① Up to now, there have been 77 investment and financing incidents in the new energy sector, a year-on-year decrease of about 30%; the total amount of open financing is about 11.32 billion yuan, which is basically the same as the same period in previous years. ② Some investors said that at present, the development of the entire new energy industry has reached an inflection point, and the investment logic should be adjusted accordingly.
“Science and Technology Innovation Board Daily”, April 29 (Reporter Ao Jin) Hot new energy investment has entered the second half.
According to data from the Financial Association Venture Capital Connect, up to now, there have been 77 investment and financing incidents in the new energy sector, a year-on-year decrease of about 30%; the total amount of public financing is about 11.32 billion yuan, which is basically the same as the same period in previous years.
Over the past 10 years, the popularity of investment in new energy has continued to rise, especially after 2021, and has become the hottest capital hotspot. However, since last year, the popularity of new energy investment has cooled down. In addition to being at the same frequency as the overall trend of contraction in investment and financing in the primary market, it is also closely related to changes in the development stage of the new energy industry.
At the “New Quality Productivity Industry Salon: Exploring New Energy Trends” event held recently, Luo Jiahua, head of the Shenzhen Hi-Tech Investment New Energy Group, said that the development of every industry follows general rules, and at present, the development of the entire new energy industry has reached an inflection point. Take the lithium battery circuit as an example. “The investment session's view on the lithium battery segment has developed more than half. After reaching the node stage, the key layout should look back, that is, focus on the application side.”
Lithium battery investment focuses on the application side
Regarding specific application areas, Luo Jiahua focused on the three major segments of energy storage, battery recycling, and marine power batteries.
Luo Jiahua said that judging from the pace of development of enterprises already invested in Shenzhen Hi-Tech Investment, in the energy storage segment, industrial and commercial energy storage has also begun to explode after the household storage and watch front markets, and is expected to achieve rapid growth of about 10 times during the year. “The turning point was the halving of lithium battery costs last year. In major industrial provinces with high electricity price differences in Fenggu, such as Guangdong and Zhejiang, some industrial and commercial projects can achieve an internal yield of 10 points. This is already a very good level of cash flow for many state-owned assets.”
At the same time, competition among energy storage companies has also heated up. In response, Xiang Chaoyao, general manager of distributed energy storage system integrator Huyu Digital Energy, said at the above event that the energy storage sector has entered the reshuffle and adjustment stage of the industry since the second half of last year. “There are only three types of enterprises that can survive. The first category is enterprises with high-quality brands and services, the second type is enterprises with good cost control, and the third category is enterprises that have embarked on a differentiated path.”
Regarding the battery recycling segment, Luo Jiahua said that lithium battery recycling will be an important application-side topic in the future, but the current price system of this racetrack still fluctuates greatly, and “the requirements for investment institutions to grasp the timing are very high.”
According to the “Science and Technology Innovation Board Daily” reporter, in 2022, there was a boom in competition between investment institutions for shares in lithium battery recycling projects in the primary market. Some investors even directly invited teams to start businesses in person because they were unable to seize shares. Beginning in the second half of 2023, due to the continuous decline in lithium battery prices, the operating performance of related projects began to decline markedly, and the capital trend changed accordingly. According to CIFA Venture Capital Connect data, since 2023, there have only been 12 investment and financing incidents in the lithium battery recycling sector.
Liu Jin, director of Xinmao New Energy, said at the event that as a battery recycling company that takes the physical technology route, Xinmao New Energy has a 30% cost advantage over wet recycling companies. However, it also admits that physical recycling will still take a certain period of time to accelerate industrialization. “This year is not a good time, because most of the batteries that are being decommissioned are still batteries from five or six years ago. At the time, lithium batteries were not mature as a whole, and the quality and performance indicators of the lithium battery materials themselves were poor. Furthermore, their specifications and models are also quite cluttered, so it is not conducive to automated dismantling.”
It further stated that using 2023 as the benchmark, moving forward another 5 to 6 years, or a better time point for large-scale industrialization of physical recycling.
Regarding marine power batteries, Luo Jiahua said that this is a core track for Shenzhen Hi-Tech Investment to actively explore based on definitive judgments on industry trends. In this field, Shenzhen Hi-Tech Investment has invested in several projects such as Anyikong Power and Hyde Bochuang. According to public information, Anyikong Power was established in November 2020 and focuses on providing new energy marine lithium battery power systems and high-safety energy storage inheritance system solutions. Up to now, the project has completed two rounds of financing.
Shenzhen Hi-Tech Investment believes that Anyikong Power has core competitiveness, that is, technical advantages and customer advantages. “The overseas shipping market is not an easy market to enter, and it is also difficult for companies such as the industry giants Ningde Era and Everweft Lithium Energy to enter, and Anyikong is already a core supplier for industry giants such as Wärtsilä and ABB.”
