Is it true that lithium batteries are expanding?

With the Advancement of policies and the stimulation of downstream demand, listed companies in the power battery industry have increased investment in production capacity. Statistics show that China's power battery production capacity is 101 GWh at the end of 2016, and it is expected that the total planned production capacity will reach 230 GWh by the end of 2017, an increase of 127 % year-on-year, and power battery production capacity will be concentrated. The reporter combed out and found that in the first half of this year, more than 20 listed companies have issued power battery expansion plans, an increase of 133 % year-on-year; There are also nearly 40 listed companies that have accelerated the deployment of lithium battery businesses through mergers and acquisitions, capital increase, and foreign investment.

According to the Action Plan for Promoting the Development of the Automobile Power Battery Industry, by 2020, China's total production capacity in the power battery industry will exceed 100 billion watt-hours, forming a leading enterprise with a production and sales scale of 40 billion watt-hours or more and having international competitiveness. Insiders said that in the future, our power battery companies have a huge space to expand production, but from the current situation, the power battery as a whole shows a situation of insufficient production capacity at the high end and excess capacity at the low end. Predictably, under the background of gradually tightening policies, the lithium power industry may accelerate the consolidation of shuffling this year, the production capacity structure will be further optimized, and market share will be concentrated in the leading enterprises in the industry.

Subdivision area leading collective expansion

The rising sales of new energy vehicles is the core source of power for lithium battery enterprises to expand production. According to industry estimates, in 2017, China's new energy vehicle sales can reach 800,000 vehicles. Just into June, JAC announced that it would set up a joint venture with Volkswagen to start planning the construction of a new energy vehicle factory with the goal of producing 360,000 vehicles per year. At the same time, Beiqi also announced that Daimler intends to invest strategically in Beiqi Group's Beiqi New Energy Company. It can be expected that as the development of new energy vehicles into a further accelerated stage, the lithium battery industry will also increase production speed.

In fact, since the beginning of this year, the pace of capacity expansion of lithium battery companies has never stopped. The leading companies in the first echelon of lithium battery industry in China are still making big moves. First, it is reported that BYD is considering splitting the independent operation of the core battery business. The industry believes that if the news is true, BYD will not further expand the capacity to supply batteries to other customers. At present, BYD's power battery capacity is about 12GWh. The company expects to reach the capacity of 16GWh ternary battery and lithium iron phosphate battery by the end of this year. Afterwards, it was reported that SAIC Group intends to jointly promote the development of the battery business through its wholly-owned subsidiary and two new power battery companies in the Ningde era. In addition, Guoxuan Hi-Tech held the groundbreaking ceremony of the 4GWh high-energy ternary battery project in Qingdao on May 28th. The total investment of the project is 2 billion yuan. It is expected to be officially put into operation in March 2018. After completion, it will form an annual output value of 6 billion yuan scale.

Prior to the "Automobile Power Battery Industry Standard Conditions (2017)" (draft for comment), the annual production capacity of lithium-ion power battery cells is not less than 8 billion watt-hours. The "Action Plan for Promoting the Development of Automotive Power Battery Industry" jointly issued by the four ministries and commissions this year clarifies that by 2020, key materials and components such as positive and negative electrodes, diaphragms and electrolytes will reach the international first-class level, and the upstream industrial chain will achieve balanced and coordinated development. Form an innovative backbone enterprise with core competitiveness. Under the encouragement of the policy, enterprises in the lithium battery industry chain began to increase the pace of expansion, especially in the lithium battery segment.

As the most critical part of the lithium battery industry chain, the mid-stream material dealer's expansion this year is more frequent. For example, Dangsheng Technology, a leading company in positive materials, has issued a fixed increase plan this year and plans to raise 1.5 billion yuan through the non-public issuance of stocks, of which 1.16 billion yuan will be invested in the third phase of the Jiangsu Dangsheng lithium positive electrode material production base. The project mainly builds a production line of high-nickel multivariate materials with a content of 18,000 tons/year.

At present, in terms of high-nickel multi-material products, Dangsheng Technology only has NCM622 production capacity of about 2,000 tons/year, and the second phase of Jiangsu Haimen Phase II project under construction is expected to be commissioned in the second half of this year. Increase the production capacity of NCM622 by about 4,000 tons / year. Dangsheng said that despite this, the company's production capacity still can not meet market requirements. Therefore, after the completion of the fundraising project, the production capacity of the company's high-nickel multi-material products will increase significantly.

As the leader of the domestic electrolyte industry, Xinzhou State announced on June 2 that the company intends to acquire 100 % equity in BASF battery materials. Regarding the inclusion of the global chemical giant BASF China electrolyte business, Xinzhoubang said that this move will help increase the company's electrolyte product production capacity and expand the company's electrolyte business's international influence.

In the same way, Jiangsu Cathay, whose sales have been leading, is eager to expand its production. On the one hand, Huarong Chemical Co., Ltd., a subsidiary of the company, has an annual output of 20,000 tons of lithium battery electrolytes. On the other hand, the company invested in the establishment of a new energy group company, and plans to invest in a wholly-owned subsidiary in Ningde, Fujian, to build an annual output of 40,000 tons of lithium-ion power battery electrolytes.

"On the one hand, the company will continue to increase investment in the field of lithium ion battery diaphragm, research and development, speed up the expansion of production, and increase the expansion in other high-end functional film areas. "Lithium battery diaphragm field leading star source material, plans to set up a project company in Changzhou Economic Development Zone, Jiangsu Province, invested 1.6 billion yuan to build an annual output of 360 million square meters of lithium battery diaphragm project to further optimize the company's production area layout, expand production capacity.

