(report producer/analyst: CITIC Securities Yuan Jiancong, Wu Weichen, Li Zijun)
Company profile: Domestic light power lithium battery leader
has been deeply engaged in the battery field for more than ten years and has grown into a leading light power lithium battery company.
company was established in 2010. Its initial stage of its establishment mainly engaged in consumer electronics lithium-ion batteries; in 2011, it launched electric bicycle battery products and began to layout the power lithium-ion battery market; in 2013 and 2014, it successively launched mobile power supply and automotive emergency power supply series products; since 2016, the company adjusted its development plan, focusing on the field of light vehicle lithium-ion batteries, and acquired CapitaLand New Energy in 2017, and its business expanded to the upstream lithium-ion battery manufacturing field. In 2021, the company successfully listed on Science and Technology Innovation Board and has now become a leading company in the field of domestic light vehicle lithium-ion batteries.
's main products are lithium-ion battery packs and lithium-ion battery cells, with rich subdivided application scenarios.
Company's lithium-ion battery pack products include three categories: light vehicle lithium-ion batteries, consumer electronic batteries and energy storage batteries. The battery cells are managed through BMS to achieve stable and safe charging and discharging functions. They can be applied to downstream products such as electric bicycles, electric motorcycles, , electric scooters, laptop , drones, intelligent robots, and other downstream products; lithium-ion batteries are mainly 8650 and 21700, two standardized products with strong versatility, with a high degree of automation production and are produced by the wholly-owned subsidiary CapitaLand New Energy.
actual controllers are Zhang Zhiping and Liu Cong, and the equity structure is relatively concentrated.
As of June 30, 2022, the company's largest shareholder Kunlun Dingtian held 42.25% of the shares, Zhang Zhiping and Liu Cong held 60% and 40% of Kunlun Dingtian's shares respectively. In addition, the two directly held 24.88% of the company's equity, and the total direct and indirect holdings was approximately 67.13%, and they are the actual controllers of the company; in addition, Boguang Juli and Qiao Geli are the company's employee shareholding platforms, each holding 3.75% of the shares. Overall, the company's equity structure is relatively concentrated.
has four wholly-owned subsidiaries and an holding subsidiary, among which CapitaLand New Energy is mainly engaged in lithium-ion battery cell business; Hong Kong Boliwei mainly conducts international import and export and payment of goods; Boliwei Europe is established in Belgium , responsible for after-sales technical services in Europe; VIRIDUS currently mainly conducts local assembly of battery packs.
industry demand is strong, and the company's revenue has grown rapidly in recent years.
benefited from the growth of the demand for lithium batteries in the electric two-wheeler industry. The company's operating income in 2019-2021 was 1.026/1.431/2.217 billion yuan, respectively, up 7.70%/+39.44%/+54.91% year-on-year, showing a rapid growth trend overall; net profit attributable to shareholders was 0.70/1.23/1.26 million yuan, respectively, up 11.36%/+75.25%/+1.95% year-on-year.
is affected by the global macroeconomic environment and the COVID-19 pandemic, and the rise in raw material prices and exchange rate fluctuations, the company's H1 revenue and net profit attributable to shareholders in 2022 were 1.231/79 billion yuan, respectively, up 20.51%/-8.00% year-on-year respectively.
Light vehicle lithium batteries account for more than 50%, and the energy storage battery business is growing rapidly.
light vehicle lithium batteries are the company's core business. The revenue in 2019-2021 was 441/653/1.23 billion yuan, respectively, +5.82%/+48.10%/+88.45% year-on-year, and the revenue in 2021 accounted for 58.7%.
consumer electronic batteries are the company's traditional business, and their revenue has maintained steady growth in recent years; energy storage batteries are the company's new business, with operating income of RMB 15/53/128 million in 2019-2021 respectively. The CAGR in the past three years has reached 192%, with rapid growth, with revenue accounting for about 6.1% in 2021.
2022H1 The company's energy storage battery business achieved revenue of 124 million yuan, an increase of 136% year-on-year, and the revenue share further increased to 10%.
gross profit margin has declined due to factors such as rising raw materials prices.
Affected by the rise in prices of major upstream raw materials and exchange rate fluctuations, the overall gross profit margins of the company in 2021 and 2022H1 were 20.2%/17.2%, respectively, year-on-year -3.8/-4.8pcts.Judging from the
-point product, the gross profit margin of lithium-ion batteries for light vehicles is the highest, with 22.66% in 2021, and consumer electronic batteries/energy storage batteries/lithium-ion batteries are 19.19%/16.83%/12.76% respectively. The cost rate during the period is steadily declining, and R&D investment is increasing year by year.
company has excellent cost control, and the expense rate has declined steadily in recent years. In 2019-2022H1 were 13.68%/12.91%/11.45%/9.83%, respectively, showing a downward trend year by year. The company attached importance to R&D and has continuously increased R&D investment in recent years. The company's R&D expenses in 2019-2022H1 were 0.46/0.61/0.99/0.55 billion yuan, respectively, and the R&D expense rates were 4.45%/4.26%/4.47%/4.45% respectively.
Due to the rise in raw material prices and the repeated impact of local epidemics in China, the company's ROE has declined.
2021 The company's ROE was approximately 15.96%, year-on-year -17pcts. According to DuPont analysis , the net sales profit margin, equity multiplier and asset turnover rate both declined. Since 2022, due to the rise in raw material prices and changes in the domestic epidemic, the company's operating pressure has increased, the asset turnover rate has declined, and the 1H2022 ROE continues to decline to 6.74%. We expect ROE to be repaired in the future as the epidemic is alleviated.
The electric two-wheeler industry continues to flourish, and the energy storage market grows rapidly
Light vehicle lithium battery: the domestic and international prosperity continues, policies and consumption upgrades promote industry growth
Electric two-wheeler can be divided into three categories according to the driving situation and power size. Domestic electric two-wheeled vehicles can be divided into three categories: electric bicycles, electric motorcycles, and electric motorcycles according to whether they can ride, speed and power.
electric bicycles can be pedaled, among which, the type that cannot be driven by pure electric power is an electric assisted bicycle, and the type that can be driven by pure electric power is an electric-driven bicycle. Electric mopeds and electric motorcycles are both motorcycles in a broad sense. The main difference in China is the limit of 25km/h speed limit and 4000W power.
China mainly uses traditional electric vehicles for transportation, and overseas electric helps bicycle develop vigorously.
There are differences in the use of electric two-wheelers at home and abroad:
1) The domestic market, since electric two-wheelers were first used as replacement of transportation tools under the motorcycle restriction order, domestic market sales are currently mainly based on electric-driven bicycles and electric motorcycles. Due to its low price and convenient use, after years of development of electric two-wheelers, it has become one of the main transportation tools for people, and has expanded applications in takeaway, same-city delivery riders, etc. The competition is relatively fierce, mainly focusing on low-end products of 1,500-2,000 yuan.
2) Overseas market, Due to the popularization of fuel vehicles in Europe and the United States and the early development of public transportation, consumers have a small demand for electric-driven bicycles as transportation tools. However, driven by outdoor sports habits, cycling culture and new things experience, they prefer electric-assisted bicycles with assisted cycling functions.
Therefore, the current European, American and Japanese electric two-wheeler markets are mainly powered by electric bicycles, and high-end products that consume 500 euros or 1800 euros or or above according to the category.
sales of electric two-wheelers under the new national standard have increased, and the trend of lithium batteries replacing lead-acid batteries is obvious.
The " Electric Bicycle Safety Technical Specification " implemented by China in 2019 requires that the vehicle quality be less than 55kg, and a transition period of 2-4 years is set up according to different regions.
lead-acid battery has a quality of 16-30kg. If lead-acid battery is used, other parts of the vehicle need to use lightweight materials with higher cost. From the perspective of battery cost, the average cost of lithium batteries is equivalent to that of lead-acid batteries, so manufacturers use more lithium batteries with lower quality to reduce costs.
Before 2019, the sales of electric two-wheelers in China remained stable at 31-32 million units. From 2019-2021, with the introduction of the new national standard, the sales of electric two-wheelers in China increased to 3680/4760/41 million units, of which the penetration rate of lithium battery was 14.7%/20.6%/23.4% respectively, and lithium batteries are gradually replacing lead-acid batteries.
Outdoor sports are emerging, and the increase in per capita consumption willingness is expected to drive the growth of electric bicycles.
Compared with 2019, the proportion of people who spend more than 1,000 yuan in China's per capita outdoor sports increased from 36% to 65%, and the proportion of people who spend more than 10,000 yuan increased from 2% to 19%, reflecting that China's enthusiasm for outdoor sports has increased under the normal epidemic prevention and control, and the per capita consumption willingness has increased.
According to Mafengwo "2022 Outdoor Leisure Wind Report", the Mafengwo Entertainment Center platform has increased by 108% in the past two years. Cycling has become one of the main ways for young people to travel and leisure exercise. Some people are willing to buy professional bicycles and accessories worth tens of thousands of yuan. The electric bicycle market is expected to grow with changes in consumption habits and consumption willingness.
European and American Electric treadmill sales have steadily increased, driving China's electric two-wheeled vehicle export growth.
