SHANGHAI, Apr. 14 (SMM) – SMM statistics revealed that the net profit of nine listed lead-acid battery companies hit RMB 2.107 billion in 2012, with the value of battery stocks hitting RMB 6.574 billion, 3.1 folds of net profit.
The 76.85% and 50.20% profit growth of Narada and Camel Group allowed growth in net profit of battery industry last year. However, the profit growth of these companies slowed significantly. This was particularly evident for Tianneng Power and Chaowei Power which reported their profit increases down from 2011’s 87.20% and 127.10% to merely 15.28% and 9% last year.
SMM attributes the sharp decline to waning battery demand and falling lead prices which caused battery prices to slip. The price war for electric vehicle batteries starting in 4Q last year should be responsible to the slowing profit growth.
Inventories at most battery producers, except Sacredsun and Wolong Electric, all increased in 2012. The value of inventories at three battery giants, Tianneng Power, Chaowei Power, and Camel Group, surged 73.72%, 55.47%, and 28.18%, respectively.
SMM believes the soaring inventories were caused by massive capacity expansion by leading battery producers and the anemic demand for electric vehicle batteries.
SMM survey shows that most battery producers are still not optimistic to battery consumption in 1H this year. The onset of low-demand season for electric vehicle batteries in April led battery producers to continue cutting prices, with prices for branded batteries down to RMB 320-330/set.