Just submitted the submission document for the prospectus. This new energy battery faucet, which is far from the market, has attracted enough interest from the market.
Ningde Times New Energy Technology Co., Ltd. (hereinafter referred to as the "Ningde times") has such a spirit of emboldenedness. It has been a hot topic for the market to have been promoted as the industry’s first power battery leader. Now the curtain has been pulled up.
If the IPO fundraising amount of RMB 13.12 billion in the Ningde era was successfully completed, the private-equity IPO financing will be refreshed. Not only that, after the successful IPO, the Ningde era is also expected to sit on the throne of the market value of GEM. The Ningde era in which countless rings were added is not surprising.
The new energy automotive industry chain has a trillion-level market space, and power batteries are the largest share of new energy vehicle costs. What makes the market even more exciting is that this trillion market is only just starting. Although the pioneers occupy the current favorable position, the participants all want to get a share from it.
The Ningde era is currently in the leading position, but it is still far away from the end. This emerging industry, dominated by policies, is full of uncertainties - government subsidies are constantly falling, technology replacement is in the ascendant, and companies are expanding their output. In this large enough market, no one has a firm position, and this is the biggest challenge facing Ningde.
Listed food feast
Recently, Ningde Times disclosed a 410-page prospectus. The company plans to raise 13.12 billion yuan for the construction of Lithium-ion power battery production base in Ningde and construction of power and energy storage batteries. As a result, this emerging industry leader has revealed its true colors.
In 2016, sales of power batteries ranked first in China, sales ranked second in China, and top three in the world; sales in the first half of 2017 ranked first in the country; power battery manufacturers with the largest number of models were installed... Even if you do not want to attract market attention is difficult.
Ningde era plans to issue new shares of no more than 217 million shares, accounting for no less than 10% of the total share capital after the issue. Based on this calculation, the IPO share price in the Ningde era will not be lower than RMB 60/share, and the market value is expected to exceed RMB 130 billion. The further increase in the market value after the secondary market transaction is almost a dead-end.
The current market capitalization of Genki shares (300498.SZ) with the market value of GEM is exactly 130 billion yuan, which means that in no event will the Ningde Times take over the banner of GEM's market capitalization.
Of the listed car companies, the market value of only SAIC Motor Corporation (600104.SH) is more than 300 billion yuan, BYD (002594.SZ) and GAC Group (601238, stocks). The market value of (601238.SH) is about 160 billion yuan. Among power battery companies, Guoxuan Hi-tech (002074.SZ) has a market capitalization of less than 30 billion yuan, and Jianruiwoeng (300116.SZ) has only a turnover of 20 billion yuan. From this we can see that the Ningde era is even expected to become one of the companies with the highest listing value of the entire automotive industry chain.
Since its establishment on December 16, 2011, it will only reach the sixth anniversary of the end of 2017, and the Ningde era will lay 100 billion net worth in six years. This rocket-like soaring speed is rare. At the end of 2015, there were only 4 shareholders in the Ningde era. After two years of shareholders, the number of shareholders has soared to 49. The year before the IPO was a period of intense change in equity in the Ningde era, with various capitals competing to debut.
From the end of December 2016 to August 2017, there have been three capital increases and five equity transfers in the Ningde era, 30 shareholders have been competing in and 10 shareholders have contributed more than RMB 1 billion. And these shareholders are about to share the listing feast in the Ningde era.
These newcomers to the Ningde era's "friend circle" list can be described as gathered. There are traditional manufacturing companies such as Lenovo and Foxconn, as well as financial capitals such as China Ping An (601318.SH) and National Development and Investment Corporation, as well as industrial investment funds guided by the government, such as the Advanced Manufacturing Industry Investment Fund (Limited Partnership). More are PE institutions such as Shenzhen Innovation Investment Group Co., Ltd.
These latecomers obtained a “boat ticket†before the listing in the Ningde era at a valuation of approximately 85 billion yuan. Take Futaihua Industry (Shenzhen) Co., Ltd. (hereinafter referred to as "Futaihua") as an example. Futaihua is a subsidiary of Foxconn's parent company, Hon Hai. It acquired 1.18% of its shares for a total of 1 billion yuan. Based on this calculation, the valuation at this time in Ningde has reached 84.746 billion yuan.
