Research and analysis of lithium battery industry status

In recent years, benefiting from the rapid growth of China's new energy (electric) vehicles and energy storage demand, China's lithium battery industry, especially the lithium battery power industry, has ushered in an explosive period of development, and the long-term prospect of the industry is optimistic. Therefore, many listed companies have layout lithium battery, trying to grab a share. For a time, lithium battery concept stocks have emerged, true and false difficult to distinguish. For this purpose, this paper specially sorts out the listed companies in the lithium battery industry and analyzes their financial conditions, so as to help readers to have a deeper and more thorough understanding of the current situation of the industry. This series of lithium battery industry enterprises are divided into: upstream resources and raw materials enterprises, mid-stream battery materials enterprises and downstream battery enterprises, this is the upstream lithium resources and raw materials chapter.

According to EVTank analysis, China's lithium battery shipments have reached 74 percent in 2017. 8Gwh, accounting for 52 percent of global shipments. 1%; Among them, vehicle power lithium battery (EVLIB) shipments up to 38. 0Gwh, accounting for 65 per cent of global vehicle power lithium battery (EVLIB) shipments. 4%. In 2016, China's lithium battery shipments were 30. 5Gwh, up from 17 in 2015. 0 GWH.

The growth in lithium battery shipments has also led to rapid growth in demand for upstream lithium compounds. According to the preliminary statistics of lithium branch of China nonferrous metal industry association, the world lithium and its derivatives output in 2017 is equivalent to about 23 lithium carbonate equivalent. 540,000 tons, up 2.1 percent year-on-year. 5%; Among them, China's lithium salt production 12. 340,000 tons, up 4.3 percent year-on-year. 5%; Global lithium consumption in 2017 is equivalent to about 23 lithium carbonate. 70,000 tons, up about 15% year-on-year; The global supply of lithium compounds is in a tight balance all year round. The price of lithium carbonate increases from RMB 120,000 and 30,000 yuan/ton at the beginning of the year to RMB 160,000 and 70,000 yuan/ton, and even reaches RMB 180,000 yuan/ton at the highest. Among them, the highest increase of lithium carbonate battery level reached 47. Industrial grade lithium carbonate up 54%, or 52. 73%.

The rapid rise in the price of lithium salt raw materials such as lithium carbonate not only pushed the expansion of the original enterprise capacity, but also attracted a large number of outsiders to enter, a battle for lithium salt is slowly beginning.

The preparation of tianqi lithium

Tianqi lithium is one of the world's five largest lithium suppliers. Its main business includes: development of solid lithium resources, production of lithium chemical products and lithium trade. The main products 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, tianqi lithium experienced a surge in performance, helped by high prices and increased demand for lithium carbonate and other minerals: sales of lithium concentrate increased 29 percent from the previous year. 84 percent, or 40 percent. 720,000 tons, the average sales price was 27. 04%; Sales of lithium chemicals were up 33 percent from a year earlier. 28%, 3. 240000 tons; Annual operating income of 54. 700 million yuan, up 40 percent from a year earlier. 09%; The combined gross margin of the product is 70. 14 per cent (see table I); Realize a net profit attributable to shareholders of the parent company 21. 4.5 billion yuan, up 4.1 percent from a year earlier. 86%.

Good performance and high lithium product price bring more confidence and more ambition to tianqi lithium. According to the financial report, tianqi lithium will vigorously promote the capacity expansion in 2018: suining anju lithium carbonate project with 20,000 tons is stepping up the feasibility study and other preparatory work, with a total of 4. The 80,000-ton battery single-water lithium hydroxide construction project is being carried out in an orderly way, including the first phase 2. 40,000 tons are expected to be completed by the end of 2018, and the second phase will be completed by the end of 2019. Jehong base and zhangjiagang base continue to implement technical reform, chongqing tianqi metal lithium and lithium profile production line in the repair optimization. Plus the lithium capacity that we have right now. 40,000 tons per year, including 0. 50,000 tons of lithium hydroxide and 20,000 tons. 90,000 tons of lithium carbonate, it is estimated that the lithium production capacity of tianqi lithium will exceed 100,000 tons by 2020.

