Listed Lithium Companies Released Last Year’s Performance – Who Enjoyed the Bonus of the Era?



Listed Lithium Companies Released Last Year’s Performance – Who Enjoyed the Bonus of the Era?

The year 2016 is the year of change for China’s new energy vehicles industry, and also the key year in which the industry walks into the growth period from a lead-in period. The opportunities were obvious, and challenges extremely difficult to meet. On one hand, many lithium battery enterprises suffered from a long account period, slowly returned money or even the pain of an almost broken capital chain, however, on the other hand those lithium battery enterprises deeply rooted in the industry, with profound accumulation and good at seizing the opportunities have fully enjoyed the bonus brought by the era of change.

Under the influence of “changing” state policies on new energy vehicles, BEV batteries, lithium battery companies, lithium battery companies established in 2016, power batteries, etc., the power battery industry went through ups and downs in 2016, which were also witnessed by the upstream lithium battery enterprises. As the year comes to an end, it’s time to look back and provide simple and straightforward performance report data that can best reflect the gains and losses of these businesses.

As of January 18, there are 12 listed lithium battery companies (some are leading enterprises in segmental markets) have released their 2016 performance reports. By comparing the revenue and net profit, we’ve found that as leading enterprises in lithium cathode materials, electrolytes, equipment, lithium batteries and other sub-areas, Cangzhou Mingzhu Plastic Co., Ltd., Xiamen Tungsten Co., Ltd., Shenzhen Capchem Technology Co., Ltd., Shenzhen Yinghe Technology Co., Ltd., Guangdong Zhengye Technology Co., Ltd., Eve Energy Co., Ltd and Guangzhou Great Power Energy and Technology Co., Ltd. reported outstanding performance with a net profit growth of 126.39% (max) or more than 50% (min).

The remaining listed companies making profound endeavors in areas like lithium carbonate, power battery, BMS & PACK and downstream charging operations, including Zhejiang Yongtai Technology Co., Ltd., Jiangsu Zhongtian Technology Co., Ltd. (ZTT), Shenzhen Desay Battery Technology Co., Ltd., Keheng Holdings and Qingdao TGOOD Electric Co., Ltd., also reported good performance.

On the whole, the year 2016 is the year of change for China’s new energy vehicles industry, and also the key year in which the industry walks into the growth period from a lead-in period. The opportunities were obvious, and challenges extremely difficult to meet. On one hand, many lithium battery enterprises suffered from a long account period, slowly returned money or even the pain of an almost broken capital chain, however, on the other hand those lithium battery enterprises deeply rooted in the industry, with profound accumulation and good at seizing the opportunities have fully enjoyed the bonus brought by the era of change.

1. Xiamen Tungsten Co., Ltd. (Xiamen Tungsten) reports outstanding lithium battery material performance; independent operation and expansion investment

On January 16, Xiamen Tungsten a published performance report saying that the company achieved revenue of 8.507 billion yuan in 2016 (Jan. – Dec.), a YoY increase of 9.70%; net profit attributable to shareholders was 144 million yuan, a YoY increase of 121.74%.

The performance report also shows that during the reporting period, Xiamen Tungsten’s profit from tungsten smelting products and rare earth business was improved. Its lithium-ion materials, especially ternary materials saw fast growth in production and sales, and have become an important engine of net profit growth. Data show that Xiamen Tungsten’s lithium battery materials achieved revenue of 1.874 billion yuan, a YoY increase of 113.32%; total profit was 55.6873 million yuan, showing a turnaround year on year.

In the past two months, two pieces of news from Xiamen Tungsten were noticeable: the company announced on Dec. 14 that it planned to invest a 100 million yuan subsidiary in order to separate its battery materials business; it was announced in early January that a power battery cathode material project with an annual output of 20,000 tons would be jointly launched.

