"if you touch lithium, it will rise"? How to break the situation when these three battery companies lost a lot of money last year?

SMM April 7: last night, Nandu Power released its 2021 results KuaiBao. According to the announcement, the company's revenue in 2021 was about 11.848 billion yuan, an increase of 15.48 percent over the same period last year, while the net profit and loss attributed to shareholders of listed companies was about 1.175 billion yuan, a decrease of 318.15 percent over the same period last year.

For the reasons for the sharp decline in the company's performance, Nandu Power said that during the reporting period, the overall price of raw materials for lithium power products rose sharply, and the prices of raw materials for lead and electricity products, such as sulfuric acid and tin, increased significantly. In the context of fierce market competition, the company's product cost growth can not be effectively transmitted, and the growth rate of product sales prices is not as fast as that of raw materials. Civil lead-acid business is affected by market competition, and the price of ordinary civil lead-acid battery products has dropped significantly.

In addition, affected by the global epidemic, the delivery of the company's products in overseas markets was affected during the reporting period, while shipping prices increased significantly, and sales in overseas markets were much lower than expected. In addition, under the influence of the "double control" policy and the adjustment of the production line, the company's capacity utilization rate did not meet expectations, the product manufacturing cost increased, and the product gross profit margin was further reduced, thus increasing the company's loss.

Specifically, the substantial increase in the price of raw materials for lithium-ion products has not only led a large number of enterprises with sufficient supply of raw materials to make a lot of money, but also caused a lot of cost pressure on mid-stream battery companies and downstream new energy vehicle companies. Many battery companies have fallen into a loss situation due to the rising prices of raw materials and rapidly rising costs. The more representative ones are Funeng technology and Tianneng shares.

Prior to the release of the results of Funeng Technology, KuaiBao said that the company's revenue in 2021 was 3.403 billion yuan, an increase of 203.97% over the same period last year. The net profit attributable to shareholders of listed companies was-974 million yuan, compared with-331 million yuan in the same period last year. At present, Funeng Technology has begun to adjust the prices of its products, saying frankly that most of the major customer price negotiations have been completed, and the prices of the company's products have increased to varying degrees in 2022.

"the price of raw materials increases the net loss of Gaofuneng Technology to 974 million yuan in 2021.

And Tianneng shares as both involved in lead-acid batteries and lithium batteries exist, and Nandu Power has a bit of the same meaning. In the lithium battery business, the continued sharp rise in raw material prices caused the company's lithium battery gross profit margin to be lower than the level of the same period last year, although the company locked in a certain amount of raw material supply through price locking, but still could not hedge the cost pressure caused by the rise in raw material prices, resulting in a lower lithium battery gross profit margin in the reporting period than in the same period last year.

According to KuaiBao, the company's results released by Tianneng shares, during the reporting period, the company achieved revenue of 38.654 billion yuan, an increase of 10.13% over the same period last year. The net profit belonging to shareholders of listed companies was 1.366 billion, down 40.07% from the same period last year.

As for the reason for the decline in the company's net profit, the company explained that the sharp rise in the price of raw and auxiliary materials for its main products during the reporting period led to a lower gross profit margin than in the same period last year. The details are as follows:

1) the sharp rise in the price of main auxiliary materials has led to a lower gross profit margin of lead-acid batteries than that of the same period last year. During the reporting period, the prices of the main auxiliary materials of lead-acid batteries rose sharply, but under the original price adjustment mechanism, the settlement price of lead-acid batteries could not be reflected in time and transmitted downstream, resulting in the gross profit margin of lead-acid batteries during the reporting period lower than that of the same period last year.

2) the continued sharp rise of major raw materials led to a lower gross profit margin of lithium batteries than that of the same period last year. During the reporting period, the prices of major raw materials of lithium batteries continued to rise and increased significantly, although the company locked in a certain amount of raw material supply through price locking, but it was still unable to hedge the cost pressure caused by rising prices of raw materials, resulting in a lower gross profit margin of lithium batteries than that of the same period last year.

"Tianneng shares made a net profit of 1.366 billion in 2021. The rise in the price of raw and auxiliary materials for major products led to a decline in gross profit margin.

According to SMM historical prices, in the past year, the spot price of battery-grade lithium carbonate rose from 53000 yuan / ton at the beginning of the year to 275000 yuan / ton at the end of the year, an increase of more than 400%. In 2022, battery-grade lithium carbonate broke through the 500000 yuan / ton mark in one fell swoop, making a large number of enterprises stunned.

"Click to view the spot market of SMM new energy products.

In order to stabilize costs, Nandu Power has specially laid out the lithium power resource recovery business. Nandu Power has previously said that starting from March this year, 25000 tons of production capacity of the first phase of the lithium recycling project will be released one after another. Nickel, cobalt, manganese, lithium and other high-value materials have been refined and separated. The business has begun to produce benefits, and the closed-loop effect of the industrial chain is beginning to show.

As for lead-acid batteries, the prices of sulfuric acid and tin as the main accessories of lead-acid batteries also continue to rise in 2021. Take the 98% price of sulfuric acid in eastern China as an example. According to SMM data, the price rose from 180 yuan / ton at the beginning of the year to 548 yuan / ton at the end of the year, with a price increase of 204.4%.

Data source: SMM database

The price of tin, another auxiliary material for lead-acid batteries, also saw an explosive increase in 2021. Judging from the futures trend, the price of Shanghai-tin main company rose by as much as 91.84% in 2021. In 2022, tin prices remain high. According to SMM spot prices, as of April 7, the average spot price of SMM tin is 345000 yuan / ton.

At a time when the price of auxiliary materials is rising so rapidly, Tianneng shares began to adjust the pricing mechanism of lead-acid batteries to bring raw and auxiliary materials into the scope of the mechanism.

As for Nandu Power, the company also issued a forecast for the first quarter of 2022 on the same day. It is reported that Nandu Power's net profit attributable to shareholders of listed companies is expected to be between 480 million yuan and 515 million yuan in the first quarter, an increase of 1514.10% to 1631.79% compared with the same period in 2021.

For the reasons for the growth of the company's performance, Nandu Power said that the current disposal of subsidiaries Jieshou Nandu Huayu Power Co., Ltd. (hereinafter referred to as "Nandu Huayu") and Zhejiang Changxing Nandu Power Co., Ltd. (hereinafter referred to as "Changxing Nandu") lost 21% equity and lost control, resulting in an investment income of about 428 million yuan.

As for business, the company's lithium resource recovery business has been gradually put into production and produced benefits, and the closed-loop effect of the industrial chain is beginning to show; however, due to the impact of the integration of industrial lead-acid production lines and the rising cost of non-lead materials, the profit level of industrial lead-acid operation decreased compared with the same period last year. Taken together, the company expects first-quarter net profit to remain positive and up year-on-year.