On the evening of August 26, Ningde times released its 2020 semi annual report. According to the report, the operating revenue of Ningde times reached 18.829 billion yuan, a slight decrease of 7.08% compared with the same period last year; the net profit attributable to the shareholders of the listed company was 1.937 billion yuan, a decrease of 7.86% compared with the same period last year.
Novel coronavirus pneumonia has been a major factor in the decline of performance. In the Ningde era, the report pointed out that the new energy vehicle sales and sales volume of new energy vehicles decreased significantly as the macroeconomic impact of the new crown pneumonia and the serious decline in market demand. According to the statistics of China Automotive Research Institute Certificate, in the first half of 2020, the production and sales of domestic new energy vehicles were 350000 and 336000 respectively, with a year-on-year decrease of 42% and 44% respectively; the total installed power battery capacity was 17.5gwh, with a year-on-year decrease of 42%. In this context, the operating revenue of the power battery sector, which accounts for more than 70% of the company’s business revenue, was about 13.478 billion yuan in the first half of the year, a year-on-year decrease of 20.21%.
In addition, due to the impact of the epidemic, the purchase demand of lithium battery materials decreased correspondingly, but at the same time, the price of some lithium battery materials was affected by the metal price, which also decreased year-on-year. Therefore, the operating revenue of lithium battery materials, which accounted for 6% of the company’s business revenue, was about 1.235 billion yuan in the first half of the year, a sharp drop of 46.53% year-on-year.
However, Ningde times further said that with the alleviation of the epidemic and the gradual recovery of the macro economy, the company’s power battery system shipment increased significantly month on month. According to the financial report analysis, in the second quarter of this year, the operating revenue of Ningde times reached 9.799 billion yuan, a slight increase of 8.5% on a month on month basis; the net profit attributable to the shareholders of the listed company was 1.195 billion yuan, a sharp increase of 61.07% on a month on month basis, and a growth of 13.27% on a year-on-year basis.
Focusing on the first half of the whole Ningde era, we may summarize four key events: losing the top position of global power battery shipment for three consecutive years, absorbing money for the construction of three major power battery projects, investing 19.7 billion yuan in domestic and foreign high-quality listed enterprises in the upstream and downstream of the industrial chain, and starting the supporting station of automobile enterprises.
As mentioned earlier, in 2020, under multiple pressures, the domestic new energy vehicle market has slowed down and continued to grow negatively. At the same time, model 3, which is equipped with LG Chemical and Panasonic power batteries, is hot in the world. According to the data released by EV sales, in the first half of this year, the cumulative sales volume of electric vehicles in the world reached 950076, a year-on-year decrease of 16%, but Tesla Model 3 took the first place with an overwhelming advantage, occupying 15% of the market share. As a result, in the first quarter of 2020, Ningde era lost the top position in the global power battery shipment for three consecutive years, and was overtaken by LG Chemical. Until the end of the first half of the year, Ningde era still did not win the championship again.
At the same time, with the abolition of the “white list” of the “standard conditions for automotive power battery industry”, the door of Japanese and Korean battery enterprises to enter China has officially opened. This means that local power battery enterprises such as Ningde times, which were supported by the “white list”, will face the competition of foreign battery enterprises.
In addition, BYD is splitting its battery business and seeking marketization to realize separate listing; Tesla, great wall, Geely and other auto companies are involved in self research of power battery technology; Volkswagen Group’s shares in GuoXuan high tech, Daimler’s shares in Funeng and other auto companies are tied up with power battery companies.
In order to seek new breakthroughs, it is the first step for every power battery enterprise to continue to widen the distance from other competitors and expand production capacity. According to the planning of Ningde times, it may release nearly 40gwh of production capacity on the basis of 58gwh in 2019 this year, and it is estimated that the production capacity of Ningde times will be nearly 250gwh by 2023.
