[SMM Cobalt Lithium] unicorn: the Age of Ningde

SMM7, July 12: Germany local time on July 9, Berlin and Germany Thuringia Ningde era CATL and Thuringia state government signed an investment agreement. According to the agreement, Ningde Times CATL will set up a battery production base and intelligent manufacturing technology research and development center in Elford, Thuringia, Federal Republic of Germany.

Zeng Yuqun, chairman of Ningde Times, said: "as a first step in Europe, we chose Germany. We hope to bring the world's leading power battery technology to Germany. By forming a localized power battery supply capacity in Europe, we can be closer to European customers, provide more timely and effective product solutions, and better and faster respond to customer needs. "

In response, Germany welcomes the strong investment of battery manufacturers from China, said WolfgangTiefensee, minister of economy of Thuringia. "We are very pleased that global lithium-ion battery industry leaders such as the Ningde era have settled in Thuringia. Investment in the Ningde era is one of the most important investments in Thuringia in the past decade, with far-reaching implications for the Ningde era, Thuringia and the European new energy vehicle industry. "

As the fastest meeting and gem unicorn in history, Ningde era, it is undoubtedly an important strategic move to build a factory in Germany, which has the highest cost of hiring employees in the world, to accept the multi-dimensional challenges of capital, cross-cultural management and so on. As far as the current global market is concerned, the power battery is basically the three largest: Ningde era, Panasonic, BYD. Panasonic, a battery supplier to electric giant Tesla, has invested in factories in China, the United States and the United States, but has not yet been involved in Europe. BYD, which started as a car, doesn't have a big market share for power batteries because it separated its battery business from the car business only last year.

As a rapidly expanding Ningde era, the company has set up subsidiaries around the world since 2014, investing 30 million euros in Finland's Weidelberg Motor Co., Ltd. in February last year and acquiring a 22 per cent stake in the company. But the road to the king of expansion in the Ningde era has only just begun.

Expand capacity distribution market, technology upgrade products, reduce prices

With the guidance of policy and the promotion of consumption, more and more new energy car enterprises have sprung up like bamboo shoots after a spring rain. On July 11, the China Automobile Association released data on car production and sales for June 2018. For the new energy vehicle segment, production and sales in June were 86000 and 84000, up 31.7 per cent and 42.9 per cent, respectively, from a year earlier. Xu Haidong, assistant secretary-general of the China Automobile Association, said that the production and sales of new energy vehicles in the first half of this year were much better than those in the same period in previous years, and it is expected that the development trend will remain relatively good in the second half of the year, maintaining the previous forecast that the annual production and sales volume exceeded 1 million units.

But while the market is bullish on the future of new energy vehicles, a story about the new energy vehicle project in the past year has been startling. According to the statistics of Geishi Automobile Network, there are more than 70 new projects planned for new energy vehicle projects in the past year, the total investment is as high as 450 billion, and the planned production capacity has reached a staggering 11 million vehicles, almost matching the annual sales volume of the whole European Union. Although the market is expected to increase the capacity of power batteries according to the principle of supply and demand, the planned capacity of 11 million vehicles is unexpected, and who will increase more in automobile capacity and power battery capacity has become the focus of hot debate.

But as the discussion heats up, the elimination of a large number of unqualified batteries has become the best answer to this question. Wu Zhixin of China Automobile Research Institute believes, "at present, the proportion of new energy vehicles is less than 3%, if the proportion reaches 10%, then the current power battery production capacity is completely insufficient, this kind of overcapacity in a short period of time should be the inevitable result of the market economy;" But at the same time, we should also beware of structural overage. with the gradual increase in the energy density of power batteries, we advocate more on-line high-end capacity projects, and low-end capacity will certainly be eliminated. "

The number of domestic power battery-related companies has fallen from 150 in 2016 to less than 100 in 2017, according to data. In the field of lithium iron phosphate batteries, in particular, the number of production enterprises in 2017 was half that of 2016. Thus it can be seen that the so-called overcapacity, like the inevitable process of the development of each industry, is only the overcapacity of the middle and low end, and in the field of high-density batteries, it is still in short supply. According to the Ministry of Industry and Information Technology, the Development and Reform Commission and the Ministry of Science and Technology issued the "medium-and long-term Development Plan for the Automobile Industry" in April 2017, it is proposed that by 2020, the annual production and marketing of new energy vehicles will reach 2 million; By 2025, new energy vehicles account for more than 20% of automobile production and marketing, it can be seen that the market demand space is still large. At the same time, in the field of energy storage batteries, due to cost, technology, policy and other reasons, it is still in the stage of market introduction. compared with the growth of power batteries, the output of lithium energy storage market in 2017 is about 3.5GWh, an increase of 13% over the same period last year. The output value was 5.5 billion yuan, an increase of 7 percent over the same period last year. In the future, with the gradual maturity of technology and the gradual decline of costs, the energy storage market is expected to become another growth point of lithium battery consumption.

By understanding this logic, we can understand the reasons for the planned expansion of production capacity in the Ningde era. According to Ningde time prospectus data show that Ningde era battery production capacity expanded year by year. The production capacity, output and sales of the company's main products are as follows:

Lithium-ion batteries:

Lithium battery materials (ternary precursors):

In Ningde era, while constantly increasing sales, it also vigorously increased the negative rate of products. with the rapid development of the new energy vehicle industry, the demand for power batteries continues to climb, the company's production capacity is gradually released, and production and sales continue to grow. This also brings the rich profit for the enterprise.

In the first half of 2017, Ningde era's revenue in the field of power batteries reached 5.33 billion yuan, accounting for 87.14 percent of the total revenue, and the revenue in the field of lithium battery materials reached 780 million yuan, accounting for 12.78 percent.

