Electrolyte faucet Guangzhou Tinci Materials Technology Co.Ltd(002709) (hereinafter referred to as ” Guangzhou Tinci Materials Technology Co.Ltd(002709) “, 002709. SZ) re throwing and expansion plan.
Recently, Guangzhou Tinci Materials Technology Co.Ltd(002709) announced that it plans to invest in the “200000 ton lithium battery electrolyte project” by establishing a wholly-owned subsidiary Zhaoqing Tianci high tech materials Co., Ltd. (hereinafter referred to as “Zhaoqing Tianci”), with a total investment of 820 million yuan. In October 2021, its subsidiary Sichuan Tianci high tech materials Co., Ltd. (hereinafter referred to as “Sichuan Tianci”) just disclosed the construction plan of 300000 tons electrolyte project with an investment of 1.53 billion yuan.
According to the recent research report of Soochow Securities Co.Ltd(601555) , the capacity expansion of Guangzhou Tinci Materials Technology Co.Ltd(002709) is accelerated, and the upstream lithium hexafluorophosphate and other electrolyte raw materials are arranged. It is expected that the company will have a supporting capacity of more than 1.2 million tons of electrolyte from 2023 to 2024.
“The production capacity put into operation in the past two years may not be as much as 1.2 million tons. The other party may double calculate some of our projects.” A person from the Securities Department told the China Business Daily that since last year, the market demand for electrolyte has exceeded the supply. The company also considers the possible excess risks in the future and will make a comprehensive plan in combination with the company’s market share, downstream demand and expectations for the future.
focus shifted to lithium business
Guangzhou Tinci Materials Technology Co.Ltd(002709) formerly Tianci Co., Ltd., established in 2000, was changed into a joint stock limited company in 2007. In 2014, Guangzhou Tinci Materials Technology Co.Ltd(002709) landed on the main board of Shenzhen Stock Exchange and raised 290 million yuan for the construction of its four material projects.
Guangzhou Tinci Materials Technology Co.Ltd(002709) its main business is the R & D, production and sales of new fine chemical materials. The products mainly include lithium-ion battery materials and daily chemical materials. According to the 2020 annual report, the company’s customers include international well-known enterprises such as LG Chemical, Dyson and BMW, and signed a strategic cooperation agreement with Tesla that year.
In recent years, with the rapid development of new energy vehicle industry, Guangzhou Tinci Materials Technology Co.Ltd(002709) lithium ion battery material business has made rapid progress.
In 2014, Guangzhou Tinci Materials Technology Co.Ltd(002709) realized a revenue of 706 million yuan, and the revenue of battery materials business in that year was 198 million yuan, accounting for 28%; Daily chemical business revenue was 419 million yuan, accounting for 59%. In 2015, the company achieved a revenue of 946 million yuan, with the revenue of battery material business and daily chemical business of 455 million yuan and 418 million yuan respectively, accounting for 48% and 44% respectively. The revenue of battery material business exceeded that of daily chemical business for the first time.
Since then, Guangzhou Tinci Materials Technology Co.Ltd(002709) lithium battery materials business has maintained a revenue proportion of more than 50%. In 2020, it was 2.659 billion yuan, accounting for 65% of the total revenue of 4.119 billion yuan in that year.
At the same time, most of the two (proposed) raised investment projects in Guangzhou Tinci Materials Technology Co.Ltd(002709) 2021 are lithium battery material related projects.
In June 2021, Guangzhou Tinci Materials Technology Co.Ltd(002709) completed a fixed increase of RMB 1.67 billion, including the project with an annual output of 20000 tons of electrolyte basic materials and 5800 tons of new lithium electrolyte (RMB 270 million), the project with an annual output of 150000 tons of lithium battery materials (RMB 150 million), the project with an annual output of 400000 tons of sulfur to sulfuric acid (RMB 190 million), the project with an annual output of 100000 tons of lithium battery electrolyte (RMB 160 million) New projects with an annual output of 50000 tons of hydrogen fluoride and 25000 tons of electronic grade hydrofluoric acid (converted into 100) (RMB 80 million), new daily chemical materials with an annual output of 185000 tons (RMB 320 million) and supplementary working capital (RMB 500 million). Among the 6 projects, 5 projects involve lithium battery materials.
In December 2021, Guangzhou Tinci Materials Technology Co.Ltd(002709) further disclosed the issuance plan of 2.56 billion yuan of convertible bonds. The projects to be raised and invested include the new lithium battery material project with an annual output of 152000 tons (RMB 820 million), the lithium difluorosulfimide project with an annual output of 20000 tons (RMB 230 million), the electrolyte basic material project with an annual output of 62000 tons (RMB 410 million), the daily chemical basic material project with an annual output of 60000 tons (phase I) (RMB 330 million) and current supplement (RMB 770 million). Three of the four projects involve lithium battery materials.
The above Guangzhou Tinci Materials Technology Co.Ltd(002709) person from the Securities Department told reporters: “lithium battery materials are currently the focus of the company’s business. In our regular reports in recent years, the revenue of lithium battery materials has always been higher than that of daily chemical business. In the fixed growth and convertible bond investment projects of the company in 2021, there are more projects related to lithium battery materials, but there are also some daily chemical renewal and iteration projects.”