Electronic treadmill sales in the European and American markets have steadily increased in recent years, reaching 5.5 million and 500,000 respectively in 2021, an increase of 61.8%/70.0% year-on-year. The European and American electric treadmill market has grown rapidly, and it has also driven the growth of China's electric two-wheeled vehicle exports. According to statistics from the General Administration of Customs and Chinamotor, China's electric motorcycles and bicycles and exports in 2021 reached 22.9 million units, of which North America and Europe accounted for 43.5% and 33.3% respectively, making it the main export market.
Subsidy policies in Europe and the United States continue, and electric two-wheeled vehicles are expected to continue to maintain their development momentum.
Europe has a strong cycling culture. Under the influence of population aging and environmental protection concepts, major European countries have successively launched electric bicycle subsidy plans to provide subsidies, loans or mileage allowances for the purchase of electric bicycles. The subsidy amounts range from 50-1,000 euros in various countries and regions.
The United States introduced the "Rebuilding a Better Future" Act in 2021, which provides a 30% refundable tax credit for purchasing electric bicycles and electric motorcycles to encourage citizens to travel with electric bicycles and electric motorcycles and consumer needs.
Under the incentives of electric two-wheeler subsidy policies in Europe and the United States, overseas electric bicycles and motorcycle sales are expected to continue to grow and the development momentum continues.
is expected to reach 14.3 million units in 2025, corresponding to CAGR from 2021 to 2025 to 2025.
According to statistics from CONEBI, eCycleElectric and other data, the total global bicycle sales are about 113 million, of which the sales of electric bikes are about 7.14 million, and the penetration rate of electric bikes is about 6.3%.
With the catalysis of the epidemic and the upgrading of consumption around the world, the electrification development of the bicycle industry has accelerated. We expect that the global electric bike sales will reach 14.3 million units by 2025, corresponding to the CAGR of 19% from 2021 to 2025. The global penetration rate of electric bikes is expected to increase from 6.3% in 2021 to more than 12% in 2025. The increase mainly comes from the European and American markets. It is expected that the sales of electric bikes in Europe and the United States will be 10 million and 3 million units in 2025, respectively, which will effectively drive the demand for lithium-ion batteries for electric bikes, and the market space will be broad in the future.
Xingheng Power and Bosch are domestic and European market giants respectively, and Bolivi's market share in Europe has increased significantly.
domestic market, from 2018 to 2021, Xingheng Power ranked first in the market share for four consecutive years, with a domestic market share of 44.43% in 2021; Boliwei ranked third in the market shipment volume of China's light vehicle lithium battery field for four consecutive years.
In the international market, according to Boliwei's prospectus, Boliwei's main competitor in the European market is Boliwei. Boliwei's market share in Europe is still the first in 2021. Boliwei's European market share reached 20% in 2021, a significant increase compared with 12% in 2019.
Energy storage lithium battery: The industry has broad prospects, and the market demand for small and medium-sized energy storage is strong
Energy storage application scenarios are mainly divided into three categories: power generation side, grid side, and user side. Sub-sectors such as auxiliary services and portable energy storage are ready to go.
Power generation side: Centralized renewable energy is connected to the grid to generate smooth power generation output power and reduce the need for wind and light abandonment.
After the wind and photoelectric power station is configured with energy storage, based on the power station output prediction and energy storage discharge scheduling, the intermittent and volatile renewable energy generation output can be smoothly controlled to meet the grid connection needs, thereby improving the utilization rate of renewable energy.
(report producer/analyst: CITIC Securities Yuan Jiancong, Wu Weichen, Li Zijun)
Company profile: Domestic light power lithium battery leader
has been deeply engaged in the battery field for more than ten years and has grown into a leading light power lithium battery company.
company was established in 2010. Its initial stage of its establishment mainly engaged in consumer electronics lithium-ion batteries; in 2011, it launched electric bicycle battery products and began to layout the power lithium-ion battery market; in 2013 and 2014, it successively launched mobile power supply and automotive emergency power supply series products; since 2016, the company adjusted its development plan, focusing on the field of light vehicle lithium-ion batteries, and acquired CapitaLand New Energy in 2017, and its business expanded to the upstream lithium-ion battery manufacturing field. In 2021, the company successfully listed on Science and Technology Innovation Board and has now become a leading company in the field of domestic light vehicle lithium-ion batteries.
's main products are lithium-ion battery packs and lithium-ion battery cells, with rich subdivided application scenarios.
Company's lithium-ion battery pack products include three categories: light vehicle lithium-ion batteries, consumer electronic batteries and energy storage batteries. The battery cells are managed through BMS to achieve stable and safe charging and discharging functions. They can be applied to downstream products such as electric bicycles, electric motorcycles, , electric scooters, laptop , drones, intelligent robots, and other downstream products; lithium-ion batteries are mainly 8650 and 21700, two standardized products with strong versatility, with a high degree of automation production and are produced by the wholly-owned subsidiary CapitaLand New Energy.
actual controllers are Zhang Zhiping and Liu Cong, and the equity structure is relatively concentrated.
As of June 30, 2022, the company's largest shareholder Kunlun Dingtian held 42.25% of the shares, Zhang Zhiping and Liu Cong held 60% and 40% of Kunlun Dingtian's shares respectively. In addition, the two directly held 24.88% of the company's equity, and the total direct and indirect holdings was approximately 67.13%, and they are the actual controllers of the company; in addition, Boguang Juli and Qiao Geli are the company's employee shareholding platforms, each holding 3.75% of the shares. Overall, the company's equity structure is relatively concentrated.
has four wholly-owned subsidiaries and an holding subsidiary, among which CapitaLand New Energy is mainly engaged in lithium-ion battery cell business; Hong Kong Boliwei mainly conducts international import and export and payment of goods; Boliwei Europe is established in Belgium , responsible for after-sales technical services in Europe; VIRIDUS currently mainly conducts local assembly of battery packs.
industry demand is strong, and the company's revenue has grown rapidly in recent years.
benefited from the growth of the demand for lithium batteries in the electric two-wheeler industry. The company's operating income in 2019-2021 was 1.026/1.431/2.217 billion yuan, respectively, up 7.70%/+39.44%/+54.91% year-on-year, showing a rapid growth trend overall; net profit attributable to shareholders was 0.70/1.23/1.26 million yuan, respectively, up 11.36%/+75.25%/+1.95% year-on-year.
is affected by the global macroeconomic environment and the COVID-19 pandemic, and the rise in raw material prices and exchange rate fluctuations, the company's H1 revenue and net profit attributable to shareholders in 2022 were 1.231/79 billion yuan, respectively, up 20.51%/-8.00% year-on-year respectively.
Light vehicle lithium batteries account for more than 50%, and the energy storage battery business is growing rapidly.
light vehicle lithium batteries are the company's core business. The revenue in 2019-2021 was 441/653/1.23 billion yuan, respectively, +5.82%/+48.10%/+88.45% year-on-year, and the revenue in 2021 accounted for 58.7%.
consumer electronic batteries are the company's traditional business, and their revenue has maintained steady growth in recent years; energy storage batteries are the company's new business, with operating income of RMB 15/53/128 million in 2019-2021 respectively. The CAGR in the past three years has reached 192%, with rapid growth, with revenue accounting for about 6.1% in 2021.
2022H1 The company's energy storage battery business achieved revenue of 124 million yuan, an increase of 136% year-on-year, and the revenue share further increased to 10%.
gross profit margin has declined due to factors such as rising raw materials prices.
Affected by the rise in prices of major upstream raw materials and exchange rate fluctuations, the overall gross profit margins of the company in 2021 and 2022H1 were 20.2%/17.2%, respectively, year-on-year -3.8/-4.8pcts.Judging from the
-point product, the gross profit margin of lithium-ion batteries for light vehicles is the highest, with 22.66% in 2021, and consumer electronic batteries/energy storage batteries/lithium-ion batteries are 19.19%/16.83%/12.76% respectively. The cost rate during the period is steadily declining, and R&D investment is increasing year by year.
company has excellent cost control, and the expense rate has declined steadily in recent years. In 2019-2022H1 were 13.68%/12.91%/11.45%/9.83%, respectively, showing a downward trend year by year. The company attached importance to R&D and has continuously increased R&D investment in recent years. The company's R&D expenses in 2019-2022H1 were 0.46/0.61/0.99/0.55 billion yuan, respectively, and the R&D expense rates were 4.45%/4.26%/4.47%/4.45% respectively.
Due to the rise in raw material prices and the repeated impact of local epidemics in China, the company's ROE has declined.
2021 The company's ROE was approximately 15.96%, year-on-year -17pcts. According to DuPont analysis , the net sales profit margin, equity multiplier and asset turnover rate both declined. Since 2022, due to the rise in raw material prices and changes in the domestic epidemic, the company's operating pressure has increased, the asset turnover rate has declined, and the 1H2022 ROE continues to decline to 6.74%. We expect ROE to be repaired in the future as the epidemic is alleviated.
The electric two-wheeler industry continues to flourish, and the energy storage market grows rapidly
Light vehicle lithium battery: the domestic and international prosperity continues, policies and consumption upgrades promote industry growth
Electric two-wheeler can be divided into three categories according to the driving situation and power size. Domestic electric two-wheeled vehicles can be divided into three categories: electric bicycles, electric motorcycles, and electric motorcycles according to whether they can ride, speed and power.
electric bicycles can be pedaled, among which, the type that cannot be driven by pure electric power is an electric assisted bicycle, and the type that can be driven by pure electric power is an electric-driven bicycle. Electric mopeds and electric motorcycles are both motorcycles in a broad sense. The main difference in China is the limit of 25km/h speed limit and 4000W power.
