Judging from the performance of the secondary market, before the Q1 earnings report was disclosed, the stock price of Zhongbi Energy had already begun to have an initial trend. Since the intraday stock price fell to a minimum of $0.82 on April 8, its stock price continued to rebound. As of May 10, the company's closing price reached 1.14 US dollars, and the stock price had increased by 39.0% over the past month.
In recent years, with the rapid development of sodium-ion batteries, they have begun to gain prominence in various segments such as two- and three-wheeled electric vehicles, household energy storage, industrial and commercial energy storage, and new energy vehicles, and have become a beneficial complement to lithium-ion batteries. On May 11 this year, the first domestic high-capacity sodium-ion battery energy storage power station, the Volin Sodium-ion Battery Energy Storage Power Station, was put into operation in Nanning, Guangxi, opening the first large-scale application of domestic sodium battery energy storage technology. In fact, the sodium battery concept was already showing signs of gaining momentum in the secondary market before.
On the day before the Vulin sodium battery energy storage station was put into operation, the US sodium battery concept stock CBAT.US (CBAT.US) revealed its 2024Q1 financial report. From its financial results and specific business performance, investors can have a deeper understanding of the current implementation and application of sodium batteries in China.
Judging from the performance of the secondary market, before the Q1 earnings report was disclosed, the stock price of Zhongbi Energy had already begun to have an initial trend. Since the intraday stock price fell to a minimum of $0.82 on April 8, its stock price continued to rebound. As of May 10, the company's closing price reached 1.14 US dollars, and the stock price had increased by 39.0% over the past month.
Hard to shake the lithium battery car market, energy storage has become a breakthrough in development
The Zhitong Finance App learned that Zhongbi Energy's Q1 net revenue reached 58.8 million US dollars, an increase of 38.7% over the previous year, but it still fell short of market expectations; net profit attributable to the company's shareholders for the current period was 9.8 million US dollars, compared with a net loss of 1.4 million US dollars in the same period last year, which turned a loss into a profit.
According to the data, Zhongbi Energy's net sales revenue for the current period reached 44.8 million US dollars, an increase of 51.5% over the previous year. Judging from the revenue situation of specific businesses, the company's current automobile power battery revenue declined across the board. Among them, light electric vehicle power battery revenue was 1.5 million US dollars, down 23.3% year on year; electric vehicle power battery revenue was 500,000 US dollars, down 73.6% year on year.
However, as a supplement, the current revenue from the residential energy supply and uninterrupted supply (energy storage) business of Zhongbi Energy reached 42.8 million US dollars, an increase of 66.0% over the previous year.
As mentioned above, Zhongbi Energy's current Q1 performance falls short of previous market expectations, and this is mainly reflected in the decline in growth. Take 2022 as an example. In 2022, China's energy revenue increased from US$53 million in 2021 to US$249 million, an increase of 372% over the previous year. Among them, the three major business segments of electric vehicles, light electric vehicles, and energy storage performed well. Revenue increased by 1824%, 775%, and 151% year-on-year, respectively.
In terms of objective factors, the company's high performance in 2022 had a lot to do with the sharp rise in the overall price of lithium batteries at the time. As the price of battery-grade lithium carbonate fell in 2023, the corresponding drop in power battery prices affected the company's revenue growth in the field of new energy vehicles. On the other hand, as players from all walks of life pour into the lithium battery circuit, the industry accelerates its “internal volume”, lithium batteries are entering a cycle of overcapacity, and the leading effect on the industry is intensifying.
Data shows that in 2023, out of 109 listed companies in the lithium battery industry chain classified by Shenyin Wanguo, only 42 had positive revenue growth, accounting for less than 40%; 22 had positive net profit growth, accounting for only 20.18%.
Furthermore, under the influence of fluctuations in lithium prices, a wave of inventory removal across the entire industry chain has begun to directly affect the profits of the lithium salt industry and the battery chemical industry. Of the 43 A-share related listed companies, only 8 had an increase in revenue compared to the same period last year, and 1 company's net profit to its mother increased positively.
Judging from the overall situation of the industry, Zhongbi Energy's performance in the lithium battery vehicle business is clearly also negatively affected by the dilution of profits in the industrial chain, but unlike companies that focus on the lithium battery business, Zhongbi Energy also has a layout in sodium batteries and continues to make efforts in the field of energy storage.
According to the Zhitong Finance App, in June of last year, Sino-Belgian Energy issued an announcement to cooperate with energy storage giant Huabao Xinneng to develop sodium batteries. Judging from this year's Q1 financial report, the company's current energy storage business revenue reached US$42,8474 million, an increase of 66% over the previous year, accounting for 95.56% of the company's total current revenue.
