Lithium battery electrolyte industry

After years of development, domestic electrolyte has become the most mature of the four materials, and has been exported in large quantities, accounting for more than 50% of the global market share. The recognition of international big factory proves the quality of domestic electrolyte. As the demand for electric cars kicks in, it won't be too hard to develop strong electrolyte leaders. In addition, the popularity of electric cars still needs to reduce the price of power batteries, so the domestic electrolyte replacement space is huge.

I. rapid growth of lithium battery demand

Demand for lithium batteries is growing fast. With excellent performance, lithium battery gradually replaced nickel, hydrogen, nickel, cadmium and other batteries, and rapidly popularized in the field of mobile power supply. In the past few years, global lithium battery production has maintained rapid growth, from 5.95GWh in 2003 to 33.5GWh in 2012, with an average annual growth rate of 21.6%. At present, it is mainly used in mobile phones, laptops, power tools and energy storage and other fields.

China's lithium battery production is growing rapidly. From 2008 to 2013, China's lithium battery production increased from 1.03 billion to 4.77 billion, an increase of 3.6 times, with an annual compound growth rate of 30%.

With the explosive growth of the demand for electric cars, electric bicycles and energy storage batteries, the demand for lithium batteries will continue to grow rapidly in the future. Lithium battery electrolyte market has great potential. From our exchanges, the majority of investors on the lithium battery industry future demand outlook is not much difference.

Two, easy to know, high-quality electrolyte threshold

Electrolyte plays the role of conducting electrons between the positive and negative electrodes in the battery, which is the guarantee for the lithium ion battery to obtain the advantages of high voltage and high specific energy. Electrolyte is made of high purity organic solvent, lithium electrolyte (lithium hexafluorophosphate, LiBF4), additive and other raw materials.

The core of electrolyte is material purification technology and formulation technology. Lithium-ion battery electrolytes typically require less than 20ppm of water and less than 50ppm of free acid. High purity is required, so higher requirements are put forward for the production process and process control of enterprises. Lithium battery is widely used, different technical routes and different application fields of lithium battery will have different requirements on electrolyte, so electrolyte manufacturers need to cooperate with downstream customers to develop, thus forming a relatively stable cooperative relationship. It can be said that every improvement in lithium battery performance is inseparable from the progress of electrolyte and its match.

Improving voltage and stability is the future. In the field of small batteries, high energy density is emphasized. For electrolytes, the future development direction is to increase the working voltage to meet the requirements of higher energy density. At present, the electrolyte voltage has gradually developed from 4.35v to 4.4v, and gradually developed to 4.5v, 4.75v or even 5v. Fluorocarbonate and dinitrile additives have been widely used. In the field of large power batteries, they often work outdoors and require high and low-temperature performance. Due to the poor thermal stability of lithium hexafluorophosphate, it is easy to decompose when heated, so it is necessary to add stabilizer to electrolyte to improve the cycling performance.

Improving voltage and stability is the future. In the field of small batteries, high energy density is emphasized. For electrolytes, the future development direction is to increase the working voltage to meet the requirements of higher energy density. At present, the electrolyte voltage has gradually developed from 4.35v to 4.4v, and gradually developed to 4.5v, 4.75v or even 5v. Fluorocarbonate and dinitrile additives have been widely used. In the field of large power batteries, they often work outdoors and require high and low-temperature performance. Due to the poor thermal stability of lithium hexafluorophosphate, it is easy to decompose when heated, so it is necessary to add stabilizer to electrolyte to improve the cycling performance.

Easier said than done, electrolyte has a high hidden threshold. Based on the above analysis, we believe that the core of lithium battery electrolyte is purification process and formula research and development. It seems that the threshold of entry is not high, but it is easier said than done. Not many manufacturers make high-quality electrolytes to meet the needs of international customers. Continuous research and development to keep up with customers' increasingly high-performance requirements for electrolytes, so there is a high hidden threshold in the industry.

Iii. Excess nominal capacity and concentrated effective capacity

There is serious nominal overcapacity. Based on statistics of lithium power industry and grassroots investigation, it is estimated that the production capacity of lithium battery electrolyte in China is about 100,000 tons. In 2013, the sales volume of electrolyte in China was about 30,000 tons, and the operating rate was only 30%. Assuming that each pure electric vehicle consumes 30kg of electrolyte, a million electric vehicles will add 30,000 tons of electrolyte demand, which is still far less than the current electrolyte production capacity in China.

Effective production capacity is relatively concentrated. The nominal capacity of electrolyte is seriously excess, but the actual output is relatively concentrated. In 2013, China produced about 30,000 tons of electrolyte, among which Jiangsu guotai and Xinzhou state produced about 5,000 tons. The second echelon of Dongguan Shanshan, Tianjin jinniu and tianci also produced 2-3 thousand tons of electrolyte, with high production concentration. According to data from Gaogong lithium power and grassroots research, the market share of the top five electrolyte manufacturers by 2012 was nearly 70%.

The global supply of lithium batteries is highly concentrated. According to IIT statistics, in 2011, Panasonic and sanyo combined output 850 million, accounting for about 23% of the global market share, the market share of the top five manufacturers combined 76.84%, high concentration. If you cannot enter the supply chain of the five customers, you will be out of the vast majority of the market. Due to the high requirements for safety and other requirements, the certification of power batteries is strict and the market is more concentrated. According to IIT statistics, before 2011, the five major battery manufacturers accounted for 94.9% of the total market share of power battery, with a higher concentration.