China mainly uses traditional electric vehicles for transportation, and overseas electric helps bicycle develop vigorously.
There are differences in the use of electric two-wheelers at home and abroad:
1) The domestic market, since electric two-wheelers were first used as replacement of transportation tools under the motorcycle restriction order, domestic market sales are currently mainly based on electric-driven bicycles and electric motorcycles. Due to its low price and convenient use, after years of development of electric two-wheelers, it has become one of the main transportation tools for people, and has expanded applications in takeaway, same-city delivery riders, etc. The competition is relatively fierce, mainly focusing on low-end products of 1,500-2,000 yuan.
2) Overseas market, Due to the popularization of fuel vehicles in Europe and the United States and the early development of public transportation, consumers have a small demand for electric-driven bicycles as transportation tools. However, driven by outdoor sports habits, cycling culture and new things experience, they prefer electric-assisted bicycles with assisted cycling functions.
Therefore, the current European, American and Japanese electric two-wheeler markets are mainly powered by electric bicycles, and high-end products that consume 500 euros or 1800 euros or or above according to the category.
sales of electric two-wheelers under the new national standard have increased, and the trend of lithium batteries replacing lead-acid batteries is obvious.
The " Electric Bicycle Safety Technical Specification " implemented by China in 2019 requires that the vehicle quality be less than 55kg, and a transition period of 2-4 years is set up according to different regions.
lead-acid battery has a quality of 16-30kg. If lead-acid battery is used, other parts of the vehicle need to use lightweight materials with higher cost. From the perspective of battery cost, the average cost of lithium batteries is equivalent to that of lead-acid batteries, so manufacturers use more lithium batteries with lower quality to reduce costs.
Before 2019, the sales of electric two-wheelers in China remained stable at 31-32 million units. From 2019-2021, with the introduction of the new national standard, the sales of electric two-wheelers in China increased to 3680/4760/41 million units, of which the penetration rate of lithium battery was 14.7%/20.6%/23.4% respectively, and lithium batteries are gradually replacing lead-acid batteries.
Outdoor sports are emerging, and the increase in per capita consumption willingness is expected to drive the growth of electric bicycles.
Compared with 2019, the proportion of people who spend more than 1,000 yuan in China's per capita outdoor sports increased from 36% to 65%, and the proportion of people who spend more than 10,000 yuan increased from 2% to 19%, reflecting that China's enthusiasm for outdoor sports has increased under the normal epidemic prevention and control, and the per capita consumption willingness has increased.
According to Mafengwo "2022 Outdoor Leisure Wind Report", the Mafengwo Entertainment Center platform has increased by 108% in the past two years. Cycling has become one of the main ways for young people to travel and leisure exercise. Some people are willing to buy professional bicycles and accessories worth tens of thousands of yuan. The electric bicycle market is expected to grow with changes in consumption habits and consumption willingness.
European and American Electric treadmill sales have steadily increased, driving China's electric two-wheeled vehicle export growth.
Electronic treadmill sales in the European and American markets have steadily increased in recent years, reaching 5.5 million and 500,000 respectively in 2021, an increase of 61.8%/70.0% year-on-year. The European and American electric treadmill market has grown rapidly, and it has also driven the growth of China's electric two-wheeled vehicle exports. According to statistics from the General Administration of Customs and Chinamotor, China's electric motorcycles and bicycles and exports in 2021 reached 22.9 million units, of which North America and Europe accounted for 43.5% and 33.3% respectively, making it the main export market.
Subsidy policies in Europe and the United States continue, and electric two-wheeled vehicles are expected to continue to maintain their development momentum.
Europe has a strong cycling culture. Under the influence of population aging and environmental protection concepts, major European countries have successively launched electric bicycle subsidy plans to provide subsidies, loans or mileage allowances for the purchase of electric bicycles. The subsidy amounts range from 50-1,000 euros in various countries and regions.
The United States introduced the "Rebuilding a Better Future" Act in 2021, which provides a 30% refundable tax credit for purchasing electric bicycles and electric motorcycles to encourage citizens to travel with electric bicycles and electric motorcycles and consumer needs.
Under the incentives of electric two-wheeler subsidy policies in Europe and the United States, overseas electric bicycles and motorcycle sales are expected to continue to grow and the development momentum continues.
is expected to reach 14.3 million units in 2025, corresponding to CAGR from 2021 to 2025 to 2025.
According to statistics from CONEBI, eCycleElectric and other data, the total global bicycle sales are about 113 million, of which the sales of electric bikes are about 7.14 million, and the penetration rate of electric bikes is about 6.3%.
With the catalysis of the epidemic and the upgrading of consumption around the world, the electrification development of the bicycle industry has accelerated. We expect that the global electric bike sales will reach 14.3 million units by 2025, corresponding to the CAGR of 19% from 2021 to 2025. The global penetration rate of electric bikes is expected to increase from 6.3% in 2021 to more than 12% in 2025. The increase mainly comes from the European and American markets. It is expected that the sales of electric bikes in Europe and the United States will be 10 million and 3 million units in 2025, respectively, which will effectively drive the demand for lithium-ion batteries for electric bikes, and the market space will be broad in the future.
Xingheng Power and Bosch are domestic and European market giants respectively, and Bolivi's market share in Europe has increased significantly.
domestic market, from 2018 to 2021, Xingheng Power ranked first in the market share for four consecutive years, with a domestic market share of 44.43% in 2021; Boliwei ranked third in the market shipment volume of China's light vehicle lithium battery field for four consecutive years.
In the international market, according to Boliwei's prospectus, Boliwei's main competitor in the European market is Boliwei. Boliwei's market share in Europe is still the first in 2021. Boliwei's European market share reached 20% in 2021, a significant increase compared with 12% in 2019.
Energy storage lithium battery: The industry has broad prospects, and the market demand for small and medium-sized energy storage is strong
Energy storage application scenarios are mainly divided into three categories: power generation side, grid side, and user side. Sub-sectors such as auxiliary services and portable energy storage are ready to go.
Power generation side: Centralized renewable energy is connected to the grid to generate smooth power generation output power and reduce the need for wind and light abandonment.
After the wind and photoelectric power station is configured with energy storage, based on the power station output prediction and energy storage discharge scheduling, the intermittent and volatile renewable energy generation output can be smoothly controlled to meet the grid connection needs, thereby improving the utilization rate of renewable energy.
Grid side: The instability of electricity generates power peak regulating, system frequency regulating and other auxiliary operation requirements.
In the power supply system, fluctuations in the electric load and frequency changes will cause a decrease in the power generation efficiency. Through energy storage, the peak and valley filling of the electric load and the rapid and flexible adjustment of the frequency can be achieved. In the power transmission and distribution system, in response to sudden line blockage and load increases, dynamic operation can be achieved through energy storage to achieve motorized power storage to ensure the quality of power and the safe and stable operation of the system.
user side: end users' peak and valley arbitrage, self-use backup, mobile portability and other needs have given rise to a variety of energy storage applications.
In the market where peak-to-valley electricity price is implemented, peak-to-valley electricity price is used to charge the energy storage system at low electricity prices and discharge the energy storage system at high electricity prices to achieve peak-to-valley electricity price arbitrage. For households and industrial and commercial users who install photovoltaic , configuring energy storage can better utilize photovoltaic power and reduce electricity consumption costs. For industrial terminals with large electricity consumption, energy storage can be configured to adjust peaks and valleys and respond to backup.
Mobile portable energy storage belongs to a niche market. The difference from conventional mobile phone power banks is that it has larger power, volume and weight, and is more suitable for providing continuous high-power power when traveling outdoors. It is mainly used for outdoor activities, emergency disaster preparedness, etc., and has a large market space.
portable energy storage belongs to the sub-branch of electrochemical energy storage, and the product matures rapidly.
electrochemical energy storage technology lithium batteries are widely used in large, medium and small energy systems due to their small size, large density, large capacity, high specific energy, fast and stable charging and discharge, and long cycle life. Portable energy storage is another innovative measure for lithium batteries in the energy storage field. It is safe, convenient, clean and low-carbon, and accurately matches the consumption pain points of the power demand market, and is adapted to almost all commonly used electronic and electrical equipment.
The epidemic catalyzed the increase in product volume, benefiting from both outdoor and emergency scenarios.
On the one hand, under normalized epidemic prevention and control, global outdoor sports are in high enthusiasm, and outdoor consumption such as family self-driving tours, small picnics, camping, photography, fishing, etc. have been upgraded, and outdoor power has become the mainstream of short-term electricity use. On the other hand, uncertain factors such as the epidemic and power outages have pushed up the demand for backup in emergency scenarios, and the use of portable energy storage at home has increased.
Portable energy storage Market penetration rate is low, and the future increase is considerable.
