Accelerating Investment And Expansion: The Global Battery Empire Ambition Of Ningde Era

Who is the next investment target of Ningde era?

Ningde era (300750. SZ) is rapidly promoting the expansion of power battery industry chain. China's largest power battery company is strengthening its position in the power battery supply chain through a series of initiatives.

On September 14, Ningde Times announced that it would take a stake in leading intelligence (300450) and take the first step in its plan to invest 19 billion yuan in listed companies; on September 19, Ningde times signed a comprehensive strategic cooperation agreement with the people's Government of Sichuan Province, planning to build a whole industrial chain system of lithium batteries in the local area.

In the outside world, Ningde era's large-scale investment in the upstream and downstream of lithium battery industry, on the one hand, is conducive to ensuring the safety of raw materials supply, on the other hand, it can also consolidate its position in the entire industrial chain.

In fact, since this year, capital operation in Ningde era is very frequent. In addition to the above 19 billion yuan investment plan, in August this year, Ningde times and Weilai automobile and other companies established a battery asset management company, and also invested in a consumer finance company led by ant group. On September 10, Ningde times successfully issued US $1.5 billion of senior double term fixed interest bonds, opening up overseas capital markets.

Behind a series of investment and operation is the ambition of this young company with a market value of 450 billion yuan to break through the upstream and downstream industrial chain and establish a global battery "empire".

Although Ningde era is now the leader of the industry, in the past decade, the annual sales volume of China's new energy vehicle market has only reached the level of one million vehicles, and the whole industry chain is in the growth period. In the next decade, the domestic new energy vehicle market is expected to develop into tens of millions of vehicles, and the power battery industry is also waiting to break out, which will bring huge business opportunities to power battery enterprises. In this process, Ningde era and Japan and South Korea battery enterprises in the global competition, to protect their own supply chain security has become more important.

Where is the 19 billion investment going?

On September 21, China ranked first in the world according to the 2020 lithium ion battery supply chain ranking released by pembo new energy finance and economics. The success of China's battery industry is, on the one hand, driven by the huge domestic battery demand of 72gwh; on the other hand, China controls 80% of the global battery metal refining capacity, 77% of the cell capacity and 60% of the key raw material capacity.

Ningde era plays an important role in it. In 2019, Ningde era occupies half of China's power battery market, and also promotes the development of the entire industry chain. In fact, before that, Ningde era held a super high voice in the upstream and downstream of the industrial chain. However, overall, the new energy vehicles and energy storage industry has developed rapidly in recent years, but there are still some shortcomings in the industrial chain, such as imperfect supporting facilities and insufficient supply of key resources, which may restrict the long-term development of the industry.

For long-term strategic development considerations, on August 11, Ningde Times announced to invest in high-quality listed enterprises in the upstream and downstream of domestic and foreign industrial chain. Ningde times plans to focus on the main business, through the investment of high-quality companies in the upstream and downstream of the industrial chain, further strengthen the cooperation and coordination of the industrial chain, improve the efficiency of resource utilization, and enhance the market competitiveness of the company.

"In the whole new energy vehicle industry chain, Ningde era is in the middle reaches. Ningde times has won a large number of battery orders from automobile joint venture companies. In the next few years, foreign brands will start to increase the launch of electric vehicle products in China. There will be a large-scale process. With the increasing demand for batteries in the downstream, Ningde era must ensure the stability of upstream suppliers. At the same time, investment in upstream enterprises can reduce production costs and improve market competitiveness. It is actually a consensus in the industry that battery companies invest in upstream material companies. " On September 20, people in the power battery industry told reporters of the 21st century economic report.

In fact, after the Ningde era announced its investment plan, the outside world is very concerned about "where to invest the 19 billion yuan" in Ningde era.

"The investment plan of 19 billion yuan may be more inclined to invest in the upstream companies of the industry, such as equipment suppliers and material suppliers, so as to ensure the supply of key resources and consolidate the foundation of their own business. At present, there is little interest in investing in vehicles. The cooperation with vehicle enterprises may be more inclined to establish a battery joint venture or try new business models together. " People close to the 21st century reported to reporters on September 17th.

The first investment target of Ningde era is lithium battery production equipment manufacturing company.

