Batian shares cut into the lithium iron phosphate circuit German nano fixed increase of 3.2 billion yuan to build 110,000 tons of production capacity

The lithium iron phosphate market is constantly attracting new players. On the evening of November 9, Batian Co., Ltd. (002170) announced that the company signed an agreement with the People's Government of Wong'an County to invest in the construction of phosphate mine green resource production battery-grade iron phosphate new materials and supporting projects in Guizhou Wong'an Economic Development Zone.

According to the announcement, the project has about 900 acres of land and an annual output of 300,000 tons of iron phosphate. The project is divided into three phases, with construction capacity of 50,000 tons/year, 100,000 tons/year and 150,000 tons/year, and the start time is November 2021, June 2022 and March 2023 respectively.

On November 5, Batian Co., Ltd. announced that it intends to set up a wholly-owned subsidiary with its own funds of 100 million yuan to engage in the production of ferric phosphate and related supporting engineering business.

The advantage of Batian's entry into iron phosphate production lies in phosphorus resources. According to soochow securities calculations, with reference to the market in the first half of this year, the cost advantage of lithium iron phosphate enterprises with self-supplied phosphorus sources is about 2135 yuan compared with the purchased phosphorus source per ton.

Batian Co., Ltd. has obtained the mining rights of Xiaogaozhai phosphate mine in Wong'an County, Guizhou Province in May 2020, and is currently in the mine construction stage. The company recently responded to investors on the interactive platform that Xiaogaozhai phosphate ore belongs to the medium and high grade phosphate ore, with an average grade of 26.74%, reserves of more than 60 million tons, the current daily output of engineering ore is about 200-600 tons, it is expected that phosphate ore mining will be greatly improved next year.

The main product of Batian co., Ltd. is compound fertilizer, and the financial report shows that the company's revenue in the first three quarters of this year was 1.731 billion yuan, an increase of 13.8% year-on-year; the net profit attributable to the mother was 58.45 million yuan, an increase of 30.2% year-on-year. It is worth mentioning that Batian co., Ltd. has previously had nitric acid production capacity to supply German nano, the leader in the domestic lithium iron phosphate industry.

In the evening, The German Nano (300769) also announced a fixed increase plan. The Company intends to issue no more than 26.768 million shares to specific targets and raise no more than RMB3.2 billion. Among them, 2.3 billion yuan is used for the annual output of 110,000 tons of new phosphate cathode material production base project, and 900 million yuan is used to supplement working capital.

German Nano said that the fundraising project belongs to the company's new product new phosphate cathode material new production capacity project, the new phosphate cathode material nano lithium iron phosphate upgrade product, with a higher voltage platform, can significantly improve the energy density of the battery, and retain the advantages of high safety and low cost.

Lithium iron phosphate industry concentration is high. According to the data of Gaogong Lithium Battery, the shipments of the top four manufacturers of lithium iron phosphate material shipments in 2020 accounted for 79.7% of the total. German Nano said that the company urgently needs to lay out the new phosphate cathode material market in advance through the implementation of this fundraising project, seize the market opportunity, and accelerate product upgrading.

Lithium iron phosphate is in the limelight in the current lithium battery market. In the power battery market, lithium iron phosphate is currently comparable to ternary materials in terms of loading capacity, and is growing at a faster rate. According to the statistics of China Automotive Power Battery Industry Innovation Alliance, from January to September, the national power battery loading volume accumulated 92.06GWh, of which the ternary battery loading volume totaled 47.1GWh, up 99.5% year-on-year; the cumulative loading volume of lithium iron phosphate batteries was 44.8GWh, up 332% year-on-year.

In addition, lithium iron phosphate is regarded as a more suitable solution in the field of energy storage, and the energy storage market is also on the eve of the outbreak. According to high-tech lithium battery data, in the first half of this year, domestic energy storage lithium-ion battery shipments were 11.1GWh, an increase of 101.8% year-on-year. Domestic lithium iron phosphate shipments in the first half of the year were 178,000 tons, which has exceeded the level of the whole year of 2020.

Recently, a number of phosphorus chemical companies have cross-border layout of lithium iron phosphate track, including Xingfa Group, Hubei Yihua, Yuntianhua, Xinyangfeng, etc., and traditional manufacturers are also expanding production on a large scale. The market expects that the production capacity will begin to be released at the end of 2021, continue to increase in 2022, and there may be a surplus situation in 2023.