Supported by the sodium battery energy storage business, although the revenue of China Energy's power battery business declined significantly, it still helped its profit level to grow steadily and eventually reverse losses. According to the data, the current gross margin of Zhongbi Energy's battery business was 41.2%, up 30.3 percentage points from 10.9% in the same period in 2023. The battery business had a net profit of $11.7 million, compared to $100,000 for the same period in 2023.
How far can sodium battery lines go?
2023 is known as the first year of mass production of sodium batteries. Progress in sodium-ion batteries has exceeded expectations. In particular, the installed rate of A00 and A0 class passenger cars, as well as medium- and low-speed two-wheelers and tricycles, has increased markedly. For example, the first sodium-ion battery test vehicle in China was equipped with a sodium battery loading test; Huanacin was able to complete orders for 100 sets of sodium battery packs for electric two-wheelers and deliver them to Keda New Energy, etc.
There are several reasons why sodium batteries are “popular.” From a resource perspective, sodium and lithium are in the same main family, and are quite rich in resources. The abundance in the earth's crust is ranked 6th. More importantly, sodium is distributed all over the world, completely unrestricted by resources and regions. In a situation where lithium resources are dependent on imports and prices are gradually rising, sodium-ion batteries have great resource advantages and cost advantages over lithium-ion batteries.
According to comparison, sodium ion battery cathode material uses less expensive sodium carbonate, and its cost is less than 50% of the cathode cost of lithium-ion batteries. At the same time, sodium does not have the problem of lithium embedding with aluminum. Both positive and negative collector fluids can use low-cost aluminum foil, and the collector cost is more than 60% lower than that of lithium-ion batteries, which has an obvious cost advantage.
In terms of performance, according to the high and low temperature test results currently disclosed in the market, sodium-ion batteries have better high and low temperature performance. They can release 70% or more of the capacity at -40℃, the capacity retention rate reaches 90% or more at -20℃, and can be charged and discharged in a cycle at high temperature of 80℃. This will improve the range achievement rate of new energy vehicles in high and low temperature environments, effectively improve the user experience and help eliminate mileage anxiety; in terms of safety, sodium-ion batteries are more safe than lithium-ion batteries, because sodium-ion batteries have a mild overcharge and overdischarge reaction and do not produce dendritic lithium, thus avoiding safety problems such as battery short circuits and uncontrolled heat.
However, when applied to energy storage, it can reduce the power quota of the air conditioning system at the energy storage system level, and also reduce the online time of the temperature control system, thereby reducing the one-time investment cost and operating cost of the energy storage system.
However, sodium batteries also have quite a few technical and industrialization pain points at this stage.
Take the energy storage business that Zhongbi Energy currently focuses on as an example. Compared with the mature lithium storage industry, although sodium storage has a cost advantage on the battery side, it does not have an advantage in overall manufacturing costs, and there are still many process technologies and manufacturing equipment that need to be optimized.
The Zhitong Finance App learned that in the first quarter of this year, domestic lithium storage prices hit a “new low”. Judging from the tender price, Xu Ji Electric recently won the 75MW/300MWh energy storage system equipment procurement project in Xinjiang at a price of 0.564 yuan/wh. Furthermore, in one of CNNC's tenders, 34 of the 71 bidders offered a price of 0.6/Wh or less.
However, as a new energy storage technology, “sodium electricity” is higher than the average price of lithium battery energy storage in terms of overall cost. According to public information, the BoM cost in the small trial phase of sodium batteries is about 0.82 yuan/Wh, and the pilot phase is 0.76-0.82 yuan/Wh.
So from a cost perspective, sodium storage is definitely less than lithium storage now, but this does not mean that sodium storage cannot “overtake corners.” In terms of battery cost, the components with the biggest cost gap between sodium batteries and lithium batteries are cathode materials and fluid collectors. As mentioned above, sodium batteries can cost far less than lithium batteries. Driven by the cost effect, GGII predicts that the price of sodium batteries is expected to be around 0.45 yuan/Wh in 2025; 0.3-0.35 yuan/Wh in 2027, which is basically the same as lithium iron phosphate.
Since the production process of sodium batteries can be compared to lithium batteries, and the production line is basically similar to the lithium-ion battery production line, in other words, once sodium batteries enter a mature development period, it may guide more lithium battery companies facing overcapacity to enter the sodium electricity market. However, for China Energy, which already has a first-mover advantage, the rise of the sodium electricity market is undoubtedly a double-edged sword. Although it can strengthen its large-scale advantage in the sodium electricity market, whether subsequent companies can stabilize their position in industry competition is the key to whether they can achieve a final rebound in valuation.