Why does Chinese lithium battery manufacturing industry appear "chubby" physique?

Recently, zte was sanctioned by the us department of commerce. The most obvious manifestation in the Chinese market is the popularity of chip manufacturing. China's chip manufacturing sector has been mentioned numerous times in the news network, and related stocks in the domestic stock market should also rise. But can such policy promotion at the government level have a short-term, intuitive and positive impact on the chip manufacturing industry? Bajie has already written about the current problems of the mobile phone industry in previous articles, so I won't repeat them today. But also because of the zte incident, eight sister can not help but think of zte and a very similar enterprise, of course, is also a hot new energy concept: ningde era. So, let's see today, China's lithium battery manufacturing status in the end?

Ningde times was approved by the issuing committee on April 4, 2018. The IPO is expected to be completed in May. From the initial release of the prospectus to the successful meeting, less than 5 months before and after.

Both the "unicorn index for greater China" released by hurun in December 2017 and the "China unicorn enterprise development report 2017" released by the torch center of the ministry of science and technology in March this year are listed in ningde times. The company, less than seven years old, has been valued at $100 billion.

In 2011,Zeng yuqun founded the ningde era. But as early as around 2000, Zeng yuqun and Liang shaokang and Chen tanghua, who also belong to the same old company -- SAE system, a world-renowned independent hard disk supplier, set up AmperexTechnologyLimited (hereinafter referred to as "ATL"), a 3C battery manufacturer registered in Hong Kong and with factories in Dongguan.

ATL is not only the battery supplier of apple mobile phone, but also a well-known enterprise in the industry for solving the problem of repeated charging and discharging of battery packs, and for its excellent safety and stability in the "battery explosion door" of Samsung mobile phone in 2016. ATL's technical advantages undoubtedly benefit the development of Ningde era. What made the Ningde era famous was becoming a supplier to BMW brilliance in 2012. At that time, there were few battery companies in China, and BYD, a company with a good reputation, did not sell batteries abroad, but only for its own mass production cars. And the Chinese government's supportive subsidy policy makes foreign companies more inclined to find local battery companies.

After 2012, Ningde era has become the power battery supplier of Yutong bus, saic, baic and other domestic automobile head enterprises.

By the end of 2017, Ningde times had 3,425 r&d technicians, 907 domestic patents and 17 overseas patents, and 1,440 domestic and overseas patents under application. In the same period, guoxuan high-tech co., LTD., which is also a head battery enterprise, has 1,114 employees, while other second-line battery enterprises have 600-700 employees.

According to the data of China industry information network, in the first nine months of 2017, the global shipments of power batteries reached 42.6GWh. Domestic power battery shipments in the first three quarters were 32.02Gwh, with a year-on-year growth of 42.1%. Among them, the output of the top ten power battery enterprises reached 24.48 Gwh, accounting for 76.5% of the total, which was basically the same as the concentration ratio in 2016.

Meanwhile, the research data of Gaogong lithium battery show that in the past three years, the sales volume of power battery system in Ningde era was 2.19GWh, 6.80GWh and 11.84GWh respectively. In 2017, it took up 30% of the Chinese market, surpassing BYD, Panasonic and other well-known domestic and foreign enterprises, and won the global sales crown of power battery.

However, no matter starting from its own products or the raw materials involved in products, Ningde era, which has been singing all the way, has more or less similar problems with zte, namely, the lack of control over core technologies and raw materials.

Technology plate by Japan TDK strong contain

TDK co., ltd. is a global well-known electronic industry brand, mainly providing electronic components for 3C products. In the questions from the issuance committee on April 4, 2018, in addition to the routine due diligence inquiries, a number of questions related to the relevance of TDK and Ningde era. On the one hand, it is due to the examination of the ratio of foreign shares of listed private enterprises; on the other hand, it also reveals the relationship between TDK and Ningde times.

According to the prospectus, TDK is the DE facto controller of ATL. From April 2014 to June 2016, Zeng yuqun, chairman of Ningde times, served as vice President and senior vice President of TDK. In October 2015, ATL transferred 15% of Ningde times' equity to Ningbo lianchuang. After the equity transfer, ATL will no longer directly or indirectly hold the equity of the company.

In addition, during the reporting period, TDK directly or indirectly held Shanghai Yuequan, the diaphragm supplier of Ningde times. Ningde times also sold power batteries, energy storage battery systems, lithium battery materials and provided consulting services to TDK. The audit committee asked Ningde times to respond to the association between the actual controller of the company, ATL and TDK, and whether Ningde times is currently under the actual control of TDK and whether there are equity entrustment and other interest-related issues.

