Reading guide: power battery, the strong are always strong.
"Investor Network" Ge Fanmei
In the past 2023, under the "dual carbon" goal, the modernization and upgrading of the energy industry, the development and expansion of the new energy industry, and the steady investment in energy to promote growth have been steadily promoted.
According to data released by National Energy, in 2023, mainland energy investment will maintain rapid growth, of which the amount of new energy investment will increase by more than 34% year-on-year; New energy storage is developing rapidly, with an additional installed capacity of about 22.6 million kW/48.7 million kWh; The national electricity market traded 5.7 trillion kWh, a year-on-year increase of 7.9%...... New developments in the energy sector continue to add vitality and momentum to the economy.
In fact, despite the ups and downs of the current new energy market, which has brought a little "chill" to the industry, the long-term growth trend of the new energy industry is determined. At present, the global penetration rate of new energy vehicles is still in the stage of growth, the general trend of electrification has not changed, and power batteries, as the core link of the new energy vehicle industry chain, will continue to benefit from the growth process of the industrial chain, and will maintain a steady growth trend in the future.
Scale: The strong are always strong
In 2023, the sales of new energy vehicles will continue to grow, and the demand for power batteries will rise sharply, driving the increase in lithium battery shipments. In recent years, China's lithium battery industry chain is the world's leading, and it has formed a complete industrial chain supporting system in the field of electric vehicles, and actively expanded overseas markets.
According to information released by the China Automotive Power Battery Industry Innovation Alliance, in 2023, the total cumulative output of Continental Power and other batteries will be 778.1GWh, a year-on-year increase of 42.5%. The total cumulative sales volume of Continental Power and other batteries was 729.7GWh. Among them, the cumulative installed capacity of power batteries in mainland China was 387.7GWh, a year-on-year increase of 31.6%. Among them, the cumulative export of power batteries reached 152.6GWh, accounting for 20.9% of the sales volume.
In the installed capacity in 2023, in terms of product types, a "three-seven" pattern has been formed. Among them, the cumulative installed capacity of ternary batteries was 126.2GWh, accounting for 32.6% of the total installed volume, with a cumulative year-on-year increase of 14.3%; The cumulative installed volume of lithium iron phosphate batteries was 261.0GWh, accounting for 67.3% of the total installed volume, with a cumulative year-on-year increase of 42.1%.
In terms of manufacturers, for the whole year of 2023, CATL (300750. SZ), BYD (002594. SZ), China Innovation Airlines (3931. HK), EVE Energy (300014. SZ), Guoxuan Hi-Tech (002074. SZ), the top five in China, Honeycomb Energy, LG New Energy, Sunwoda (300207. SZ), Funeng Technology (688567. SH), Zhengli Xinneng followed.
According to the latest data, in the first quarter of 2024, the total global installed battery capacity reached 158.8GWh, an increase of 22% compared to the same period last year. During this period, the top two companies in terms of total global installed battery capacity were China's CATL and BYD, which accounted for the majority of the global market with installed battery capacity of 60.1GWh and 22.7GWh respectively.
Among them, CATL's battery installed capacity increased by 31.9% year-on-year, while BYD's installed capacity increased by 11.9%, and the market share of the two companies is close to 70%. In addition, the top 10 Chinese companies in the global total installed battery capacity also include China Innovation Airlines, EVE Lithium Energy, Guoxuan Hi-Tech and Honeycomb Energy.
According to the data released by the China Automotive Power Battery Industry Innovation Alliance, from January to March 2024, the cumulative installed capacity of power batteries in China reached 85.2GWh, accounting for about 54% of the world's total, a year-on-year increase of 29.4%.
Profitability: The Matthew effect is significant
Although power battery companies have been among the top ten, there is also a large gap in performance. The profitability of some power battery-related enterprises has improved, which proves the solid performance and stable profitability of enterprises.
From the perspective of performance, the performance of CATL, BYD, EVE Lithium Energy, and Guoxuan Hi-Tech in 2023 showed a double growth in operating income and net profit. Among them, BYD had the largest revenue, achieving revenue of 602.315 billion yuan, a year-on-year increase of 42.06%, and a net profit of 30.041 billion yuan, a year-on-year increase of 80.72%. In terms of the scale of net profit attributable to the parent company, CATL ranked first, with a net profit of 44.121 billion yuan, a year-on-year increase of 43.58%, and a revenue of 400.917 billion yuan, a year-on-year increase of 21.83%.
