last year’s net profit increased by more than 20 times Ningbo Shanshan Co.Ltd(600884) , and gained the blessing of Contemporary Amperex Technology Co.Limited(300750) , Byd Company Limited(002594) , PetroChina
On April 19, Ningbo Shanshan Co.Ltd(600884) announced that it plans to increase the capital of Shanghai Shanshan lithium battery, the holding subsidiary of the company, through the wholly-owned subsidiary Ningbo Shanshan new energy and four strategic investors, Byd Company Limited(002594) , Ningde new energy and Kunlun capital, with a total capital increase of 3.05 billion yuan and a total new registered capital of 305 million yuan. As of the closing on April 20, Ningbo Shanshan Co.Ltd(600884) reported 25.16 yuan / share, up 0.88%, with a total market value of 53.92 billion yuan.
war investment partners
Specifically, Ningbo Shanshan new energy increased capital by 2.4 billion yuan, wending investment increased capital by 300 million yuan, Byd Company Limited(002594) increased capital by 150 million yuan, Ningde new energy and Kunlun capital increased capital by 100 million yuan respectively. It is worth mentioning that wending investment is wholly controlled by Contemporary Amperex Technology Co.Limited(300750) and Kunlun capital is subordinate to Petrochina Company Limited(601857) group.
The war investment introduced this time are the core strategic customers and suppliers upstream and downstream of Ningbo Shanshan Co.Ltd(600884) cathode material business, of which Contemporary Amperex Technology Co.Limited(300750) , Byd Company Limited(002594) are the downstream customers of the company’s cathode materials, and Petrochina Company Limited(601857) subordinate members are the upstream raw material suppliers.
It is reported that Shanghai Shanshan lithium battery is mainly engaged in the R & D, production and sales of lithium-ion battery cathode materials and carbon materials. By the end of 2021, the total assets of Shanghai Shanshan lithium battery were 10.203 billion yuan. In 2021, the operating revenue was 4.181 billion yuan and the net profit attributable to the parent company was 601 million yuan.
Ningbo Shanshan Co.Ltd(600884) said that through this capital increase and share expansion, Shanghai Shanshan lithium power will help to optimize its asset liability structure, reduce financial costs, enhance capital strength and provide financial guarantee for the expansion of negative electrode material business. After the capital increase is completed, the registered capital of Shanghai Shanshan lithium battery will be changed from 877 million yuan to 1.182 billion yuan. The company’s shareholding ratio of Shanghai Shanshan lithium battery will be changed from 89.99% to 87.08%. Shanghai Shanshan lithium battery will still be the holding subsidiary of the company.
artificial graphite ranks first in the world in terms of shipment
Contemporary Amperex Technology Co.Limited(300750) , Byd Company Limited(002594) , why do PetroChina favor Ningbo Shanshan Co.Ltd(600884) ? In 1999, Ningbo Shanshan Co.Ltd(600884) entered the lithium battery track as the first stock of Chinese clothing at that time. Since then, it has gradually developed into the only enterprise covering the production of anode and cathode materials and electrolyte in China.
According to the contents of the annual report, the sales volume of Ningbo Shanshan Co.Ltd(600884) negative electrode materials exceeded 100000 tons in 2021. According to the statistics of xinlune lithium battery, the company ranked first in the world in terms of artificial graphite shipments, accounting for 15% of the output of negative electrode materials, ranking second only to beiteri.
At the same time, Ningbo Shanshan Co.Ltd(600884) is also stepping up production expansion. It disclosed in its 2021 annual report that the company’s Inner Mongolia Baotou phase II integrated production line has a design capacity of 60000 tons and a graphitization capacity of 52000 tons. It has been put into trial production at the end of 2021 and is expected to reach production in the third quarter of 2022. The design capacity of Meishan integrated base in Sichuan is 200000 tons, which is constructed in two phases; Phase I 100000 tons is planned to be put into trial production by the end of 2022 Ningbo Shanshan Co.Ltd(600884) said that after the second phase of Baotou, Inner Mongolia is completed in 2022, the graphitization capacity of the company will reach 94000 tons. At the same time, with the launch of graphitization capacity of Meishan project phase I, the self-sufficiency rate of graphitization of the company will be further improved.
With the support of the high prospect of the new energy vehicle industry, the demand for cathode materials is strong. According to the prediction of Sinopharm Research Institute, the global demand for lithium battery cathode materials will reach 1.34 million tons in 2025, with a scale of 43 billion yuan, and a five-year compound growth rate (CAGR) of more than 27%, of which the scale of artificial graphite will exceed 30 billion yuan, accounting for 71%.
