Subject to the price rise of bulk commodities and other factors, Sunway Co.Ltd(603333) ( Sunway Co.Ltd(603333) , SH) suffered a loss in net profit in 2021. Compared with the company’s traditional special cable business, this year’s transformation of cross-border cathode materials is the focus of investors.
In January this year, the listed company signed an agreement with conch entrepreneurship, which mainly involves the first phase of the 40000 ton project of the integration project of negative electrode materials of power energy storage batteries with an annual output of 200000 tons.
In this regard, Sunway Co.Ltd(603333) relevant people told the reporter of the daily economic news that the company’s cross-border negative electrode materials are not storytelling. At present, the joint venture team has been established in place, and the construction may start in May.
commodity price increases affect profits
On April 20, Sunway Co.Ltd(603333) held the annual general meeting of shareholders. This year, due to the epidemic prevention and control, Li Guangsheng, chairman of the company, presided over the meeting remotely.
According to the annual report of the company in 2021, the operating income of Sunway Co.Ltd(603333) in 2021 was 2.344 billion yuan, the net profit attributable to shareholders of listed companies was 308967 million yuan, and the deduction of non net profit was 358569 million yuan. The loss mainly occurred in the fourth quarter of last year.
Sunway Co.Ltd(603333) business involves the cable field, and its loss is related to the rise in commodity prices. Last year, the copper price was on the rise as a whole, hitting a new high in recent ten years, with the highest price exceeding 78000 yuan / ton. During the reporting period, copper prices generally rose unilaterally and fluctuated at a high level. The average purchase price of copper of the company in 2021 was 69300 yuan / ton, an increase of 19100 yuan / ton compared with 50200 yuan / ton in the same period in 2020. In addition to copper, the prices of other main raw materials have increased to varying degrees. The gross profit margin of the company’s special cable also decreased slightly over the same period of last year.
In addition, the competition pattern of the fireproof cable market where the main products of the subsidiary Shangwei Ike are located has changed significantly, which is mainly reflected in the increase of enterprises participating in the market competition and serious product homogenization. In response to the above changes in the market competition pattern, sunway Ike has continuously adjusted and improved its products to improve its market competitiveness. However, due to the serious homogenization of products and the intensification of market competition, the development progress of product market is lower than expected, and the operation and financial situation are seriously deteriorated Sunway Co.Ltd(603333) therefore, the comprehensive impairment test of various assets was carried out for Shangwei Aike, and the corresponding provision for asset impairment was withdrawn, resulting in an increase of 151247 million yuan in the company’s asset impairment loss.
“Our company is mainly special cables, which belong to subdivided fields, and the market has a certain growth.” Relevant persons of the company told the reporter of daily economic news that the application fields of special cables include nuclear power, rail transit, state grid power, optoelectronics, wind power, chemical industry, petroleum and petrochemical industry.
and conch’s joint venture team have been established
In the past two years, Sunway Co.Ltd(603333) has not made a big breakthrough in its performance, and the company has been thinking about the road of transformation. Despite skeptical voices in the market, the company said that the transformation was not a story tellingp align=”center”>
On January 14, 2022, the company signed the new energy southwest manufacturing base project investment agreement with Leshan Municipal People’s government, Leshan high tech Industrial Development Zone Management Committee and China conch venture Holding Co., Ltd. (hereinafter referred to as conch venture), and plans to invest in the construction of “new energy southwest manufacturing base project” in Leshan high tech Zone. On the same day, the company and conch venture signed the joint venture agreement on the establishment of Sichuan Haichuang Shangwei New Energy Technology Co., Ltd. with respect to the investment and construction of the first phase 40000 ton project of the 200000 ton power energy storage battery cathode material integration project in the above investment agreement, and it is proposed to jointly invest and establish a joint venture to operate the investment project. According to the investment proportion, Sunway Co.Ltd(603333) plans to contribute 245 million yuan to the joint venture.
