Abstract: According to incomplete statistics from the battery network, as of now, a total of 63 listed companies of cathode materials and upstream raw materials have disclosed their reports for the first quarter of 2023 and 2024. Judging from the data, the cooling of performance has become the basic plate of this track, among which, the net profit of enterprises in 2023 will drop by more than 90 times, and more than one-third will not make money; In the first quarter of 2024, corporate net profit will drop by nearly 94 times.
In recent years, the rapid rise of the new energy industry has brought a huge volume to the development of the battery industry, and the track players have continued to pour in, and the competition has become increasingly fierce. Since 2023, under the slowdown of downstream cyclical growth, the involution of the battery new energy industry has become the norm, and cathode materials and upstream raw materials, as the core materials of battery new energy, are also one of the most competitive tracks.
Since 2023, the mainland lithium price has gradually returned to rationality, and the profits of the cathode materials and upstream raw material industry chain have also been reconstructed.
According to incomplete statistics from the battery network, as of now, a total of 63 listed companies of cathode materials and upstream raw materials have disclosed their reports for the first quarter of 2023 and 2024. Judging from the data, the cooling of performance has become the basic plate of this track, among which, the net profit of enterprises in 2023 will drop by more than 90 times, and more than one-third will not make money; In the first quarter of 2024, corporate net profit will drop by nearly 94 times.
The performance has cooled and the lithium price has bottomed out
In terms of operating income, the 63 companies included in the statistics will have a total operating income of about 1,357.113 billion yuan in 2023, with an average operating income of 21.541 billion yuan, and 25 companies with operating income exceeding 10 billion yuan, including 3 companies with operating income exceeding 100 billion yuan, including Zijin Mining, Luoyang Molybdenum, and Sichuan Road and Bridge. There are 18 companies with positive year-on-year growth in operating income, of which only 5 have an increase of more than 10%, and the largest is 59.68%; There were 45 enterprises with negative year-on-year growth in operating income, and 34 companies decreased by more than 10%, with the largest range reaching 63.54%.
In the first quarter of 2024, 63 enterprises will have a total operating income of 289.449 billion yuan, with an average operating income of 4.594 billion yuan, and 35 companies will have an operating income of more than 1 billion yuan, including Zijin Mining, Luoyang Molybdenum, Sichuan Road and Bridge, Chint Electric, Huayou Cobalt, Sinochem International, and Western Mining exceeding 10 billion yuan. There are 20 enterprises with positive year-on-year growth in operating income, and Fulin Seiko has the largest range, reaching 106.34%; Enterprises with negative year-on-year growth in operating income still account for the majority, 43, with the highest decline of 87.88%.
In terms of net profit, the 63 companies included in the statistics will have a total net profit of 78.72 billion yuan in 2023, with an average net profit of 1.25 billion yuan, 38 of which will be profitable, and 18 will exceed 1 billion yuan, of which only 1 will have a net profit of more than 10 billion yuan, 11 will have a positive year-on-year growth in net profit, and 52 will have a negative year-on-year growth, with a maximum decline of 9044.38%. In addition, there are 25 companies that do not make money, and Sinochem International has a loss of 1.848 billion yuan.
In the first quarter of 2024, the net profit of 63 companies totaled 11.849 billion yuan, with an average net profit of 188 million yuan, 42 companies made profits, and 4 companies exceeded 1 billion, namely Zijin Mining, China Molybdenum, Sichuan Road and Bridge, and Chint Electric; There are 21 companies that have lost money, 20 companies have lost less than 500 million yuan, and only one Tianqi Lithium has a loss of 3.897 billion yuan. There are 31 companies with positive year-on-year growth in net profit, of which Tengyuan Cobalt increased by 1705.74%; There were 32 companies with negative year-on-year growth, among which Tianli Lithium Energy had the largest decline, reaching 9355.11%.
