Rongbai Technology's net profit last year was 213 million yuan, a year-on-year increase of 144.13%

On February 25, Rongbai Technology released an announcement on its 2020 annual results. The company achieved operating income of 3.788 billion yuan in 2020, a year-on-year decrease of 9.59%, and net profit attributable to shareholders of listed companies was 213 million yuan, a year-on-year increase 144.13%.

Rongbai Technology mentioned in the announcement that operating revenue in 2020 has declined compared with the same period of the previous year, mainly due to the fact that the global new energy vehicle market in the first half of 2020 was greatly affected by the new crown epidemic, and the company and downstream manufacturers Due to the temporary drop in operating rate, the operating income in the first half of the year decreased by about 36.8% compared with the same period of the previous year; in the second half of 2020, as the domestic epidemic was brought under control, the demand for new energy vehicles recovered and the demand from strategic customers increased, the company's orders in the second half of the year were relatively high. The production and sales volume of high-nickel ternary cathode material NCM811 increased significantly, and the production and sales volume of the high-nickel ternary cathode material NCM811 increased rapidly, which promoted a faster recovery of annual operating performance.

During the reporting period, international mainstream car companies accelerated their deployment of high-nickel battery technology routes, and market demand for high-nickel materials further increased. Thanks to the long-term focus on implementing specialized strategic routes, the company started in the fourth quarter of 2020 Entering the state of full production, in order to meet the needs of customers' orders, the company officially launched a new round of capacity expansion for its three manufacturing bases in Hubei, Guizhou, and South Korea, and leveraged the company's engineering equipment and technology advantages to accelerate capacity construction. Internally promote management changes, implement a business department system, introduce IPD processes, implement equity incentives, and further enhance management innovation capabilities.

Rongbai Technology believes that the main reasons for the increase or decrease of the company’s main indicators are:

1. During the reporting period, the company realized operating profit increased by 153.08% year-on-year, total profit increased by 139.97% year-on-year, and net profit attributable to owners of the parent company increased by 144.13% year-on-year. Net profit from recurring gains and losses increased by 185.16% year-on-year, and basic earnings per share increased by 128.57% year-on-year, mainly due to: (1) The demand for new energy vehicles in the second half of 2020 has rebounded and the demand for high nickel cathode materials has risen. The company's core product NCM811 series The substantial increase in sales has effectively compensated for the adverse effects of the new crown epidemic in the first half of the year and promoted a faster recovery of annual operating performance; (2) Operational efficiency has been improved, and the effect of reducing costs and increasing efficiency is significant. The company's core product NCM811 has a significant profit per ton in the fourth quarter Recovery; (3) The company actively strengthened customer credit risk management and control, coupled with the rebound of the power battery industry, customer payment status was in good condition, and there was no similar situation in which a large provision for bad debts of accounts receivable was made in the previous year during the reporting period.

2. In 2019, the company made a large amount of bad debt provision for the balance of some customers' accounts receivable. In 2020, the company will increase the collection of accounts receivable, through cash collection and mutual payment. At the same time, the company's cash flow continued to improve, capital utilization efficiency increased, and investment income was obtained through the purchase of wealth management products through idle funds. The above non-recurring gains and losses further increased the company's 2020 performance.

According to public information, Rongbai Technology is a multinational group company in the high-tech new energy materials industry, specializing in the research and development, production and sales of lithium battery cathode materials. As the first cathode material manufacturer in China to achieve mass production of NCM811, Rongbai Technology has established long-term cooperative relationships with customers such as Ningde Times, BYD, LG Chem, Tianjin Lishen, Funeng Technology and so on.

On February 8, Rongbai Technology issued an announcement stating that the company’s wholly-owned subsidiary Guizhou Rongbai Lithium Battery Materials Co., Ltd. (hereinafter referred to as 'Guizhou Rongbai') cooperated with the Honghuagang District People’s Government of Zunyi City. The first phase of the '100,000 tons of high nickel cathode material production line project' with an annual output of 15,000 tons was completed and put into production in 2019. The company decided to start the second phase of the 100,000 tons of high nickel cathode material production line and subsequent projects in 2021 (below (Referred to as 'Phase II and Follow-up Projects'), and has signed a cooperation agreement with the People's Government of Honghuagang District, Zunyi City on matters related to this project, and reached an agreement on the project implementation cycle, project construction land, and policy preferences. The investment and construction funds for the second phase and subsequent projects are expected to not exceed RMB 2.9 billion.

The project will introduce advanced ternary cathode material production and research equipment at home and abroad, and build a high-nickel cathode production line, factory buildings, office bases, and related intelligent transportation and storage facilities. The production is based on NCM811 and NCA. The main high nickel cathode material.

It is reported that in the second half of 2020, the new energy vehicle market will recover. The production and sales volume of Rongbai Technology’s main product NCM811 high nickel cathode material has increased significantly, orders are saturated, and production capacity is insufficient. The company actively promotes global deployment and expands production capacity to meet market demand through the three major manufacturing bases in Hubei, Guizhou, and South Korea. As an important part of the company's lithium battery industry cluster layout in the southwest region, the company's production capacity construction supports important customers in the southwest region, which is beneficial to deepening the company Strategic cooperation with domestic and foreign customers to further increase market share.