GGII is expected to ship 4.838 million units of portable energy storage equipment in 2021, and it is expected that the global shipment of portable energy storage equipment will reach 31.1 million units by 2026, with a 5-year CAGR+45%. The global shipment of portable energy storage batteries in 2021 is expected to be 1.3GWh, and GGII is expected to ship 8.4GWh by 2026, corresponding to a 5-year CAGR+45%.
The market size of portable energy storage in 2021 will reach 11.13 billion yuan. GGII expects that by 2026, the global market size of portable energy storage will exceed 80 billion yuan, with a 5-year CAGR+48%.
household energy storage evolved from emergency electric scenarios, with high overseas demand.
Home energy storage refers to a large household energy storage device with an electric capacity of more than 3 degrees. Home storage evolved from the original diesel generator to solve the situation of home emergency electricity use. Now it has gradually developed into a lithium battery-led energy storage system that is self-contained and self-contained and self-use energy storage system, which is used in off-grid household self-generating, power storage backup and peak-to-valley electricity price arbitrage. Due to the stable domestic power grid + high unit price of household energy storage, overseas is currently the main consumer market. The product consists of an integrated lithium battery energy storage system + household energy storage solutions.
The economy of household energy storage is becoming more and more prominent.
Residents in Europe and other regions face high electricity prices. Coupled with the subsidy for grid electricity prices (FiT) has brought about a decline in electricity prices, and the self-use economy of household energy storage is highlighted. China has developed power systems and affordable electricity prices. Home energy storage is still in its early stages of development. In the future, as the cost of energy storage systems rapidly decreases, the household side light storage parity will gradually be achieved, and the household energy storage market is expected to explode.
Take Germany as an example. In 2019, the cost of photostore/photovoltaic kilograms was 15.9/9.6 euro cents/kWh, and the electricity price of residents was 30.5 euro cents/kWh. The cost of photostore/photovoltaic kilograms was 52%/31% of the electricity price of residents.
In the future, with the decline in the cost of optical storage, the gap between residents' electricity prices and optical storage LCOE scissors is expected to increase, promoting the increase in demand for residents' users.
Using energy storage and portable energy storage are the same in terms of technology, products and channels, and the growth space for household energy storage is even greater.
household energy storage and portable energy storage have synergistic effects in technology and industrial chain distribution, and the technology span of high-power products of household storage is not large. Both belong to the category of consumer electronics , and they are both power supply categories. To C application brand awareness and channels have synergy. Household energy storage is currently in the early stages of industry development and has huge development potential.
The proportion of new household energy storage installed capacity overseas is higher than that in China.
From the perspective of application scenarios, according to CNESA data, the global new electrochemical energy storage projects in 2020 are mainly used for renewable energy grid connection, accounting for about 48%, followed by household energy storage, accounting for 21%.
In comparison, among the new domestic electrochemical energy storage projects in 2020, the proportion of renewable energy grid connection was 40%, peak-shaving, frequency regulation and auxiliary services accounted for 23%/21%, and household energy storage accounted for only 14%, lower than overseas.
is expected to add about 100GWh of the global household storage products by 2025, corresponding to a CAGR of 98.8% from 2021 to 2025. According to historical statistics from IHS Markit and GGII, the global household storage products installed capacity in 2021 was about 6.4GWh, an increase of 156% year-on-year.
According to GGII, the new installed capacity of household storage products in the global 2022 is expected to reach 15GWh, an increase of 134% year-on-year; under optimistic estimates, the global installed capacity is expected to reach 100GWh in 2025, corresponding to the industry CAGR of 98.8% from 2021 to 2025.
leads the light power industry, and the portable and household energy storage business is growing rapidly
Technology: Battery products have excellent performance, focusing on technology research and development
Light vehicle lithium-ion batteries have high requirements for quality, safety, etc.
In the field of light vehicle use, since the application environment is mainly outdoor dynamics, the standards and parameters of lithium-ion batteries are required for high requirements, and there are many test projects. Among them, safety is the focus of the test, which is mainly reflected by the operating temperature range of lithium-ion batteries, whether the battery pack will be short-circuited at a specific temperature, and whether the battery will catch fire or disintegrate during the charging and discharging test.
In addition, due to the complexity of the working environment of lithium-ion batteries for light vehicles, waterproof level test is also required to determine the protection level of its shell against foreign object intrusion. The larger the number, the higher the protection level of the product.
The company's light vehicle lithium-ion battery pack uses a 36V nominal voltage platform, and its product performance is in the leading position in the industry.
Compared with the 36V voltage platforms of other companies in the industry, the company's lithium battery capacity can reach up to 20Ah, which is at the leading level in the industry; the company's products have more diverse communication methods, including CANBus, UART, etc.; in terms of system compatibility, in addition to being compatible with BOSCH, ANANDA and other systems, the company's products can also be compatible with BAFUNG, MOTINOVA, POLINI and other systems, which is more flexible than other companies in the industry. In terms of waterproofing level, the company's waterproofing level can achieve IPX7, which is higher than the waterproofing level of Bosch and BMZ's 36V nominal voltage platforms.
Overall, the company's 36V light vehicle lithium-ion batteries have higher quality and better safety, and are in the leading position in the industry.
attaches great importance to technology research and development and actively lays out new technologies.
From 2019 to 2021, the company's R&D expenses were RMB 46/61/99 million, respectively, up 23.3%/33.5%/62.5% year-on-year, and the number of R&D personnel was 152/190/313, accounting for 10.9%/9.3%/13.4% of the company's overall number of employees. The company's R&D investment and the number of R&D personnel have increased significantly in recent years, reflecting the company's high attention to technology R&D.
In addition, according to the company's 2022 semi-annual report, the company is currently actively developing new materials systems and actively laying out new technologies, including high-energy density lithium iron phosphate battery , low-temperature lithium iron phosphate battery, 2200Wh AC2400W energy storage batteries, solid and quasi-solid state lithium ion battery products, sodium ion battery products, etc., and most of the new technology research and development can be applied in the energy storage field.
Customer: Overseas revenue accounts for a high proportion, and high-quality customer resources
Overseas revenue accounts for more than 50%. According to the company's regional revenue structure in recent years, the company's domestic and overseas revenue distribution is relatively even, basically maintaining at about 50%. From 2018 to 2021, the company's overseas revenue was 42/49/73/1.09 billion yuan, accounting for 47.9%/51.8%/53.7%/52.0% of the company's total revenue, respectively. The company's overseas revenue mainly comes from its light vehicle lithium-ion battery business, and its customers mainly come from Europe and other places.
has high-quality customer resources and constantly develops potential new customers.
At present, the company has established stable cooperative relationships with high-quality foreign electric vehicles such as Germany Prophete, Romania EUROSPORT, Denmark EB Component, France Manufacture Francaise and other high-quality foreign electric vehicles; in China, it has also developed well-known electric two-wheeled vehicle companies such as Maverick Electric , Yadi Holdings, Emma Technology , and Xinri Co., Ltd.
In addition, the company has successfully developed electric off-road motorcycle customers such as Qiulong Technology, and has developed DJI , Xinbao Co., Ltd., and GOAL ZERO in the field of consumer electronics and energy storage products. In 2020 and 2021, the total sales of the company's top five customers accounted for 24.8% and 26.4% respectively, and the customer structure was relatively dispersed. In 2021, Leader 96 and Yongqi (China) entered the company's top five customer systems for the first time, and the company's new customer development results were remarkable.
Supply Chain: Layout the battery cell link and switching large battery cell platforms are expected to improve profitability
The cost structure of direct material accounts for more than 85%, mainly affected by the price fluctuations of raw material . In the company's cost structure, direct materials accounted for the largest proportion, accounting for 85.9% and 86.4% respectively in 2020/2021. The increase in the proportion of direct materials costs in 2021 is mainly affected by the increase in raw material prices.
battery cell procurement costs account for more than 50%, which is the company's main raw material cost.
From 2018 to 2020, among the main raw materials purchased by the company, the purchase amount of lithium-ion cells accounted for the largest proportion, 47.6%, 55.0%, and 56.1% respectively; followed by electronic component , accounting for 21.1%, 15.1% and 16.2% respectively from 2018 to 2020. Among the raw materials used in the company's lithium-ion cell production, the proportion of the procurement amount of positive electrode materials is the highest, 18.9%, 12.9% and 7.6% respectively.
acquires CapitaLand New Energy to deploy lithium-ion battery cells, leading the industry in terms of technical indicators.
In 2017, the company acquired CapitaLand New Energy to expand into the upstream battery cell field, and currently produces 18650 products with a capacity of 2,600mAh. The 18650 battery cell products produced by the company have an energy density of 535Wh/L and an operating voltage range of 4.2-2.75V, which can be compared with the products of the industry such as 0-violet lithium energy , Penghui Energy, LG and Panasonic .
In addition, the company's product operating temperature range is between -20℃ and 60℃, reaching the industry average, with up to 1,000 cycles, which is at the industry-leading level.
battery cell technology platform switches to 21700 large battery cell, with high energy density and low cost advantages.
As the diameter of the cylindrical battery increases, the proportion of mass of structural parts and other components decreases, and the battery capacity increases, further reducing the production cost of battery single Wh. Taking the Tesla 18650 battery and 21700 battery as an example, compared with 18650, the battery cell capacity of 21700 can be increased by about 33.3%-36.4%, the system energy density is increased by about 20%, the system cost is reduced by about 9%, and the system price is reduced by about 8%.
