Rapid growth of demand for lithium hexafluorophosphate Yan'an Bikang's net profit in the first three quarters increased by more than 42 times year-on-year.

On August 27th, Yan'an Bikang (002411) disclosed that the company's operating income in the first half of the year was 3.449 billion yuan, down 1.64% from the same period last year. The net profit belonging to shareholders of listed companies was 304 million yuan, up 161% from the same period last year.

The semi-annual report revealed that on the same day, Yan'an Bikang also issued a forecast of results for the first three quarters of 2021. It is estimated that the company's net profit in the first three quarters of this year will reach 550 million yuan to 600 million yuan, an increase of 4207.51% to 4599.10% over the same period last year.

With regard to the reasons for the relatively large increase in net profit in the first half and the first three quarters, Yan'an Bikang said that the company's subsidiaries 99 Jiujiu science and technology new energy products were affected by market demand, the release of production capacity, the rise in market prices, and other reasons, resulting in an increase in profits compared with the same period last year.

It is understood that the new energy product of 99 Jiujiu Technology, a subsidiary of Yan'an Bikang Holdings, is lithium hexafluorophosphate, which is one of the core raw materials of lithium-ion battery electrolyte. Lithium-ion batteries are widely used in new energy vehicles, consumer electronics products and energy storage fields. In the first half of this year, the company's revenue from lithium hexafluorophosphate products reached 670 million yuan, an increase of 480.58% over the same period last

In terms of production capacity, the design capacity of 99 Jiujiu technology lithium hexafluorophosphate existing plant is 5000 tons / year. After energy saving, tapping potential and optimizing transformation, the actual production capacity reaches 6400 tons / year, ranking in the forefront of the industry. Jiujiu Technology recently introduced in a research activity that there are sufficient orders for lithium hexafluorophosphate products on hand, continuous full production and full sales, and basically no inventory.

It is worth noting that in July and August this year, Jiujiu Technology successively signed a supply Association with the BYD supply chain and South Korea's Enchem. By 2026, Jiujiu Technology will supply no less than 14300 tons of lithium hexafluorophosphate to the two companies.

In addition to BYD and South Korea Enchem, 99 technology lithium hexafluorophosphate's main customers are the new Zebang and Shanshan shares, Zhuhai Saiwei, Xianghe Kunlun and other domestic mainstream electrolyte manufacturers.

Yan'an Bikang analysis, with the new energy vehicle industry ushered in a period of vigorous development, the rapid improvement of downstream demand directly led to the rapid growth of electrolyte and its core raw material lithium hexafluorophosphate demand. In the context of rigid supply, the price of lithium hexafluorophosphate products continues to rise rapidly, the current market quotation has exceeded 400000 yuan / ton, and will remain high for some time in the future.

According to the research of Citic Securities, it is predicted that the global demand for electrolyte, lithium salt, solvent and additive will be 1.462 million tons, 176000 tons, 1.214 million tons and 73100 tons respectively in 2025, which is 5.0-5.2 times that of 2020, and the global market size will exceed 50 billion yuan in 2025. Due to the decline in the profits of the electrolyte industry chain from 2017 to 2019 leading to a slowdown in the expansion of upstream raw materials, this round of demand has led to a significant gap in the supply of upstream raw materials such as lithium hexafluorophosphate, VC, FEC and other upstream raw materials, significantly pushing up product prices and industry prosperity, due to the long cycle of new capacity put into production of the above products, the industry will continue with the mismatch between supply and demand in the coming year, and product prices will continue to rise.