“Science and Technology Innovation Board Daily”, August 2 (Reporter Yu Jiaxin) The performance of upstream lithium battery materials companies is still under pressure.

Today (August 2), Xiamen Tungsten Xinneng released its 2024 semi-annual report showing that revenue and net profit continued to decline, achieving operating income of 6.3 billion yuan, a year-on-year decrease of 22.43%; net profit to mother was 0.239 billion yuan, a decrease of 6.12% over the previous year.

Looking at a single quarter, Xiamen Tungsten Xinneng achieved net profit of 0.128 billion yuan in the second quarter, an increase of 14.82% over the previous quarter. However, the “Science and Technology Innovation Board Daily” reporter noticed that since 2023, the company's net profit for each quarter has shown a year-on-year downward trend.

Xiamen Tungsten Xinneng said that in the first half of 2024, with the gradual spread of AI intelligence, the 3C consumer market is recovering, which will bring new development opportunities for lithium cobalate; the sales growth rate of new energy vehicles has increased, and the acceptance of medium nickel high-voltage ternary materials among end customers continues to increase due to their cost performance advantages, but ternary materials as a whole are being squeezed by lithium iron phosphate.

In terms of sales, in the first half of this year, the company sold 0.0448 million tons of lithium battery cathode material products. Among them, lithium cobalate achieved sales volume of 0.0184 million tons, an increase of 29.98% year on year; ternary materials achieved sales volume of 0.0263 million tons, up 108.59% year on year; and hydrogen storage alloy sales volume was 1859.99 tons, up 7.53% year on year.

Currently, Xiamen Tungsten New Energy has 14 ongoing research projects with a budget of over 8 million yuan, including 4.53V lithium cobalate development and development of ternary materials for drone use. The semi-annual report shows that the company's development of cathode materials for sodium-ion batteries is in the pilot phase.

In terms of fund-raising projects, the company currently has projects under construction such as a new project to expand production of 0.03 million tons of lithium-ion battery materials at the Haijing base and a comprehensive production workshop expansion project (annual capacity planning of 0.015 million tons), the Ya'an base liquid phase lithium iron phosphate project, Ningde 0.07 million ton lithium-ion cathode material project, and a ternary material project with an annual output of 0.04 million tons in France.

Xiamen Tungsten Xinneng admits that if there are factors such as the overall production capacity of the industry growing too fast in the future, the increase in industry demand falling short of expectations, the expansion of major customers failing to achieve the expected goals, or major adverse changes in the market environment, there is a risk that the new production capacity will not be digested in a timely manner.

Despite pressure on performance, Xiamen Tungsten Xinneng has accelerated its expansion into overseas markets. According to its 2023 report, during the reporting period, Xiamen Tungsten Xinneng used the five-year strategic plan as the investment guide, making Europe the first stop for the company's global layout and speeding up the development of overseas markets.

On the same day (August 2), Xiamen Tungsten Xinneng issued two announcements related to overseas business. One of the announcements mentioned that Xiamen Tungsten Xinneng plans to establish a joint venture with Orano PCAM, a wholly-owned subsidiary of Orano, in France through its wholly-owned subsidiary European Xinneng Program. The joint venture plans to build a cathode material precursor project with an annual output of 0.04 million tons.

“This investment is mainly to support the precursor needs of new tungsten materials in Xiamen, France. It is an important step in the company's overseas development and is in line with the company's overall strategic development direction in the future.” Xiamen Tungsten Xinneng said.

According to the announcement, the total investment amount for the project was 0.21 billion euros, of which European Xiamen Tungsten Xinneng held 49% of the shares in the joint venture, which was 0.103 billion euros. The total construction investment of the project is planned to be 3.16 billion yuan. The main construction includes 2 main cathode material precursor plants, product warehouses, raw material warehouses, water treatment support centers, R&D centers and related auxiliary facilities. The board of directors of the joint venture consists of 5 directors, including 3 nominated by Orano PCAM and 2 nominated by European Xiamen Tungsten Xinneng.

In order to support the above project, another announcement issued by Xiamen Tungsten Xinneng today (August 2) further mentioned that the company plans to increase its wholly-owned subsidiary European Xiatungsten Xinneng Capital Provident Fund by 0.103 billion euros through self-financing; after the completion of this capital increase, the registered capital of European Xiatungsten New Energy will not change, and the capital reserve fund will increase to 0.233 billion euros.

The “Science and Technology Innovation Board Daily” reporter noticed that the new project announced this time is a further deepening of the company's business in France.

In May of last year, Xiamen Tungsten Xinneng revealed plans for cooperation with Orano, a multinational company in the French energy industry. In September of last year, it announced that its subsidiary European Xiatungsten New Energy and Orano CAM set up a joint venture in France to build a ternary cathode material production line with an annual output of 0.04 million tons. At the time, in order to support the above project, on December 20 of last year, the company said that it plans to increase its capital reserve fund by 0.13 billion euros through instalments.

Compared to newly established joint ventures, Europe's Xiamen Tungsten Xinneng shares 51% of the shares in the above joint ventures. Accordingly, 3 candidates for the 5-member board of directors were nominated.