GEM's 2021 NCM precursor shipments exceed 91,000 tons

GEM (stock code: 002340) will achieve revenue of 19.301 billion yuan in 2021, a year-on-year increase of 54.8%; a net profit attributable to the parent of 923 million yuan, a year-on-year increase of 123.8%. The company's performance growth mainly comes from new energy battery materials.

The significant year-on-year growth in shipments of ternary batteries has led to a surge in the shipments of upstream ternary materials and ternary precursors. The production and sales of ternary precursors are generally booming, and the supply of products is in short supply.

Figure 1: NCM 611 Precursor (Withou Li) SEM

On the whole, GEM's new energy battery materials business in 2021 has the following highlights:

1. The shipment of ternary precursors exceeded 91,000 tons, and the shipments of high-nickel ternary precursors accounted for more than half.

In 2021, GEM's new energy battery material business will achieve an operating income of 13.73 billion yuan, a year-on-year increase of 106.13%, becoming the main force for the company's performance growth.

In order to further enhance the company's competitive advantage in the ternary precursor market, GEM has fully implemented the transformation and upgrading of ternary precursors from 5-series and 6-series products to 8-series and above high-nickel products, which in turn drives the company's high-nickel ternary precursors. Body shipments have grown significantly.

Figure 2 : NCM Precursor shipment status

2. The export of ternary precursors accounts for nearly 40%, and the strategic customers are deeply tied to one million tons of orders.

In 2021, GEM will export 34,200 tons of ternary precursors, a year-on-year increase of more than 74.4%, accounting for 37.4% of the total shipments, an increase of 175.1% over 2019.

Among them, in April 2021 and March 2022, GEM and ECOPRO BM signed a memorandum of agreement on the medium and long-term supply of high-nickel precursors (NCA and NCM) for power batteries. GEM will supply no less than 176,000 tons and 700,000 tons of NCA&NCM high nickel ternary precursors to ECOPRO BM in 2021-2023 and 2023-2026, respectively.

3. Strengthen the layout of raw material supply guarantee and build a diversified raw material supply system.

On the one hand, in 2021, GEM will increase its control over the Indonesian nickel resource project, accelerate the construction of the Indonesian nickel resource project, and obtain a 72% controlling stake in the Indonesian nickel resource project. The Indonesian nickel resource project is planned to produce 60,000 tons of metallic nickel per year, and it is planned to be put into operation in the first half of 2022.

On the other hand, GEM is based on the circular economy and obtains nickel resources through recycling. The company has reached strategic cooperation with Yiwei Lithium Energy, Funeng Technology, ECOPRO, Rongbai Technology and other enterprises in the recycling and directional recycling of waste batteries, and opened up new supply channels for nickel resources.

4. The expansion of production capacity has been accelerated, and product development has been strengthened to enhance competitiveness.

The production capacity of GEM's ternary precursor materials has doubled, exceeding 230,000 tons per year. In terms of products, GEM has achieved mass production of a full range of new-generation materials such as 9-series high-nickel, core-shell high-nickel, quaternary high-nickel, and cobalt-free products. At the same time, the company takes the lead in controlling product quality at the ppb level, and the magnetic foreign matter of high nickel products is less than 1ppb, becoming one of the few companies in the world that can control high nickel precursor materials at the ppb level.

It is worth noting that while accelerating production capacity construction, GEM is also accelerating the construction of zero-carbon factories to reduce carbon emissions. In the next 5 years, GEM will comprehensively upgrade to low-carbon parks. All 16 parks will be upgraded to low-carbon parks, and 2-3 near-zero carbon demonstration parks will be created. It will take the lead in setting an example of carbon neutralization and reduce carbon by 1 million in 2026. tons or more.