The performance of LFP material manufacturers is booming collectively
On October 27, 2022, Dyanonic, Wanrun, Fulin P.M. and other lithium iron phosphate materials companies disclosed their quarterly reports simultaneously, and the results broke out collectively. The net profits in the first three quarters were 1.828 billion RMB, 792 million RMB and 600 million RMB, respectively, with a year-on-year growth rate of 6.28 times, 3.33 times and 1.51 times.
Since last May, the continuous rise of lithium battery raw materials has put pressure on the profits of the industrial chain. Lithium iron phosphate battery, with its high cost performance and high safety, has returned to the market center and its installed capacity has grown rapidly.
From January to September this year, the cumulative loading of power batteries in China was 193.7GWh, of which the cumulative loading of lithium iron phosphate batteries was 116.3GWh, accounting for 60.1% of the total, with a year-on-year growth of 159.8%.
Driven by the strong terminal demand, lithium iron phosphate material plants have expanded production to seize market share, and the industry has poured into new companies represented by titanium dioxide and phosphorus chemical companies.
On the day of the disclosure of the third quarterly report, Dynamonic, Wanrun and Fulin P.M. all released plans for expansion of production, with an accumulated investment of more than 13 billion RMB.
Lithium iron phosphate listed companies have doubled their income
From the results of the previous three quarters, the average income of lithium iron phosphate listed companies doubled. Dynamonic’s operating revenue in the first three quarters was 14.416 billion RMB, up 519.79% year on year; Net profit was 1.828 billion RMB, with a year-on-year growth of 628.2%.
The revenue and net profit in the third quarter were 6.859 billion RMB and 548 million RMB respectively, with year-on-year growth rates of 552.41% and 372.6% respectively.
Wanrun’s operating income in the first three quarters was 7.44 billion RMB, up 549.59% year on year; The net profit was 792 million RMB, up 332.93% year on year. In the third quarter, a single quarter recorded a revenue and net profit of 4.045 billion RMB and 298 million RMB, with a year-on-year growth rate of 803.66% and 600.24%.
Fulin P.M.’s net profit in the first three quarters was 600 million RMB, a year-on-year increase of 151.35%; The revenue and net profit in the third quarter were 2.026 billion RMB and 246 million RMB respectively, with a year-on-year growth of 220.46% and 214.27%.
It is worth mentioning that the net profit growth rate of the aforementioned companies in the third quarter could not catch up with the growth rate of revenue, and the gross profit margin showed a downward trend.
Among them, the gross profit rate of Dynamonic in the first three quarters was 22.24%, down 5.57 percentage points over the half year. The gross profit rates of Wanrun and Fulin P.M. in the first three quarters were 18.34% and 20.15% respectively, down 3.75 percentage points and 0.6 percentage points over the half year.
In terms of cash flow, the operating net cash flow of the three companies was negative, and further decreased compared with the same period last year. Among them, the net cash flow generated by Dynamonic’s operating activities was -4755 billion RMB, and that of Wanrun and Fulin P.M. was -2187 million RMB and 359 million RMB respectively.
Dynamonic and Wanrun released the investment and expansion plan for lithium iron phosphate materials
The continuous enlargement of the market scale and the performance dividend that has been realized have promoted the continuous expansion of lithium iron phosphate material factory. On October 27, 2022, both Dynamonic and Wanrun released their investment expansion plans.
The announcement shows that Dynamonic plans to jointly invest with Qujing Heijin Energy in the construction of lithium battery materials supporting project in Qujing, China, with a total investment of about 2.5 billion RMB.
In addition, the company plans to build a lithium supplement production base project with an annual output of 5000 tons in Chengdu, with a total investment of no less than 1 billion RMB. This expansion of Wanrun will be mainly used to increase the capacity of lithium iron phosphate.
According to the plan, the company plans to use the over raised capital of 2.049 billion RMB to increase the capital of 1.549 billion RMB and 500 million RMB respectively to the holding subsidiary Lubei Wanrun and the wholly-owned subsidiary Huahong Qingyuan and jointly implement the project of co production of 240000 tons of iron phosphate with 240000 tons of lithium iron phosphate per year. The fixed asset investment of the project is 6.19 billion RMB.
Fulin P.M. cooperates with JSMC to optimize the layout of lithium battery materials
On October 27, 2022, Fulin P.M. plans to invest in the construction of a new type of high pressure lithium iron phosphate and supporting main materials integration project with an annual output of 200000 tons in Yichun Economic Development Zone, China, and first start the construction of a production capacity with an annual output of 150000 tons, with an investment amount of about 3.5 billion RMB, which is expected to be completed and put into operation by the end of December 2023.
At the same time, Fulin P.M. has reached a strategic cooperation agreement with JSMC, one of the top 10 lithium carbonate battery companies in China, to establish a cooperative relationship in the optimization of the lithium battery material industry capacity layout and industrial investment.
Fulin P.M. will participate in JSMC’s Yifeng lithium salt project in China, jointly invest in the construction of the 20,000 ton/year lithium salt project, and obtain the priority supply right of 50% of the output of lithium carbonate produced.
The two parties will establish a joint venture to carry out technical research and development and industrial investment in the preparation of lithium dihydrogen phosphate from lithium sulfate. In addition, Fulin P.M. and Jiangte Mining, a subsidiary of JSMC, will jointly build a new lithium salt project with an annual output of no less than 50000 tons in Yifeng County, China.
Many new manufacturers have invested in lithium iron phosphate related capacity
Lithium iron phosphate has also attracted new manufacturers such as titanium dioxide and phosphorus chemical industry.
Recently, CJN, a phosphorus chemical company, announced that it is planned to raise no more than 1.5 billion RMB for the 50000 t/a battery grade lithium iron phosphate cathode material precursor material iron phosphate and supporting 600000 t/a sulfur based sulphuric acid production project, the 100000 t/a battery grade lithium iron phosphate cathode material project (Phase I) of CJN, and supplement working capital.
Before that, LB Group, Annada, CNNC, Hui Yun Titanium Industry, Xingfa, CHANHEN and other companies have announced the construction of lithium iron phosphate related capacity.