The net profit of New Zebang in the first quarter is 160 million and plans to expand the production of electrolyte additives and lithium battery materials by 1.85 billion.

On the evening of April 21, New Zebang (300037) disclosed that the company reported total revenue of 1.14 billion in the first quarter of 2021, an increase of 118.6% over the same period last year, and net profit of 160 million, an increase of 57.5% over the same period last year.

New Zebang said that in the first quarter of this year, the company's main business profits increased compared with the same period last year, mainly benefiting from: on the one hand, the market demand for new energy vehicles increased significantly, and the company seized the development opportunity of the power lithium battery industry. The increase in market orders for lithium battery electrolyte led to a rapid increase in the company's production and sales; on the other hand, the company's organic fluorine chemicals business orders at home and abroad increased, the sales scale expanded; In addition, the company's capacitive chemicals business with industry influence and product technology advantages, sales continued to grow steadily; semiconductor chemicals business market development and customer certification progress accelerated, product sales increased significantly.

It is reported that New Zebang is working on battery chemicals (high energy density lithium iron phosphate, high voltage ternary, high voltage lithium cobalt battery suitable electrolyte and its additives, etc.) and semiconductor chemicals (functional formula products, ultra-high purity reagents, and fluorine-containing functional materials). Steady progress in the research and development of key projects. By the end of the first quarter, the high energy density lithium iron phosphate series electrolyte developed by the company has been recognized by customers and delivered in batches. High voltage series of electrolytes and series of additives have passed the pilot test certification of medium and high-end customers and received good feedback.

The strong technical guarantee is indispensable for the new Zebang products to consolidate the first-mover advantage in the market. In the first quarter of this year, the company received a total of 9 invention patents. As of March 31, 2021, the company has applied for and accepted a total of 565 invention patents (including 381 domestic applications, 104 foreign applications and 80 PCT international applications), 66 utility model patent applications, a total of 186 domestic and foreign invention patent authorizations, 65 utility model patent authorizations, and a total of 120 domestic and foreign trademarks.

While disclosing the first quarter, in order to ensure the safe supply of key raw materials for lithium power and fill the gap in the company's layout in North China, New Zebang also issued an announcement on investment in the construction of a lithium additive project with an annual capacity of 59000 tons, as well as investment in the construction of Tianjin New Zebang semiconductor chemicals and lithium battery materials.

According to the announcement, Xinzhoubang plans to use Jiangsu Hankang Electronic Materials Co., Ltd., a joint venture company set up under Jiangsu Hankang New Materials Co., Ltd. (hereinafter referred to as "Jiangsu Hankang"), a joint venture company (tentatively named, subject to industrial and commercial registration). (hereinafter referred to as "Hankang Electronic Materials") as the implementation body, it plans to invest in the construction of an annual lithium electricity additive project with an annual output of 59000 tons in Huai'an Industrial Park, Huai'an City, Jiangsu Province, with a total investment of about 1.2 billion yuan. The investment is divided into two stages, the first phase investment is about 660 million yuan, and the construction period is 2 years. The investment of the second phase is about 540 million yuan, and the second phase of the project will be launched in time according to the market demand.

The main body of the project, Hankang Electronic Materials, was set up by Jiangsu Hankang and Huaian Hanbang New Materials Partnership (Co., Ltd.) (hereinafter referred to as "Hanbang Energy") with a joint investment of 300 million yuan. it is used to invest in the construction of an annual lithium battery additive project with an annual output of 59000 tons. After all the projects are completed and reach production, the average annual operating income is about 2 billion yuan, and the profit and tax is about 320 million yuan. After the completion of the first phase, it is estimated that the annual business income will be about 800 million yuan, and the profits and taxes will be about 140 million yuan.

New Zebang said that with the rapid growth of global lithium-ion battery electrolytes in the future and the substantial increase in the company's lithium-ion battery electrolyte production, the company is faced with insufficient design capacity such as vinylidene carbonate and fluoroethylene carbonate and the development opportunity of sustained and rapid increase in demand for new products such as lithium difluorooxalate borate, lithium dioxalate borate, trimethylsilyl borate and other new products. The construction of this project contributes to the integrated development of the company's lithium battery industry, and is of great significance to ensure the safe supply of key raw materials for lithium battery, enhance the market competitiveness of lithium-ion battery electrolyte products and maintain the company's leading position in the industry.

