Per reporter: Ye Xiaodan Per editor: Zhang Haini
Photo source: Photo by Ye Xiaodan, reporter (data map)
368 billion yuan, Tsingshan Holdings disclosed the group's sales revenue in 2022 on January 12. In 2020, Tsingshan Holdings' revenue was 292.8 billion yuan.
In two years, the sales scale increased by more than 70 billion yuan. This private enterprise born in Wenzhou, from stainless steel to nickel metal, the global layout of the industry, is also known as the "low-key nickel king".
"Through about 10 years of hard work, Tsingshan has rewritten the history of the original international nickel ranking without Chinese companies." In 2022, Tsingshan Holdings, which is on the list, ushered in more intensive exposure. In the long-short game of the LME "demon nickel" incident, Tsingshan Holdings has attracted more attention and focus from domestic and foreign public opinion.
Bulls hunting, short gambling, skyrocketing prices, LME "pulling the wire", and the irrational market of nickel futures have made some people ecstatic and some people crazy. Tsingshan Holdings, which was forced to take a position by bulls, experienced a far-reaching "nickel crisis" in 2022.
"In 2022, Tsingshan enterprises encountered some challenges in the development process, but the more difficult the moment, the more we must strengthen our confidence, face difficulties and proactively face difficulties." Xiang Guangda, Chairman of the Board of Tsingshan Holdings, concluded at the 2022 year-end symposium.
Rui Pu Lanjun who rushed to IPO: wild and forbearing
Tsingshan Holdings, which owns the development rights of laterite nickel mines in Indonesia, is also vigorously promoting the expansion of the industrial chain downstream, and in December 2022, Ruipuranjun, a new energy sector under Tsingshan Holdings, rushed to IPO in Hong Kong, exposing a corner of the "Nickel King" industrial map to the public.
0.75 yuan/Wh, which is the average selling price of energy storage battery products disclosed by Ruipulanjun in January ~ June 2022.
Energy storage battery products are a major business segment of Ruipulanjun's rapid development in the first half of 2022, and the prospectus shows that the revenue of this sector in the first half of 2022 increased by 599.7% year-on-year, accounting for 46.8% of revenue, surpassing power battery products and becoming Ruipulanjun's largest source of revenue.
If you compare the average selling price of the company's products in different years in years, the average price of Ruipu Lanjun energy storage battery products in 2019 was 1.07 yuan / Wh, and then fell to 0.59 yuan / Wh, and then rose slightly, and the price in the first half of 2022 increased compared with the same period in 2021.
However, Ruipu Lanjun fell into a situation of "selling more than enough". Although the sales volume of the company's energy storage battery products increased in the first half of 2022, the gross profit lost 227 million yuan, and the gross loss rate was 12%. From the 2019~2021 data disclosed by Ruipulanjun, energy storage battery products have been in a loss state. In the first half of 2022, with the increase in sales, the loss also further widened compared to the same period of the previous year.
Ruipu Lanjun responded to this: "The proportion of small-capacity batteries in energy storage battery products is high, and its profit is low during the track record period, first, the production efficiency of small-capacity batteries is still improving and has not reached the optimal level; Second, in order to strive for market share, the company has set the price of small-capacity batteries at a more competitive level. ”
Low prices for the market, which also dragged down the company's overall performance.
According to the prospectus, Ruipulanjun's revenue in 2019, 2020 and 2021 was 233 million yuan, 907 million yuan and 2.109 billion yuan, respectively, and the losses during the period were 112 million yuan, 53.27 million yuan and 804 million yuan, respectively. In the first half of 2022, the revenue was 4.017 billion yuan, compared with 666 million yuan in the same period of the previous year, and the loss during the period was 705 million yuan, compared with a loss of 216 million yuan in the same period last year.
After the equity penetration, Xiang Guangda, Tsingshan Holdings and Yongqing Technology are the controlling shareholders of Ruipulanjun.
