Focusing on both R&D and market development, Gotion High-Tech expects significant growth in the third quarter

On the evening of August 29, Guoxuan High-tech (002074) released its performance report for the first half of 2018. The company achieved operating income of 260,671.77 million yuan, an increase of 8.76% over the same period last year; and achieved net profit attributable to shareholders of listed companies of 46,555.18 million yuan, an increase of 4.57% over the same period last year.

As for the reasons for the steady growth in profitability, the company analyzed that it was mainly due to the company's adherence to the business philosophy of "product is king, talent is the basis, and customer is supreme", closely focusing on the strategy and business plan formulated at the beginning of the year, and giving full play to the company's core competitive advantages.

Talent-oriented, 22 international patents, leading the industry

The emphasis on talent development determines the height of corporate development. As one of the earliest companies in China to engage in independent research and development, production and sales of new energy vehicle power lithium batteries, Guoxuan High-tech has always attached great importance to the introduction and training of mid- to high-end talents, and also has a technical research and development team that is envied by the industry. The company currently has more than 1,000 R&D personnel, more than 100 doctors, and many outstanding talents such as doctors and overseas experts who studied in Europe and the United States. It has a strong R&D team and technical strength.

As of the end of the reporting period, the company has applied for 2,282 patents, including 1,135 invention patents; 1,086 patents have been authorized, including 241 invention patents (including 22 international patents); the company has published 199 academic papers, including 15 SCI papers and 114 core journals, which is a leading position in the industry.

Data shows that in terms of product development, Guoxuan High-tech has concentrated its R&D efforts to promote the industrialization of its core products. Through measures such as optimizing the material system, improving the cell structure design, and enhancing the equipment control capability, it has developed a cell with a single energy density of over 180Wh/kg, and has successfully applied it to downstream customer products such as JAC Motors and BAIC New Energy, achieving the same level of lithium iron phosphate batteries and ternary batteries in the field of new energy passenger vehicles.

The research and development of core material technology for power lithium batteries has always been one of the company's core competitiveness. The company's independently developed ternary battery products have completed design verification, with a single cell energy density of more than 210Wh/kg, and have been delivered to downstream customers. With the completion of the upgrade and transformation of Qingdao Guoxuan and Hefei Guoxuan's annual production line of 1GWh ternary battery, Hefei Guoxuan Battery's annual production line of 4GWh ternary battery is expected to be put into production in the second half of 2018, and new models of downstream customers are launched one after another, the proportion of ternary batteries in the company's product structure is expected to gradually increase.

Product is king, cultivate the market in the sub-sectors

In the first half of 2018, the company effectively integrated internal resources, adopted the marketing model of the product division, directly faced end customers, quickly and accurately fed back customer needs to all aspects of the company's production and R&D, and developed products closely in line with customer and market needs.

With the changes in the downstream application areas of power lithium batteries, Guoxuan High-tech has vigorously expanded the passenger car market, steadily developed the commercial vehicle market, carefully cultivated the special vehicle market, and expanded and strengthened the energy storage application field.

In the passenger car market, the company continued to consolidate its cooperative relationship with JAC Motors, BAIC New Energy and others, deepened its presence in the field of pure electric passenger cars such as Zotye and Chery, and achieved certain breakthroughs in the PHEV market. In the company's product structure, passenger cars now account for a larger proportion than commercial vehicles.

In the commercial vehicle field, after years of deep cultivation, the company already has a number of strategic cooperation customers including Yutong Bus, Hunan CRRC, Shanghai Shenlong, Geely Automobile, Zhongtong Bus, Nanjing Golden Dragon, Ankai Bus, Foton and Hubei Xinchufeng.

In the field of energy storage applications, the company has actively explored the industrial application, market development and business model of energy storage technology, and has made substantial progress. For example, the Changwang Energy Storage Power Station project undertaken by Shandong Electric Power Group Co., Ltd. provided 8 2MWh container battery energy storage systems.

According to the semi-annual report of Guoxuan High-tech, the net profit attributable to shareholders of the listed company varied by 0.21%-9.43% from January to September 2018, and the company's net profit was between 641 million and 700 million yuan. The company said that with the gradual release of new production capacity, product shipments have increased significantly compared with the same period last year, the scale effect has become more prominent, and the cost control ability has been enhanced. The overall operating performance is expected to be stable and rising.