Zebra consumption Fan Jian
Appointed to take charge of Shanshan shares in danger, the "second generation" Zheng Ju encountered a severe test, and the first annual report card handed over was difficult to satisfy investors.
The leading enterprises in the new energy vehicle industry chain, such as BYD and CATL, have made a lot of money, but Shanshan shares, as a supplier, are difficult to get rid of the bad luck of a sharp decline in performance.
In the anode material and LCD polarizer business, Shanshan's market share ranks first in the world. However, due to the fierce competition in the industry, it is difficult for the company to transform the scale advantage into an absolute profit advantage.
The first report card dropped miserably
In February 2023, Zheng Yonggang, the founder and soul of Shanshan Enterprise, passed away suddenly due to illness, and his son Zheng Ju was appointed to take charge of the family industry.
For his son Zheng Ju, Zheng Yonggang has always cultivated him as a successor. After returning from overseas study, he entered Shanshan and experienced many positions, holding important positions in Shanshan Holdings and Shanshan Group.
Unexpectedly, Zheng Ju took the helm of Shanshan shares (600884. SH) in its first year, it encountered a severe test.
In 2023, the company will achieve operating income of 19.070 billion yuan, a year-on-year decrease of 12.13%; the net profit attributable to the parent company was 765 million yuan, a year-on-year decrease of 71.56%; The non-net profit was only 219 million yuan, a year-on-year decrease of more than 90%.
Shanshan Co., Ltd. started in garment and went public in 1996, becoming the first listed company in China's garment industry.
Subsequently, under the leadership of Zheng Yonggang, Shanshan Co., Ltd. continued to transform and adjust, forming a pattern of "anode material + polarizer" dual main business development.
Shanshan's lithium battery anode materials are widely used in consumer electronics, energy storage and new energy vehicles. With the vigorous development of China's new energy vehicle industry, the market demand for lithium battery materials, as the middle of the industrial chain, is also increasing.
Driven by the joint efforts of the two owners, the company has ushered in a leap forward in 2021. In that year, the operating income increased by 151.94% year-on-year to 20.70 billion yuan, and the net profit attributable to the parent company increased by 2320.00% to 3.340 billion yuan.
However, in 2023, terminal demand will suddenly slow down, and there will be greater inventory pressure in the lithium battery industry. In this context, lithium battery materials are facing a phased imbalance in the relationship between supply and demand, and product prices are declining.
Affected by this, Shanshan's anode material business and the cathode material business in which Shanshan shares participated, product prices and profits both declined year-on-year. At the same time, the company's divestment of non-core businesses and inefficient assets, resulting in related losses and asset impairment, also had a certain impact on the performance.
There is status, but there is no profit
Zheng Yonggang had experience in the army, and at the age of 31, he took over the Yonggang Garment Factory, which suffered serious losses, and started his own Shanshan business empire.
In the impression of those around him, Zheng Yonggang is both easy-going and arrogant. And his evaluation of himself is "the boldness of the Northeast people, the vigorous and resolute behavior of the soldiers, and the sensitivity and shrewdness of Zhejiang businessmen".
In the Zhejiang business circle, Zheng Yonggang is an absolute boss, not only because of wealth, but also because of his amazing business vision and business courage.
At the beginning of Shanshan's listing, the company was immersed in joy, but Zheng Yonggang had a strong sense of crisis and planned the company's transformation path in advance.
To this end, he traveled from Ningbo to Shanghai to find a "new species" of anode materials. At that time, this was only a research project, and it was still very far from industrialization.
Zheng Yonggang believes that this is the trend of the future, and he will continue to invest the hard-earned money from selling clothes.
Shanshan Co., Ltd. is the first enterprise engaged in the R&D and production of artificial graphite anode materials for lithium-ion batteries in China, and is the global leader in anode materials. In 2023, the company's output of artificial graphite, an anode material, ranked first in the world for three consecutive years. The products are supplied to CATL, Ultiumcells, BYD, LGES, ATL, Funeng, Guanyu, Xinwangda and other mainstream battery companies at home and abroad for a long time.
Such a stable position in the industry cannot strive for stable profitability for Shanshan shares.
In 2023, the company will sell 264,400 tons of anode materials, a year-on-year increase of 44.55%; However, the business revenue of this segment fell by 9.82% year-on-year to 7.267 billion yuan, and the gross profit margin of the business fell by 10.36 percentage points to 11.77%.
Data from relevant institutions show that China's anode materials have a stage of overcapacity. In 2023, the total capacity utilization rate of the top 6 enterprises in the industry can reach 70%, and the average capacity utilization rate of the top 7 enterprises and beyond will be less than 30%.
How to break through?
In 2007, the layout of Shanshan's new energy industry was determined, and Zheng Yonggang resigned as chairman of the listed company to focus more on the group level.
Until the end of 2020, he went out again to stabilize the company's new round of strategic layout.
The company spent 5.34 billion yuan to acquire LG Chem's LCD polarizer business and related assets in Chinese mainland, Taiwan and South Korea, and entered the polarizer industry in one fell swoop.
It is precisely because of the consolidation of new businesses that the company's performance has increased significantly in the short term.
In 2023, the sales volume of the company's polarizer business will increase by 10.18% year-on-year, and the share of large-size polarizers will increase from 30% in the previous year to 33% (by shipment area), continuing to maintain the world's first. The market share of polarizers for LCD TVs and LCD displays ranks first in the world.
Similarly, the company's polarizer business is also facing the dilemma of sales growth, revenue decline, and a significant decline in profitability.
In the eyes of industry insiders, Shanshan shares have certain advantages in LCD polarizers, but the current trend of OLED replacing LCD has become clearer and clearer, and only enterprises that carry out industrial layout in advance can grasp the first-mover advantage.
Of course, Shanshan shares can also see the industry trend. In the 2023 annual report, the company made it clear that in terms of OLED polarizers, the company has developed two application directions of large size and small and medium-sized at the same time, and the transformation of technological achievements has been remarkable. During the reporting period, the company's self-developed polarizers for OLED TV and OLED mobile phones have been mass-produced and shipped, and the polarizers for OLED IT are in the customer certification stage, and will accelerate the mass production and shipment.
In terms of automotive polarizers, the company has completed the technology and patent reserves, and is in the internal testing stage; In terms of VR/AR polarizers, the company has completed independent development of polarizers for VR display terminals and is currently in the customer certification stage.
At the same time, in order to accelerate the breakthrough from LCD polarizers to LCD+OLED polarizers, the company plans to further acquire LG Chem's automotive, OLED, and high-end IT display polarizer businesses.
For the anode material business, Shanshan can only further reduce costs and increase efficiency, and establish its own competitiveness through scale advantages. At the same time, we will increase breakthroughs in new technologies such as silicon-based anodes.
At the beginning of 2024, the company's operating performance is still not ideal. In the first quarter, the operating income fell by 15.67% year-on-year, and the net profit attributable to the parent company turned from profit to loss, with a loss of 73.28 million yuan.
Shanshan's performance continued to decline, and the company's stock price also fluctuated sharply.
After a sharp drop in August last year, the company's eight directors (executives) decided to invest 20 million yuan to 40 million yuan to increase their holdings to stabilize market confidence.
By February 29 this year, the executives had increased their holdings by a total of 20.9374 million yuan, stepping on the downline to complete their commitment to increase their holdings. In fact, Chairman Zheng Ju alone increased his holdings by 20.7287 million yuan, and the other executives almost did not move.