Liang Zi, vice president of Anyikong Power, said at the scene that the penetration rate of new energy electric ships is still affected by factors such as industry policies, ship cycles, supporting facilities, and costs. “Following the previous ship cycle, now is the time for a new ship cycle. There may be more market application performance in the next year or two. Furthermore, factors such as the decline in battery prices, the participation of more and more innovative Chinese companies in the field of electric ships, and the increasing popularity of electrification in mainstream ship models will encourage more shipowners and shipping companies to choose new energy electric ships.”
Hyde Botron is a specialty power solutions provider, and its current focus also includes marine new energy. Up to now, the company has completed three rounds of financing. In addition to Shenzhen Hi-Tech Investment, Kaiying Capital and Optics Valley Venture Coffee are also investors in Hyde Bochuang.
Wu Liping, deputy general manager of Hyde Bochuang, said on the scene that in the big scenario of switching between old and new kinetic energy, sufficient familiarity with the ship market and leading technology research and development capabilities are the keys for enterprises to gain a competitive advantage. At present, Hyde Bochuang has implemented cooperation cases with China Shipbuilding Group, Guangzhou Shipbuilding International, and CSIC.
How can businesses stay competitive in the second half
Liu Ming, senior investment director of the Greater Bay Area Fund, said at the round table that in terms of selecting specific projects in the field of new energy, the main focus is on whether they are in line with the national strategy, whether they have leading industry value, and whether they have core technical barriers; for the selection of segmented tracks, it indicates that the upstream and downstream of the NEV industry chain will be the focus of attention this year. Upstream has invested in driving technology, lane lines, Minluo equipment, etc. Recently, there is also a layout for complete commercial vehicles, and for hydrogen energy, which is currently receiving a high level of attention, it is still necessary to develop a long development cycle.
The current state of tightening IPOs is also affecting the investment strategies of investment institutions in all sectors of the industry. Huang Yiming, executive director of Jiaqiao Capital, said at the roundtable forum at the event that for companies that have withdrawn their IPO applications, institutions will first focus on cash flow. The macro environment is uncertain, and the financing pace needs to be advanced to prevent cash flow problems during the IPO waiting period and re-reporting after the impact; the second is to focus on market share. The economic recovery period is an opportunity for excellent companies to expand their market share. With sufficient cash flow, use the current window period to further expand the market size; finally, focus on overseas opportunities. Problems entrepreneurs need to face this year.
It said that in the field of new energy, bridge construction capital is currently paying more attention to opportunities in the intelligent transformation of new energy vehicles. Specifically, looking at the project in this direction, building a bridge will first focus on segmented industry ceilings. Companies with high industry ceilings are more likely to grow, and at the same time leave more room for trial and error; secondly, focus on the industry pattern. The industry pattern should not be too scattered; the third is that downstream customers are doing well; and finally, the degree of personnel matching, team genes are highly compatible with the capabilities required by the industry.
While some segments are receiving attention, other sectors are experiencing market and time tests. The sodium battery sector is one of them.
Chao Dongliang, financial director of Weifang New Energy, admits that the current development of sodium batteries is not as fast as expected by the market. “Sodium battery materials have special characteristics, and the entire industry chain is still in an imperfect stage. One very important reason is that material products and systems have not yet reached consensus within the industry.”
It further stated that there are three different technical routes in the field of sodium batteries, which correspond to products with these three different systems, and there is currently no uniform parameter or standard in the industry for this difference. “For products with different battery systems, the corresponding voltage platforms are different, and the material characteristics are not the same, so inverters, etc. involved in terminal applications need to be improved in a targeted manner. Sodium batteries are also a new industry that only became popular in the past year or two, and it will take some time to form a complete industrial chain.”
Regarding Fangfang New Energy, Chao Dongliang said that at present, the company's cathode materials are involved in all three technical routes, of which the layer oxygen route may be industrialized faster; its current battery products include two categories of water-based batteries and organic batteries. “Water-based applications mainly replace lead-acid, and are mainly used in some application scenarios with very strict safety requirements, such as UPS in data centers and large-scale energy storage power plants. Organic systems have higher energy density, so they are more suitable for low-speed two-wheeled and three-wheeled electric vehicles, A00 class electric vehicles, and industrial energy storage.”
Another industry that has received attention is the charging industry. On the question of whether the charging industry has entered the second half, Yang Ying, finance director of RCD Runchengda, said at the round table that the next focus of the new energy charging and storage circuit will be on the three major areas of refinement, product iteration and stable output, and customer operation.
“The core competitiveness of this racetrack company comes more from its ability to integrate the industrial chain to ensure continuous cost reduction and efficiency, product strength and iteration speed, deep understanding of scenario customers, and the speed of transformation, including brand accumulation achieved through long-term efforts. These are also the reasons why we have survived until now and were able to get more than 200 million yuan in financing last year when the capital market environment was not good. We will continue to deeply cultivate domestic and foreign markets in the future.”
According to Tianyan survey information, RCD Runchengda completed the 224 million yuan B++ round of financing in July last year. Investors include Hongtai Fund, Pingxiang SDIC, and Su Gaoxin.