Towards 900 Billion: Radical Expansion Of AB Side In Ningde Era

On the evening of February 2, Ningde times (300750. SZ) announced the investment and expansion of production capacity, and planned to invest no more than 29 billion yuan in Yibin, Sichuan, Zhaoqing, Guangdong and Xiapu, Ningde, Fujian Province, to build and expand production capacity.

Affected by the news, on February 3, Ningde times shares rose 3.58% to 380.98 yuan per share, with the latest market value of 887.48 billion yuan.

China's leading power battery company, with a market value of nearly 900 billion yuan, is accelerating its expansion. At the end of December 2020, more than a month ago, Ningde era just announced that it would invest 39 billion yuan in Fujian Fuding, Sichuan Yibin and Jiangsu liyang to increase production and production.

It is a forward-looking deployment of Ningde era to cope with the growth of domestic new energy vehicle market in the next few years.

"China's new energy vehicle industry is moving from quantitative change to qualitative change. As a leading lithium battery enterprise, the capacity expansion of Ningde era has sufficient order support. At the same time, it is followed by a number of high-quality suppliers, which can keep up with the pace of its expansion. " Qingjiao, Secretary General of Zhongguancun new battery technology innovation alliance, said in an interview with 21st century economic reporter on February 3.

However, for the Ningde era, there are also risks behind the radical expansion of production capacity. The power battery competition among China, Japan and South Korea is increasingly fierce, and the market competition pressure is increasing. While being sought after by capital heat, Ningde era must also prove the value behind its 900 billion valuation.

The planned capacity is 10 times the sales volume in 2020

On January 13, according to the global power battery market data for 2020 released by SNE research, a market research institution in South Korea, the global power battery and energy storage battery shipment volume reached 213gwh, a year-on-year increase of 34%. Among them, the shipment volume of Ningde times was 52.8gwh, with a year-on-year growth of 27%, with a market share of 25%, ranking first in the world.

The 21st century economic reporter found that there were five production bases in China in Ningde era: Ningde in Fujian, Liyang in Jiangsu, Xining in Qinghai, Yibin in Sichuan and Zhaoqing in Guangdong. In addition, Ningde era is also building overseas bases in Thuringen, Germany.

Among them, Ningde Lake East, Ningde Lake West, Liyang phase I and phase II, as well as Xining production base have been fully put into use, with a total capacity of about 63gwh.

According to the statistics of 21st century economic report, according to the plan of increasing production and expanding production in recent years in Ningde era, the total planned investment capacity in the five bases mentioned above is 367gwh.

In addition, Ningde times also built joint venture factories with SAIC, FAW, Dongfeng, GAC, Geely and other automobile enterprises. At present, the joint venture companies Shidai SAIC, Dongfeng SAIC and Shidai FAW have been put into operation. Era GAC plans to put into operation in October 2021, while time Geely factory plans to put into operation in 2022. The total planned capacity of these companies is 108gwh.

A person familiar with Ningde era told the 21st century economic report that the batteries of the joint venture company mainly supply batteries to its own brands and joint venture brands.

That is to say, from the current planning point of view, in five years' time, the capacity built in Ningde era will be 10 times of its shipment volume in 2020.

Judging from the planned production capacity layout, Fujian is the base camp of Ningde era. Liyang mainly radiates the Yangtze River Delta region, with complete industrial chain supporting system; Yibin, Sichuan mainly meets the needs of the western market; Qinghai is rich in lithium resources; and Zhaoqing factory will become an important base in the Pearl River Delta region and Guangdong, Hong Kong and Macao Bay Area in Ningde era.

Overall, through a series of capacity expansion planning, Ningde era has formed a relatively complete production capacity layout in China.

From the development space of new energy vehicle market, the capacity expansion of Ningde era is reasonable.

In 2020, the sales volume of new energy vehicles in China will be 1.3 million, and it is expected to reach 1.8 million in 2021. According to the new energy vehicle industry development plan (2021-2035) issued by the general office of the State Council, the sales volume of new energy vehicles in China will reach about 20% of the total sales volume of new vehicles by 2025. The market estimates that the scale is about 6 million vehicles.

In fact, in the past few years, China's power battery industry has experienced the problem of insufficient high-quality production capacity. Most auto companies prefer to choose batteries supplied by head suppliers to ensure the quality of electric vehicles. This also prompted Ningde era to become an oligopoly in the market, occupying half of China's power battery market.

