Lithium battery industry ushered in the development of the explosion period Lithium salt battle began to kick off

The high demand for lithium resources such as lithium carbonate and high prices have attracted a batch of distributors, first-in-comers occupy more high-quality lithium resources (lithium ore and salt lakes) and are more competitive; while newcomers have greater enthusiasm but more uncertainty.

In recent years, benefiting from the rapid growth of China's new energy (electric) vehicles and energy storage demand, China's lithium battery, especially the power lithium battery industry, has ushered in a period of development, and the long-term prospects of the industry are optimistic. Therefore, many listed companies have laid out lithium batteries in an attempt to grab a piece of cake. For a time, lithium battery concept stocks have taken off, it is difficult to distinguish between true and false. To this end, this article specifically combs the listed companies in the lithium battery industry and analyzes its finances to help readers understand the current situation of the industry.

According to institutional analysis, in 2017, China's lithium battery shipments have reached 74.8Gwh, accounting for 52.1% of global shipments; among them, automotive power lithium battery (EVLIB) shipments reached 38.0Gwh, accounting for the global automotive power lithium battery (EVLIB)) Shipments of 65.4%. In 2016, China's lithium-power battery shipments were 30.5Gwh, and in 2015 it was 17.0Gwh.

The growth in lithium battery shipments has also driven the rapid growth in demand for upstream lithium compounds. According to the preliminary statistics of the China Nonferrous Metals Industry Association Lithium Branch, in 2017, the world lithium and its derivatives production equivalent to lithium carbonate equivalent of about 235,400 tons, an increase of 21.5%; of which, China's lithium salt production was 123,400 tons, an increase of 43.5%; In 2017, global lithium consumption was equivalent to about 237,000 tons of lithium carbonate, an increase of about 15% year-on-year; global lithium compound supply was in a tight balance throughout the year, and the price of lithium carbonate rose from 12,000 yuan/ton at the beginning of the year to 16, 70,000 yuan/ton, even reached a maximum of 180,000 yuan/ton; among them, battery-grade lithium carbonate rose by 47.54%, industrial grade lithium carbonate rose by 52.73%.

The rapid increase in the price of lithium salt raw materials such as lithium carbonate not only promoted the expansion of the capacity of the original enterprises, but also attracted a large number of outsiders to enter, and a battle for lithium salt was slowly kicking off.

Tianqi Lithium Industry

Tianqi Lithium is one of the top five lithium ore suppliers in the world. Its main business includes solid lithium resources development, lithium chemical production and lithium mining. The main product varieties include chemical-grade lithium concentrate, technical grade lithium concentrate, industrial grade lithium carbonate, battery grade lithium carbonate, industrial grade lithium hydroxide, battery grade lithium hydroxide, anhydrous lithium chloride, lithium metal and other lithium chemical products. .

In 2017, benefiting from high prices such as lithium carbonate and increased demand, Tianqi Lithium's performance increased significantly: lithium concentrate sales increased by 29.84% from the previous year to 407,200 tons, and the average sales price increased by 27.04% compared with the previous year; The sales volume of chemical products increased by 33.28% compared with the previous year, reaching 32,400 tons; the annual operating income was 5.47 billion yuan, an increase of 40.09% over the same period of the previous year; the comprehensive gross profit margin of products was 70.14%; the net profit attributable to shareholders of the parent company was 2.145 billion Yuan, an increase of 41.86% over the same period of the previous year.

Good performance and high prices of lithium products have brought greater confidence and greater ambition to Tianqi Lithium Industry. According to the financial report, Tianqi Lithium Industry will vigorously promote capacity expansion in 2018: Suining 20,000 tons of lithium carbonate project is stepping up a feasibility study and other preparatory work. Australia's total of 48,000 tons of battery-grade lithium hydroxide monohydrate is under construction. In the orderly implementation, the first phase of 24,000 tons is expected to be completed by the end of 2018, the second phase will be completed by the end of 2019; the injection and flood base and the Zhangjiagang base will continue to implement technical transformation, and the Chongqing Tianqi metal lithium and lithium profile production line will be optimized and improved. Together with the current lithium salt production capacity of 34,000 tons/year, including 0.5 million tons of lithium hydroxide and 29,000 tons of lithium carbonate, it is estimated that by 2020, Tianqi lithium salt production capacity will exceed 100,000 tons.

