Head picture source | catl official
The battery companies that supply the car companies leave the vast majority behind.
On February 3, 2020, the first day of the market after the Spring Festival, the new crown epidemic led to the overall green of the stock market. However, with the news of winning Tesla as a big customer, Ningde times has become “a little red in the green cluster”, with its share price rising to a record high of 137.6 yuan and its market value exceeding 300 billion yuan.
A year later, Ningde era has once again brought investors a “perfect start”.
On the first day of market opening in 2021, Ningde times’ stock price broke through the 400 yuan mark, and its market value stood at 900 billion yuan. As of January 6, the share price of Ningde times closed at 406.77 yuan, up more than 274.9% in the past year, with a market value of 941.340 billion yuan, ranking second only to Wuliangye, and only one breath away from the trillion yuan market value.
Source: Google Finance
On June 11, 2018, Ningde times was listed on Shenzhen stock exchange with an issue price of 25.14 yuan per share. On June 12, the first day of Ningde era’s opening, the share price rose 44%, closing at 36.2 yuan per share, with a total market value of 78.642 billion yuan. In less than three years, the share price of Ningde times has increased 15 times than the issue price, and the market value has increased more than 10 times.
From the perspective of the market, the news that Tesla Model y was listed on January 1 triggered A-share concept stocks, and the new energy vehicle concept stocks represented by Ningde era burst out simultaneously. On the other hand, the factors influencing the rise of Ningde times’ share price also include the announcement that Ningde times will invest nearly 39 billion yuan to build three battery manufacturing bases by the end of 2020.
Of course, it is far more than that that that has propped up nearly a trillion yuan of market value in the Ningde era.
Market value surpasses PetroChina
Magic 2020 in Ningde Era
2020 is magic, especially in Ningde era. In December 2020, this battery R & D and manufacturing company, which has been established for less than 10 years and listed for less than 3 years, surpassed PetroChina in market value, and was interpreted as the end of an era by the outside world.
Source: Google Finance
Historically, the good fortune of Ningde era in the industry is closely related to the “standard conditions for automotive power battery industry” issued by the Ministry of industry and information technology in 2015. The latter and the list of four batch of enterprises that meet the “standard conditions” published in succession are called the “white list” of power batteries. At that time, Ningde era ranked first among the first batch of enterprises on the “white list” with boundless scenery.
However, with the official abolition of the “white list” in June 2019, Ningde era, like all other players, must go to the market to compete with their ability. It is particularly important to win the order of Tesla, the industry leader.
On February 3, 2020, Ningde Times announced that it would supply lithium-ion power battery products to Tesla, thus taking advantage of the localization of Tesla Model 3. “With the improvement of localization rate of Shanghai factory model 3 and model y, we have entered the Ningde era of supplier system and become the most direct beneficiary.” Liang Chen, an analyst at Orient Securities Investment Bank, said in an analysis of ID: Auto time.
Cost is one of the most important factors for Tesla to choose Ningde era. “Musk talks about cost every day.” Zeng Yuqun, chairman of Ningde times, said in an interview earlier, “I told him that I would solve the problem of battery cost and let him not worry.”
Bernstein, a foreign analyst, said that the manufacturing cost of a Chinese made Tesla Model 3, equipped with a smaller and cheaper LiFePO4 battery in Ningde era, will drop from $600 to $1200 (about 4200 to 8400 yuan) per car.
Thanks to the drop in battery costs, the domestic model 3 also helped Tesla reap more market share. In 2020, Tesla will deliver a total of 499550 electric vehicles in the world, among which Tesla’s performance in China is outstanding. According to the data of the passenger car Association, from January to November 2020, the cumulative sales volume of domestic model 3 in China will exceed 110000.
While holding on to Tesla, Ningde era signed a big deal with Mercedes Benz and Honda. In addition to BMW, Volkswagen, Toyota and Hyundai, almost all the leading car companies in the global electric vehicle field are stationed in the downstream of Ningde era.
Ningde era, which is constantly seizing orders, urgently needs to break the ceiling of maintaining production capacity. In 2020, Ningde era will expand production on a large scale simultaneously.
In February and July 2020, Ningde times invested 10 billion yuan and 19.7 billion yuan to expand its production capacity. In the next 2-4 years, with the above two projects reaching production capacity, CICC predicts that Ningde times will add a total capacity of 120-150gwh, which is more than the total installed capacity of global power batteries in 2019 (115.21gwh).