The estimated investment amount of the first phase of the 40000 ton project is 1.6 billion yuan, the planned investment amount of the whole annual output of 200000 tons is 8 billion yuan, and the construction period of the first phase of the project is 18 months.
There are also voices of confusion in the market. First, whether the monetary funds of Sunway Co.Ltd(603333) can match. According to the contents of the annual report, the balance of cash and cash equivalents at the end of last year was 750 million yuan. Can this match the total investment of 8 billion yuan?
There is also a voice pointing to the field of negative electrode materials of power energy storage batteries. Beiteri is a leading enterprise in the Chinese industry, and its corresponding production capacity has not exceeded 200000 tons. The partner conch venture is an enterprise providing energy-saving and environmental protection solutions. At present, the existing projects are the recycling of cathode materials and lithium batteries, and there are no projects related to cathode materials.
“The capital and technology are in the charge of conch venture. In addition to paying the corresponding registered capital of the joint venture, we have no major capital expenditure.” Relevant people of the company said that for conch entrepreneurship, it has capital investment strength and is also carrying out strategic expansion. In terms of upstream materials, it also hopes to cut into the field of negative materials Sunway Co.Ltd(603333) investment sources include not only self owned funds, but also loans and credits from financial institutions. “Financial institutions hope to invest funds in entities, which is still relatively positive.”
According to the reporter of the daily economic news, the joint venture has been established and a team of more than 20 people has been established. At present, the corresponding environmental assessment work and construction scheme have been completed, and it is planned to start in May.
At present, Sunway Co.Ltd(603333) has the intention to negotiate with customers from corresponding departments. “Although large-scale production has not come out yet, it is necessary to understand customer needs, product quality and technical reserves in the early stage, which can be done in advance.” These people said. For the technical problems of negative electrode materials, the joint venture also hired experts from the negative electrode material industry.
negative electrode material or more emphasis on energy consumption cost
In fact, Sunway Co.Ltd(603333) had no relevant experience in new energy before. Why did the partner of cathode material base choose it?
“We are familiar with local conditions and policies and have been planning the transformation of new energy.” Sunway Co.Ltd(603333) relevant people said that different cathode materials will have some differences in specifications. In contrast, cathode materials pay more attention to cost, especially power cost. Southwest China has the advantage of hydropower, which is one of the main reasons why the partners value it. On the other hand, energy consumption indicators are relatively scarce, and local governments also hope to allocate them to companies with technical strength and project operation ability.
At present, new energy cathode materials are also popular segments.
According to the research data of Gaogong lithium battery, in 2020, the global shipment of negative electrode materials was 530000 tons, and Chinese lithium battery negative electrode material enterprises shipped 365000 tons, a year-on-year increase of 37.74%. In 2021, Chinese lithium battery negative electrode material enterprises shipped 720000 tons, a significant increase of 97.26% over 2020.
According to the forecast of Gaogong lithium battery, it is expected that in the next few years, China’s cathode material shipment will still maintain a growth rate of more than 20%, and the cathode material shipment is expected to reach 1.45 million tons in 2025. According to Gaogong lithium battery, in 2019, the shipment of artificial graphite negative materials accounted for 78.49% of the total shipment of negative materials, and in 2020, the shipment of artificial graphite negative materials accounted for 84.11% of the total shipment of negative materials. According to Sunway Co.Ltd(603333) understanding, there is still a shortage of negative electrode materials in China.
Last month, Yin Tongyue, Secretary of the Party committee and chairman of Chery Holding Group Co., Ltd., Xu Hui, deputy general manager and Wang Kaifu, assistant general manager, visited Sunway Co.Ltd(603333) for investigation. Yin Tongyue said at that time that he hoped that taking this visit as an opportunity, Chery could cooperate with Shangwei in many fields to achieve mutual benefit and win-win results. However, Sunway Co.Ltd(603333) relevant persons said that the specific contents were not easy to disclose.
