Chuancai Securities: the monthly output of lithium iron phosphate battery exceeds that of ternary battery with good development momentum.

Main point of view: the monthly output of lithium iron phosphate battery exceeds that of ternary battery for the first time, and the development momentum is good. In May, the production and sales of new energy vehicles completed 217000, an increase of 1.5 times and 1.6 times respectively over the same period last year, continuing to set a new record for the month's historical production and sales. Of these, the production and sales of pure electric vehicles completed 181000 and 179000 respectively, an increase of 1.8 times and 1.7 times respectively over the same period last year; plug-in hybrid vehicles completed production and sales of 36000 and 39000 respectively, an increase of 67.8% and 1.2 times respectively over the same period last year; and the production and sales of fuel cell vehicles completed 38 and 9 respectively, down 41.5% and 90% respectively from the same period last year. From January to May, the production and sales of new energy vehicles totaled 967000 and 950000 respectively, an increase of 2.2 times over the same period last year. Of these, the production and sales of pure electric vehicles completed 818000 and 794000 respectively, up 2.6 and 2.5 times respectively over the same period last year; the production and sales of plug-in hybrid vehicles completed 149000 and 156000, respectively, up 1.1 and 1.3 times over the same period last year; and fuel cell vehicles completed 188and 207, respectively, down 47.3% and 44.1% respectively from the same period last year.

New energy vehicles: sales of new energy vehicles reached 217000 in May, up 159.7% from the same period last year and 5.4% from the previous month, setting an all-time high for the 11th month in a row. In the first five months of this year, 950000 new energy vehicles were sold, with a penetration rate of more than 8.7%. Compared with the 2020 data, the penetration rate of new energy vehicles from January to May increased by 3.3%, 7.6%, 9.0%, 9.1%, 10.2% respectively, showing a steady upward trend, and the monthly penetration rate exceeded 10% for the first time, and the electrification process continued to speed up. Although the penetration rate of China's electric vehicle market is increasing rapidly, compared with Europe, there is still a certain gap. The monthly penetration rate of new energy vehicles in Germany is stable at more than 20%, while that in Britain and France is also close to 20%. It is expected that the penetration of electric vehicles in China will continue to accelerate in the future, and the annual sales of electric vehicles are expected to exceed 2.4 million.

Lithium batteries: in May, lithium iron phosphate batteries loaded a total of 4.5 GWH, up 458.6% from the same period last year, up 45.9% from the previous month. From January to May this year, lithium iron phosphate batteries were loaded with 3.3GWh, 2.2GWh, 3.9GWh, 3.2GWh and 4.5 GWH respectively, accounting for 37.9%, 39.3%, 43.3%, 38.1% and 45.9% of the total installed capacity, respectively, with a steady increase in market share. In the first five months of this year, lithium iron phosphate batteries loaded a total of 17.1 GWH, up 456.6% from the same period last year, accounting for 41.3% of the total installed capacity, and the market share increased significantly by 17.2% over the same period last year. In terms of production, in May 2021, China's power battery production totaled 13.8 GWH, an increase of 165.8% over the same period last year and 6.7% month-on-month growth. Among them, the output of ternary batteries was 5.0GWH, accounting for 36.2% of the total output, up 62.9% from the same period last year, down 25.4% from the previous year; and the output of lithium iron phosphate batteries was 8.8GWH, accounting for 63.6% of the total output, up 317.3% from the same period last year and 41.6% from the previous year. This is also the first time in recent years that the output of lithium iron phosphate batteries has exceeded that of ternary batteries. From the point of view of scheduling, lithium iron phosphate material manufacturers and battery manufacturers have been in full production since this year. According to the Financial Associated Press, domestic Tesla Model Y may plan to launch lithium iron phosphate battery version, Model Y in July, with sales of 12728 vehicles in May, which has exceeded Model 3., Model Y has become a new popular model. The introduction of lithium iron phosphate models will continue to drive the growth of lithium iron phosphate battery demand. We are optimistic about the development of lithium iron phosphate battery for a long time. It is suggested to pay attention to the lithium iron phosphate battery industry chain, related targets: Ningde era, BYD, Fulin Seiko, German Nano, Penghui Energy, Guoxuan Hi-Tech, Yiwei Lithium Energy and so on.

Fuel cell: on May 31, the Development and Reform Commission of Hebei Province issued the outline of the 14th five-year Plan for the National Economic and Social Development of Hebei Province and the long-term goals for the year 2035. The outline stresses that it is necessary to speed up the process of carbon peak carbon neutralization, integrate carbon peak and carbon neutralization into the overall layout of ecological civilization construction, strengthen policy design, and speed up green and low-carbon development in key industries and key areas. For the planning of hydrogen energy, it is proposed to overcome a number of "sticking" technologies in the field of hydrogen energy storage, speed up hydrogen production from new energy, rationally arrange hydrogen filling stations and hydrogen transmission pipelines, promote the construction of hydrogen energy base in Bashang area, improve the industrial chain of new energy vehicles and hydrogen energy, accelerate the process of scale and commercialization of hydrogen energy industry, and implement the demonstration project of cross-border industrial integration. To build a new development pattern in which renewable energy power generation is coordinated with other energy development, development and consumption are matched, and "power generation, transportation and storage" are linked up, so as to help achieve the goal of "carbon peak". Since the goal of carbon neutralization was put forward, all provinces have made clear plans for carbon neutralization in the 14th five-year Plan. As an important part of carbon neutralization, hydrogen energy has been paid more and more attention by the government and enterprises. At present, the hydrogen energy industry is in the early stage of commercialization, and the preparation, storage, transportation and safety of hydrogen need to be improved. We believe that the active subsidies and support measures of local governments will help to improve the enthusiasm and vitality of R & D investment of hydrogen energy enterprises, and it is expected that in the next few years, the technology of hydrogen energy and fuel cell industry chain will develop rapidly, and the cost will be greatly reduced. and gradually achieve commercial application landing, it is suggested that attention should be paid to: 1) enterprises with the advantages of scale and resources and the layout of the whole industry chain; 2) the enterprises that master the core link technology and are expected to promote the localization of the fuel cell industry chain. Related targets: Yihuatong, Meijin Energy, Xiongtao shares, Houpu shares and so on.

Market performance

In May, the CSI 300 rose 4.06%, the automobile index rose 6.43%, outperformed the market by 4.37%, the new energy vehicle index rose 12.00%, outperformed the market by 7.94%, and the power equipment and new energy index rose 7.78%, outperforming the market by 3.72%.

Company trends

Ganfeng Lithium Industry (002460): GFL International Co, a wholly owned subsidiary of the company. Limitied plans to buy a 50 per cent stake in the Dutch company SPV with its own capital of US $130 million. Upon completion of the transaction, Ganfeng International will hold 50 per cent of SPV of the Netherlands and, Firefinch Limited will hold 50 per cent of SPV of the Netherlands.

Risk hint: policy risk; sales volume is less than expected; raw material price fluctuation risk.