Zhenhua new materials: the sales revenue of high nickel 8 series NCM ternary materials is expected to exceed 1.407 billion this year.

According to the announcement on the website of the Shanghai Stock Exchange, the Science and Technology Innovation Board listing Committee is scheduled to hold the 36th Review meeting of the listing Committee in 2021 at 9: 00 a.m. on June 11, 2021, when it will examine the initial issue of Zhenhua Xincai.

Recently, Zhenhua Xincai said in response to the "letter of implementation of the opinions of the examination Center on the initial Public offering of Guizhou Zhenhua New Materials Co., Ltd. And the listing of Science and Technology Innovation Board" that the company's performance fluctuated greatly and its product sales depended heavily on the Ningde era. From January to March in 2018, 2019, 2020 and 2021, the proportion of the company's sales to Ningde era to the current operating income was 65.22%, 74.44%, 31.22% and 65.11% respectively, which was at a high level as a whole. Ningde Times is the largest customer in the company's reporting period. The company's sales revenue and share of Ningde era declined in 2020, mainly due to the postponement of orders for some products caused by the outbreak of novel coronavirus.

At the same time, Zhenhua Xincai said that the company has a higher proportion of sales revenue and operating income in the Ningde era, and there is a possibility that the amount and proportion will further increase in the future.

Specifically, Zhenhua New Materials combines the business characteristics of the ternary cathode material industry, the company's three-fired synthesis process of large single crystal materials, and the layout of low-cobalt / cobalt-free products, ultra-high nickel 9-series products, Ningde era industry leading position and the growing overall procurement scale and other factors analysis, in the Ningde era of procurement of ternary cathode material suppliers, the company and other suppliers are less likely to replace each other. According to public disclosure, the Ningde era has a production capacity of 53GWH in 2019 and is expected to reach 389.5GWH by 2025, an increase of 6.35 times. In this context, with the increase of the overall procurement scale of ternary cathode materials in Ningde era, it is expected that the main suppliers of ternary cathode materials, including the company, will continue to maintain a steady growth trend.

In response to the implementation letter, Zhenhua Xincai also pointed out that the ternary cathode materials business is the main component of the company's operating income, accounting for more than 85% from 2018 to the first quarter of 2021. From January to March in 2018, 2019, 2020 and 2021, the sales income of the company's ternary cathode materials was 2.5338961 billion yuan, 2.3625062 billion yuan, 886.4397 million yuan and 909.2543 million yuan respectively, of which the proportion of sales income of nickel 5 series products in the company was 99.97%, 96.70%, 91.48% and 77.97% respectively, and that of medium and high nickel 6 series products was 0.01%, 2.53%, 1.89% and 0.48%, respectively. The proportion of sales revenue of high nickel 8 series products is 0.02%, 0.77%, 6.27% and 21.55%, respectively. During the reporting period, the sales income of nickel-5 series ternary materials is the main component of the company's ternary cathode material income, which is higher than that of comparable companies in the same industry, and the product structure is relatively simple.

It is worth noting that the medium-high nickel 6 series low cobalt / cobalt-free products and ultra-high nickel 9 series products developed by Zhenhua New Materials have sent sample certification to customers such as Ningde era, Funeng Technology, New Energy Technology, etc., as this kind of product certification is completed and supplied in bulk, it is expected that the revenue of this kind of new products will become a new growth point of the company's operating revenue.

Combined with the demand plan of major customers, the average sales price of high-nickel 8-series NCM ternary materials in the first quarter of 2021 and the market forecast and careful calculation, Zhenhua Xincai expects the company's sales income of high-nickel 8-series NCM ternary materials to achieve 14.07 to 1.865 billion yuan in 2021, accounting for about 40% of the company's main business income in 2021, which is an important guarantee for the continuous growth of the company's business income in 2021 and subsequent years.

Zhenhua New Materials Analysis, under the background of downstream power battery head enterprises expanding production, increasing permeability of new energy vehicles, increasing product power and increasing production and sales of new energy vehicles driven by consumption, ternary cathode materials have become one of the mainstream choices of power battery cathode materials because of their high energy density, good safety performance and high recovery value. it is expected that the market of ternary cathode materials will continue to grow. The output value of the company's ternary cathode materials will reach about 7.2 billion yuan in 2023, and the market prospect is promising.

In addition, according to the initial public offering prospectus of Zhenhua New Materials Co., Ltd. (upper draft), the company plans to publicly issue no more than 110733703 RMB common shares (excluding the number of shares issued with over-allotment options) and raise capital of 1.2 billion yuan. after deducting the issuing expenses, it will invest in the construction project of lithium-ion battery cathode material production line (Shawen II) (650 million yuan) in order of priority. Lithium-ion power battery ternary material production line construction (Yilong II) (200 million yuan) and supplementary working capital (350 million yuan).

Among them, Shawen Phase II and Yilong Phase II projects are used to expand the production capacity of lithium-ion battery cathode materials, especially medium high nickel and low cobalt, high nickel and low cobalt ternary cathode materials, which are conducive to optimizing product structure and production process, and further expand and strengthen the company's main business.

Zhenhua new material said that in 2009, the company completed the research and development and production of primary particle large single crystal material of nickel-cobalt lithium manganate ternary cathode material at home and abroad. After years of research and development and technology accumulation, the company's primary particle large single crystal technology has been fully applied to many series of NCM cathode material products. The company has a leading competitive advantage in the accumulation of primary large single crystal technology, R & D system, product quality, customer resources and material recovery, which provides a technical basis and market guarantee for the smooth development of fund-raising investment projects. The fund-raising investment project mainly distributes the next generation of high-nickel, low-cobalt, high-nickel and low-cobalt products of the company, which meets the technical and technological requirements of the development of the industry for the future cathode material products, and helps to optimize the product structure of the company's cathode materials. enhance the company's core competitiveness, enhance sustainable profitability, and consolidate the company's dominant position in the ternary cathode material industry.