Shanshan reported that the net profit of lithium materials business reached 460 million and the shipment volume reached 64000 tons.

On August 9, Shanshan shares (600884) disclosed its half-yearly 2021 report that the company realized operating income of about 9.947 billion yuan in the first half of the year, an increase of 209.82 percent over the same period last year, and the net profit belonging to shareholders of listed companies was about 760 million yuan, up 659.15 percent over the same period last year. Net profit belonging to shareholders of listed companies after deducting non-recurring gains and losses is about 724 million yuan; basic earnings per share is 0.467 yuan.

In the first half of the year, benefiting from the continued strong demand from downstream battery customers, Shanshan Lithium material business shipped 64000 tons, up 74.41% over the same period last year; realized main business income of 4.674 billion yuan, up 87.34% over the same period last year; realized net profit of 580 million yuan, up 1295.19% over the same period last year; and net profit belonging to shareholders of listed companies was 460 million yuan, up 1327.91% over the same period last year.

Shanshan shares said that the sharp increase in performance in the first half of the year was mainly due to: (1) the negative material business benefited from the sustained high boom of the downstream new energy vehicle industry, and sales increased significantly in the reporting period compared with the same period last year. The first phase of the superimposed negative Baotou integration project reached production, relying on the advantages of local electricity prices and integrated production lines in Inner Mongolia, the gross profit margin of negative products increased significantly; (2) the positive business benefits from the rapid increase in market demand for downstream power and small power, and the sales volume increases rapidly compared with the same period last year, while the company continues to strengthen supply chain management, and the price increase of raw materials is smooth, realizing a substantial increase in profit per ton of cathode materials compared with the same period last year; (3) the electrolyte business benefits from the increase in the price of lithium hexafluorophosphate and part of the company's own production capacity of lithium hexafluorophosphate to turn losses into profits compared with the same period last year. two。 The polarizer business in this period has made a great contribution to its performance. In the first half of 2021, the polarizer business realized a net profit of 515 million yuan belonging to the shareholders of the listed company.

Negative service

The global new energy vehicle industry chain continued to be highly prosperous in the first half of 2021. The negative business performance of Cunninghamia lanceolata was eye-catching, with shipments of 41536 tons, an increase of 107.79% over the same period last year, and main business income of 1.646 billion yuan, an increase of 72.71% over the same period last year. And with high-capacity fast-filling materials with leading performance, shipments from overseas customers increased by 131% in the current period compared with the same period last year. And the proportion of shipments of the top five customers of the negative company continues to increase, and the customer structure is further optimized. During the reporting period, the net profit of the negative company was 264 million yuan, an increase of 780.08% over the same period last year, and the net profit belonging to the shareholders of the listed company was 231 million yuan, an increase of 828.59% over the same period last year. The substantial increase in net profit compared with the same period last year is mainly due to: (1) the first phase of Baotou integration project reached production during the period, relying on the advantages of local electricity price and integrated production line in Inner Mongolia, reducing costs and increasing efficiency obviously, and product gross profit margin increased significantly; (2) sales volume increased significantly; (3) the product structure was continuously optimized, and the proportion of consumer products with higher gross profit margin increased.

Positive service

The rapid growth of market demand for small power and new energy vehicles in the first half of 2021 led to an increase in shipments of ternary materials from positive companies. In the first half of the year, shipments of Cunninghamia lanceolata cathode materials reached 16722 tons, an increase of 84.98 percent over the same period last year. During the period, the positive company realized main business income of 2.745 billion yuan, an increase of 105.35% over the same period last year, a net profit of 257 million yuan, an increase of 1039.46% over the same period last year, and a net profit of 176 million yuan belonging to shareholders of listed companies, an increase of 1039.46% over the same period last year. The substantial increase in performance compared with the same period last year is mainly due to: (1) the rapid growth of downstream power and small power market demand has led to a substantial increase in the sales of cathode materials of the company; (2) the rise in the prices of raw materials such as cobalt and lithium in the first half of 2021 led to an increase in the price of cathode materials, the company studied the factors of market changes and optimized the supply chain system and procurement structure, so that the increase in the price of cathode materials was higher than the increase in cost, and the gross profit per ton increased significantly compared with the same period last year.

Electrolyte business

In the first half of 2021, the shipments of Shanshan's electrolyte business reached 5277 tons, down 28.68% from the same period last year. The decline was mainly due to the tight supply of additive VC, and the company's electrolyte production could not meet the order demand. In the first half of 2021, the company's electrolyte business realized main business income of 282 million yuan, an increase of 39.62% over the same period last year; the net profit of the current period was 49.655 million yuan, an increase of 63.2108 million yuan over the same period last year, and the net profit belonging to shareholders of listed companies was 43.7255 million yuan, an increase of 54.4423 million yuan over the same period last year. This is mainly due to the increase in the price of lithium hexafluorophosphate and the company's own production capacity of lithium hexafluorophosphate.