According to the company's 2022 semi-annual report, the company is currently actively promoting the conversion of battery cell technology platform from 18650 to 21700 to digest cost pressure internally. We expect that the switching of large battery cell platforms is expected to significantly increase the company's product energy density and reduce production costs.
self-produced and purchased, and the self-supply rate of battery cells is expected to further increase.
Company's lithium-ion battery pack products adopt a combination of self-produced battery cells and purchased battery cells. The proportion of self-produced battery cells from 2018 to 2020 was 27.3%, 26.1% and 22.1% respectively. In addition to using self-produced battery cells, the company also purchases battery cells from domestic and foreign brands such as LG, Panasonic, Samsung , Lishen to meet the customized needs of some customers.
With the company's further investment in the production and application of lithium-ion cells in the future, it is expected that the proportion of self-produced batteries for the company is expected to further increase. At the same time, with the switching of large battery cells platforms, it is expected to improve the profitability of batteries.
Energy storage: Focusing on the fields of portable and household energy storage, the business growth is significant
The company has rich energy storage products and a variety of application scenarios.
In the field of energy storage battery products, the company has started to develop and produce energy storage batteries, develop spare batteries for outdoor activities, and backup batteries during power outages since 2016. At present, the company's energy storage products are mainly sold for portable and household energy storage products, and also include mobile power supply , automotive emergency start-up power supply and other energy storage lithium batteries. The products are rich in variety and can be used in different application scenarios.
Energy storage business is developing rapidly, and its revenue share is gradually increasing.
2019-2021H1, the company's energy storage business revenue was RMB 0.15/0.53/128/124 million, respectively, -12.1%/+265%/+140%/+136% year-on-year, accounting for 1.54%/3.94%/6.10%/10.1% of the main business revenue, respectively.
The company's energy storage business revenue has grown rapidly, mainly due to the shortage of energy in Europe this year and the sharp increase in the demand for household roof photovoltaics and energy storage installed capacity.
From 2018 to 2021, the gross profit margins of the company's energy storage business were 13.5%/22.3%/23.0%/16.8%, respectively, mainly due to the rise in the prices of major upstream raw materials and the impact of exchange rate fluctuations.
binds a major customer Goal Zero to open the US portable energy storage market.
Judging from the distribution of portable energy storage sales in 2020, the United States is the world's largest portable energy storage market, accounting for about 47.3%, and the Japanese market accounted for about 29.6%, and the two together accounted for more than 75%.
company's portable energy storage battery products are mainly sold to American customer Goal Zero. According to statistics from China Chemical and Physical Power Industry Association , Goal Zero's global portable energy storage market share (by shipment volume) in 2020 was about 5.6%, ranking third in the world.
In the future, with the growing industry demand and the company's continuous development of downstream customer channels, the company's energy storage business is expected to maintain rapid growth.
storage products have excellent performance and are expected to benefit from the explosion of overseas demand.
In the field of home energy storage, the CN012 product produced by the company has a capacity of 72000mAh, a nominal voltage of 51.2V, a standard charge and discharge current of 36A, a maximum continuous discharge current of 72A, a working voltage of 44.8V~56.4V, the product's working and storage temperature range is -20~55℃, and it has strong environmental adaptability.
The company's household energy storage products have excellent performance and are mainly aimed at overseas markets. It is expected to usher in rapid growth due to the explosion of industry demand overseas since 2022.
In recent years, the company's lithium battery and battery cell capacity utilization rate has steadily increased.
From 2018 to 2020, the company's consumer electronic lithium battery production capacity was 6.33 million, 7.52 million, and 15.83 million units, respectively, with a capacity utilization rate of 80.0%/90.2%/94.0% respectively; the production capacity of lithium-ion batteries for light vehicles was 71/73/1.03 million units, with a capacity utilization rate of 96.0%/93.4%/99.2% respectively; the production capacity of lithium-ion batteries was 5276/54 million units, with a capacity utilization rate of 60 million units, with a capacity utilization rate of 83.6%/88.2%/94.9% respectively. The capacity utilization rate of consumer electronic lithium batteries, light vehicle lithium-ion batteries and lithium-ion cells of
company has steadily shown an overall upward trend.According to the company's 2021 annual report, the company's production capacity has expanded by 70% to meet the supply demand of the market for light vehicle lithium-ion batteries.
capacity layout has been increased again, and the capacity utilization rate is expected to maintain a large elasticity.
According to the company's announcement, in August 2021, the company signed an investment agreement with the People's Government of Wangniudun Town, Dongguan City, intending to invest 3 billion yuan to build the Bolivi lithium battery cell and energy storage battery R&D and production headquarters project, and provide land supply and construction in two phases. The company is expected to be completed in 5-6 years, with an annual output value of about 2.4 billion yuan. In December 2021, the company's wholly-owned subsidiary Dongguan CapitaLand successfully won the first phase of the project land for 41.81 million yuan. As the Wangniudun base is gradually completed and put into production, the company's production capacity is expected to reach a higher level.
In addition, the energy storage batteries produced by the company are small household energy storage products, and are mainly packs. Compared with battery cells, PACK has small investment and short production expansion cycle. It is expected that when demand in the energy storage industry explodes, the company can maintain a high capacity utilization elasticity and meet the needs of downstream customers well.
Risk factors
1) The demand for light electric two-wheeler industry is lower than expected risk:
The company's light vehicle lithium battery business is mainly aimed at overseas markets such as Europe. If the impact of factors such as inflation in Europe, the Russian-Ukraine war, and energy shortage continues in the future, the demand for light electric two-wheeler may slow down or decline, which will have an adverse impact on the company's overseas market business.
2) The demand for the energy storage industry is lower than expected:
In recent years, the demand for the energy storage industry, especially the small and medium-sized energy storage such as household energy storage and portable energy storage, has increased significantly, and the company's energy storage business has also maintained a rapid growth trend. If the demand for the energy storage industry in the future is lower than expected, it may have an adverse impact on the company's energy storage business shipments and profit levels.
3) Risk of intensifying competition in the lithium battery industry:
company mainly produces lithium-ion batteries, used in light two-wheeled electric vehicles, consumer electronic products and energy storage industries. The lithium battery industry has significant growth and many new players have entered the market. If the competition in the industry intensifies in the future, it may have an adverse impact on the market structure and the company's profitability.
4) Risk of rising raw material prices: The battery products produced by
need to be upstream raw materials including battery cells, electronic components, structural parts, positive electrode materials, negative electrode materials, diaphragms, electrolytes, etc. The raw material prices are fluctuating due to the supply and demand relationship. If the price of upstream raw materials continues to rise, it may have an adverse impact on the company's profitability.
5) Risk of customer development not as expected:
Company is actively developing downstream customers in light power, energy storage and other business fields to achieve an increase in shipment volume and market share. If downstream customers develop less than expected, it will have an adverse impact on the company's sales revenue.
6) Risk of change in technical route:
The battery products currently produced by the company are mainly lithium batteries. If the industry's technical route changes significantly in the future, and the company cannot keep up with the industry's technological changes or the R&D progress is less than expected, it may have an adverse impact on the company's production, operation and market position.
Earnings Forecast and Valuation
Key Assumptions and Earnings Forecast
Industry Assumptions
1. Light vehicle lithium battery industry: has been catalyzed by the epidemic and consumption upgrades around the world, and the electrification process of the bicycle industry has accelerated. It is estimated that the global electric bike sales are expected to reach 14.3 million units by 2025, corresponding to a CAGR of 19% from 2021 to 2025. The global penetration rate of electric bikes is expected to increase from 6.3% in 2021 to more than 12% in 2025, which will effectively drive the demand for lithium-ion batteries for electric bicycles, and the market space will be broad in the future.
2. Energy storage lithium battery: According to GGII forecast, the global shipment of portable energy storage batteries in 2021 will be 1.3GWh, and the shipment is expected to reach 8.4GWh by 2026, corresponding to a 5-year CAGR+45%; in 2021, the new installed capacity of household storage products worldwide will be approximately 6.4GWh, an increase of 156% year-on-year.
GGII It is estimated that the global installed capacity of household storage products in 2022 is expected to reach 15GWh, an increase of 134% year-on-year; under optimistic estimates, the global installed capacity is expected to reach 100GWh in 2025, corresponding to the industry CAGR of 98.8% from 2021 to 2025.
Company business operations assumptions
1. Lithium-ion batteries for light vehicles: is a leading domestic light power lithium battery company. In 2021, the revenue of the young automotive lithium-ion battery business accounts for 55.5%. The company's products are mainly aimed at the domestic and foreign electric two-wheeled vehicle markets, and the customer structure is high-quality.
In the medium and long term, with the increase in lithium battery penetration rate in the domestic and foreign two-wheeler markets, it is expected that the company's light vehicle lithium-ion battery business is expected to maintain rapid growth. It is expected that the revenue in 2022/2023/2024 will be 1.518/2.366/3.121 billion yuan, respectively, up 23%/+56%/+32% year-on-year.
main assumptions are as follows:
1) Shipping volume assumptions: In 2021, the company's shipment of lithium-ion batteries for light vehicles was 1.7 million sets, a year-on-year increase of 71%. In 2022, due to factors such as rising upstream raw material prices, overseas inflation and rising energy prices, the sales growth rate slowed down. It is estimated that the company's shipment of lithium-ion batteries for light vehicles will be 209/300/3.84 million sets, a year-on-year increase of 23%/+43%/+28%.
