ASIACHEM <China LIB Annual Report 2018> shows that, in H1, 2018, China Top 5 power battery enterprises installation volume proportion is almost 80%, shows situation of highly concentration. ASIACHEM believes that, China power battery situation of oligopoly is forming. Adding Japanese and South Korean enterprises actively distribution in China, China LIB industrial chain will begin a new round of shuffling.
Public data shows that, in 2016, number of China power battery enterprises was 155, and which decreased to around 130 in 2017. In 2018, it is estimated to further reduce to 105.
ASIACHEM <China LIB Annual Report 2018> information shows that, since 2018, power LIB projects been abandoned one after another.
Zhejiang Kan Specialities Material
Apr 2018, Zhejiang Kan Specialities Material released announcement, the company was planning to purchase 87.58% share of Shenzhen Zhuoneng New Energy Ltd. by issuing stocks and paying cash and raised supported capital. Now as industry policy and security market etc. external environment changed, the company and counterpart cannot reach agreement on asset evaluation and pricing scheme of the target company, the company decided to stop this major asset reorganization.
Apr 2018, Zhejiang Great Southeast released announcement, the company would stop implementing 300MAh/a High Energy Power LIB Construction Project. Implementing subject of this project is Zhejiang Lvhai New Energy Technology Co., wholly owned subsidiary company of the company, project estimated total investment was CNY 795.6M. Information shows that, up to Dec 31, 2017, the company accumulated invested CNY 83.7768M, project pace 10.53%.
By constructing early phases of ‘300MAh/a High Energy Power LIB Construction Project’, part of project has operation and launched operation, current existed infrastructure and devices already have met the requirements of daily production and operation of Zhejiang Lvhai; besides, currently, China related departments to vehicle used battery’s allowances are unclear, downstream requirement is weak, under market requirement of the company power products is downturn, the company capacity expansion is more careful; meanwhile, LIB upstream raw materials price rising level is quite big, and which cause product market price trends remain unclear. In order to avoid above risks, the company active controls project capacity and concentrates advantage resources to do power battery R&D. Thus, the company plans to stop implementing ‘300MAh/a High Energy Power LIB Construction Project’.
Hybrid Kinetic Group
Jul 2018, Hybrid Kinetic Group released announcement, the company signed transfer agreement with 3 enterprises, transferred its holding all 25% shares of Zhejiang GBS Energy Co. Ltd. and total amount is CNY 88.614M.
Hybrid Kinetic Group stated that, since completing purchasing, facing technical increase of other green energy batteries, Zhejiang GBS engaged LIB technologies did not meet expectation of the Group for many years, thus, the company decided to strip it off.
Sichuan Chengfei Integration
Jul 2018, Sichuan Chengfei Integration Technology Corp released announcement, the company plans to reorganize its current holding LIB business assets (include but not limit in shares of China Aviation (Luoyang) Lithium Battery, China Aviation (Jiangsu) Lithium Battery and China Aviation LIB Technology Research Institute etc. companies) base on China Aviation (Jiangsu). After reorganization, the company will no longer bring China Aviation (Luoyang) and China Aviation (Jiangsu) into combined statement.
Information shows that, in 2017, Chengfei Integration operating income was CNY 1.943bn, YOY decrease 13.47%; net profit CNY 108M, YOY decrease 176.19%. As for reasons of loss, Chengfei Integration stated that, it mainly is led by the LIB business achievements decrease. In 2017, the company LIB business block realized CNY -197M net profit, YOY decrease 401.87%; yet, other blocks of the company are positive increase.
In 2017, China NEV allowance policy increased technical requirement and reduced allowance quota, market appeared largely adjustment, passenger used vehicle gradually occupies market mainstream, special used vehicle market also greatly increases, yet, coach market was greatly influenced by the policy and whole industry competition is more and more fierce, downstream new energy whole vehicle factories transfer its main cost of allowance decrease to battery manufacturers, and which lead LIB product price greatly decrease.
Guangdong Dynavolt Power
The company semiannual report shows that, in H1, 2018, the company realized CNY 755M operating income, YOY decrease 51.30%, among, LIB industry realized CNY 62.9979M operating income, YOY decrease 55.52%; net profit CNY -308M, YOY decrease 752.61%.
In H1, 2018, influenced by China allowance decrease and market competition, NEV enterprises digested market pressure and transferred pressure to upstream supported enterprises at the same time, LIB industry enters shuffling stage, unqualified power battery products are gradually eliminated by market, market price of ternary power battery packs have great decrease as well, adding operating mileage requirement of new energy logistics vehicles applying for financial allowance is no less than 20k km, the payment collection period is long, which bring quite big difficulties to NEV enterprises and upstream supported enterprises.
The company 2 major LIB production bases are still under construction, currently, the construction capacity is only 1GWh and capacity has not yet released. What is more, the preliminary fixed investment of high-end power battery project is huge, China economy deleverage policy causes huge influence to the company financing work, lack of capital leads production line cannot construction and operation as planned; part clients as the company capital is nervous, and worried the company deliver ability and cancelled the original order. Above all, the company LIB block H1 operation achievements were greatly influenced.
J&R Optimum Energy
Jul 2018, J&R Optimum Energy released announcement, the company plans to convert part assets of OptimumNano into money.
Aug 2018, J&R Optimum semiannual report shows that, in H1, 2018, as OptimumNano self strategic decision was wrong, expansion speed was too fast, internal management was out of control, adding new energy market environment and China policy adjustment etc. disadvantages, it got into debt crisis. Afterwards, a series of chain reactions were caused, most bank accounts of the company were frozen and large amount of operating assets were sealed up, and led production and operation seriously affected, and overall operating rate of OptimumNano is seriously insufficient, achievement is further decreased. Up to Aug 6, 2018, the company operating rate was about 1.66%, only Shenzhen and Anhui Shucheng 2 production bases were under commissioning and production.
Sep 2018, Zhejiang Unifull Industrial Fibre stated that, as the company was filed for investigation, and influenced by China NEV allowance policy change, operation of Zhihang New Energy, wholly owned subsidiary of the company, was greatly influenced, operating rate is always insufficient. Besides, financing, investment and R&D of Zhihang New Energy are greatly influenced. Before, in Aug 2018, the company 2018 semiannual report shows that, Zhihang New Energy net profit was about CNY -960M.