Lithium battery material factories ushered in a cycle recovery?

On the evening of April 9, the 2024 annual report disclosed by A-share lithium battery material manufacturer Rongbai Technology (688005.SH) showed that its operating income during the reporting period was 15.088 billion yuan, a year-on-year decrease of 33.41%; the net profit attributable to the parent company was 296 million yuan, a year-on-year decrease of 49.06%; The net profit deducted from non-attributable to the parent company was 244 million yuan, a year-on-year decrease of 52.64%.

"Mainly due to the adjustment of the company's product selling price with the decline in the price of raw materials." Rongbai Technology explained the reasons for the decline in operating income in the financial report, "The sales volume of the company's main products was 123,000 tons, a year-on-year increase of 21.82%, and the company's global ternary market share exceeded 12%, which was further increased by 2 percentage points compared with 2023, and remained the first in the world for four consecutive years." ”

Although the overall revenue of Rongbai Technology is declining compared with 2023, it is not difficult to see that the company's business has begun to change from the perspective of the subdivided quarterly indicators, and its quarterly net profit attributable to the parent company has shown a trend of increasing quarter by quarter; Cash flow from operating activities increased from -1,001 million yuan in the first quarter of 2024 to 1,008 million yuan in the fourth quarter of that year.

Source: Screenshot of the official website of Rongbai Technology

On April 10, the share price of Rongbai Technology closed at 19.45 yuan per share, up 4.46%. On performance and other related issues, Times Finance has called the office of the secretary of the board of directors of Rongbai Technology many times, but as of press time, the phone has still not been answered.

From a single-quarter loss of more than 37 million to a net profit of 180 million

Ronbay Technology's 2024 annual report is a "live report" for investors to spy on the lithium battery cycle.

Times Finance noticed that although the overall revenue of Rongbai Technology is declining compared with 2023, it is not difficult to see that the company's business has begun to change from the perspective of the subdivided quarterly indicators.

According to the financial report data, from the first quarter to the fourth quarter of 2024, Rongbai Technology achieved operating income of 3.692 billion yuan, 3.196 billion yuan, 4.436 billion yuan and 3.764 billion yuan respectively, net profit attributable to the parent company of -37.2416 million yuan, 47.5195 million yuan, 106 million yuan and 180 million yuan respectively, and cash flow from operating activities increased from -1.001 billion yuan in the first quarter to 1.008 billion yuan in the fourth quarter.

According to data from EVTank, a research institution, global sales of new energy vehicles will reach 18.236 million units in 2024, a year-on-year increase of 24.4%. Global power battery shipments have continued to grow, driven by the new energy vehicle market. According to data from the research institute SNER, the total installed capacity of global power batteries in 2024 will be 894.4GWh, a year-on-year increase of 27.2%. According to the data of Xinchun Lithium Battery, an enterprise information platform in the battery industry, the global ternary material output in 2024 will be 953,000 tons, of which China's ternary material output will be 614,000 tons.

These data show that the growth of the market is still there, and also explain why the operating performance of Rongbai Technology has shown a quarter-by-quarter increase.

Ronbay Technology mentioned that with the full production of the South Korean factory in the fourth quarter, the sales volume of overseas customers and the proportion of ultra-high nickel product sales were further increased, and the annual operating income was 15.088 billion yuan and the net profit was 329 million yuan.

According to Times Finance, the current overseas production capacity of Rongbai Technology mainly includes the production capacity layout of South Korea with an annual output of 20,000 tons of high-nickel ternary and 6,000 tons of precursors, and another 40,000 tons of high-nickel production capacity has been completed, which is expected to be put into trial production in the first half of 2025; In Europe, the first phase of the 20,000-ton medium/high nickel ternary material project in Poland is progressing, and the main project is planned to be completed in 2025; In North America, the subsidiary was registered and entered the start-up stage.

From the perspective of business composition, Rongbai Technology has made a targeted layout of almost all cutting-edge technologies.

According to the financial report, the daily business of Rongbai Technology is divided into five major businesses: ternary cathode, lithium manganese iron phosphate, sodium battery, precursor, and equipment. Among them, ternary cathode materials are the core business of Ronbay Technology, and its products can be applied to emerging markets such as solid-state batteries, low-altitude economy, and humanoid robots, while precursors, lithium manganese iron phosphate, and sodium electricity are regarded as strategic businesses by the company to help realize the company's strategic layout and customer position.

Solid-state batteries are the most noteworthy label for investors on Ronbay Technology.

Rongbai Technology clearly mentioned in the financial report that at present, the demand for high-end batteries with high energy density and long battery life for high-end models in the European and American markets is clear, and high-nickel/ultra-high-nickel ternary is still the best choice at present. Especially with the gradual industrialization of solid-state batteries, the requirements for energy density are getting higher and higher, and high-nickel/ultra-high-nickel ternary materials will be the best choice for solid-state batteries.

But solid-state batteries are still some way from being fully commercialized.

"Solid-state batteries also have to pass the technical route, experimental verification, and production process, the advantage is that the essence is safer, so that the electrolytic layer of the lithium-ion battery from the flammable liquid state, into a non-flammable solid, and its form has hardness, not easy to be pierced by lithium dendrites and short circuit positive and negative electrodes, the thickness of the layer is smaller, the battery is lightweight and the capacitance is better. However, there are still problems to be overcome in terms of solid-state interface impedance, large changes in long-term use interface, and process, equipment, and cost. Cao Guangping, a partner of Chefu Consulting, said in an interview with Times Finance.

