Key investment points
The negative electrode industry in the world and China is highly concentrated. From the perspective of global competition pattern, among the top ten negative electrode material manufacturers in 2020, there are 7 Chinese enterprises, with a total market share of 60%. The market share of China’s leading enterprises beiteri, Ningbo Shanshan Co.Ltd(600884) , Shanghai Putailai New Energy Technology Co.Ltd(603659) has reached 38%, and the market share of Japanese and Korean enterprises has declined. Chinese enterprises occupy a leading position in the global competition in the field of lithium battery cathode. The concentration of China’s negative electrode industry is also high, showing an echelon pattern of “four major and three small”, with Cr4 reaching 70%.
The demand for negative electrode materials driven by power batteries is growing rapidly. It is estimated that the annual compound growth rate of global power battery loading volume is expected to reach about 40% from 2021 to 2025. From 2021 to 2025, the global demand for negative electrode materials of power batteries will increase at a compound growth rate of 37%. From 2021 to 2025, the global demand for cathode materials is expected to increase from 620000 tons to 2.11 million tons, with a compound annual growth rate of 36%. China is the world’s leading producer of negative electrode materials, and the proportion of shipments has increased to about 70% in the past two years. It is estimated that the shipment of negative electrode materials in China will increase from 365000 tons in 2020 to 1.48 million tons in 2025, with a compound annual growth rate of 32%.
The self supply rate of graphitization of head enterprises has been increasing. Graphitization processing cost accounts for more than 50% of the production cost of artificial graphite negative electrode materials. Reducing processing cost is an important way for enterprises to reduce the production cost of artificial graphite negative electrode materials. Under the influence of the dual control of national energy consumption, the graphitization processing capacity with high energy consumption is limited. At the same time, the demand of the downstream new energy vehicle market is growing rapidly, and the graphitization supply and demand is tight. The graphitization processing cost is expected to remain high in 2022. In recent years, China’s lithium battery cathode material head enterprises have gradually shifted to the upstream graphitization processing layout and transformed into an integrated production and operation mode. The self supply rate of graphitization for Shanghai Putailai New Energy Technology Co.Ltd(603659) , Ningbo Shanshan Co.Ltd(600884) , Hunan Zhongke Electric Co.Ltd(300035) will be increased to about 80% in the next 1-2 years, which will help enterprises control costs and enhance their competitive advantage.
Investment suggestion: on the demand side, the global new energy vehicle market is expected to resonate upward in 2022, maintain a high outlook, drive the demand for power batteries to remain strong, and the demand for cathode materials, one of the key materials, will maintain rapid growth. On the supply side, in the medium and long term, under the influence of dual control of national energy consumption, the release and expansion of high energy consuming negative electrode graphitization processing capacity will be limited, and the supply and demand will be tight. In the short term, with the Winter Olympic Games approaching, more efforts will be made to limit the production of environmental protection, the capacity of negative electrode graphitization is tight, the graphitization processing price will remain high, and the supply of negative electrode materials is tight. Enterprises with high self supply rate of graphitization and gradual improvement of integrated industrial layout have strong cost advantages and are expected to achieve both volume and profit. It is suggested to pay attention to the artificial graphite cathode leader Shanghai Putailai New Energy Technology Co.Ltd(603659) (603659) with prominent advantages of integrated industry, Hunan Zhongke Electric Co.Ltd(300035) (300035) with accelerated capacity expansion towards the first tier, and the old brand cathode leader Ningbo Shanshan Co.Ltd(600884) (600884) driven by two wheel business.
Risk warning. The production and sales of new energy vehicles are lower than expected; The price of raw materials has risen sharply; Market competition intensifies risks; Iteration risk of new technology change; Electric vehicle safety risk
