On the first day of the new year in 2022, Shanshan Co., Ltd. (600884.sh) announced the completion of a fixed increase plan of 3.053 billion yuan, which was mainly used to replace the acquisition of Shanshan Shares in the early stage, that is, to increase the capital of Suzhou Shanjin to obtain 70% of the equity of Suzhou Shanjin, and indirectly purchased 70% of LG Chemical's LCD polarizer business and related assets in China (mainland China, Taiwan) and South Korea through Suzhou Shanjin.
The implementation of this fixed increase will greatly enhance the technology and scale competitiveness of Shanshan Co., Ltd. in the global LCD polarizer market, and further strengthen the leading position in the global polarizer industry.
The performance of the polarizer industry has taken off strongly
Since the completion of the transaction of the Chinese mainland related assets of the acquisition on February 1, 2021, the polarizer business has been included in the consolidated statements of the listed company. In the first three quarters of 2021, the polarizer business achieved revenue of 7.53 billion yuan and net profit attributable to the mother of 890 million yuan, accounting for 48% and 32% of the company, respectively, with outstanding performance contributions and a great trend of lifting half the sky.
Polarizer is the key component of the production of LCD panels, LCD panels are widely used in televisions, monitors, notebook computers, tablets and other consumer electronics, the market demand has steadily increased, especially the demand for large-size TV, it is expected that the whole year of 2021 will increase by 23% year-on-year, and will maintain a compound annual growth rate of about 16% in the next few years.
Since 2016, the global panel industry chain has gradually shifted to China, and the lcd panel production capacity and share of the Chinese mainland market have been rapidly increased, and the scale has ranked first in the world.
Compared with the rapid increase in LCD panel production capacity, there is still a large gap in the localization supply of polarizers as the main raw material, according to IHS data, the Chinese mainland polarizer production capacity gap will reach 117 million square meters in 2022.
In the face of such a blue ocean market, the company's timing of acquiring polarizer business at this time is also just right. The LG chemical polarizer business acquired by the company has become an industry leader since 2013, accounting for about 25% of the global market share in 2020, ranking first in the world.
From the perspective of different display application fields, in 2020, LG Chem's market share of polarizers for large-size TFT-LCD, polarizers for LCD TV, and polarizers for Monitor was 24.1%, 25% and 24% respectively, ranking first in the world, of which more than 65 inches (inclusive) accounted for more than 40%, which is a real global head enterprise.
Polarizer business currently has 8 front-end production lines, with a production capacity of about 130 million square meters, of which 5 are ultra-wide production lines of more than 2 meters, which is the global market leader in the field of ultra-wide format, and the first company in the industry to use ultra-wide production lines, of which the 2600 mm ultra-wide production line is the world's largest. In the first half of the year, the company has successively launched new projects in Zhangjiagang, Mianyang and other places, which will increase the annual production capacity by 90 million square meters after full production, further improving the overall production capacity.
In addition, in 2003, LG Chem took the lead in investing in post-processing production lines in Nanjing, and currently has 12 post-processing bases distributed throughout the country, with strong post-processing production strength.
Back-end production lines include industry-leading RTS (Coil-to-Sheet) production lines and RTP (Coil-to-Panel) production lines, which can provide downstream LCD panel manufacturers with a complete set of RTP production lines that can be used for their back-end production, and most factories are located near customer factories, which can quickly meet customer needs such as changing and control transportation and packaging costs.
At present, polarizer business customers include the world's leading LCD manufacturers BOE, LG Display, Huaxing Optoelectronics, XiaPupu Innolux, etc., of which the cooperation time with LG Display, BOE and Sharp is as long as 20, 15 and 13 years respectively.
It can be seen that the polarizer business acquired by the company is a high-quality asset, and in the case of continuous growth in market demand and obvious capacity gap, the company still ranks first in the world and has obvious advantages.
Lithium battery materials are busy expanding production
The company began to industrialize anode materials in 1999, in 2003 involved in cathode materials, in 2005 involved in electrolyte, deep ploughing lithium battery for more than 20 years, the industry's leading position is stable, the comprehensive production capacity is industry-leading, is the winner of lithium battery materials Grand Slam.
As of the semi-annual report of 2021, the company has a production capacity of 60,000 tons of cathode materials, 120,000 tons of anode materials, and 40,000 tons of electrolyte production capacity. Customers include ATL, LGES, CATL, BYD, Lishen, Hive Energy, Fu Energy, Guoxuan Hi-Tech, Yiwei Lithium Energy, SDI and other global mainstream battery cell companies.
Benefiting from the continuous prosperity of the downstream new energy automobile industry and the continuous production of the company's lithium battery material project, the company's lithium battery material business has also achieved a performance explosion, with revenue and net profit attributable to the mother reaching 7.23 billion and 840 million yuan in the first three quarters of 2021, respectively, an increase of 58% and 465% year-on-year.
