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Xiangfenghua gem IPO successfully passed the meeting. The production capacity of lithium anode material is expected to reach 60, 000 tons in the next three years.
Jul 30,2020 08:23CST
The content below was translated by Tencent automatically for reference.

SMM: July 29 news, gem listing Committee 2020 9th review meeting held on the 28th, the audit results show that Shenzhen Xiangfenghua Technology Co., Ltd. (hereinafter referred to as "Xiang Fenghua") meets the issuance conditions, listing conditions and information disclosure requirements. It is reported that this is the 121st enterprise that will meet this year (excluding Kechuang board).

Data show that Xiang Fenghua was founded on June 12, 2009, the main products are divided into natural graphite and artificial graphite two categories, including power (electric vehicles, such as new energy vehicles, electric bicycles, etc.), 3C consumer electronics and industrial energy storage and other lithium battery fields.

Xiang Fenghua plans to issue no more than 25 million shares, accounting for no less than 25 per cent of the total share capital after the offering. The sponsor institution of this issue is Shen Wanhongyuan underwriting sponsor, and the audit institution is Zhonghua Accounting firm (Special General Partnership). According to the prospectus, Xiang Fenghua plans to raise 500 million yuan. After deducting the issuance expenses, the funds raised will be invested in the construction project of 30000 tons of high-end graphite anode material production base.

According to Xiang Fenghua's plan, in the next three years, the company will focus on the research and development of new technologies and new products in the field of new energy and new materials, conscientiously implement fund-raising projects in accordance with the plan, realize high-end intelligent manufacturing, and expand production scale. firmly seize the opportunity of rapid development of the industry to form an annual production capacity of 60,000 tons of lithium battery anode materials.

In terms of financial data, benefiting from the continued growth of the new energy vehicle industry, Xiang Fenghua maintained growth in operating income and net profit during the reporting period from 2017 to 2019. In 2019, Xiang Fenghua's operating income was 645.5288 million yuan, an increase of 7.67% over the same period last year, and its gross profit margin was basically the same as the same period last year, with a gross profit of 142.0461 million yuan, an increase of 9.3682 million yuan. Affected by the epidemic, and with a high base affected by the "rush to install" market in the first half of 2019, Xiang Fenghua achieved sales revenue of 210.7745 million yuan from January to June 2020, down 32.58 percent from the same period last year. Net profit after deducting non-recurrent profits and losses was 25.8302 million yuan, down 29.56 percent from the same period last year.

In terms of comprehensive gross profit margin, Xiangfenghua's comprehensive gross profit margin was 30.40%, 22.13% and 22.00% in 2017, 2018 and 2019, respectively. In the first half of 2020, the prices of upstream coke raw materials, graphitization processing and primary graphite raw materials all decreased to varying degrees, of which coke raw materials fell by more than 50%. As a result, Xiangfenghua's artificial graphite gross profit margin increased by 4.19% in the first half of the year compared with the same period last year, and the natural graphite gross profit margin also increased by 6.82% compared with the same period last year. The gross profit margin of the main business was 29.22%, an increase of 7.25 percentage points over the previous year, and has rebounded significantly.

In terms of research and development, Xiang Fenghua has a total of 47 patents, including 38 invention patents and 9 utility model patents, and more than 60 invention patent applications are under examination. In the past three years, the company's R & D expenses accounted for about 4 per cent of revenue, with R & D expenses of 16.3173 million yuan, 20.697 million yuan and 26.9297 million yuan respectively.

In terms of major customers, the battery network noted that by the first half of 2020, Xiang Fenghua had become a qualified supplier of four of the top five power lithium battery manufacturers in the world (LG Chemistry, Ningde Times, BYD, Samsung SDI), while among the top ten power lithium power manufacturers in 2019, in addition to BYD and Ningde era, Xianghua also established business relations with Guoxuan Hi-Tech, Yiwei Lithium Energy and Funeng Technology.

In the first half of 2020, Xiang Fenghua's largest customer, LG Chemical, accounted for 45.76%, BYD accounted for 35.58%, and Guoxuan Hi-Tech, the third largest customer, accounted for 7.42%. The customer structure continued to be optimized.

From January to June 2020, Xiangfenghua's share of natural graphite sales increased to 54.41%. The increase in sales revenue of natural graphite is mainly due to the batch supply of natural graphite from Xiang Fenghua to LG Chemical since November 2019. LG chemical power lithium battery production bases are mainly Wucang in South Korea, Michigan in the United States, Nanjing and Poland in China, with a total production capacity of about 110GWh. China Nanjing plant (2) planning 35GWh is mainly aimed at the Chinese market and Tesla (Shanghai).

Benefiting from the substantial increase in LG chemical orders in the first half of 2020, Xiang Fenghua natural graphite shipments increased significantly, making the total sales volume of Xiang Fenghua reach 6762 tons in the first half of 2020, which is basically the same as the same period last year. Among them, shipments increased 1.7 times in June compared with the same period last year, and production and operation have fully recovered. With the further recovery of the new energy vehicle industry in the second half of the year, the operation of Xiang Fenghua will further improve.

In addition, in April 2020, Xiang Fenghua officially became a supplier of Samsung SDI. Samsung SDI began small-scale procurement of the company's products for trial production or commissioning from June 2020, and is expected to purchase in bulk from December 2020.

At the same time, Xiang Fenghua is also actively contacting Panasonic and other well-known Japanese and South Korean lithium enterprises to prepare for further opening up the Japanese and South Korean markets.

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