Long-term Lithium Science: the supply of products in the first quarter exceeds the demand for 40,000 tons of new production capacity as soon as May.

In 2021, with the profit growth brought about by the high boom in each link of the power battery industry chain, the domestic leading manufacturers have released their new production capacity in 2022 one after another. On the afternoon of March 28th, long-term Lithium Division (688779.SH) approved the bill that companies meet the conditions for issuing convertible corporate bonds to unspecified objects by a majority of 99.98%. After the meeting, the relevant person in charge of the company communicated with reporters on the production capacity layout of cathode materials, the rise of raw materials and the pattern of competition.

"the current pattern of the domestic ternary cathode market is relatively scattered, and there is no absolute leader yet. The shares of the top three companies are all about 10%, and the share will increase after production expansion this year. The company's products are in short supply in the first quarter, and battery manufacturers are scrambling for the new production capacity released by the company. Year-on-year production and sales have increased rapidly, and the profit per ton has risen from 16000 yuan / ton to about 20, 000 yuan / ton. the first phase of the 40, 000-ton project is expected to reach full production as soon as May this year. With reference to the construction schedule of the first phase of the project, the second phase of the 40,000-ton project may gradually release production capacity in the first quarter of next year, "said the person in charge of the long-term Lithium Department.

According to the company announcement, it intends to issue convertible bonds to raise no more than 3.25 billion yuan, which will be used for the second phase of production expansion of automotive lithium battery cathode materials, an annual output of 60, 000 tons of lithium iron phosphate project and supplementary working capital.

With regard to the latest progress of the second phase of the project, the above-mentioned responsible person said that the 40,000-ton second-phase project under construction by the company is divided into two plants like the first phase, and now the north factory building has been capped and the southern factory building foundation project has been completed. It is expected to be put into production by the end of this year, which will bring great performance growth to the company next year. Another 60,000 tons of lithium iron phosphate project is already under construction and is expected to be completed and put into production in the first quarter of 2023. At present, the company's products are in short supply, and the production line is running at full load. according to the order demand of downstream customers, it is expected to maintain the trend of full production and full sales this year.

As for why the layout of lithium iron phosphate project is considered, the person in charge said that the cost performance of lithium iron phosphate technology is still quite high, and lithium iron phosphate battery has become one of the important choices for many vehicle enterprises because of its low cost and high safety. In the lithium iron phosphate business, the company overlaps with some customers in the ternary business, and some customers have put forward order requirements to the company.

In addition, based on the rapid development of the energy storage market, the market demand will continue to expand in the future, so the company will carry out the corresponding layout. The production capacity planning of 60,000 tons belongs to the starting scale in the industry, and considering the rapid expansion of production capacity in this market, we still cut into this area carefully.

At present, the company has three production bases: Lugu base, Tongguan base and high-tech base. Although the long-term market share of lithium ternary cathode materials has been in the first echelon of the market for many years, its market share is still in a state of fluctuation. In the face of the major cathode material suppliers in the same industry are carrying out capacity expansion one after another, actively seizing the market, the company is also speeding up the construction progress of production capacity.

Incomplete statistics show that in terms of ternary positive electrodes, CR3 is 35% in 2020 and 52% in 2021; CR3 is 35% in 2021 and 55% in 2021. 2022 is the peak of production capacity, and Rongbai Science and Technology will reach 250000 tons in 2022. Dangsheng Technology, long-term Lithium Science, Xiamen Tungsten Xinneng, Tianjin Bamo and Zhenhua New Materials are expected to reach 100000 tons, 120000 tons, 105000 tons, 143000 tons and 73000 tons respectively.

Is it too aggressive for market capacity expansion? The above responsible person believes that according to the actual demand of the major battery manufacturers, the demand for battery cathode materials will reach 1.5 million tons in 2025. If you want to have some influence in this industry, the production capacity should be more than 300000 tons. It is expected that after the production expansion, the market share of the top three companies will increase compared with the same period last year, and the size of other small companies will be reduced.

The reporter noticed that the price of lithium phosphate, the main raw material, has now reached 500000 yuan / ton. does the rise in cost have an impact on gross profit? The person in charge said bluntly that downstream battery manufacturers actually expand production faster, car factories are also looking for battery manufacturers to line up for goods, because the company's own cathode materials are in short supply, (lithium phosphate) raw materials have risen so much, the company will transmit downstream. Based on economies of scale and improved production efficiency, the company made 15,000 yuan per ton last year and about 20,000 yuan per ton in the first quarter of this year.

He also said that for some car factories, the price of lithium carbonate of 500000 / ton is actually a bit untenable, because it is very difficult for models with prices below 100000 to transfer costs downstream, and some of them may have to digest them by themselves. but car factories are grit their teeth to grab market share this year. It is expected that downstream demand will be good at least in the first half of this year when there is a shortage of effective supply upstream. The future price market of lithium phosphate has been divided in the short term, but it is expected to be relatively consistent next year, that is, it is impossible to quote such a price after the entire supply, which will be beneficial to the development of the industry as a whole.

KuaiBao shows that the long-term net profit of Like in 2021 was 701 million yuan, an increase of 538.17% over the same period last year. On March 28, the company issued a pre-increase announcement for the first quarter of 2022, predicting revenue of 3.35 billion yuan to 3.45 billion yuan in the first quarter of 2022, an increase of 175.77% to 184.00% over the same period last year, and net profit of 280 million yuan to 320 million yuan, an increase of 143.00% to 177.72%. As for the fact that the increase in net profit in the first quarter was lower than that in 2021, the person in charge said that the growth rate in 2021 was even greater because of the low base effect in 2020. With the release of capacity, revenue is expected to rise to another level this year.