The battle between China, Japan and South Korea in the lithium battery industry chain

In 2016, Cangzhou Mingzhu achieved a total operating income of RMB 2.765 billion (the same below), an increase of 27.10% over the previous year;

The net profit attributable to the owners of the parent company was RMB 487 million, an increase of 127.05% over the previous year. Among them, the production of lithium-ion battery separator products was 1,532.17 tons, an increase of 102.73% over the previous year; the operating income was RMB 377 million, an increase of 119.34% over the previous year, accounting for 13.65% of the operating income.

It has changed its name from Green to Zhongke Technology. Its diaphragm revenue was RMB 250 million in 2014 and reached RMB 360 million in 2015, an increase of 44%. In 2016, it further exceeded RMB 400 million.

Others include Henan Yi Teng New Energy, Shanghai Enjie and other diaphragm manufacturers.

Of course, we must realize that in the diaphragm industry, even the largest Star Source Material is only ranked fourth in the world. It will take several more years to break the monopoly of Japan and South Korea in the mid-to-high-end market. If domestic manufacturers maintain this pace of development, China will surely eliminate the last blind spots of the four core raw materials.

Another point is that the current diaphragm production is gradually shifting to wet production, and the main upstream raw material required for wet production is high-molecular polyethylene. In June 2017, China's Yangzi Petrochemical achieved mass production of this material for the first time, breaking the import monopoly.

Of course, the upstream of positive electrode materials and electrolytes is lithium metal materials.

In 2016, Tianqi Lithium achieved operating income of 3.904 billion yuan, an increase of 109% over the previous year; and realized net profit of 1.512 billion yuan, an increase of 510% over the previous year.

Ganfeng Lithium achieved operating income of RMB 2.844 billion in 2016, up 110.06%, and net profit of RMB 464 million, up 270.74%.

In addition to the four core materials of lithium batteries, there is another battery aluminum-plastic film. The localization rate in China is very low. There is no problem with our hard-shell battery production, but consumer electronics products need to use soft-package batteries for high density. Because the metal shell of hard-shell batteries is really large, soft-package batteries and aluminum-plastic film are the most commonly used shell materials.

In 2016, the self-sufficiency rate of aluminum-plastic film in my country was less than 7%, and the domestic aluminum-plastic film market was monopolized by four Japanese and Korean companies: Dai Nippon Printing (DNP), Showa Denko, Toppan Printing (T&T) and Kurimura. As the demand for localization of aluminum-plastic film becomes increasingly prominent,

China's Xinlun Technology seized the opportunity and acquired the business of T&T, one of the top three global suppliers of lithium battery soft pack materials, in April 2016, which accelerated the localization process of aluminum-plastic film and improved the mass production capacity and market share of domestic aluminum-plastic film.

On April 25, 2017, Selen Science & Technology released its 2016 annual report, achieving operating income of 1.65 billion yuan, a significant increase of 61.94% over the same period last year; of which aluminum-plastic film revenue was about 70 million yuan. The company said that in 2017, with the release of production capacity of the Japanese factory and the commissioning of domestic factories, the aluminum-plastic film business is expected to achieve rapid growth this year.

In 2017, the localization rate of aluminum-plastic film is expected to increase to more than 10%, which is an astonishing growth rate.

Not only upstream raw materials, but also upstream domestic lithium battery equipment is rising rapidly.

In 2016, the demand for lithium battery production equipment in China was approximately RMB 14.5 billion, while domestic equipment (excluding imports) reached RMB 11.5 billion, and the localization rate reached 80%.

Although Chinese manufacturers are still not as good as Japanese and Korean manufacturers in some high-end equipment products, they have achieved the localization of every link of lithium battery production equipment, that is, Chinese companies have the ability to provide entire lithium battery production lines.

Domestic equipment has not only occupied a dominant position in newly built lithium battery factories in China. For example, CATL, which has developed rapidly in the past two years and is launching new lithium battery production lines on a large scale, has a proportion of domestic production equipment in its new production lines reaching 86%. It has also begun to counterattack and penetrate the production lines of Japanese and Korean lithium battery manufacturers. The battery production lines of Panasonic, Samsung, and Sony all have Chinese production equipment.

