On November 26, Oriental Seiko sold a 100% stake in its power battery company Pride at a price of 1.5 billion yuan, which was less than 1/3 of the purchase price three years ago (4.75 billion yuan). This battery company, which once owned dozens of domestic vehicle enterprise customers, is behind the big dive of the dive, which is the increasingly difficult survival dilemma of power battery companies in recent times. Not long ago, the first three quarters of financial reports issued by many listed companies in the lithium battery industry chain showed that more than half of the companies net profit fell, and even the leading company Ningde Times failed to "survive", the third quarter net profit attributable to shareholders fell year-on-year 7.2%, the net profit after non-deduction fell 11.01% year-on-year.

"The decline in profit may be mainly due to two reasons." Xu Haidong, assistant secretary general of China Association of Automobile Manufacturers (hereinafter referred to as "China Automobile Association"), analyzed in an interview with a reporter from "China Auto News", on the one hand, he was affected by the decline in production and sales of new energy vehicles. As a result, the installed capacity of batteries also declined. On the other hand, under the premise of no breakthrough technology, it is more difficult to reduce the cost of power battery companies, and some OEMs will transfer cost pressure to battery suppliers, which has caused the profitability of battery companies. Adverse effects. "The recovery of the new energy vehicle market remains to be seen, and power battery companies need to be prepared for thewinter." Xu Haidong said.

Net profit of head companies declined

n the latest financial report released by Ningde Times, although the performance in the first three quarters was okay, it achieved a total revenue of 32.856 billion yuan, a year-on-year increase of 71.7%; net profit attributable to shareholders was 3.464 billion yuan, a year-on-year increase of 45.65%, but it was specific to the third In the quarter, while revenues continued to increase, net profit had already declined. The financial report shows that the total revenue of Ningde Times in the third quarter was 12.592 billion yuan, a year-on-year increase of 28.8%, and the net profit attributable to shareholders was 1.362 billion yuan, a year-on-year decrease of 7.2%, and net profit after deduction of non-non-revenue decreased by 11.01% year-on-year. In this regard, Ningde’s explanation is: “Some product prices have fallen, gross margins have decreased, coupled with the increase in R&D investment and management expenses in the third quarter, the proportion of expenses in revenue has increased.”

Guoxuan High-tech in the head team performed even worse: the operating income in the first three quarters of 2019 was 5.152 billion yuan, an increase of 25.75% year-on-year; the net profit attributable to shareholders of listed companies was 578 million yuan, a decrease of 12.25% year-on-year; The company’s shareholders’ net profit after deducting non-recurring gains and losses was 409 million yuan, a year-on-year increase of only 2.02%.

Even the upstream enterprises of power batteries have also been "implicated": in the first three quarters of this year, polyfluoride achieved a total operating income of 2.949 billion yuan, a year-on-year increase of 10.44%, and net profit attributable to shareholders of listed companies was 97.693 million yuan, a year-on-year decrease of 42.1 %. Tianqi Lithium also suffered a net profit loss for the first time in five and a half years. In the third quarter, operating income and net profit attributable to shareholders of listed companies were 1.208 billion yuan and -53.92 million yuan, down 17.81% and 114.20 year-on-year respectively. %.

Of course, among battery companies, there has also been a rise in net profit. For example, Yiwei Lithium Energy achieved an operating income of 4.577 billion yuan in the first three quarters of this year, a year-on-year increase of 52.12%, and a net profit of 1.159 billion yuan, a year-on-year increase of up to 205.94%. . However, such rapid growth is partly because of the huge orders held by Daimler, and more importantly, the demand for "Lithium primary batteries for ETC and smart watches and SPCs superimposed by Yiwei Lithium in the financial report. The volume of goods has increased exponentially, the gross profit margin of products has risen, and the net profit has increased significantly. That is to say, the growth of the non-vehicle power battery business is the important source of the substantial growth of Yiwei Lis net profit.

Are they all caused by subsidies?

As Xu Haidong said, the direct cause of the general decline in the profit level of power battery companies is the decline in installed capacity.

According to statistics from the China Automobile Association, in October this year, Chinas total installed capacity of power batteries was 4.1GWh, a year-on-year decrease of 31.4%. Among them, the installed capacity of ternary batteries and lithium iron phosphate batteries were 2.9GWh and 1.1GWh, a year-on-year decrease of 26% and 41.7%. This is already the third consecutive month of negative growth in my countrys power battery installed capacity this year. Although the power battery market showed signs of recovery in October, it was still lower than the same period last year. Even the two battery companies that are firmly in the top and second in market share have seen a decline in installed capacity: in October this year, the installed capacity of the Ningde era was 2.21GWh, a decrease of 2% from the previous month; BYD’s installed capacity in the month It was 455MWh, a decrease of 3.1% month-on-month.