Zhang Xiang, a visiting professor at the Yellow River Institute of Science and Technology, told Times Finance that solid-state batteries should have high requirements for the production process, and now many companies have announced the development of solid-state batteries, but there has been no large-scale mass production, which shows that the scrap rate is relatively high and the production process is not mature.

According to the China Inorganic Salts Association, in view of the need to reduce costs and improve energy density, high-nickel ternary and lithium-rich manganese-based cathode materials will become the main direction of research and development of cathode materials for solid-state batteries in the future. These materials are all within the business scope of Ronbay Technology.

Soochow Securities research report pointed out that in terms of solid state, sulfide electrolyte has been recognized by many domestic and foreign customers, and the pilot line will be completed in 2025. According to Times Finance, the current technical route of all-solid-state batteries focuses on sulfide electrolytes.

Xiantao Tycoon started his business for the second time

The reason why Rongbai Technology will boldly bet on cutting-edge technology is closely related to Bai Houshan, the actual controller behind it.

Bai Houshan, born in Xiantao City, Hubei Province in 1964, is currently the chairman and general manager of Rongbai Technology, and is also a fellow villager of Lei Jun.

In 1980, Bai Houshan was admitted to Central South University, majoring in non-ferrous metallurgy, and four years later entered the Shenyang Institute of Mining and Metallurgy as an ordinary technician. In 1987, Bai Houshan studied heavy metal pyrometallurgy at Northeastern University, and after graduating with a master's degree, he entered the General Institute of Mining and Metallurgy in Beijing in 1990, and worked from assistant engineer to deputy director of the Metallurgical Office of the General Institute of Mining and Metallurgy.

In 1992, Bai Houshan served as the leader of an electronic ceramic additive product research group of the Beijing Mining and Metallurgical Research Institute's Beikuang Electronics Center, which was later listed company Dangsheng Technology (300073. SZ). In 2001, the North Mining Electronics Center was restructured, and Bai Houshan served as the chairman of Dangsheng Technology, making every effort to enter the lithium battery cathode material industry.

In 2010, Dangsheng Technology was in the leading position in the industry in the field of lithium battery cathode materials. In April of the same year, Dangsheng Technology landed on the Shenzhen Stock Exchange, and Bai Houshan joined the army of "technology wealth creation" as the fourth largest shareholder.

Whether it is professional or experience, Bai Houshan is a "veteran figure" of China's lithium battery chemical materials. However, due to the poor performance of Dangsheng Technology after its listing, under the pressure of several major shareholders, Bai Houshan's first entrepreneurial journey ended and left the market.

In 2013, Bai Houshan founded Rongbai Investment in the same year that he left Dangsheng Technology. In the following year, Bai Houshan used a large amount of money to obtain the control of the old battery manufacturer Jinhe Lithium Battery, and established "Ningbo Rongbai Lithium Battery Materials Co., Ltd." on the basis of Jinhe Lithium Battery, which is now Rongbai Technology.

After the establishment of Ronbay Technology, it specialized in ternary cathode materials. Under the leadership of Bai Houshan, Rongbai Technology soon became a major manufacturer in the field of ternary cathode. In just five years, Ronbay Technology has integrated global resources through mergers and acquisitions of overseas targets such as South Korea's JS Co., Ltd. and EMT Co., Ltd. In 2019, Bai Houshan landed on the Science and Technology Innovation Board with Rongbai Technology and officially became one of the "billionaires".

In fact, Bai Houshan was able to develop rapidly with Rongbai Technology, which is related to his radical expansion style.

As early as the era of Dangsheng Technology, Bai Houshan has attached great importance to capital operation and actively looked for venture capital for Dangsheng Technology. In the process of founding Ronbay Technology, venture capital institutions such as GSR Capital frequently appeared in the list of investment shareholders. According to market sources, Bai Houshan is good at operating capital and has set three iron laws for the company: technology must be ahead of the industry for three years, capital must be bound to the industry leader, and production capacity must exceed market demand.

However, the industry cycle is changing, and the performance curve of Rongbai Technology shows "big ups and downs" fluctuations, and the stock price has also followed the "roller coaster".

In the pro-cyclical period from 2019 to 2021, the operating income of Rongbai Technology soared from 4.190 billion yuan to 10.259 billion yuan, and the net profit attributable to the parent company jumped from 87 million yuan to 911 million yuan. In the counter-cyclical period that began in 2022, the operating income of Rongbai Technology fell from 30.123 billion yuan to 15.088 billion yuan in 2024, and the net profit attributable to the parent company fell from 1.353 billion yuan to 296 million yuan.

Flush iFind shows that from 2019 to 2021, the share price of Rongbai Technology has hit from the range of 40 yuan/share to more than 100 yuan/share, and in 2022, it will set a record high of 168.00 yuan/share, and then continue to fall, and the stock price shows a typical "A-word kill" trend.

With signs of positive changes in the performance of Ronbay Technology, it remains to be verified whether its stock price has a chance to return to the peak.

This article is from the WeChat public account "Times Finance APP" (ID: tf-app), author: He Mingjun, 36 Krypton is authorized to publish.