The final shareholders of Ping An, Lenovo, etc. also obtained shares of Ningde Times with different shares at the same valuation. Some minority shareholders also slightly higher than the valuation of the share price, Ningbo Meishan Bonded Port District Huifa Xinyuan Investment Partnership (Limited Partnership) for 341 million yuan to obtain a 0.4% stake in Ningde era, its valuation of 85.255 billion yuan, the actual The difference is not obvious.
Even at the valuation of RMB 85 billion, the valuation of the Ningde Times IPO has increased by more than 50% after one year. As the second-tier dealers have no suspense premium, these shareholders will earn more profit.
Compared with these latecomers, the actual controllers of the Ningde era, Zeng Yiqun and Li Ping, will be the biggest winners, especially Zeng Yiqun. If the market is successfully listed in 2018, the top seats of various rich list will leave him a place.
Born in Hong Kong in 1968, Zeng Yiqun was born in Hong Kong and was a Ph.D. student in the Institute of Physics of the Chinese Academy of Sciences. He is currently the chairman of the company. He holds a 100% stake in Ningbo Meishan Bonded Port Area Ruiting Investment Co., Ltd., a major shareholder of Ningde Times, and indirectly holds the age of Ningde 29.23. % of equity. Holding nearly 30 percent of the company’s shares, it is not an unattainable dream to reach 100 billion worth of net worth.
Time heroes. In a trillion market-sized industry space, a company occupies a leading position and deserves to have a corresponding market position. The Ningde era is the pioneer in this one trillion industry.
Grab a trillion market
How hot the new energy auto industry is, see what Gree Electric Co., Ltd. (000651.SZ) had done.
In August 2016, Gree Electric announced that it planned to acquire a 100% stake in Zhuhai Yinlong New Energy Co., Ltd. (hereinafter referred to as “Zhuhai Yinlongâ€) from its 21 shareholders at RMB 15.57 per share for a consideration of RMB 13 billion. Prior to this, except for those in the industry, there were few people who knew Zhuhai Yinlong.
What does Zhuhai Yinlong, which can make Gree Electric Co., Ltd. pay for a billion-dollar purchase, do? In a word, Zhuhai Yinlong claims to be the master of "the most advanced lithium-battery electric bus production company." Diversification of home appliance companies is not new, but the industry's leading Gree cross-border first step to choose new energy Automotive field.
Although small and medium shareholders vetoed Gree’s acquisition, the chairman of Gree’s Dong Mingzhu seems to have identified the industry. Gree failed to win Zhuhai Yinlong. Dong Mingzhu began to take shares in his own name, holding 17.46%, second only to 25.99% of major shareholders.
The leader of an industry can be so "delicious" and how fiery the emerging industry is. The new energy auto industry that was formally launched in 2014 is now on the prosperous road of a trillion market scale.
The new energy auto industry is a typical policy-driven market. The industry’s initial starting point dates back to June 2010. At that time, ministries and commissions such as the Ministry of Industry and Information Technology jointly issued a subsidy policy and took the lead in starting pilot private subsidies for purchasing new energy vehicles in 6 cities including Beijing and Shanghai, with a maximum subsidy of 60,000 yuan.
The start is not going well. Until 2013, sales of new energy vehicles in the country were still less than 20,000 vehicles. The country’s sales of passenger cars totaled 17.93 million vehicles, and new energy vehicles accounted for less than one-thousandth. Newly-powered new energy vehicles still need the government to “send one more journey†to become market-oriented.
In the second half of 2013, the Ministry of Finance and other ministries issued notices to expand the list of new energy vehicles to promote and apply cities while expanding the list of subsidies for new energy vehicles. The subsequent list increased from 6 to 88. In 2014, the State Council announced that from September 1, 2014 to September 1, 2017, new energy vehicles will be exempt from vehicle purchase tax.
The Ministry of Industry and Information Technology and other ministries also announced that the proportion of new energy vehicles purchased by government agencies and public institutions that promote the use of new energy vehicles in cities, including the Ministry of Industry and Information Technology, shall account for no less than 30% of the total amount of new energy vehicles for the current year, and will increase year after year.
In addition to the central subsidies, local governments also provided additional funds for subsidies. Therefore, the industry said that 2014 was not the first year for China's new energy vehicles. It was also from this year that sales of new energy vehicles broke out.
