The first fundraising in Ningde era will break the record to become the first market capitalization stock of ChiNext

[Ningde era initial fund-raising will break record as the first market value stock of ChiNext] After officially obtaining IPO approval on Friday, on the evening of May 21st, Ningde Times released "IPO and preliminary listing on GEM" "Prices and Promotional Bulletins" and "IPOs and Proposed Notices on the Growth Enterprise Market," which means that Ningde era is one step closer to listing.

Previously, the Ningde era once set a record of 24 days of "lightning." According to the information released by the China Securities Regulatory Commission on the 18th, the total amount of green power and fundraising in the Ningde era does not exceed RMB 6 billion, and the fund-raising amounting to RMB 13.12 billion pre-disclosed in the previously published prospectus in the Ningde era has shrunk by over 50%.

According to the green fund, the pre-disclosed fund raised in the prospectus was 560 million yuan, which suggests that the initial fund-raising in the Ningde era may exceed 5 billion yuan. According to statistics, the largest initial fundraising for the GEB was 2.553 billion yuan for Bishuiyuan. Therefore, the amount of funds raised in the Ningde era is likely to be refreshed.

In addition, there are views that the net profit for the Ningde era in 2017 is 3.971 billion yuan, which is likely to surpass the current Wenzhou shares of the largest market capitalization company (as of May 21, the total market value of 136.3 billion yuan).

A securities firm told the "Securities Daily" reporter that in fact, the shrinking fund-raising in the Ningde era was not accidental, nor was it a case. In the case of a shortened listing period, the amount of "supply" was also within a reasonable range.

Continue to increase R&D investment

In the era of Ningde, it became the hot stock for the concept. It is actually the concern of the industry behind it in the new energy automotive industry behind it.

The data in the Ningde Times prospectus shows that in 2015, 2016, and 2017, the company’s operating income was 5.703 billion yuan, 14.889 billion yuan, and 19.997 billion yuan, respectively, and the CAGR was as high as 87.26. %; Net profit was 951 million yuan, 3.089 billion yuan and 4.288 billion yuan respectively, with an average annual compound growth rate of 112.39%.

Behind this alarming growth data is the rapid development of the new energy automotive industry supported by national policies.

With the rapid development of the new energy automotive industry and rising demand, Ningde's production capacity has been continuously released in recent years, and the utilization rate is as high as over 90%. Data show that the company’s lithium-ion battery capacity was 2.6GWh, 7.6GWh, and 17.09GWh from 2015 to 2017, respectively, and the capacity utilization rates were 96.92%, 92.37%, and 75.54%, respectively. In the second half of 2017, the growth of power battery capacity was faster, so capacity utilization rate decreased.

The industry believes that another important reason why the Ningde era, which was only established in 2011, can quickly become the industry leader in just 6 years is the company’s precise grasp of the technology and direction of new energy vehicle power batteries.

According to the Ningde Times prospectus, from 2015 to 2017, the ratio of R&D expenses to main business income of the company was 4.93%, 7.27%, and 8.02%, respectively. According to the comparison of R&D expenditures invested by Guoxuan Hi-tech, Gerry Veineng, Chengfei’s subsidiary, CNAC Lithium Energy and Yiwei Lithium Energy in the same industry listed companies, in the first half of 2017, Ningde’s R&D expenses accounted for the highest proportion, and More than 5.81% of the average.

It is worth noting that the fundraising plan for the Ningde era plans to invest 9.86 billion yuan, and the construction land area will be 385 mu. There will be 24 production lines with a total annual production capacity of 24GWh of power battery products; the company plans to invest 4.2 billion yuan for power and Energy storage battery R&D project. According to previous estimates by the agency, after the completion of the above fund-raising plan, the company will have an annual production capacity of 24GWh, and it is expected to realize an operating income of 20.582 billion yuan and a net profit of 1.416 billion yuan.

The securities companies mentioned to the "Securities Daily" reporter that, in fact, the shrinking fund-raising in Ningde was not unexpected. So before the listed Wuji Mingde, the initial fund-raising and planned fund-raising shrunk by 63%. The company's fund-raising "discount" is also reasonable. The most important thing is that the Ningde era itself has better profitability.

Subsidy test under the slope

The new energy auto industry policy still has a big impact on the industry, and the subsidy retreat is a trend.

In this regard, Ningde Times stated in its prospectus that sales of power battery systems are the company’s main source of income. In 2015, 2016 and 2017, the sales revenue of the company's power battery system was 4.981 billion yuan, 13.976 billion yuan and 16.657 billion yuan respectively, accounting for 87.98% of the main business revenue and 95.8% respectively. .55% and 87.01%. The changes in the new energy automobile industry related policies will have a certain impact on the development of the power battery industry, which will in turn affect the company’s product sales and operating income.

In addition, due to the rapid increase in the production capacity of power batteries and the adjustment of subsidies for new energy vehicles, the decrease in the selling price of power battery systems led to a drop in the company's gross profit margin. In 2015, 2016 and 2017, the company's comprehensive gross profit margin was 38.64%, 43.70% and 36.29%, respectively. However, the gross profit margin remained relatively high.

Ningde Times believes that with the adjustment of subsidy policies and production capacity acceleration, the average sales price of power battery systems tends to decline, from 2.28 yuan/Wh in 2015 to 1.41 yuan/Wh in 2017, with a cumulative decrease of 38. .26%.

The Ningde Times stated that the company has taken various measures to reduce the unit cost of its power battery system, from 1.33 yuan/Wh in 2015 to 0.91 yuan/Wh in 2017, with a cumulative decrease of 31.78%.

In addition, the company is actively deploying energy storage systems. In terms of lithium battery materials, the company's lithium battery material sales price has increased from RMB 63,500/t in 2015 to RMB 81,500/t in 2017. The cumulative increase is 28.30%. The company's lithium battery material unit cost increased from RMB 53,200/t in 2015 to RMB 59,500/t in 2017, with a cumulative increase of 11.75%, which is lower than the cumulative increase in average sales prices over the same period.

According to GGII data, China's auto lithium battery production in 2017 was 44.5GWh, a year-on-year increase of 44.5%. With the gradual landing of national policies, as well as the promotion of lithium battery production technology in the future, cost reduction, and the increasing popularity of new energy vehicles and ancillary facilities, the demand for power batteries for new energy vehicles will continue to grow in the next three years. GGII expects that by 2020, China's auto lithium battery production will reach 215GWh, an increase of 3.8 times year-on-year.

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