According to the official website of Tsingshan Holdings, Ruipulanjun is the first enterprise of Tsingshan Holdings to invest in the field of new energy in combination with its own rich mineral resources.
Power battery products and energy storage battery products are the two major key sectors of Ruipulanjun. According to data from the China Automotive Power Battery Industry Innovation Alliance, Ruipulanjun ranked eighth in the domestic power battery installed volume ranking in November 2022. In the past year, lithium batteries have benefited from the high prosperity of the new energy industry and ushered in continuous strong demand. It's just that from the perspective of actual income, Ruipulan Jun is like entering the situation of "half flame, half seawater".
Strong market, loss-making performance, before submitting the prospectus at the end of 2022, Ruipu Lanjun conducted multiple rounds of financing. The prospectus disclosed that in the A round of financing in January 2022, Qingdao Motor and Jiaxing SAIC increased their capital in Ruipulanjun; In the A+ round of financing at the end of February 2022, Wenzhou Transport also signed a capital increase agreement with the company.
In August 2022, the two rounds of financing of Ruipulanjun attracted more investors, including Tianjin Haihe (IDG Capital Entity), Wuhu Mingming, Ping An Investment, CITIC Investment, Zhejiang University Education Foundation, etc., as well as the second batch of investors including Shenzhen Venture Capital, HOPU Oriental and 3W Global I.
In this sprint to IPO Hong Kong stocks, Ruipu Lanjun said that the net proceeds were mainly used to expand production capacity; Technology research and development of advanced lithium-ion batteries, advanced materials and advanced production processes; Repayment of bank loans and for working capital and other general corporate purposes.
Ruipu Lanjun is only the "tip of the iceberg" in the huge territory of Tsingshan Holdings of 368 billion yuan, and Tsingshan Holdings, which has industries in many places around the world, adheres to a low-key style in China, and the founder Xiang Guangda rarely speaks out. Only after the LME "demon nickel" incident did Xiang Guangda and Tsingshan Holdings gradually enter the spotlight of public opinion.
Nickel crisis: "nickel king" in the spotlight
$40,000, $50,000, $100,000...
On March 8, 2022, the price of LME nickel futures rose sharply in a short period of time. When the price of nickel soared to a peak of $101365, the price set a record for the highest nickel price ever recorded by the LME. For bears, for every point the price of nickel disk increases, the loss is exacerbated.
Eight months later, LME experts said in their self-defense that on March 8, 2022, "extreme price movements cannot be explained by rational market forces, and the market has become disorderly." ”
Nickel market crisis, long and short gambling, and Tsingshan Group is also in this gamble, was reported by many media to hold a large number of short positions, in the irrational market by long positions.
In a self-defense disclosed by the LME to the Daily Economic News at the end of November last year, it was said: "A high margin call will lead to default on at least 7 clearing members." If this disorderly transaction is deemed valid and representative of market value, it will result in all open market positions being revalued and also lead to an unprecedented margin call of at least over $19.75 billion. ”
Finally, at 8:15 London time on 8 March 2022, the LME suspended nickel trading and cancelled all trades executed on telephone trading and LMEselect after midnight UK time on 8 March 2022.
This decision is also considered LME's decision to "wind back the clock".
This also gives holders of short positions in LME nickel futures a breather.
The decision to "turn back the clock" has also led to judicial proceedings and huge claims to the LME, and there are also voices questioning: Is the LME decision to declare the transaction invalid on March 8 last year to protect Tsingshan Group or other companies with short positions?
The LME said in its self-defense that "this is completely wrong". The LME emphasises that the Exchange's core statutory duty is to maintain a fair and orderly market and that these decisions are not made to support or protect any particular group or any particular market participant, nor for the financial interests of the LME Group.
However, the LME also mentioned some problems with Tsingshan Holdings in this incident.