Photovoltaic service

In the first half of 2021, Shanshan's photovoltaic business achieved a main business income of 498 million yuan, an increase of 46.64% over the same period last year, mainly due to the increase in component sales. The net profit belonging to shareholders of listed companies was 2.176 million yuan, down 87.40% from the same period last year. The component products were mainly affected by the sharp rise in the price of raw and auxiliary materials upstream, and the price increase of component terminals was less than that of raw and auxiliary materials. The gross profit margin of component sales fell 8.45% compared with the same period last year, resulting in a year-on-year decline in the net profit of the company's photovoltaic business.

Progress in divestiture of related assets

In recent years, Cunninghamia lanceolata has taken measures such as stopping new investment, shrinking business scale, streamlining personnel and controlling costs for non-core businesses such as energy storage, charging piles, lithium-ion capacitors and new energy vehicle design and research and development. and actively promote the divestiture of these businesses and assets. As of the date of disclosure of this report, the remaining shares of Fubin financing shares have been sold; the equity disposal of the energy storage business operation and maintenance platform company has been completed; and the charging pile business is in negotiations with the intended acquirer.

Data show that Shanshan shares completed the delivery and consolidation of LCD polarizer business in mainland China on February 1, 2021, focusing on the two core businesses of lithium materials and polarizer. The company began to industrialize anode materials in 1999, cathode materials in 2003 and electrolyte in 2005. It has more than 20 years of research and development and industrial production practice in the field of lithium materials.

In terms of production capacity, as of the date of disclosure of the report, Shanshan has a production capacity of 60, 000 tons of cathode materials, 120000 tons of negative materials and 40, 000 tons of electrolyte.

Cunninghamia lanceolata has four major production bases, covering fire and wet production lines. The wet production line can produce various specifications of single crystal / secondary ball ternary precursor products from low nickel to high nickel, special doping-coated cobalt oxide and other high-end customized products, mainly to meet the needs of internal production. The fire production line mainly includes three series products: lithium cobalt oxide (LCO), lithium manganate (LMO) and ternary material (NCM/NCA).

Shanshan shares negative electrode Inner Mongolia Baotou annual production line of 100000 tons of negative materials integration project has reached production, relying on the advantages of local electricity prices and integrated production lines in Inner Mongolia, effectively reduce costs and increase product gross profit margin, further enhance the profitability and competitive advantage of Cunninghamia lanceolata negative materials business. As of the date of disclosure of the report, the company has launched the second phase of the integration project of negative electrode materials with an annual output of 100000 tons in Baotou, Inner Mongolia, which is planned to be completed and put into trial production from the end of 2021. The company also plans to build a new 200000-ton anode material integration project in Meishan, Sichuan, which will be implemented in two phases with a production capacity of 100000 tons each. The construction period of the first phase of the project is expected to be 16 months (from the date of obtaining the construction license of the first phase of the project). The construction cycle of the second phase of the project is expected to start after the completion of the first phase of the project and obtaining the relevant construction permits).

In the industrial chain, Shanshan shares through strategic joint ventures and cooperation, self-building integrated base and other ways to improve the layout of lithium materials industry chain. For the upstream key raw material lithium and other resources, the company established Hunan Yongshan Lithium Industry Co., Ltd. to build its own lithium salt production capacity, the first phase of the project capacity of 25000 tons is expected to be trial production by the end of September 2021. Through the establishment of joint ventures with leading enterprises in the industry, we can give full play to their respective advantages and reduce the procurement cost of raw materials. In terms of positive materials, the company established Fujian Changqing New Energy Technology Co., Ltd. in a joint venture with Zijin Mining and Geely Group to ensure the supply of cathode materials precursors; in terms of negative materials, the company established a strategic cooperative relationship with the top domestic suppliers of negative materials, and expanded its graphitization production capacity in the form of self-construction and equity participation to ensure the supply security and cost advantages of the company's negative raw materials and main process links. In terms of electrolyte, the company has a production capacity of 2000 tons of lithium hexafluorophosphate and plans to build a new production capacity of 2000 tons of lithium hexafluorophosphate. After it is completed and put into production, the company's capacity of lithium hexafluorophosphate will reach 4000 tons, which not only ensures the safety of the company's electrolyte raw material supply, but also reduces the raw material cost of the company's electrolyte.

In terms of customers, Shanshan has established a long-term and stable cooperative relationship with global mainstream lithium battery manufacturers, including ATL, LGES, CATL, BYD, Lishen, Honeycomb Energy, Funeng Technology, Guoxuan High Tech, Yiwei Lithium Energy, SDI and other mainstream battery enterprises at home and abroad, relying on its market accumulation in the field of lithium battery materials, as well as high-quality products and technical services.

In terms of scientific research, as of June 30, 2021, there have been 127 authorized patents for Shanshan cathode materials, including 47 invention patents and 80 utility model patents, including 3 international patents. There are 121 patents for anode materials, including 101 invention patents and 20 utility model patents, including 2 international patents. There are 93 authorized patents for electrolyte, including 49 invention patents and 44 utility model patents, including 2 international patents.