EV battery graphite quality?, page-54

below is a google translate of an article on the top three Chinese producers of anode materials. bw them these three control well over half the global market for anode materials. presumably we must be currently supplying our graphite to these guys rather than direct to catl/byd?

interesting stats on their margins, pressure to expand and also the increasing portion of dirty synthetic graphite in their mix...


beirutai (835185.NQ), Shanshan shares (600884.SH), and Putailai (603659.SH) are the leading companies in the industry. Since the beginning of this year, their stock prices have risen by 104%, 71% and 89% respectively. Among them, Putai The market value of the coming surpassed 100 billion in July.

◆Putelai’s performance in recent years has been better than that of Beiterui and Shanshan, and its profitability is better than that of its peers. On the one hand, in terms of revenue structure, the company’s negative electrode materials account for a larger proportion, and the business has a high gross profit margin. In the business of cathode materials. On the other hand, due to the company's product positioning in the high-end market, its average sales price and net profit per ton are leading the industry

◆According to the product structure, the anode material can be divided into artificial graphite, natural graphite and other new materials. From the perspective of industry development trends, after the rise of power batteries, artificial graphite has gradually become the mainstream. In the past two years, major domestic major anode manufacturers have also deployed graphitization. As new production capacity has been put into operation one after another, the proportion of external graphitization of major anode manufacturers has gradually decreased.

◆With the increasing pressure of industry competition, if the gross profit margin of negative electrode companies in the future wants to reach a steady state of more than 30%, a self-supply rate of graphitization of more than 50% or standard configuration; considering the investment per 10,000 tons of graphitization of 100 to 200 million yuan , The financial barriers in the negative electrode industry are gradually strengthening

Putailai leads in profitability and production capacity is lower than other leaders

The rapid growth of the lithium battery application market has led to an increase in the demand for lithium batteries, driving the development of upstream industries in the lithium battery industry chain. According to Zheshang Research Institute, power lithium battery materials include positive electrode, negative electrode, separator and electrolyte, and the cost ratio is about 44%, 19%, 12%, and 12%, respectively. Among them, the negative electrode material is an important part of the upstream raw materials of the lithium battery, which plays a role in storing and releasing energy in the lithium battery, and affects the first efficiency and cycle performance of the lithium battery.

The anode material industry is growing rapidly. In 2020, China's anode material shipments will be about 365,000 tons, a year-on-year increase of about 37.74%. At present, the global concentration of lithium battery anode materials is very high, mainly in China, Japan and South Korea. In 2020, China's output of anode materials will further increase to 85% of the world. Baterui, Shanshan Co., Ltd., and Putailai are the leading companies in the industry, and the market value of Putailai exceeded the 100 billion mark in July this year.

1703
Comparing the fundamentals of the three leading companies, Beterui leads in the proportion of production and sales, production capacity and R&D investment, Putailai leads in performance growth and profitability, and Shanshan shares leads in overall revenue scale. , But its performance was the worst, and its profitability and shipment speed lag behind its peers.

In recent years, Putailai's revenue growth rate has been higher than that of Baterui and Shanshan. In 2020, when the net profits of the other two companies attributable to the parent company have declined year-on-year, Putailai will achieve a year-on-year growth of 2.5%. The main reason for its profitability is better than that of its peers. On the one hand, in terms of revenue structure, the company's anode materials account for a larger proportion, and the business's gross profit margin is higher than that of cathode materials and other businesses. On the other hand, the company's products are positioned in the high-end market.

1703
Specifically, in terms of revenue structure, Putailai focuses on anode materials. Last year, this business accounted for about 70% of its revenue, and its gross profit margin was 31%. In the first quarter of this year, the company's gross profit margin increased significantly to 37.8%.

The proportion of Shanshan's anode materials is on the rise, but as of the end of last year, it was only about 30%. The cathode materials accounted for 46.84%. Its gross profit margin for cathode materials was 12.38%, and its gross profit margin for anode materials was 27.72%. 18.4%, the bottom of the three companies in the long-term.

Baterui's cathode materials account for 23%, and anode materials account for about 70%, but its cathode material gross profit margin is very low, only 5.54%, and anode materials 36.82%, which results in the company's overall gross profit margin less than 30%. .

In terms of product positioning, Putailai is positioned in the high-end anode market, and its average sales price and net profit per ton are both leading the industry. In the past three years, the average price of Putailai's anode has been around 60,000 yuan/ton, and that of Shanshan and Beiterui is between 40,000 and 50,000 yuan/ton. In terms of net profit per ton, according to Tianfeng Securities’ calculations, Putailai’s net profit per ton in 2020 is close to 10,000 yuan/ton, and the profit per ton including silicon-carbon anodes of Beiterui is 8,000 yuan/ton. Shanshan shares are 4,000 yuan/ton.

However, the market criticized Putaili for being limited to the high-end market and not actively expanding production. Its market share has remained at 17% in the past three years, and has not seen an increase. Sun Xiaoya, an analyst at Tianfeng Securities, said that the high-end market has limited physical volume, coupled with the lack of certainty of downstream demand in the past few years, the company's expansion is relatively conservative, and the production capacity is lower than that of its peers. In 2020, the effective production capacity of Putailai anode will be 70,000. Tons, Beiterui and Shanshan shares were 104,000 and 120,000 tons, respectively.