Regarding the market decision to declare the trading invalid on March 8 last year, the LME believes that there are very large short positions in over-the-counter nickel futures, and the over-the-counter market has exacerbated the market chaos. At the same time, the LME noted that Tsingshan Group appears to have some short positions in the over-the-counter market.
In the LME self-defence filed with the court, the disturbance of the LME nickel futures market by the over-the-counter market was also mentioned. In an email reply to the Daily Economic News, the LME revealed that the LME now knows that including a large number of over-the-counter trading positions (including a portion held by Tsingshan Group) is an important cause of the LME market chaos. But at the time, the exchange was unaware of this, and the interests of any of the above parties did not constitute an incentive for the London Metal Exchange to make a decision.
After announcing the suspension of nickel futures trading on March 8 last year, the LME did not resume trading in nickel contracts until 8:00 London time on March 16 last year.
In the period before the LME reopened, the most concerned question in domestic public opinion was whether Tsingshan Group had enough funds to deliver the deposit after the LME opened. Can I transfer enough stock for delivery?
At 1 a.m. Beijing time on March 15 last year, Tsingshan issued a statement on its public account Tsingshan Industrial, saying, "Tsingshan Group has reached a silent agreement with a syndicate of creditors of futures banks. During the quiet period, Tsingshan and the syndicate will actively negotiate the implementation of a standby and secured liquidity facility, which will be mainly used for Tsingshan's nickel position margin and settlement needs. During the quiet period, the participating futures banks agreed not to liquidate Tsingshan's positions or require additional margin for existing positions. As an important part of the agreement, Tsingshan Group should reduce its existing holdings in a reasonable and orderly manner as abnormal market conditions are eliminated. ”
Tsingshan Holdings in this long-short gamble, what is the success or failure? The outside world has no way of knowing, and it is difficult to judge how big and far-reaching the impact of the demon nickel incident on Tsingshan Holdings is; More games may have disappeared into smoke after this turmoil.
Photo source: Photo by Cheng Ya, reporter (data map)
Tsingshan Holdings' "circle of friends"
Before being dubbed the "Nickel King" by the outside world, Tsingshan Holdings' earliest business focused on the stainless steel industry.
As a representative of Wenshang, the history of Tsingshan Holdings can be traced back to Zhejiang Ouhai Automobile Door and Window Manufacturing Company founded in 1988. In the eighties and nineties of the 20th century, Wenzhou had a strong business atmosphere, and the development of private enterprises was further nourished; Ten years later, Zhejiang Tsingshan Special Steel Company, the predecessor of Tsingshan Holdings, was officially established. According to the official website of Tsingshan Holdings, the plant was one of the largest private stainless steel manufacturers in China at that time.
In 2003, Tsingshan Holdings was formally established, and since then, it has proposed "building 10,000 green mountains and refining stainless steel for a hundred years".
In Xiang Guangda's view, in 2008, the entire steel industry was the same: carbon steel and stainless steel were subject to resource constraints. "60%~70% of stainless steel is nickel, so who produces nickel?" It is produced by foreigners, we do not produce it ourselves. However, if stainless steel wants to develop, it is necessary to solve the problem of "insufficient nickel".
In 2009, before the introduction of the ban on nickel mines in Indonesia, Xiang Guangda was the first person to voluntarily choose to build a smelter in Indonesia.
Seven years later, Tsingshan Holdings may be grateful for its vision in 2009, which laid the groundwork for Tsingshan Holdings to develop a new energy track many years later.
Another listed company in the nickel industry chain, Liqin Resources (HK02245, stock price HK$15.000, market value HK$23.339 billion), analyzed in the prospectus that stainless steel has historically accounted for the largest share of global nickel product consumption. In 2021, the nickel product consumption of stainless steel was 1927.1 kilometal tons, accounting for 66.5% of global nickel consumption, while the nickel consumption of batteries accounted for 14.0%. In the future, batteries, especially power batteries, are expected to be the main contributors to the growth of global nickel consumption. In 2026, batteries are estimated to rank second in terms of global nickel consumption, with a market share of 34.3%.