The person said that from the perspective of products, the company’s lithium battery materials mainly include electrolyte and lithium iron phosphate products. At the same time, the company has arranged the raw materials upstream of these two types of products, such as iron phosphate, the raw material of lithium iron phosphate, electrolyte, in addition to solvents, there are relevant additives and lithium salts.
accelerated capacity expansion
Since the second half of 2020, the market demand for electrolyte has been strong, the price has risen sharply, and Guangzhou Tinci Materials Technology Co.Ltd(002709) has frequently expanded the production capacity of electrolyte.
Guangzhou Tinci Materials Technology Co.Ltd(002709) according to the 2020 annual report, since the fourth quarter of that year, the delivery pressure of the company’s upstream lithium battery materials, solvents and additives has increased sharply, and the market is in short supply. Through communication with suppliers, the company ensures the timely supply of most raw materials and the timely delivery of products. In that year, the company delivered 73000 tons of electrolyte, an increase of 52% over 2019; The net profit attributable to the parent company was 530 million yuan, a sharp increase of 4400%.
The above Guangzhou Tinci Materials Technology Co.Ltd(002709) 1.67 billion yuan fixed increase plan includes an annual output of 100000 tons of lithium battery electrolyte project to expand its production capacity in Ningde City and meet the development needs of key customers.
In October 2021, Guangzhou Tinci Materials Technology Co.Ltd(002709) announced that it planned to establish a wholly-owned subsidiary, Sichuan Tianci, and through its “annual output of 300000 tons of electrolyte and 100000 tons of lithium iron battery recovery project” invested 1.53 billion yuan in Sichuan Pengshan Economic Development Zone, it is expected to be completed in early 2023. At the end of December 2021, Guangzhou Tinci Materials Technology Co.Ltd(002709) announced again that it planned to invest 820 million yuan to build the “annual output of 200000 tons of lithium battery electrolyte project” by establishing a wholly-owned subsidiary Zhaoqing Tianci.
According to the above Soochow Securities Co.Ltd(601555) Research Report, Guangzhou Tinci Materials Technology Co.Ltd(002709) has built three bases in Ningde, Guangzhou and Jiujiang, with a cumulative electrolyte production capacity of nearly 150000 tons. In addition, the electrolyte projects of 100000 tons in phase I of Liyang base, 100000 tons in Fuding base, 150000 tons in Jiujiang base, 20000 ~ 30000 tons in phase I of Czech subsidiary and 200000 tons in Nantong are under construction. Coupled with the planned 300000 tons capacity of the new base in Sichuan, it is expected that the company’s electrolyte capacity will exceed 1.2 million tons after all these projects are completed.
However, Guangzhou Tinci Materials Technology Co.Ltd(002709) raised objections to the above capacity. “The production capacity put into operation in the past two years may not be as much as 1.2 million tons. The other party may double calculate some of our projects.” The person from the above Guangzhou Tinci Materials Technology Co.Ltd(002709) Securities Department told reporters.
The person also said: “the company’s electrolyte production capacity by the end of 2020 is about 100000 tons. This year, two electrolyte projects will be put into operation, 150000 tons and 100000 tons respectively. The company’s electrolyte business is scattered. In addition, each project has a planning period and construction period, and the completion time is also affected by many factors, so we don\’t have very accurate data.”
For the excess risk generally worried by the market, the person said that since last year, the market demand for electrolyte has exceeded the supply. Whether there is excess risk in the future depends on the balance of overall supply and demand. The company will also consider it and make comprehensive adjustment in combination with the company’s market share, downstream demand and expectations for the future.
It is worth noting that while Guangzhou Tinci Materials Technology Co.Ltd(002709) continues to expand, some financial indicators have fluctuated greatly since its listing.
From 2014 to 2017, Guangzhou Tinci Materials Technology Co.Ltd(002709) increased from RMB 50 million to more than RMB 300 million in terms of net profit deducted from non parent company; In 2018 and 2019, it dropped sharply to the level of RMB 10 million; It will soar again to 530 million yuan in 2020; Up to RMB 1.51 billion in the first three quarters of 2021.
The “self hematopoietic capacity” of Guangzhou Tinci Materials Technology Co.Ltd(002709) is also unstable. From 2014 to 2016, the company’s net cash flow from operating activities remained between RMB 60 million and RMB 240 million; From 2017 to 2019, it was negative, ranging from – 10 million yuan to – 320 million yuan; There was a significant increase in 2020 and the first three quarters of 2021, which were 630 million yuan and 990 million yuan respectively.
The above Guangzhou Tinci Materials Technology Co.Ltd(002709) person from the Securities Department said that part of the reason for the fluctuation of the company’s performance is that the market in 2018 and 2019 was very poor compared with 2015 and 2016. Due to the decline of new energy vehicle subsidies, insufficient demand and overcapacity in the whole industrial chain, and the gross profit margin of related products also declined.
