Hundreds of billions of “Cobalt Mao” turned around, and the battle for power battery routes has resurfaced

Visual China

Reporter | Yin Jingfei

From automotive lubricants to lithium battery tracks, Longpan Technology (603906.SH) “holds” the “thighs” of Ningde Times (300750.SZ), intending to show off its strengths. But who is the dark horse on the inner lithium iron phosphate track?

Since Longpan Technology announced on May 30, 2022 that it has completed a fixed increase of 2.2 billion yuan, the stock price has begun to rise. Based on the closing price, as of June 15, the company’s share price rose from 29.95 yuan per share to 36.78 yuan per share, and the share price rose by more than 20% in 11 trading days. The 15 fixed increase subscription institutions recorded a floating profit of 38%.

Since the introduction of the lithium battery concept, the market value of Longpan Technology has soared, from 2.9 billion yuan at the end of May 2020 to 17.7 billion yuan today, an increase of about 510%. Just on the track where the investment in lithium iron phosphate is rolling in all the way, can this rally continue? And has Longpan Technology retained enough stamina?

Adjacent to “King Ning”

The original main business of Longpan Technology revolves around automobile manufacturing and automobile aftermarket . The main products include lubricating oil, diesel engine exhaust gas treatment fluid, engine coolant, and vehicle maintenance products. The company’s revenue growth will enter a bottleneck period before 2021, the stock price rises lacking imagination, and the market value once stagnated at two or three billion yuan .

Longpan Technology’s revenue over the years, picture source: choice terminal

Longpan Technology’s net profit has been returned to its mother over the years. Image source: choice terminal

In 2020 the company begins to look for a second growth curve.

At the end of that year, Biteray, a leader in anode materials, signed a contract with Longpan Technology to sell its lithium iron phosphate-related assets and business to the latter. In 2021, the company will use Changzhou Liyuan New Energy Technology Co., Ltd. (hereinafter referred to as Changzhou Liyuan) as a springboard to start transformation and undertake new energy business.

According to Tianyancha, Changzhou Liyuan was only established on May 12, 2021. In June 2021, Tianjin Nano and Jiangsu Nano, two subsidiaries of Betterray, completed the delivery and transfer, and transferred to Changzhou Liyuan.

Changzhou Liyuan, a subsidiary of Longpan Technology Holdings, picture source: Tianyancha

After winning the lithium iron phosphate assets, Changzhou Liyuan joined the Shanghai State-owned Assets Supervision and Administration Commission and the “leader of lithium batteries” Ningde era.

The shareholder of Changzhou Liyuan, a holding subsidiary of Longpan Technology, picture source: Tianyancha

On December 16, 2021, Daily State Liyuan welcomed 2 significant investment institutions. According to Tianyancha, Fujian Times Mindong New Energy Industry Equity Investment Partnership (Limited Partnership) holds about 10.43% of the shares, and Ningbo Meishan Bonded Port Area Aspiration Investment Co., Ltd. (hereinafter referred to as Wending Investment) holds about 9.57% of the shares.

The actual controller of the former is Shanghai State-owned Assets Supervision and Administration Commission, and the shareholders include: Qingdao SAIC Innovation and Upgrade Industry Equity Investment Fund Partnership (Limited Partnership) under Shanghai State-owned Assets Supervision and Administration Commission, and Ningde Transportation Investment Group Co., Ltd. under Ningde State-owned Assets Supervision and Administration Commission, the third largest The shareholder is CATL.

Shareholders of Fujian Times Mindong New Energy Industry Equity Investment Partnership (Limited Partnership), picture source: Tianyancha

The aspiration investment is 100% invested and controlled by CATL. In summary, CATL holds 12.72% of Changzhou Liyuan shares.

Shareholder of Ningbo Meishan Bonded Port Area Aspiration Investment Co., Ltd., picture source: Tianyancha

In June 2021 , Changzhou Liyuan Company was consolidated into a listed company, which doubled the revenue of Longpan Technology. In 2021 , the company’s total operating income is 4.054 billion yuan, and the net profit attributable to the parent is 351 million yuan, a year-on-year increase of more than 110 % and 70% respectively .

The operating income of the holding subsidiary Changzhou Liyuan is 1.895 billion yuan, accounting for 46.7% of the listed company’s revenue, with a net profit of 225 million yuan and a net profit of 174 million yuan attributable to the parent, contributing nearly 50% of the listed company ‘s net profit attributable to the parent.

Longpan Technology’s revenue structure, picture source: choice terminal

7 billion bet on lithium iron phosphate

The market value has soared and the revenue has soared. Longpan Technology is fully betting on the lithium iron phosphate track.