In addition to maintaining confidence in the market, Tianqi Lithium is more prepared based on its own competitiveness.

First, resource reserves are sufficient. Tianqi Lithium currently possesses solid lithium resources and is involved in salt lake resources. Its controlling Thaleson has the largest and best quality spodumene mine currently being mined in the world - Greenbushes of Western Australia (Green Bush Mine). According to the reserve assessment report issued by BehreDolbear Australia Pty. Limited, as of September 30, 2016, the total resources of the Green Bush Lithium Mine was 165.1 million tons, equivalent to 8.33 million tons of lithium carbonate equivalent; The total reserves of the mine is 86.4 million tons, equivalent to 5 million tons of lithium carbonate equivalent.

Its wholly-owned subsidiary Shenghe Lithium owns the mining rights of the Tula Lithium Gemstone Mine in Yajiang County, Sichuan Province. The mine identified 171.74 million tons of ore, equivalent to 255,744 tons of lithium oxide resources, and an average grade of lithium oxide of 1.3%, equivalent to lithium carbonate equivalent, about 630,000 tons.

Second, financial preparation is sufficient. In 2017, Tianqi Lithium's asset-liability ratio was only 40.39%, and the current ratio was 3.11. The ratio of monetary assets to current assets was as high as 70.24%, which means that its monetary assets are twice that of current liabilities, and there is no debt repayment pressure. Its monetary fund amounted to 5.524 billion yuan, fundraising activities increased by 2.264 billion yuan, and operating activities increased by 3.095 billion yuan; apparently, Tianqi Lithium Industry has made sufficient financial preparations for capacity expansion.

The third is cost control and research input. In 2017, Tianqi Lithium's R&D investment was 28.55 million yuan, an increase of 342% over the same period last year. While vigorously increasing R&D investment, we strictly control other expenses, which is obviously beneficial to its improvement of gross profit margin and competitiveness.

Tianqi Lithium Industry has fully prepared for future competition. As an old rival in China, Haofeng Lithium Industry is not behind.

The layout of Yanfeng Lithium Industry

Qifeng Lithium is one of the world's top five lithium compound and lithium metal suppliers. Its business covers upstream lithium extraction, midstream lithium compounds and lithium metal processing, and downstream lithium battery production and recycling, including upstream lithium resource extraction, lithium compounds, five major businesses, including deep processing, metal lithium production, lithium battery production, and lithium secondary utilization and recycling.

In 2017, Haofeng Lithium's performance increased significantly: operating income increased from 2.844 billion yuan in 2016 to 4.383 billion yuan in 2017, a growth rate of 54.12%; net profit attributable to shareholders of listed companies from 2016's 464 million yuan Increased to 1.469 billion yuan in 2017, the growth rate was 216.36%. The company's total assets increased from 3.809 billion yuan in 2016 to 8 billion yuan in 2017, with a growth rate of 110.02%; net assets increased from 2.488 billion yuan in 2016 to 4.037 billion yuan in 2017, with a growth rate of 62.25%.

Like Tianqi Lithium, Haofeng Lithium also began its own upstream capacity expansion. On February 25, 2018, Haofeng Lithium said that its newly built 20,000-ton lithium hydroxide production line has been completed and put into production, which is in the trial phase. The 175,000 tons of lithium carbonate production line still under construction is scheduled to be put into operation in the second half of 2018. At the end of 2018, its lithium salt processing capacity will reach nearly 80,000 tons.

