Taking advantage of the trend of new energy, Changzhou has handed over an excellent answer sheet of trillions of GDP.
At the beginning of 2024, the work report of the Changzhou government shows that in 2023, Changzhou will enter a city with a GDP of one trillion yuan with high quality, becoming a trillion city with the smallest population, a small geographical area and a high per capita level in the country.
Every industrial outlet is an opportunity for the city to reshuffle. Changzhou has seized the trump card of new energy to stand out. When Changzhou realized that the development of new energy was a sunrise industry, it began to plan the layout and adjust the industrial structure to gain a certain first-mover advantage in the domestic new energy market. At present, Changzhou has become a "hexagonal warrior" of the new energy industry: not only the production and sales of power batteries rank first in the country, but also the output of new energy vehicles is also in the forefront, and the new energy "generation, storage and delivery" industry closed loop has been initially built, and its strength should not be underestimated.
With the theme of "City Speed: How Can Changzhou Overtake Through New Energy and Intelligent Manufacturing?", the first Innova Gathering of Matrix Partners in 2024 will discuss the investment trends of the new energy industry, the driving role of industrial clusters, and the practical problems often encountered by startups such as financing, legal affairs, human resources, and equity. Here, I would like to thank the leaders of Changzhou Municipal Government and Wujin District for their strong support.
At the event, Liu Zhuang, Managing Director of Matrix Partners shared the investment logic and layout of Matrix Partners in the new energy field, how to empower the portfolio companies, and looked forward to the future of investment in the new energy field. Enjoy:
01
What are the new opportunities in 2024?
This time, we will mainly analyze the track opportunities in the new energy field from five major areas, and talk about the layout of Jingwei in this track and the future focus direction, as well as the interaction between Jingwei and the invested companies in the empowerment of post-investment enterprises.
In my opinion, new energy is one of the few industries in China that has high added value and international competitiveness. Now we see that whether it is our cars, batteries, battery cells, and photovoltaics, many companies with very large revenues have begun to roll into the world, and they have very strong competitiveness. So I think that's the biggest change right now, and that's why we're focusing on this space.
Next, I will introduce the layout of Jingwei in the new energy track from five aspects, as well as several subdivisions that we will focus on in the future.
As shown in the figure below, first of all, we focus on the battery industry, which includes power batteries and energy storage batteries in terms of end use, and there is also an overseas household energy storage track that will begin to grow rapidly in 2022.
So the investment and financing of spin-off power batteries, we first pay attention to investment opportunities in the field of battery recycling, because the power battery installed in the car may run for 8-10 years, and the follow-up battery recycling is also a 100 billion or even trillion track.
In addition, in the next generation of battery materials, such as silicon-based anodes, composite current collectors, LiFSI, semi-solid-state batteries and other fields. Except for semi-solid-state batteries, these other fields are relatively clear in terms of performance to improve the existing battery system, but for cost reasons, they have not yet been promoted on a large scale. Semi-solid-state batteries, due to the greater technical challenges, we are still paying attention to their technological maturity progress.
The second is the internationalization of China's battery material enterprises, which will be the theme for more than 10 years in the future. In the field of battery materials, many domestic listed companies are very large, if a start-up company is simply done in China, it is indeed difficult to do a traditional listed company.
We also pay attention to the fact that because European and American countries have higher requirements than China in terms of environmental protection, trade unions, and laws, the new generation of founders who are younger, more open, and more able to learn are often more able to adapt to the environment of going overseas. Therefore, in this field, young founders with continuous learning and iteration ability are more suitable for going to sea, which is also the opportunity to disrupt existing large companies.
In the field of energy storage batteries, on the one hand, we pay attention to the recycling of energy storage batteries, although domestic can not use cascade batteries for large storage, but overseas, with the improvement of BMS technology, the recycling of energy storage batteries, as well as the downgrading of battery use, has become a trend.
In addition, we can see that from 2023, the cost of the entire battery cell will decline very quickly, which will leave a lot of room for many new products. With the decline in the cost of energy storage batteries and the beginning of large-scale applications, we pay attention to energy storage safety, such as energy storage liquid cooling, energy storage fire protection, which are accompanied by the improvement of energy density of energy storage batteries and the application of large-scale storage, and the ensuing new application opportunities.
