What is the strength of Lithium Power supplier Yiwei Lithium?

The chairman of Yiwei LiNeng once said, "only if you have the vision and courage to be a world-class product, can you make the best lithium battery in the world." At present, Yiwei Lithium is really popular in the capital market, and the company focuses on the lithium battery industry and chooses to face stronger competitors and continue to expand its own market. Today, let's briefly talk about the strength of Yiwei LiNeng.

Company introduction

Yiwei Lithium Energy started as lithium primary battery. Since 2008, the company has been the largest supplier of lithium primary battery in China, the first in China and the third in the world. However, the market space for lithium primary battery is limited, and after the business reaches the top, the company needs to find a new breakthrough and gradually expand from lithium primary battery to lithium-ion battery. The continuous attention to the forefront of the industry makes the company very forward-looking.

In 2014, cooperation with Nanjing Jinlong began to layout power batteries, taking the bus market as a starting point, and then partnered with SKI to enter the high-end passenger car market. The company's main products are: square lithium iron phosphate battery and large soft package ternary battery. In the new energy vehicle business, the company has formed strategic cooperation with downstream customers such as Daimler, Hyundai Kia, Nanjing Jinlong, Zhengzhou Yutong, Geely Automobile and other well-known automobile manufacturers. At present, Daimler, Hyundai Kia and Xiaopeng are the company's ternary soft bag customers, and in July 2020, it won the favor of BMW with its own ternary square battery.

Growth logic

1. The company's lithium primary battery has a leading competitiveness.

The company's gross profit margin for lithium batteries has been more than 33% in the past 10 years, and has reached 40% in recent years. The company has a certain pricing power. The size of the company is in the forefront, and the comprehensive advantage is also ahead. The original lithium business will maintain excellent development. Under the general trend of the Internet of things, the demand for power in all kinds of Internet of things applications will blow out, including intelligent meters and intelligent transportation. At the same time, other piecemeal markets of the Internet of things are also gradually emerging, such as home intelligent monitoring, smoke alarm, vehicle maintenance alarm and other markets that are relatively easy to standardize. In the long run, lithium primary battery and small lithium-ion battery will be the main mode of power supply.

2. Cylindrical batteries are in short supply.

Starting from Q2 in 2020, the downstream of the company's cylindrical battery business has benefited from a high boom in markets such as power tools and electric two-wheels. the company's cylindrical ternary batteries are in short supply and remain in full production. At the same time, with the improvement of yield, profitability continues to improve, and the estimated net interest rate is more than 10%.

At present, the company has a production capacity of about 300 million ternary cylindrical batteries, which is in short supply downstream, and the company continues to expand its production capacity. It is expected that the deliverable capacity in 2021 will more than double that of this year, and it is expected to reach 800 million, and the shipping scale is expected to increase significantly.

From the perspective of the whole industry, cylindrical batteries have entered a stage of high-quality and higher-than-expected development. According to Murata, the global market for lithium batteries for power tools is expected to demand about 2.4 billion lithium batteries in 2020 and 4.4 billion in 2025, and the industry will maintain steady growth, but Chinese companies will accelerate their penetration and development as the domestic substitution process begins. There is a good demand for power tools and electric two-wheelers this year, with full production and full sales. The top ten power tool manufacturers in the world are all customers of the company, and the demand has been rising. Compared with the batteries made by overseas Japanese and Korean factories, there is no big difference in the performance of the company's products, but the cost is lower.

3. Invest in Si Moore, and the strategy is far-sighted.

After seeing the huge prospect of the e-cigarette industry, in order to seek synergy, Yiwei Lithium was able to buy 50.1% of Smaller's shares for 440 million yuan in 2014; in 2017, in order to support the independent listing of Smaller, the company transferred part of its shares to the original founder of Smallville. By August 2020, when Si Moore was successfully listed on the Hong Kong Stock Exchange, Yiwei LiNeng was the second largest shareholder, with a stake of 32.62%. Seymour's performance soared by 70-75% in 2020 compared with the same period last year. Among them, the performance of 20Q4 is about 12.7-1.38 billion yuan, and after adding back the one-time fee, it is about 13.9-1.5 billion yuan. Given the continued appreciation of the 20Q4 renminbi and the export-oriented business of the company, the actual profit will be even higher than expected. Si Moore performance continues to exceed expectations, we can see that the company is to invest in Si Moore for a long time, with a far-sighted strategic vision.

Summary

Looking at the separation of the business, the company's lithium battery revenue is expected to be 1.934 billion yuan in 2021, an increase of 16% over the same period last year. Considering the relatively stable lithium battery pattern and industry demand, the company is expected to have a gross profit margin of 40% in 2021. The company is actively expanding cylindrical battery capacity, and it is expected that the company's capacity will double in the next 2 years, resulting in incremental performance. The company's consumer battery revenue is expected to be 5.432 billion yuan in 2021, an increase of 70% over the same period last year, with a gross profit margin of 24%. With regard to the power battery business, it is expected that the shipment of power / storage batteries in 2021 is expected to reach 13GWhh, with an operating income of 9.973 billion yuan, an increase of 192% year-on-year and a gross profit margin of 23%.

The company has been ploughing the lithium battery industry for nearly 20 years, the technology reserve is sufficient, the strategic layout of the management is ruthless and stable, and every technology switch is in place. At the same time, it is deeply bundled with Simel International, the leader of the electronic cigarette generation factory, and the power battery has also successfully won orders from international customers such as Daimler, Hyundai Kia and so on. It can be said that the company's business is in full bloom, which is full of surprises.