Demand for high nickel cathode materials rises. Rongbai Technology's net profit last year increased by 144.13% year-on-year

On the evening of February 25, Rongbai Technology (688005) disclosed the 2020 annual results bulletin. The company achieved operating income of 3.788 billion yuan in 2020, a decrease of 9.59% from the same period last year. The net profit attributable to shareholders of listed companies was 213 million yuan, which was higher than the previous year. A year-on-year increase of 144.13%. Rongbai Technology stated that the company’s operating income for 2020 has declined compared to the same period last year, mainly due to the fact that the global new energy vehicle market in the first half of 2020 was greatly affected by the new crown epidemic, and the company’s and downstream manufacturers’ operating rates have temporarily decreased. In the second half of 2020, as the domestic epidemic is brought under control, demand for new energy vehicles has recovered, and demand from strategic customers has increased, the company’s orders in the second half of the year will be relatively full, and capacity utilization will gradually return to a relatively high level in the second half of 2020. The high-level, high-nickel ternary cathode material NCM811 production and sales have increased significantly, which has promoted a faster recovery of annual operating performance. In 2020, mainstream international car companies will accelerate the deployment of high-nickel battery technology routes, and the market demand for high-nickel materials will further increase. Thanks to the long-term focus on implementing specialized strategic routes, the company will begin to enter full production in the fourth quarter of 2020, in order to meet In response to customer orders, the company officially launched a new round of capacity expansion for its three major manufacturing bases in Hubei, Guizhou, and South Korea, to give full play to the company's engineering equipment and technology advantages to accelerate capacity construction. Internally promote management changes, implement a business department system, introduce IPD processes, implement equity incentives, and further enhance management innovation capabilities. In 2020, Rongbai Technology's operating profit increased by 153.08% year-on-year, total profit increased by 139.97% year-on-year, and net profit attributable to owners of the parent company increased by 144.13% year-on-year. Net profit attributable to owners of the parent company after non-recurring gains and losses increased year-on-year An increase of 185.16%, basic earnings per share increased by 128.57% year-on-year. Rongbai Technology said that the main indicators of the increase and decrease are mainly due to: (1) The demand for new energy vehicles in the second half of 2020 has rebounded, and the demand for high nickel cathode materials has risen. The sales volume of the company's core product NCM811 series has increased significantly, which has effectively made up for the new crown in the first half of the year. The adverse impact of the epidemic has promoted a faster recovery of annual operating performance; (2) Operational efficiency has been improved, and the effect of cost reduction and efficiency enhancement has been significant. The company's core product NCM811 has a significant increase in profit per ton in the fourth quarter; (3) The company has actively strengthened customer credit Risk management and control, coupled with the rebound of the power battery industry, the customer's payment status is good, and there will be no similar situation in 2020 of the previous year's large provision for bad debts of accounts receivable. It is worth noting that on February 8, Guizhou Rongbai, a wholly-owned subsidiary of Rongbai Technology, cooperated with the Honghuagang District Government of Zunyi City to build the first phase of '100,000 tons of high nickel cathode material production line project' with an annual output of 15,000 tons. The project has been completed and put into production in 2019. The company has decided to start the second phase and subsequent projects of the 100,000-ton high-nickel cathode material production line in 2021, and has signed a cooperation agreement with the Honghuagang District Government on project-related matters. The project construction land, policy preferences and other content have reached an agreement. The investment and construction funds for the second phase and subsequent projects are expected to not exceed 2.9 billion yuan. The announcement shows that the second phase and subsequent projects are about 48 months in total, including 15,000 tons of the second phase project and 70,000 tons of the follow-up project. Together with the 15,000 tons of the first phase, they form a lithium battery high nickel cathode material production line with an annual output of 100,000 tons. Among them, the second phase is expected to be completed in 2021. In addition, Rongbai Technology is also actively deploying overseas Korean production capacity. A wholly-owned subsidiary Co., Ltd. is responsible for the construction of 70,000 tons/year high nickel cathodes. Currently, it is actively preparing for the first phase of 20,000 tons of production capacity. The project is also expected to be completed in 2025. At the same time, the production capacity of precursors has also been deployed in Chungju (EMT), South Korea. On the basis of the existing production capacity of 6,000 tons, it will be expanded by 6,000 tons. Orient Securities stated that Rongbai Technology's production capacity will continue to be released in the next five years. It is estimated that by 2025, the company will have 172,000 tons of ternary cathode production capacity (high nickel production capacity will account for more than 95%) and 149,000 tons of precursor production capacity. .