INTRO
As people celebrated the New Year, a piece of news blew up the new energy industry. South Korean battery manufacturer LG New Energy Solutions (LGES) was officially listed on the Korean exchange and pointed to the Catalpa Era. LG New Energy's IPO plans to raise $10.7 billion, equivalent to about 68 billion yuan, which is the largest IPO in South Korea's history. Even if you look at the world, it is second only to the US electric vehicle manufacturer Rivian's $12 billion, becoming the world's second largest IPO in nearly a year.
01
"Calling the board" in the Ningde era,
What does LG New Energy rely on?
LG New Energy's IPO attracted countless attentions, because it is another listed asset of LG Group, the fourth largest consortium in South Korea, and because the company bet on the new energy vehicle track. At present, many Chinese investors are also interested in it, because LG has openly spoken of the "calling" of the Ningde era.
In the four years from 2018 to 2021, the cumulative stock price increased by 198.3%, 44.7%, 231.2% and 67.6% respectively, and the current market value reached 1.35 trillion yuan, which is the fourth largest market capitalization company in A-share after Guizhou Moutai, Industrial and Commercial Bank of China and China Construction Bank.
LG New Energy borrowed the listing of Dongfeng and rubbed the heat of the Ningde era, making its IPO suddenly become "eye-catching". LG New Energy CEO Kwon Young-soo is full of confidence, he once said that LG New Energy will soon beat Chinese rival Cathe era, in the global competition of the electric vehicle battery market, its global market share will surpass catheter era, becoming the world's first.
And where is LG New Energy's arrogance to talk so harshly?
Overall, there are three reasons. First of all, LG New Energy is highly optimistic about capital. Judging from the reflection of the secondary market, LG New Energy easily got the top price of 300,000 won. At the same time, Korean retail investors subscribed to more than 70 times the subscription scale. According to media reports, LG New Energy IPO has accumulated 114 trillion won subscriptions, with 4.424 million subscribers. According to other reports, the LG new energy IPO directly stimulated the number of new accounts opened in South Korea, and the new account data of some Korean securities companies increased by more than 200% compared with previous years.
Secondly, LG New Energy is facing the global market, with a broader user coverage and strong cooperation manufacturers. From the prospectus, it can be seen that LG New Energy's production capacity covers China, the United States, Poland, Germany, Australia and other countries, and its core users are also leading enterprises in various countries, including Hyundai, Tesla, Volkswagen and other strong players. At the same time, almost all mainstream car companies in Europe are LG new energy customers. For LG New Energy, the European and American markets are its own places, and the overseas market is the focus of its pioneering. According to market data, the installed capacity of overseas new energy vehicle power batteries outside China in 2020 was 81.2GWh, of which the installed capacity of LG new energy was 26.8GWh, and the market share reached 33.1%. The overseas loading volume of catheter in the NINGDE era was 5.3GWh, and the market share was 6.5%, ranking fifth.
From the current manufacturers have been bound to support the new energy vehicle companies, LG new energy is indeed remarkable, although there is still a gap compared to the "Ning Wang", but it is still the most likely to catch up with the existence of Ningde.
Finally, LG New Energy is optimistic about the backlog of orders in its hands. LG New Energy CEO Quan Yingshou said: Compared with the Cataline Era, LG Energy has more remaining orders, of which the remaining orders for automotive batteries are worth 260 trillion won (about 1.374 trillion yuan). As a result, the company can maintain double-digit operating profits while increasing annual revenue by 25%.
02
Speak with strength
The "King of Ning" in the world is not a vegetarian
Although LG new energy refers to the "Ning Wang" momentum, but at present, the Ningde era is still standing at the top of the industry with the momentum of the king and it is difficult to shake.
According to the latest statistics released by the South Korean market research institute SNE on February 7, the global power battery load in 2021 will be 296.8 GWh, doubling year-on-year. Among them, the global power battery loading volume of catheter era reached 96.7 GWh, with a market share of 32.6%, an increase of 8 percentage points compared with 2020.
Unsurprisingly, the Ningde era once again won the title of the first place in the installed capacity of global power batteries, and successfully won the "five consecutive championships".
The breakthrough of China's and the global new energy vehicle market has made the Ningde era has long become the "fragrant food" of China's A-share market, and in the past year, its market value has increased by 552.6 billion yuan throughout the year, becoming the "most profitable stock" of the A-share market.
In the same period, the revenue and net profit of the Ningde era also rose sharply. According to the performance forecast previously released by CATL, it is expected that the company's net profit in 2021 will be in the range of 14 billion to 16.5 billion yuan, an increase of 150% to 195% year-on-year. In contrast, the market share of LG New Energy fell by 3 percentage points to 20.3%, and the installed volume of LG power batteries in 2021 was 60.2 GWh, still ranking second.