The division of the company's main business income by product is as follows:

According to reports, the sales customers of the power battery system in the products are mainly domestic and foreign new energy passenger car enterprises, new energy bus enterprises and new energy special vehicle enterprises; The sales customers of energy storage system mainly include power grid companies, power generation enterprises, telecommunications enterprises, commercial buildings and industrial parks and other power enterprises; the sales customers of lithium battery materials are mainly lithium-ion battery cathode material manufacturers.

Through the comparison of the main business income by region in previous years, we can find that the layout of Ningde era abroad has increased year by year, from 14.72 million yuan in 2014 to 70.2946 million yuan in 2017.

Main business income by region:

The expansion of production capacity has established a huge market foundation for the Ningde era. on this basis, with the progress and industrialization of power battery technology, more and more enterprises have begun to lower their prices. This not only enables the new energy vehicle to compete with the traditional automobile, but also can promote the rapid development of the new energy vehicle industry. At present (up to the first half of 2017), the average selling price of power battery system in Ningde era is 2.89yuan / Wh, 2.28/Wh, 2.06/Wh and 1.52yuan / Wh, respectively, showing a decreasing trend year by year.

The price changes of the company's main products are as follows:

Friends upstream and downstream of Ningde era

As a giant manufacturer of power batteries, the demand for raw materials is also very huge. According to Ningde Times, the company's raw materials mainly include lithium iron phosphate, ternary materials, graphite, diaphragm, electrolyte, shell / top cover and so on. We can see from the data. In Ningde era, the procurement of lithium iron phosphate decreased gradually, while the demand for ternary materials increased year by year.

The changing trend of the company's main raw materials and energy prices:

As a result of the wave of high nickel, many battery makers are beginning to favor ternary materials more than lithium iron phosphate, as the price of lithium carbonate rose in the first half of 17 years and the price of cobalt metal rose between 2016 and 2017. The average purchase price of ternary materials also increased year by year in the first half of 17 years, and the price volatility reached 12.66%.

(price chart of lithium iron phosphate for the first half of 2017)

(electrolytic cobalt 2016-2017 price chart)

So these raw materials Ningde era is from those "friends" to buy it? According to the Ningde Times prospectus, The company's top five suppliers are: Wuxi pilot Intelligent equipment Co., Ltd., Glencore International AG, Shenzhen Kedali Industrial Co., Ltd., Guizhou Zhenhua New Materials Co., Ltd., Zhangjiagang Guotai Hua Rong Chemical New Materials Co., Ltd.

The company's five largest suppliers procured as follows:

Ningde Times said that the total purchase amount of the company's top five suppliers accounted for 40.57%, 19.79%, 19.19% and 19.75% of the company's total procurement in the current period, respectively. At the same time, because of the low dependence on a single supplier, the top five suppliers account for less than 45%, and the procurement of goods from suppliers is different, there is no heavy dependence on a small number of suppliers in Ningde era.

With more stable suppliers of raw materials, the marketing of products is also very important, according to Ningde Times. The company's top five customers are: Zhejiang Geely holding Group Co., Ltd., Plade New Energy Battery, Zhengzhou Yutong Group Co., Ltd., Hunan China car era Electric vehicle Co., Ltd., Dongfeng Automobile Group Co., Ltd.

Sales of the company's top five customers:

Science and technology are the primary productive forces

As the era of Ningde, which is in the forefront of power battery technology, great importance is attached to the research and development of technology. As of September 30, 2017, the company and its subsidiaries have 813 domestic patents and 13 overseas patents, covering materials, cell design, batteries, battery packages, energy storage systems and other fields.

In terms of R & D projects and R & D results, Ningde era has been involved in a number of national ministries and commissions and provincial scientific research projects. The company's R & D projects cover materials, cell design, devices and processes, battery packs, electronics and electricity, battery packages, energy storage systems, mobile power supplies and other fields. Among them, for the related technology of power battery, Ningde era is in the forefront of the world.

The main projects are as follows:

The company's advanced technology in power batteries also comes from continuous investment in technology research and development. according to relevant information, the company's investment in research and development costs is gradually increasing, accounting for 6.08% of the revenue from the original R & D expenditure in 2014. To date, it has reached 10.65 per cent.

The composition of the company's R & D expenses in the last three years and the first phase, as a proportion of its operating income:

Ningde Times successfully listed in the gem on June 11, eight consecutive trading boards, making the original 30.17 yuan share price fly to 70.54, more than tripling, although it fell slightly after the opening of the board, but it is still a strong market after the opening of the board. Provides a strong example of opposition to all bearish Ningde-era views. On 11 July, the Sino-US trade war escalated, and the market was stunned by the news of the US $200 billion tariff list. however, on that day, the Ningde era still rose by 6.44%, and the trend rose all the way up the next day (12 July). Seal the trading board at about 2: 00 p.m.

(Ningde Times soared from 30.17 yuan listed to 84.77 yuan as recently as July 12.)

(the Ningde era rose all the way on July 13, blocking the trading limit again)

As the "first brother" of power batteries, according to the latest news, BMW Group has established a 4 billion euro battery procurement intention with the Ningde era in China, specifically allocated to 1.5 billion euros in Germany and 2.5 billion euros in China. Gaulle, president and chief executive of BMW Group Greater China, commented: "the in-depth cooperation with Ningde era proves BMW's global corporate strategy based in China. Through the early layout of the supply network, BMW will be able to accelerate the electrification of the automotive industry in the Chinese and global markets. "

The powerful development of Ningde era not only shows the strong strength of the company, but also reflects that Chinese lithium power enterprises are in the forefront of the world. The growth in the production and marketing of new energy vehicles in China has not only served the people, but also promoted the development of the field of power batteries in our country. with a very competitive enterprise on the world stage, Made in China will also become China's "international business card."