Haofeng Lithium has made sufficient resources for capacity expansion. At present, Haofeng Lithium owns six high-quality lithium resources in Australia, Argentina, China, and Ireland:

One is MountMarion, the world's second-largest spodumite mine. The amount of resources that MountMarion controls and infers according to the JORC rules is 2.7 million tons of LCE, and the average lithium oxide content is 1.37%. The company has entered into a long-term underwriting agreement to cover all lithium concentrates produced by MountMarion from 2017 to 2020 and to underwrite not less than 49% of lithium concentrates after 2020;

The second is Mariana, a lithium potash lake located in the province of Salat, Argentina. According to a resource estimate prepared by Geos Mining, the Mariana project has a lithium-containing brine reserve of 1,127 million cubic meters and controls and infers lithium resources at 1,866 kilotons of LCE. Preliminary exploration results indicate that Mariana has a homogeneous geochemical composition that can be extracted at a relatively low cost through traditional solar evaporation processes;

The third is Cauchari-Olaroz, a lithium salt lake located in the province of Jujuy, Argentina. The Cauchari-Olaroz project has a lithium-containing brine reserve of 11.8 million tons of LCE. The company entered into an underwriting agreement to purchase 80% of the actual production of 50% of the Cauchari-Olaroz resources in the Americas. Cauchari-Olaroz plans to start production in late 2019 or early 2020;

The fourth is Pilgangoora, one of the world's largest new spodumene mines in Western Australia. The Pilgangoora project has a sulphurite reserve of 4.9 million tons of LCE and an average lithium oxide content of 1.25%. The company entered into a long-term underwriting agreement to supply 160,000 tons of lithium raw materials per year with an initial term of ten years. Currently, the Pilgangoora project is scheduled to go into production in the second half of 2018;

Fifth, Avalonia, a spodumene mine in Ireland, is currently in the early stages of exploration;

The sixth is the Ningdu Heyuan Mine, located in Ningdu County, Cangzhou City, Jiangxi Province. The Ningdu Heyuan Mine has a lithium resource of 100,000 tons of LCE and an average lithium oxide content of 1.03%.

In terms of financial preparations, at the end of 2017, Yanfeng Lithium's asset-liability ratio was 49.45%, and the current ratio was 1.62, which was healthier and insolvent; cash was 2.237 billion yuan, which was relatively sufficient; cost control was also good.

Salt Lake shares attack

Seeing the expansion of the two giants, the Salt Lake shares backed by salt lake resources are not to be outdone.

Salt Lake is a well-established listed company in Qinghai. Its lithium carbonate business is part of the comprehensive utilization of salt lake resources. It is mainly operated by Lanke Lithium, an indirect holding subsidiary, and currently has a capacity of 10,000 tons of lithium carbonate.

In 2017, Salt Lake's operating income reached 11.699 billion yuan, an increase of 12.88% over the previous year; among them, lithium carbonate business only achieved 748 million yuan of operating income, but net profit reached 420 million yuan, profit margin as high as 56.15%, gross profit margin reached 68.59%.

Undoubtedly, increasing the production capacity of lithium products and increasing their share of revenue is the best way to improve the profitability of enterprises.

Therefore, on December 27, 2017, Salt Lake announced the capacity expansion plan: Salt Lake is planning to start a 50,000 tons/year battery-grade lithium carbonate project, among which Lanke Lithium plans to have 10,000 tons/year of carbonic acid. On the basis of the lithium plant, the expansion of the 20,000 tons/year battery-grade lithium carbonate project will increase the production scale to 30,000 tons/year of lithium carbonate; in addition, the salt lake BYD will build a new annual production capacity of 30,000 tons/year of battery-grade lithium carbonate. After the expansion, the production capacity of Salt Lake will reach 60,000 tons.

According to the financial report, the expansion of Salt Lake's shares is based on the development of lithium resources in Chaerhan Salt Lake. The annual production of potash fertilizer in Salt Lake is calculated according to the output of 5 million tons per year. The annual emission of old halogen is about 200 million cubic meters per year, and the lithium ion concentration is about 200-250 mg, that is, the annual lithium resources in the old halogen are equivalent to lithium chloride. It is 200,000-300,000 tons; this raw material liquid provides a reliable resource guarantee for the development of the lithium industry.

The second is the technical advantage. Lanke Lithium has an annual output of 10,000 tons of lithium carbonate project. In 2010, it introduced the Russian adsorption method to extract lithium salt technology, which has broken through the key technology of extracting lithium salt from high magnesium and low lithium brine.