Yinghe Technology has become a leading manufacturer of lithium battery equipment in China. It claims to be the only company in the world that can provide complete solutions for power battery intelligent production lines. In fact, if you look at Yinghe Technology's financial reports, you will find that they are really not bragging. Since 2015, Yinghe Technology has become the first company to promote the "turnkey" project of lithium battery complete line equipment for lithium battery manufacturers.

In 2016, Yinghe Technology's operating income reached 850 million, a sharp increase of 132.77%, and its net profit reached 124 million, a sharp increase of 105.89%. Among them, the four major items of winding machines, coating machines, film making machines, and polymer battery fixture forming machines accounted for more than 70% of the operating income, and the sales of other production equipment such as roller presses, slitting machines, die-cutting machines, liquid injection machines, and laminating machines were all over 10 million yuan.

Judging from the situation in the first quarter of 2017, Yinghe Technology continued to maintain its super-fast growth momentum.

Another leading company in China is Wuxi Lead Intelligent Technology Co., Ltd., which started to engage in the R&D and manufacturing of lithium battery production equipment in 2008.

It can develop and produce winding machines, pole piece slitting machines, welding and winding machines, electrode stacking machines, assembly machines, four-in-one molding machines, etc. In 2016, the company achieved operating income of 1.08 billion yuan, a year-on-year increase of 101.26%; the net profit attributable to shareholders of the listed company was 291 million yuan, a year-on-year increase of 99.68%; the growth mainly came from the rapid growth of lithium battery production equipment, of which the revenue of lithium battery production equipment accounted for 67.76%, about 732 million yuan.

Lead Intelligent is the only company in China that provides power lithium battery winding machines for BYD and Tesla, two world leaders in electric vehicles. At the same time, its lithium battery production equipment has also been sold to the lithium battery production lines of Panasonic, Sony and Samsung.

Especially for Panasonic, both consumer lithium battery equipment and power lithium battery equipment have begun to be supplied in small batches.

In addition to the two giants of lithium battery production equipment in China, a number of lithium battery equipment companies with a scale of over 100 million and growing rapidly have also emerged in China, such as Shenzhen Jiyang Intelligent (currently controlled by Zhiyun Co., Ltd.), which had lithium battery equipment revenue of 140 million in 2015, and revenue soared to 230 million in 2016. In 2017, the contract amount is expected to reach 500 million, and the revenue is expected to exceed 300 million. The picture below shows the fully automatic winding machine for square lithium batteries developed by Jiyang Intelligent.

Jiyang Intelligent's main customer is ATL New Energy Company in Dongguan, which is also a domestic enterprise.

The aforementioned Keheng Co., Ltd. had an operating income of 787 million yuan in 2016, an increase of 102.43%, and a net profit of 34 million yuan, an increase of 145.74%. Among them, the income from lithium battery production equipment was 172 million yuan, while the income from lithium battery production equipment in 2015 was only 122 million yuan, an increase of 41%.

There is also a company called Zhengye Technology in China. In the field of lithium battery testing, the company's X-ray automated testing equipment has formed a monopoly, with a market share of over 70%. In 2016, the company achieved operating income of 600 million yuan, an increase of 68.12% over the same period last year; the net profit attributable to shareholders of the listed company was 72.8365 million yuan, an increase of 85.14% over the same period last year.

Of course, lithium battery testing equipment is only a small part of the company's business. They also provide LCD panel assembly production equipment. In addition, it is worth mentioning that the company provides a large number of automated production line equipment mainly based on automated welding. Panasonic, Toshiba, Midea, Gree, and Mitsubishi are all its customers. Who said that the Japanese don't use Chinese machinery?

Of course, there is another giant that has entered the domestic lithium battery equipment industry, that is, Han's Laser, which has an advantageous position in the welding of lithium batteries, and is among the top three in the world in the laser field and the first in China. Based on lithium battery laser welding technology, Han's Laser's ambition is not satisfied with welding production. It has successively invested in and acquired lithium battery equipment companies such as Dongguan Junzhuo, Shenzhen Bonatus and Jiangsu Jinfan Zhanyu, and has gradually mastered the production capacity of power battery manufacturing equipment through mergers and acquisitions.