(1) Anode: The world's leading Shanshan anode company is the first enterprise engaged in the research and development and production of artificial graphite anode materials for lithium-ion batteries, and its consumer battery anode materials lead the industry technical standards, and power products sell well in the market at home and abroad with very cost-effective advantages, and the share of core customers such as ATL and CATL continues to expand. The company's independent development of high energy density low expansion technology, fast charging coating technology, silicon anode precursor synthesis technology are in the forefront of the industry, since 2019, Shanshan anode technology ranked among the national team, selected as the national enterprise technology center, the national manufacturing single champion demonstration enterprise, national high-tech enterprises.
With the rapid development of the new energy industry, lithium battery anode materials will also maintain explosive growth in the next decade, and the company is also ahead of the layout of production capacity construction. At present, the company has a production capacity of 120,000 tons of anode materials, and with the commissioning of the second phase of the Baotou integration project at the end of 2021, the company's anode production capacity will reach 180,000 tons.
On January 4, 2022, the company's Meishan annual output of 200,000 tons of anode material project officially started construction, the project in terms of investment intensity, production capacity scale or process technology, have reached the industry-leading level, but also make the company step forward to become the world's leading enterprises in anode materials.
The key to the production of anode materials lies in the security of the supply of raw materials and the cost of graphitization processing in the main process links.
The company signed a strategic cooperation agreement with PetroChina Jinzhou Petrochemical Company, will carry out all-round cooperation in the field of needle coke, petroleum coke, calcined coke and other raw materials, Jinzhou Petrochemical is the industry leader in the field of needle coke, technical advantages and resource advantages are outstanding, will provide raw material guarantee for shanshan shares' strategic planning in the next 3 to 5 years.
In terms of graphitization processing, the company has expanded its graphitization capacity in the form of internal expansion and equity participation, and the current proportion of graphitization support is relatively high. The cost of raw material supply and graphitization processing has been guaranteed, the optimization of the superimposed product structure and the scale effect have emerged, and the gross profit margin of the company's anode materials has been continuously improved, from 24.4% in 2018 to 27.7% in 2020.
(2) Cathode: In terms of strong combination cathode materials, the company has maintained a leading position in the industry in high-voltage and high-capacity 3C consumer electronics products lithium cobalt oxide cathode material technology, and has also built its own product and technical system in ternary materials, especially high-nickel powered ternary cathode materials, which can meet the needs of customers at different levels. At present, the company has a cathode material production capacity of 60,000 tons, and it is expected that after the second phase of the Greater Changsha Base is put into operation in 2022, the production capacity will reach 90,000 tons.
On August 31, 2021, Shanshan Energy, the company's cathode business company, completed the integration with BASF in Germany, a world-renowned chemical leader and the first company in the world to have ternary cathode material plants on three continents, with a ternary patent authorization from Argonne National Laboratory (ANL) in the United States.
This joint venture will help Shanshan Energy to quickly integrate into and seize the global market and enhance its profitability and market share under the wave of global new energy development, through BASF's advantages such as the world's leading car company cooperation resources, global industrial layout, core patent technology licensing, and international brand influence. After the completion of the transaction, the company's shareholding in Shanshan Energy will be reduced from the original 68.6438% to 49%, which will no longer be incorporated into the consolidated statements, but the company will appoint some directors and senior executives to participate in its daily operation and management, and contribute to the company's profits through long-term equity investment and profit distribution accounted for by the equity method.
(3) Electrolyte: cost decline, profitability improvement the core of the electrolyte is lithium hexafluorophosphate, in the first half of 2021, the company's 2,000 tons of lithium hexafluorophosphate production line has reached production, in the case of lithium hexafluorophosphate prices soared and the company has its own part of lithium hexafluorophosphate production capacity, the performance increased significantly year-on-year, in the first three quarters of 2021 electrolyte business to achieve a net profit attributable to the mother of 224 million.
The company also plans to build a new 2,000 tons of lithium hexafluorophosphate production capacity, after the completion and operation, the company's lithium hexafluorophosphate production capacity will reach 4,000 tons, to ensure the company's electrolyte raw material supply security at the same time can reduce the company's electrolyte raw material costs, improve profitability.
With the continuous development of the global new energy industry, Shanshan shares, which also lay out lithium battery cathode materials, anode materials and electrolytes, have finally ushered in a highlight moment, and their profitability has been continuously improved, and their performance has achieved a big explosion. Through the acquisition of LG high-quality polarizer assets, the company completed the layout of "lithium battery materials + polarizers" two major plates, and a new journey has begun.
Source: China NetScience
![Tianjin athlete Ding Song debuted in the Winter Olympics! "Wild Boys" strike at the best[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)