Image source: Visual China
Blue Whale Financial Reporter Wang Xiaonan
Recently, Ganfeng Lithium (002460.sz) Vice President Shen Haibo submitted his resignation report. At the same time, the company appointed Li Chenglin and Wang Bin as the company's vice presidents. Among them, Li Chenglin is the son of Li Liangbin, the actual controller and chairman of Ganfeng Lithium Industry. The story of Ganfeng Lithium’s second-generation succession is in full swing.
Affected by the cyclical nature of the lithium industry, the growth rate of terminal demand has slowed down and the price of lithium salt products has dropped significantly. Ganfeng Lithium Industry's net profit in 2023 is expected to fall by 70%. However, "expanding against the trend and aggressively buying mines" seems to have become a routine operation of Ganfeng Lithium Industry since last year. The company has frequently invested in shares to acquire mines and expand production capacity. On the other hand, Ganfeng Lithium Industry is constantly seeking to expand the integrated industrial chain and frequently invests in research and development in the lithium battery sector, aiming to rely on technology to support the next decade.
95 The second generation of post-entrepreneurs comes to the forefront
The story of the succession of the second generation of post-entrepreneurs in Ganfeng Lithium Industry seems to be in full swing.
html On March 6, Ganfeng Lithium Industry announced that the board of directors had recently received a resignation report from the company’s vice president Shen Haibo. Due to job transfer, Shen Haibo applied to resign as vice president, but continued to serve as a director of the company, holding 0.76% of the total share capital.At the same time, the board of directors also reviewed and approved the proposal to appoint new vice presidents of the company, and agreed to appoint Li Chenglin and Wang Bin as vice presidents of Ganfeng Lithium Industry. It is noteworthy that Li Chenglin is the son of Li Liangbin, the actual controller and chairman of the company.
According to the announcement, Li Chenglin was born in 1996 and graduated with a bachelor's degree in economics from the University of Southern California. In February 2022, Li Chenglin joined Ganfeng Lithium Industry and served successively as manager of the company's investment department and assistant to the president. While taking over as vice president of Ganfeng Lithium, Li Chenglin also served as a director of Jiangxi Zhili Technology Co., Ltd. (hereinafter referred to as "Zhili Technology") and a director of Jiangxi Ganfeng Lithium Technology Co., Ltd. (hereinafter referred to as "Ganfeng Lithium") .
Although Li Chenglin does not currently hold shares in Ganfeng Lithium, he has already participated in the operations of the listed company's subsidiaries and holds shares. According to the Tianyancha app, Li Chenglin serves as a shareholder in Ganfeng Lithium Battery, Zhili Technology, Shanghai Zhuque Bingzi Investment Partnership (Limited Partnership) and Jiangxi Ganxin Industrial Holdings Co., Ltd.
Ganfeng Lithium Battery was once a wholly-owned subsidiary of Ganfeng Lithium Industry. In November 2020, Ganfeng Lithium Industry announced that its subsidiary Ganfeng Lithium Battery would increase capital and shares and introduce an employee stock ownership platform. Li Chenglin, the son of the company's chairman Li Liangbin, invested 57 million yuan and acquired 6.23% of Ganfeng Lithium Battery's equity. Currently, Li Chenglin’s shareholding ratio in Ganfeng Lithium Battery is approximately 2.67%.
In addition, Li Chenglin is also the second largest shareholder of NEEQ company Zhili Technology (873906.nq), holding 25.05% of Zhili Technology’s shares. Two years after
joined Ganfeng Lithium, 28-year-old Li Chenglin, the son of the actual controller, was appointed as the company’s vice president. But his father, Li Liangbin, was a real founder. He only reached a turning point in his life when he was 30 years old.
Li Liangbin was born in 1967. He was admitted to the Chemistry Department of Yichun University (formerly Yichun Teachers College) at the age of 19. After graduating in 1988, Li Liangbin was assigned to work at the Jiangxi Lithium Plant Scientific Research Institute, where he was engaged in the research and development of lithium salt products. He also worked from a technician to the director of the lithium bromide branch.