Behind the cooling of performance, it is mainly due to the slowdown in the growth rate of lithium battery downstream market demand, the intensification of international and domestic market competition and other factors, and the sales price of raw materials and products has declined sharply. Since 2023, the price of lithium carbonate has fluctuated and fallen, from 500,000 yuan/ton at the beginning of the year to below 100,000 yuan/ton at the end of the year, and in 2024, the tonnage price of lithium carbonate will also fluctuate around 100,000 yuan.
In the continuous fluctuation of lithium prices, the performance of lithium salt enterprises with mines in hand is the first to bear the brunt. Among them, compared with 2022, Tianqi Lithium and Ganfeng Lithium, the two domestic lithium mines, will earn a total of 32.385 billion yuan less in 2023, and their net profits will decline by 69.75% and 75.87% year-on-year respectively; The net profit of Salt Lake shares fell by 49.17% year-on-year. In addition, Shengxin Lithium Energy's net profit decreased by 87.35% year-on-year; Yahua Group's net profit decreased by 99.11% year-on-year; Jiangte Motor's net profit decreased by 117.06% year-on-year......
According to industry insiders, because the price of lithium carbonate has broken through the cost line of most enterprises, a large number of lithium-related enterprises in Yichun, Jiangxi Province have stopped production, and the enterprises that are still open for business have also significantly reduced their production capacity.
In contrast, companies with a multi-business layout are relatively less affected by the decline in lithium prices. Shengtun Mining will achieve a net profit of 265 million yuan in 2023, a year-on-year increase of 127 times, mainly benefiting from the rise in copper prices; Huayou Cobalt holds nickel, cobalt and lithium resources development, and the net profit decline is also lower than the overall level of the industry, and the company's copper products and nickel products revenue increased by 11.16% and 224.84% respectively, which constitutes a certain support for its performance.
In addition to lithium miners and lithium salt companies, with the decline in lithium prices, the cathode material manufacturers who are "hoarding" at high prices are more "injured", especially lithium iron phosphate companies. Among them, although the proportion of Hunan Yuneng's inventory in 2023 decreased from 18.81% to 4.94%, in the case of a large number of destocking, in 2023, the company's net profit will be 1.581 billion yuan, a year-on-year decrease of 47.44%.
Not only Hunan Yuneng, but also the annual report data of German Nano also shows that in 2023, the company's asset impairment loss will total 1.042 billion yuan, of which the inventory decline loss and contract performance cost impairment loss will reach 944 million yuan. In 2023, the loss of German Nano will reach 1.636 billion yuan, a year-on-year decrease of 168.74%; The company's gross profit margin was only 0.19%, and the capacity utilization rate was 69.54%.
Like German Nano, cathode material manufacturers focusing on lithium iron phosphate routes, such as Lopal Technology, Fulin Seiko, Fengyuan Shares, Anda Technology, Hezong Technology, and Wanrun New Energy, will also suffer losses to varying degrees in 2023.
Some institutions pointed out that as the supply and demand pattern turns to surplus, it is expected that lithium prices will be in the bottoming stage in 2024. The industry generally believes that from the analysis of lithium price trends in the long term and recent years, generally speaking, the price of lithium carbonate this year is mainly stable and will not fluctuate greatly.
It is worth mentioning that the current phased changes in the relationship between supply and demand have not subverted the development logic of long-term demand is still good, so with the gradual clearing of high-priced material inventories, the recovery of profits in the lithium iron phosphate cathode material market seems to be in the making. Judging from the net profit in the first quarter of 2024 alone, Fulin Seiko's net profit increased by 107.6% year-on-year; German nano net profit increased by 74.25% year-on-year; Fengyuan shares increased by 70.68% year-on-year; Lopal Technology increased by 64.96% year-on-year......
Innovation and competition to go to sea for glory
Technological innovation is the primary productive force of an enterprise, and it is also the competitiveness. On May 8, the Electronic Information Department of the Ministry of Industry and Information Technology publicly solicited opinions on the standard conditions and announcement management measures for the lithium battery industry (draft for comments). It is mentioned that enterprises will be guided to reduce manufacturing projects that simply expand production capacity, strengthen technological innovation, improve product quality, and reduce production costs. According to the analysis of industry insiders, this new regulation will guide and standardize the orderly development of the lithium battery industry chain, and improve the quality of related products from technological innovations such as improving energy density and cycle life, so as to achieve the effect of reducing costs and increasing efficiency.