On the other hand, with the implementation of Tesla's MEGAPACK in China, it is believed that more Chinese companies will drive technological changes in Chinese energy storage suppliers in the future, just like the previous Tesla car supply chain.
In the field of overseas household storage, we believe that there need to be terminal brand barriers, rather than simply being an OEM factory for overseas brands, so we still pay attention to teams with strong overseas and international capabilities.
The second area is wind power, and we have invested in wind turbine blade main material companies. With the rise of the sea breeze, larger blades and corrosion-resistant materials will have more room to grow. In addition, with the end of rough development, wind turbine blade recovery, more effective pitch system, as well as follow-up maintenance of wind power, and more refined management capabilities have become the key points of wind farm profitability, which will also bring greater opportunities to enterprises.
The third is the photovoltaic field, the opportunity to increase the penetration rate of new technologies or introduce them, such as HJT production capacity and equipment companies, core consumables such as adhesive film, silver-clad copper companies, etc., perovskite and tandem production capacity and equipment companies, composite frame and other new technology penetration companies, new product iteration and auxiliary materials to improve concentration, such as silver paste, etc. are the future development directions.
The fourth is the field of hydrogen energy, we focus on lower-cost hydrogen production, green hydrogen to ammonia, methanol, etc., bringing the promotion of new energy ships, which is a better downstream demand direction. In addition, green hydrogen also has a good promotion space in the chemical industry.
The fifth point is that in 2024, we will pay more attention to opportunities in frontier areas: one of them is the promotion of supercharging.
For example, at the end of 2023, the penetration rate of new energy vehicles in the United States will be 9%-10%, and the penetration rate of new energy vehicles in Europe will be about 25%, compared with China, the penetration rate of new energy vehicles at the end of 2023 will be 40%;
From China's side, starting in the second half of 2023, passenger cars will begin to gradually promote 800V supercharging. In addition, supercharging stations will also be gradually rolled out from the second half of 2023, so on the other hand, supercharging in Europe and the United States will also accelerate in the next 1-2 years.
From the perspective of changes in the industry, most of the previous charging piles are AC piles, which are generally used in home scenarios, and the entry threshold is very low, and the popularization of high-voltage fast charging and the promotion of V2G/V2H in the future will greatly improve the technical threshold of charging piles, which is also an opportunity for major changes in the industry. In addition, the popularity of household storage in Europe also gives electric vehicles the opportunity to become a large household storage product that transmits power to the grid in reverse, bringing a huge increase to V2G charging piles, so we keep an eye on the charging module of supercharging piles, V2G functions, liquid cooling and other fields, especially pay attention to companies with the ability to go to sea, China's 2024 is the first year of popularizing supercharging, and large-scale supercharging construction will be carried out overseas in the next 1-2 years.
The second is that with the promotion of AI supercomputing, the next generation of chips will require more power to support higher computing density, which will require more than 200 kilowatts of power at the rack level, while the current traditional CPU server racks can only provide 15-20 kilowatts.
As the demand for electricity increases, transmission and conversion losses (i.e., wasted electricity) increase disproportionately. The cost of electricity is one of the largest expenses in a data center, and reducing power loss is critical to improving total cost of ownership (TCO).
Then we are looking at the opportunities in the field of liquid cooling, which are increasing the huge power consumption and the huge losses in the ultra-high current field close to the chip, and the accompanying new power supply modules, higher performance transformers, and supercomputing liquid cooling.
02
Jingwei's layout in the field of new energy
We can take a look at the specific layout of Jingwei in the field of new energy:
First of all, in the field of battery materials, we have laid out a new type of lithium battery separator coating materials, as well as carbon capture materials of carbon language new energy, the founder is the CTO and R&D director of the head company of lithium battery dry separator, we invested in him very fate, we have looked at two lithium battery downstream related companies, just met him (as a supplier), and communicated with him many times. Subsequently, he recognized Jingwei's cognition and professionalism in this field, and found Jingwei on the first phone call when he came out to start a business. The other is Hedian Technology, which is a cathode material for sodium batteries, and we are both angel round investors in these two companies.
In the field of battery main materials, we invested in Rongbai Technology, a global leader in ternary cathode, in 2018, and it was listed in the first batch of the Science and Technology Innovation Board in 2019.
In the field of battery recycling, we invested in CN Technology in 2021, which has the ability to recycle and process ternary, lithium iron phosphate and graphite anode in the whole chain. Jingwei is also one of the earliest mainstream funds to realize that battery recycling is a huge potential track.