Government support "too much"

According to public information, on January 15, 2016, the second capital increase of Ningde times involved state-owned China merchants bank no.3 and Guangfa xinde. As of September 2016, after the completion of the third capital increase, CMB no.3 became the fifth largest shareholder with 24.0524 million shares holding 4.38% of Ningde times. Direct or indirect ownership of Ningde era also CDB power, Ming rui no. 7, sdic innovation and other enterprises.

In addition, during the reporting period, the national development fund, the management committee of Jiangsu zhongguancun science and technology industrial park and China merchants leasing provided a large amount of funds in the form of "equity and real debt", low-interest loans and financial leasing, involving a total amount of over 1 billion yuan. In addition, during the reporting period, the non-operating revenue of Ningde times was 711.1904 million yuan, 189 million yuan and 186.555 million yuan respectively. Except for the 2017 subsidy, the remaining revenue was mainly from the government.

In terms of policy, apart from the macro environment that the state encourages the development of new energy vehicles, some detailed rules and regulations also directly benefit domestic battery manufacturers. In March 2016, the new energy automobile production enterprises and products access management rules (revised edition) "new energy vehicles recommended directory and the auto motive battery specification conditions bundle, this means that most of the models into the recommended directory, shall conform to the requirements of the aforesaid documents of form a complete set of power battery at the same time to obtain appropriate subsidies. This virtually excluded foreign battery companies, boosting the development of domestic enterprises.

Lithium battery raw material field layout too late

When it comes to the manufacture of lithium battery, its main raw materials for cobalt and lithium metal.

In the case of cobalt, global cobalt consumption was about 115,000 tonnes in 2017, up nearly 11 per cent year-on-year, according to antaike. Among them, the battery industry accounted for as much as 59%.

China's cobalt smelting output in 2017 was nearly 66,000 tons, up about 14 percent year-on-year, according to antaike. At present, the output and production capacity are mainly concentrated in large enterprises such as Huayou, green beauty, Jinchuan, Tengyuan, Jana, Klixin, Maolian, Hanrui, Xiongfeng and Kaishi.

There is no sign of Ningde era in terms of the current shareholding of these 13 companies. As for glencore, molybdenum, Sheridan and vale, which have global price leadership, the likelihood of buying a stake today is almost zero.

In the case of lithium metal, lithium salt prices continued to rise in 2017.

In terms of global lithium resource development, the pattern of "four brines and three ores" emerged in 2017.

Among the original brine lithium extraction giants, except that FMC added 8,000 tons of lithium hydroxide capacity, SQM, Yabao and Xinxing kept the capacity and output unchanged. In terms of ore, besides tianqi lithium and tilisen mines, new mines such as MtCattlin and ganfeng MtMarion of galactic resources have been accelerated.

Although Ningde times and these companies can not produce a substantial share of the intersection, but also went down the curve of resource distribution.

On March 10, 2018, *ST jean announced that because it could not meet the financial needs of the operation and project construction of the north American lithium, sun jien international, a wholly-owned company, intends to transfer the entire equity of its north American lithium to Canadian times, a wholly-owned company of Ningde times. After the transaction, Ningde times will acquire the controlling stake of the north American lithium.

The announcement shows that the main business of north American lithium is lithium mining, mineral processing and smelting. After the acquisition of north American lithium in 2016, the company optimized and upgraded the production process of north American lithium. In July 2017, the company started the trial operation of the plant. Currently, the company is in the trial production stage of lithium oxide concentrate and has not yet entered the commercial production stage. Meanwhile, lithium in North America has completed the 43-101 feasibility report, covering the investment analysis and construction plan of lithium carbonate. At present, we are still optimizing the development plan of lithium carbonate project and exploring how to reduce the construction cost in the feasibility study report.

*ST jean has released an announcement on March 3 that Ningde times intends to invest 50 million Canadian dollars to increase the capital of north American lithium, and another 16 million Canadian dollars to subscribe the convertible bonds of north American lithium. Before the increase in capital and share, jinian international held 36592364 ordinary shares of north American lithium, with a holding ratio of 68. 61% Canadian Quebec government owns 3751369 ordinary shares of lithium in North America, with a ratio of 7. Canadian time holds 12989600 ordinary shares of north American lithium, accounting for 24 percent. 36%.

But from the overall layout of raw materials, Ningde era is still in a weak position.

Bajie believes that although the analysis here is the situation of Ningde company, it also represents the current situation of China's lithium battery manufacturing industry to a large extent. If the control of core raw materials and core technologies cannot be mastered in our own hands, if we cannot accelerate the realization of industrial closed-loop, if we don't realize the seriousness until something goes wrong with the industrial chain, or if the last resort still relies on pressure from the government... Zte, then, will not be the last to be badly beaten in China's manufacturing transformation.

The page contains the contents of the machine translation.