their own by-products, joining the suppliers of lithium salts, phosphate salts, fluoride salts, electrolytes and other materials to seek new profit growth points. such as Yuntianhua and other large chemical enterprises, the pace of transformation and production expansion is obviously accelerated, and the growth momentum will continue to appear in the future.

Second, some of the leading enterprises in subdivided areas are not yet listed, such as Hunan Yuneng and Hubei Wanrun in lithium iron phosphate materials. the performance of these enterprises has undoubtedly benefited from the rising price of lithium iron phosphate and the outbreak of demand.

Third, in order to solve the problem of tight supply of raw materials in battery enterprises as soon as possible, there are not a few material enterprises that speed up horizontal integration and diversified layout, such as Pu Tai Lai, Green Mei and other enterprises, have been involved in the production of positive and negative materials, and their own competitiveness has been further improved.

Fourth, with the expansion of cathode materials and electrolyte suppliers, the new production capacity will be mainly focused on cost competition in the next few years, and the degree of competition will be intensified.

Fifth, the upstream of lithium battery mostly belongs to the type of heavy asset enterprises, the early investment is huge, and the construction cycle of the production line is long. On the one hand, mineral and material enterprises have demand to "form a bundle" with battery enterprises, on the other hand, for battery enterprises, equity participation, long-term cooperation and other forms also help to reduce the cost and protect the supply of materials, and the two hit it off. This kind of cooperation model may be more in the future. The same is true of all kinds of material cooperation.

The agency predicts that global sales of new energy vehicles will break through the 10 million mark in 2022, and the demand for power lithium batteries will continue to show rapid growth.

In 2022, power lithium battery head enterprises have long been optimistic about high nickel ternary batteries and lithium iron phosphate batteries, as well as lithium manganese iron phosphate and other types of batteries have been "re-awakened". The whole lithium battery track will continue to be hot.

With the continuous increase of the production capacity of the power lithium battery head enterprises, the enterprises in the middle and lower reaches of the industrial chain expect the upstream mineral enterprises to make breakthroughs in lithium extraction technology, and the supply and demand structure may maintain a tight balance; positive material enterprises will continue to increase output in ternary, lithium iron phosphate, lithium manganese phosphate and other products; negative material enterprises will also accelerate the expansion of negative electrode integration projects. Electrolyte, diaphragm and aluminum-plastic film enterprises all need to simultaneously expand production capacity to meet the exuberant needs of downstream customers. In addition to the partial influence of geographical and epidemic factors, it is expected that the revenue and net profit of leading enterprises in various fields upstream of lithium power will continue to maintain high growth in 2022.