Author: Shi Ziyan
At present, benefiting from the rapid development of the new energy vehicle industry in recent years, the demand for power batteries has continued to rise, which has led to a significant increase in the demand for lithium battery electrolytes. Among them, electrolyte additives are quite beneficial as an indispensable and important part of the lithium battery industry chain. According to data from the China Business Industry Research Institute, the global lithium battery electrolyte additive market size in 2021 will be about 10.735 billion yuan, a year-on-year increase of 261.5%, while the average compound growth rate from 2016 to 2021 is as high as 56.88%, with a rapid growth trend. China Business Industry Research Institute predicts that the global lithium battery electrolyte additive market size is expected to reach 13.556 billion yuan in 2022, which will continue the industry’s high prosperity, which undoubtedly provides a very broad development space for enterprises in this field.
In this context, on July 13, Huasheng Lithium Battery (688353.SH), the leader in electrolyte additives for lithium-ion batteries, rang the bell and officially listed on the Science and Technology Innovation Board, opening a new chapter in the capital market. In the future, the company is expected to open a new growth cycle with the support of the capital market.
The prospectus shows that Huasheng Lithium Battery focuses on the research and development, production and sales of lithium battery electrolyte additives. The main products include two series of electronic chemicals and special silicones. Among them, the field of electronic chemicals is the company’s core business sector, and has gradually It has developed into a leading global supplier of the main additives vinylene carbonate (VC) and fluoroethylene carbonate (FEC). Photovoltaic power plants and many other fields.
Industry-leading electrolyte additive products
Boost performance to achieve strong growth
Facing the development prospects of the overall lithium battery industry, Huasheng Lithium Electrode has forward-looking and market insight. As early as 2003, it began to set foot in the lithium battery electrolyte additive market and seized the market opportunities. In recent years, the company has grasped the development trend of the industry, benefiting from the continuous increase in downstream market demand, the company has been able to grow rapidly and continue to grow and develop. At present, the company has formed comprehensive advantages in R&D, production, sales and management, and has become a global leader in lithium-ion battery electrolyte additives.
In terms of refined products, VC and FEC are the two core products of the company. In 2021, the revenue of the two types of products will be 639 million yuan and 291 million yuan respectively, accounting for 63.04% and 28.68% of the main revenue. The total proportion of FEC income has always remained above 85%, which is the main source of income of the company. According to the certificate on the market share of lithium-ion battery electrolyte additives issued by China Battery Industry Association, the market share of lithium-ion battery electrolyte additives produced by the company from 2018 to 2020 ranks first among similar products in China. According to the statistics of Ivey Economic Research Institute, among the global electrolyte additive companies in 2020, Huasheng Lithium Battery ranks first with a market share of 20.89%, which is evident in the industry status.
Under the blessing of comprehensive advantages and strong industry status, the performance level of Huasheng Lithium Battery has improved year by year. In terms of operating income, the company has increased from 423 million yuan in 2019 to 1.014 billion yuan in 2021, achieving a nearly doubled growth, and its net profit has increased from 76 million yuan in 2019 to 420 million yuan in 2021, an increase of nearly six. times, reflecting strong growth momentum.
Strong downstream demand products are in short supply
Fundraising projects anchor capacity expansion
With the rapid growth of terminal demand such as new energy vehicles, Huasheng Lithium’s electrolyte additive products are in short supply. It is understood that the company’s customers include Mitsubishi Chemical, BYD, CATL, Tinci Materials, Cathay Huarong, Shanshan and other well-known domestic and foreign lithium battery industry chain manufacturers, and maintain long-term and stable cooperative relations. In order to better meet the strong downstream product demand, the company has actively expanded its production capacity. Now it has two production bases in Zhangjiagang Phase I and Phase II and a wholly-owned subsidiary Taixing Huasheng, with an annual production capacity of 5,000 tons of VC and FEC.
It is worth mentioning that between August and September 2021, Huasheng Lithium Power has signed long-term cooperation agreements with leading companies in the industry, CATL, BYD, and Tinci Materials. In the face of the current increasing downstream demand, the company has sufficient orders on hand, and the existing production capacity can no longer fully meet the demand for subsequent products. Taking the core products VC and FEC as an example, the production and sales ratios in 2021 will be 100.64% and 100.45%, respectively, and the capacity utilization rates will be 103.94% and 96.36%, respectively, which have reached full production and full sales.
In order to solve the “urgent need”, in this IPO, Huasheng Lithium Electric raised funds to focus on the expansion of production capacity on the basis of strengthening technological innovation capabilities, of which 674 million yuan will be used to produce 6,000 tons of vinylene carbonate and 3,000 tons of fluorine per year. Substitute ethylene carbonate project, the construction period is 2 years. In the future, with the implementation of production capacity projects, the company’s product supply capacity will be greatly improved, realizing leap-forward development of production capacity, and then fully meeting the product needs of downstream customers.
Independent research and development to strengthen product competitiveness
Strategic layout LiFSI development opportunities
For high-tech enterprises, innovation is the foundation of their business, and it is also a “booster” for progress. As a leading enterprise of lithium-ion battery electrolyte additives, Huasheng Lithium Battery attaches great importance to independent R&D and innovation, and has an experienced and highly skilled R&D team. By the end of 2021, technical R&D personnel account for 11.13% of the total employees. The R&D team constantly seeks technological innovation and breakthroughs for main products and services. From 2019 to 2021, a total of nearly 100 million yuan has been invested in R&D expenses.
Not only that, Huasheng Lithium Battery also fully infiltrated the research and development results into actual production and services. Relying on strong technical reserves, the company has put into production VC, FEC, BOB and other production lines, and has a mature production, quality and cost control system. In addition, the company has 63 domestic authorized patents and 9 international patents, and has led the drafting of VC national standards and FEC industry standards. At present, Huasheng Lithium Battery maintains a good reputation and brand image among domestic and foreign customers with its leading technological advantages, excellent product quality and excellent after-sales service, and its industry influence is increasing day by day.
On the basis of profound insight into the development trend of lithium battery electrolyte additives, Huasheng Lithium will focus on the future. It is reported that LiFSI is currently used as an electrolyte additive for lithium battery electrolyte, which can effectively improve battery cycle performance and prolong battery life, and has broad market application prospects in the future. In this regard, Huasheng Lithium Battery has also made strategic deployments. The company will continue to improve product performance by increasing investment in R&D in manufacturing technology. While consolidating its leading position in the VC and FEC markets, through cooperation with partners such as Sanmei, Increase the research and development and industrialization of new lithium salts such as LiFSI, continue to enrich the company’s core technology and product system, and strengthen its comprehensive competitiveness. Moving forward with determination and perseverance, the future performance of Huasheng Lithium Battery is worth looking forward to.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.
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