1703
Shanshan has the highest production capacity but the worst performance, and its profitability and shipment speed are far behind its peers. The company's negative gross profit margin and net profit per ton are at the bottom of the industry, and the market is skeptical of its profitability.

The financial report shows that Shanshan's revenue and net profit attributable to the parent company in 2019 and 2020 have both declined, of which revenue fell by 2% and 5.35%, respectively, and the net profit attributable to the parent company declined by 76% and 49%, respectively. . It was not until the first half of this year, driven by the consolidation of the new polarizer business and the electrolyte business, that the company turned losses into profits, and its performance in the first half of the year was expected to increase significantly.

Ping An Securities analyst Zhu Dong analyzed that Shanshan's low profitability was mainly due to factors such as its rapid expansion of its early production capacity and low graphitization production capacity. Its anode bases are mainly distributed in Shanghai, Huzhou, Ningbo, Ningde, Baotou and other places, and the initial production capacity is relatively scattered. In fact, the company has built a nominal capacity of 120,000 tons as early as 2019, which is much higher than other competitors in the same period. The rapid expansion of production capacity has led to low capacity utilization, which has affected profitability to a certain extent.

At the same time, Shanshan's negative electrode shipment growth rate has been slower than that of its main competitors in recent years, and the market is worried about the decline in the company's negative electrode competitiveness. Ping An Securities Research Report believes that the current domestic negative electrode market competition pattern is not clear, and the sales volume of first-tier companies has not opened a significant gap. The market share of leading companies is only 22%, which is lower than other segments. "The pressure of industry competition It will encourage first-tier companies to penetrate into various segments, and the gap in customer types, product structure and product positioning will gradually narrow, which will eventually bring the level of profitability closer."

The negative electrode industry has not come out of the absolute leader, self-built graphitization is the key to cost reduction

Although the three major leaders have their own advantages and disadvantages in many aspects, the current negative electrode industry has not yet come out of the absolute leader, and the TOP3 companies have not widened the gap in domestic market share. In the past three years, Beiterui's market share has been around 22%, and Shanshan and Putailai have been around 17%. The Tianfeng Securities Research Report pointed out that the raw materials of anode materials are relatively bulky, and the main processes rely on outsourcing (a form of outsourcing) to show cost differences. The industry has not yet seen an absolute leader.

1703
In terms of customer situation, Shanshan shares a high degree of overlap with Putailai customers. Common key customers include ATL (the top two suppliers of negative electrodes), LG Chem (the top two suppliers of artificial graphite in China), and Samsung SDI (the top two suppliers in China). Artificial graphite supplier), CATL (300750.SZ), Zhuhai Guanyu, etc. Battery accounts for a relatively large number of overseas customers, mainly including Panasonic, LG Chem, Samsung SDI, Murata, Lishen, and BAK.

Under this circumstance, how can costs be reduced and differentiated advantages can be highlighted? The research report of Ping An Securities pointed out that graphitization accounts for about 40% of the production cost of negative electrodes and is one of the core links in reducing negative electrode costs.

According to the product structure, the anode materials can be divided into artificial graphite, natural graphite and other new materials. From the perspective of industry development trends, after the rise of power batteries, artificial graphite has gradually become the mainstream. China Merchants Securities Research Report stated that the excellent cycle performance of artificial graphite is the key to supporting its large-scale application in power batteries. With the development of technology, the specific capacity and compaction density of high-end artificial graphite products have gradually caught up with natural graphite, and the cost has been declining. In 2020, the proportion of artificial graphite in anode materials has reached 84%.

At present, self-built graphitization has become the mainstream, and the company's self-supplied rate is leading the mainstream anode companies and basically have the capability of graphitization. In the past two years, major domestic major anode manufacturers have deployed graphitization. As new production capacity has been put into production one after another, the proportion of external graphitization of major anode manufacturers has gradually decreased.

Judging from the specific enterprise situation, Putailai's self-supply rate of graphitization is in a leading position, at around 70%. The self-supply rate of graphitization of Beterui also exceeds 50%. The graphitization self-supply rate of Shanshan has been low, but after the company's Baotou Phase II project is put into operation, the company's anode and graphitization capacity will reach 180,000 tons, respectively, and the graphitization self-supply rate is expected to be close to 60%.

Ping An Securities Research Report believes that as industry competition pressures intensify, in the future, if the gross profit margin of negative electrode companies wants to reach a steady state of more than 30%, a self-supply rate of graphitization of more than 50% or standard configuration; taking into account the investment per 10,000 tons of graphitization 1 200 million yuan, the capital barriers in the negative electrode industry are gradually strengthening.

But at the same time, Ping An Securities also warned that intensified industry competition may lead to a sharp drop in product prices. The rapid development of the new energy vehicle market has attracted many suppliers to expand their production capacity. The price war brought about by intensified industry competition will significantly affect the profitability of enterprises.

The Dongguan Securities Research Report also stated that the price of anode materials will decline slightly in the past two years. “From the perspective of the industry, the current direction of anode material technology is relatively clear, and the production technology of the products is relatively mature, and the technical premium is not obvious. And, with Customers have a strong demand for cost reduction and quality improvement, and the company's negative electrode materials are under pressure to reduce prices to a certain extent