About Guangdong Jiayuan Technology Co.Ltd(688388)
Application documents for issuing shares to specific objects
Reply report of the second round of audit inquiry letter
(Revised Version)
Sponsor (lead underwriter)
Shanghai Stock Exchange, North block of excellence Times Square (phase II), No. 8, Zhongxin Third Road, Futian District, Shenzhen, Guangdong Province:
We have received the inquiry letter on the second round of examination of Guangdong Jiayuan Technology Co.Ltd(688388) the application documents for issuing shares to specific objects (hereinafter referred to as the “inquiry letter”) issued by your exchange on March 25, 2022, Citic Securities Company Limited(600030) (hereinafter referred to as ” Citic Securities Company Limited(600030) ,” sponsor “and” sponsor “) as the sponsor of Guangdong Jiayuan Technology Co.Ltd(688388) (hereinafter referred to as” Guangdong Jiayuan Technology Co.Ltd(688388) , “issuer” and “company”) issuing shares to specific objects, and Guangdong Jiayuan Technology Co.Ltd(688388) Guangdong Xinda law firm (hereinafter referred to as “the issuer’s lawyer”) and Lixin Certified Public Accountants (special general partnership) (hereinafter referred to as “the issuer’s reporting accountant” and “the accountant”) have carefully implemented the questions listed in the inquiry letter one by one. Now, the reply to the questions in the inquiry letter is as follows, please review.
Unless otherwise specified, the abbreviations or terms in the reply report of this inquiry letter have the same meanings as those in the prospectus for offering shares to specific objects in Guangdong Jiayuan Technology Co.Ltd(688388) 2021.
Question 1. Rationality of production expansion
According to the first round of inquiry reply, according to the prediction of the third-party organization, the total demand for global power battery + energy storage battery is expected to be 1966gwh in 2025. By 2025, the demand for lithium copper foil is expected to reach nearly 1 million tons. In 2021, the issuer’s lithium copper foil capacity will account for about 7.58% of the global demand for lithium copper foil.
Please explain: (1) distinguish domestic and overseas markets, respectively explain the current market capacity, future development and calculation basis of power battery and energy storage battery, quantitatively analyze the impact of lithium battery demand growth on lithium battery copper foil, and the market share and calculation basis of the issuer in domestic and overseas lithium battery copper foil market; (2) Industry development in the downstream application field of PCB, and quantitatively analyze the impact on the whole market demand of PCB copper foil and the demand of the issuer; (3) Further explain the rationality of the new capacity planning and the rationality of the sales volume forecast in the benefit forecast of the raised investment project in combination with the above situation, industrial policies, the current and under construction capacity of the market and the measures of the issuer to maintain the current market position; (4) Average annual energy consumption of the project invested with raised funds.
reply:
1、 Distinguish the domestic and overseas markets, respectively explain the current market capacity, future development and calculation basis of power battery and energy storage battery, quantitatively analyze the impact of lithium battery demand growth on lithium copper foil, and the market share and calculation basis of the issuer in the domestic and overseas lithium copper foil market
(I) domestic and overseas markets respectively describe the current market capacity, future development and calculation basis of power battery and energy storage battery
1. Power battery market capacity and future development
According to the research of GGII (lithium battery research institute of advanced industry research), the shipment volume of China Shipbuilding Industry Group Power Co.Ltd(600482) batteries was 80 GWH in 2020 and 220 GWH in 2021, an increase of 175% compared with 2020. It is estimated that the shipment volume of China Shipbuilding Industry Group Power Co.Ltd(600482) battery is expected to reach 545gwh in 2025, with a compound annual growth rate of 46.78% in the next five years. In 2020, the global power battery shipment will be 186gwh. It is estimated that the global power battery demand will reach 1550gwh in 2025, with a five-year compound growth rate of 52.81%.
The main reasons for the rapid growth of power battery shipments are: (1) in 2021, the growth of Shanxi Guoxin Energy Corporation Limited(600617) terminal market exceeded expectations, and star models appeared in many sub circuits, making the output of Shanxi Guoxin Energy Corporation Limited(600617) automobile market close to 3.5 million, with a year-on-year increase of more than 180%, driving the growth of China Shipbuilding Industry Group Power Co.Ltd(600482) battery shipments to 175%; (2) In 2021, the European new energy vehicle market continued to grow rapidly, with an annual sales volume of more than 2 million vehicles, driving the increase of the shipment scale of some Chinese head battery enterprises.
