Since the beginning of this year, although the Hong Kong stock IPO market has been relatively sluggish, there are many companies with eye-catching performance among the new listings.
Flush data shows that there are a number of new stocks that have more than doubled their cumulative gains during the year, among which the larger increase is Limeng Technology (02405.HK) and Shengneng Group (02459HK), the cumulative increase of the two reached 69286% and 38125%。
Since the listing of the Hong Kong stock market of the graphite electrode manufacturer Shengneng Group, the stock price has continued to rise, earning enough market attention. On December 20, the share price of Shengneng Group hit a new high again, closing up 1544%, with a market capitalization of HK$7.7 billion.
It is worth noting that compared with many new shares with more scattered shares, Shengneng Group's equity is more concentrated, and its controlling shareholder and executive director of the company, Hou Haolong, currently holds up to 73% of the company's shares. When the stock price was at a high level, Hou Haolong bought 20 million shares of Shengneng Group on November 21. According to the company's announcement, Hou Haolong transferred the 20 million shares to a group of individuals free of charge, who has always maintained a deep friendship with Hou Haolong.
The recent announcement of entering the graphite anode material market may be a major driving force for the take-off of Shengneng Group's stock price.
Cut into the new energy track
On November 13, Shengneng Group announced that considering the expected growth in demand for lithium-ion batteries in the overseas electric vehicle and energy storage system markets, the directors believe that it is the best time for the group to enter the graphite anode material market through its own graphite anode material production plant.
The Directors have decided to enter into a deed of assignment to effectively repurchase the Narni 1 site for its own graphite anode material production plant in Europe, given that the Narni 1 site is adjacent to the Group's existing graphite electrode production plant in Narni, Italy, and that the plant is currently expected to demonstrate synergies between the graphite electrode and graphite anode materials in common process technologies (such as roasting and graphitization).
According to the data, Shengneng Group is a global manufacturer of ultra-high power graphite electrodes, with a customer base in more than 25 countries around the world, including the world's major electric arc furnace steel manufacturers in the Americas, Europe, the Middle East and Africa, Asia Pacific and China, and sells its products to the automotive, infrastructure, construction, electrical, machinery, equipment and transportation industries.
Shengneng Group's revenue is relatively simple, all of which comes from the sale of graphite electrodes, and cutting into graphite anode materials is also an attempt to diversify Shengneng Group's business.
At present, lithium batteries are the main application in the field of power batteries in China, and lithium batteries are mainly composed of positive electrodes, negative electrodes, electrolytes and separators, among which the selection of negative electrode materials will be directly related to the energy density of batteries.
At present, the anode materials used in lithium batteries on the market mainly include carbon materials, of which carbon materials include graphite anodes, which are currently the most used, as well as disordered carbon anodes, hard carbon, soft carbon, etc. The highest degree of market-oriented application is graphite anode materials, of which artificial graphite and natural graphite have large-scale industrial applications, accounting for more than 80%.
Benefiting from the vigorous development of China's new energy vehicle market, China's anode material shipments have grown rapidly in the past few years. According to data from the Lithium Battery Research Institute of Advanced Engineering Industry and Research, China's anode material shipments in the first three quarters of this year were 1.19 million tons, a year-on-year increase of 25%. Among them, 105 artificial graphite materials were shipped80,000 tons, natural graphite material shipments 1390,000 tons, a year-on-year increase.
The performance was unstable and turned negative in the first half of the year
Shengneng Group is in the track under the "dual carbon" policy, and the "double carbon" goal has brought global impetus to the transformation of the company's steel manufacturing downstream industry from blast furnace steelmaking to electric arc furnace steelmaking.
According to the data, ultra-high power graphite electrodes are key industrial materials for electric arc furnace steel manufacturers. At present, blast furnace steelmaking still dominates steel manufacturing, accounting for 70% of the world's steel manufacturing and even 90% in China. In terms of pollutant emissions and energy consumption, the use of electric arc furnaces is more environmentally friendly, and is considered to be a central pillar of "ultra-low emission" transformation and decarbonization within the steel industry.
However, Shengneng Group has failed to translate China's environmental protection trend into a driving force for its profitability improvement, and its operating performance in the past few years has not been good.
In 2019 and 2020, Shengneng Group's revenue fell sharply, and its net profit fell off a cliff**. Among them, the revenue in 2019 still declined despite the increase in sales volume, mainly due to the decline in the average selling price of products, which also led to a significant decrease in its gross profit, which in turn affected profitability.
During 2021 and 2022, the average price of graphite electrodes in China has increased, which has led to the recovery of Shengneng Group's performance, but there is still a large gap compared with 2018 and 2019.
In 2023, with the decline in the average price of graphite electrodes and the decline in global crude steel production under the economic situation, the volume and price of Shengneng Group's products will fall, and its profitability will be weakened again. In the first half of 2023, Shengneng Group turned from a profit to a loss, with a loss of more than US$4 million.
From the above, it can be seen that the reason for the instability of Shengneng Group's performance stems from the excessive reliance on a single product of graphite electrode, so that it has been greatly impacted by unfavorable factors such as changes in market demand, product decline and raw materials. The layout of new businesses and the opening up of new growth poles have become one of the best ways for Shengneng Group to reverse the decline in operation.
Graphite anode and graphite electrode can be described as "the same origin", the raw materials are the same, the carbonization and graphitization process equipment are the same, but there are slight differences in raw material addition, processing accuracy, etc., and the adjustment of the production end is more flexible. Based on the accumulation of various aspects in the field of graphite electrodes, it is expected that Shengneng Group will be able to avoid detours on the way to cut into graphite anode materials. At the same time, China's anode material market is as strong as a forest, showing a "big and many small" competition pattern, and it will take time to verify whether Shengneng Group can get a piece of the pie in the track in the future.
Author: Far away.