In the 1990s, the lithium industry was not optimistic due to high refining and manufacturing costs. It wasn't until Chile Chemical Mining Co., Ltd. developed salt lake lithium extraction technology, which reduced the cost of developing and refining lithium resources, that lithium resources truly entered the public eye. Li Liangbin, who has worked in the industry for many years, realized that the opportunity had come. Li Liangbin, who resigned as factory director, had a hard time starting his business and even reached the point of bankruptcy.
It was not until 2000, when Li Liangbin officially founded Ganfeng Lithium Industry, that things turned around. However, due to the shortage of skills, Li Liangbin, who is in urgent need of recruiting people, even does not hesitate to steal people from customers. Wang Xiaoshen, the current vice chairman and president of Ganfeng Lithium Industry, is the agent of the company's client Chile Chemical Mining Co., Ltd. He currently holds 7.01% of the listed company and is the company's third largest shareholder and the natural person shareholder after Li Liangbin.
Under the leadership of Li Liangbin, Ganfeng Lithium became the “first A-share lithium mine” in 2010. In 2018, it became the first “A+H” listed company in China’s lithium industry. In 2022, Li Liangbin's personal wealth reached 32.5 billion yuan, and he has been the "richest man in Jiangxi" many times.
The next decade of Ganfeng Lithium Industry
But by 2023, Ganfeng Lithium Industry seems to have entered the fog.
In 2023, although Li Liangbin ranked on the Hurun Rich List with a wealth of 20.5 billion yuan, his throne as the "richest man in Jiangxi" was taken away by Li Xiande, the actual controller of JinkoSolar. At the same time, Ganfeng Lithium's stock price also fell from the highest stock price of 157.41 yuan/share on September 1, 2021 to 40.48 yuan/share on March 11. The cumulative decline in stock price exceeded 74.28%, and the company's market value increased from more than 2,200 yuan. 100 million yuan fell all the way to 75.4 billion yuan, 144.6 billion yuan evaporated.
Although Ganfeng Lithium Industry has gradually grown and grown and once became an industry leader, it still cannot escape the impact of the lithium cycle. In 2019, due to the decline in subsidies for new energy vehicles and lower than expected sales, the price of lithium carbonate plummeted, and Ganfeng Lithium's net profit fell to 353 million yuan from 1.224 billion yuan in 2018.
In 2020, thanks to the "dual carbon" policy, the sales of new energy vehicles have surged, and the price of lithium carbonate, which is in short supply, has soared. Ganfeng Lithium Industry has once again reaped cyclical dividends. From 2020 to 2022, Ganfeng Lithium Industry's performance has continued to rise, with the company's revenue rising from 5.524 billion yuan to 41.823 billion yuan, and net profit also rising from 1.064 billion yuan to 20.461 billion yuan.
However, this wave of cyclical dividends did not last. As lithium carbonate production capacity is gradually released, and new energy vehicle sales are lower than expected, the price of battery-grade lithium carbonate will drop from 500,000 yuan/ton at the beginning of the year to 100,000 yuan/ton at the end of 2023. At its peak in 2022, this price reached 600,000 yuan/ton.
html On January 31, Ganfeng Lithium Industry disclosed its performance forecast for 2023, with estimated profits of 4.2 billion yuan to 6.2 billion yuan, a decrease of 79.52% to 69.76% compared with the same period last year. It said that due to the cyclical impact of the lithium industry, the growth rate of terminal demand has slowed down, the price of lithium salt products has dropped significantly, and the decline in the price of lithium ore raw materials is smaller than the decline in the price of lithium salt and downstream products, resulting in a decline in the company's gross profit margin.Speaking of which, in addition to the sharp drop in the price of lithium salt products, the significant changes in Ganfeng Lithium's performance are also related to the company's continuous pursuit of integrated expansion of the industrial chain, especially increased investment in power batteries.
