The production and sales of new energy vehicles continue to exceed expectations and the annual report of lithium power enterprises is brighter than expected [institutional review]

The performance of lithium battery enterprises in 2021 is outstanding, and the positive 2022 rising trend at the beginning of 2022 is still up to January 22, 2022. 19 lithium battery industry chain enterprises have made performance forecasts for 2021, of which 15 have increased in advance, 4 have turned losses into profits, and 13 have a year-on-year increase in net profit of more than 100%. Looking back in 2021, the booming production and sales of new energy vehicles promoted the growth of demand for lithium materials, and the profits of enterprises with the advantages of technology and integration grew rapidly under the simultaneous rise of volume and price. Since 2022, the prices of negative electrodes, diaphragms and electrolytes have remained stable, while the prices of positive electrodes have been continuously pushed up due to the influence of lithium salts. Looking forward to the whole year, under the support policies of various countries and the supply optimization of automobile enterprises, the new energy vehicle market is expected to maintain rapid growth, and the demand for lithium electric main materials is still strong.

The penetration rate of new energy vehicles continued to rise in 2021, and the prices of lithium battery main materials continued to rise. Domestic sales of new energy vehicles in 2021 were 3.521 million, an increase of 158% over the same period last year. The penetration rate of new energy vehicles has reached 13.5%. It is expected to promote the industry to maintain high growth by increasing the annual subsidy policy of 8.1pct.2022 and abolishing the subsidy ceiling of 2 million vehicles. Under the continued tightening of carbon emissions policies, sales of new energy vehicles in the eight European countries reached 1.813 million in 2021, an increase of 69 per cent over the same period last year. Sales of new energy vehicles in the United States reached 652000 in 2021. 2022 is the first year of electric pick-up trucks in the United States, and sales are expected to double year-on-year, driven by a variety of models and policies.

Battery side: from January to November 2021, the global installed capacity of power batteries was 250.8 GWH, an increase of 112% over the same period last year. Among them, Ningde era had the largest installed capacity in the world, with a market share of 31.8%. In 2021, the installed capacity of domestic power batteries was 154.5 GWH, an increase of 143 percent over the same period last year, of which lithium iron phosphate batteries accounted for 51.7 percent, an increase of 13.3pct over the same period last year. We expect that with the hot sales of iron-lithium models and the promotion of technologies such as CTP and blade batteries, the proportion of more cost-effective iron-lithium batteries is expected to maintain a high level.

Material end: in 2021, the proportion of domestic ternary 8-series materials increased to 36%, an increase of 12pct over the same period last year, with a significant trend of high nickelization. The outbreak of terminal demand led to a structural shortage of iron phosphate, and the climbing price of superimposed lithium salt pushed up the price of lithium iron phosphate in 2021. Under the double control of double carbon and energy consumption, graphitization is limited to a certain extent, which restricts the production expansion of negative electrode. Affected by the surge in demand and the blank period of production expansion, lithium hexafluorophosphate increased by more than 400% in 2021. Additives and other additives are also affected by double control, the price is higher, and the cost pressure pushes up the price of electrolyte throughout the year. The price of the diaphragm first stabilized and then rose in 2021, the lower reaches of the price conflict landed later, and the supply of the diaphragm link affected by equipment in 2022 is still tight.

Investment advice: policy-supply continues to optimize, new energy vehicle-end sales of enterprises that pay attention to the pattern with good valuation continue to be exuberant under high prosperity, and we are optimistic about the leading target of better pattern and reasonable valuation. It is suggested that attention should be paid to: 1) the import substitution of consumer battery, the price increase is smooth, and the pattern is excellent. Recommend power tool battery (azure lithium core), consumption 3C lithium electricity domestic leader (Zhuhai Guanyu); 2) continuous shortage of supply and demand: positive recommendation Rongbai technology, Dangsheng technology, diaphragm industry chain recommended Enjie shares and Xingyuan material; 3) integrated layout advantages: Huayou Cobalt Industry, PUTLai, Tianchi materials.

Risk hint: the risk of policy change; the price of raw materials fluctuates sharply; the production and sales of electric vehicles are not as expected.