Since this year, upstream and downstream companies in the lithium battery industry chain have announced fundraising plans, hoping to invest in new production line construction projects through capital operation to expand production capacity. The demand in the downstream market is soaring, and new technologies are accelerating the iteration. Lithium battery companies in the world keep up with the development trend and frequently raise funds to expand production plans.
Relevant data shows that since the beginning of this year, among more than 70 upstream and downstream companies in the battery industry chain, more than 20 companies have raised funds through capital market financing such as initial public offerings, non-public offerings of stocks, and convertible corporate bonds. And many plans are used to expand production, with a total amount exceeding 90 billion RMB. 2022 to 2023 is a window period for the scale, industrialization and commercialization of new battery technologies. The layout of the industrial chain has been significantly accelerated. Battery companies have raised funds to build new production lines. It is expected that related projects will be accelerated.
1. Lithium battery companies increase investment to expand production capacity
On October 18, Shanshan released the 2022 annual non-public issuance plan, planning to issue no more than 672 million shares to no more than 35 specific investors, with a total raised capital of no more than 6 billion RMB. The raised funds are intended to be invested in the project of an integrated base for lithium-ion battery anode materials with an annual output of 300,000 tons and to supplement working capital. As one of the lithium ion battery anode material companies, Shanshan's main business is battery anode materials, and its products involve artificial graphite, natural graphite and silicon-based anodes.
With the rapid development of the new energy vehicle industry, the market demand for battery anode materials has shown an explosive growth trend. At present, the company's graphitization own production capacity and the production capacity of negative electrode materials are seriously mismatched, the proportion of outsourced processing is relatively high, and the production capacity of anode materials for lithium batteries is increasingly tight.
It is hoped that the self-sufficiency rate of graphitization will be improved through the investment project of the raised funds, the cost economy of integrated production will be highlighted, and the supply stability of the company's anode materials will be strengthened. Since this year, upstream and downstream companies in the battery industry chain have announced fundraising plans, hoping to invest in new production line construction projects through capital operation to expand production capacity.
Battery companies EVE, Sunwoda, CALB and other planned investment projects include power batteries and energy storage batteries, and the selected technical directions are also blooming. There are lithium iron phosphate batteries, cylindrical lithium batteries, semi-solid lithium batteries, high-power solid-state lithium batteries, etc. At the same time, lithium battery cathode and anode material companies such as Shanshan, electrolyte companies such as Shinghwa Advanced Material, lithium salt companies such as Salt Lake, and copper foil companies such as Huachuang New Material have also stated that they will further expand their production capacity.
2. Lithium battery demand rises and value rises
The sales of electric vehicles in China exceeded expectations, the demand for energy storage is hot, and leading companies are accelerating production expansion. At the same time, the new technology of battery is iteratively accelerated, and the leading enterprises of battery lead the industry progress. The electrochemical system upgrade takes the positive electrode as the core, the ternary takes the ultra-high nickel and high voltage as the trend, and the lithium iron phosphate takes the manganese iron lithium as the direction. In addition, the progress of sodium battery technology has also accelerated significantly.
The period from 2022 to 2023 is the window period for the implementation of new battery technologies, and the layout of the industrial chain will be significantly accelerated. It is estimated that by 2025, the global sales of new energy vehicles will reach 18 million, and the demand for power batteries will reach 1.059 billion kWh. Under the carbon neutralization goal, the cost of energy storage lithium batteries will gradually decrease, the business model will gradually become clear, and the demand for energy storage batteries in many application scenarios will gradually increase.
As the world's largest producer and manufacturer of lithium batteries, China will gain greater development opportunities. The market prospects are improving, and the enterprise value of lithium batteries has risen. Among the recent IPOs of battery companies, portable power station companies, power battery cathode material companies, etc., the raised funds have exceeded the actual funds required by the investment project plan. According to data from the third-party information platform Oriental Fortune, since October, the battery sector has risen from 3014.15 points to the current 3260.43 points, showing an overall upward trend.
3. The prosperity of lithium battery industry chain companies is rising
The boom in the global new energy vehicle and energy storage markets has prompted the performance of upstream and downstream companies in the lithium battery industry chain to flourish. On October 17, ZEC, a battery cathode material company, disclosed its performance forecast for the first three quarters of 2022. From January to September, the company achieved a net profit attributable to shareholders of listed companies of 980 million to 1.02 billion RMB, an increase of 719 million RMB to 759 million RMB, an increase of 276.16% to 291.51% year-on-year.
ZEC said that benefiting from the rapid development of the new energy industry during the reporting period, strong customer demand, the company has sufficient orders on hand. The revenue of the ternary cathode material business has increased significantly, and the combined effect of the company's appropriate procurement strategy and the advantages of production resources in the western region has brought about an increase in profitability. A-share listed companies such as EVE, Tianqi Lithium, Tibet Mineral, Yongxing Special Steel, etc. have also released their results for the first three quarters, all showing varying degrees of growth.
However, it is worth noting that due to the rising prices of raw materials for lithium batteries this year, the performance of some companies has also been affected to a certain extent. However, under the trend of maintaining hot market demand, the performance is being revised. Taking EVE as an example, in the first half of the year, the company's revenue was about 14.926 billion RMB, a year-on-year increase of 127.54%, while the net profit attributable to the parent in the same period was about 1.359 billion RMB, a year-on-year decrease of 9.08%.
The gross profit margin of lithium batteries also declined. In the first three quarters, EVE's net profit attributable to its parent reached about 2.474 billion RMB to 2.659 billion RMB, a year-on-year increase of 10% to 20%. EVE said that the prices of major upstream materials rose sharply, the company adjusted its product pricing mechanism, and the profitability of each product line was better restored. With the new factory and new production line entering the mass production stage, the company's shipment scale has grown rapidly.