Hengdian East Magnetic Discharge Billion New Lithium-ion Battery Production Line

Hengdian Dongmao(002056) announced on the evening of December 18 that it plans to invest in an annual output of 100 million 18650 high-capacity lithium-ion power batteries. The total investment of the project is 425,399,800 yuan, of which 245,399,800 yuan is newly invested in fixed assets and 18.0 million yuan in New liquidity. Investment funds are entirely self-financed by the company.

The construction of the project is scheduled to start in December 2015 and will be completed and put into trial production in June 2016. After the completion of the project construction, it is expected that it will reach an annual sales revenue of 812 million yuan, an annual profit of 135.8713 million yuan, and a static investment recovery period(including the construction period of half a year) of 2.36 years.

According to the latest statistics, 72,378 new energy vehicles were produced in China in November 2015. Among them, 30,111 are pure electric passenger vehicles, 7,510 are plug-in hybrid passenger vehicles, 21,804 are pure electric passenger cars, 9,042 are pure electric special vehicles, and 3,911 are plug-in hybrid passenger cars.

The cumulative output of new energy vehicles in January and November was 279,300 vehicles. If the November blowout continues in December, it is expected that the total production for the whole year will exceed 330,000 vehicles, and may even reach 350,000 vehicles, an increase of about four times that of 2014. The rapid growth of new-energy vehicles is the result of the dual resonance of policy and market, and shows a good development trend in the background of the gradual slowdown of sales growth in the entire automotive market.

Under good circumstances, BYD, Jianghuai, Beiqi, Kangdi, Zhongtai, Yutong, Zhongtong, Jinlong, CSR and other companies all want to take advantage of the situation to increase sales and expand market share, but in fact they are falling into a lack of production capacity. The reasons for the subsequent weakness are basically the same. The lack of supply of power batteries at the front end limits the scale of production capacity of the entire vehicle company.

Industry analysis, in addition to BYD is its own production of power batteries, supply is guaranteed, and other vehicle companies are from the battery companies, generally faced with insufficient supply, long supply cycle, small negotiating space, product quality instability. Imperfect ,after-sales service and other difficulties. In front of suppliers have always been very strong vehicle enterprises, in the start-up era of new energy vehicles, but had to bow to the power battery companies, in order to stabilize the supply and effort. The wave of new energy vehicles that began in the second half of 2014 has made the entire industrial chain of upstream and downstream enterprises unexpected, focusing on insufficient production capacity planning, lagging investment plans, and unbalanced supply and demand relations. The more upstream this demand relationship is transmitted, the slower the speed and the longer the period. Global lithium-ore companies were still digesting their inventories last year, with no clear plans to upgrade production capacity. This year, they faced inventory shortages, supply shortages, and stock hoarding and speculation by some companies, resulting in daily prices and even market prices. The coming year of 2015 is a year of explosive growth for new energy vehicles, with all companies in the industrial chain sharing the dividends of the industry's rapid development. At the same time, this year is also a year when the supply of power batteries is seriously insufficient. Obtaining goods should be the common pressure and common goal of power battery companies and vehicle companies.

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