In 2011, Ganfeng Lithium Industry began to deploy lithium resources globally. After 2015, Ganfeng Lithium Industry's global layout of lithium resources accelerated, and it successively increased lithium salt production in Australia, Argentina and other countries through equity participation and underwriting. And through multiple external mergers and acquisitions, Ganfeng Lithium's lithium salt reserves are also increasing. In 2022, Ganfeng Lithium's lithium resource equity equivalent will be 45.34 million tons, making it the world's first-tier lithium mining company. At the same time, Ganfeng Lithium's lithium salt production capacity is increasing year by year. In 2022, it has formed a domestic lithium salt product production capacity of approximately 120,000 tons of lce, and Ganfeng Lithium also plans to form a total of 120,000 tons of lce by 2030 or before. Lithium product supply capacity with an annual output of no less than 600,000 tons of lce.
“expanding against the trend and aggressively buying mines” seems to have become Li Liangbin’s regular operation in 2023. According to incomplete statistics from Blue Whale Finance, in 2023, Ganfeng Lithium completed the acquisition of 10% of the equity of Xinyu Ganfeng Mining for 360 million yuan, and subscribed for 106.11 million Australian dollars to subscribe for an additional 9.9% of the total equity of Leo Lithium Limited in Australia. , acquired 70% equity of Xianghuangqi Mengjin Mining Development Co., Ltd. for 1.424 billion yuan, and its wholly-owned subsidiary Ganfeng International increased its capital to mali lithium b.v. by subscribing for new shares to no more than 138 million US dollars.
In 2024, which is the same day that Ganfeng Lithium disclosed executive changes, the company plans to subscribe for no less than 14.8% of the shares of Argentinian pgco company with a transaction consideration of no more than 70 million U.S. dollars in its own funds.
In addition to expanding its lithium salt production capacity, Ganfeng Lithium Industry is also stepping up its layout of lithium battery business. In 2011, Ganfeng Lithium Industry established a subsidiary, Ganfeng Lithium Battery, to enter the downstream of the lithium industry. In 2021 and 2023, Ganfeng Lithium Battery has completed two rounds of financing, including Oppo, Changan Automobile, Xiaomi Yangtze River Industry Fund, etc.
As of June 30, 2023, Ganfeng Lithium has 6 lithium battery production bases and 6 lithium battery bases under planning.In August last year, Ganfeng lithium-ion solid-liquid hybrid lithium-ion battery was officially delivered and installed on the pure electric SUV Cyrus SF5; in September, Ganfeng lithium-ion super semi-solid new front battery was released.
Although Ganfeng Lithium is still young in the lithium battery field compared with big players such as CATL, in the first half of 2023, Ganfeng Lithium’s lithium battery series product revenue was 4.085 billion yuan, a year-on-year increase of 117.31%. Even in May last year, Ganfeng Lithium said it was evaluating the feasibility and necessity of a spin-off and listing of the lithium battery sector.
However, lithium battery research and development requires a large amount of investment. In 2018, Ganfeng Lithium Industry’s R&D investment was only 63 million yuan. By 2022, it would have been as high as 1.007 billion yuan. It has been spent on September 30, 2023 alone. 942 million yuan. At a time when performance is sluggish, Ganfeng Lithium's debt repayment pressure is not low. As of September 30, 2023, Ganfeng Lithium's monetary funds were 9.672 billion yuan, short-term borrowings were 6.57 billion yuan, non-current liabilities due within one year were 2.51 billion yuan, and long-term borrowings were 15.453 billion yuan.
Ganfeng Lithium Industry has been established for more than 20 years. Li Liangbin once concluded that the company's development has two major stages, one is around products, and the other is around resources. But for the next 10 years, the development theme he gave is "Technology Ganfeng" , obviously Ganfeng Lithium Battery has high hopes. As the lithium cycle fluctuates, how will Li Chenglin, the second-generation founder who comes to the forefront, write about Ganfeng Lithium Industry?