In order to further ensure the steady progress of the planned production capacity construction, Ningde Times announced on February 26 this year that it plans to issue shares to no more than 35 specific objects in a non-public manner, raising about 20 billion yuan for the construction, research and development of power battery and energy storage battery projects, and replenishing the working capital, so as to further enhance the profit margin and stabilize the market position. Although the fund-raising amount was reduced to 19.7 billion yuan in the subsequent announcement in May, the investment amount for Ningde times Huxi lithium-ion battery expansion project, Jiangsu times (Liyang) power and energy storage lithium-ion battery R & D and production project (phase III), Sichuan times (Yibin) power battery project phase I, and electrochemical energy storage frontier technology reserve R & D project remained unchanged.
In order to seek new breakthroughs and continue to widen the distance from other competitors, expanding production capacity is only the first step. Then we need to develop new orders in the expanding new energy vehicle market to ensure that the market share will not decline.
In January, Tesla announced the addition of Ningde times as its supplier to its Shanghai plant. Jiang Li, deputy general manager and Secretary of the board of directors of Ningde times, responded that Tesla will purchase lithium-ion power batteries from the company from July 1, 2020 to June 30, 2022, and the supply is not limited to lithium iron phosphate or lithium ternary battery.
Subsequently, the name of Ningde times constantly appeared in the information column of power batteries for Hyundai, Nissan and Mercedes Benz new energy vehicles. On July 10, Honda Technology Research Industry Co., Ltd. (hereinafter referred to as “Honda”) directly announced that it had signed the “global partnership agreement” (hereinafter referred to as “agreement”) with Ningde times. According to the agreement, Honda plans to subscribe for the non-public offering shares of Ningde times through its subsidiary Honda technology research industry (China) Investment Co., Ltd. in China, and the number of shares subscribed accounts for about 1% of the total share capital of Ningde times after the non-public offering.
Ningde Times said in the announcement that the signing of the “agreement” further consolidated the global partnership between the company and Honda, and will further enhance its own sustainable profitability and business performance in the future, and help to enhance its market position and influence. In addition, Mercedes Benz also announced that Ningde times has become a leading supplier in the field of power batteries, and the two sides will jointly develop the next generation of power batteries.
Affected by the above good news, as of the close of August 26, the share price of Ningde times reached 194.40 yuan, an increase of more than 60% compared with less than 107 yuan / share at the beginning of the year. In more than half a year, the total market value of Ningde era was as high as 495 billion yuan, a record high.
But obviously, the Ningde era was not satisfied with the status quo.
At the 12th China Auto blue book forum held recently, Zeng Yuqun, chairman of Ningde times, said that by the beginning of 2025, the purchase cost of new energy vehicles will be little different from that of fuel vehicles. In order to reduce the cost of new energy vehicles, how to reduce the cost of the power battery, which accounts for more than 30% of the total cost, has become the key. How to reduce the cost faster in the post subsidy era, who can have more say in the global lithium battery market competition.
In Ningde era, the synergy of industrial chain is one of the key to cost reduction. In the past development process, Ningde era directly and indirectly held the shares of upstream raw material enterprises to build a strong industrial chain structure, which provided support for raw material supply and cost control of its own products. On August 11 this year, Ningde Times announced that the company will make investment related to the industrial chain, with an investment amount of no more than 19.076 billion yuan, of which the overseas investment amount is no more than 2.5 billion US dollars.
However, in the view of many people in the industry, behind the 19 billion yuan investment, it will not only reduce costs, but also increase investment to stabilize the upstream and downstream, and accelerate the layout of overseas in the case of rapid expansion of production capacity.
To a certain extent, 2020 is the node of great changes in the global pattern of new energy vehicles. In the past six months, the growth rate of new energy vehicle production and sales in China slowed down, but the European market grew rapidly, a number of power battery enterprises were deeply bound with vehicle enterprises, and the next generation of power battery technology emerged frequently. In the second half of the year, many new energy vehicles were put on the market. However, based on the frequent actions of Ningde era in the first half of the year, the second half of 2020 is still worth looking forward to.
Editor in charge: Tzh