On June 13 this year, the company decided to change the original investment project “Environmental Environmental Fine Chemicals Project for Vehicles” in Zhangjiagang to “Ternary Cathode Material Precursors and Other Projects “ , and increase the investment scale to 1.5 billion yuan.

In fact, from the second half of 2021 to the present , the company has accelerated its transformation to the lithium battery track with Changzhou Liyuan as the core , or established or acquired Liyuan subsidiaries, and has successively announced multiple capacity expansion plans.

Longpan Technology’s holding subsidiary Changzhou Liyuan invested abroad. Source of information: Tianyancha

According to Jiemian News statistics, its planned and signed projects involve a total investment of nearly 7 billion yuan. Although many of these projects are joint construction capacity and are constructed in first and second phases, the scale of capital cannot be underestimated.

For example, this year:

• In April, Longpan Technology plans to sign the “Investment Contract” with the Xiangcheng District People’s Government of Xiangyang City, and plans to invest 1.9 billion yuan to build a lithium iron phosphate cathode material production base project in Xiangcheng District. The first phase is to build a project with an annual output of 50,000 tons of lithium iron phosphate and 25,000 tons of iron phosphate. The construction period is 6 months. In the second phase, an additional project with an annual output of 50,000 tons of lithium iron phosphate and 25,000 tons of iron phosphate will be constructed. The equipment installation and commissioning will be completed and put into operation within 24 months after the first phase of the project is put into operation.
• On May 11, in order to integrate upstream and downstream industrial chain resources, the company plans to jointly invest 900 million yuan with Tangshan Xinfeng Lithium Industry Co., Ltd. to invest in the development and construction of 30,000 tons of lithium hydroxide / lithium carbonate per year in Hubei Province or Tangshan City, Hebei Province project.

Data source: Company, finishing and drawing: Yin Jingfei

Establishing a number of lithium source subsidiaries and expanding production capacity, where does the money come from?

On August 28, 2021, the company announced that it plans to raise about 2.2 billion yuan, and the fundraising will be completed on May 30 this year.

Longpan Technology’s fixed increase capital use, data source: company announcement

The project of “ waiting to be fed” consumes most of the funds just raised. On June 14, the company stated that the 1.29 billion yuan of the raised funds will increase the capital of Changzhou Liyuan, and Changzhou Liyuan will increase the capital of its wholly-owned subsidiary and the company’s holding subsidiary, Sichuan Liyuan, with the raised funds of 1.29 billion yuan. .

It is worth noting that the company’s current interest-bearing liabilities amounted to 3.384 billion yuan, of which short-term borrowings amounted to 2.240 billion yuan.

“Pang Shang” lithium battery, the market value seems to have imaginable space. The market value of Longpan Technology has risen from 2.9 billion yuan at the end of May 2020 to more than 34 billion yuan at the end of October 2021. Today, the market value is about 17.7 billion yuan.

Longpan Technology’s stock price trend, picture source: choice terminal

The concept of lithium battery also makes the company’s fixed increase project sought after by institutions.

This targeted financing issue of shares adopts the method of inquiry, and the issue price is not lower than 80% of the company’s average stock trading price in the 20 trading days before May 10, 2022, that is, 24.13 yuan per share. After inquiries to 24 investment institutions and natural persons, the final issue price was set at 26.51 yuan per share, and the ratio of this price to the issue reserve price was 109.86%.

The target of the private placement was finally determined to be 15. According to the closing price of 36.78 yuan per share on June 15 , the 15 investment institutions have made a floating profit of 38%.

At the same time, nearly 10,000 investors “entered” in only 2 months.

Longpan Technology announced on SSE E Interactive on May 31, 2022 that as of May 20, 2022, the number of shareholders of the company was 61,200, an increase of 9,590 over the previous period (March 31, 2022), an increase of 18.59%. But the spread of chips is not a good thing for the stock price.

Can Longpan Technology’s stock price rise continue?

Multiple forces disrupt

From an industry perspective, this track is becoming more and more inward, and the production capacity of lithium iron phosphate batteries may be excessive.

There are two mainstream technical routes for lithium batteries, which are divided by positive electrode materials, namely ternary lithium batteries and lithium iron carbonate batteries. The biggest difference between the two materials is that the latter does not contain cobalt and nickel. In the past, ternary lithium batteries have accounted for more than 60% of the market for many years, occupying the mainstream of the market.

