The Enemy Retreats Me, The Chinese, Japanese And Korean Wars In The Lithium Battery Industry Chain

- Sep 27, 2019-

To say that human beings are the only energy device that they carry with them, that is lithium batteries, specifically lithium-ion batteries. We usually use smart phones, tablets, laptops, and even electric taxis on the streets of Shenzhen, Beijing, Hangzhou, Taiyuan, Shanghai and other cities, electric buses, and lithium-ion batteries inside.

Since the birth of the lithium-ion battery industry in the early 1990s, it has been around for 30 years. This industry has monopolized from Japan to Japan and South Korea, and now China, Japan and South Korea are three pillars, and now they are gradually developing towards China's monopoly.

Our lithium batteries are mainly used in two major industries, one is consumer electronics and the other is automobiles.

The inventor of the lithium battery was a Western American. Professor John Goodenough, who graduated from Yale University and the University of Chicago, paid attention to this surname, goodenough, and he really didn't know what to think. Professor Goodenough is still alive, and he can be seen at various summits of lithium batteries, forums and the like.

The lithium battery industry is very interesting. Once this industry was a monopoly of the world by the Japanese, the world's first company to commercialize lithium batteries was Sony in Japan. In 1991, commercial lithium-ion batteries were used for consumption. electronic product.

However, everyone knows that a new technology and a new product are high-end before the Chinese come in. Once the Chinese enter the industry, the industry will quickly become cabbage.

Remember that in the 1990s, mobile phone batteries could sell for seven or eight hundred yuan or even thousands of yuan? At that time, the Chinese people’s salary was only a month’s salary. A mobile phone battery topped your salary for a few months. At that time, a Chinese boss took out a big brother worth 10,000 yuan and put it on the table. It is a local tyrant, indicating that this boss has strength.

Because of this, the Japanese really made a lot of profits. Later, South Korea's Samsung and LG also entered the industry, and quickly became the world's giants. Their prices are also high. After all, South Korea is also a small country. There are only a few companies that can do lithium batteries. Of course, they can jointly control prices. Sell
high prices.

However, after 2000, China's battery king BYD took the lead in the lithium battery field, marking the first time China has rushed into the ranks of lithium batteries (mainly lithium-ion batteries). Why is this time?

The overlord of the mobile phone in that era was Nokia and Motorola. Unlike today, Apple Huawei Samsung, a motorcycle V3 mobile phone sales of hundreds of millions, the bosses across the country took cash to the Tianjin Motorola factory to get goods, because Taiji made money.

In 2000, BYD was the first company in China to receive an order for Motorola's mobile phone lithium battery. In 2002, it was the first company to receive an order for Nokia's mobile phone battery, marking the recognition of the quality and technology of China's lithium battery by top electronics brands.

With the rise of BYD, a large number of Chinese companies have entered the lithium battery industry. After more than a decade of development, this industry has now become the situation of the three countries of China, Japan and Korea. Due to the rise of Chinese companies, the price of lithium batteries quickly fell below 100 yuan.

Why is an industry clearly making money for everyone to earn money, and the Chinese will immediately become cabbage when they come in?

This has something to do with the size of China's country. Japan and South Korea are highly monopolized by the consortium. There are so few lithium batteries, so many customers, and the market is only that big. The new company has not survived under the pressure of the consortium. space. Take South Korea as an example. The customers of lithium batteries are Samsung and LG. They all buy their own batteries. Other battery companies simply can't survive.

China is different. The market is too broad. I don't say that I have entered the big company's suppliers. I specialize in battery targeting the aftermarket, which is enough for me to survive.

Your Apple, Samsung, Huawei mobile phone battery is broken, if you walk into the roadside mobile phone accessories store, you will not buy the original battery in all likelihood, they are from where it comes from China's large and small Lithium battery manufacturers.

If I can't get into the high-end brand industry chain, I will enter the cottage and enter the industrial chain of small and medium-sized electronic brand companies, which is enough for me to survive. China's vast market of 1.4 billion people, even if I earn 10 yuan for a battery, I will sell 10 million yuan a year and have a net profit of 10 million.

So what is the current competitive situation in the three countries? Let's look at the following 2016 competition map. The world's top ten lithium battery companies, Japan has two: Panasonic and Sony, South Korea has two: Samsung and LG, the rest are Chinese companies, of which BYD is China's boss.

