Text | Cockroaches
Changes in stock prices are always wrapped up in market sentiment, especially in an environment full of turmoil and uneasiness. It is easy to use changes in stock prices to speculate about the operation of enterprises, instead of rational thinking and judgment.
The Ningde era, where stock prices are weakening, is in such a situation. The listing of LG New Energy has set off ripples in China's new energy industry. Some voices have made a judgment on the Ningde era earlier, believing that they have won the end, so they have thrown out a series of reasons - the local state-owned shares of China Innovation Airlines have developed rapidly and obtained a number of customers, Fu Neng Technology and Mercedes-Benz have carried out a deeper binding, and Volkswagen has become the largest shareholder of Guoxuan Hi-Tech. Since its listing on January 22, "news" such as excluding the sector index and negotiating with Tesla has emerged in an endless stream, and the stock price of "Ning Wang" has fallen by about 15%.
Corresponding to the stock price, according to the new data released by south Korea's SNE, the international and domestic market share of CATL in 2021 is continuing to increase: the global market share of CATL has exceeded 32.6%, and the domestic market share continues to remain above 50%.
Market share as a criterion for the competitiveness of enterprises, more reflects the "past", in such a market environment of various news shocks, people began to worry about the Ningde era, like many Chinese companies, fell into a big but not strong dilemma?
01 Technology is being surpassed?
The reason why power batteries are classified as high-end manufacturing is mainly because the core competitiveness comes from technical capabilities. In other words, the technological leadership of power batteries depends to a large extent on the understanding of electricity, chemistry and mechanics.
The knowledge of electrochemistry takes time to accumulate, so the inheritance of technology determines the starting point of the enterprise. LG new energy and CATL can be said to be the old enemy, CATL inherited from the ATL power battery sector, as early as the consumer lithium battery field, LG new energy and ATL to kill the sword and light sword shadow, the final result is ATL with technological breakthroughs to solve customer pain points stand out, successfully entered the Apple supply chain, leapt into the global consumer battery leader, the latest market share once reached 45%, in an absolute leading position.
Born out of ATL, the Ningde era has maintained its leading position in the competition with LG New Energy in the field of power batteries with the same fanatical technical genes. As of the end of the third quarter of 2021, the number of R&D personnel in the Ningde era has reached 9,491, accounting for nearly one-third of the total number of employees of 33,000, far exceeding LG New Energy's 3,332 people. From the perspective of R&D expenses, LG New Energy's R&D expenses (including the consumer battery business segment) in the first three quarters of 2021 reached 453 billion won, or about 2.44 billion yuan, accounting for 3.4% of revenue. In the same period, catalpin's R&D expenditure was 4.60 billion yuan, accounting for 6.3% of the total revenue. Such an investment is not difficult to understand, the Ningde era to sue Tafil, Zhongxin Airlines patent infringement and hive unfair competition, watching the hard-won results are easily taken away, no one can stand it, of course, this is a digression.
R & D team personnel and investment is only the foundation, but this is the necessary support for enterprises to have the ability to multi-point layout and make breakthroughs in the original technical route, with the lengthening of the timeline, the technical strength between enterprises will gradually open up.
Public information shows that in the past, the focus of LG new energy's material system was only in the ternary, whether it is a power battery or an energy storage battery, and the Ningde era has walked on three yuan / iron lithium two legs since cutting into the power battery, in the ministry of industry and information technology disclosed in the mass production model battery energy density data, the square shell battery Ningde era whether in the ternary or iron lithium has occupied the top spot all year round.
In the future, LG new energy innovation seems to be all ALL IN in the material system, technical coverage including NCMA, solid-state batteries, lithium-sulfur batteries, recently forced by safety issues, for the has been rejected lithium iron phosphate route has finally put down the body. In the Ningde era, both in the material system and system structure, sodium-ion batteries, cobalt-free batteries, anode-free financial batteries, lithium metal batteries, solid-state batteries, rare metal batteries, lithium-empty batteries, CTP, CTC, A/B mode can be described as multi-point flowering. Last year, it even licensed the CTP patent to Hyundai, a Korean base camp.