In addition to BYD and CATL, the net profit of other power battery companies has not exceeded 5 billion yuan, and even some companies have suffered losses. In 2023, EVE's net profit will be 4.055 billion yuan, ranking third, Xinwangda will be fourth, only 1.076 billion yuan, and Guoxuan Hi-Tech and China Innovation Airlines will be 938 million yuan and 294 million yuan respectively.
It is worth noting that in 2023, although Funeng Technology's revenue will increase by 41.91% year-on-year to 16.436 billion yuan, its net profit attributable to the parent company will decline sharply, with a loss of 1.868 billion yuan, an increase of 926 million yuan compared with the loss in the same period in 2022. The main reasons for the loss were the provision for inventory decline, investment losses and fair value change losses. In FY2023, Funeng Technology plans to improve its performance through management optimization, overseas business expansion, mass production of sodium-ion batteries, and inventory control. According to the information in the first quarter of 2024, during the period, the company achieved revenue of 2.924 billion yuan, a year-on-year decrease of 21.70%; The net profit attributable to the parent company was -217 million yuan, which has narrowed from the loss in the same period in 2023.
From the perspective of gross profit margin, in 2023, the overall gross profit margins of CATL and BYD will be 22.58% and 20.21% respectively; The gross profit margin gap between EVE and Guoxuan Hi-Tech is not large, which is 16.76% and 16.30% respectively; It was followed by Sunwoda, 14.34%, China Innovation Airlines 13%, and Funeng Technology 6.63%.
Challenge: The core contradiction of the industrial chain is on the supply side
In 2023, the price of battery-grade lithium carbonate has been declining, from nearly 500,000 yuan/ton in 2022 to more than 100,000 yuan/ton at the end of the year. The market view is that the decline in lithium carbonate prices is expected to drive down battery costs and terminal selling prices, which is expected to stimulate downstream demand.
However, in the face of the sharp decline in the prices of core raw materials in the supply chain and changes in market orders, the high price of raw materials has become a high-priced inventory, which has also become a heavy burden for some enterprises in 2023. For example, Funeng Technology will make a provision of 606 million yuan for inventory price decline in 2023.
Wind data shows that as of the end of 2023, the inventories of BYD and CATL are 87.676 billion yuan and 45.434 billion yuan respectively, while the inventories of China Innovation Airlines and Xinwangda are 7.126 billion yuan and 7.045 billion yuan respectively; EVE 6.3161 billion yuan, Guoxuan Hi-Tech 5.678 billion yuan, and Funeng Technology 3.599 billion yuan.
In fact, in 2023, the cycle of the lithium industry will change rapidly, and the upstream link will be hit more violently. In 2023, the lithium prices of 17 listed lithium companies will plummet by 80% during the year, and the oversupply will have a certain impact on the industry. Among the 17 lithium companies, 14 saw a decline in revenue and 16 in earnings, with varying declines. Among them, Jinyuan shares (000546. SZ), Jixiang shares (603399. SH), Jiangte Motor (002176. SZ) suffered a loss, with net profit attributable to the parent company of -678 million yuan, -337 million yuan and -397 million yuan respectively.
In 2024, although lithium prices rebounded in the first quarter, they remained generally sluggish. According to wind data statistics, the average price of domestic battery-grade lithium carbonate rebounded from 96,900 yuan per ton to 109,600 yuan in the first quarter, with a quarterly average price of 101,600 yuan and an average price of 402,700 yuan in the same period last year.
In this context, the performance of lithium companies in the first quarter will naturally not be good, including Tianqi Lithium, Jiangte Motor, Shengxin Lithium Energy, Ganfeng Lithium, etc., all suffered losses in the first quarter; The net profit attributable to the parent company of Yahua Group and Sinomine Resources fell by 97.48% and 76.63% respectively.
Dongxing Securities Research Report pointed out that the core problem of the current sector is still oversupply, the fundamentals are still in the bottoming stage in the short term, the industry expansion rate has slowed down significantly, the downstream competition is increasingly fierce and the industry refinancing policy is tightened, the pressure on the capital side of the enterprises continues to increase, the industry is expected to accelerate into the tail clearance stage, and the supply and demand pattern is expected to usher in marginal improvement.
At the same time, it believes that the current lithium carbonate price is low and the downside is limited, which has a certain support for the decline in the price of the industrial chain, and the growth rate of the demand side remains stable, and the supply side shifts from the slowdown of expansion to the gradual clearing of the pattern, the elasticity of the overall profitability of the plate may be improved, and the fundamentals are expected to usher in an inflection point, and they are optimistic about the opportunity to return after the performance bottoms out and stabilizes. (Produced by Thinking Finance)■