Li Xiaoming fell into the trough of the industry, and his wealth shrank by 54.5 billion, and the medium-term net profit of Enjie shares fell by 74%, and he went to sea to seek change

Yangtze River Business Daily News ● Yangtze River Business Daily reporter Pan Ruidong

The lithium battery industry continues to be under pressure, and the global wet separator leader Enjie Co., Ltd. (002812. SZ) fell sharply in the first half of the year.

On July 5, the company announced that it is expected that the net profit attributable to the parent company in the first half of the year will be 258 million yuan to 358 million yuan, a year-on-year decrease of 74.5% to 81.6%. The pressure on profitability caused by intensified market competition and declining prices of lithium battery separator products has continued since last year.

Transmitted to the secondary market, the share price of the company has fallen to about 30 yuan per share, less than one-tenth of the historical high in 2021. The wealth of the company's founder, Li Xiaoming's family, has also shrunk by 54.5 billion yuan.

In the case of Engjie shares, Li Xiaoming's family has earned huge returns, and when the stock price was high, it once reduced its holdings and cashed out. Now, in the face of the falling stock price, Li Xiaoming's brothers promised not to reduce their holdings and increase their holdings to protect the disk.

The performance and stock price were "double killed", and Li Xiaoming's brothers faced a severe test. A good sign is that the pace of going overseas is accelerating, and the revenue structure is being optimized.

Successfully capture the diaphragm tuyere

Looking back, Li Xiaoming's entrepreneurial road can be described as smooth.

According to public information, Li Xiaoming was born in Yuxi, Yunnan Province in 1958, and his father was the director of Yunnan No. 1 Plastics Factory. After graduating from university, Li Xiaoming was assigned to the Kunming Plastics Research Institute, and two years later he was promoted to deputy director, and he worked as deputy director for five years. Around 1989, he went to the University of Massachusetts in the United States for graduate studies, and not long after, his younger brother Li Xiaohua also came to the University of Massachusetts, also majoring in polymer materials. Since then, the two have had almost the same trajectory in their lives.

The polymer materials major of the University of Massachusetts is known as the "temple" of polymer materials research in the United States. After graduation, both Li Xiaoming brothers worked in American companies, and then returned to China to start their own businesses.

At the beginning of the business, Li Xiaoming brothers in Yuxi, Yunnan Province and local state-owned enterprises jointly established Hongta Plastics, the main business is used for cigarette packaging cigarette labels and BOPP film, the products soon entered the Hongta Group, Hongyun Honghe Group and other tobacco enterprise leaders, with the support of heavy customers, Li Xiaoming brothers quickly earned the first pot of gold in their lives. In 2004, after the withdrawal of the original state-owned shareholders, Li Xiaoming's brothers obtained the actual right to operate Hongta Plastics.

In 2006, Li Xiaoming brothers acquired Yunnan Yuxi Innovation Color Printing Co., Ltd., and completed the share reform in 2012. In September 2016, the company was listed on the Shenzhen Stock Exchange with the stock name of Innovation Co., Ltd., mainly engaged in traditional packaging business, including BOPP film, aseptic packaging, special paper, cigarette labels, etc.

With the increasing maturity of the packaging business, Li Xiaoming began to explore the trend of the times, and he set his sights on the lithium battery separator business, and in this way, in 2015, Shanghai Enjie was established and began to produce lithium battery wet separator.

Li Xiaoming is good at binding large customers, after the establishment of Shanghai Enjie, he copied the successful experience of Hongta Plastics, and supplied to CATL at the beginning, and the performance and business scale rose.

In May 2018, Li Xiaoming launched capital operation and loaded Shanghai NXT into Innovation Shares at a consideration of 5.55 billion yuan, and the listed company was renamed NXT Shares, successfully realizing the transformation.

Stepping on the tide of the new energy era, the company has achieved soaring performance. Flush data shows that the company's revenue in the year of listing was less than 1.2 billion yuan, and it will reach 12.591 billion yuan in 2022, and the net profit attributable to the parent company will also increase from 165 million yuan to 4 billion yuan in the same period.

In the secondary market, the company has also had unlimited glory. The company's share price reached a high price of 316 yuan per share in mid-September 2021, and the Hurun Report that year showed that the wealth of Li Xiaoming's family was as high as 72.5 billion yuan.

Competition intensified and performance came under pressure

After the scenery, the challenge hits.

With the rapid development of the new energy industry chain, the production capacity of the lithium battery material industry has surged, the industry involution has intensified, and the profit margin has been squeezed.

In 2023, the operating income and net profit attributable to the parent company of the company will be 12.042 billion yuan and 2.527 billion yuan respectively, a year-on-year decrease of 4.36% and 36.84% respectively. The company said in the annual report that the overall product price of the diaphragm industry continued to decline for one year due to the downstream destocking and cost reduction requirements, the centralized release of new production capacity of diaphragm enterprises, and the intensification of market competition.

In the face of the current situation of industry competition, Li Xiaoming believes that optimizing the product and customer structure is one of the trends in the development of diaphragm enterprises. Last year, on the one hand, the company increased the shipment of coated film, and on the other hand, accelerated the pace of going to sea.

Flush data shows that in 2022 and 2023, the overseas revenue of Engjie will be 1.332 billion yuan and 2.017 billion yuan respectively, accounting for 10.58% and 16.75% of revenue respectively, and the revenue structure will be further optimized in 2023.

However, the company's profitability is not expected to improve in 2024.

On July 5, the company announced that it is expected that the net profit attributable to the parent company in the first half of 2024 will be 258 million yuan to 358 million yuan, a year-on-year decrease of 74.5% to 81.6%. The decline in the price of lithium battery separator film products is still the main reason for the decline in profits.

As of the close of trading on July 5, 2024, the company's share price was 30.92 yuan per share, less than one-tenth of the historical high in 2021. Li Xiaoming's family's wealth has also shrunk significantly, according to the 2023 Hurun Report, his family wealth has shrunk to 18 billion yuan, a decrease of 54.5 billion yuan from 2021.

In addition, what has attracted much attention and doubts from the outside world is that Li Xiaoming's family has made a huge reduction in holdings at a high level.

According to the data, on August 10, 2020, Li Xiaoming's family completed the first round of reduction, reducing a total of 14.2149 million shares and cashing out 930 million yuan. On May 18, 2021, Li Xiaoming's family completed the second round of shareholding reduction, reducing the number of shares by 3.0277 million shares, cashing out about 440 million yuan. On June 20, 2022, the third round of shareholding reduction was completed, with a total of 10,451,400 shares, an average price of about 240 yuan per share, and about 2.5 billion yuan in cash.

In the above three rounds of reductions, Li Xiaoming's family cashed out a total of about 3.87 billion yuan.

In the face of falling stock prices, the company has also taken a variety of measures such as equity incentives, share repurchases, and shareholder increases. Among them, on June 26, 2023, Li Xiaoming increased his holdings by 2.0783 million shares and promised not to reduce his holdings, and on April 11, 2024, Li Xiaoming and Li Xiaohua promised to increase their holdings by no less than 30 million yuan and 20 million yuan.

The lithium battery industry has entered a severe adjustment period, when will the company usher in a rebound?