2) Unit price assumption: The average selling price of the company's light vehicle lithium-ion battery pack in 2020/2021 is 657/723 yuan respectively. With the rise in raw material prices and the switching of large-capacity batteries, the price of the company's lithium battery pack is expected to continue to increase. It is estimated that the average selling price of a single lithium battery pack in 2022/2023/2024 will be 725/790/813 yuan respectively.
3) Gross profit margin assumption: In the first half of 2022, the rise in the price of lithium battery raw materials puts certain pressure on the company's gross profit margin. With the smooth transmission of the company's price increase to some downstream customers, the impact of the price increase of some raw materials can be offset. It is expected that the gross profit margins of the company's 2022/2023/2024 young automotive lithium-ion batteries will be 22.0%/23.0%/23.0% respectively.
2. Consumer electronics batteries: From the perspective of industry demand, the shipments of IT digital products represented by laptops and mobile phones continue to decline, and the industry's growth rate is slowing down. It is expected that the company's consumer electronics battery business will remain consistent with the industry's growth rate. It is expected that the company's consumer electronics battery revenue will be RMB 596/640/718 million in 2022/2023/2024, respectively, of -2%/+7%/+12% year-on-year, and the gross profit margin will be RMB 18.1%/17.2%/16.4% respectively.
3. Energy storage batteries: In 2021, the company's energy storage battery business achieved revenue of 12.8 billion yuan, an increase of 140% year-on-year, achieving more than double growth. The company focuses on portable and household energy storage products. Benefiting from the explosion of overseas demand, it is expected to continue to maintain rapid growth. It is expected that the company's energy storage battery business will achieve revenue of 39/84/1.68 billion yuan in 2022/2023/2024, respectively, an increase of 205%/+115%/+100% year-on-year, and the gross profit margin is 18.0%/.18.0%/18.0%/18.0% respectively.
4. Lithium-ion battery cells: 's battery cells are partially used and partially sold to the outside world. The production capacity and scale are basically stable. It is estimated that the company's lithium-ion battery cell business will achieve revenue of RMB 176/212/254 million, respectively, up 35%/20%/20% year-on-year, and the gross profit margin remains stable at 15.0%.
In summary, the company is expected to achieve operating income of 2.835/4.259/6.035 billion yuan in 2022/2023/2024, respectively, up 28%/50%/42% year-on-year, and gross profit margins are 19.6%/20.2%/20.0% respectively.
expense rate Assuming
sales expense rate: company's sales expense rate in 2019-2021 will be 4.0%/3.5%/3.0%, respectively, which is on a downward trend and is expected to remain relatively stable in the future. It is expected that the company's sales expense rate will be 3.2%/3.0%/3.0% respectively from 2022-2024.
administrative expense ratio: Company's administrative expense ratio in 2019-2021 was 4.7%/4.2%/3.9%, respectively, and is expected to remain stable in the next few years. It is expected that the company's administrative expense ratio will be 4.1%/4.0%/4.0%/4.0% respectively in 2022-2024.
R&D expense ratio: Company's R&D expense ratio in 2019-2021 was 4.4%/4.3%/4.5%, respectively, which remained relatively stable. With the iterative upgrade of the battery industry's technical route, it is expected that the company will maintain a large proportion of R&D investment, and the company's R&D expense ratio in 2022-2024 will be 4.8%/4.3%/4.3%/4.3% respectively.
Financial expense ratio: Company's financial expense ratios in 2019-2021 were 0.5%/0.9%/0.1%, respectively. In 2022, the company's financial expense ratio decreased. It is expected that the company's financial expense ratio will be -0.1%/0%/0% respectively in 2022-2024.
Company valuation
From the industry perspective, the light vehicle lithium-ion battery and energy storage battery industries are in a stage of rapid growth, and the industry is growing rapidly; from the company perspective, affected by the demand of downstream industries and fluctuations in upstream raw material prices, the company's overall revenue and net profit growth rate fluctuated greatly. Absolute valuation method DCF valuation requires the company to continue and maintain stable operations and profits, so the company is not applicable to the DCF valuation method, and the company is valuated by the relative valuation method.
is a leading domestic light power lithium battery enterprise, with its business covering lithium-ion batteries, energy storage batteries, consumer batteries and lithium-ion batteries for light vehicles. In 2021, the company's overseas revenue accounted for about 52%, and in Europe, the market share of electricity-powered bicycle lithium batteries reached 20%, ranking among the forefront of the industry.
As the domestic and foreign electric two-wheeler industry continues to flourish, coupled with policies and consumption upgrades, it is expected that the company will maintain steady growth in the field of light vehicle lithium-ion batteries; at the same time, the company seizes the development opportunities of the energy storage industry, focuses on portable and household energy storage products, and has significant business growth.
We expect the company's net profit attributable to shareholders in 2022/2023/2024 to be 183/302/412 million yuan respectively. At the same time, Penghui Energy, Yiwei Lithium Energy, Xinwangda, and Paineng Technology were selected as comparable companies. The average PE in 2023 is about 26x (of which Penghui Energy, Yiwei Lithium Energy, and Xinwangda are Wind's consistent expectations corresponding to PE). We give the company a 26x PE valuation in 2023, corresponding to a target market value of 7.8 billion yuan in 2023, and the corresponding target price is 78 yuan per share.
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In the future, with the decline in the cost of optical storage, the gap between residents' electricity prices and optical storage LCOE scissors is expected to increase, promoting the increase in demand for residents' users.
Using energy storage and portable energy storage are the same in terms of technology, products and channels, and the growth space for household energy storage is even greater.
household energy storage and portable energy storage have synergistic effects in technology and industrial chain distribution, and the technology span of high-power products of household storage is not large. Both belong to the category of consumer electronics , and they are both power supply categories. To C application brand awareness and channels have synergy. Household energy storage is currently in the early stages of industry development and has huge development potential.
The proportion of new household energy storage installed capacity overseas is higher than that in China.
From the perspective of application scenarios, according to CNESA data, the global new electrochemical energy storage projects in 2020 are mainly used for renewable energy grid connection, accounting for about 48%, followed by household energy storage, accounting for 21%.
In comparison, among the new domestic electrochemical energy storage projects in 2020, the proportion of renewable energy grid connection was 40%, peak-shaving, frequency regulation and auxiliary services accounted for 23%/21%, and household energy storage accounted for only 14%, lower than overseas.
is expected to add about 100GWh of the global household storage products by 2025, corresponding to a CAGR of 98.8% from 2021 to 2025. According to historical statistics from IHS Markit and GGII, the global household storage products installed capacity in 2021 was about 6.4GWh, an increase of 156% year-on-year.
According to GGII, the new installed capacity of household storage products in the global 2022 is expected to reach 15GWh, an increase of 134% year-on-year; under optimistic estimates, the global installed capacity is expected to reach 100GWh in 2025, corresponding to the industry CAGR of 98.8% from 2021 to 2025.
leads the light power industry, and the portable and household energy storage business is growing rapidly
Technology: Battery products have excellent performance, focusing on technology research and development
Light vehicle lithium-ion batteries have high requirements for quality, safety, etc.
In the field of light vehicle use, since the application environment is mainly outdoor dynamics, the standards and parameters of lithium-ion batteries are required for high requirements, and there are many test projects. Among them, safety is the focus of the test, which is mainly reflected by the operating temperature range of lithium-ion batteries, whether the battery pack will be short-circuited at a specific temperature, and whether the battery will catch fire or disintegrate during the charging and discharging test.
In addition, due to the complexity of the working environment of lithium-ion batteries for light vehicles, waterproof level test is also required to determine the protection level of its shell against foreign object intrusion. The larger the number, the higher the protection level of the product.
The company's light vehicle lithium-ion battery pack uses a 36V nominal voltage platform, and its product performance is in the leading position in the industry.
Compared with the 36V voltage platforms of other companies in the industry, the company's lithium battery capacity can reach up to 20Ah, which is at the leading level in the industry; the company's products have more diverse communication methods, including CANBus, UART, etc.; in terms of system compatibility, in addition to being compatible with BOSCH, ANANDA and other systems, the company's products can also be compatible with BAFUNG, MOTINOVA, POLINI and other systems, which is more flexible than other companies in the industry. In terms of waterproofing level, the company's waterproofing level can achieve IPX7, which is higher than the waterproofing level of Bosch and BMZ's 36V nominal voltage platforms.
Overall, the company's 36V light vehicle lithium-ion batteries have higher quality and better safety, and are in the leading position in the industry.
attaches great importance to technology research and development and actively lays out new technologies.
From 2019 to 2021, the company's R&D expenses were RMB 46/61/99 million, respectively, up 23.3%/33.5%/62.5% year-on-year, and the number of R&D personnel was 152/190/313, accounting for 10.9%/9.3%/13.4% of the company's overall number of employees. The company's R&D investment and the number of R&D personnel have increased significantly in recent years, reflecting the company's high attention to technology R&D.