In addition, Ningbo Shanshan Co.Ltd(600884) is planning to be listed overseas. On March 18, Ningbo Shanshan Co.Ltd(600884) announced that in order to expand the company’s international financing channels, meet the company’s business development needs at home and abroad, and improve the company’s international brand and corporate image, the company plans to issue global Depositary Receipts (GDRs) overseas and be listed on the Swiss Stock Exchange.
performance explosion
Benefiting from the continued strong demand in the downstream market of the negative electrode material business, from January to February 2022, Ningbo Shanshan Co.Ltd(600884) achieved an operating revenue of about 3.214 billion yuan, a year-on-year increase of about 44%, and the net profit attributable to the parent company was about 566 million yuan, a year-on-year increase of about 313%.
In addition, according to the 2021 annual report released by the company on April 19, the company realized an operating revenue of 20.699 billion yuan, a year-on-year increase of 151.94%, a net profit attributable to the parent of 3.34 billion yuan, a year-on-year increase of 2320%, deducting non net profit of 1.885 billion yuan, which turned from loss to profit year-on-year.
For the significant increase in performance, Ningbo Shanshan Co.Ltd(600884) said that the prosperity of the new energy vehicle industry continued to improve in 2021, telling that the overall sales volume and profitability of the lithium battery materials business increased significantly year-on-year. During the reporting period, the net profits of lithium battery cathode materials, electrolyte and cathode materials were 525 million yuan, 368 million yuan and 304 million yuan respectively. During the period, the newly added polarizer business has brought great performance contribution to the consolidated statement. In 2021, the business realized a net profit of 1.197 billion yuan.
However, looking at the extended time line, the performance of Ningbo Shanshan Co.Ltd(600884) fluctuates frequently. According to the annual report, in 2016, the net profit attributable to the parent company of Ningbo Shanshan Co.Ltd(600884) s decreased by 50.34% year-on-year. In 2017 and 2018, it increased by 171.38% and 24.43% respectively. In 2019 and 2020, it fell by 75.8% and 48.85% again.
When the business is improving, Ningbo Shanshan Co.Ltd(600884) plans to sell lithium assets to related parties. On January 6, Ningbo Shanshan Co.Ltd(600884) announced that it agreed that Ningbo Yongshan, a wholly-owned subsidiary, would transfer its 100% equity of Hunan Yongshan to Jinzhou Jixiang Molybdenum Co.Ltd(603399) , a related party of the company, with a total transaction price of 480 million yuan. As the actual controllers of Ningbo Shanshan Co.Ltd(600884) and Jinzhou Jixiang Molybdenum Co.Ltd(603399) are Zheng Yonggang, the above transactions constitute related party transactions.
In 2020, Hunan Yongshan’s revenue was only 1.52 million yuan and its net profit loss was 4.89 million yuan. In the first three quarters of 2021, the revenue of Hunan Yongshan suddenly increased to 27.47 million yuan, and the net profit also changed from loss to profit, reaching 6.31 million yuan Ningbo Shanshan Co.Ltd(600884) once disclosed that the planned capacity of Hunan Yongshan lithium salt project is about 25000 tons of lithium carbonate and lithium hydroxide. In late December 2021, Ningbo Shanshan Co.Ltd(600884) said on the interactive platform that Hunan Yongshan phase I project is currently in the stage of equipment installation and commissioning.
As for why Hunan Yongshan, whose sales performance is picking up and production capacity is about to be released, Ningbo Shanshan Co.Ltd(600884) said that the purpose of selling assets is to further deepen the specialization development strategy, focus on the development of polarizer and lithium battery cathode material business, optimize resource allocation and enhance the company’s core competitiveness.
Ningbo Shanshan Co.Ltd(600884) also took administrative measures for violation of the letter phi. On April 13, Ningbo Securities Regulatory Bureau issued the decision on administrative supervision measures to the company. On January 6, the company announced that it had received 452363 million yuan of government subsidies related to income in the second half of 2021. On September 28, 2021, Ningbo Shanshan Venture Capital Co., Ltd., a wholly-owned subsidiary of the company, received a single income related government subsidy of RMB 32.3 million. However, the company failed to disclose the above government subsidies in time, in violation of relevant regulations. Ningbo securities regulatory bureau decided to take administrative supervision measures of issuing warning letters to the company, then Secretary Chen Ying and then chief financial officer Li Keqin.
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