The third is the cost advantage. Based on the abundant lithium resources of Chaerhan Salt Lake and the public facilities of the Salt Lake Co., Ltd. industrial park, Lanke Lithium has a comparative advantage in the production cost of lithium phosphate adsorption technology, which is also suitable for the large-scale layout of the lithium industry.

At present, given the pressure on the repayment of salt lake shares, the expansion of lithium carbonate production capacity will continue to increase its debt repayment pressure in the short term. However, after the release of capacity, the high gross profit margin of the lithium industry will generate sufficient cash flow and profits for it, and ultimately improve its financial position.

Yahua Group's ambition

Different from the situation of the first three, Yahua Group's main business is a civil explosion and lithium business, while also expanding overseas, transportation, military business; among them, lithium business mainly covers upstream lithium resource protection, middle reaches of lithium carbonate, lithium hydroxide Production and sales of basic lithium salt products.

In 2017, Yahua Group achieved operating income of 2.358 billion yuan, an increase of 49.33% over the same period of the previous year; among them, lithium product operating income was 698 million yuan, accounting for 29.59% of total operating income, an increase of 100.92%; total profit reached 336 million Yuan, an increase of 73.21% over the same period of last year; net profit attributable to shareholders of listed companies was 238 million yuan, an increase of 78.11% over the same period of the previous year; realized earnings per share of 0.25 yuan, an increase of 78.57% over the same period of the previous year.

Obviously, lithium products contribute a lot to the revenue of the Yahua Group, while its contribution to profits is relatively small.

Under this circumstance, Yahua Group still adds capacity to lithium products. According to the financial report, Yahua Group will promote the first phase of the Ya'an project by 20,000 tons in 2018, and at the same time carry out the preparatory work for the construction of the second phase of 20,000 tons of lithium hydroxide; after the completion of the project, plus the current Xingyu lithium industry (wholly-owned) 6000 Tons of lithium hydroxide capacity, Guoli lithium salt (holding 56.26%) 5,000 tons of lithium hydroxide and 7,000 tons of lithium carbonate capacity, around 2019, it will have a lithium salt capacity of 38,000 tons, will have 58,000 tons in 2020 Lithium salt production capacity.

One of the strengths of the Yahua Group's plus lithium capacity is its lithium resource guarantee. According to the financial report, Yahua Group has continuously enriched the lithium resources reserve for the future development of the lithium industry, providing sufficient lithium resource protection for the development and expansion of the lithium industry: First, through a long-term supply agreement with the important lithium concentrate production company in Australia, Galaxy Lithium Industry To provide the most basic resource guarantee for the company's stable production of lithium salt; the second is the Lijiagou spodumene mine in Sichuan Aba, which was developed in cooperation with Chuan Energy Investment. The proven resource reserves are 251,185 tons of lithium oxide; the third is to participate in Australia. Core obtained access to its lithium mine underwriting rights. It is worth mentioning that Core has 100% mining rights in the Phoenix lithium mine, with a mining area of approximately 400 square kilometers. It is located in the Northern Territory of Australia and consists of four mines BP33, Far West, Ahoy and Grantz. The mine is located in the plain area. The surrounding hydropower roads are complete and close to the port. The mining obstacles are small. The Grants block has been reported by the JORC standard. There are still 25 historical pegmatite mines that have not yet been tested and several large scales. The pegmatite target is to be drilled.

Resources are guaranteed, but finances are not yet fully prepared. Although the asset-liability ratio of the Yahua Group is low, its solvency is generally low, and the cash reserve is not enough to complete the expansion of the Ya'an project. It is bound to be borrowed, which may have a negative impact on its project construction.

Jiangte Motor's expectations

For Jiangte Electric, which is committed to building a new lithium-ion energy industry chain from lithium ore-lithium carbonate-positive materials-new energy motors-new energy vehicles, it is imperative to develop the lithium industry.