In 2013, the country sold 17,600 new energy vehicles. From 2014 to 2016, the country’s sales of new energy vehicles were 74,800, 331.1 thousand, and 507,000, respectively, an increase of 3.25, 3.43, and 53 respectively over the same period of last year. %. The slowdown in sales growth in 2016 was affected by factors such as the “deception†turmoil and the delayed introduction of the New Deal.
In 2016, a total of 24,376,900 passenger vehicles were sold, a year-on-year increase of 14.93%. New energy vehicles accounted for more than 2% to reach 2.08%. From January to November 2017, sales of new energy vehicles were 560,000, an increase of 50% year-on-year. Since the end of the year is the peak sales of new energy vehicles, it is not particularly difficult to complete the 700,000 targets set by the FAA at the beginning of the year.
From less than one-thousandth of the proportion to now accounting for more than 2%, the new energy automotive industry has achieved explosive growth in three years. The Ministry of Industry and Information Technology plans to clearly point out that by 2020, the annual production of new energy vehicles in China will reach 2 million vehicles. By 2025, the proportion of new energy vehicle sales to total sales will reach over 20% of the development target.
It is precisely for this reason that some organizations predict that the entire new energy automobile industry chain, including vehicle manufacturing, parts and components and supporting services market will usher in a trillion market scale. The motorization of automobiles has spawned a trillion-level market space, and as the core component, the power battery is the top priority of new energy vehicles.
The power battery is the key component of the electric vehicle. The battery-driven system occupies 30%-45% of the cost of the new energy vehicle, and the power lithium battery occupies about 75%-85% of the cost of the battery-driven system. Simply put, the "heart" of an electric car is a power battery.
From the industry rankings, we can intuitively see that the Ningde era is the leader of domestic power batteries. In 2015 and 2016, the company’s power battery system sales were 2.19GWh and 6.8GWh, respectively, ranking the top three global power battery companies for two consecutive years. In the domestic market, the company has replaced BYD as the battery manufacturer with the largest market share.
According to statistics from the Institute of Lithofium Institute for Advanced Electronics Industry (GGII), from the perspective of market share, BYD's lithium-ion battery shipments reached 3.69GWh in 2015, accounting for 23.2% of the market; Ningde Times surpassed Guoxuan Hi-Tech to become the power battery maker. Second, shipments reached 2.43 GWh, with a market share of 15.3%. The number of shipments of Watermar reached 1.37 GWh, and the market accounted for 8.6%. Guoxuan Hi-Tech Co., Ltd. accounted for 1.8% of the company's 1.08GWh share.
In 2016, BYD's power battery sales reached 8.23GWh, which accounted for 27% of the market share; Ningde Times' annual sales reached 6.27GWh in the second place, accounting for 20.5% of the market share; and Wal-Mart ranked third, all year round. Sales volume was 2.53GWh, accounting for 8.3% of the market share; Guoxuan High-Tech sales volume was 1.93GWh, accounting for 6.3%.
In the first half of 2017, the sales volume in Ningde was 3.51GWh, ranking first in China. In terms of sales, the Ningde Times ranked first in 2016. According to statistics of GGII, Ningde Times ranked first in terms of sales of power battery in 2016, accounting for 23.3% of the total, leading 22.5% of BYD.
Established in 1995, BYD has more than 20 years ago. The company has been working hard in the field of lithium batteries for many years. In 2003, after acquiring Xi'an Qinchuan Automobile, it obtained the vehicle license. In front of BYD, the original Ningde era was just one of the many new players in the industry.
Tracing the source, the history of the Ningde era was not much worse than BYD, and the two companies were competitors from the beginning. Until now, with a more focused attitude, the Ningde era has surpassed the former.
Thick and thin
The IPO filings showed that from 2014 to 2016, the Ningde era achieved operating revenue of 869 million yuan, 5.703 billion yuan and 14.879 billion yuan, and a net profit of 54.43 million yuan, 931 million yuan, and 3.022 billion yuan. In the first half of 2017, the company realized revenue of 6.295 billion yuan and net profit of 1.857 billion yuan.
According to the information disclosed by the company, during the period from 2014 to 2016, the proportion of the income in the first half of the Ningde era was 20.23%, 22.76% and 31.52%, respectively. This means that if it is based on this proportion of revenue, Ningde's full-year 2017 revenue is expected to reach 20 billion yuan.