In addition, New Zebang plans to take Tianjin New Zebang New Materials Co., Ltd. (tentative name, subject to industrial and commercial registration, hereinafter referred to as "Tianjin New Zebang") as the main body of the project to invest in the construction of Tianjin New Zebang Semiconductor Chemicals and Lithium Battery Materials Project in Tianjin Nangang Industrial Park. The construction content of the project is to produce 50, 000 tons of lithium battery materials and 90, 000 tons of semiconductor chemicals and its supporting public works and auxiliary facilities. The total investment is expected to be about 650 million yuan, which is divided into two phases. The investment in the first phase is about 450 million yuan, and the construction period is 2.5 years. The investment of the second phase is about 200 million yuan, and the second phase of the project will be launched in time according to the market demand.

After the project is completed and put into operation, the average annual operating income is about 3 billion yuan, and the profit and tax is about 360 million yuan. After the completion of the first phase, it is estimated that the annual business income will be about 2.5 billion yuan, and the profits and taxes will be about 270 million yuan.

New Zebang said that at present, the company has established relevant industrial layouts in South China, East China, Central China and Fujian, and has established a number of production bases for battery chemicals, capacitive chemicals, semiconductor chemicals, organic fluorine chemicals, and so on. However, the company has no locations in North China for the time being. In order to be close to the end market, quickly respond to customer demand, and reduce product transportation costs, it is looking for a professional chemical park in North China. The establishment of a production base can not only fill the gap in the layout of the company in North China, but also play a positive role in seizing the North China market, maintaining the company's leading market position in the lithium-ion battery electrolyte industry and actively expanding the semiconductor market.

In terms of performance, in 2020, the net profit of New Zebang was 518 million, an increase of 59.29% over the same period last year, and its operating income was 2.961 billion, an increase of 27.37% over the same period last year. Among them, the operating income of battery chemicals, organic fluorine chemicals, capacitive chemicals and semiconductor chemicals accounted for 56.03%, 18.97%, 18.14% and 5.31% of the revenue respectively.

In the field of battery chemicals, in 2020, the company's revenue from battery chemicals was 1.659 billion yuan, an increase of 43.44 percent over the same period last year; the compound growth rate in the past five years was 18.06 percent; the gross profit margin of products was 25.76 percent; the company's existing production capacity of battery chemicals was about 100000 tons, and the capacity under construction was about 180000 tons. At present, the market share of battery chemicals is among the top three in the industry.

It is worth noting that in 2020, the overseas revenue of New Zebang was 634 million yuan, an increase of 30.83% over the same period last year, accounting for 21.43% of the company's total revenue; overseas revenue accounted for about 21% of the total revenue of the battery chemicals business.

At present, New Zebang has a total of 15 subsidiary companies, including 4 wholly-owned subsidiaries, 11 controlling companies and 2 associated companies. In terms of global layout, the company has set up an American company, a production base in Poland, offices in South Korea and Japan, and plans to set up an European company.

In order to implement the sustainable development strategy of international layout and meet the growing needs of customers, on March 25 this year, New Zhou Bang plans to set up a wholly-owned subsidiary "CapchemEuropeB.V." in the Netherlands with a cash contribution of 10 million euros (about 77.78 million yuan) (provisional name, the final name is subject to the approval of the relevant registration authority). New Zebang said that the investment and establishment of a wholly-owned subsidiary in the Netherlands is in line with the company's international development strategy, through which wholly-owned subsidiaries can provide services to European customers more quickly and more comprehensively, which is conducive to speeding up the process of internationalization of the company. to further enhance competitiveness in the international market.

In addition, in order to meet the strategic development needs of the company, on April 12, New Zebang proposed to introduce LG Energy Solution,Ltd. (hereinafter referred to as "LG New Energy"), a wholly owned subsidiary of LG Chemical (LG Chem,Ltd.) Co., Ltd., to jointly increase the capital of the Polish New Zeus, with a total capital increase of 80276989 zlotys (equivalent to about 137 million yuan), and 50585227 zlotys (equivalent to about 86.6 million yuan). Hong Kong New Zeus contributed 12646307 zlotys (equivalent to about 21.65 million yuan), LG New Energy contributed 17045455 zlotys (equivalent to about 29.18 million yuan).

The announcement shows that after the completion of this capital increase, the share capital of the Polish new Zeus will increase from 11284000 zloty to 28153250 zloty, of which the new Zeus holds 68 per cent of the Polish new Zeus, the Hong Kong new Zeus holds 17 per cent of the Polish new Zeus, and LG New Energy holds 15 per cent of the Polish new Zeus. After the completion of the capital increase, the new Zeus directly holds 68% of the shares of the Polish new Zeus, and indirectly holds 17% of the Polish new Zeus through the Hong Kong new Zeus, which is still its controlling shareholder.