At the end of August, China's power battery company CATL released the semi-annual report for 2019. According to the financial report, this battery giant's total operating revenue in the first half of this year was CNY 20.3 billion, which increased 116.5% compared to the same period last year. The net profit attributable to shareholders was CNY 2.1 billion, which went up 130.79% on a year-on-year base. Since its establishment eight years ago, the CATL era has sung high, it not only won the world's first place in the power battery market, but also with a net value exceeded CNY 180 billion once.
Another domestic player BYD has established strategic partnerships with many OEMs by the middle of 2019. In October last year, the Chairman and President of BYD Wang Chuanfu (王传福) revealed that under the overall liberalization strategy, BYD's idea of splitting of the battery independently has been put on the agenda, and it is expected that the IPO will be carried out around 2022.
However, with the gradual liberalization of foreign investment policies, especially the elimination of the 'white list' of power batteries, battery companies in Japan and South Korea have made a comeback, once again blew the horn of entering the Chinese market. Battery companies will face more intense global competition.
The first one which has return to the Chinese market was the power battery maker Panasonic. In 2018, the sales volume of CATL reached 21.18GWh, ranking first among the global automotive lithium battery enterprises, with a market share of 22.64%. Followed by Panasonic, its global market share of 20.75%, only 1.89% behind. Panasonic's battery capacity layout in China began at the end of 2015 and currently has two plants in Dalian with a capacity of nearly 5GWh and it is planning to spend hundreds of millions of dollars to deploy two new production lines in its battery factory in China, which will increase the company's battery capacity in China by as much as 80%. While Panasonic restarted its expansion in China, South Korean power battery companies such as LG Chemical also responded positively and joined the battle.
Two months ago, LG Chemical announced a new five-year plan to increase its total revenue from the current USD 24 billion to USD 50 billion. The most striking of these is that the production and sales of automotive power batteries will increase by about 5 times until 2024, reaching nearly USD 26.7 billion.
At present, LG plans to reinvest CNY 7.26 billion to expand its battery production line in Nanjing, China by 2020, to continue to maintain its leading position in the automotive battery industry and maintain an overwhelming technological advantage in the third generation of electric vehicles ( E-range of 500 km and above).
According to incomplete statistics, Panasonic, SK, LG Chemical, and Samsung SDI have invested more than CNY 50 billion in power battery industry in China in the past year. More than 40% of the total investment in global power battery companies is for China's market.
In terms of the PE market, the total PE investment amount of the power companies reached CNY 11.4 billion in 2019 by far. The number of PE events has decreased on a year-on-year base but the average amount reached CNY 443 million per trade, which was much higher than 2017 and 2018.
Wei Qiului (魏秋利), executive director of the China Energy Economic Research said that as the government releases signals to encourage foreign power battery companies to invest in China, competition between leading Chinese and foreign companies will inevitably intensify in the next two years.