New energy vehicles were fully launched in 2014. In 2015, the Ningde era achieved a full-scale outbreak of business performance. From the nearly 60% of Yutong’s contribution in 2014, Jinlong Motors, Beijing Automotive and Geely, and other new energy leaders have become the company’s major customers. The rise of the Ningde era was not accidental, but the result of years of accumulation.
In the prospectus, the Ningde era did not introduce the history before 2011. In fact, the predecessor of the Ningde era was the power battery division of ATL (New Energy Technology Co., Ltd.). Founded in 1999, ATL started researching power batteries as early as 2004. In 2008, the Power Battery Business Division was established. As a result of national policy restrictions (power batteries cannot be wholly owned by foreign companies), ATL’s Power Battery Business Unit operates independently in 2011.
ATL is mainly engaged in R&D and production of lithium batteries for consumption. It has long taken the lead in the industry. Today, there are still business contacts between the two companies. In 2014 and 2016, the Ningde era purchased raw materials of 255 million yuan and 460 million yuan respectively from ATL, and was the company's first and third largest supplier.
Not only that, in December 2014, Ningde Times and its shareholders borrowed US$1.2 billion worth of RMB 1.2 billion from ATL and its subsidiaries. In September 2015, Ningde era repaid interest and compensation, and after the above loan agreement was lifted, the company signed a loan agreement of the same amount with Dongguan New Energy, an ATL subsidiary. Until March 2016, Ningde Times repaid the loan principal in advance. And interest.
However, for the Ningde era from ATL's “separation of householdsâ€, the prospectus did not give a brief introduction. How do the shareholders of Ningde Times spend more on how to divide the assets of people, equipment, and factory buildings when the two “divideâ€? Money was bought from ATL and was not introduced in the prospectus.
Therefore, in the Ningde era, which seems to have turned into a reality, in fact, we have accumulated more than 10 years experience in R&D of power lithium batteries. Moreover, investment in R&D has always remained high in the Ningde era. In 2014-2016, the company invested 52.67 million yuan, 281 million yuan, and 1.081 billion yuan in R&D, accounting for 6.08%, 4.93%, and 7.27% of the revenue.
In the first half of 2017, the company's R&D investment was 670 million yuan, accounting for 10.65% of the total revenue. Research and development accounted for much more than 3% of high-tech companies. In the first half of 2017, the company had 3,628 R&D personnel, accounting for 20.1% of the total. As of the end of the third quarter, Ningde Times and its subsidiaries had a total of 813 domestic patents and 13 overseas patents, and a total of 1,193 domestic and overseas patents being applied for.
With more than 10 years of technology accumulation and constant investment in R&D, the Ningde era has now become a solid “home-made childâ€. However, in the submission document for the prospectus, the Ningde era is also slightly exaggerated for its unfathomable words. The so-called international leader is far from having market rumors and has advantages. The company's revenue and purchase amount also have doubts.
Income question
The Ningde Times stated that the company “is one of the few suppliers in China that provides power battery solutions for international automotive brands,†and has entered the supply system of BMW, Volkswagen and other world-class automotive companies.
In the first half of 2014-2017, the overseas business income in the Ningde era was 14.72 million yuan, 33.83 million yuan, 82.71 million yuan and 70.29 million yuan respectively, accounting for 1.94%, 0.6%, 0.57% and 1.15 of the main business revenue, respectively. %, a small percentage. The company's leading global market position cannot be reflected from offshore income. The domestic market is still a source of income that the company relies on.
The submission document for the prospectus shows that Ningde Times had 22 holding subsidiaries, 9 shareholding subsidiaries, and 1 branch company. Among the overseas subsidiaries of the mainland, except Germany and Hong Kong, the two subsidiaries were established earlier in 2014, three of the remaining four overseas subsidiaries were established after May 2017.
These subsidiaries, which have just been established in France, the United States, and Canada, are more like the "fabricated facades" required before the Ningde era was listed, making the company more international. Even among the 16 domestic subsidiaries, 6 have only been established since 2017.
