Smarter Energy: Maintaining the Lead with Production Expansion, R & D, Market and Strategic Upgradin

    After the weakness in the first half of the year, the market demand for new energy vehicles has begun to boom since the third quarter, driving the rapid growth of power batteries in shipments. According to the New Energy Vehicle Industrial Chain Database released by         Shenzhen Gaogong Industry Research Co., Ltd (GGII), the total installed electric quantity of power batteries increased month by month in Q3 of 2017. The accumulated installed electric quantity has reached about 8.9GWh, an increase of 71% over the same period of last year. Industry experts predict the market will usher in a more violent boom in Q4, so as to further enhance the concentration of power battery market, and speed up the polarization trend. This year, the Far East Smarter Energy Co., Ltd. (hereinafter referred to as “Smarter Energy”, stock code: 600869) has fully spread its strategic layout of lithium battery business through a series of measures, such as expanding production capacity, strengthening technological R & D, manufacturing diverse products and extending upstream industrial chain.

    The public data reveals that this April, Smarter Energy (600869) has launched “R&D and industrialization project of power storage lithium battery with annual production of 3GWh energy density” focusing on the production of 21700 Battery, an upgrade product of 18650 Battery. Currently there have been 9 domestic battery enterprises announcing plans to produce 21700 Battery. Compared with other companies, one of the advantages of Smarter Energy (600869) in strategic layout lies in the positioning of high performance battery. The originally planned single cell capacity of its 21700 Battery is above 5Ah. The second advantage is intelligent and standardized plant construction. Today in China, the production capacity of 1GWh demands capital input of about RMB 700 million, while Smarter Energy (600869) can effectively reduce the cost of new projects, to realize quality improvement and price reduction, relying on the team’s mature experience in equipment construction and excellent ability of process control. With the continuous promotion of new-type cells, Smarter Energy (600869) with significant competitive advantages is expected to enhance its influence in the industry, thus rapidly expanding market share.

    Besides, as a domestic leading manufacturer of 18650 Cylindrical Battery, Smarter Energy (600869) has not only deep rooted in cylindrical batteries, but also carried out important layout for the diversification of lithium battery products. The Far East First New Energy Co., Ltd., a subsidiary of Smarter Energy, hosted the Commencement Ceremony of 12GWh Lithium Battery Project at Smarter Energy Industrial Park of Gaocheng Town, Yixing City, Jiangsu Province in September. The project covers a planning area of over 1,000 mu, and aims to build a domestic and foreign first-class automated and intelligentized production base of aluminum laminated batteries and quadrate lithium batteries by the end of 2018. The whole project will be completed and reach design capacity within 3 years. At that time, the Far East First New Energy will produce power batteries up to 12 GWh in annual production capacity, and take a share in the lithium battery market valued at RMB 1 trillion.

    It should be noticed by investors that, the industry of new energy vehicles maintains a good momentum, which drives power battery and battery material industries to present an upward trend. As an indispensable material of lithium battery, the copper foil also shows rapid and massive growth. Smarter Energy (600869) grasps the development trend of the industry, timely seizes market opportunities, extends to upstream industrial chain of original lithium battery business, and manufactures high-precision and ultrathin copper foil products applied in lithium batteries through strategy upgrading. It is reported that the company plans to invest RMB 1.05 billion for the new plant in Hongqiao Industrial Park, Taixing, Jiangsu. At the scheduled time, the plant can produce 20,000 tons of high-precision and ultra-thin copper foil products applied in lithium batteries per year, and the increasing sale income will reach RMB 1.8 billion. The project is divided into three phases. Currently the Phase I (5,000 tons) is under construction. It is estimated that the construction of production infrastructure as well as the installation and debugging of equipment will be completed by the end of 2017, and the production scale of copper foils at 5,000 tons will be reached in 2018. The product structure is mainly double shiny copper foils at 8-9μm; the production and sale scales will reach RMB 400 million. The Phase II (5,000 tons) and the final expansion project (10,000 tons) will be launched, and double shiny copper foil products at 6μm will be manufactured in the latter half of 2018.

    It can be predicted that after the completion of 12GWh project at the base of Yixing, Jiangsu, 3GWh project in Yichun, Jiangxi, and the project of producing 20,000 tons of high-precision and ultra-thin copper foils per year, the growth space of Smarter Energy (600869) will be further broadened. Driven by the sustained development of new energy vehicle market, Smarter Energy (600869) will continue to lead the power battery industry.