Original title: Started with BYD, became in the CATL era, lithium battery structural parts leader Kodali: You laugh at it for making big money, it laughs at you for not knowing the happiness of cashing out 1 billion
The ability to return shareholders is limited, and the expansion of production depends on continuous fundraising.
Author | wooden fish
Edit | Xiaobai
Lithium battery is composed of cathode materials, anode materials, separators, electrolytes, precision structural parts and other parts, of which the first four plates have always attracted market attention, and there are also various faucets that can be named.
For example: cathode material manufacturers Rongbai Technology, Xiamen Tungsten New Energy, Dangsheng Technology, Changchang Lithium;
anode material manufacturers beiteri and Putailai;
diaphragm manufacturers Enjie shares, Sinoma Technology;
Electrolyte manufacturers Tianci Materials, Capchem and so on.
(Source: Market Value APP)
In the cost composition of power lithium batteries, in addition to the four major materials of cathode, anode, separator and electrolyte, the cost of battery shell accounts for 16%, second only to cathode materials, and is also one of the important components.
(Chart: Market Cap APP)
The listed company Kodali that Fengyunjun wants to talk about today is the representative of this business.
1. Leading precision structural parts of lithium batteries
01. Global market share of 31%
Kedali's main business is lithium battery precision structural parts, which are mainly used for new energy vehicle power lithium batteries and energy storage batteries, specifically shells and top covers.
There are three kinds of lithium batteries: prismatic, cylindrical, and soft pack, and prismatic batteries are currently the absolute mainstream. According to the statistics of Gaogong Lithium Battery, in 2021, the installed capacity of prismatic batteries in China will account for 86%.
Kodali's lithium battery structural parts are also in line with the mainstream products in the market, mainly prismatic batteries. In terms of technology, Kedali has achieved key technological innovations such as product safety explosion-proof, anti-leakage, ultra-long tensile, safe power-off protection, and material corrosion resistance, safety, high strength, high capacity and lightweight.
In 2022, Kedali lithium battery structural parts will achieve an operating income of 8.327 billion yuan, accounting for 96% of the operating income, and the downstream is mainly oriented to prismatic batteries, which is the absolute main source of income.
At present, the companies engaged in the business of lithium battery structural parts include Zhenyu Technology, Jinyang Co., Ltd., and Zhongrui Electronics (IPO registration stage).
(Chart: Market Cap APP)
From the perspective of the revenue scale of their respective battery structural parts, Kedali is far ahead, more than twice that of the second place Zhenyu Technology.
According to the estimation of Zheshang Securities Research Institute, in 2022, the global market share of Kedali battery structural parts will be 31%, leading the share.
02. Benefit from the explosion of demand for trams and energy storage terminals
New energy vehicles often use hundreds of battery cells in series and parallel to ensure the supply of high-power power, and need to be equipped with structural parts to ensure the safety, airtightness and energy efficiency of lithium batteries, and their value is dozens to 100 times that of portable lithium batteries in the past.
Among them, the main function of the shell is to fix and seal the internal structure, and the structure is relatively simple;
The main function of the cover plate is energy transmission, explosion-proof pressure relief, including cover plate, positive and negative poles, explosion-proof devices, liquid injection holes, etc., and the structure is relatively complex.
Through independent research and development, Kedali currently has core technologies such as lithium battery safety explosion-proof technology, structural parts sealing technology under high and low temperature conditions, high-strength friction welding technology, and power battery aluminum shell deep drawing technology. According to Kedali's calculations, each GWh lithium battery production capacity corresponds to about 30 million yuan of structural parts demand.
According to EV Volumes statistics, global sales of new energy vehicles (including hybrid and pure electric) increased from 791,000 units to 10.522 million units from 2016 to 2022, which has become an inevitable trend in the future.
At present, the policies and regulations of major countries have been tilted towards new energy vehicles, and global car companies are also increasing the layout of new energy vehicle business, and the industry is expected to continue to grow rapidly in the future.
As the leading country of new energy vehicles, the scale of the domestic lithium battery market is also expanding rapidly. According to the statistics of Gaogong Lithium Battery, from 2016 to 2022, China's power lithium battery shipments increased from 31GWh to 480GWh, an increase of more than 10 times.
If other factors such as energy storage and electronics are taken into account, China's lithium battery shipments reached 655GWh in 2022 and are expected to reach 1,747GWh in 2025.