Image source: Tsingshan Holdings official website
Tsingshan Holdings, which holds the development rights of nickel mines in Indonesia, provides a highly strategic raw material supply for the subsequent upstream and downstream layout of new energy lithium batteries. In the development of the domestic new energy market and Indonesia's policy of banning the export of nickel ore, it has become one of the few private enterprises in China that controls the scarce upstream.
According to the prospectus of Liqin Resources, global nickel ore reserves are mainly concentrated in Indonesia, Australia and Brazil, accounting for 55.2% of global nickel ore reserves as of 2021. Laterite nickel ore and nickel sulfide ore reserves account for 60% and 40% respectively.
Laterite nickel ore is mainly distributed in Indonesia, Brazil and other places. Nickel sulfide ore is mainly distributed in Russia and China. Australia has laterite nickel ore reserves and nickel sulfide ore reserves. Although China has a large demand for nickel resources, it has only very limited nickel ore reserves, accounting for 2.7% of global reserves.
Indonesia has one of the highest nickel ore reserves and has banned nickel ore exports since January 1, 2020, aiming to develop its domestic nickel industry chain. As a result, nickel ore exports are expected to shift to other countries. Import and export traders in Indonesia and Chinese nickel industry enterprises are expected to turn to investing in local smelting projects in Indonesia and exporting other nickel products (such as ferronickel, MHP and MSP).
Image source: Screenshot of Liqin Resources' prospectus
This policy has had a profound impact on relevant enterprises in China's nickel industry chain. The reporter of "Daily Economic News" noted that in the past two years, listed companies related to the domestic nickel industry chain have increased their investment layout in Indonesia.
Jiang Xinbin, senior analyst of nonferrous metals at Zhejiang Futures, told the "Daily Economic News" reporter on January 19 that as a country with a high endowment of nickel ore resources, the Indonesian government has long been committed to improving the added value of nickel products. Since 2009, the Indonesian government has issued a series of export and investment policies to support the development of related industries, such as linking nickel ore exports to smelter construction progress and nickel ore export bans. As the top Chinese-funded enterprises have successively reached production in Indonesian projects, a large number of low-cost nickel raw materials have been returned to domestic enterprises for deep processing, and the investment in the nickel industry in Indonesia has shown greater benefits.
At the same time, due to the rising sales of global new energy vehicles and the high endurance demand of high-end models, the overall demand for nickel raw materials has been boosted, and a large number of industrial chain enterprises have entered Indonesia to cooperate with leading enterprises to build smelting projects through existing infrastructure and nickel ore resources. Due to the large fluctuation of upstream resource prices, industrial chain companies stabilize the supply chain by locking in the supply of raw materials, which is conducive to the long-term development of the industry.
Weiming Environmental Protection (SH603568, stock price 19.23 yuan, market value 32.580 billion yuan), Grammy (SZ002340, stock price 7.67 yuan, market value 39.390 billion yuan), Huayou Cobalt (SH603799, stock price 64.36 yuan, market value 102.8 billion yuan) and other listed companies are trying to reach closer strategic cooperation with the upstream.
Huayou Cobalt cooperated with Tsingshan Holdings as early as 2018. In 2018, Huayou Cobalt and Tsingshan Holdings established Huayue Nickel and Cobalt (Indonesia) in Indonesia, with a planned project capacity of 60,000 tons of nickel metal, and then introduced Luoyang Molybdenum (SH603993, stock price 4.99 yuan, market value 107.780 billion yuan) as a new shareholder. In 2022, Huayou Cobalt disclosed that it has reached a strategic cooperation intention with Volkswagen (China) and Tsingshan Holdings on the upstream and downstream cooperation of the power battery cathode material industry chain, and jointly build an internationally competitive new energy lithium battery material integrated manufacturing platform.