In terms of domestic customers, the Ningde era has a close cooperation with mainstream manufacturers. From 2014 to 2016, the top five customers accounted for more than 80% of the company’s revenue. Yutong, Jinlong and other bus companies are the main sources of revenue for the company. Beijing Pride New Energy Battery Technology Co., Ltd. ("Pred") is also one of the company's major customers.
Pride is mainly engaged in power battery PACK business, PACK grouping is the core link of power battery from production to application in new energy vehicles, Pride mainly serves Beiqi New Energy, is in the Oriental Seiko (002611, stock it) (002611. SZ) Prior to the acquisition, Prades was also one of the related parties of the Ningde era. The Ningde era held 23% of Pride.
The Oriental Seiko acquisition book shows that from 2014 to 2015, Prader purchased raw materials such as batteries for 47.05 million yuan and 750 million yuan respectively from the Ningde era. It is the company's second and largest supplier. In the first 10 months of 2016, the purchase amount was as high as 2.46 billion yuan, accounting for 83.57% of the total.
In the top five client list of Ningde era, Prader is also among them. In 2014-2016, Prades contributed RMB 54.75 million, RMB 708 million and RMB 2.769 billion, respectively, to the Ningde era, accounting for 6.32%, 12.42% and 18.61% of revenue, respectively.
In the first half of 2017, Prades contributed 906 million yuan of revenue, accounting for 14.44%. The connected transactions at that time contributed a lot to the Ningde era. However, in 2014, Ningde said that the amount of income was 7.7 million yuan more than that of Prader, and the revenue adopted in 2015 was 42.35 million less than the amount announced by Pride.
So is it the difference between the two companies that disclosed the difference in timing? In the report of Oriental Seiko’s acquisition of Pride, Ningde’s operating results as one of the major shareholders have been disclosed in advance.
According to Oriental Seiko’s acquisition book, in 2014 and 2015, the Ningde era achieved operating revenue of 677 million yuan and 5.726 billion yuan respectively, net profit of 55.56 million yuan and 951 million yuan. According to the Ningde Times prospectus, the 2014 income and net profit are exactly the same, and the 2015 net profit is no different. However, the 2015 revenue was 5,703 million yuan, which is 2348 less than the revenue disclosed by Dongfang Precision in 2015. Ten thousand yuan.
It is not the Pride family that has a connection with the Ningde era. The Ningde era also accounts for more sales to related parties. In the first half of 2014-2017, the related sales amount in the Ningde era was 85.2 million yuan, 915 million yuan, 3.517 billion yuan and 944 million yuan respectively, accounting for 9.82%, 16.05%, 23.64% and 15% of the operating income respectively.
Shanghai Times New Energy Technology Co., Ltd. (hereinafter referred to as “Shanghai Timesâ€) is also one of the main targets of associated sales in the Ningde era. In 2015 and 2016, the sales amount from Ningde Times to Shanghai Times was RMB 144 million and RMB 677 million respectively, accounting for 2.53% and 4.55% of the revenue respectively.
Shanghai Shida Investment Management Co., Ltd. controlled by Li Ping once held 100% equity in Shanghai Times. In December 2015, the above equity was transferred to Zhuang Chunlei and Li Xin. According to regulations, the two are still related before the full 12 months of transfer.
Industrial and commercial information shows that the shareholders of Shanghai Times have changed to Gongqingcheng Hongzhi Investment Management Partnership (Limited Partnership), and the ultimate shareholders are the major shareholders Wang Fuyuan and Pan Yanyan. The relationship between Wang Fuyuan’s identity and the Ningde era has been extensive.
A message from the Wuhou District Government website in Chengdu in August 2015 showed that Wang Fuyuan, a director of Ningde Times New Energy Technology Co., Ltd., who was the predecessor of the Ningde era, met with the chief leaders of Wuhou District. Is Wang Fuyuan, the actual controller of the Shanghai era, the former director Wang Fuyuan?
The production of power batteries requires positive and negative electrode materials, separators, and electrolytes. In addition to purchases from the original parent company ATL, Ningde is also sourcing from major raw material suppliers. However, on the purchase amount, the amount disclosed by a number of listed companies is far from the Ningde era.
Purchase amount puzzle
Shenzhen Defang Nano Technology Co., Ltd. (hereinafter referred to as “Derfang Nanoâ€), Qinghai Taifeng First and Kodari (002850.SZ) maintained the procurement relationship with the Ningde times from 2014 to 2016. Of these three companies, German Nano is also in the IPO queue, and Kodari has just landed in the small and medium board in March.
