Ningde era / BYD direct shareholding! Lithium Iron Phosphate "No.1 Brother" IPO accepted

On September 28th, Hunan Yuneng New Energy Battery Materials Co., Ltd. (hereinafter referred to as "Hunan Yuneng") declared that the gem IPO was accepted, and the sponsor was CITIC Construction Investment Securities.

Hunan Yuneng, founded in 2016, is a major supplier of cathode materials for lithium-ion batteries in China, focusing on R & D, production and sales of cathode materials for lithium-ion batteries, according to the prospectus. The company's main products include lithium iron phosphate, ternary materials and other cathode materials for lithium-ion batteries, which are mainly lithium iron phosphate, accounting for more than 95% of revenue.

This time, IPO, Hunan Yuneng plans to raise 1.8 billion yuan for Sichuan Yuneng Phase III / IV Lithium Iron Phosphate Project with an annual production capacity of 60, 000 tons and supplementary working capital, with a total annual production capacity of 120000 tons of Lithium Iron Phosphate.

In terms of shareholders, in December 2020, Hunan Yuneng increased its capital and shares and introduced Ningde Times and BYD as strategic investors. at present, Ningde Times and BYD directly hold 10.54% and 5.27% shares of Hunan Yuneng respectively. In addition, Changjiang Morning Road is the eighth largest shareholder in Hunan Yuneng, with a shareholding ratio of about 4.49%, while Ningde Times indirectly participates in Changjiang Morning Road through its Ningbo Chengding investment.

In terms of product sales, the prospectus shows that Hunan Yuneng Lithium Iron Phosphate produced 31025.54 tons and sold 31286.81 tons in 2020, exceeding the annual shipment. The output of ternary materials is 222.53 tons, and the sales volume is 186.45 tons, which is still in the early business development period, and the sales volume is relatively small.

In terms of market position, GGII data show that lithium iron phosphate shipments in 2020 were 124000 tons, an increase of 40% over the same period last year. Hunan Yuneng's lithium iron phosphate market share in 2020 was 25%, ranking first in the industry.

In terms of customers, from 2018 to the first quarter of 2021, Hunan Yuneng's sales revenue to the top five customers accounted for more than 95% of the total sales revenue. Among them, the company's total sales revenue to Ningde era and BYD accounted for 91.24%, 93.56%, 91.10% and 96.99% respectively, with a high degree of customer concentration.

In addition, Hunan Yuneng is also opening up other customers, including Yiwei Lithium Energy, Honeycomb Energy, Ganfeng Lithium Power, Vision Power, Ruipu Energy, Ningde New Energy, ZTE Energy, Penghui Energy, Nandu Power, and so on.

In terms of production capacity, Hunan Yuneng currently has three production bases, which are located in Xiangtan, Hunan, Jingxi, Guangxi and Suining, Sichuan. From 2018 to 2020, the production capacity of lithium iron phosphate is 5300 tons, 14200 tons and 29400 tons respectively.

At present, the lithium iron phosphate production line with an annual output of 20,000 tons is under construction in Suining, Sichuan. after the above production line is put into production, the total annual production capacity of Hunan energy lithium iron phosphate can reach about 50,000 tons. Hunan Yuneng official website points out that Suining, Sichuan, as an important production base of the company, plans to invest 5 billion yuan and has a total land area of 800mu. After completion, the annual production capacity of lithium iron phosphate, iron phosphate and ternary lithium cathode materials will reach 170000 tons, 100000 tons and 50, 000 tons respectively.

In terms of performance, from 2018 to 2020, Hunan Yuneng's revenue was 162 million yuan, 581 million yuan and 955 million yuan respectively, and the net profit was 11.71 million yuan, 57.37 million yuan and 46.23 million yuan respectively.

From the latest performance, from January to March 2021, Hunan Yuneng achieved revenue of 512 million yuan and net profit of 53.62 million yuan, showing an overall upward trend. Hunan Yuneng said that during the reporting period, the company was located in the lithium iron phosphate cathode material industry and the downstream new energy vehicle market environment was good, with the gradual release of the company's production capacity, the company's operating income increased steadily, operating profit, total profit and net profit and other operating results maintained a sustained growth trend, business scale and profitability continued to improve.

From the perspective of business structure, from 2018 to 2020 and from January to March 2021, Hunan Yuneng's main business income is mainly from lithium iron phosphate products, accounting for 100.00%, 96.16%, 97.37% and 95.27% of the company's main business income, respectively.

In terms of gross profit margin, from 2018 to 2020 and from January to March 2021, Hunan Yuneng's comprehensive gross profit margin was 20.86%, 23.64%, 15.29% and 20.85%, respectively.

Specifically, Hunan Yuneng lithium iron phosphate business is the main source of gross profit contribution, accounting for 99.76%, 102.78%, 102.77% and 98.48% of the total gross profit respectively. During the reporting period, the gross profit of the company's ternary materials business was negative, mainly because the new production line of ternary cathode materials was officially put into production in the second half of 2019, the output scale has not yet been released, and the fixed costs such as labor and depreciation expenses borne by the ternary cathode materials business are relatively high. as a result, the gross profit of the ternary material business is negative.

In addition, the ternary material has completed the Ningde era ternary product certification and production line certification, is carrying out mass production introduction, it is expected that the company's ternary material gross profit situation will be improved after batch supply.