Specifically, Xiamen Tungsten planned to offer cash contribution of 100 million yuan to hold 100% stake in Xiamen Tungsten New Energy; meanwhile, it will transfer its lithium business assets (land, plant, equipment, projects under construction, etc.) to the latter or fund the latter. It is understood that this move is to ensure the independent operation of the battery material business, fully mobilize the work enthusiasm of backbone staff and promote the company’s lithium battery business performance and core competitiveness.

Xiamen Tungsten New Energy and Fujian Mindong Electric Power Limited Company will jointly establish the Ningde Xiamen Tungsten New Energy Materials Co., Ltd. (Hereinafter referred to as “Ningde Xiamen Tungsten New Energy”). They will also jointly invest in the construction of a car lithium ion ternary material production line with an annual output of 20,000 tons, mainly engaged in production and sales of high nickel ternary materials.

According to Xiamen Tungsten, its car lithium-ion ternary materials are now in short supply, while large domestic battery manufacturers are endeavor in the power lithium batteries area, looking for qualified power-type high-nickel ternary material manufacturers. This time, by expanding the production capacity of high nickel ternary materials, the company will meet the growing needs of customers and lay a good foundation for the development of lithium batteries in years to come.

2. Shenzhen Capchem sees booming electrolyte production and sales; expansion project is progressing smoothly

On January 11, Shenzhen Capchem Technology Co., Ltd. (Shenzhen Capchem) released its 2016 annual results, showing that the company’s revenue during the reporting period was 1.589 billion yuan, a YoY increase of 70.1%; net profit attributable to shareholders was 256 million yuan, a YoY increase of 100.4%.

Shenzhen Capchem said that the company’s main business went into a rapid growth trend during the reporting period. Benefiting from the rapid growth of the domestic new energy automotive market, lithium-ion battery electrolyte and chemicals received booming production and sales, sales orders increased significantly, leading to rapid growth in its revenue and profit; fluorine chemical market remained stable, with good supply and sales, and strong product profitability. During the reporting period, Hexafluo was included into the Company's consolidated statements, which improved the Company’s strategic layout and further increased the growth rate of net profit attributable to shareholders.

Based on our knowledge, in order to meet the growing customer demand, Shenzhen Capchem’s electrolyte expansion project is progressing smoothly, with the total capacity of Nantong and Huizhou bases expanded to 25,000 tons; the 10,000-ton capacity at Fujian base is to be built, and the capacity layout at Tianjin base is under further planning. It is worth mentioning that the Hunan Bofu New Materials Technology’s LiFSI project in which Capchem holds shares has been smooth in trial production and brought out excellent products.

3. Shenzhen Yinghe achieved net profit of 112-113 million yuan with obvious whole line advantage

On January 12, Shenzhen Yinghe Technology Co., Ltd. released advanced notice of its 2016 annual results that during the reporting period the net profit attributable to shareholders was 112-113 million, a YoY increase of 85.96% -115.85%.

Shenzhen Yinghe said that the reporting period benefited from the state new energy vehicle development policy and the rapid growth of the downstream market. The company grasped the market opportunities and was the first in the industry to launch a whole line solution. Since 2016, the whole line operation has been normal with obvious advantage, and business growth has been significant.

It is worth mentioning that Yinghe announced on December 5 “the company’s issuing shares and paying cash to buy in 100% stake in ARECONN and raising funds” was passed by the SFC unconditionally. ARECONN is a company specializing in the R&D and manufacturing of high-precision, high-performance lithium battery production automation equipment.

4. Eve Energy expects to achieve net profit of 242-288 million yuan; power battery business expands fast

On January 12, Eve Energy Co., Ltd released its 2016 annual results showing that during the reporting period, net profit attributable to shareholders was 242-288 million yuan, a YoY increase of 60% -88%.

Eve Energy indicated the main reasons of the YoY increase in the 2016 annual results: first, the company’s lithium battery performance and e-cigarette business saw rapid growth; second, the company’s ternary lithium ion battery and lithium iron phosphate lithium-ion battery production line built in Huizhou, Guangdong and Jingmen, Hubei respectively went into scale production. The company was included into the “List of Enterprises Meeting the Normative Conditions of Automotive Power Battery Industry” (the 4th batch); in the Ministry of Industry Road Motor Vehicle Manufacturers and Products new model announcement, a variety of models support the company’s products, promoting the sale of power batteries.

