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On the eve of Tesla's "Battery Day", the demand for individual stocks in the supply chain is expected to increase greatly, such as solvent leader Shi Dashenghua DMC.
Sep 21,2020 10:25CST
translation
[on the eve of Tesla's "Battery Day", supply chain stocks are expected to increase greatly.) Tesla's "Battery Day" on September 22nd is coming. This so-called "Apple press conference of the automobile industry" has attracted much attention in the field of new energy vehicles. Driven by this news, A-share related concept stocks have a strong trend recently, with Shi Da Shenghua, Junsheng Electronics and other stocks leading the gains. Among them, the solvent leader Shi Da Shenghua closed with the daily limit on September 18.
The content below was translated by Tencent automatically for reference.

SMM Network: September 22nd Tesla "Battery Day" is approaching, this so-called "Apple press conference of the automobile industry" has attracted much attention in the field of new energy vehicles, driven by the news, recently A-share related concept stocks are strong, Shi Da Shenghua, Junsheng Electronics and other stocks are among the top gainers, among which the solvent leader Shi Da Shenghua closed with the daily limit on Sept. 18.

It is not without reason that Shi Da Shenghua has attracted market attention. Its core products, such as DMC dijia carbonate and other solvents, are important raw materials in Tesla lithium battery electrolyte. According to the analysis of Zhongtai Securities, Shi Da Shenghua, as a world-class leader in electrolyte solvents, is expected to maintain rapid growth in DMC, EC and other products of dijia carbonate series in the next few years.

Tesla is an important supplier of battery raw materials.

On September 21, with regard to the downstream Tesla "Battery Day" and the opportunities that may be brought about by the rapid development of new energy vehicles, a number of relevant responsible persons of Shi Dashenhua said that although the specific route of Tesla's new battery formula is not clear, it is certain to increase the proportion of DMC.

According to the person in charge of the company, Shi Da Shenghua occupies an important position in the electrolyte solvent supply chain of Tesla battery. From a regional point of view, Tesla in the United States uses Panasonic batteries, Panasonic buys electrolytes from Japan's Mitsubishi Chemical, and Shida Shenghua is the only domestic (battery-grade DMC) supplier of Mitsubishi Chemical.

In China, domestic Tesla mainly uses Ningde era batteries. Ningde Times purchases electrolytes from Jiangsu Cathay Pacific and Tianzhi Materials. Shi Dasenghua accounts for 90 per cent of Jiangsu Cathay Pacific battery-grade DMC procurement and more than 50 per cent of Tianzhi battery-grade DMC procurement.

It is reported that the Quanzhou epoxy yi alkane technology DMC, which will be put into production in April next year, has the advantage of distance from the downstream major customer Ningde era. The above official said that after the Quanzhou project is put into production, the company will form a DMC scale of 100000 tons, and the scale effect will make the cost more advantageous, and the raw materials of the project are deeply bound with Sinochem and have raw material advantages; in addition, epoxy yi alkane technology has more cost advantages than the current epoxy propylene oxide wan,.

According to the research and analysis of Zhongtai Securities, the battery-grade DMC, Shi Da Shenghua occupies an absolute leading position. In 2019, the domestic DMC has an effective design capacity of 557000 tons, with Shida Shenghua taking the lead in producing 125000 tons. Among them, the total production capacity of battery-grade DMC is 100000 tons, of which Shida Shenghua is 75000 tons. In 2018, Shida Wenghua sold tens of thousands of tons of battery products, accounting for more than 60% of domestic sales.

The position of the core supplier of DMC is difficult to shake in the short term.

It is also worth noting that due to the extremely strict examination procedures of downstream electrolyte manufacturers on suppliers, the longer certification cycle, and the high cost of replacing suppliers, Shi Da Shenghua's position as an important supplier of Tesla in the solvent field may be difficult to shake in the short term. Shi Da Shenghua related staff said frankly: "in the next 2-3 years, in addition to Shi Dasheng Hua, there is no expansion in the field of DMC."

The reason is that there are considerable technical barriers in the field of DMC, DMC manufacturers need to have the ability to produce raw materials epoxy propylene wan and epoxy yi alkane, the industrial chain is extended for a long time, and the downstream electrolyte manufacturers are not willing to extend the industrial chain. It is understood that the purity of battery-grade DMC should be more than 5 9s (that is, the purity is more than 99.999%). Its purity is higher than that of industrial grade DMC, and the technical barrier is relatively higher. At present, there are only a handful of DCM manufacturers that can produce 2 ppm (2/1000000) moisture, and Shi Da Shenghua is one of them.

It is worth noting that despite the current soaring DMC prices, the company is at full capacity 24-hour full capacity production is still difficult to meet downstream demand. The relevant person in charge of the company said: "the downstream enterprises are not sensitive to the price of the solvent, and the solvent accounts for only 15% of the cost of the electrolyte. The price increase can be transmitted quickly and improve the profits of the downstream enterprises. What the downstream enterprises are most worried about is not the price." it's whether the supply is adequate. "

In addition to DMC solvent, the price of LiPF6 lithium hexafluorophosphate, the company's product, is also on the rise, and due to factors such as a long production expansion cycle, the price increase space for this product is promising; the construction of wind power, photovoltaic and 5G base stations will lead to an increase in the demand for energy storage batteries; in addition, the lithium difluorophosphate additive project, which was put into production in October this year, has also attracted market attention.

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