According to GGII's statistical forecast, the market size of battery structural parts in mainland China will reach 78.1 billion yuan in 2025, of which the scale of prismatic and cylindrical battery structural parts will be 62.1 billion yuan and 16 billion yuan respectively.
As a leader in lithium battery structural parts, Kedali naturally benefits from the outbreak of the lithium battery industry chain.
Second, it began with BYD and became in Ningde
Going back, Kedali was established in 1996 and then listed in 2017, and the actual controllers are the brothers Li Jianju and Li Jianjian.
Kodali began its cooperation with BYD in 1999 in the portable lithium battery structural parts business, and later expanded to automotive structural parts, and became the two main revenue drivers.
With the help of the high-safety and high-precision production process mastered in the portable lithium battery precision structural parts business, as well as the large-scale structural parts production equipment and development conditions obtained in the automotive structural parts business, Kedali entered the field of power lithium batteries, and began to supply power lithium battery structural parts products to BYD in 2008.
In 2010, Kedali successively developed customers such as CATL, EVE Lithium Energy, LG, Samsung, and AVIC Lithium Battery, and the business entered an accelerated stage.
But until 2014, Kodali still relied on BYD, a major customer. During the period from 2011 to 2014, BYD, as the largest customer, contributed about 60% of its revenue every year, ranking first in the two major business segments of lithium battery structural parts and automotive structural parts.
In particular, in the automotive structural parts business, BYD contributed almost all of its revenue sources.
(Source: Prospectus)
The turning point was 2015.
This year, CATL's lithium battery business grew in volume, and then increased the purchase of Kodali lithium battery structural parts, and surpassed BYD to become the largest customer in 2016.
(Chart: Market Cap APP)
Since then, BYD's importance to Kodali has gradually diminished, until it disappeared from the top five customers in 2020 and was replaced by CATL.
(Chart: Market Cap APP)
With the end of the cooperation with BYD's automotive structural parts business, Kedali's business and revenue focus has gradually shifted from automotive structural parts to lithium battery structural parts, and has grown rapidly with the rise of CATL.
3. Proficient in the management of the automotive industry
Compared with new material industries such as cathode materials and anode materials, lithium battery structural parts essentially belong to the traditional industry. Kedali also characterizes the industry as a metal products industry in the prospectus, and the new technology content is naturally inferior to other lithium battery materials, so there is no lack of doubts and criticisms of Kodali in the market.
However, in Fengyunjun's view, Kodali can be like a fish in water in such an industry and dominate for a long time, more than technology research and development, more to benefit from the management of the way of operation.
When selecting suppliers, automobile OEMs and parts factories generally have to go through 3-5 years of technology and product running-in, and usually do not easily adjust the suppliers with stable cooperation, which is commonly known as "customer stickiness".
Including the historical performance of suppliers in the industry, cooperation with leading enterprises in the industry, etc., are important indicators to consider, that is, the popular "large customer demonstration effect".
Kodali can be said to have made full use of the characteristics of these two industries.
With the help of the early cooperation with BYD, Kodali was able to explore and enter the field of power and energy storage lithium battery structural parts in 2007, accumulate product and technical experience, obtain the industry's technology first-mover and leading advantage, and then get the certification of Panasonic, Samsung, LG, Sony and other cross-enterprise enterprises.
At this time, it also coincided with the rise of new forces such as CATL, AVIC Lithium Battery, and EVE Lithium Energy, and Kedali quickly entered their supplier list by relying on the brand effect accumulated in the early stage.
In order to further bind large customers, Kedali chooses to support production bases near customers. For example, it supports Dalian base for Dalian Panasonic, Jiangsu, Huizhou and Fujian bases for CATL, and Jiangsu base for China Innovation Aviation and Honeycomb Energy.
In the process of cooperation, Kedali connects the whole process through the interactive R&D mode, goes deep into the customer's R&D and design, and can complete the development of new products in as little as 3 days.
(Source: Company announcement)
By 2021, Kodali's cooperation with customers such as China Innovation Airlines, EVE and SVOLT Energy has also formed a scale, and the revenue from CATL is also increasing, but its dependence on CATL is decreasing.
Kedali has also perfectly enjoyed the explosive dividends of the lithium battery industry, and its performance has achieved geometric growth.
(Chart: Market Cap APP)
After doubling for two consecutive years, in 2022, Kedali's operating income will increase to 8.654 billion yuan, and the net profit attributable to the parent company will increase to 901 million yuan.