In addition to maintaining confidence in the market, tianqi lithium expanded so because it was prepared for its own competitiveness.

First, there are plenty of resources. Tianqi lithium currently has solid lithium resources and sets foot in salt lake resources. Thales, which is controlled by thales, owns the largest and best plantation lithium pyroxene minerals currently mined in the world. According to BehreDolbearAustraliaPty, a private company in Australia. (Limited) issued reserves assessment report, as of September 30, 2016, the total resources of greenbush lithium mine is 165.1 million tons, equivalent to 8.33 million tons of lithium carbonate equivalent; Lithium reserves total 86.4 million tons, equivalent to 5 million tons of lithium carbonate equivalent.

Its wholly owned subsidiary, shenghe lithium, owns the right to mine the cuola lixiacite deposit in sichuan's yajiang county, which has an ascertained ore volume of 1,971 tons. 40,000 tons, equivalent to the amount of lithium oxide resources 255,744 tons, lithium oxide average grade 1. 3%, equivalent to about 630,000 tons of lithium carbonate equivalent.

Second, financial preparation. In 2017, the asset-liability ratio of tianqi lithium was only 40. 39% (see table 2), the flow ratio is 3. 11. The ratio of monetary assets to current assets is as high as 70. 24%, meaning that its monetary assets are twice its current liabilities and there is no debt servicing pressure. Its monetary capital stands at 55. 2.4 billion yuan, an increase of 2.2 billion yuan in fund-raising activities. 6.4 billion yuan, an increase of 3 billion yuan in business activities. 9.5 billion yuan; Clearly, tianqi lithium has prepared financially for capacity expansion.

Third, cost control and research input. In 2017, research and development investment of tianqi lithium was 28.55 million yuan, an increase of 342% year-on-year. A big increase in r&d spending, coupled with strict control of other expenses (see table 3), is clearly conducive to improving its gross margin and competitiveness.

Tianqi lithium has prepared well for future competition. And as a domestic rival, ganfeng lithium is not backward.

The layout of ganfeng lithium

Jiangxi feng LiYe as global supplier of metallic lithium, lithium compounds and its business covers the upper lithium extraction, middle lithium lithium compounds and metal processing and the downstream lithium battery production and recovery, including: upstream of lithium resource extraction, processing of lithium compounds, metal lithium, lithium battery and lithium secondary production use, and recycling and other five major business.

In 2017, the performance of ganfeng lithium increased significantly: its operating revenue increased from 28 in 2016. 4.4 billion yuan increased to 4.3 billion yuan in 2017. 8.3 billion yuan, an increase of 5.4 percent. 12%; The net profit attributable to shareholders of the listed company increased from 4 percent in 2016. 6.4 billion yuan increased to 1.4 billion yuan in 2017. 6.9 billion yuan, an increase of 21.6 billion yuan. 36%. The company's total assets rose from 38 in 2016. 9 billion yuan increased to 8 billion yuan in 2017, a growth rate of 11 billion yuan. 02%; Net worth increased from 24 in 2016. 8.8 billion yuan increased to 40 billion yuan in 2017. 3.7 billion yuan, an increase of 6.2 percent. 25%.

Similar to tianqi lithium, ganfeng lithium has begun its own upstream capacity expansion. On February 25, 2018, ganfeng lithium said that its new 20,000-ton lithium hydroxide production line has been completed and put into production and is in the trial stage. 1, which is still under construction. The 750,000 ton lithium carbonate production line is scheduled to start production in the second half of 2018. With the current capacity of nearly 40,000 tons, the lithium salt processing capacity will reach nearly 80,000 tons by the end of 2018.

Ganfeng lithium has developed sufficient resources for the expansion of production capacity. Currently, ganfeng lithium has six high-quality lithium resources in Australia, Argentina, China and Ireland:

One is MountMarion, the second largest lithium pyroxene mine in the world. The resource quantity controlled and inferred by MountMarion according to the JORC rule was 2.7 million tons of LCE, and the average lithium oxide content was 1. 37%. The company has entered into a long-term underwriting agreement, which can underwrite all lithium concentrates produced by MountMarion from 2017 to 2020, and not less than 49% after 2020.

