[SMM Analysis] epidemic situation shrouded in, domestic market wolves look around Ningde era of poor performance in the first quarter

SMM4, March 17: recently, Ningde Times announced the first quarter results forecast, the announcement shows that the company is expected to make a profit of 7.33-838 million yuan in the first quarter, year-on-year decline in 2030%, and the announcement almost meant the Ningde era of stocks, after the announcement, its share price also showed a certain extent of decline.

According to the 2019 annual report of the Ningde era, the new energy vehicle industry is developing rapidly, and the market demand for power batteries has increased compared with the same period last year. In addition, the company strengthens the market development, the early investment cable capacity release, the production and sales volume increases correspondingly. The company continues to strengthen cost control, expenses as a proportion of revenue, and so on, all of which contributed to the 2019 performance compared with the same period last year.

But in 2020, as a result of this year's Spring Festival holiday, and subsequent outbreaks have had a serious impact on the installed capacity of Ningde era and the domestic market for new energy vehicles. This year, due to the impact of the epidemic, domestic production and sales of new energy vehicles in the first quarter was only 105000 and 114000, down 60.2 per cent and 56.4 per cent respectively from a year earlier, while domestic power battery installations were 2.32 and 0.6GWha in January and February respectively, down 53 per cent and 73 per cent from a year earlier. Installed capacity was 2.8 Gwha in March, down 45.6% from a year earlier. Overall, the decline was large. Ningde installed 2.4Gwh power batteries in the first quarter, down more than 50 per cent from the first quarter of 2018.

In addition, with the gradual improvement of Tesla's sales in the domestic market, driving the rise of battery supplier LG Chemistry, LG Chemistry has been firmly in the top 10 position in the domestic market for three months in a row in the first quarter. LG Chemical supplied Tesla with 600-700Mwh power batteries in the first quarter. Although there is still a big gap with the Ningde era, it is widely believed that Tesla's new long-term version of model 3 will use LG chemical batteries, which will further stimulate demand for LG batteries.

With Tesla's car registrations rising to a record 11280 in March. The domestic new energy vehicle market is also being quickly swallowed by Tesla, other new energy vehicle manufacturers will be affected accordingly, and the Ningde era battery market, which mainly supplies domestic automakers, will also be affected. The rapid rise in Tesla sales will bring considerable dividends to LG Chemistry.

Recently, following the explosion-proof valve patent lawsuit involving 120 million yuan, Ningde Times, the world's largest power battery manufacturer, sued Jiangsu Tafel New Energy Technology Co., Ltd. Ningde Times said that the lawsuit with Tafel in the Fuzhou Intermediate Court has begun, involving four cases corresponding to four patents, a total of 80 million involved in the case. The protection of patent infringement is not perfect, which will put the enterprise in a disadvantageous position in the market competition.

Although the Ningde era has become Tesla's partner, but the Ningde era to start supplying Tesla still takes time, coupled with the impact of the epidemic, there is still a lot of uncertainty in the future market. Coupled with the fact that other domestic battery suppliers are still chasing after them, it has also brought great pressure to the Ningde era.

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