Weiming Environmental Protection, which is also a Wen businessman with Tsingshan Holdings, revealed in an investor survey in February 2022 that it plans to invest and build a high-ice nickel project in Indonesia, with an annual output of 40,000 tons of high-ice nickel-containing metal, and the total investment of the project will not exceed 390 million US dollars. The high-ice nickel project is located in Tsingshan Industrial Park in Indonesia.
At the same time, in 2022, Weiming Environmental Protection, together with Tsingshan Holdings, Shengtun Mining (SH600711, stock price 6.14 yuan, market value 19.287 billion yuan), Sunwoda (SZ300207, stock price 22.54 yuan, market value 41.977 billion yuan), etc., jointly planned to invest in the development and construction of high-ice nickel refining, high-nickel ternary precursor production, high-nickel cathode material production and related supporting projects in Wenzhou City.
On the evening of January 15, 2023, Grammy announced that on January 14, the first loading and delivery ceremony of MHP for the first batch of 1,200 tons of metal nickel for the Qingmei Bang Nickel Resource Project in Indonesia was held.
Indonesia Qingmei Bang nickel resources project is jointly invested and built by Qingmei Bang New Energy Materials Co., Ltd., Greenmei, a subsidiary of Tsingshan Holdings, Hong Kong Bangpu Cycle Technology Co., Ltd., Japan Hanwa Industrial Co., Ltd. and ECOPRO GLOBAL Co., Ltd.
In August 2022, the Indonesian Qingmeibang nickel resource project invested in the construction of 23,000 tons of nickel metal per year on the basis of the previous 50,000 tons of nickel metal / year, and the total production capacity of the Indonesian Qingmei Bang nickel resource project is 73,000 tons of metal nickel / year.
Grammy said that this marks the successful operation of the company's self-designed Indonesian Qingmei Bang nickel resource project, which completed the climbing commissioning on schedule and moved towards a new stage of production Danone, which will produce 5,000 tons of metal nickel MHP in the first quarter of 2023 and 25,000 tons of metal nickel MHP for the whole year.
Tsingshan Holdings' "circle of friends of listed companies" is continuing to expand. It is worth noting that ternary precursor manufacturers Zhongwei Co., Ltd. (SZ300919, stock price 72.96 yuan, market value 48.929 billion yuan), Huayou Cobalt, Grammy and Bangpu Cycle have extended to upstream raw ore mining and nickel sulfate fields.
Image source: Screenshot of Liqin Resources' prospectus
Liqin Resources analysis believes that in the next few years, with the increase of nickel iron production capacity in Indonesia, one of the main origins of nickel resources, Indonesia is expected to provide more nickel-containing products, thereby significantly increasing the global nickel supply and gradually reducing nickel prices. At the same time, given the cash cost of nickel smelting projects and the strong demand for nickel-containing power batteries, nickel prices are not expected to fall significantly in the next few years.
In addition, from the perspective of nickel price fluctuations, Jiang Xinbin believes that after experiencing the LME squeeze market at the beginning of 2022, nickel prices have fluctuated sharply, mainly due to the insufficient supply of futures delivery products, resulting in long-term inventory hovering at a low level, and commodity prices are prone to sharp rises and falls under low inventory conditions. Looking forward to the future market, as the process of domestic enterprises using high-ice nickel to produce electrowinning nickel gradually matures, the problem of insufficient supply of deliverables is expected to be gradually solved, and in the context of the overall supply of nickel-based products tends to be oversupply, nickel prices are expected to gradually fall from a high level, but the pace of decline still needs to pay attention to inventory changes.
Of course, reality also gives market participants a profound warning. When the expected general trend and the sudden "black swan" narrow road meet, the extreme market that does not play according to the routine may give everyone in the market a "head-on drink".
The opportunities of the times and the tests of human nature, in the midst of thousands of turns, leave traces and become the past.
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