Turning over the history of LG, its research in the field of lithium-ion batteries also began in 1995, which is almost the same as the establishment time of ATL in 1999, but in fact, the gap between consumer batteries and power batteries is widening, in addition to the R & D team personnel and input, deep material understanding and transformation, but also depends on a wide and diverse customer base, product on the road practice of solution accumulation, long-term high market share of R & D innovation "ideas" feeding and evolution, and so on.
02 Customer relationship collapse?
In response to the rumors of the collapse of the talk, although Xiaopeng and Tesla have come forward to refute the rumors, many people still imagine this as the beginning of the decline of the Ningde era. However, it is not difficult to see from the flip chart that with LG as a reference, the customer composition of the Ningde era is very healthy.
LG New Energy entered the power battery field before 2010, but the customer development has been slow. The data shows that in 2021, LG downstream customers all bet on the passenger car field, and the top three customers include Volkswagen, Nissan Renault, and Tesla China, accounting for 69% of battery sales, that is to say, the influence of one customer is enough to make his building fall.
In contrast, the source of customers in the Ningde era is extremely rich. The data shows that in 2021, catheter era has achieved all-round coverage of passenger cars, buses and heavy trucks, and the proportion of battery sales of the top three customers in the passenger car field is much lower than that of LG. In the list of customers in the Ningde era, there are not only new car-making forces such as Weilai and Xiaopeng, state-owned enterprises such as BAIC and Chang'an, but also European and American car companies such as Volkswagen and Tesla, and even Japanese and Korean companies such as Hyundai and Honda.
Such a customer structure has also been a virtuous circle, CATL through the output of solutions to different customers, from the automakers to get positive feedback, and then continue to improve the research and development ideas, optimize product design, and then program output. It's like a top student, constantly doing dense papers in various regions, he not only comes into contact with more question types, but also accurately perceives the test points, compared to candidates who do simple test papers in a single region, the results are naturally very different.
From the perspective of automakers, the cost of power batteries accounts for more than 40% of the total vehicle, and a heavyweight battery supplier is ballast stone. Therefore, many automakers are very envious of Tesla and can form such a close cooperation with battery factories, but don't forget that Tesla, as a technology company, communicates with battery factories in the same technical dimension, and automakers without battery technology are just complaining, why can't you get closer to me.
03 Can only rely on scale to reduce costs?
One of Musk's judgments when deciding to make a new energy vehicle is widely circulated in the market: he believes that according to first principles, the price of power batteries will eventually be infinitely close to its cost, that is, the sum of the values of various materials. Objectively speaking, the battery itself is a technical activity, and in theory, the final price should also enjoy a technical premium, but this does not affect the development of the battery industry, because under the impetus of enterprises such as the Ningde era, the battery cost is getting lower and lower. But if the cycle of consideration is extended to a longer period, it will be found that it is still not the end of the price reduction of power batteries.
Ideal Auto CEO Li Xiang once calculated the price of LG new energy batteries in mid-2020, the battery cells were made into modules, and then made into PACK, "The price including tax is basically close to 200 US dollars / kWh." "In contrast, the battery cost of the Ningde era is much lower. According to Reuters, in the same period of 2020, the cost of lithium iron phosphate battery packs in the Ningde era has dropped to less than $80 per kilowatt-hour, of which the cost of batteries has dropped to less than $60 per kilowatt-hour, and NMC ternary battery packs are close to $100 per kilowatt-hour.
Some people attribute this to China's demographic dividend and scale, which is obviously very unobjective. As the first to be named a lighthouse factory by the World Economic Forum in the field of batteries, how can you do without two technical brushes? The comment given at the time of the evaluation was that with artificial intelligence, advanced analysis and cloud computing and other technologies, the defect rate of only one billionth of a billion was achieved at a speed of 1.7 seconds to produce each set of batteries, which increased production efficiency by 75% and reduced energy consumption by 10%. In the same industry, even the Level of Six Sigma Lean Management can only reach the defect rate of one part per million.
Take apart the report and crush it to see, the gross profit margin of LG New Energy and Ningde Era from 2018 to 2020 is 17.5%, 13.2%, 15.9% and 32.8%, 29.1%, 27.8%, and the net profit margin is 0.1%, -5.1%, -3.6% and 12.6%, 11.0%, 12.1%, LG New Energy is basically only half of the Ningde Era.
