The New Energy Vehicle Market Is Improving.

- Nov 23, 2018-

The new energy vehicle market is improving. The downstream motor electronic control field will usher in a turning point.

Data show that from January to September this year, the production and sales volume of new energy vehicles increased by 40.2% and 37.7% respectively. Under the policy push, new energy vehicles still face large development opportunities, which will drive the growth of the entire industrial chain. The upstream raw material field is expected to continue, while the middle and lower reaches of the motor electronic control, battery and other links are expected to turn around or further improve.

Raw material prices continue to rise

New three-board enterprises such as Ronghui Lithium, Baijierui, Jinyuan New Materials, Jinchuan Technology, Zhongyi Shares, Jiayuan Technology, Jinli Permanent Magnet are engaged in the production of upstream raw materials for new energy vehicles, including lithium carbonate, lithium hydroxide and cobalt sulfate. , cobalt trioxide, electrolytic copper foil, permanent magnet materials, and the like.

In the first half of this year, the overall performance of these companies increased significantly. The data shows that the above seven companies achieved operating income of 3.05 billion yuan in the first half of the year, a year-on-year increase of 62%; net profit at home reached 706 million yuan, a year-on-year increase of 288%. The sharp increase in performance was mainly due to strong downstream demand and high prices of related products. Taking Ronghui Lithium as an example, the company said that lithium battery new energy market continued to be hot, lithium battery demand remained strong, industry development opportunities were highlighted, downstream lithium battery manufacturers demand for lithium carbonate remained strong, and lithium carbonate prices remained high.

It is worth noting that the performance of cobalt companies has increased tremendously. Jinchuan Technology produces cobalt sulphate, cobalt metal and nickel-cobalt manganese. In the first half of this year, it achieved a net profit of 447 million yuan, a year-on-year increase of 2545.63%. The company said that the price of cobalt metal increased rapidly in the first half of the year, and the price of the company's products increased significantly. In particular, the nickel-cobalt-manganese ternary precursor product completed the product certification of many customers, and the production and sales volume increased significantly compared with the previous year. Jinyuan New Materials produced battery-grade cobalt trioxide, cobalt sulfate and industrial grade lithium carbonate. In the first half of this year, it achieved a net profit of 13.263 million yuan, an increase of 835.34%. The company said that with the development of the new energy industry, the demand for the downstream industry chain has increased; at the same time, since 2017, the cobalt market has rebounded and prices have continued to rise.

Some companies' performance has increased slightly. Baijierui produces lithium salt, which is mainly used in new energy vehicles, energy storage and 3C electronics. The net profit in the first half of the year only increased by 5.88%. The main reason is that the price of raw materials for lithium salt continued to fluctuate at a high level in the first half of the year, and rose slightly. The company has adopted appropriate measures to facilitate the long-term cooperation customers in the sales price.

According to industry analysts, the development prospects of new energy vehicles are good. Cobalt is an important element of cathode materials for power batteries, and demand is growing rapidly. Cobalt prices have risen by about 60% this year and have been adjusted recently, but they are still expected to rise in the fourth quarter, which will still have a positive impact on the performance of related companies.

Prospects for ternary materials are promising

The positive electrode material of the power battery has a great influence on the performance of the battery, and the added value is high. 12 new three-board companies such as Anda Technology, Betray, Tianli Lithium Energy, Oscar Energy, and Golden Lithium Technology produce cathode materials. From the operating situation in the first half of this year, the performance of Sanyuan Materials Co., Ltd. has grown rapidly, while the performance of lithium iron phosphate enterprises has declined to some extent.

The data shows that in the first half of the year, the above 12 enterprises achieved operating income of 4.944 billion yuan, an increase of about 49% year-on-year; net profit of 560 million yuan, an increase of 26.3%. Overall growth is relatively fast. From the ternary materials and the growth of the performance of lithium iron phosphate related companies, there is a big difference. The net profit of seven lithium iron phosphate enterprises such as Anda Technology and Zhuoneng Materials declined in the first half of the year. Among them, three companies suffered losses. In the first half of the year, Anda Technology's operating income decreased by 16.29% compared with the same period of last year; while net profit decreased by 51.05% compared with the same period of last year; gross profit margin decreased from 44.99% in the same period last year to 31.81%. The main reason is that the price of the product lithium iron phosphate has been appropriately adjusted. In addition, the price of battery-grade lithium carbonate, the main raw material, has risen, resulting in an increase in the cost of lithium iron phosphate. In the first half of the year, Jiu Zhao Technology suffered a loss of 4.97 million yuan, and the net profit for the same period last year was 4.57 million yuan. The company said that due to the adjustment of the subsidy policy for new energy vehicles, the production, sales volume and revenue of major products in the first half of 2017 decreased sharply, while the new product lithium iron phosphate A15 is still in the stage of R&D and customer verification.

In sharp contrast, the companies with five ternary materials such as Shanshan Energy and Zhenhua New Materials achieved operating income of 3.05 billion yuan in the first half of the year, up 96.4% year-on-year; net profit was 331 million yuan, up 161% year-on-year. Shanshan Energy produced lithium cobalt oxide and multi-component cathode materials. In the first half of the year, its operating income increased by 88.99% over the same period of last year; its net profit increased by 166.68% over the same period of the previous year. Mainly due to the expansion of the company's production capacity, customer structure optimization, sales of high-end new products, cost control and strengthening. The main products of Zhenhua New Materials are lithium cobalt nickel manganese ternary, lithium cobalt oxide and composite ternary. The operating income in the first half of the year increased by 168% and the net profit increased by 564%. Mainly due to the surge in demand from corporate customers, sales of power ternary materials increased significantly, with sales increasing by 2,453 tons year-on-year, an increase of 424.41%.

According to industry insiders, the demand for ternary cathode materials has increased significantly and the performance of lithium iron phosphate companies has declined, mainly due to policy drivers. The new energy vehicle subsidy policy introduced in 2017 has increased the battery energy density requirement, and the ternary materials can meet the high performance demand, so the demand has increased significantly, which has promoted the growth of Sanyuan Cathode Materials. The penetration rate of the future ternary materials market will further increase and the development prospects are good.


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