Customer concentration brings supplier concentration. Generally, only 3-4 suppliers are selected by large international manufacturers. Take Panasonic, the battery supplier of tesla, for example, which had four major suppliers of electrolyte in 2012. Therefore, lithium battery material investment should focus on the industrial chain, light production capacity data.

We believe that due to the lack of technology and customers, China's electrolyte industry has a large number of invalid capacity.

Pattern stability, leading companies profit stability. Due to the lack of technology and customers, a large number of small and medium-sized electrolyte manufacturers can only rely on low-cost competition in the low-end market, it is difficult to keep up with the pace of technological progress in the industry. In the traditional digital battery field cannot obtain the big customer favor, these manufacturers also very difficult in the request higher power battery field to challenge the traditional leading company. Therefore, after the launch of the electric vehicle market, we believe that the electrolyte industry will continue to maintain the existing pattern. Due to the relatively stable pattern, the profitability of leading electrolyte companies remains relatively stable despite the excess capacity, and among the four major lithium battery materials, the profitability is also relatively good. In 2013, the lithium battery industry was in a downturn, and the electrolyte price dropped significantly. Many small and medium-sized manufacturers fell into operating difficulties, while the leading company's gross margin increased instead of decreased.

Electrolyte prices will remain stable in the future. In 2013, the price of domestic lithium hexafluorophosphate dropped sharply, and the current price has dropped from more than 300,000 yuan/ton to about 80,000 yuan/ton. At this price level, according to our calculation, the gross profit rate of lithium hexafluorophosphate is only 10-15%, with poor profitability. Therefore, there is little room for further sharp price decline. Jiangsu guotai announced in November 2013 to terminate the implementation of 300 tons/year lithium hexafluorophosphate project. Therefore, we believe that the price of electrolyte will remain stable in the future.

Iv. With mature technology, domestic electrolyte share continues to increase

China's electrolyte international share continues to increase. Unlike anode materials, the electrolyte does not have the risk of technical route. In the field of power battery, electrolyte will still be the system of lithium hexafluorophosphate + solvent. The manufacturing and research and development level of China's leading electrolyte companies have been rapidly improved in recent years, and the product quality has quickly approached the international advanced level. With the advantage of cost performance, the global market share of electrolyte in China has increased rapidly in recent years, and the products of Jiangsu guotai, xinzhou bang, Tianjin jinniu and other companies have entered the international market. According to China battery net, Chinese electrolyte enterprises sold 22,800 tons of electrolyte in 2012, up 48.70 percent year-on-year. The global market share of Chinese enterprises also increased from 48.70% in 2011 to 51.70% in 2012, and exceeded 50% for the first time.

Under the pressure of price reduction, the share of domestic electrolyte will continue to increase. In the field of digital batteries, south Korean companies have increased their share of the global lithium battery market in the past few years, posing a serious challenge to Japanese manufacturers due to their strong procurement of Chinese raw materials and obvious cost advantage. As a result, Japanese battery companies are accelerating the transfer of capacity to China. In the future, the popularization of electric vehicles still needs further reduction of lithium battery and its materials. Under the pressure of cost, we believe that Japanese enterprises will also increase the purchase of lithium battery materials in China, providing rare development opportunities for China's leading electrolyte companies.

Breakthrough patent blockade, leading companies are expected to benefit from the power battery. According to our understanding, the problem of electrolyte formula patent is also an important reason for Chinese enterprises to go out. At present, some of the electrolyte formula patents are in the hands of Japanese manufacturers such as mitsubishi and ube, which has become a key obstacle to the entry of Chinese electrolyte into the Japanese market. At present, Jiangsu guotai and new zhou bang have increased the research and development of formula. If we can break through the patent blockade of Japan and open the Japanese market, the market space will grow substantially. Given that most of the world's power cells are now made in Japan, breaking the patent blockade will be even more significant.

Five, good electrolyte industry, preferably leading

To sum up, different from the market view, we believe that:

1. The technical threshold of electrolyte is not high, but the recessive threshold is high. Lithium battery electrolyte easy to enter, it is difficult to do well.

2. Electrolyte is a differentiated product, and the nominal capacity is seriously excess, but the effective capacity is much smaller than the actual capacity. Industry structure is stable, regardless of falling costs, the price of electrolyte will also remain stable.

3. Domestic electrolyte technology is relatively mature and recognized by international large factories, which proves the quality of domestic electrolyte. Power battery and digital battery in the electrolyte link there is no technical path risk, research and development of strong electrolyte leading company into the field will not be too difficult. The popularization of electric vehicles still needs the reduction of power batteries, and there is a huge space for domestic electrolytes to replace them.

Therefore, we continue to favor China's lithium battery electrolyte industry, strongly recommend the new zhou bang, at the same time, investors are advised to pay attention to Jiangsu guotai and Shanshan shares. According to our calculation, for every 1000 yuan/ton increase in the electrolyte price, the EPS of Xinzhou zhou bang, Jiangsu guotai and Shanshan increased by 0.011 yuan, 0.006 yuan and 0.002 yuan respectively. For every 1,000 tons of additional sales, the EPS of xinzhoubang, Jiangsu guotai and shanshan increased by 0.047 yuan, 0.026 yuan and 0.018 yuan respectively.

Vi. Risk warning

Sales of electric cars fell short of expectations; Price fluctuation of raw materials; Changes in national industrial policy.

The page contains the contents of the machine translation.