In the profit composition of LG new energy, power batteries and energy storage batteries are almost not profitable, according to the research report of Haitong Securities, LG new energy power batteries and energy storage sector revenue of 50.9 billion yuan in the first three quarters of last year, and the profit is only 500 million yuan. Even in the same dimension, LG's factories in China theoretically have the same industrial fertile soil, demographic dividend, and supply chain resources, but they also produce power batteries, and the net profit margin in 2020 is only 5%. The net profit margin of its Polish factory is -5.9%, and the US factory is only -16.7%, of which the Polish and US factories have at least 4 years of operating experience and still have not turned a profit.
According to the survey of Haitong Securities, the production and manufacturing cost LG is 45 yuan / kwh higher than that of the Ningde era, of which the module packaging cost is 20 yuan / kwh higher and the depreciation cost is 25 yuan / kwh higher. Also producing 1GWh, LG new energy uses 1.5 times the staff of the Ningde era. Such data can't help but remind people of the olympic slogan of higher, faster, stronger, Ningde era in the current manufacturing should be said to be good, fast, and stable.
Compared with LG new energy with both technology and capital, the Ningde era is still leading a lot, under the Matthew effect, it is difficult for other enterprises to have living space, and in order to survive, some companies have moved the brain outside the development of the right path. The most direct is the low-price competition strategy, in order to lock in customers in exchange for scale and then go public, and then obtain a return through financing, but in the high-end manufacturing industry, such a strategy is tantamount to drinking and quenching thirst. Low price means that it does not make money or even lose money, the deterioration of finance directly leads to the research and development and equipment iteration of the heart of the powerless, the same cycle, on the one hand, the enterprise through the technology to reduce costs, on the other hand is the enterprise loss supply, the result can be imagined, the gap will only grow larger. On the other hand, who pays for the low price can only rely on the drumming of capital to pass on the flowers, and finally the shareholders pay the bill, and when the shareholders see through such a trick, the enterprise can only be a chicken feather in the end.
04 Where is the ceiling?
In the past two years, the Ningde era has been sealed as the "King of Ning" by the private sector because of its good performance in the capital market, and the market value once exceeded 1.6 trillion yuan, so is 1.6 trillion yuan the ceiling?
May wish to compare LG New Energy, according to LG New Energy's disclosure of the financial data details for January-September 2021, as well as the 2021 operating performance forecast, its 2021 full-year power battery and energy storage battery revenue is expected to be 67.8 billion yuan, net profit attributable to the mother of 1.6 billion yuan, according to its latest disclosure of the 2022 performance outlook in February, excluding the impact of SK innovation litigation compensation once included in operating income, the operating income growth rate is 13.88%, Then in 2022, the revenue of power batteries and energy storage batteries should be about 77 billion yuan, the net profit attributable to the mother should be less than 1.9 billion yuan, and the EBITDA should be about 9.3 billion yuan.
In the same data dimension, according to the average performance growth of the NINGDE era given by nearly 20 securities companies, the revenue of the NINGDE era in 2022 is expected to exceed 260 billion yuan, the net profit attributable to the mother should exceed 28 billion yuan, and the EBITDA is nearly 56 billion yuan.
That is to say, in the field of power batteries and energy storage batteries, the revenue of CATL is 3.4 times that of LG New Energy, the net profit is nearly 15 times, and the EBITDA is more than 5 times.
If LG New Energy removes consumer batteries, what is the real valuation of its power batteries and energy storage batteries? As of February 22, LG New Energy's total market value is equivalent to 547 billion yuan, of which the consumer battery part, according to the first 9 months of last year and the performance forecast, the net profit attributable to the mother is 3.3 billion yuan, the price-earnings ratio we give the highest coefficient, according to the world's first consumer battery ATL parent company TDK 22.26 times the price-to-earnings ratio, its consumer battery plate valuation of about 76.4 billion yuan, that is, the valuation of LG power batteries and energy storage battery sector is 470.6 billion yuan.
So the question is, should the valuation of the Ningde era be 3.4 times, 5 times or 15 times that of LG New Energy, is it 1.6 trillion, 2.4 trillion or 7 trillion? Where the ceiling is, I am afraid, is a matter of benevolence and wisdom.