In the field of battery equipment, we have invested in Yihong Intelligence, lithium battery vision and front-end main equipment, and are also expanding the field of testing equipment in semiconductors and other fields, and also invested in Herunda, a lithium battery chemical component capacity detection equipment in an angel round. They are all assisting domestic leading lithium battery manufacturers, including Ningde, to go overseas, and are also seizing the opportunity of this round of internationalization.
As a lithium battery equipment company, we are very concerned about the company's industry expansion capabilities, whether it is deep cultivation of existing fields, from a single equipment to comprehensive equipment, or the use of universal advantages, in the field of non-lithium battery rationalization, are the direction of our support, we also help the above companies to recruit executives, but also in terms of capitalization for the enterprise to make suggestions.
In the field of photovoltaics, we have invested in photovoltaic smart solution companies and Guangtongyao, as well as the leading electrical department of indium tin oxide target and cadmium telluride, which are all upstream core components and materials companies of photovoltaics.
In the field of energy storage, we have invested in Haichen Energy Storage, the world's fourth-largest energy storage cell and energy storage solutions company. and China Shipping Energy Storage, which invested in iron-chromium flow energy storage in the early stage. We believe that unlike power batteries, energy storage batteries are mainly based on lithium iron phosphate, overseas Samsung, Panasonic, LG, etc., before the main construction of ternary battery production capacity, in the field of lithium iron phosphate relative to China, both in terms of production capacity and technology have obvious backwardness, so the internationalization of China's energy storage battery enterprises will be much better than power batteries (there is no short-term substitute for foreign countries). In addition, with the rise of long-term energy storage and some occasions with high safety requirements, there is also room for the development of flow batteries.
In the field of wind power, we have invested in the field of battery potting adhesive and structural adhesive, and entered the industry's leading OEMs and battery factories. In the field of new energy power generation, whether it is photovoltaic or lithium battery, there are several hundreds of billions of companies, driving more tens of billions of enterprises, and in the field of wind power, although the power generation is not much different from photovoltaics, the market value of listed companies is generally low, we believe that this is due to the internationalization of the photovoltaic industry, China's photovoltaic is basically equal to the global production capacity and sales. In the field of wind power, there are still many European and American manufacturers overseas, and once Chinese wind power companies achieve internationalization in the future, they will have a high space for both performance and market value.
03
How to help without adding chaos after warp and weft investment
We would like to use a specific example to talk about the example of Jingwei and the invested companies to help not add to the chaos.
Previously, a new energy company had the idea of going overseas, but there was a lack of talents in the company. After communicating with the company, Jingwei's post-investment HR team helped introduce a lot of candidates. However, the company actually lacked experience in this area at the beginning, and the recruitment requirements put forward could not meet the company's needs in practice, so no less than 7 or 8 candidates were recommended, but they never met the company's requirements.
Later, we carefully analyzed the company's needs, and more importantly, grasped the main contradictions. If you choose to go to sea, you don't need to have stronger language skills in terms of technology, because technical personnel can be sent from home and abroad, but they are more familiar with the local laws, regulations, trade unions, etc., and language skills are secondary (in fact, English is common in European and American countries). Therefore, we have revised the company's candidate standards, no longer limited to a small industry scope (not required to understand this technology), but for candidates who have experience in mergers and acquisitions and integration in the local area or the entire economic circle, and even have experience in enterprise operation and maintenance, and understand local laws and regulations. The final recommended candidate passed the company's repeated interviews at one time, and has now served as a relatively important core backbone within the company. This is a small contribution we make in helping our portfolio companies with recruitment.
The above is a brief introduction of Jingwei in the field of new energy and the direction we have invested in and will focus on in the future.
We always pay attention to investment ecology, post-investment scenarios, and brand strategy. Our portfolio companies in the field of new energy will have more or less business collaboration, we provide post-investment services after in-depth understanding of the needs of enterprises, such as post-investment recruitment, capital market operation, brand positioning and publicity, financial and tax consulting, and even including the creation meeting, to provide equity and bond financing docking for enterprises.
We believe that China's new energy industry will eventually go global and become the most important new force in the field of global carbon neutrality, and China's new energy enterprises will also become world-class enterprises in this wave of huge technological changes. We hope to accompany these enterprises, from small to large, to make their own contribution to China's economic development.
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