However, lithium iron phosphate batteries will achieve a counterattack in 2021 . According to the data of the Power Battery Application Branch, the shipment of lithium iron phosphate materials in the Chinese market will reach 480,000 tons in 2021, an increase of nearly 2.5 times compared with 2020.

Among them, the top five companies in terms of shipments of lithium iron phosphate materials are Hunan Yuneng, Defang Nano, Guoxuan Hi-Tech, Hubei Wanrun and Changzhou Liyuan, with a cumulative market share of 69.1%. In addition, Rongtong Hi-Tech, Peking University Xianxing, Jiangxi Shenghua (Fulin Seiko), Anda Technology, Chongqing Terui and other shipments are also relatively high.

The research of Battery China pointed out that in 2021, the installed capacity of Ningde era and BYD lithium iron phosphate power battery will be 42.9GWh and 25.2GWh respectively. majority share. Among them, the largest customers such as Hunan Yuneng, Defang Nano, Changzhou Liyuan, Jiangxi Shenghua, and Rongtong Hi-Tech are all CATL. In particular, 69.66% of Defang Nano’s lithium iron phosphate materials were sold to CATL last year.

As the company with the largest downstream throughput of lithium iron phosphate , CATL, BYD and other companies are also extending upstream. Through equity participation, long-term association, investment, joint venture and other forms, they are in-depth with Hunan Yuneng, Defang Nano, Jiangxi Sublimation , Changzhou Liyuan and other companies are “bound”.

In addition, many companies in the titanium dioxide track and the phosphorus chemical track are also taking advantage of cost advantages to compete in this field.

On May 29, Jinpu Titanium Industry (000545.SZ) in the titanium dioxide industry announced that it planned to invest 1.28 billion yuan for the construction of 200,000 tons/year battery-grade iron phosphate, 200,000 tons/year lithium iron phosphate and other new technologies . Energy battery material integration project.

In fact, since 2021, a large number of titanium dioxide companies have entered the field of iron phosphate and lithium iron phosphate materials. Longbai Group (002601.SZ), China Nuclear Titanium Dioxide (002145.SZ), Ananda (002136.SZ) , Tianyuan Co. , Ltd. , Anning Co. , Ltd. and other titanium dioxide industry companies have planned a large number of iron phosphates based on the comprehensive advantages of raw material costs. and lithium iron phosphate production capacity.

Titanium dioxide enterprises cross-border into iron phosphate and lithium iron phosphate materials, data source: choice terminal

Phosphorus chemical companies include Yuntianhua (600096.SH), Xingfa Group (600141.SH), Wanhua Chemical (600309.SH), Chuanfa Lomon (002312.SZ) , Batian , Hubei Yihua , Guizhou Phosphorus Hua , Chuanjinnuo , etc. are also continuing to increase their weight in this field. In February this year, Chuanfa Lomon announced that it plans to invest 12 billion yuan to build the Deyang Chuanfa Lomon lithium battery new energy material project and enter the field of lithium iron phosphate.

Phosphorus chemical enterprises cross-border entry into iron phosphate and lithium iron phosphate materials, data source: choice terminal

Felicity Seiko (300432.SZ), which is in the automobile manufacturing track, has increased its lithium iron phosphate business by acquiring Sublimation Technology.

According to incomplete statistics from Shenzhen High-tech Industrial Research Institute (GGII), the domestic lithium iron phosphate planned projects in 2021 will exceed 3 million tons, and the planned projects in 2022 will be superimposed, and the total planned production capacity will exceed 5.4 million tons, far exceeding the market demand in 2025. In 2021, the domestic production capacity of lithium iron phosphate will be close to 970,000 tons. With the release of new production capacity this year, it is expected to reach 3 million tons by the end of the year. The overcapacity of lithium iron phosphate materials is approaching.

The in-rolling track also made it only took half a year for Huayou Cobalt (603799.SH ) , with a market value of 100 billion, to go from entering lithium iron phosphate to pressing the stop button .

On the evening of June 14, Huayou Cobalt announced that after full and friendly negotiation with Huayou Holdings, the company decided to terminate the acquisition of 100% equity of Sheng Vanadium Technology through its holding subsidiary Bamo Technology. The company explained that in order to further concentrate advantageous resources, improve the efficiency of capital use, focus on the new energy lithium battery ternary material industry chain, accelerate the layout of upstream nickel, cobalt, and lithium resources, and downstream product development and capacity expansion, the company decided to terminate the use of lithium iron phosphate materials. field layout.

Today, many forces on the lithium iron phosphate track are staking their ground , and the market reshuffle will accelerate. Who will become the dark horse? Brokerage analysts pointed out that in the future, companies with product and cost differentiation may stand out.