Three Gate Of Life In CATL

- Apr 14, 2018-

Three "Gate of Life" in CATL

Introduction: If there is no listing plan, the CATL may be just the role of the dark horse in the vertical field of lithium batteries, silently, hatching the dream of "Lithium-electricity safety to be the world's best." Now, the influence of the CATL has exceeded the lithium-electricity circle. This unicorn, which is covered with a gold-clad cloak, shines brilliantly.

Lithium giant CATL IPO rushed, only one step away from the A shares, then we must choose a day to ring the bell.

If there is no listing plan, the CATL may only be the dark horse role in the vertical field of lithium batteries, silently working, hatching the dream of "Lithium-electricity safety to be the best in the world."

Now, the influence of the CATL has exceeded the lithium-electricity circle. This unicorn, which is covered with a golden cloak, shines brilliantly.

As a lithium battery company, the CATL is somewhat unthinkable: it challenges the customers of the downstream car companies, enticing the envy and hatred of their peers. In just 7 years, it has become the world's largest lithium battery shipment company; it has passed 24 days. Refreshing the IPO will record the myth that CATL seems to be non-replicable.

Three "Gate of Life" in Ningde Times

In the early stages of development, there were BMW auto brand endorsements, and the CATL won the favor of a number of car companies. It also attracted first-line car companies to invest in shares and carry out interest binding. In the face of new energy vehicles subsidy, the technical requirements of the battery is high, and competitors launch insults and other practical problems, how long can the high gross profit of the CATL be maintained? Is its considerable profitability sustainable?

Analysts believe that the profitability in the CATL is a certain concern, and this is the B-side that is not noticed in the CATL in the capital rave party.

Policy tightened The power battery industry entered the era of low profit

Under the arduous efforts of several generations of automakers, the development of China’s fuel vehicles has still failed to catch up with the pace of the West. “Very changing lanes ahead” and the development of new energy vehicles provide an opportunity to start “turning over”.

In this catch-up, the state has provided substantial subsidies for new energy vehicles that meet the requirements, and the new energy automobile industry has taken the lead in the world driven by policies.

However, the subsidy retreat until complete cancellation is the general trend. New energy vehicles and power battery companies that have grown up in the care of the country have benefited from the subsidy while benefiting from subsidies. The power battery is the core component of the new energy vehicle, and the cost accounts for 30% to 50% of the entire vehicle. The subsidy retreat means that the power battery company must bear the corresponding price pressure.

Many people should have the impression that on November 15, 2017, under the influence of the rumor of a 40% drop in subsidies for new energy vehicles, the A-share lithium battery segment suffered a drop of more than 3%, and the concept of 2017 hot Shares of salt lakes (mainly engaged in the manufacture of chemical raw materials and chemicals, lithium in salt lakes is an important business), pilot-intelligent (lithium-electric equipment companies) and other lithium-related sectors have all fallen below the limit.

In the past few years, hundreds of billions of dollars of funds poured into the field of new energy vehicles and power batteries. On February 13, 2018, the "Circular on Adjusting and Perfecting the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles" was promulgated. Subdivided subsidy standards were generally consistent with rumors, and investors gradually resumed their rationality and calmed down.

Liu Yanlong, secretary-general of the China Chemical and Physical Power Industry Association, said that the subsidy retreat and the issuance of a new subsidy policy have shattered policy hotbeds, and the power battery industry has entered a period of market transition, and the brutality of industry competition has begun to show.

“The continuous increase in the energy density of power batteries has increased the entry threshold for products and accelerated the elimination of outdated enterprises.” Liu Yanlong bluntly stated, “The pressure of price cuts has been transmitted upstream and gradually, and power batteries have gradually changed from profitable industries to meager profits.”

The CATL also failed to break away from the industry's development laws. Due to the rapid increase in power battery capacity and the subsidy policy for new energy vehicles, the price of power battery systems in the CATL was significantly reduced from 2.28 yuan/Wh in 2015 to 1.41 yuan/Wh in 2017. The cumulative decline of 38.26%.

The CATL transferred its 23% stake in Prader to Oriental Seiko. Affected by this, it is not optimistic about the net profit after deducting non-debenture that can more objectively and fairly reflect the operating status of the company. The data shows that after the CATL, the net profit after deductions fell from 2.96 billion yuan in 2016 to 2.47 billion yuan in 2017, which is unbelievable. With the retreat of subsidies, the ability to maintain current profitability is a test for the CATL.

Driven by the downstream new energy vehicles and power batteries, the prices of cobalt and other raw materials used in the upstream batteries skyrocketed. On the one hand, customers are exerting pressure on battery prices. On the other hand, upstream suppliers are madly increasing their prices, and the situation of battery companies is self-evident.