(Chart: Market Cap APP)
In the first three quarters of 2023, Kedali achieved revenue of 7.768 billion yuan and net profit attributable to the parent company of 795 million yuan, continuing to increase significantly by 30.12% and 33.95%.
Fourth, expansion and fundraising are the themes
01. Follow the pace of expansion of major customers
At present, Kedali has laid out corresponding production capacity in the key areas of lithium batteries in East China, South China and Central China, with 13 production bases in China and 3 production bases overseas.
Following the expansion plan of downstream customers, Kedali continues to expand production and build supporting production capacity. Of course, in order to maintain the current scale advantage, Kodali can only do this.
(Source: Company announcement)
In recent years, major lithium battery manufacturers such as CATL, China Innovation Airlines, Honeycomb Energy, Sunwoda, and EVE have corresponding capacity expansion plans in Jiangxi, Hubei, Jiangsu, Guangdong and other places.
Kodaly's expansion plans are also located in these areas, for example:
Among them, the Huizhou project (phase I) and Huizhou project (phase III) mainly support CATL and supply other customers with production capacity layout in Guangdong Province, and the Huizhou project (phase II) supports overseas customers;
The Jiangmen project mainly supports the production capacity layout of China Innovation Airlines and other customers in Guangdong Province;
The Jiangsu Project (Phase III) project supports the capacity expansion of CATL, China Innovation Airlines, SVOLT and LG in Jiangsu.
These projects plan to invest 9.1 billion yuan, and 4.1 billion yuan has been invested so far, and there will still be up to 5 billion yuan of continuous investment in the future.
(Source: Company announcement)
At present, Kedali has built a production capacity of 9.1 billion yuan, and it is expected that domestic projects under construction will add 14.6 billion yuan in the future, which is 1.6 times of the existing production capacity.
In order to ensure the digestion of production capacity, most of Kodali's expansion plans correspond to the clear expansion projects of downstream customers, and also refer to the market share of competitors.
Taking the Jiangxi project as an example, it corresponds to the expansion projects of Sunwoda, CATL, Honeycomb Energy and other customers, corresponding to the demand of 4.5 billion yuan, and the planned production capacity is 1.623 billion yuan.
(Source: Company announcement)
02, 6 years and 9 months burned 6 billion money
Like many companies in this industrial chain, Kodaly's current capital and earning strength are completely unable to keep up with the rapid expansion of production capacity.
(Chart: Market Cap APP)
Since 2017, Kodaly's free cash flow has been an outflow, with a total of 6 billion in 6 years and 9 months as of the end of the third quarter of 2023.
It can also be seen from the above that the capital needs of Kodali to expand production mainly rely on financing. Since its listing, Kodali has raised 4 times of financing, raising a total of 7.7 billion yuan.
In the current state, Kedali does not have enough ability to pay cash dividends, and the total cash distribution since listing is only 360 million.
However, this does not affect the boss and brothers to get rich, and in the more than three years since the lifting of the ban on listing, a total of 970 million has been reduced and cashed out.
epilogue
As the old saying goes, you win with glory. The rise of a company drives the prosperity of an entire industrial chain.
Kodali is a vivid example of this. In addition to technological innovation and business strategy, the growth of Kedali has coincided with the rise of China's new energy industry.
Feng Yunjun has a deep memory of an earlier post in the Wenyou Circle, BYD built a factory in a county town in Shaanxi, which drove 20,000 local jobs and revitalized the local economy, which then produced a series of chain reactions.
Just imagine, in the wave of new energy in full swing, how many companies like Kodali have driven how many local jobs and revitalized how many local economies?
(Note: Only part of the content is extracted.) Source: Market Value Fengyun APP Wenyou Circle)
Of course, I still hope that when the boss and brothers eat a mouthful of fat, don't forget that those small and medium-sized shareholders are still sitting on the side and eating chaff vegetables, many of which have been with the company for a long time.
Disclaimer: This report (article) is based on the public company nature of the listed company, based on the listed company's public company attributes, based on the listed company's public disclosure in accordance with its legal obligations (including but not limited to temporary announcements, periodic reports and official interactive platforms, etc.) as the core basis; The information or opinions expressed in this report (article) do not constitute any investment advice, and Market Value Storm does not assume any responsibility for any actions taken as a result of the use of this report.
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