2. Market capacity and future development of energy storage battery
In the context of striving to achieve “carbon peak and carbon neutralization”, the world has vigorously developed renewable energy in recent years. The impact of the transformation of energy structure on the power grid provides a huge driving force for the energy storage market. Electric energy storage is mainly divided into electrochemical energy storage and mechanical energy storage. Lithium energy storage is the main technical route of electrochemical energy storage. In recent years, the installed scale has continued to increase and has great potential in the future.
According to the data of GGII, the global shipment volume of energy storage lithium battery was 27gwh in 2020, and the global shipment volume of energy storage lithium battery industry reached 70gwh in 2021, with a year-on-year increase of 159.26%. It is estimated that the global demand for energy storage lithium battery industry will reach 460gwh in 2025, and the compound growth rate will reach 60.1% from 2021 to 2025. In the Chinese market, the shipment of energy storage batteries in China in 2021 was 48gwh, a year-on-year increase of 2.6 times. It is estimated that by 2025, the shipment volume of energy storage lithium batteries in China will reach 180gwh.
3. Calculation basis
The above data mainly quote the data of GGII (lithium battery research institute of senior industry research). Senior industry research was established in June 2006 and headquartered in Shenzhen. It is a consulting and media organization focusing on the research of China’s strategic emerging industries. It focuses on lithium battery, electric vehicle, Siasun Robot&Automation Co.Ltd(300024) , new materials, led, intelligent manufacturing and other national strategic emerging industries. Its research data has been quoted by many financial institutions, research institutions and industry institutions, and has a certain authority and credibility.
The above prediction comprehensively considers the following aspects: (1) lithium battery is accelerating the penetration of energy storage and small power battery with its advantages of small volume, high energy density, long service life and good cycle performance. With the decline of cost, its replacement of lead-acid battery is accelerating. (2) In 2018, China issued the standard conditions for the lithium ion battery industry and the Interim Measures for the administration of the standard announcement of the lithium ion battery industry to regulate and adjust the lithium battery industry, which is conducive to the healthy and rapid development of the lithium battery industry in the next few years; (3) Governments around the world have vigorously supported and promoted the development of new energy vehicle industry and implemented a series of favorable policies. Many European countries have extended or increased the amount and scope of subsidies for new energy vehicles, and relevant policies have driven the sustained and high growth of global power batteries; (4) At present, the endurance mileage of lithium electric vehicles has reached the level of 600 kilometers. With the progress of technology, the cost of lithium batteries has decreased and the performance has improved, the problems such as endurance anxiety will become less and less obvious, and the market competitiveness will gradually increase; (5) According to China’s new energy vehicle industry development plan (20212035), by 2025, the sales of new energy vehicles will account for 25% of the total sales of vehicles in that year. The phased high goal of the policy is conducive to the rapid development of new energy vehicle industry and indirectly drive the development of power cell market; (6) With the increase of support for grid side energy storage from countries such as Australia, the United States and Japan, the development of household energy storage markets in Germany and the United States, and the construction of 5g base stations in China, the global energy storage battery market will enter a stage of rapid development.
(II) the impact of lithium battery demand growth on lithium battery copper foil
Lithium battery copper foil is an important component material of lithium battery. Driven by the rapid growth of the global lithium battery market, the demand for lithium battery copper foil also maintains a steady growth trend.
The amount of copper foil per GWH lithium battery is related to the thickness of copper foil. The thinner the thickness of copper foil, the less copper foil consumption per GWH lithium battery. Referring to the Research Report of Ping An Securities, in 2021, the consumption of 8 µ m copper foil, 6 µ m copper foil and 4.5 µ m copper foil per GWH lithium battery was 800 tons, 620 tons and 450 tons respectively. According to the data of electronic copper foil materials branch of China Electronic Materials Industry Association (CCFA), in 2020, the share of 6 µ m copper foil was 34%, 4.5 µ m copper foil was 3%, and the rest were copper foil with a thickness of more than 8 µ M.