Cataline era is invincible with a rich product matrix. First, the Ningde era insists on lithium iron phosphate (LFP) batteries and ternary lithium batteries walking on two legs, according to century securities statistics, the proportion of shipments between the two technical products in the Ningde era in 2020 is about 1:1.2. Second, CATL has developed new products such as sodium-ion batteries and solid-state batteries, and the rich product matrix will promote the market share of THE NINGDE era.
At the same time, the in-depth layout of the NINGDE era in the upstream and downstream of the power battery industry chain has begun to feed back the enterprise. At present, the world's lithium resources are entering a relatively shortage of state, NINGDE era in the form of acquisition, investment and other forms of intervention in the upstream and downstream of the power battery industry chain, in order to enhance the control of raw materials, thereby obtaining the right to speak on the supply side. This greatly reduces the adverse impact of rising raw material prices on it, and is also conducive to maintaining its own profit margins.
Recently, the Ningde era has entered the supplementary energy market, and the development prospects continue to improve. According to media reports, on January 17, Times Electric Service, a wholly-owned subsidiary of CATL, released the overall solution of EVOGO (Lexing Power Exchange) and the combination of power exchange service brand, officially cutting into the power exchange track. 2022 will be the first year of the power station release. By broadening its own business lines, CATL has further standardized the battery pack standards in the power exchange market, deepened cooperation with car companies, and improved its competitiveness.
03
Chess against opponents
Who will laugh last
The battle for supremacy continues, and the division is not over. In 2021, the new energy vehicle market in major markets around the world will grow rapidly, making power batteries one of the "leading tracks" in the investment industry. Market data shows that at present, power battery factories around the world are running at full capacity, but there is still a huge capacity gap in the industry.
At least until 2023, the entire market cake will be getting bigger and bigger, bringing battery suppliers a "strong seller market". According to SNE Research, by 2023, the global demand for power batteries for electric vehicles will reach 406GWh, but the power battery production capacity is only 335GWh, and there is a huge gap of about 70GWh between supply and demand.
Changjiang Securities predicted in an earlier auto industry report that the sales of new energy vehicles in the United States will reach 700,000 and 1.3 million in 2021 and 2022, respectively, nearly doubling. Among them, Tesla and many traditional car companies in the United States new energy vehicle sales are continuing to rise, in addition to Tesla's current self-produced batteries, other car companies have to rely on third-party battery suppliers.
The rapid rise of new energy vehicles has made power batteries a key part of the competition. For the battery giants, the expansion of production has become the top priority of the strategic deployment of the battery giants.
According to the data, in the recent IPO, LG New Energy raised a total of about 68.3 billion yuan, and said that in addition to the research and development of new products and the construction of smart factories to improve product quality and quality, the rest of the funds are all used to expand production, including joint ventures with car companies such as General Motors, Stellantis Group and Hyundai Motor in different regions, and will invest 1.2 trillion won and 1.4 trillion won in China and Eastern Europe to increase production capacity.
Up to now, LG New Energy has set up battery production bases in China, South Korea, the United States and Europe, and plans to increase global battery production capacity from 150GWh in 2021 to 430GWh in 2025. General Motors of the United States recently announced that it will establish a fourth battery plant in a joint venture with LG New Energy to cope with the rapid increase in battery demand in the North American market in the future.
The Ningde era grasps R&D cooperation with both hands, focusing on the improvement of R&D strength. In research and development, CATL continues to increase investment. According to the financial report, from 2017 to the first three quarters of 2021, the R&D expenses of CATL were 1.632 billion yuan, 1.991 billion yuan, 2.992 billion yuan, 3.569 billion yuan and 4.595 billion yuan, respectively, with a total of about 14.8 billion yuan in the past five years. In terms of R&D cooperation, CATL cooperated with the Institute of Physics of the Chinese Academy of Sciences to establish a clean energy joint laboratory, establish a collaborative research and development platform for collaborative innovation, and create a highland for joint innovation in the field of clean energy technology and technology. In addition, the CATL Future Energy Research Institute is located in Minhang District, Shanghai, and will cooperate with Shanghai Jiao Tong University.
At present, whether it is the confident LG new energy or the Ningde era that has become the king, they need to maintain their industry competitiveness by taking advantage of their strengths and avoiding their weaknesses. For example, to make up for the shortcomings in production capacity, to strengthen technical advantages... Manufacturers can only continue to consolidate their position and maintain their position in the industry by taking advantage of their strengths and avoiding their weaknesses.
Although the new energy market penetration rate is huge, it remains to be seen whether LG New Energy can shake the first throne of the Ningde era.
Source: Yuanchuan Research Institute, Leek Economy, Economic Daily, Starting Point Lithium Battery Big Data