In the year of 2014-2016, German Nano was always the fifth largest supplier in the Ningde era. The purchases received in the past three years amounted to RMB 22.96 million, RMB 160 million and RMB 353 million respectively. According to the German manuscript prospectus report, Ningde Times contributed revenue of RMB 24.39 million and RMB 158 million respectively in 2014 and 2015. yuan. According to the amount disclosed by the two companies, the difference is in the million-dollar level.
According to the Kedali prospectus, ATL (including CATL) is the company's top two customers. Its contribution revenue for 2014-2016 was 76.47 million yuan, 271 million yuan and 573 million yuan. In the same period, the Kedeli purchases disclosed in the Ningde era were 39.4 million yuan, 263 million yuan and 563 million yuan respectively. Since Kudalie disclosure covers a wider range of companies, some differences between the two companies can also be explained.
Unlike the two companies mentioned above, Shanshan Co., Ltd. (600884.SH) mainly supplies positive and negative materials. From 2014 to 2015, the Ningde era purchased RMB 33.3 million and RMB 161 million respectively. Ningde era's purchase amount in 2014 is still unable to enter the top five Shanshangufen customers, 2015 meet this condition.
In 2015, Shanshan’s largest customer contributed 173 million yuan, the second largest customer contributed 120 million yuan, and Ningde’s 161 million yuan purchase amount was 11.89 million yuan. Since the amount of purchases and income disclosed in the annual report is not taxable, there should be no obvious difference between the two. The difference between the two companies of ten million yuan is obviously not a small amount.
The Ningde era is not the same as the number disclosed by a listed company. Leading Intelligence (300450.SZ) is the leading power battery equipment company. The company is the third and second largest supplier in Ningde era in 2015 and 2016. According to the Ningde Times prospectus, the pilot intelligence received 173 million yuan in purchases and 502 million yuan in purchases, respectively.
In 2015 and 2016, PI Intelligence did not disclose the top five customers' specific targets, but disclosed the amount of revenue contributed by the top five customers. In 2015, the company’s largest customer contribution revenue was 180 million yuan, and the second largest customer contribution was 49.74 million yuan; in 2016, the company’s largest customer contribution revenue was 262 million yuan.
In the Ningde era, in 2015, the company purchased 173 million yuan of raw materials from the pilot, and the leading intelligent customer contributed 180 million yuan. If the difference between the two is about to be negligible, then how can we explain the difference of nearly two times in 2016?
As the downstream is facing the new energy vehicle manufacturers, accounts receivable is a topic that can not be relied on by the power battery industry. The Ningde era is no exception. In 2014-2016, the company’s accounts receivable were 372 million yuan, 2.394 billion yuan and 7.316 billion yuan, respectively, accounting for 42.91%, 41.98% and 49.17% of the revenue. In the first half of 2017, the company’s accounts receivable was RMB 6.005 billion, accounting for 95.39% of the total.
Even if we do not consider the impact of the semi-annual report, it is an indisputable fact that the accounts receivable in the Ningde era are higher. However, in addition to the provision of bad debts for lithium battery materials within one year, Ningde Times made zero provision for accounts receivable within one year of power and storage battery business.
Of the companies in the same industry that have already been listed, Jianruiwa can accrue accounts receivable within 1 year as 1%, and Guoxuan Hi-Tech Co., Ltd., within 1% of accounts receivable within 1 year, accounts for 5%. Since the account receivables of the Ningde era were basically within one year, the zero-yield accounts receivable amounting to billions of companies added a lot to the company's net profit.
For reasons not accrued, Ningde Times stated that since the company's customers are mainly domestic large-sized vehicle companies, the credit status is good, and the accounts receivable receivables are relatively normal, and more than 98% of the company's accounts receivable are aged within one year. Therefore, the provision for bad debts is less.
However, at the beginning of 2017, ministries and commissions such as the Ministry of Industry and Information Technology issued a new policy. New energy vehicles purchased by non-individual users should apply for a subsidy, and the accumulated mileage must reach 30,000 kilometers. The subsidy standards and technical requirements should be implemented in accordance with the vehicle's annual driving license. This makes the cycle of subsidies in place more uncertain.
