Positive policies on new energy industry lead great production expansion
On September 26, three ministries and commissions jointly announced the continuation of the vehicle purchase tax exemption policy for new energy vehicles. Then, on September 28, the central bank set up a special re-loan for equipment renovation to support equipment renovation in manufacturing and other fields.
The relevant person in charge of EVE Energy Co., Ltd. (EVE) believes that the measures show that the country intends to drive the growth of supply by stimulating consumption and drive the development of the industry through the expansion of demand, so the new energy vehicle industry is expected to continue to grow at a high speed.
The relevant person in charge of Wuxi Lead Intelligent Equipment Co., Ltd. (LEAD) also says that the continued exemption of new energy vehicle purchase tax can reduce the impact of the rise of short-term costs on demand, which is beneficial to the long-term development of the industry.
The relevant person in charge of BYD Co. mentions that the extension of Chinese new energy vehicle purchase tax policy will further stabilize the industry's expectation and increase automobile consumption.
According to Jun Ma, Chief Analyst of Changjiang Securities, the extension of the policy is actually to maintain the stability of the electric vehicle policy, which will be beneficial to the overall growth of new energy vehicle sales next year. He expects 40% year-on-year sales growth. Chief Analyst of Soochow Securities and Essence Securities also have a similar forecast. Yan Cui, Chief Analyst of Huaxi Securities, also considers that great policy support can increase the growth space of new energy.
On September 28, CATL announced that it would build a battery production base in Luoyang, Henan Province. The investment of the base is not more than 14 billion yuan, and the capital source is self-raised by the company. Construction period of the project is expected to be no more than 36 months from the start of construction. Also, the day before, EVE announced a number of investment plans. First, the company will build energy storage and power battery project with planned capacity of 40GWh. The total investment is expected to reach 10 billion yuan. Second, the company will increase capital 884 million yuan to the subsidiary to build capacity of lithium battery anode materials. Third, it will spend 800 million yuan to acquire a 20% stake in Shandong RuiFu Lithium Industry.
Analysts are generally optimistic about the new energy industry chain because of support of policies and performance. Jun Ma notes that the valuation of the entire field has been declining, with the partial field represented by lithium batteries returning to the low valuation of nearly three years. There are two obvious investment opportunities in the new energy field. On the one hand, the battery industry chain continues to grow rapidly; on the other hand, the development of intelligence and networking accelerates significantly.
Duohong Zeng, Chief Analyst of Soochow Securities, worries about the sustainability of the high-speed growth in domestic demand for energy vehicles, but she is still optimistic about the investment opportunities in the electric vehicle field. Yang Hu, Chief Analyst of Essence Securities, is also firmly optimistic about the new energy car industry chain. There are three reasons: first, valuation of the enterprises is low; second, the global penetration rate of new energy is also low, only 10% to 15%; third, leading enterprises have a high industrial chain status, they don't need to worry about excessive competition. Tao Zeng, Chief Analyst of CICC, considers that high boom in the new energy vehicle industry is continuing because of low global penetration rate, and also policy subsidies boost demand. It is expected that the global sales of new energy vehicles will reach 10,000,000 units in 2022, with an increase of 40-50% year-on-year. Accordingly, the demand on positive electrode plate, negative electrode plate, separator, electrolyte will increase 54.6%, 52.1%, 52.7%, 52.7% respectively.
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