On the evening of March 29, Rongbai Technology issued a series of 40 announcements, including stock issuance plans to specific targets, annual report for 2021, and the establishment of equity investment funds.
Invest nearly 35.7 billion to expand production
According to the preliminary Plan for issuing A-shares to specific objects in 2022, the number of shares to be issued by Rongbai Technology will not exceed 44803763 shares (including), and the total amount of funds raised shall not exceed 6.068 billion yuan (including capital). After deducting the issuance cost, it is intended to be used for lithium cathode material production expansion project, 2025 power lithium battery material comprehensive base (phase I) project, engineering equipment phase I project, supplementary liquidity.
Specifically, the lithium cathode material expansion project includes three projects at home and abroad, namely, Xiantao Phase I project with an annual output of 100000 tons, Zunyi Phase 2-2 project with an annual output of 34000 tons, and Zhongzhou Phase 1-2 project with an annual output of 15000 tons.
Among them, Xiantao Phase I lithium cathode material project is part of Rongbai Science and Technology Xiantao Base Project. Rongbai Technology will set up Xiantao Rongchuang No.1 New Energy Partnership (limited partnership) matching project construction.
Vico Lithium noted that on the same day of the fund-raising announcement, the construction of the Xiantao base of Rongbai Group began grandly, and the first phase of the project is scheduled to be completed by the end of June 2023. As far as the whole Xiantao base is concerned, the annual production capacity of 400000 tons of high nickel cathode materials will be built, with a total investment of 30 billion yuan, which will be completed in three phases.
In terms of the above projects, 30 billion + 700 million + 792 million + 1.95 billion + 432 million + 1.82 billion = 35.694 billion yuan, which also means that Rongbai Technology will invest nearly 35.7 billion yuan in project construction.
After the above new project is completed and put into production, the production capacity of Rongbai technology cathode materials will be further expanded, the supply capacity will be enhanced, and the proportion of high nickel cathode materials will be further increased.
Performance soared by 327.56%
According to the 2021 Annual report, Rongbai Technology achieved an operating income of 10.259 billion yuan in 2021, an increase of 170.36 percent over the same period last year, and a net profit of 911 million yuan, an increase of 327.59 percent over the same period last year.
At the same time, Rongbai technology gross profit margin and net profit margin also showed an upward trend. In 2021, the gross profit margin was 15.34%, an increase of 3.16 percentage points over the same period last year; and the net profit margin was 8.85%, an increase of 3.3 percentage points over the same period last year.
The substantial increase in Rongbai's technology performance is due to a substantial increase in sales of cathode materials. Among them, there are two key pushers.
First, the main products are full of orders for high-nickel ternary cathode materials, the release of new production capacity, a substantial increase in sales, and an increase in stacking prices. According to GGII statistics, the global high nickel ternary shipments in 2021 was 309000 tons, an increase of 120.71% over the same period last year, accounting for 41.76% of the total shipments of ternary cathode materials.
Among them, Rongbai Technology ranks first in China in terms of high nickel shipments in 2021 and second in the world, with high nickel ternary shipments accounting for 90% of total shipments.
Downstream customers lock future production capacity ahead of time through long-term procurement agreements, which will further consolidate Rongbai's high-nickel leading position. Rongbai Technology has signed a strategic cooperation agreement with Ningde Times to make it clear that the company will be the first supplier of its ternary cathode powder from 2022 to 2025. At the same time, important customers such as Funeng Technology, Honeycomb Energy, Ulay Motor, Weilan Battery and other important customers have also signed strategic cooperation agreements with Rongbai Technology; overseas customers such as SK on, SDI, Northvolt, ACC and Saft have also launched various types of cooperation. In the field of small power, Rongbai Technology has established cooperation with customers such as ATL and Tianpeng Energy.
With the high increase in shipments and the jump in downstream customer demand for high-nickel ternary materials, Rongbai Technology began to actively expand production last year. Its three major bases in Ezhou, Hubei, Zunyi, Guizhou and South Korea were expanded at the same time, and the high nickel production capacity increased from 40, 000 tons / year at the beginning of the year to 120000 tons / year at the end of the year. Among them, the production capacity of Ezhou in Hubei Province has exceeded 100000 tons per year, making it the largest production base of high nickel ternary materials in the world.
Cathode material is one of the core materials of power battery, with the largest proportion of cost, among which the global shipments of ternary cathode materials account for 50.3% of cathode shipments in 2021, which is one of the main directions of cathode materials.
Furthermore, in the future, new energy vehicles will continue to develop towards higher energy density and longer mileage, and the development trend of high nickel ternary battery is more and more obvious.
In order to further enhance the market competitiveness in 2021, the major engine factories will further accelerate the launch of mid-and high-end models with higher mileage. The permeability of high-nickel batteries in overseas markets is much higher than that in China. Tesla Model Y, Volkswagen ID.4/ID.6, Nissan Ariya and other popular models are equipped with high-nickel batteries. A large number of high-nickel new models will be launched in the next two years, including Volkswagen, Daimler, BMW and other car companies.
Based on this, Rongbai Technology has already accelerated the production capacity layout of high-nickel cathode materials to meet the rapid development of market demand and strive to continue to enhance market share and core competitiveness in the future competition. The latest fund-raising is an important means for Rongbai Technology to ensure the smooth and rapid progress of production capacity construction.
The second is the increase of self-financing rate of precursors, which has a positive impact on the profitability of Rongbai technology. In 2021, the sales of Rongbai technology precursors increased by 200% compared with the same period last year, and the rate of self-supply to the positive increased to about 30%.
In terms of production capacity, the Rongbai technology precursor has a production capacity of 30,000 tons in 2021 and is expected to reach 90,000 tons by the end of 2022 with the commissioning of 60,000 tons in the first phase of Linshan. At the same time, some of the high nickel precursor products of Rongbai Technology have entered the stage of international first-class battery customer certification.
Stability needs to be from the inside to the outside. In addition to asking inward to increase the self-supply rate of precursors, Rongbai Technology also ensures effective supply externally. Last year and this year, it signed precursor supply agreements with Huayou Cobalt and Grimmei respectively.
Set up equity investment fund
According to the announcement on participating in the Investment and Establishment of Equity Investment Fund and related transactions, Rongbai Technology intends to set up a Rongbai Battery Triangle No. 1 Equity Investment Fund Partnership (limited partnership) with Rongbai Management and other partners.
The investment fund aims to raise 5 billion yuan in phase 1-1, with an initial period of 1.25 billion yuan. As a limited partner (LP), Rongbai Technology plans to contribute 640 million yuan with its own funds, accounting for 12.8% of the total contribution of the fund.
In addition, Rongbai Technology has signed strategic cooperation agreements with Yangtze River Industrial Investment Fund Management Co., Ltd., and the people's Government of Hanyang District of Wuhan City. The latter two designated investors as limited partners (LP) to participate in the follow-up raising of industrial investment funds.
According to reports, the investment fund will mainly invest in lithium power industry projects, focusing on high-end manufacturing, resource recovery and related upstream and downstream projects related to the lithium power industry, as well as high-quality projects in the field of emerging technologies in the lithium power industry.
It is worth mentioning that Rongbai Technology will also cooperate with Yangtze River Industrial Investment Fund Management Co., Ltd. to promote the investment layout of Rongbai Group in Hubei Province. including landing Huazhong regional headquarters, the world's largest cathode material base, engineering equipment company and other projects.
In the secondary market, as of March 30, Rongbai Science and Technology closed at 139.87 yuan, up 12.07 yuan or 9.44%, with a total market capitalization of 62.667 billion.
