Nobel Laureate in Economics Richard Thaler said in his book "Winner's Curse" that big companies are the winners in the market, and the winners tend to be too conceited and always think that they are better than other participants in the market. To be more accurate, clearly winning in the market competition, but ultimately falling into a defeat, this paradox is called "winner's curse."
This is the current problem encountered by Zhang Tianren, chairman of Tianneng Power (00819.HK), China's largest battery manufacturer.
On August 10, an announcement that did not attract widespread attention indicated that Tianneng Power, the largest lead-acid battery manufacturer in my country, had attempted to accelerate the development of lithium battery business, but Tianneng’s attempts over the past three years proved that Tianneng Power The lithium battery business has been in trouble.
Tianneng Power announced that the company will acquire a total of 40% of the shares of Zhejiang Tianneng Energy Technology Co., Ltd. (hereinafter referred to as "Tianneng Energy") held by the management for 127 million yuan.
Tianneng Energy is the carrier of Tianneng Power's lithium battery business.
Three years ago, Zhang Tianren placed great hopes on Tianneng Energy. In order to stimulate the vitality of the team, Tianneng Energy began to carry out management shareholding reform. In 2016, management including Zhang Tianren bought a 40% stake in Tianneng Energy for 114 million. According to Zhang Tianren’s plan, after Tianneng Energy’s spin-off, the first step is to carry out management’s shareholding reform, the second step is to consider introducing strategic investors, and the third step is to return to domestic listing.
After only three years, the management team lost confidence-after two years of loss of 170 million yuan due to poor management, Tianneng Power repurchased the management’s shares at a premium of about 11%, and the management successfully escaped .
一
Tian can miss the best opportunity to enter the lithium battery
This is another example of a lead-acid battery enterprise transforming the lithium battery business story.
In 1986, a battery factory was established in a village in Changxing County, Zhejiang Province where Zhang Tianren was located. In 1988, due to poor management, the battery factory was facing a crisis of bankruptcy. The 26-year-old Zhang Tianren boldly took over this hot potato with a loan of 5,000 yuan.
In 2007, Zhang Tianren successfully promoted Tianneng Power on the main board of Hong Kong, becoming the “first battery in China”.
There is a saying that the barrier that Tianneng has built in the lead-acid battery industry over the years is not its brand and technology, but its huge channel system. Tianneng has been deeply engaged in lead-acid batteries for more than 30 years and has established a complete marketing system. It has nearly 300,000 marketing outlets across the country. This is the biggest competitiveness that other companies in the same industry cannot match.
So when Johnson, the world's largest lead-acid battery company, entered the Chinese market in 2005, it found that this was a difficult barrier to overcome.
However, in the field of power batteries, Zeng Yuqun failed this barrier.
After founding ATL for twelve years and making ATL the world's largest polymer battery supplier, Dr. Zeng Yuqun from the Institute of Physics of the Chinese Academy of Sciences started his second venture. In 2011, he spun off ATL's automotive power department and established CATL in Ningde, Fujian. , Is the new energy of CATL. The doctor
resolutely entered the power battery that year, Tianneng Power achieved operating income of 5.438 billion yuan, a year-on-year increase of 44.9%, and realized a net profit of 616 million yuan, a year-on-year increase of 77.9%. The gross profit margin of was close to 30% .
But 6 years later, CATL successfully listed on the A-share market with a market value of 150 billion yuan. In 2017, the unicorn company achieved operating income of 19.997 billion yuan, a year-on-year increase of more than 34%; realized net profit of 3.972 billion yuan, a year-on-year increase of 31.4%; gross profit rate as high as 36.2%; power battery shipments as high as 12GWh, ranking firmly in the world the first.
Although Tianneng Power achieved operating income of 26.9 billion yuan in 2017, a year-on-year increase of 25.2%; however, its gross profit margin was only 13.0%, a year-on-year decrease of 0.8 percentage points; net profit attributable to shareholders was 1.178 billion yuan, a year-on-year increase of 37.3%.
So far, the market value of Tianneng Power is only about 10 billion yuan, only 1/15 of the Ningde era.
7 years, enough to change everything.
Zhang Tianren realized the broad prospects of power batteries early on. Tianneng Energy was established in 2004 and initially mainly developed and produced Ni-MH powerChi, began to enter the lithium battery business field around 2008. In 2013, Zhang Tianren put forward the strategy of “one stability and three fast” in Tianneng Power-the steady development of electric bicycle batteries, and accelerate the development of new energy vehicle lithium batteries, micro electric vehicle batteries and waste battery recycling business.
In 2015, great changes in the industrial environment accelerated his layout.
In that year, my country's new energy vehicles showed explosive growth, with the output of 379,000 units, a year-on-year increase of 3.5 times. In November of that year, the proportion of new energy vehicles production and sales in the overall automobile industry exceeded the 1% barrier for the first time. That year, China officially became the world's largest incremental market for new energy vehicles.
From 2014 to 2015, China's new energy vehicle market suddenly became lively. New car forces such as LeTV, Xiaopeng Motors, and Weilai Motors suddenly swarm into this blue ocean full of huge imagination.