The second is Mariana, a lithium-potash lake in Argentina's sarta province. According to the resource estimation report prepared by Geos mining, the Mariana project has 1,127 million cubic meters of lithium brine reserves and 1,866 kiloton LCE of lithium resources under control and inference. Preliminary exploration results show that Mariana has homogeneous geochemical composition and can be extracted at a relatively low cost through the traditional solar evaporation process.

The third is cauchari-olaroz, a lithium lake in Argentina's Jujuy province. The Cauchari-Olaroz project has a lithium brine reserve of 11. Eight million tons of LCE. The company has entered into an exclusive distribution agreement, purchasing the American lithium, accounting for 80% of the actual output of 50% of the first stage of cauchari-olaroz resources. Cauchari-olaroz is scheduled to start production in late 2019 or early 2020.

The fourth is Pilgangoora, one of the world's largest new pyroxene mines in western Australia. The Pilgangoora project has 4.9 million tons of lithium pyroxene reserves and an average lithium oxide content of 1. 25%. The company has entered into a long-term exclusive sales agreement to obtain the annual supply of 160,000 tons of lithium raw materials, with an initial period of 10 years. Currently, the Pilgangoora project is scheduled to start production in the second half of 2018.

Fifth, Avalonia, a lithium pyroxene mine in Ireland, is in the early stage of exploration.

Sixth, ningdu heyuan mine, located in ningdu county, ganzhou city, jiangxi province, has a lithium resource of 100,000 tons of LCE and an average lithium oxide content of 1. 03%.

Financial preparation: at the end of 2017, the asset-liability ratio of ganfeng lithium was 49. 45% (see table 4), with a flow ratio of 1. 62, healthier and less debt-paying pressure; The cash is 22. 3.7 billion yuan, relatively sufficient; Cost controls are also good (see chart 5).

Salt lake shares advance

See the two giants wantonly expansion, backed by the salt lake resources of the salt lake shares are not to be outdone.

As an old listed enterprise in qinghai, the lithium carbonate business of the company is part of the comprehensive utilization of the resources of the salt lake. It is mainly operated by the indirectly controlled subsidiary, lankelithium, and currently has the capacity of 10,000 tons of lithium carbonate.

In 2017, salt lake shares achieved operating income of 116 million yuan. 9.9 billion yuan, up 1.2 percent from the previous year. 88%; Among them, lithium carbonate business only realized 7. Operating income of 4.8 billion yuan, but net profit of 4. Two billion yuan, a 56 percent profit margin. 15% with a gross margin of 68. 59% (see table 7).

Undoubtedly, the best way to improve the profitability of enterprises is to increase the production capacity of lithium products and its proportion in the revenue.

Then, on December 27, 2017, salt lake co announced capacity expansion project: salt lake shares proposed planning starting project of 50000 tons/year battery grade lithium carbonate, among them, the blue division LiYe proposed in the existing 10000 tons/year lithium carbonate device based on the expansion of 20000 tons/year battery grade lithium carbonate project, after expanding production scale will reach 30000 tons/year lithium carbonate; In addition, salt lake byd will build a new battery lithium carbonate project with an annual output of 30,000 tons. After the expansion, the capacity of salt lake will reach 60,000 tons.

According to financial reports, the salt lake shares of the first expansion is based on the chaerhan salt lake lithium resources development advantages. The annual output of salt lake share potash fertilizer production is calculated according to 5 million tons, and the annual discharge of old halogen is about 200 million cubic meters/year, and the lithium ion concentration is about 200-250 mg, that is, the annual discharge of old halogen lithium resources is equivalent to 200-300 thousand tons of lithium chloride; The raw material liquid provides a reliable resource guarantee for the development of lithium industry.

