Core growth leaders jointly build a 100 billion lithium battery whole industry chain project to jointly consolidate the long-term growth expectation of the industry
The people’s Government of Yuxi City, Yunnan Province, Yunnan Energy New Material Co.Ltd(002812) , Eve Energy Co.Ltd(300014) , Huayou holdings and Yunnan Yuntianhua Co.Ltd(600096) jointly signed the cooperation agreement on the whole industry chain project of new energy batteries. The agreement stipulates that: (1) both parties jointly set up two joint ventures in Yuxi City, one of which is mainly engaged in mineral resource development and the other is mainly engaged in mineral production and processing, The shareholding ratios of the two companies are government (23%), Yunnan Energy New Material Co.Ltd(002812) (22%), Eve Energy Co.Ltd(300014) (20%), Zhejiang Huayou Cobalt Co.Ltd(603799) (18%), Yunnan Yuntianhua Co.Ltd(600096) (17%). (2) Construction of new energy battery, lithium battery isolation film, iron phosphate, lithium iron phosphate, copper foil and other battery supporting projects in Yuxi City. The project is divided into three phases. The first phase of the project promises an investment of about 18.05 billion yuan, which will be completed before December 31, 2023. The promised investment for phase II of the project is about 33.65 billion yuan, which will be completed before December 31, 2025. The third phase of the project is planned to be completed by 2030. We believe that the investment in the upward cycle of electric vehicles has entered the third stage and pay attention to investment opportunities in three directions: core growth, post cycle and new technology; The corresponding beneficiary targets of this cooperation agreement: (1) core growth and high barrier link leaders: Eve Energy Co.Ltd(300014) , Yunnan Energy New Material Co.Ltd(002812) ; (2) Zhejiang Huayou Cobalt Co.Ltd(603799) , Yunnan Yuntianhua Co.Ltd(600096) with strong resource attributes and medium and long-term resource endowment advantages; (3) The expansion of industrial chain is accelerated, and the post cycle benefits from energy storage, such as Guangzhou Great Power Energy&Technology Co.Ltd(300438) .
Yuxi is rich in new energy resources (lithium, nickel, phosphorus, etc.) and has an excellent location, which is conducive to building a low-cost base
(1) Yuxi is one of the cities with the most abundant mineral resources in China. The reserves of phosphate rock are 1.54 billion tons, ranking second in the province; The reserves of iron ore resources are 720 million tons, ranking first in Yunnan Province; Nickel ore reserves 530000 metal tons, which is the second largest nickel ore in China; Copper reserves of 3 million tons of metal, is an important copper producing area in Yunnan. Several core raw materials of lithium battery main materials can be provided locally, and the local mining and non-ferrous metal smelting in Yunxi city are very mature. In addition, xiaoshiqiao lithium mine (clay mine) was newly discovered in Yuxi in 2020. According to the scientific exploration of Yunnan exploration team, it is predicted that the potential lithium oxide resources will reach 4.89 million tons, some of which have good mining conditions and can even be mined in the open air.
(2) advantageous geographical location. Except Yunnan, China’s main mineral resources are in the northwest, but China’s main battery industry chain base is located in the south of the Yangtze River, and the transportation cost of raw materials from the northwest to the south is high. To the north of Yunnan Province is Sichuan, to the East is Guangxi and Guangdong, with a relatively convenient geographical location.
Leading companies run horse enclosure to ensure future supply and improve long-term growth expectations
The impact is in the medium and long term, not in the short term. The first batch of investments will be completed before the end of 2023, and it is expected that the contribution to the performance in 2023 will be relatively limited. Therefore, Yuxi base will mainly contribute to the performance of each company after 2024.
Yuxi base will be one of the core production bases of the above lithium battery leaders. Taking Eve Energy Co.Ltd(300014) as an example, assuming that the single GWH investment is 200 million yuan (30 billion yuan is invested to expand production by 150 GWH in Jingmen), the corresponding production capacity of Eve Energy Co.Ltd(300014) by 2025 is expected to reach 50 GWH.
Horse racing enclosure to ensure long-term supply capacity. Under the background of substantial growth in downstream demand in 2021, the battery industry chain reflects the shortage of raw materials in the middle and upper reaches. At present, the whole battery demand is at the level of 100 GWH. It is expected that the demand will rise to TWH level in 2 to 3 years, and the demand for raw materials will rise to another level. The best companies lock in the upstream raw materials at the current time point to ensure the stable supply of raw materials for larger scale production in the future.
Risk tip: the development of new technologies exceeds expectations, the demand is lower than expectations, and the competition in the new energy market is intensified.
