[semi-annual report] the new energy car market has been hit hard by lithium battery companies, and the market demand is improving in the second half of the year.

SMM9 March 3: due to the impact of the epidemic in the first half of the year, various industries have been affected to varying degrees, and the lithium industry chain is no exception. In the first half of the year, domestic production and sales of new energy vehicles completed 350000 and 336000 respectively, down 42% and 44% respectively from the same period last year; the installed capacity of power batteries was also less than expected, and the total installed capacity of power batteries in the first half of the year was 17.5 GWH, down 42% from the same period last year. Recently, as the major lithium industry giants have disclosed their first-half results one after another, the net profits of many listed companies have declined compared with the same period last year, and the Ningde era, the leader of the power battery industry, has also been greatly affected, with net profit down 7.86%. The net profit of Tianqi lithium industry even plummeted by 460.15% in the first half of the year. From the 10 lithium battery companies known to SMM, only BYD and Foster's first-half net profit rose year-on-year.

Tianqi lithium industry

In the first half of the year, the net profit attributed to shareholders of listed companies was-696.5651 million yuan, a decrease of 460.15% compared with the same period last year. The main reasons are: (1) the sales volume and price of lithium chemical products and the sales price of lithium concentrate products decreased significantly compared with the same period last year, resulting in a decline in operating income and gross profit; (2) the SQM performance of the invested unit declined, resulting in a decline in investment income. During the reporting period, the company's basic earnings per share and weighted average return on net assets decreased by 435.71% and 12.38 percentage points respectively over the same period last year, mainly due to a decrease in net profits belonging to shareholders of listed companies during the reporting period.

At the present stage, Tianqi lithium industry mainly relies on Shehong Tianqi, Jiangsu Tianqi and Chongqing Tianqi to provide lithium carbonate, lithium hydroxide, lithium chloride and metal lithium products, with a total planned production capacity of more than 110000 tons / year. Terrison lithium concentrate has a completed capacity of 1.34 million tons / year, with a planned production capacity of 1.94 million tons / year, and the company's overall product scale has obvious advantages.

Tianqi Lithium Industry believes that with the active layout of downstream power battery manufacturers and the release and promotion of electrification plans of international well-known car companies, the global trend of automobile electrification has been established as the main growth point of lithium demand in the future. its rapid development will form a strong support for the demand and price of lithium compounds in the future.

Xin Wanda

In the first half of 2020, the company achieved a total operating income of 11.51 billion yuan, an increase of 6.02% over the same period last year, and the net profit attributed to the parent company was 5.8824 million yuan, down 97.43% from the same period last year. This is mainly due to the following factors: (1) the adverse impact of the COVID-19 epidemic on the company's operation in the first quarter; (2) the amortization of the company's equity incentive expenses; (3) affected by the epidemic in the first quarter, the international exchange rate market fluctuated greatly, and Indian subsidiaries brought large exchange losses to the company due to the devaluation of the rupee; (4) the electric vehicle battery sector continued to invest and did not make a profit for the time being.

In order to increase high-quality orders and accelerate the expansion of production capacity, the development of Xinwanda power battery business has been driven into the fast lane. On July 10, the mass production delivery ceremony of the first phase of Nanjing Xinwangda New Energy Project was solemnly held in Lishui District, Nanjing. It is understood that the Nanjing Xinwangda project has a total investment of 12 billion yuan, which is divided into three phases of construction, of which the first phase invests 3.5 billion yuan to build about 8GWh cell and 8GWh battery system production line project; the second phase plans to invest 4 billion yuan, the project will add 10GWh cell and 10GWh battery system production line; the third phase plans to invest 4.5 billion yuan, the project will add 12GWh battery and 12GWh battery system production line; after the project reaches production, it can form the production capacity of 30GWh cell and system respectively.

Nissan previously said it would work with Xin Wanda on the next generation of car batteries and jointly develop the next generation of in-car batteries for Nissan's e-POWER system, with a final agreement expected by the end of the year.

Ningde era

Although both net profit and operating income of Ningde era declined in the first half of the year, Ningde era, as the leader of lithium batteries, has huge opportunities in its industrial chain, and its shipments of power batteries are highly certain in 2020. According to capacity estimates, shipments may reach 48GWH in 2020, with a market size of about 50 billion and a growth rate of 45 per cent compared with 2019. At the same time, there are many downstream cooperative manufacturers in the Ningde era, which is enough to resist the sudden systemic risks in the industry.

The number of orders in the Ningde era is still not to be underestimated, and at least 20 car companies have established partnerships with the Ningde era, including BMW, Volkswagen and Volvo. In February, Ningde Times signed a procurement agreement with Tesla, which means that Ningde Times will also take a share of Tesla's power battery supply in the Chinese market. It is reported that Ningde era will be equipped with 40% Tesla Model3, according to Tesla Model3 production of 49800 vehicles in the first half of the year, the total battery set is 2634.42MWh, only Tesla Model3 will bring the battery installation increment of 2634.42MWh*40%=1053.77MWh for Ningde era. In addition, Ningde Times is also actively expanding production capacity, expanding power battery production lines in Ningde, Jiangsu, Sichuan and other places to increase production capacity. In addition, it also makes efforts in the field of energy storage and capital, and gradually distributes the upstream and downstream of the industry.

Guoxuan high-tech

The net profit in the first half of the year was 36 million yuan, down 89.72% from the same period last year. Although the performance has declined seriously, the company has actively resumed work and production to promote technology upgrading and new product development and verification. The single energy density of lithium iron phosphate battery is more than 200W / kg, the energy density of the system is 160W / kg, and the cycle life is 3000 cycles; the cycle life of long cycle energy storage battery is 6000 cycles; in terms of high power battery products, 5C~40C charging at different rates can be realized and the cycle life can reach 7500 cycles. With the continuous breakthrough of energy density, the research and development reserves of different functional cells, and give full play to the high safety, high stability and superimposed cost advantages of lithium iron phosphate cells, the company has gradually outstanding competitive advantages in the application of lithium iron phosphate batteries in the field of power batteries and energy storage.

BYD

The operating income in the first half of the year was 60.53 billion yuan, down 2.7% from the same period last year, and the net profit belonging to shareholders of listed companies was 1.662 billion yuan, up 14.29% from the same period last year.

As a global leader in new energy vehicles with core technology and leading market position, BYD firmly grasps the key core technologies of new energy vehicles through technological breakthroughs and innovation in the field of new energy vehicles. continue to launch models with market competitiveness, firmly pave the way for national brand self-improvement. In March, BYD released and mass-produced a new generation of battery product "Blade Battery". In June, it launched the global super-safe intelligent new energy flagship model "Han", which was equipped with "blade battery" and high-performance silicon carbide motor control module for the first time. It integrates the three major advantages of safety, performance and luxury, and has won enthusiastic response in the market with excellent internal and external decoration design and excellent performance. At present, it has accumulated a large number of orders on hand. Affected by COVID-19 's epidemic situation, the Group's new energy and new models will be launched in the second half of the year.

In the first half of the year, the new energy vehicle market was hit hard, and the order volume of power battery enterprises dropped sharply. Many battery companies carried out digital battery business, which restored their business income to some extent. In addition, the impact of the epidemic this year has led to a trend of cost reduction in the entire new energy industry chain, and the gross profit margin of battery enterprises has also declined. In the second half of the year, the new energy market has gradually picked up, and orders in the domestic market have begun to increase. In addition, a number of first-and second-tier battery companies have cooperated with overseas car companies. This year, the European new energy market has increased greatly, and the number of orders will also increase accordingly.

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