A large part of Ningde's income comes from non-personal vehicles. In 2014, the Yutong family accounted for nearly 60% of the revenue. In 2015, Yutong and other three bus manufacturers accounted for nearly 66% of the total. In 2016, the proportion was 51.09%, which means that more than half of Ningde's revenues depend on new energy buses. Delays in getting subsidies from automakers will inevitably put pressure on parts and components companies. The recovery period of the receivables of suppliers such as the Ningde era must inevitably increase. The resulting financial pressures and uncertainties are unpredictable.
Compared with the issue of accounts receivable, the problem of blind expansion of the power battery industry is more worthy of attention. The accessory companies headed by the Ningde era are working hard on capacity. The new energy vehicle industry chain will have trillions of space in the future, but it will take time for space. Does the blind expansion of the industry mean to repeat the mistakes of solar PV?
Great leap in productivity
According to the prospectus report, one of the investment projects in the Ningde Times is a lithium battery project with a total investment of 9.86 billion yuan. The project will build 24 production lines, with a total annual production capacity of 24GWh of power battery products.
In 2016, the production capacity in the Ningde Times was 7.6 GWh and in the first half of 2017 was 5.18 GWh, which means that the annual production capacity is expected to exceed 10 GWh. Under the circumstances of maintaining the original production capacity, after the Ningde era investment project was put into production, the production capacity exceeded 30GWh without suspense.
According to the Gail Waver Energy Annual Report, in 2016, the power capacity of the Watermaline battery was 12GWh. Guoxuan Hi-tech Co., Ltd. said that the company’s existing power battery capacity totals approximately 5.5GWh, and will have 8GWh of power battery capacity after mid-2017 transformation and upgrading. BYD said that by the end of 2017, total production capacity will reach 16GWh. Of these, 10 GWh is a lithium iron phosphate battery and 6 GWh is a ternary battery.
This means that the current total capacity of the above four power lithium battery companies is about 46 GWh, which does not take into account the planned expansion plans for the current and future plans. According to various business plans, the future wave of expansion is still on the road.
BYD's third lithium battery base is under construction in Qinghai. The project plans to complete the installation and commissioning of the equipment in June 2018 and put the entire process into production. The project includes three projects with an annual output of 10GWh power battery, an annual output of 20,000 tons of lithium iron phosphate, and an annual output of 30,000 tons of lithium carbonate. BYD is looking for the fourth lithium battery base, with a capacity target of 31GWh by 2020.
In the era of Ningde, 24GWh of investment projects are currently being expanded. In an interview, the president of the company, Huang Shilin, said that the total lithium battery capacity of the company in 2020 is expected to be 50GWh. There are many plans for expansion such as Guoxuan Hi-Tech and Waterma.
According to EVTank statistics, China's power battery shipments for 2014-2016 were 5.9GWh, 17GWh and 30.5GWh, respectively. Among them, the shipments of BYD, Watermam and Guoxuan Hi-tech in 2016 were 8.23GWh, 2.53GWh and 1.93GWh, respectively. According to the 2016 capacity of the three companies, except that BYD's capacity utilization rate is about 80%, Water The utilization rate of Ma and Guoxuan Hi-Tech is far less than half the level.
In the first 10 months of 2017, the cumulative installed capacity of power batteries was 18.1 GWh, an increase of 31.43% year-on-year. At this growth rate, the annual shipments will reach around 40GWh. While the rate of expansion of various companies far exceeds the growth in installed capacity, the capacity utilization rate will further decline.
What level of future lithium battery shipments will reach? According to BOC International's analysis, from 2015 to 2016, domestic new energy vehicles achieved output of 379,000 units and 517,000 units respectively, corresponding to shipments of power batteries of 17.0 GWh and 30.5 GWh.
Taking into account factors such as policy objectives, recurring points, and vehicle sales planning, it is expected that the production of new energy vehicles will be 700,000, 990, 1.37 million and 2.13 million vehicles in 2017-2020, respectively. The corresponding demand for power batteries is 34GWh, 47GWh, 58GWh, and 88GWh.
The Ministry of Industry and Information Technology aims to produce 2 million new energy vehicles by 2020. According to the target of 700,000 vehicles in 2017, the compound growth will exceed 40%, and the demand is not low. Correspondingly, the demand for power batteries will also be close to 40% compound growth.