According to the country, Chinese manufacturers account for 60% of global sales, Japan accounts for 17% of the world, and South Korea accounts for about 23%. More importantly, the growth rate of Chinese manufacturers is faster than that of Japan and South Korea, that is, China’s share of the world continues to increase.

We will put our eyes on the top 20 in the world. In 2016, we have 15 global TOP20 lithium battery manufacturers, 15 in China, 3 in Japan, Panasonic, Sony, AESC, 2 in Korea, LG and Samsung.

From the above sales in 2016, we can see that the top three lithium battery companies are Japanese and Korean companies: the first Panasonic 23 billion yuan, the second LG 21 billion yuan, and the third Samsung SDI 20.5 billion yuan. Both are more than 20 billion yuan.

The second echelon to follow is China's Big Three: BYD 16 billion yuan, CATL (Ningde Era) 14 billion yuan, ATL 13.5 billion yuan, all of the 10 billion yuan revenue level.

Ningde era and ATL can actually be regarded as one, you pay attention to the name, CATL (Ningde era) and ATL is very similar to the relationship between OPPO and VIVO. Ningde era was established in 2011, focusing on the power battery for automobiles. The founder Zeng Yiqun came from ATL.

ATL is also a company created by the Chinese. Unfortunately, although the technical and management team is basically Chinese, from a capital perspective, it is a Japanese TDK-controlled company. Next down is the third echelon of 50-100 billion, Sony World's seventh billion yuan, the domestic manufacturer Wattmar 8.5 billion, Tianjin Lishen ninth billion.

However, in terms of growth rate, the four major families of Japan and South Korea and the Chinese wolves are completely incomparable.

In 2016, Panasonic ranked first with a 15% increase, second place with a LG increase of 18%, and third place with a Samsung SDI growth of 11.4%.

The fourth place BYD increased by 28%, the fifth place in the Ningde era soared by 145.6%, and the sixth place in Dongguan ATL increased by 13.4%.

If you look further down, Sony in the seventh place fell 20%, China Wattmar in the eighth place grew by 199.5%, and power in the ninth place increased by 71.4%.

In fact, this TOP20 list missed two of China's mainstream mobile phone lithium battery suppliers, Shenzhen Xinwangda and Huizhou Desai Electronics, the two are the battery suppliers of Apple Iphone.

Xinwangda is a bumper harvest in 2016. Its revenue was 8.090 billion yuan, an increase of 25.01% compared with the same period of last year. The net profit attributable to shareholders of listed companies was 450 million yuan, an increase of 38.59% compared with the same period of the previous year. In addition to Apple, Xinwangda has become a major supplier of domestic first-line mobile phone brands such as Huawei, OPPO, vivo, Xiaomi, Lenovo, Meizu, LeTV and Jinli. Since the realization of the rise of the domestic mobile phone brand and the beginning of “far apple pro-domestic”, Xinwangda has maintained rapid growth in the past two years.

Let’s take a look at Desai Battery’s revenue for the whole year of 2016 was 8.724 billion yuan, up 3.44% year-on-year; net profit was 255 million yuan, up 10.89% year-on-year.

Overall, Apple, as the largest customer of Desai battery, accounted for more than 60% of its revenue, so Desai battery is greatly affected by Apple's revenue. Now Desai is also adopting a strategy to reduce dependence on Apple, in the market of electric vehicles, power tools, and domestic smartphone brands.

Seeing the law, the domestic supply chain is trying to reduce the dependence on Apple, which fully illustrates the rise of domestic brands.

In the next few years, the era of China's lithium battery manufacturers in terms of market share, operating income and profits will overwhelm Japan and South Korea. In the Ningde era, it is possible to replace BYD as the largest lithium battery manufacturer in China in 2017. In May 2017, Ningde Times announced that it will establish a joint venture with Shanghai Automotive, the largest auto company in the country, to produce lithium batteries for electric vehicles, which is mainly for its own electric vehicles. BYD, which supplies lithium batteries, has brought about a big stimulus. BYD is also considering starting to export lithium batteries for electric vehicles and expanding sales. Otherwise, it is only a matter of time before the lithium battery business is overtaken by the Ningde era.

In June 2017, the announcement of the Ningde era, the upcoming A shares, its valuation is actually more than 120 billion yuan.