On the evening of July 22, Tinci Materials (002709, SZ; the previous closing price of 104.90 yuan) issued an announcement stating that its wholly-owned subsidiary Jiujiang Tinci Advanced Materials Co., Ltd. (hereinafter referred to as Jiujiang Tinci) and LG Energy Solution (Chinese name: LG New Energy) ) An order for 55,000 tons of electrolyte products has been signed, and the delivery date is from the second half of 2021 to the end of 2023.
The reporter of “Daily Business News” found that since 2018, LG New Energy’s purchase of electrolyte products from Tinci Materials has increased significantly. In 2018, it was only 55.322 million yuan. By 2020, it has increased to 402 million yuan, an increase of more than 620% in three years. In contrast, the amount of electrolyte purchased by CATL (300,750, SZ; previous closing price: 547.01 yuan) from Tianci Materials increased from 457 million yuan in 2018 to 997 million yuan in 2020, an increase of only 118%.
Although the main reason for the gap in increase is the large gap between the bases of the two sides, LG New Energy’s increased procurement from Tinci Materials can also reflect its “sprint” in the field of power batteries from the side. According to the latest report of the research institute SNE Research, in May this year, LG’s new energy installed capacity has surpassed the Ningde era, ranking first in the world.
A “challenge of offensive and defensive battle” seems to be staged in the power battery industry.
LG New Energy Battery Business Expansion
According to the announcement of Tinci Materials, LG New Energy will purchase 55,000 tons of electrolyte products from Jiujiang Tinci from the second half of 2021 to the end of 2023. This quantity is the estimated quantity. LG New Energy will adjust and update the estimated quantity at the end of each year. The specific transaction status of the product is subject to the actual implementation. At the same time, in the announcement, Tinci Materials also disclosed that the amount of electrolyte purchased by LG New Energy from the company accounted for the company’s total revenue from 2018 to 2020, which were 2.66%, 2.46%, and 9.75%.
Combined with the historical revenue data of Tinci Materials, it can be calculated that the amount of electrolyte purchased by LG New Energy from Tinci Materials from 2018 to 2020 is 55.322 million yuan, 67.763 million yuan and 402 million yuan. The purchase amount increased by more than 620% in 3 years.
On May 28 this year, Tinci Materials also issued an announcement stating that its wholly-owned subsidiary Ningde Kaixin Battery Materials Co., Ltd. has signed an order with Ningde Times from the effective date of the agreement to June 30, 2022. Times Supply is expected to use a corresponding amount of electrolyte products of 15,000 tons of lithium hexafluorophosphate. In this announcement, Tinci Materials disclosed that Ningde Times purchased electrolyte products from the company from 2018 to 2020, which were 457 million yuan, 775 million yuan, and 997 million yuan, respectively, with a three-year increase of 118%.
Although the rapid growth of LG’s new energy purchase amount is based on a relatively low base, its increase in procurement from the leading electrolyte, Tianci Materials, can also reflect the expansion of LG’s new energy battery business from the side.
To find out more detailed information, the reporter of “Daily Economic News” called the Securities Department of Tianci Materials on July 23, but as of press time, no one answered.
According to the research report of Guosen Securities, the unit consumption of lithium hexafluorophosphate for the electrolyte products of Tinci Materials is about 0.12. That is, 1 ton of lithium hexafluorophosphate produces about 8.33 tons of electrolyte. Based on this calculation, Tinci Materials will supply approximately 125,000 tons of electrolyte products to CATL before June 30, 2022.
Assuming that the price of electrolyte products supplied by Tinci Materials to LG New Energy is the same as the price supplied to Ningde Times, based on the amount, it can be calculated that the number of electrolyte products purchased by LG New Energy from Tinci Materials in 2019 is less than 1/11 of that of Ningde Times. . According to the orders signed this year and the above calculations, Tinci Materials will provide approximately 125,000 tons of electrolyte products for CATL in more than a year, and 55,000 tons of electrolyte products for LG New Energy in two and a half years. . In terms of the number of electrolytes purchased, although there is still a big gap between LG New Energy and the Ningde era, the gap has gradually narrowed.
Has become a major enemy of the Ningde era
In fact, LG New Energy has begun to conquer the market in the field of power batteries.
Public information shows that LG New Energy was originally the battery business unit of LG Chem, which was spin-off and independent in December 2020. After the spin-off, LG New Energy has made frequent moves in the battery field.
According to Jiemian News quoted Yonhap News, on July 8, local time, LG Group announced that by 2030, its battery manufacturing and chemical divisions will invest 15.1 trillion won (about 85 billion yuan) in South Korea to develop next-generation battery technology. , To consolidate its leading position in batteries.
According to data from SNE Research, CATL’s installed capacity on electric vehicles in 2020 will be 34GWh, with a market share of 24.82%, ranking first in the world. LG’s new energy installed capacity is 31GWh, with a market share of 22.63%, closely behind.
According to the latest data from SNE Research, the installed capacity of LG New Energy reached 5.7GWh in May this year, an increase of 370% year-on-year, and it has surpassed the Ningde era and ranked first in the world.
LG Group’s massive investment and the rapid growth of its power battery business declare that LG New Energy has become a major “compete” in the Ningde era after its spin-off and independence.
However, from the overall situation of the first 5 months, CATL still ranked first with 22.1GWh installed capacity and 27.1% market share, and LG New Energy ranked second with 21.7GWh installed capacity and 26.6% market share. .
In the face of LG’s new energy offensive, CATL also has certain defensive advantages. Backed by the vast demand of the Chinese market, the “local and indigenous” CATL has a “geographic advantage.” According to EV Sales data, global sales of new energy passenger vehicles, including plug-in hybrid, pure electric, and fuel cell vehicles, reached 3.124 million in 2020, an increase of 41% year-on-year. Among them, the cumulative sales volume in the Chinese market is 1,271,900 vehicles, accounting for 40.7%.
Under LG’s offensive, the CATL, which has “topped” the global power battery installed capacity list for four years, can “defensively” succeed this year? Everyone will wait and see.
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