May 08, 2018 14:19
Author: Chen Xianfan
source: Soochow Securities
edit:Oriental Wealth Network
Lithium-Ion Device Industry: The Global Trend of Electricization Cannot Be Ignored Event 1:Volkswagen announced that it will double the scale of battery procurement contracts to US$ 48 billion (approximately 305.2 billion yuan).
Event 2: Tesla CEO Musk said that the announcement of the China Battery Factory will be announced before the fourth quarter of this year.
Event 3According to BusinessKorea, South Korean battery makers (LG, Samsung SDI, SK) are increasing their investment in China as subsidies to Chinese auto makers will end by the end of next year.
Investment Highlights
Volkswagen Expands Battery Purchase Contract, Accelerates Battery Industry Layout Process
VW’s shareholders’ meeting last week stated that it has increased the amount of battery purchases from the US$25 billion disclosed last month to US$48 billion. And according to the company's plan, by 2025, the company will produce 3 million electric vehicles each year and launch 80 new electric car models to meet the needs of its new energy vehicles. At present, the public did not disclose the list of battery manufacturers with which they signed a contract, but the outside world speculated that it may be LG Chem, Samsung SDI, Panasonic or CATL.
Tesla's second super factory 2018Q4 lands in China, favoring local battery manufacturers
Tesla’s CEO stated at the shareholders’ meeting that related announcements from China Battery Factory will be announced soon. The specific address of the second super battery plant in China will be announced before the fourth quarter of this year. The future super battery plant will also take care of the manufacturer. On April 17, the National Development and Reform Commission announced its relaxationAutomobile industryThe time limit for the proportion of foreign-invested shares was limited, and foreign investment access was greatly relaxed. In 2018, the ratio of foreign-invested shares of new energy vehicles was cancelled. The foreign-owned automakers represented by Tesla, who are focused on new energy vehicles, will become direct beneficiaries of this open policy in the short term. According to Tesla's plan, the company plans to produce 500,000 electric vehicles in 2020, and the demand for lithium batteries will exceed 60GWh. This super factory's landing in China is expected to increase the demand for domestic power batteries, fully benefiting local power battery suppliers.
International car giant to lead the electric wave, lithium battery expansion will exceed expectations
The latest actions of Volkswagen and Tesla have shown that the global electromobility rate will accelerate, and global new energy vehicles will usher in a high economic cycle. With the subsidy for Chinese auto makers ending next year, the Chinese market will once again be opened to foreign battery makers. South Korean battery makers are increasing their investment in China: Samsung SDI said it will prepare for the end of China's subsidy policy in 2020; LG Chemicals announced that it will invest 239.4 billion won to establish a battery material production joint venture in China; SK Innovation Invest in "SK Blue Dragon Energy" and begin localization initiatives. Panasonic and LG leaders have been cautious about capacity expansion due to the disadvantages of policy subsidies. Under the strong certainty of the industry outbreak in 2019-2020, the expansion of foreign leading capacity will exceed expectations in 2018, and equipment companies entering the global supply system will offset Domestic industry short-term fluctuations.
As the market continues to rush to rush, the industry maintains a high degree of prosperity
With the subsidy policy landed before the Spring Festival and implemented in mid-June, the industry is in a buffer period. Electric vehicle rushing prices continue to ferment. We expect the demand for batteries to pick up significantly. In addition, due to the expected fullness, the current operating rate of leading battery companies has been restored to 70% and is still gradually improving, with a better-than-expected degree, and a year-on-year growth trend. According to the data from the China Automobile Association, China’s annual automobile production and sales volume in 2017 was 29.015 million vehicles and 28.889 million vehicles, ranking the first in the world for nine consecutive years. Among them, the market share of new energy vehicles was 2.7%, which was an increase of 0.9% from 2016.
In addition to factors affecting the scale of production expansion, Lithium power equipment will welcome a new round of high-growth cycle!
The spin-off of the CATL listing and BYD battery business is an important factor affecting the progress of the expansion of the two giants since Q4 2017. With the arrival of these two important events, we have determined that the progress of the CATL and BYD bids for the expansion of production will be accelerated. It is expected that the industry will soon enter the peak of tendering, and the leading edge of lithium equipment will usher in a new round of high growth cycles! In addition, the CATL's IPO affects the cash flow of the entire industry chain. With the listing financing of CATL, its upstream and downstream cash flows will also improve;Pilot intelligenceAs the largest equipment supplier disclosed in its prospectus, cash flow is expected to improve significantly.
Investment Advice: Be optimistic about the equipment company that is bound to the leading global battery manufacturer. With the continuous progress of battery technology and the acceleration of the electrification trend, the lithium battery industry has entered the era of global leading expansion and continues to be optimistic about the investment opportunities for lithium-electric equipment. We are optimistic about the equipment company that is bound by the world's leading battery manufacturers. Key recommendation: leading global leader in lithium battery equipment [leadership intelligence]: The projected net profit for 2018, 2019, and 2020 is 11.30, 17.33, and 2.425 billion, EPS is 2.56, 3.94, and 5.51 yuan, and PE is 28, 18, and 13X for PE. .2,Keheng shares Cathode material production capacity continues to expand + Haoneng technology orders sufficient lithium coating equipment leader. 3,Tailai Core equipment + key materials, synergies lead the lithium industry upstream. Proposed Concern: Power Lithium Battery Recycling ScarceTian Qi shares], Third-party lithium battery PACK faucetOriental Seiko].
risk warning: The implementation of the policy is lower than expected and electric vehicle sales are lower than expected.