In addition, according to the company's 2022 semi-annual report, the company is currently actively developing new materials systems and actively laying out new technologies, including high-energy density lithium iron phosphate battery , low-temperature lithium iron phosphate battery, 2200Wh AC2400W energy storage batteries, solid and quasi-solid state lithium ion battery products, sodium ion battery products, etc., and most of the new technology research and development can be applied in the energy storage field.
Customer: Overseas revenue accounts for a high proportion, and high-quality customer resources
Overseas revenue accounts for more than 50%. According to the company's regional revenue structure in recent years, the company's domestic and overseas revenue distribution is relatively even, basically maintaining at about 50%. From 2018 to 2021, the company's overseas revenue was 42/49/73/1.09 billion yuan, accounting for 47.9%/51.8%/53.7%/52.0% of the company's total revenue, respectively. The company's overseas revenue mainly comes from its light vehicle lithium-ion battery business, and its customers mainly come from Europe and other places.
has high-quality customer resources and constantly develops potential new customers.
At present, the company has established stable cooperative relationships with high-quality foreign electric vehicles such as Germany Prophete, Romania EUROSPORT, Denmark EB Component, France Manufacture Francaise and other high-quality foreign electric vehicles; in China, it has also developed well-known electric two-wheeled vehicle companies such as Maverick Electric , Yadi Holdings, Emma Technology , and Xinri Co., Ltd.
In addition, the company has successfully developed electric off-road motorcycle customers such as Qiulong Technology, and has developed DJI , Xinbao Co., Ltd., and GOAL ZERO in the field of consumer electronics and energy storage products. In 2020 and 2021, the total sales of the company's top five customers accounted for 24.8% and 26.4% respectively, and the customer structure was relatively dispersed. In 2021, Leader 96 and Yongqi (China) entered the company's top five customer systems for the first time, and the company's new customer development results were remarkable.
Supply Chain: Layout the battery cell link and switching large battery cell platforms are expected to improve profitability
The cost structure of direct material accounts for more than 85%, mainly affected by the price fluctuations of raw material . In the company's cost structure, direct materials accounted for the largest proportion, accounting for 85.9% and 86.4% respectively in 2020/2021. The increase in the proportion of direct materials costs in 2021 is mainly affected by the increase in raw material prices.
battery cell procurement costs account for more than 50%, which is the company's main raw material cost.
From 2018 to 2020, among the main raw materials purchased by the company, the purchase amount of lithium-ion cells accounted for the largest proportion, 47.6%, 55.0%, and 56.1% respectively; followed by electronic component , accounting for 21.1%, 15.1% and 16.2% respectively from 2018 to 2020. Among the raw materials used in the company's lithium-ion cell production, the proportion of the procurement amount of positive electrode materials is the highest, 18.9%, 12.9% and 7.6% respectively.
acquires CapitaLand New Energy to deploy lithium-ion battery cells, leading the industry in terms of technical indicators.
In 2017, the company acquired CapitaLand New Energy to expand into the upstream battery cell field, and currently produces 18650 products with a capacity of 2,600mAh. The 18650 battery cell products produced by the company have an energy density of 535Wh/L and an operating voltage range of 4.2-2.75V, which can be compared with the products of the industry such as 0-violet lithium energy , Penghui Energy, LG and Panasonic .
In addition, the company's product operating temperature range is between -20℃ and 60℃, reaching the industry average, with up to 1,000 cycles, which is at the industry-leading level.
battery cell technology platform switches to 21700 large battery cell, with high energy density and low cost advantages.
As the diameter of the cylindrical battery increases, the proportion of mass of structural parts and other components decreases, and the battery capacity increases, further reducing the production cost of battery single Wh. Taking the Tesla 18650 battery and 21700 battery as an example, compared with 18650, the battery cell capacity of 21700 can be increased by about 33.3%-36.4%, the system energy density is increased by about 20%, the system cost is reduced by about 9%, and the system price is reduced by about 8%.
According to the company's 2022 semi-annual report, the company is currently actively promoting the conversion of battery cell technology platform from 18650 to 21700 to digest cost pressure internally. We expect that the switching of large battery cell platforms is expected to significantly increase the company's product energy density and reduce production costs.
self-produced and purchased, and the self-supply rate of battery cells is expected to further increase.
Company's lithium-ion battery pack products adopt a combination of self-produced battery cells and purchased battery cells. The proportion of self-produced battery cells from 2018 to 2020 was 27.3%, 26.1% and 22.1% respectively. In addition to using self-produced battery cells, the company also purchases battery cells from domestic and foreign brands such as LG, Panasonic, Samsung , Lishen to meet the customized needs of some customers.
With the company's further investment in the production and application of lithium-ion cells in the future, it is expected that the proportion of self-produced batteries for the company is expected to further increase. At the same time, with the switching of large battery cells platforms, it is expected to improve the profitability of batteries.
Energy storage: Focusing on the fields of portable and household energy storage, the business growth is significant
The company has rich energy storage products and a variety of application scenarios.
In the field of energy storage battery products, the company has started to develop and produce energy storage batteries, develop spare batteries for outdoor activities, and backup batteries during power outages since 2016. At present, the company's energy storage products are mainly sold for portable and household energy storage products, and also include mobile power supply , automotive emergency start-up power supply and other energy storage lithium batteries. The products are rich in variety and can be used in different application scenarios.
Energy storage business is developing rapidly, and its revenue share is gradually increasing.
2019-2021H1, the company's energy storage business revenue was RMB 0.15/0.53/128/124 million, respectively, -12.1%/+265%/+140%/+136% year-on-year, accounting for 1.54%/3.94%/6.10%/10.1% of the main business revenue, respectively.
The company's energy storage business revenue has grown rapidly, mainly due to the shortage of energy in Europe this year and the sharp increase in the demand for household roof photovoltaics and energy storage installed capacity.
From 2018 to 2021, the gross profit margins of the company's energy storage business were 13.5%/22.3%/23.0%/16.8%, respectively, mainly due to the rise in the prices of major upstream raw materials and the impact of exchange rate fluctuations.
binds a major customer Goal Zero to open the US portable energy storage market.
Judging from the distribution of portable energy storage sales in 2020, the United States is the world's largest portable energy storage market, accounting for about 47.3%, and the Japanese market accounted for about 29.6%, and the two together accounted for more than 75%.
company's portable energy storage battery products are mainly sold to American customer Goal Zero. According to statistics from China Chemical and Physical Power Industry Association , Goal Zero's global portable energy storage market share (by shipment volume) in 2020 was about 5.6%, ranking third in the world.
In the future, with the growing industry demand and the company's continuous development of downstream customer channels, the company's energy storage business is expected to maintain rapid growth.
storage products have excellent performance and are expected to benefit from the explosion of overseas demand.
In the field of home energy storage, the CN012 product produced by the company has a capacity of 72000mAh, a nominal voltage of 51.2V, a standard charge and discharge current of 36A, a maximum continuous discharge current of 72A, a working voltage of 44.8V~56.4V, the product's working and storage temperature range is -20~55℃, and it has strong environmental adaptability.
The company's household energy storage products have excellent performance and are mainly aimed at overseas markets. It is expected to usher in rapid growth due to the explosion of industry demand overseas since 2022.
In recent years, the company's lithium battery and battery cell capacity utilization rate has steadily increased.
From 2018 to 2020, the company's consumer electronic lithium battery production capacity was 6.33 million, 7.52 million, and 15.83 million units, respectively, with a capacity utilization rate of 80.0%/90.2%/94.0% respectively; the production capacity of lithium-ion batteries for light vehicles was 71/73/1.03 million units, with a capacity utilization rate of 96.0%/93.4%/99.2% respectively; the production capacity of lithium-ion batteries was 5276/54 million units, with a capacity utilization rate of 60 million units, with a capacity utilization rate of 83.6%/88.2%/94.9% respectively. The capacity utilization rate of consumer electronic lithium batteries, light vehicle lithium-ion batteries and lithium-ion cells of
company has steadily shown an overall upward trend.According to the company's 2021 annual report, the company's production capacity has expanded by 70% to meet the supply demand of the market for light vehicle lithium-ion batteries.
capacity layout has been increased again, and the capacity utilization rate is expected to maintain a large elasticity.
According to the company's announcement, in August 2021, the company signed an investment agreement with the People's Government of Wangniudun Town, Dongguan City, intending to invest 3 billion yuan to build the Bolivi lithium battery cell and energy storage battery R&D and production headquarters project, and provide land supply and construction in two phases. The company is expected to be completed in 5-6 years, with an annual output value of about 2.4 billion yuan. In December 2021, the company's wholly-owned subsidiary Dongguan CapitaLand successfully won the first phase of the project land for 41.81 million yuan. As the Wangniudun base is gradually completed and put into production, the company's production capacity is expected to reach a higher level.
In addition, the energy storage batteries produced by the company are small household energy storage products, and are mainly packs. Compared with battery cells, PACK has small investment and short production expansion cycle. It is expected that when demand in the energy storage industry explodes, the company can maintain a high capacity utilization elasticity and meet the needs of downstream customers well.
Risk factors
1) The demand for light electric two-wheeler industry is lower than expected risk:
The company's light vehicle lithium battery business is mainly aimed at overseas markets such as Europe. If the impact of factors such as inflation in Europe, the Russian-Ukraine war, and energy shortage continues in the future, the demand for light electric two-wheeler may slow down or decline, which will have an adverse impact on the company's overseas market business.