According to the distinction of power battery, energy storage battery and 3C consumer battery, the impact of lithium demand growth on lithium battery copper foil is quantitatively analyzed as shown in the following table:
Project compound
20212022e 2023e 2024e 2025e growth rate
Shipments of various lithium batteries
China Shipbuilding Industry Group Power Co.Ltd(600482) battery shipment (GWH) 220.00 276.00 346.27 434.41 545.00 25.46%
Global power battery shipments (GWH) 284.23 434.35 663.75101430155000 52.81%
China’s energy storage battery shipment (GWH) 48.00 66.80 92.95 129.35 180.00 39.16%
Global energy storage battery shipments (GWH) 70.00 112.08 179.44 287.30 460.00 60.11%
Global 3C consumer battery shipments (GWH) 75.00 80.00 86.00 92.00 98.00 6.92%
Global total lithium battery shipments (GWH) 429.23 626.43 929.19139361210800
Proportion of copper foil of various thickness
Lithium copper foil with thickness of 8 µ m and above accounts for 44%, 38%, 32%, 25% and 19%
6 µ m thick lithium copper foil accounts for 51%, 50%, 49%, 49%, 48%
4.5 µ m and below thickness lithium copper foil accounts for 5%, 12%, 19%, 26%, 33%
Project 20212022e 2023e 2024e 2025e compound growth rate
Unit consumption of various thickness copper foil
Unit consumption of 8 µ m thick copper foil (T / GWH) 800
Unit consumption of 6 µ m thick copper foil (T / GWH) 620620 620620
Unit consumption of 4.5 µ m thick copper foil (T / GWH) 450
Demand for various types of copper foil
Demand for 8 µ m lithium battery copper foil (10000 tons) 15.25 19.07 23.56 28.26 32.04
Demand for 6 µ m lithium battery copper foil (10000 tons) 13.47 19.40 28.40 42.04 62.73
4.5 µ m lithium battery copper foil demand (10000 tons) 0.97 3.38 7.94 16.31 31.30
Demand for lithium battery copper foil in the global market (10000 tons) 29.68 41.85 59.91 86.60 126.08
Note 1: the shipments of power batteries and energy storage batteries refer to the statistical data of GGII, and the shipments of 3C consumer batteries refer to the statistical data of marklines, sneresearch and Huachuang securities. Note 2: refer to the predicted data of GGII and other institutions for the permeability of copper foil with different thickness.
(III) market share and calculation basis of the issuer in domestic and overseas lithium battery copper foil
According to the prediction of the third-party organization, the demand for lithium copper foil is expected to reach nearly 1 million tons by 2025. The issuer’s lithium copper foil production capacity accounts for about 7.58% of the global demand for lithium copper foil in 2021. These reports are mainly issued in 2021. Since the release of the above research report, the demand of the global lithium battery market has shown an unexpected development speed, especially in terms of new energy vehicles. According to the data of the passenger Federation, the retail sales volume of new energy passenger vehicles in 2021 reached 2.989 million, with a year-on-year increase of 169.1% and a penetration rate of 14.8%, significantly higher than the penetration rate of 5.8% in 2020, of which the penetration rate in December even reached 22.6%. Therefore, based on the vigorous development trend of the global lithium battery market, GGII raised the expected global power battery shipment in 2025 according to the latest situation of the new energy vehicle market in 2021 in March 2022. According to the latest predicted downstream demand, the demand for lithium battery copper foil in the global market is expected to reach 1260800 tons in 2025.
According to the latest data disclosed by GGII in March 2022, the shipment of lithium battery copper foil in China reached 280500 tons in 2021, with a year-on-year increase of 122.9%. The issuer shipped 24800 tons of lithium battery copper foil in 2021, accounting for 8.85% of the total lithium battery copper foil shipments in China.
GGII has not disclosed the statistical data of global lithium battery copper foil shipments in 2021. According to its estimate made in August 2021, the global lithium battery copper foil shipments in 2021 are expected to reach 370000 tons. The issuer’s annual lithium battery copper foil shipments in 2021 account for 6.71% of the global market.
2、 Industry development in the downstream application field of PCB, and quantitatively analyze the impact on the whole market demand of PCB copper foil and the demand of issuers 1
(I) development of downstream application industry