According to the fixed increase plan disclosed by pioneer intelligence on the evening of September 14, it is planned to raise no more than 2.5 billion yuan at the issue price of 36.05 yuan per share, and Ningde times intends to subscribe for all the shares of this issue. According to the upper limit of the number of shares to be issued, Ningde times will hold 7.29% of the company's shares after the issuance and become a leading intelligent strategic investor.

According to the investment logic of Ningde era, many institutions have analyzed that key materials such as nickel, cobalt and lithium will also be potential investment targets of Ningde era in the future.

Who is the next investment target of Ningde era? Tianqi lithium industry (002466. SZ), which is located in Sichuan Province, has become the focus of attention in the industry after taking a stake in leader intelligence and signing cooperation with Sichuan provincial government. In this regard, the 21st century economic report reporters to the Ningde era to verify, Ningde Times said "we have not considered this issue.".

Tianqi lithium's last trading limit was on August 12, the day after Ningde Times announced its investment plan of 19 billion yuan. At that time, the stock prices of several upstream lithium battery companies with cooperative relationship with Ningde times were soaring, and Tianqi lithium industry was one of them. However, Tianqi lithium industry's performance in the past two years is poor, with serious losses and high debt. The net loss in 2019 is 5.98 billion yuan, and the loss in the first half of this year is nearly 700 million yuan. Whether it is worth investment needs to be considered comprehensively.

Preparing for Globalization

In addition to opening up the upstream and downstream industries through investment, another goal of Ningde era is to further expand its business territory.

Since 2018, Ningde era has started cooperation with Sichuan Province. At present, Ningde times has signed a contract to invest in three major lithium industry projects of Sichuan times, times Geely and Tianyi lithium industry in Yibin City. The deepening cooperation with Sichuan provincial government and the establishment of local lithium battery industry chain system will be conducive to the radiation of Ningde era to the market business in Southwest China. Chengdu and Chongqing are important automobile industry bases in China, and many customers of Ningde era have set up vehicle factories there.

With the rapid development of the new energy vehicle industry, the commercial territory of Ningde era is also expanding rapidly. Not only at home, but also abroad, Ningde era has great ambition.

At present, the global power battery market is dominated by China, Japan and South Korea. Among them, LG Chemical of South Korea is the most important competitor of Ningde era. The power battery orders signed by the two companies with vehicle enterprises in the next few years are far higher than those of other battery manufacturers. In addition, together with Tesla's main partner, Panasonic battery of Japan, the competition pattern of the three enterprises has basically appeared.

In the first half of this year, Ningde lost its position in battery sales in the first half of this year and surpassed that in the second half of this year. The fierce global competition among battery giants in China, Japan and South Korea is becoming increasingly fierce.

However, compared with Panasonic and LG, which have many years of global operation experience, the supply chain system of Ningde era is not dominant. The young Ningde era wants to do well in globalization, especially in the current complex international situation, facing great challenges.

On September 10, Ningde times successfully issued US $1.5 billion of overseas bonds. The 21st century economic reporter learned from people familiar with Ningde era that the purpose of this bond issue is to open overseas financing channels and prepare for the overseas construction base and business development of Ningde era.

In addition, according to Ningde times' previous investment plan of 19 billion yuan for domestic and overseas upstream and downstream enterprises, some analysts believe that in addition to domestic investment, Ningde times may invest in overseas upstream companies to serve overseas factories.

Ningde era's first overseas battery factory is located in Thuringen, Germany, which started construction in October last year and plans to put into operation next year to supply batteries to European vehicle manufacturers. Although Ningde times has not disclosed which main engine plants the German factory will supply batteries to, Volkswagen, Mercedes Benz and BMW of Germany have cooperation with Ningde times in China, which are considered as potential cooperation objects of German factories in Ningde era.

Before the German factory of Ningde times was officially put into production, Ningde times urgently needed to improve its overseas supply chain, so as to ensure the smooth production process. In the era of Ningde, whether it can build a complete overseas supply chain in the current changing global economic and trade environment and open up the overseas market situation will be an important issue for whether Ningde can become a global company, and also a key battle to prove its market value of 450 billion yuan.

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