At present, the competition in the battery new energy track is becoming increasingly fierce, and it has become an inevitable trend to increase technological innovation and material iteration, promote the clearance of backward production capacity, and reduce costs and increase efficiency.
From the perspective of R&D expenditure, 58 of the 63 listed companies on cathode materials and upstream raw materials included in the statistics disclosed their R&D investment in 2023 and the first quarter of 2024. Among them, in 2023, 35 companies will invest more than 100 million yuan in R&D, and 8 companies will invest more than 1 billion; There were 23 companies with positive year-on-year growth in R&D investment, and Chuanjinnuo had the highest growth rate of 337.62%. In the first quarter of 2024, there will be 13 companies with R&D investment of more than 100 million, and 21 companies will show positive year-on-year growth, with Tianli Lithium Energy increasing the most, to 209.15%.
With the continuous increase in R&D investment, the R&D hotspots of lithium battery cathode material technology continue to emerge, and the project layout continues to land.
Due to the safety of lithium iron phosphate and the advantages of high energy density of ternary materials, the cost-effective lithium manganese iron phosphate will gradually heat up in 2023, and relevant projects such as Rongbai Technology, German Nano, Hunan Yuneng, and Guanghua Technology have been planned and released. From the perspective of progress, while maintaining the first shipment of lithium manganese iron phosphate in 2023, Ronbay Technology has also developed ternary blended M6P products, high-capacity products with a manganese-iron ratio of 7:3, and a next-generation solid-liquid integrated process product, and completed the pilot test on the vehicle-gauge power battery, which is expected to achieve a breakthrough in the automotive market in 2024; The German nano lithium manganese iron phosphate has also had mass production capacity, and has taken the lead in loading, officially starting the process of commercial application; Hunan Yuneng lithium manganese iron phosphate materials have been in the stage of mass trial production, and are actively promoting the industrial application of lithium manganese iron phosphate......
While lithium manganese iron phosphate drives the market of phosphate cathode material technology to rise, ternary materials are also developing towards high nickel, high voltage and single crystal under the call of high rate fast charging and high energy density. Not only that, under the guidance of the next generation of battery technology, the pace of innovation of cathode materials for sodium batteries and solid-state batteries has never stopped, only in the field of solid-state batteries, Rongbai Technology, Xiamen Tungsten New Energy, Zhenhua New Materials, Dangsheng Technology, etc. have realized the relevant technical layout of cathode materials.
In addition to technological innovation, in order to bypass the current "roll-up" domestic market and seek a new path for development, more material manufacturers have looked at overseas markets, and overseas markets have also become a place where lithium battery companies are competing for layout.
According to incomplete statistics from the battery network, in 2023, Tianci Materials, Lopal Technology, Hailiang Co., Ltd., GEM Co., Ltd., Changchang Lithium Co., Ltd., BYD, Huayou Cobalt, Putailai, Nord Co., Ltd., Xiamen Tungsten New Energy, Dow Technology, Capchem, Huayou Cobalt, Zhongwei Co., Ltd., Dangsheng Technology, Rongbai Technology, Shanshan Co., Ltd., Beiteri and other enterprises have overseas project plans and releases. Among them, cathode material companies include Tianci Materials, Lopal Technology, GEM, Changchang Lithium, Xiamen Tungsten New Energy, Dow Technology, Huayou Cobalt, Zhongwei Co., Ltd., Dangsheng Technology, Rongbai Technology, Beiteri, etc.
Entering 2024, GEM will once again increase its nickel projects in Indonesia; beiteri Morocco cathode material project started; Ronbay Technology disclosed that the production capacity of the South Korean base continued to increase, and new progress was made in the layout of North America and Europe.
Looking forward to the future, the competition of cathode material companies in new technologies and new processes, overseas expeditions and other competitions continues, and the R&D hotspots and directions are far more than this, and the performance of listed companies related to cathode materials will continue to change.