In addition, in order to further reduce the cost of the battery, Ningde times is hoping to use nickel and manganese to replace cobalt, which is the most expensive raw material of the battery. To this end, Ningde times also announced in December 2020 that it will invest US $5 billion to build a battery factory in Indonesia, the world’s first nickel producer and exporter. The factory is expected to be officially put into operation in 2024.
Ningde times 2020 chronicle drawing: future auto daily
Struggling to regain the “iron throne”
The hidden worries behind the soaring stock price
The market value of Ningde era is far behind not only PetroChina, but also many Chinese and foreign auto companies.
Up to now, the market value of Ningde times (about 914.3 billion yuan) has exceeded that of Volkswagen Group (about 635.4 billion yuan) and BYD (about 545.8 billion yuan), and even exceeded the total market value of Great Wall Motor, SAIC, Geely motor and Chang’an Motor (about 896.12 billion yuan).
Being crushed by an upstream power battery company in terms of market value, auto companies may not like this capital story. In recent years, the new energy revolution in the automotive industry has made the automotive companies realize that it is related to the redistribution of interests, and everyone wants to have more say in the future.
In the process of industry reshuffle, Ningde era, which is “led” by new energy vehicles, is no longer the only choice for car companies.
BMW Brilliance, the “Bole” of Ningde era, chose Yiwei lithium energy in July 2020; Volkswagen invested 1.1 billion euro in GuoXuan high tech in 2020, and chose Wanxiang 123 as the supplier; Mercedes Benz also invested 10 million euro in Funeng technology.
Orders are divided, and the “iron throne” of Ningde era will be shaken in 2020.
According to the statistics of SNE research, a South Korean energy market analysis company, from January to November 2020, the cumulative installed capacity of global electric vehicle batteries in Ningde times was 28.1gwh, taking the lead with 24.2% of the market share. In the same period, the installed capacity of LG new energy (formerly LG Chemical) was 26.4gwh, taking the second place with 22.6% of the market share.
But before that, the advantages of Ningde era were once overtaken. LG always leads the world in total installed capacity until March 2020.
Such a competitive situation reflects the weakness of Ningde era in overseas market development. In 2020, the European new energy vehicle market is developing rapidly. In the first half of the year, when China’s new energy vehicle sales fell 44% year-on-year, the European market experienced a year-on-year growth of 52%.
Zeng Yuqun source: world new energy vehicle Conference
The rise of new energy vehicle market in Europe gives LG Chemical a share. General Motors, Renault, Daimler, Volkswagen and other enterprises are LG Chemical’s “fanatical supporters”. In July 2020, Reuters reported that Tesla has increased orders to LG Chemical, which plans to produce batteries for Tesla cars in domestic factories from 2021.
In the first three quarters of 2020, LG Chemical’s installed capacity will reach 19.13gwh. In the third quarter, sales of LG’s chemical battery business reached US $2.62 billion and operating profit reached US $140 million, both of which reached a record high.
In contrast, in Ningde era, it did not have a large shipment volume in Europe. Although the “circle of friends” of automobile enterprises in Ningde era is very luxurious, “the main supply market is still located in China, and the market in North America and Europe is still in the stage of expansion.” Vinson, an insider of Ningde times, told future auto daily. The factory invested by Ningde times in Germany is not expected to be put into operation until 2021, and the annual capacity of 14gwh batteries will be realized by 2022.
Although “injured” in the first half of 2020, Ningde era has gradually recovered “vitality” in the second half of 2020. On the evening of October 27, 2020, Ningde times released its third quarterly report. According to the data, the company achieved an operating revenue of 12.7 billion yuan in the third quarter, a year-on-year increase of 0.8%, and a net profit of 1.42 billion yuan, a year-on-year increase of 4.24%.
Although the gross profit rate in the financial data has declined successively from 2016 (43.70%) to the third quarter of 2020 (27.41%), in the eyes of many investors, it still does not constitute a reason to see the era of declining Ningde. “Gross margin is not the core index to measure valuation. EPS (earnings per share) and PE (price earnings ratio) are growing, and it doesn’t matter if gross margin falls.” Liang Chen said that the capital market is still focused on the embodiment of the strength of Ningde era in the energy alternating industry.
In December 2020, TWH will enter the era of lithium industry. This means that in the next five years, lithium batteries will usher in a ten fold capacity expansion. Combined with the current overall rising trend of new energy vehicles, the “valuation myth” of Ningde era may continue, and it is only a matter of time before we move into the trillion market value club.
But in the industry where everything is still changing, Ningde era needs to show more sexy technology and strength in order to achieve greater development goals and stabilize its position as the first brother of power battery.
(all the interviewees are pseudonyms)