In 2017, Jiangte Motor achieved operating income of 3.365 billion yuan, an increase of 12.75%; total profit of 329 million yuan, an increase of 39.06%; net profit attributable to the parent company of 281 million yuan, an increase of 42.58%; 100 million yuan, lithium carbonate is 163 million yuan, the amount is still small, but its gross profit margin is the highest. Obviously, the amplification of its lithium business capacity will help companies to enhance their profitability.

Therefore, whether it is strategic needs or profitability, it is imperative to increase the capacity of lithium.

Jiangte Motor recently announced that the subsidiary's silver lithium company's annual production capacity of 5,000 tons of lithium carbonate production line has reached the design requirements, successfully reached production, the application of lithium mica to produce 10,000 tons of lithium carbonate and the application of lithium concentrate to produce 15,000 tons of lithium carbonate production line It will also be completed in the first half of this year. After the completion of the production, the company's lithium carbonate production capacity will reach 30,000 tons.

According to the financial report, Jiangte Motor has a wealth of lithium resources. In the lithium-ceramic mine, it has 5 mining rights and 8 exploration rights. It is the single largest shareholder of Australian listed company Tawana, which owns Western Australia Barr. The Bald Hill project is 50% owned. The mine area of the project is nearly 800 square kilometers. It has explored nearly 20 million tons of high-grade lithium resources and has abundant resources.

Although the expansion of lithium production capacity will increase its financial pressure; however, for tomorrow, Jiang Te Electric has to fight.

Follow-up of Weihua

The traditional main business of Weihua is the production and sales of medium (high) density fiberboard, forest planting and sales. In 2016, the company controlled the Zhiyuan Lithium Industry and Wanhong Gaoxin through a capital increase. The company's business extended to new energy materials such as lithium salt and rare earth products, thus forming a pattern of new energy materials business and wood-based panel business. Zhiyuan Lithium is mainly engaged in R&D, production, and sales of basic lithium salt products. The designed production capacity is 40,000 tons of battery-grade lithium carbonate, lithium hydroxide monohydrate, and lithium chloride.

According to the financial report, Zhiyuan Lithium Industry is still in the construction period in 2017, which has little impact on the performance of Weihua.

On the evening of March 29, Weihua announced that the first 13,000-ton production line of the company's wholly-owned subsidiary Zhiyuan Lithium's 40,000 tons of lithium salt project was officially put into operation. The first phase of 13,000 tons includes 8,000 tons of battery-grade lithium carbonate and 5000 tons of lithium hydroxide; the remaining 27,000 tons of capacity will also be completed by the end of the year.

In terms of lithium resource protection, in addition to the supply of Yabao lithium mines in the United States, Weihua has also signed long-term supply cooperation with another Australian company and is also promoting the inclusion of Jinchuan Aino Mining to obtain relevant resources.

Obviously, as a new entrant, Weihua has sufficient financial conditions to develop new businesses such as lithium, but it also risks greater uncertainty.

More than Weihua shares, there are more enterprises continue to enter the field of lithium carbonate: Yongxing Special Steel plans to invest in the construction of 30,000 tons of lithium-ion materials (battery grade lithium carbonate and lithium hydroxide) in Yifeng County, Jiangxi Province, construction Annual production capacity of 2.4 million tons of mining and mineral processing projects; Xinhaiyi plans to participate in the construction of an annual output of 40,000 tons of battery-grade lithium carbonate project; Jinyinhe invested in the construction of lithium mica to prepare battery-grade lithium carbonate and high value-added by-product comprehensive utilization project (Phase I) Wait.

The high demand for lithium resources such as lithium carbonate and high prices have attracted a batch of distributors, first-in-comers occupy more high-quality lithium resources (lithium ore and salt lakes) and are more competitive; while newcomers have greater enthusiasm but more uncertainty. In the next two or three years, with the release of design capacity, the tight balance between supply and demand of lithium carbonate will be broken, and the price will face more intense fluctuations. Only rich in high-quality lithium resources, higher gross profit margin, and healthier financial structure. Enterprises such as Tianqi Lithium Industry and Yanfeng Lithium Industry are more likely to win and grow stronger in the fierce competition.

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