This article**: Times Business School Author: Wentong
Where there are people, there are rivers and lakes, and where there are rivers and lakes, there are stories.
With the disclosure of the third quarterly report, the report card of listed companies has been released, and the undercurrent of the lithium battery industry chain that has attracted much attention is surging, and several are happy and a few are sad.
Lithium iron phosphate, as a cathode material for lithium-ion batteries, is affected by changes in supply and demand, and the industry will enter the "deep water area" of overcapacity and survival of the fittest in 2023. However, the cycle is an objective phenomenon of the stage, and the cycle has not subverted the development logic of the new energy industry.
Wanrun New Energy (688275.)SH) is a leading enterprise in the domestic lithium-ion battery cathode material industry, focusing on the R&D, production and sales of lithium-ion battery cathode materials, and its market share has been at the forefront of the industry, with customers including BYD, CATL and other well-known large enterprises.
In this round of adjustment cycle, Wanrun New Energy actively gave full play to the advantages of industrial chain integration of precursors and cathode materials, continuously reduced production costs, the growth rate of product shipments far exceeded the industry average, and the operating income increased greatly against the trend, occupying a leading position in the fierce competition.
Revenue bucked the trend and increased by three percent, and the growth rate of shipments far exceeded the industry average
In recent years, with the strengthening of the technical iteration of the packaging form by the leading enterprises of power batteries in China, especially the landing and application of CTP technology and blade battery technology, the energy density of lithium iron phosphate batteries has been greatly improved, and the proportion of lithium iron phosphate applications has also been continuously improved, and the lithium iron phosphate industry has entered the fast lane.
As a high-prosperity track, many manufacturers of lithium iron phosphate have announced expansion plans, but the rapid expansion of industry production capacity has also exacerbated the phenomenon of oversupply in the market, and the price of lithium iron phosphate products has continued to decline.
At present, in this round of industry downward cycle, enterprises at the tail end of the industry and low gross profit space will first be eliminated due to continuous losses;Although the enterprises at the head of the industry are also facing a short-term crisis, in the long run, the market share and competitiveness of the leading enterprises will be further consolidated and improved.
As a leading enterprise of lithium battery cathode materials, Wanrun New Energy produces a variety of lithium iron phosphate products, a complete product system, and a good layout in power materials, power materials, energy storage materials, and long-life materials. At present, Wanrun New Energy has developed core competitive products represented by A8-4E, A8-4F2 and A8-4G, and has reached long-term and stable cooperative relations with BYD, CATL and other leading lithium battery companies by virtue of its excellent quality control capabilities, advanced technical level and stable product capabilities, and its product shipments have been at the forefront of the industry.
According to the financial report, in the first three quarters of 2023, under the condition of slowing downstream demand growth and fierce market competition, Wanrun New Energy deepened customer cooperation through technical process optimization and product iteration, and the growth rate of shipments exceeded the industry average, and the operating income exceeded 10 billion yuan, a year-on-year increase of 3442%；From the perspective of quarterly trends, the number of product sales in the first three quarters of Wanrun New Energy was eye-catching, with a year-on-year increase of 10354%, demonstrating the ability to navigate through industry cycles.
At present, lithium iron phosphate cathode materials** are undergoing a round of deep adjustment, but the industry track is seriously differentiated, and not all companies can achieve positive revenue growth like Wanrun New Energy.
According to the financial report, in the first three quarters of 2023, among the comparable listed companies, German Nano (300769SZ) had an operating income of 143100 million yuan, down 076%；Fulin Seiko (300432.)SZ) had an operating income of 417.8 billion yuan, down 11 percent year-on-year54%；Anda Technology (830809.)BJ) was 427.4 billion yuan, down 7 percent year-on-year55%。
Even Hunan Yuneng (301358., the largest production capacity in the industrySZ), whose revenue in the first three quarters was 343300 million yuan, a year-on-year increase of 2944%, the growth rate is not as good as Wanrun New Energy.