Second, technological advantage. Lankelithium has an annual output of 10,000 tons of lithium carbonate project. In 2010, it introduced the Russian brine extraction technology of adsorption method, and has broken through the key technology of extracting lithium salt from brine with high magnesium and low lithium.

Third, cost advantage. Relying on the rich lithium resources in qarhan salt lake and the public facilities in the industrial park of salt lake co., LTD., the lithium adsorption and extraction technology, the production cost of lithium carbonate has a relative advantage compared with its peers, and it is also suitable for the large-scale layout of lithium industry.

At present, in view of the great debt repayment pressure of salt lake shares (see table 8), the expansion of lithium carbonate capacity will still increase the debt repayment pressure in the short term. However, after the release of capacity, the high gross margin of lithium industry will generate sufficient cash flow and profit for it and eventually improve its financial situation.

Ya hua group's ambition

Different from the situation of the first three, yahua group mainly engages in the business of civil explosion and lithium, and also continuously expands its overseas, transportation and military business. Among them, lithium business mainly covers the protection of upstream lithium resources, the production and sales of basic lithium products such as lithium carbonate and lithium hydroxide in the middle reaches.

In 2017, yahua group achieved an operating income of 23 percent. 5.8 billion yuan, up 4.9 percent from a year earlier. 33%; Among them, the operating income of lithium products is 6. 9.8 billion yuan, accounting for 2.9 percent of the total operating income. 59 percent, an increase of 100 percent. 92%; Total profit realized 3. 3.6 billion yuan, up 7.3 percent from a year earlier. 21%; The net profit attributable to shareholders of the listed company is 2. 3.8 billion yuan, up 7.8 percent from a year earlier. 11%; Earnings per share: 0. 25 yuan, up 78 percent from a year earlier. 57%.

Obviously, lithium products contribute more to yahua group's operating income and less to its profit (see table 9).

In this case, ya hua group still increase the capacity of lithium products. According to the financial report, in 2018, ya hua group will advance the first phase of ya 'an project with 20,000 tons, and carry out the preparation work for the second phase with 20,000 tons of lithium hydroxide. After the completion of the project, in addition to the current xing sheng lithium (wholly owned) production capacity of 6000 tons of lithium hydroxide, guoli lithium salt (holding 56 shares). It has a capacity of 5,000 tons of lithium hydroxide and 7,000 tons of lithium carbonate, and around 2019, it will have a lithium salt capacity of 3. 80,000 tons, which will be 50,000 tons by 2020. 80,000 tons of lithium capacity.

One of the bases for ya hua group to increase lithium production capacity is its lithium resources guarantee. According to the financial report, yahua group keeps enriching the reserves of lithium resources for the future development of lithium industry and provides sufficient lithium resources for the development and expansion of lithium industry. The second is the lijiagou lithium pyroxene deposit in aba, sichuan, which was developed in cooperation with sichuan energy investment co., LTD. 21.85 million tons; The third is to participate in the Australian Core company to obtain the exclusive right to sell lithium ore. It is worth mentioning that the Core company has 100% fe loch lithium mineral rights, the mining area is about 400 square kilometers, is located in the northern territory of Australia, by BP33, FarWest, Ahoy and rolled up four ore composition, the mine is located in the plain area, the surrounding road of water and electricity facilities, and close port, mining obstacle is small, rolled up the grid plot has won JORC standard exploration report, still has a history of 25 has not yet been tested pegmatite ore and several large-scale pegmatite targets for drilling.

Resources were secured, but the finances did not appear to be adequately prepared. Although the asset-liability ratio of ya hua group is low, its solvency is generally (see table 10), and its cash reserve is not enough to complete the expansion of ya 'an project, so it is bound to take on debt, which may have a negative impact on its project construction.

Jiangte motor expectations

For jiangte motor, which is committed to building a relatively complete lithium electric new energy industry chain from lithium ore - lithium carbonate - cathode material - new energy motor - new energy vehicle, the development of lithium industry is imperative.