2) The demand for the energy storage industry is lower than expected:
In recent years, the demand for the energy storage industry, especially the small and medium-sized energy storage such as household energy storage and portable energy storage, has increased significantly, and the company's energy storage business has also maintained a rapid growth trend. If the demand for the energy storage industry in the future is lower than expected, it may have an adverse impact on the company's energy storage business shipments and profit levels.
3) Risk of intensifying competition in the lithium battery industry:
company mainly produces lithium-ion batteries, used in light two-wheeled electric vehicles, consumer electronic products and energy storage industries. The lithium battery industry has significant growth and many new players have entered the market. If the competition in the industry intensifies in the future, it may have an adverse impact on the market structure and the company's profitability.
4) Risk of rising raw material prices: The battery products produced by
need to be upstream raw materials including battery cells, electronic components, structural parts, positive electrode materials, negative electrode materials, diaphragms, electrolytes, etc. The raw material prices are fluctuating due to the supply and demand relationship. If the price of upstream raw materials continues to rise, it may have an adverse impact on the company's profitability.
5) Risk of customer development not as expected:
Company is actively developing downstream customers in light power, energy storage and other business fields to achieve an increase in shipment volume and market share. If downstream customers develop less than expected, it will have an adverse impact on the company's sales revenue.
6) Risk of change in technical route:
The battery products currently produced by the company are mainly lithium batteries. If the industry's technical route changes significantly in the future, and the company cannot keep up with the industry's technological changes or the R&D progress is less than expected, it may have an adverse impact on the company's production, operation and market position.
Earnings Forecast and Valuation
Key Assumptions and Earnings Forecast
Industry Assumptions
1. Light vehicle lithium battery industry: has been catalyzed by the epidemic and consumption upgrades around the world, and the electrification process of the bicycle industry has accelerated. It is estimated that the global electric bike sales are expected to reach 14.3 million units by 2025, corresponding to a CAGR of 19% from 2021 to 2025. The global penetration rate of electric bikes is expected to increase from 6.3% in 2021 to more than 12% in 2025, which will effectively drive the demand for lithium-ion batteries for electric bicycles, and the market space will be broad in the future.
2. Energy storage lithium battery: According to GGII forecast, the global shipment of portable energy storage batteries in 2021 will be 1.3GWh, and the shipment is expected to reach 8.4GWh by 2026, corresponding to a 5-year CAGR+45%; in 2021, the new installed capacity of household storage products worldwide will be approximately 6.4GWh, an increase of 156% year-on-year.
GGII It is estimated that the global installed capacity of household storage products in 2022 is expected to reach 15GWh, an increase of 134% year-on-year; under optimistic estimates, the global installed capacity is expected to reach 100GWh in 2025, corresponding to the industry CAGR of 98.8% from 2021 to 2025.
Company business operations assumptions
1. Lithium-ion batteries for light vehicles: is a leading domestic light power lithium battery company. In 2021, the revenue of the young automotive lithium-ion battery business accounts for 55.5%. The company's products are mainly aimed at the domestic and foreign electric two-wheeled vehicle markets, and the customer structure is high-quality.
In the medium and long term, with the increase in lithium battery penetration rate in the domestic and foreign two-wheeler markets, it is expected that the company's light vehicle lithium-ion battery business is expected to maintain rapid growth. It is expected that the revenue in 2022/2023/2024 will be 1.518/2.366/3.121 billion yuan, respectively, up 23%/+56%/+32% year-on-year.
main assumptions are as follows:
1) Shipping volume assumptions: In 2021, the company's shipment of lithium-ion batteries for light vehicles was 1.7 million sets, a year-on-year increase of 71%. In 2022, due to factors such as rising upstream raw material prices, overseas inflation and rising energy prices, the sales growth rate slowed down. It is estimated that the company's shipment of lithium-ion batteries for light vehicles will be 209/300/3.84 million sets, a year-on-year increase of 23%/+43%/+28%.
2) Unit price assumption: The average selling price of the company's light vehicle lithium-ion battery pack in 2020/2021 is 657/723 yuan respectively. With the rise in raw material prices and the switching of large-capacity batteries, the price of the company's lithium battery pack is expected to continue to increase. It is estimated that the average selling price of a single lithium battery pack in 2022/2023/2024 will be 725/790/813 yuan respectively.
3) Gross profit margin assumption: In the first half of 2022, the rise in the price of lithium battery raw materials puts certain pressure on the company's gross profit margin. With the smooth transmission of the company's price increase to some downstream customers, the impact of the price increase of some raw materials can be offset. It is expected that the gross profit margins of the company's 2022/2023/2024 young automotive lithium-ion batteries will be 22.0%/23.0%/23.0% respectively.
2. Consumer electronics batteries: From the perspective of industry demand, the shipments of IT digital products represented by laptops and mobile phones continue to decline, and the industry's growth rate is slowing down. It is expected that the company's consumer electronics battery business will remain consistent with the industry's growth rate. It is expected that the company's consumer electronics battery revenue will be RMB 596/640/718 million in 2022/2023/2024, respectively, of -2%/+7%/+12% year-on-year, and the gross profit margin will be RMB 18.1%/17.2%/16.4% respectively.
3. Energy storage batteries: In 2021, the company's energy storage battery business achieved revenue of 12.8 billion yuan, an increase of 140% year-on-year, achieving more than double growth. The company focuses on portable and household energy storage products. Benefiting from the explosion of overseas demand, it is expected to continue to maintain rapid growth. It is expected that the company's energy storage battery business will achieve revenue of 39/84/1.68 billion yuan in 2022/2023/2024, respectively, an increase of 205%/+115%/+100% year-on-year, and the gross profit margin is 18.0%/.18.0%/18.0%/18.0% respectively.
4. Lithium-ion battery cells: 's battery cells are partially used and partially sold to the outside world. The production capacity and scale are basically stable. It is estimated that the company's lithium-ion battery cell business will achieve revenue of RMB 176/212/254 million, respectively, up 35%/20%/20% year-on-year, and the gross profit margin remains stable at 15.0%.
In summary, the company is expected to achieve operating income of 2.835/4.259/6.035 billion yuan in 2022/2023/2024, respectively, up 28%/50%/42% year-on-year, and gross profit margins are 19.6%/20.2%/20.0% respectively.
expense rate Assuming
sales expense rate: company's sales expense rate in 2019-2021 will be 4.0%/3.5%/3.0%, respectively, which is on a downward trend and is expected to remain relatively stable in the future. It is expected that the company's sales expense rate will be 3.2%/3.0%/3.0% respectively from 2022-2024.
administrative expense ratio: Company's administrative expense ratio in 2019-2021 was 4.7%/4.2%/3.9%, respectively, and is expected to remain stable in the next few years. It is expected that the company's administrative expense ratio will be 4.1%/4.0%/4.0%/4.0% respectively in 2022-2024.
R&D expense ratio: Company's R&D expense ratio in 2019-2021 was 4.4%/4.3%/4.5%, respectively, which remained relatively stable. With the iterative upgrade of the battery industry's technical route, it is expected that the company will maintain a large proportion of R&D investment, and the company's R&D expense ratio in 2022-2024 will be 4.8%/4.3%/4.3%/4.3% respectively.
Financial expense ratio: Company's financial expense ratios in 2019-2021 were 0.5%/0.9%/0.1%, respectively. In 2022, the company's financial expense ratio decreased. It is expected that the company's financial expense ratio will be -0.1%/0%/0% respectively in 2022-2024.
Company valuation
From the industry perspective, the light vehicle lithium-ion battery and energy storage battery industries are in a stage of rapid growth, and the industry is growing rapidly; from the company perspective, affected by the demand of downstream industries and fluctuations in upstream raw material prices, the company's overall revenue and net profit growth rate fluctuated greatly. Absolute valuation method DCF valuation requires the company to continue and maintain stable operations and profits, so the company is not applicable to the DCF valuation method, and the company is valuated by the relative valuation method.
is a leading domestic light power lithium battery enterprise, with its business covering lithium-ion batteries, energy storage batteries, consumer batteries and lithium-ion batteries for light vehicles. In 2021, the company's overseas revenue accounted for about 52%, and in Europe, the market share of electricity-powered bicycle lithium batteries reached 20%, ranking among the forefront of the industry.
As the domestic and foreign electric two-wheeler industry continues to flourish, coupled with policies and consumption upgrades, it is expected that the company will maintain steady growth in the field of light vehicle lithium-ion batteries; at the same time, the company seizes the development opportunities of the energy storage industry, focuses on portable and household energy storage products, and has significant business growth.
We expect the company's net profit attributable to shareholders in 2022/2023/2024 to be 183/302/412 million yuan respectively. At the same time, Penghui Energy, Yiwei Lithium Energy, Xinwangda, and Paineng Technology were selected as comparable companies. The average PE in 2023 is about 26x (of which Penghui Energy, Yiwei Lithium Energy, and Xinwangda are Wind's consistent expectations corresponding to PE). We give the company a 26x PE valuation in 2023, corresponding to a target market value of 7.8 billion yuan in 2023, and the corresponding target price is 78 yuan per share.
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