[agency Review] in July, the installed capacity increased greatly compared with the same period last year to maintain the stability of iron and lithium share.

Main points of investment

The output of new energy vehicles in July was 222300, compared with + 132 per cent month-on-month, which is in line with market expectations: according to GGII data, the production of new energy vehicles in July 2021 was 222300, up 132 per cent from the same month last year and down 3 per cent from the previous month. Of these, the output of passenger vehicles was 213600, up 151% from the same period last year, down 2% from the previous year, of which the output of pure electric passenger vehicles increased to 169800, up 150% from the same period last year and down 5% from the previous year; passenger car output was 2070, down 63% from the same period last year and 53% from the previous year; the output of special purpose vehicles was 6661, up 32% from the same period last year and 4% from the previous year. From January to July in 21 years, the cumulative output of electric vehicles reached 1.252 million, up 180% from the same period last year, maintaining high-speed growth; passenger car production totaled 1.204 million, + 202% from the same period last year; bus production totaled 19100, down 6% from the same period last year; and special purpose vehicle production totaled 29000, an increase of 4% over the same period last year.

The electricity installed in July was 9.73 GWH, an increase of 95% over the same period last year and a decrease of 11% from the previous month. The cumulative installed capacity from January to July in 2021 was 56.12 GWH, an increase of 150% over the same period last year. 1) the installed power of the three yuan in July was 5.80gWH, up 82% from the same period last year, but decreased by 9% from the previous month, accounting for 60% of the installed capacity; the cumulative installed power from January to July of 2021 was 33.87gwhr, an increase of 118% over the same period last year, and the cumulative installed capacity accounted for 60%. 2) the installed capacity of lithium iron in July was 3.90 GWH, up 139% from the same period last year, down 14% from the previous month, and the installed capacity accounted for 40% of the total installed capacity, and the share was stable; from January to July 2021, the cumulative installed capacity of lithium iron phosphate was 21.28 GWH, an increase of 242% over the same period last year, and the cumulative installed capacity accounted for 38%.

From the point of view of the average carrying capacity of each model, the average carrying capacity decreased in July compared with the previous month. The electricity carried by pure electric passenger cars was 46.72 kWH in July, which decreased from January to July in 2021, and the average carrying electricity was 46.32kwh/ vehicles from January to July in 2021. In July, the average carrying capacity of pure electric buses was 189.3kwh/, which decreased by 15% compared with the previous month. From January to July of 2021, the average carrying capacity was 213.7kwh/. In July, the average carrying capacity of pure electric special vehicles rose to 80.06kwh/, an increase of 8.5% month-on-month. From January to July of 2021, the average carrying capacity of pure electric vehicles was 74.60kwh/.

From the perspective of battery manufacturers, Ningde era July installed 4.74gwh (including time SAIC), up 101% from the same period last year, down 11% from the previous month, and the market share of monthly installed capacity was 48.7%, keeping the first place. BYD ranks second in installed capacity, with 1.77 GWH installed in July, + 179% Universe 1.4% compared with the previous month, and 18.2% installed capacity. The third place was AVIC Lithium, which installed 0.79gwhr in July, a year-on-year increase of 381%, a month-on-month increase of 7.6%, accounting for 8.1% of the installed capacity.

The market concentration is high, and the leading position in Ningde era is maintained. In July, the top five installed capacity of lithium iron phosphate market accounted for 94.9% of the market share, with a high degree of market concentration, of which BYD and Ningde era (including SAIC) accounted for 40.8% and 36.9% of the market share, respectively. The sharp increase in BYD's share of lithium iron phosphate is mainly due to the switching of its main models to blade batteries. The three-yuan market is mainly concentrated in Ningde era, LG Chemical, Funeng Technology, Ruipu Energy and BYD. The top five manufacturers account for 66% of the market share, of which Ningde era (including time SAIC) has a market share of 56.9%. LG Chemical, Funeng Technology, Ruipu Energy and BYD have a market share of 4.7%, 3.4%, 3.3% and 2.9%, respectively.

Investment suggestion: from the point of view of the industry chain, we expect the output to increase by 5% in August compared with the previous month, and the planned shipments will double by 30% to 40% in 2022. We will continue to be bullish in an all-round way. We strongly recommend the global leader in the middle reaches of lithium power and the leader in lithium resources. Push Ningde Times, Yiwei Lithium Energy, Rongbai Technology, Enjie shares, Kodali, Tianzhi Materials, Putailai, New Zebang, Zhongwei shares, Tiannai Technology, Huayou Cobalt Industry, Ganfeng Lithium Industry (concern), Tianqi Lithium Industry (concern), German Nano, and spare parts Hongfa shares, Huichuan Technology, Sanhua Intelligent Control, etc., with emphasis on BYD, Xingyuan Materials, Xin Wanda, Guoxuan Tech, etc. Pay attention to Zhongke Electric, Betteri, Jiayuan Technology, Nord shares, Rongjie shares, Tianhua Super Clean, Yongxing Materials, Funeng Technology and so on.

Risk tips: policy and sales volume fall short of expectations, competition intensifies, price competition exceeds expectations, and investment growth declines.