Objectively, the lithium battery industry track is still showing a good development trend, and the future demand for power batteries and energy storage batteries for new energy vehicles and energy storage batteries is long-term optimistic.
In the context of the industry reshuffle caused by phased overcapacity, the scale, cost and technical advantages of the leading enterprises represented by Wanrun New Energy are gradually highlighted, and they are expected to cross the cycle and become the winner of the second half of lithium iron phosphate.
With the clearing of the industry's production capacity and the rebound of product prices, Wanrun New Energy can expect to grow elastically in the future by virtue of its product performance advantages, customer resource advantages, technology iteration advantages, and cost control advantages.
Wanrun New Energy said that the company has always adhered to the vision of "leading the development of the industry with scientific and technological innovation, creating a model of green recycling and low-carbon, and becoming a global leader in new energy materials", and has always adhered to the R&D strategy of "R&D generation, reserve generation, and production generation", built a rich and comprehensive lithium iron phosphate product system, and reserved the core technology of new products such as cathode materials for sodium-ion batteries and lithium manganese iron phosphate, so as to further enhance the company's profitability and enhance its ability to resist risks.
The hematopoietic capacity of the main business has recovered significantly, and the operating cash flow has improved
The lithium battery cathode material industry is a technology-intensive industry, but also a capital-intensive industry, and large-scale production has a high demand for fixed asset investment and daily working capital. Wanrun New Energy keeps up with the development trend of the industry, reasonably plans the construction progress of the production capacity under construction, and has laid out large-scale production bases in Hubei, Shandong and Anhui provinces, and the relevant fund-raising projects are also being implemented and implemented as scheduled, among them, the "Hongmai High-tech High-performance Lithium-ion Battery Materials Project" has been put into operation and achieved external sales, which is expected to continue to contribute considerable performance to the company.
At present, Wanrun New Energy has realized the front-end integration of the industrial chain of precursor and cathode, and the iron phosphate manufactured is used in the company's continuous production of lithium iron phosphate cathode materials, so as to reduce product costs, ensure stable and controllable product quality, and have the advantages of perfect industrial chain integration.
Thanks to the advantages of industrial chain integration, Wanrun New Energy has gradually improved the operational efficiency and hematopoietic capacity of its main business in the face of phased downside risks in the industry.
According to the financial report, at the end of the first quarter, the end of the second quarter, and the end of the third quarter of 2023, Wanrun New Energy's inventory was 241.1 billion yuan, 257.7 billion yuan, 158.4 billion yuan, showing a downward trend, and the effect of destocking is obvious;During the same period, the company's inventory turnover days were 7982 days, 7613 days, 54In 74 days, the inventory turnover rate continued to increase.
In addition, the profitability of Wanrun New Energy has also improved significantly.
According to the financial report, from a single quarter, in the third quarter of 2023, thanks to cost reduction and efficiency increase, Wanrun New Energy's gross profit margin rose to 606%, from negative to positive, and in the second quarter, affected by the large fluctuations in the upstream raw material lithium carbonate**, its gross profit margin was -1893%。
From the perspective of operating cash flow, Wanrun New Energy's own hematopoietic capacity also continues to improve. In the third quarter of 2023, Wanrun New Energy's net cash flow from operating activities was 17.8 billion yuan, from negative to positive, compared with net cash flow from operating activities of -8 in the same period last year$1.6 billion.
It can be seen that in the face of the severe market environment, Wanrun New Energy's inventory turnover, gross profit margin, and operating cash flow tend to improve, highlighting the ability of leading enterprises to pass through the cycle by virtue of cost advantages and management and control capabilities.
Wanrun New Energy said that with the successive implementation of fundraising projects and the continuous enhancement of production scale and supply capacity, the company will continue to promote the company's endogenous growth and extension expansion, maintain the steady growth of its core business, continuously improve profitability, and create greater value for shareholders.