Binding with four super giants, the leader in negative electrode materials invests another 9.7 billion to expand production!

On the evening of April 26, Shanshan Holdings Group (600884) issued an announcement stating that the board of directors agreed that its subsidiary Shanghai Shanshan would set up a project company in Anning, Yunnan, and invest in the construction of an integrated base project with an annual output of 300,000 tons of lithium-ion battery negative electrode materials .

The project has a planned total fixed asset investment of approximately RMB 9.7 billion (excluding working capital). It will be built in two phases. The first phase has an annual production capacity of 200,000 tons, and the second phase has an annual production capacity of 100,000 tons. The construction period for each phase is 16 months.

Introducing strategic investment from four major companies

According to the calculation that 1GWh power battery requires 1,300-1,400 tons of negative electrode materials, the above 300,000 tons of negative electrode materials can meet the battery production capacity demand of about 214GWh-230GWh. It can be seen that the scale of Shanshan’s capacity expansion this time should not be underestimated. Behind this, of course, is its unstoppable confidence.

First, it is deeply bound to the four giants, with all customers and raw materials available.

On April 19, before the announcement of the expansion, Shanshan Holdings Group announced that Shanghai Shanshan had introduced four strategic investors, including Ningbo Wendi Investment Co., Ltd. ( a wholly-owned subsidiary of CATL ), BYD , ATL, and China National Petroleum Corporation Kunlun Capital Co., Ltd. (China National Petroleum Corporation holds a 51% stake), with a total capital increase of 650 million yuan.

Among them, Wending Investment invested 300 million yuan, BYD invested 150 million yuan, ATL invested 100 million yuan, and Kunlun Capital invested 100 million yuan. In addition, Ningbo Shanshan, a wholly-owned subsidiary of Shanshan Holdings, also invested 2.4 billion yuan to increase its capital in Shanghai.

After the completion of all the above transactions, Suning Holdings Group's equity ratio in Shanghai Shanshan changed from 89.99% to 87.08%, and Shanghai Shanshan will remain its wholly-owned subsidiary.

It has to be said that the four strategic investors introduced by Shanghai Shanshan this time are quite clever. On the one hand, CATL, BYD and ATL are all core customers of Shanshan's negative electrode material business; on the other hand, PetroChina is one of its strategic suppliers of raw materials for negative electrode products.

Second, the negative electrode business is booming.

If we say that Shanshan's expansion is closely related to its deep ties with the four giants, then we have to say that Shanshan's own booming negative electrode business is also an important support.

According to the annual report, the demand for Shanshan's negative electrode product orders in 2021 far exceeded its supply capacity. The company took multiple measures to achieve full-load production, and the sales volume of negative electrode materials exceeded 100,000 tons in 2021. At the same time, the unit profit level of the company's negative electrode material products grew against the trend, with net profit per ton increasing by 65% ​​year-on-year, and product sales increasing by 71.27%. The shipment volume of artificial graphite ranked first in the world.

As a result, Shanshan Co., Ltd. achieved revenue of 4.14 billion yuan in its negative electrode materials business in 2021, a year-on-year increase of 64.42%; and achieved a net profit attributable to shareholders of the listed company of 525 million yuan, a year-on-year increase of 199.91%.

As of the end of 2021, Shanshan shares' negative electrode material finished product production capacity is 120,000 tons and graphitization capacity is 42,000 tons. With the mass introduction of new-generation fast-charging products on the consumer side and the increasing demand for fast-charging products from power customers, the existing production capacity cannot meet the demand. It is actively promoting the expansion of the second phase of Baotou, Inner Mongolia, the integrated base in Meishan, Sichuan, and the Yunnan base invested and built this time.

Among them, the second phase integrated production line in Baotou, Inner Mongolia has a designed production capacity of 60,000 tons and a graphitization capacity of 52,000 tons. It has started trial production at the end of 2021 and is expected to reach full production in the third quarter of 2022; the Sichuan Meishan integrated base has a designed production capacity of 200,000 tons and will be built in two phases. The first phase of 100,000 tons is planned to be put into trial production before the end of 2022. It has obtained energy assessment and environmental assessment approvals and has started construction.

The upstream is accelerating capacity expansion, and the downstream is deeply bound

Data shows that affected by the rising prices of oil and other commodities, the prices of raw materials such as needle coke and petroleum coke rose by 5-10% month-on-month in the first quarter of this year, pushing up the cost of negative electrode materials. Among them, the comprehensive cost of artificial graphite made from petroleum coke rose by about 5-10%.

Under this circumstance, upstream artificial graphite negative electrode leading enterprises are accelerating the expansion of production capacity to seize market share. According to incomplete statistics, from the beginning of the year to date, 16 negative electrode material investment projects have been officially announced, with a total investment amount of 48.132 billion yuan, and a planned annual additional production capacity of 1.44 million tons; at the same time, 24 projects have been put into production, of which 21 have announced investment amounts totaling 80.71 billion yuan, and a planned annual additional production capacity of 2.791 million tons.

Downstream battery companies have formed a deep bond with negative electrode companies through strategic equity investment and long-term contract agreements to ensure a stable supply of negative electrode products. Since the beginning of this year, leading battery companies such as Honeycomb Energy, CATL, BYD, and EVE Energy have strategically invested in negative electrode material companies.

In January, Honeycomb Energy completed its investment in Hebei Kuntian New Energy Technology Co., Ltd., holding a 1.8% stake. On April 25, Hebei Kuntian's 200,000-ton lithium battery negative electrode material production project officially started, with a total investment of approximately 5.6 billion yuan and will be built in two phases.

On February 20, Zhongke Electric announced that it had signed an agreement with CATL to jointly increase capital in Zhongke Xingcheng, Gui'an New District. Zhongke Electric increased capital by 420 million yuan, and CATL increased capital by 280 million yuan, to invest in the "annual production of 100,000 tons of lithium battery negative electrode material integrated project".

After the completion of this capital increase, CATL or its wholly-owned subsidiary will hold 35% of the equity of Zhongke Xingcheng in Gui'an New District.

On April 8, Dow Technology announced that it plans to increase capital in Griffin and introduce strategic shareholders such as BYD, with a planned capital increase of 600 million yuan. It is reported that Griffin plans to set up a new holding subsidiary in Lanzhou New District to invest in the construction of "annual production of 5,000 tons of carbon nanotube powder, 30,000 tons of carbon nanotube slurry (including related industrial chain supporting facilities) and 150,000 tons of silicon-carbon, graphite negative electrode materials and graphitization processing production projects".

On April 24, EVE Energy newly invested in Yunnan Zhongke Xingcheng Graphite Co., Ltd., with an investment ratio of 40%. This also marks the official implementation of the joint venture project announced by EVE Energy and Zhongke Xingcheng in October last year.

Summarize

Judging from the market situation and the investment layout trends of upstream and downstream companies, negative electrode materials will still be a hot player in the lithium battery market in 2022. In the short term, due to the constraints of energy consumption indicators and graphitization links, some negative electrode production capacity cannot be fully released. But in the long run, negative electrode materials are basically in a state of supply and demand balance.