In the lower reaches of the lithium battery industry chain, Xinwangda, the leader of the domestic lithium electric module, intends to raise no more than 3.246 billion yuan this year for the expansion of consumer lithium battery modules and the construction of power lithium battery production lines. Among them, the construction project of the power lithium battery production line is the focus of this increase. The company plans to use the raised funds of 2.05 billion yuan and plans to build an annual production line of 6GWh power lithium batteries(including 4GWh power lithium battery cores) within two years. Xinwangda estimates that after the birth of the project, the annual operating income of 9.72 billion yuan and net profit of 854 million yuan can be achieved.

In addition, the pilot intelligence of the lithium electric equipment industry will start the construction of the power lithium battery equipment production base project(Phase 1). After the project is put into operation, it is expected that the company's lithium battery equipment production capacity can be expanded by about twice.

Industry reshuffle consolidation

"As with other industries, when lithium battery companies expand intensively, the entire industry will face the problem of low-end overcapacity. "Yeyuhong, a partner in the investment, told reporters that although downstream demand has brought impetus to the expansion of lithium power companies, the increase in volume does not guarantee the synchronization of quality. In fact, the performance, quality and cost of lithium-ion battery products in China are still difficult to meet the demand for the promotion and popularization of new energy vehicles, and there is still a large gap between the basic key materials, technologies and manufacturing processes and the international advanced level.

The Action Plan for the Development of the Automobile Power Battery Industry proposes that by 2020, the energy ratio of the new lithium-ion power battery monomer will exceed 300 watts/kg; The system strives to reach 260 watt/kg of energy, the cost drops to 1 watt/watt-hour, and the use environment reaches -30 °C to 55 °C, which can have 3C charging capacity.

"It is foreseeable that the threshold for the lithium battery industry will become higher and higher in the future, and the requirements will be more stringent. This will, to a certain extent, screen out high-quality enterprises in the industry and eliminate a batch of low-end product producers." Ye Yuhong further pointed out As the relevant departments raise the requirements for battery safety, quality and performance, there will be a tendency for small and weak enterprises to go out and some relatively high-quality enterprises to be merged.

According to the data, there were nearly 60 domestic M&A projects in the lithium battery industry in 2016. Since the beginning of this year, there have been nearly 20 cases in which M&A industry chain companies have expanded their business scope. Such as Changxin Technology, this year disclosed the restructuring plan, plans to acquire 75% stake in BAK Power for 6.75 billion yuan, the latter is mainly engaged in the research and development, production and sales of ternary lithium batteries. After the asset reorganization is completed, Changxin Technology will hold the ratio. Bick Power 84% shares. Changxin Technology is so "infatuated" with BAK Power, precisely because of the synergy between the two in the industrial chain, and the latter's leading position in the field of ternary lithium batteries.

Or based on the optimistic enthusiasm of the ternary lithium battery industry, the transaction has given a huge performance commitment, that is, the credit profit of BAK Power from 2017 to 2019 is not less than 700 million yuan and 1.2 billion yuan respectively. And with a total investment of 1.25 billion yuan, the three-year performance totaled 3.15 billion yuan. Changxin Technology said that after the completion of this transaction, BAK Power will be an important strategic layout of the company's new energy field, deepening the company's penetration in the field of new energy vehicles. If the restructuring is successful, the company will take advantage of BAK Power and Changxin Technology to increase the production capacity of BAK Power to the top three in China.

The lithium-battery industry has also attracted a number of listed companies across the border "lithium" share. For example, the innovative shares of the main packaging and printing business are to acquire the entire equity of Shanghai Enjie, the leading domestic supplier of lithium ion battery isolation film, with a total consideration price of 5.55 billion yuan, and raise supporting funds of no more than 800 million yuan for the first phase of Zhuhai Enjie diaphragm. 5 wet production line construction. After the transaction is completed, the innovative shares will achieve the development of packaging printing business and lithium battery isolation film business two-wheel drive.

Another example is the essence of Weike, which is mainly engaged in traditional textile business. It proposes to acquire 71.40 % equity of Weike Battery, 100 % equity of Weike New Energy, 60 % equity of Weike Energy, and raise supporting funds of no more than 800 million yuan for the target company. Construction projects, etc.. After the transaction is completed, the listed company will add lithium battery business.

In fact, "Lithium-related" has already caused many companies to taste the "sweetness." For example, Skyline, which is mainly engaged in the manufacture of electrical machinery and equipment, is expected to increase its net profit by 380% to 430% in the first half of this year, mainly due to the acquisition of 100% equity of Jiangsu Xintai and the main lithium-ion battery of Jiangsu Xintai. The materials business has been included in the consolidated financial statements of the company since December 2016.

For example, Oriental Precision expects net profit in the first half of this year to increase by 290% to 340%, as the company's new energy battery system solution provider Pride has been included in the company's financial report consolidation since the second quarter of this year.

Mergers and acquisitions have become the most direct way for enterprises to get involved in the lithium battery field and expand the lithium battery business rapidly. Industry insiders predict that the investment and acquisition boom in the lithium battery industry will continue in the second half of this year. The expansion of production has become one of the key tasks for lithium battery companies in 2017.

The page contains the contents of the machine translation.