In 2017, jiangte motor realized 33 percent of its operating income. 6.5 billion yuan, up 1.2 percent year-on-year. 75%; Total profit 3. 2.9 billion yuan, up 39 percent year-on-year. 06%; Net profit attributable to parent company 2. 8.1 billion yuan, up 4.2 percent year-on-year. 58%; Among them, lithium mining and dressing is 100 million yuan, lithium carbonate is 1. At 6.3 billion yuan, the amount is small, but its gross margin is the highest (see chart 11). Obviously, its lithium business capacity to enlarge the enterprise to enhance profitability.

Therefore, regardless of the strategic need, or the need for profitability, it is imperative to increase lithium capacity.

Jiangte motor recently announced that its subsidiary silver lithium company's annual output of 5,000 tons of lithium carbonate production line has met the design requirements, the success of the production, the use of lithium mica to produce 10,000 tons of lithium carbonate and lithium concentrate production 1. The production line of 50,000 tons of lithium carbonate will also be completed in the first half of this year, and the production capacity of the company will reach 30,000 tons after completion.

According to the financial report, jiangte electric machinery has mastered rich lithium resources. In terms of lithium porcelain and stone, it has 5 mining rights and 8 exploration rights. It is the single largest shareholder of Tawana, an australia-listed company with a 50% interest in the BaldHill project in western Australia, which covers an area of nearly 800 square kilometers and has nearly 20 million tons of high-grade lithium resources and abundant reserves.

Although, the expansion of lithium capacity will increase its financial pressure (see table 12); But, for tomorrow, jiang te motor has to fight.

Weihua shares follow up

The traditional main business of huawei is the production and sales of medium (high) density fiberboard, forest planting and sales. In 2016, the company increased the capital and controlled zhiyuan lithium and wanhong gaoxin. The company's business extended to lithium salt, rare earth products and other new energy materials, thus forming the development pattern of new energy materials business and wood-based panel business. Zhiyuan lithium is mainly engaged in the development, production and sales of basic lithium salt products, with the design capacity of 40,000 tons of battery-grade lithium carbonate, lithium hydroxide monohydrate and lithium chloride annually.

According to the financial report, zhiyuan lithium is still in the construction stage in 2017, which has little impact on the performance of weihua group (see table 13).

On the evening of March 29, the company announced that zhiyuan lithium, a wholly-owned subsidiary of the company, has developed the first lithium salt project of 40,000 tons. The 30,000-ton production line was officially put into production, and its first phase was 1. 30,000 tons including 8,000 tons of battery-grade lithium carbonate and 5,000 tons of lithium hydroxide; The remaining two. The capacity of 70,000 tons will be completed by the end of the year.

In terms of lithium resource security, in addition to the lithium supply from yabao mine in the United States, wah shares has also signed a long order supply cooperation with another Australian enterprise, and is also promoting the incorporation of jinchuan oyinuo mining to obtain relevant resources.

Obviously, as a new entrant, weihua stock has sufficient financial conditions to develop lithium and other emerging businesses, but it also takes great uncertainty risks.

Not only weihua shares, but also more enterprises continuously enter the lithium carbonate field: yongxing special steel plans to invest in yifeng county of jiangxi province to build lithium electric materials (battery lithium carbonate and lithium hydroxide) with an annual output of 30,000 tons, and to build mining and mineral processing projects with an annual output of 2.4 million tons. Xinhaiyi plans to participate in the construction of battery lithium carbonate project with an annual output of 40,000 tons; Jinyinhe has invested in the comprehensive utilization project of lithium mica for battery grade lithium carbonate and high value-added by-products (phase I).

The soaring demand and high price of lithium resources such as lithium carbonate have attracted a lot of people. The first entrants occupy more high-quality lithium resources (lithium ore and salt lake) and have stronger competitiveness; Newcomers are more enthusiastic but more uncertain. The next two to three years, as the design capacity, such as lithium carbonate tight balance between supply and demand will be broken, volatile prices will face more fierce, only with a lot of high quality lithium resources, higher gross margin and healthier financial structure of enterprises, such as: day qi feng LiYe LiYe, gan, only makes it easier for firms to win in the fierce competition and development.

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