For Ningde era's radical expansion, whether it will bring overcapacity, many industry insiders said they are not worried about it. And with the expansion of Ningde era, it will speed up the clearing of backward production capacity in the market, so as to promote the development of power battery industry to high quality.

"The demand market for new energy vehicles, energy storage base stations, 3C, electric tools, electric bicycles, etc. is on the rise. A new round of expansion of lithium battery production is about to reach a small peak. After the previous round of industry reshuffle, the enterprises that still have the strength to invest and expand production are basically enterprises with certain competitiveness. Moreover, the expansion cycle of power battery is about 2-3 years, and the release of capacity takes time. There is no need to worry about the phenomenon of high-end overcapacity in the next three years at least. " Yu qingjiao said.

Support the upper and lower reaches and expand the legitimate forces

With the rapid expansion of production capacity, all parties in the supply chain system of Ningde era need to follow up quickly to adapt to the growth rhythm of Ningde era. Otherwise, Ningde era will face the risk of supply chain brought by too radical expansion.

As a matter of fact, since last year, Ningde times has strengthened its investment in the upstream and downstream of the industrial chain to avoid the supply chain risks caused by the rapid growth of the power battery industry.

Some industry insiders told the 21st century economic reporter that one of the important reasons why Ningde era has a market value of nearly 900 billion is that it has a very high voice in the whole power battery industry chain.

On August 11, 2020, Ningde Times announced that it plans to invest 19 billion yuan in high-quality listed enterprises in the upstream and downstream of the industrial chain at home and abroad.

In 2020, Ningde times has participated in or invested in many enterprises. It includes not only materials companies and battery production equipment companies in the upstream of the battery, but also lithium battery testing company and auto driving chip company horizon in the downstream of the industrial chain, as well as companies in the application market and supporting facilities in the middle and lower reaches.

It is worth mentioning that, driven by the Ningde era, the development prospects of the upstream and downstream companies of the industrial chain are also optimistic. On September 15, 2020, Ningde Times announced that it would take a stake in leader intelligence. In the past four months, the share price of pioneer intelligence has risen from about 30 yuan per share to more than 90 yuan.

From the investment logic of Ningde era, the first is to invest in the upstream resource nickel cobalt lithium company to ensure the supply safety of key raw materials; the second is to invest in the middle reaches of high barrier industry companies to ensure the consolidation of industrial chain status and discourse power; the third is to support the rapid development of industrial chain enterprises through investment and technology to jointly realize the growth value.

"Ningde era wants to tie the upstream and downstream of the industrial chain, and the core is to keep the overall ecological development of its battery. If it is too loose with the industrial chain, this leading position will be easily replaced by others in the future." Some people in the automobile industry told reporters of the 21st century economic report.

Global problems to be solved

From the production capacity planning of Ningde era. At present, more than 98% of the capacity of 500gwh completed and planned to be built is in China. At present, the only overseas factory planned by Ningde times is the Turing factory in Germany, which starts construction in 2019, with a planned capacity of 14gwh.

Although Ningde era is the power battery enterprise with the highest loading volume in the world, compared with Japanese and Korean enterprises, the development in the global scope is not balanced. The success of Ningde era is mainly attributed to the scale of China's electric vehicle market. In 2020, the market share of Ningde era in China's power battery market will reach 50%, far exceeding that of other enterprises.

Although LG Chemical, Samsung, SK, Panasonic and other Japanese and South Korean battery companies are speeding up the layout in China, and BYD is also accelerating the promotion of battery supply abroad, the dominant position of Ningde era in the domestic market is hard to shake.

However, in the global competition with Japanese and Korean battery companies, Ningde era is at a disadvantage.

According to SNE research and China charging infrastructure alliance data, in 2020, the global loading volume of Ningde times and LG Chemical will be 34 GWH and 31 GWH respectively, among which, the loading capacity in China will be 31.79 GWH and 4.13 GWH respectively. Ningde times accounts for 93.5% of the total loading volume in the Chinese market, while LG Chemical only accounts for 13.3% of the total. LG Chemical has global distribution in China, South Korea, Europe and the United States.

Europe and the United States and other major power battery market, at present, the main market share is occupied by Japanese and Korean battery companies.

Ningde times certainly does not want to be a local enterprise in China. The new energy vehicle and power battery industry has great development opportunities in the world.

Although Ningde era wants to seize a place in European and American markets from Japanese and Korean battery companies, it is extremely difficult. At the same time of radical expansion, how to go global is an important issue facing Ningde era.

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