Two
Lithium battery business encounters the winner's curse
According to visible understanding, Tianneng’s lithium battery business has encountered difficulties, mainly due to three reasons: First, the overall market environment has affected the subsidy decline; Second, the winner’s curse, the original The status of the leader of lead-acid batteries does not mean that they have an advantage in lithium batteries, but it becomes an obstacle; third, there are some problems in quality.
Many people familiar with Tianneng Group said:
"The winner's curse is the main reason."
On November 23, 2015, Tianneng Power announced that it plans to spin off the lithium battery business and return to domestic listing. According to a report issued by Nomura Securities in November 2015, Tianneng’s current lithium battery production capacity is 1.25GWH, ranking 6th in China at that time.
According to Zhang Tianren's vision, after Tianneng Energy's spin-off, the first step is to carry out management shareholding reform, which will stimulate the vitality of the new team, the second step considers the introduction of strategic investors, and the third step is to return to domestic listing.
At the beginning of 2016, Zhang Tianren announced that the company's "new energy vehicle lithium battery" business has obtained the approval of the stock exchange to spin-off, and plans to test the waters on the New Third Board before June 2016, aiming at the main board or the small and medium-sized board in the medium and long term.
After the management held shares, Tianneng Energy's management team had contacted several investment institutions, but it finally stopped. According to Tianneng's vision, the company can also go public directly without financing.
Before the transformation, in 2013 and 2014, Tianneng Energy’s net profit was 12.3 million yuan and 12.69 million yuan, respectively. However, in 2016 and 2017, Tianneng Energy had a total loss of 160 million yuan. By the end of 2017, the company’s net assets Only 116 million yuan.
As of the end of last year, Tianneng’s effective production capacity of lithium battery cells and packs was 2.5GWh, and shipments were only 1GWh. Among the top ten power battery shipments of
in 2017, the shadow of Tianneng lithium battery has not been seen.
The market share of the top five lithium battery companies for power battery shipments in 2017 was 67%. People familiar with Tianneng Energy said that the company has high expectations for lithium batteries, but in fact, it may not give enough resources. After all, lead-acid batteries are absolutely dominant. In 2017, the sales revenue of the lithium battery business was 1.223 billion yuan, accounting for only 4.55% of Tianneng Power's total sales revenue.
From the perspective of Tianneng Group, because the proportion of lithium battery revenue is too small, as the company's most profitable traditional lead-acid battery business team, it is in an absolute strong position in the company and is undoubtedly supported by the company's main resources.
three
dilemma
As for the first factor in the dilemma of Tianneng lithium battery, it is a common phenomenon-data shows that China's power battery production capacity will reach 101GWh in 2016 and will reach nearly 250GWh in 2020, and the corresponding demand, 2016, 2017 There are only 27GWh and 37GWh in the year, and only 101GWh in 2020. The overall supply is several times the demand, and the structural overcapacity in the industry is extremely serious.
Despite this, the power battery industry has not all fallen. In the first half of 2018, CATL achieved operating income of approximately 9.36 billion yuan, an increase of 48.69% compared with the same period last year; realized net profit of approximately 911 million yuan attributable to the parent, a decrease of 49 compared with the same period last year..70%; the net profit realized after deduction of non-parents was approximately 697 million yuan, an increase of 36.55% over the same period last year. The company's overall gross profit margin is still as high as 31.28%. According to data from China Automotive Research Institute, the total installed capacity of power batteries in my country in the first half of 2018 was 15.45GWh, a year-on-year increase of nearly 150%. Among them, CATL led the industry with 6.5GWh installed capacity, with a market share of 42%. The last factor of
may never be acknowledged by Tianneng, but there are indeed some quality problems in the market.
On November 17, 2016, a lithium battery exploded in Uncle Qiu's home in Mentougou, Beijing. Uncle Qiu's wife was taken to the hospital due to carbon monoxide poisoning, but died after rescue efforts failed.
Uncle Qiu sued the electric wheelchair dealer and battery manufacturer Tianneng Energy, but because of lack of evidence, the dealer was eventually sentenced to compensate Uncle Qiu 870,000 yuan.
In March 2018, Wang Guopei, a well-known creative person in Shanghai and the inventor of "Abnormal Characters", bought an electric car containing Tianneng Energy's lithium battery. It suddenly exploded and caught fire during the normal charging process, and home objects were burned. The two parties finally reached a settlement.
Whether it is a quality problem or a strategic problem, it is almost impossible to incubate a "unicorn" company in a new field within the original huge system. Not all companies finally hatch WeChat like Tencent. .
Zeng Yuqun, the new richest man in Fujian and the founder of CATL, knew this well, so he decisively spun off ATL's automotive power department and founded CATL, which opened the way to "unicorns".
Three years ago, Zhang Tianren believed that the management of Tianneng Energy's shareholding reform would benefit the company's long-term development. Three years later, Tianneng Power recovered all the shares held by the management.
Tianneng Power’s board of directors controlled by Zhang Tianren believes that after the share repurchase, Tianneng Energy will more effectively obtain internal resources of the group in order to promote the development of the company. The minority shareholders of
have a lot of complaints about this repurchase. The snowball netizen "happyinvestor1" said:
earns it by himself, and sells it to the listed company at a premium if it loses. Thank you Zhang Tianren for treating our minority shareholders like this.
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