In fact, the total installed capacity of power batteries dropped sharply because of the decline in sales of new energy vehicles, and the most important reason for the market decline is the sharp decline in subsidies for new energy vehicles this year. Xu Yanhua, deputy secretary general of the China Automobile Association, told reporters that passenger cars with a driving range of 200 to 250 kilometers in 2013-2018 will receive an average subsidy of 10% per year, while those with a driving range of 250 to 300 kilometers For car use, its subsidies have also dropped by 40% over a period of 5 years. With the cancellation of this year’s land subsidies, this represents a total decrease of 97%.

Cai Yi, Dean of Guoxuan High-Tech Engineering Research Institute, publicly stated that the subsidy withdrawal has brought great pressure to the entire power battery industry. In the past, most vehicle companies directly linked the price of power batteries to how much subsidy they can get. Together, as much as the subsidy declines, the price pressure of automakers on power battery companies will increase. "The pressure of subsidies for OEMs to retreat downhill is unavoidable and will be passed on to upstream battery companies. This has often been the case before." Zhang Tianren, chairman of the board of directors of Tianneng Group, said in an interview with reporters that some OEMs have not yet obtained When subsidizing, it will take the way of arrears in the payment of upstream battery companies, until the subsidy is not settled.

"The subsidy slope has been retreated too quickly, but the cost of power batteries has not fallen so quickly." Xu Yanhua pointed out that taking lithium iron phosphate batteries as an example, the industrys average cost in 2018 was 1.1 to 1.2 yuan/Wh, and it fell to 0.96 to 1 yuan in 2019. /Wh, the decrease is only 15%. If calculated according to the total cost of the bicycle battery, plus the increase in the mileage threshold, the total cost of the bicycle battery has risen from 53,000 yuan in 2018 to 54,000 yuan in 2019, without falling but rising. "The situation of new energy vehicles is not optimistic. At present, the entire new energy vehicle chain such as complete vehicles, power batteries, and key components is very fragile." Xu Yanhua said bluntly.

Battery company profitability or a worldwide problem

In view of the current high cost challenges faced by domestic battery companies, Xu Haidong suggested that on the basis of no breakthroughs in technology, power battery companies can start from the perspective of production management, such as learning lean production from Japanese companies and improving the automation of production equipment. Rate and other ways to achieve a reduction in overall cost. But Xu Haidong pointed out that the difficulty of making profits may not only be a problem faced by domestic battery companies. Multinational companies may also have the same troubles.

thats the truth. LG Chems third-quarter financial report shows that sales from July to September this year increased by 1.6% year-on-year to 7.3 trillion won (approximately RMB 44.22 billion); operating profit decreased by 37% year-on-year to 380.3 billion won (approximately RMB) 2.29 billion yuan); net profit was 137.2 billion won (approximately RMB 830 million), a year-on-year decrease of 60.4%; the same was true for Panasonic, which achieved sales of 195.3 billion yen (approximately RMB 126.53 billion during the third quarter financial report period Yuan), a year-on-year decline of 2%; operating profit of 83.9 billion yen (approximately RMB 5.43 billion), a year-on-year decline of 11.3%; net profit of 51.1 billion yen (approximately RMB 3.31 billion), a year-on-year decline of 5.1%. Samsung SDI achieved revenue of 25679 billion won (about 15.58 billion yuan) in the third quarter, an increase of 1.8% year-on-year; operating profit was 166 billion won (about 1.01 billion yuan), a year-on-year decline of 31%; net profit was 2174 100 million won (about 1.32 billion yuan), a slight increase of 1.6% year-on-year.

"According to general estimates, when the cost of the battery system drops to about 0.6%, it can compete with traditional fuel vehicles." Xu Yanhua pointed out that under the premise of ensuring safety, it is very difficult to reduce the cost of batteries, which requires materials, batteries and module design. And the common progress of manufacturing technology. Xu Yanhua suggested that in order to continue to ensure the enthusiasm of the consumption of new energy vehicles after the subsidy declines, can I implement a tax deduction policy, such as the purchase of a new energy vehicle can be deducted from the personal tax of 15,000 yuan to offset the new The losses of enterprises related to the energy industry chain promote and support the development of the new energy vehicle industry.