Entering Tesla’s supply chain, this material company “makes a profit”!
“Strong gambling”
This is another “strong gambling” lithium battery industry chain enterprise.
Although the chairman was halfway through his career, he took the lead in entering the Tesla supply chain, which has extremely strict technical requirements.
The founder and chairman of FY shares said, “In 2002, I started my business as a university professor, and many people felt sorry at that time. I did have a lot of things that I didn’t understand at the time, but I took that step bravely. .”
At present, FY shares are “the only domestic supplier that can supply NCA precursors for Panasonic batteries in a stable and large-scale”.
In the first half of this year, a particularly eye-catching report card was delivered, and the company’s net profit increased by 12 times year-on-year!
According to the performance of the interim report released on August 17, revenue in the first half of this year was 903 million yuan, a year-on-year increase of 207.87%; net profit attributable to owners of the parent company was 53.919 million yuan, a year-on-year increase of 1204.01%.
At the beginning of August, FY shares were listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange, and the stock price rose 640% on the first day of listing!
Why is the performance “so great”?
No. 1 export volume of NCA precursors, In the first half of this year, China’s new energy vehicle wholesale and retail both exceeded one million vehicles. From January to June, the wholesale of new energy passenger vehicles was 1.087 million, a year-on-year increase of 231.5%; the retail volume was 1.001 million, a year-on-year increase of 218.9%.
It is estimated that the forecast sales of new energy passenger vehicles this year will be raised to 2.4 million.
From January to June this year, the total installed capacity of power batteries reached 52.5GWh, a cumulative increase of over 200% year-on-year.
Among them, the installed capacity of ternary batteries was 30.2GWh, accounting for 57.5%, a cumulative year-on-year increase of 139.0%; the installed capacity of lithium iron phosphate batteries was 22.2GWh, accounting for 42.3%, a cumulative year-on-year increase of 368.5%.
Opportunity
Benefiting from the high boom in the downstream new energy vehicle field, driving the rapid development of the lithium-ion battery industry, which in turn drives the strong demand for ternary precursors, the company’s production capacity continues to be released, and the company’s product sales increase significantly.
The total operating income in the first half of the year achieved a year-on-year Significant growth.
FY shares is a leading domestic manufacturer of lithium battery NCA cathode material precursors. The 2020 annual report shows that its main business is NCA ternary precursors, NCM ternary precursors, cobalt sulfate, spherical nickel hydroxide, and other businesses. The income ratios are: 51.35%, 33.67%, 8.6%, 6.34%, 0.04%.
In terms of product sales, we have always adhered to the key account strategy. As early as 2017, it began to sell high-nickel NCA ternary precursors to Tesla supplier Panasonic for Panasonic to manufacture high-energy-density ternary lithium batteries and use them in Tesla electric vehicles.
In the end, it became the only domestic supplier that can supply NCA precursors for Panasonic batteries in a stable and large quantity.
At present, the domestic high-nickel NCA precursor products are mainly exported, and FY shares will maintain the first domestic export volume of NCA precursors from 2018 to 2020.
In addition, it has established good cooperative relations with mainstream lithium battery or cathode material manufacturers at home and abroad, and expanded in-depth cooperative relations through continuous technological innovation and process optimization, stable product quality and cost advantages.
Lack of advantage
However, despite the strong momentum and increasing orders from major customers, the company does not have an advantage in terms of production capacity when looking at the entire industry.
According to data, there are 5 domestic companies with a total annual output of ternary precursor materials exceeding 30,000 tons in 2020. Among them, Zhongwei’s ternary precursor output exceeds 70,000 tons, which is an absolute leader. In 2020, there are 10 domestic enterprises with a production of ternary precursor materials exceeding 10,000 tons.
Obviously, among the TOP5 companies, there are no FY shares. Therefore, breaking through the bottleneck of production capacity has become a top priority for the company.
IPO plan
This time, a total of 366 million yuan was raised through the IPO, which is planned to be used for the annual production of 50,000 tons of high-end ternary lithium battery precursors (NCA, NCM) and 10,000 tons of battery lithium hydroxide projects.
- On the one hand, the projects invested in this IPO will be used to expand the production capacity of high nickel ternary cathode material precursors and optimize the production process, which will help the company solve the problem of insufficient production capacity in the future;
- On the other hand, it can give full play to the company’s non-ferrous metal resources Comprehensive utilization of technical advantages in the field, extracting battery-grade lithium hydroxide from lithium battery cathode waste, and preparing ternary cathode materials for downstream customers, will help the company improve resource utilization efficiency and optimize product structure.
Since the cost of raw materials in the precursor industry is relatively large, how to reduce costs is the key to a company’s leading position in the market. FY shares use its own core technology to purify crude products to obtain a high-purity sulfate solution for the production of ternary precursors, which can effectively reduce manufacturing costs.
Compared with traditional processes that use nickel sulfate and cobalt sulfate crystals as raw materials, this technology reduces the requirements for raw materials and reduces the purchase cost of nickel and cobalt raw materials.
At the same time, this technology also makes full use of other effective components in nickel and cobalt resources to extract the manganese sulfate and zinc sulfate required by NCM and spherical nickel hydroxide ensure the self-sufficiency of raw materials to the greatest extent, which can further enhance the core competitiveness of the company’s products.
In the next 5 years, the technical path of ternary main lithium iron phosphate supplemented by the technology will not change. It is estimated that by 2025, the demand for ternary precursors will reach 1.6 million tons, of which the demand for power batteries will be close to 1.54 million tons.
Driven by both the popularity of high nickel and the increase in the share of integrated enterprises, the profitability of the ternary precursor industry will continue to rise.
