since the first quarter of this year, lithium salt prices have remained high, relevant enterprises have made huge profits, and battery manufacturers under pressure for a long time are also looking for a way out
On April 6, Keda Industrial Group Co.Ltd(600499) disclosed the performance forecast for the first quarter. It is estimated that the net profit attributable to the parent company in the first quarter of 2022 will increase by about 709 million yuan, a year-on-year increase of about 371.91%, and the net profit deducting non net profit will increase by about 693 million yuan, a year-on-year increase of about 388.22%.
The next day, Keda Industrial Group Co.Ltd(600499) opened up by more than 2.6%, and then fluctuated downward to close at 18 yuan / share, down 1.32%, with a total market value of 33.99 billion yuan.
these enterprises have doubled their net profits
For the pre increase of performance, Keda Industrial Group Co.Ltd(600499) mentioned that due to the rise of market price of lithium carbonate products, the net profit realized by the company’s joint-stock Company Qinghai Salt Lake Lanke Lithium Industry Co., Ltd. increased significantly compared with the same period of last year, and the investment income recognized by the company increased significantly compared with the same period of last year.
On March 25, Tibet Mineral Development Co.Ltd(000762) announced that the expected revenue in the first quarter was 300 million yuan to 450 million yuan, with a year-on-year increase of 120.39% to 230.58%, and the net profit attributable to the parent company was 100 million yuan to 150 million yuan, with a year-on-year increase of 398.08% to 647.12% Tibet Mineral Development Co.Ltd(000762) said that the main reason for the substantial growth of the company’s performance over the same period of last year was that during the reporting period, the company’s business continued to make steady progress and its performance increased steadily, especially the rising demand for lithium resources, the rising price of lithium salt products, the gradual increase of sales volume of lithium salt products and the substantial increase of lithium business profits.
In addition, according to the announcement on February 21, Sichuan Yahua Industrial Group Co.Ltd(002497) it is estimated that the net profit attributable to the parent company will reach 900 million yuan to 1.2 billion yuan in the first quarter, with a year-on-year increase of 105367% to 143822%. In 2021, Sichuan Yahua Industrial Group Co.Ltd(002497) net profit was 925 million yuan, which means that its net profit in the first quarter of this year may exceed that of last year.
The strong rising raw material prices have brought support to the performance of lithium enterprises. Market data show that the price of domestic battery grade lithium carbonate is less than 60000 yuan / ton at the beginning of 2021, and has exceeded 500000 yuan / ton so far. According to the monitoring data of business society, on April 6, the price of battery grade lithium carbonate was 505600 yuan / ton.
upstream and downstream maintenance game
However, not all lithium enterprises have benefited from the price rise of lithium carbonate.
On February 27, Farasis Energy (Gan Zhou) Co.Ltd(688567) released a performance express. In 2021, the company achieved a revenue of 3.403 billion yuan, an increase of 203.97% year-on-year. The net loss attributable to the parent company was 974 million yuan, which doubled from 331 million yuan last year.
Farasis Energy (Gan Zhou) Co.Ltd(688567) said that in the early stage, based on the market trend of raw materials from 2018 to 2020, the company negotiated pricing with customers, the sales price was low, and provided certain price concessions for key customers. In addition, the prices of raw materials of the company’s main products have risen sharply, and the cost of materials has increased.
The business agency pointed out that the price of lithium carbonate has remained stable recently, the current market operating rate is relatively stable, and the supply shows an upward trend. In the demand side market, the orders of cathode materials decreased slightly in April. In terms of iron and lithium, orders were affected due to the suspension of some terminal models and the high inventory of battery factories. The procurement demand of the material end in the overall market is relatively light.
At present, the downstream enterprises have low acceptance of high priced lithium carbonate and less market trading volume, but the quotation enterprises still do not let go, and the upstream and downstream game sentiment is strong. It is expected that the short-term lithium carbonate price may be weak and subject to shock adjustment.
battery manufacturers find a way out
The pressure on battery manufacturers downstream of the industrial chain is more obvious Tianfeng Securities Co.Ltd(601162) pointed out that if the impact of bargaining power and procurement volume on the actual procurement cost is combined with the hedging of performance technology progress and cost rise, the cost increase transmitted from the price rise of raw materials to the power battery end is about 20% to 25%.
Battery manufacturers seek “self-help” by raising prices. Zhang Xiang, President of the New Energy Vehicle Technology Research Institute of Jiangxi Vocational College of new energy technology, told the international financial news, “some battery manufacturers successively announced price increases last year, with a range of about 20%. Other data show that the price of each kilowatt hour has increased by 300 yuan.” However, Zhang Xiang judged that the price rise is a short-term behavior. “After the price rise, the industry chain will be optimized and reorganized to form a new balance. It is expected that the price will stabilize in the second half of this year.”
On the other hand, battery manufacturers have chosen zhantou lithium salt company.
On March 30, beehive energy and BASF Shanshan strategically invested in Hunan Yongshan Lithium Industry Co., Ltd. and held a signing ceremony. After signing the contract, beehive energy and BASF Shanshan, as shareholders of Yongshan lithium industry, will each hold 10% equity of the latter. During the cooperation period, the three parties will reach strategic cooperation in industrial capital, lithium salt product supply, lithium mineral resources and so on. In addition, honeycomb energy also signed a strategic cooperation framework agreement with Yongshan lithium.
Also in March, 00224 threw out a fixed increase of 3 billion yuan, which was fully covered by Byd Company Limited(002594) and Byd Company Limited(002594) is expected to hold more than 5%. The two sides will cooperate in the purchase and sale of raw materials, raw material processing, technology, mineral resources and industrial chain resources.
In terms of purchase and sales of raw materials, Chengxin Lithium Group Co.Ltd(002240) belongs to the upstream raw material supplier of Byd Company Limited(002594) and Byd Company Limited(002594) will include Chengxin Lithium Group Co.Ltd(002240) into the supplier list of long-term strategic cooperation. On the premise of meeting the requirements of Byd Company Limited(002594) own procurement management system and not violating other procurement related agreements, Chengxin Lithium Group Co.Ltd(002240) will be taken as the priority procurement object under the same conditions to maintain long-term strategic cooperation Chengxin Lithium Group Co.Ltd(002240) promises to give priority to the supply of lithium products to Byd Company Limited(002594) under the same conditions, and guarantees that the price given to Byd Company Limited(002594) is the most favorable price under the same conditions.
Zhang Xiang told the international financial news, “it is becoming a trend for battery manufacturers to invest in lithium salt enterprises. After holding lithium enterprises, battery manufacturers will get the corresponding voice and decision-making power to ensure the stability of their supply chain prices.”