In the recent month, two major news of Eve Energy are worth noting: one is that the company signed a Strategic Cooperation Agreement with Nanjing Golden Dragon Bus Co., Ltd. on developing the market of power battery products for new energy vehicles, establishing a strategic partnership and a long-term cooperation mechanism, as well as co-development of new energy automotive market. Nanjing Jinlong is expected to purchase 1 billion yuan power batteries from the company in the year 2017.

The other news is that Eve Energy plans to obtain the full stake in FANSO with a post-money valuation of not more than RMB 150 million yuan. Established in 2002, FANSO is specialized in lithium battery manufacturing, with annual output of 80 million lithium batteries. The transaction will contribute to a further optimized product structure of Eve Energy and strengthen the company’s foothold and leadership in the lithium battery industry.

5. Shenzhen Desay expects to record revenue of about 8.75 billion yuan; its subsidiary plans to jointly invest another 100 million yuan in Blueway

On January 17, Shenzhen Desay Battery Technology Co., Ltd. announced that the company expects to see revenue of about 8.75 billion yuan in 2016, net profit of 246 – 269 million yuan and a YoY increase of 7% -17%.

According to Shenzhen Desay, improved management during the reporting period led to improved production efficiency and a certain degree of decline in production losses; meanwhile, due to changes in customer structure and product structure, the material cost ratio during the reporting period decreased over the same period last year; based on the above factors, the profitability of the battery packaging business during the reporting period has improved.

The company’s secondary holding subsidiary Huizhou Xinyuan is expected to record a loss of about 60.8 million yuan in 2016, resulting in a net profit of -34.2 million yuan. Shareholding company MTRONICS closed down for liquidation; Blueway Electronics Co., Ltd. bore a loss and provision for impairment of investment totaling about 8.3 million yuan, resulting in a net profit attributable to shareholders of about -6.225 million yuan.

On December 28, Shenzhen Desay announced that n order to address the funding needs of Blueway Electronics Co., Ltd. (hereinafter referred to as Blueway) in the development process, enhance its compliance and financing capacity and meet the business needs, the shareholders now intends a capital increase of 100 million yuan in same proportion of shareholding.

Shenzhen Desay said that this capital increase will be used to enrich the working capital of Blueway, promote the company’s large power batteries, energy storage batteries and other power management systems and packaging integration business. The move will help accelerate the company’s new business development, promote industrial chain extension, improve market competitiveness and enhance the company’s industry position and influence.

6. Zhongtian Technology sees rapid overall growth in new energy industry chain

Zhongtian Technology announced that it is expected to achieve a net profit attributable to shareholders of 1.58-1.78 billion yuan in 2016 (Jan. – Dec.), and a YoY increase of 60% -80%.

Zhongtian Technology attributes the main reasons of pre-increase in performance to the increased profitability of the communications and power business segments, as well as the rapid overall growth of the new energy industry chain. Specifically, the capacity of power to the grid of the company’s distributed photovoltaic power station continued to increase. Also the company was ranked among the top suppliers for lithium batteries and photovoltaic backplanes with enhanced profitability.

It is worth mentioning that in a recent research by investment institutions, Zhongtian Technology said that the company has currently formed into a stable supporting system with Dongfeng Yangtze Motor, Nanjing Golden Dragon Bus Co., Ltd., Foton, BAIC MOTOR, Asiastar, GreenWheel EV and other vehicle enterprises in the field of new energy vehicles.

It is reported that relying on its technical strength and rich experience in energy storage field, Zhongtian Technology is making great effort on power batteries for new energy vehicles. It said that the company has been working with the Institute of Physics and Qingdao and Institute of Bioenergy and Bioprocess Technology, Chinese Academy of Sciences, Tsinghua University and other famous research institutes and universities, developing in advance high specific energy, high security and high magnification technology, making forward-looking arrangements on lithium iron phosphate battery, high security ternary battery, silicon high specific energy battery, high specific energy super capacitor and all solid high-security battery technology.