Even so, by 2020, the demand for power batteries will be less than 90 WGh, and the four companies in the Ningde Times, BYD, Kennedy Warhol and Guoxuan Hi-Tech Co., Ltd. will have a total capacity plan of more than 100 GWh in 2020. The production capacity of the four companies will be Enough to meet the needs of the industry. Then, where is the second-tier industrial Tianjin Lishen, China Aviation Lithium, Shenzhen BAK and other lithium battery capacity used?
Power battery is currently in the stage of a typical "price increase". With the advancement of technology and large-scale production, the price of lithium batteries continues to decline, and along with the decline in subsidies, vehicle manufacturers' demand for lithium battery prices will increase.
In the year of 2014-2016, the unit prices of lithium batteries in Ningde era were 2.89 yuan/Wh, 2.28 yuan/Wh, and 2.06 yuan/Wh, respectively, which fell by 28.72% in three years. In the first half of 2017, it further decreased to 1.52 yuan/Wh, and the decline rate was expanded to 47.4%. Since the outlook for back-off in 2018 is facing, the continued decline in battery prices is a major trend.
Financial subsidies are the direct driving force for the outbreak of new energy vehicles. At present, the state has adopted three standards for subsidies for new energy sources. Taking pure electric passenger cars as an example, before 2013, subsidies for each vehicle will be 60,000 yuan. The standards for the next two years to be introduced in 2013 are as follows: Passenger cars use pure electric mileage (R) as a standard, 80R<150 km per vehicle 35,000, 150R<250 km per vehicle 50,000, and R250 km per vehicle 60,000 yuan.
The subsidy standard in 2017 further declined. 100R <150 km per vehicle subsidies 20,000 yuan, 150R <250 km per vehicle subsidies 36,000 yuan, R 250 km subsidy of 4.4 million.
As the subsidy retreat may be implemented in advance in 2018, it means that the administratively promoted new energy auto industry is increasingly relying on market forces. At this time, new energy car companies have the blood from the government to their own blood changes? From the current point of view, the traditional car companies said that the policy of making more than new energy vehicles, subsidies, and double-integration policies is still dependent on the development of the industry.
The small changes in policies have a huge impact on the industry chain. At present, there are no less than 100 power battery manufacturers, and 4 companies such as Ningde have seized the leading position. Whether this position can be consolidated is unknown. As we all know, the lithium battery industry is not a stable technology industry. Industry technology is always in the process of upgrading.
The current mainstream is lithium iron phosphate and ternary lithium batteries, while hydrogen fuel cells and solid-state lithium batteries have long been in progress. Zhuhai Yinlong claims to have a unique lithium titanate technology that keeps Dong Mingzhu always in mind. Fisker also claims to have a solid-state battery technology that will last for one minute and charge 800 kilometers...
Even the existing mainstream lithium batteries are constantly updated in technology. No matter if it is a production process or a technical improvement, it is possible to make the existing leader become a backward party. For example, strengthening the safety and increasing the energy density of lithium batteries are the two “pain points†of lithium batteries, which is also the current leader. The direction of the company's main efforts.
All this is like the original photovoltaic industry. The same environmental considerations are also driven by policy subsidies. In the same year, the photovoltaic industry also experienced an initial blind expansion to a large area of ​​collapse, bankruptcy, loss of the entire industry, and the gradual recovery of the industry reshuffle.
Once China’s richest man, Shi Zhengrong, Wuxi Suntech, China’s largest photovoltaic company, had long gone bankrupt and restructured. Some of the former PV giant Livial’s assets have been owned by Yicheng Xineng (300080.SZ). What was the scenery when you landed on the New York Stock Exchange, it's hard to find out now.
Tianwei Group, which has a military background and is related to the power business, has also gone bankrupt and restructured. It has caused its bankruptcy precisely because of its ambitious investment in the entire PV industry chain.
When they first entered the photovoltaic industry, they also had a temporary advantage and even got into the position of the leading position in the industry. When the crisis came, even the industry’s first did not stand the test. It is not an overstatement that power batteries are the industry's outlet for new energy vehicles. However, if blindly expanding competition brings about a price war, it is not surprising that the story of the photovoltaic industry was once again staged here.
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