The company is currently the only national level lithium-ion battery intelligent manufacturing model enterprise in China, and has been included into the authoritative List of Enterprises Meeting the Normative Conditions of Automotive Power Battery Industry.

7. Yongtai Technology sets foot in lithium hexafluorophosphate and a new lithium salt project

Zhejiang Yongtai Technology Co., Ltd. announced that the company achieved a net profit attributable to shareholders of 303-346 million yuan, up by 110%-140% over the same period last year. Yongtai said that during the reporting period the company reduced the stake it held in Jiangxi Fuxiang Pharmaceutical Co., Ltd., and relevant investment income had a positive impact on the company’s profits.

Setting foot in merely a lithium hexafluorophosphate and new lithium salt project, Yongtai is still a strange face in the field of lithium battery. Currently the projects are under construction. As early as on July 5, 2016, Yongtai announced that its holding subsidiary Shaowu Yongtai High-tech Materials Co., Ltd. planned to invest 387.6 million yuan in a lithium hexafluorophosphate project with an annual output of 6,000 tons and a new lithium salt project with an annual output of 2,000 tons. The phase I projects will realize a production capacity of 3,000 tons and 1,000 tons respectively, and the construction period is expected to be 1.5 years.

8. TGOOD’s new energy EV business still in the developing period

Qingdao TGOOD Electric Co., Ltd announced that the company achieved net profit attributable to shareholders of 190-230 million yuan, up by 30% -60% over the same period last year. TGOOD indicated that the company’s traditional manufacturing business continued to grow steadily in the reporting period. Also during the period, the company continued to increase and enhance its investment operation and market layout of the new energy EV business, despite that it was still in the developing period. Relevant infrastructure, technology, R&D and personnel were costly, but the pre-phase layout, input and business model have seen preliminary results, with profitability released partially, thereby enhancing the company’s overall net profit growth.

9. Guangzhou Great Power is expected to record net profit of 131-157 million yuan, a YoY increase of 50% -80%

Guangzhou Great Power Energy and Technology Co., Ltd announced that during the period from January 1 to December 31, 2016, the Company realized net profit attributable to shareholders of RMB131-157 million, representing an increase of 50% -80% over the same period of last year.

Great Power indicated the reasons for the performance change: the company actively opened up the market and saw continuous growth in sales revenue. It strengthened internal management, and strictly control the cost; it is expected that the amount impacted by the non-recurring gains and losses on the company’s net profit in 2016 was between 10 million to 15 million yuan.

10. Cangzhou Mingzhu achieve net profit of 486 million yuan, a YoY increase of 126.39%

Cangzhou Mingzhu Plastic Co., Ltd. announced that the company’s total revenue in 2016 was 2.755 billion yuan, net profit attributable to shareholders was 486 million yuan, up by 26.64% and 126.39% respectively over the same period last year.

Cangzhou Mingzhu said that the company was operating in good condition during the reporting period, with production and sales increased in different degrees. Due to improved technical level, the actual production of dry separator was increased substantially. The “Wet lithium ion battery separator project with an annual output of 25 million” was formally put into operation in the reporting period. Due to a growing market demand, the BOPA products were in short supply and there has been a substantial increase in price. During the reporting period, the company saw substantial increase in both sales revenue and operating results.

11. Guangdong Zhengye expects net profit of 64.9117-76.7138 million yuan, a year on year increase of 65% -95%

Guangdong Zhengye Technology CO., Ltd. announced that in 2016, the company is expected to achieve net profit attributable to shareholders of 64.9117-76.7138 million yuan, a YoY increase of 65%-95%.

12. Keheng Holdings expects net profit of 30-36 million yuan

Keheng Holdings announced that in 2016 the company achieved net profit attributable to shareholders of 30-36 million yuan.