TU-TESL

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In order to expand production capacity and meet the increasing market demand of customers, Samsung SDI is strengthening its lithium raw material reserve. Novonix, a US developer of lithium battery test equipment, has signed a deal with Samsung SDI to supply graphite anode materials to Samsung SDI, positioning the company as a new supplier in the battery anode material market, foreign media reported. Under the terms of the deal, novonix will provide its proprietary "puregraphic anode ” product, as part of a multi-stage agreement, with the first 500 tons expected to be delivered in October 2020. The company said it would "consider mass production every year, depending on supply, market conditions and Samsung's requirements.". Novonix confirmed that its graphite anode materials will be produced in U.S. factories and then exported to Samsung's battery production plants in other countries. In addition to the supply agreement, Samsung SDI and novonix also agreed to explore opportunities for Samsung to provide new graphite anode materials for electric vehicles under a parallel R & D cooperation plan. Thanks to the growth of power battery, small battery and energy storage business, Samsung SDI lithium battery sales achieved a substantial growth in 2019. Samsung SDI Q3 financial report shows that the company's revenue from July to September was 2567.9 billion won (15.58 billion yuan), up 7% on a month on month basis, up 1.8% on a year-on-year basis; its operating profit was 166 billion won (1.01 billion yuan), up 6% on a month on month basis, down 31% on a year-on-year basis; its net profit was 217.4 billion won (1.32 billion yuan), up 1.6% on a year-on-year basis. Among them, the lithium battery business achieved revenue of 1951.7 billion won (about 11.84 billion yuan), a 7% month on month increase, a 1.5% year-on-year increase, mainly due to the increase in sales of power batteries and ESS. Samsung SDI said that its battery business Q3 revenue increased significantly month on month due to the introduction of new hybrid models with plug-in power by its main engine factory customers, as well as the resumption of sales growth in domestic ess sales and overseas markets such as the United States. The company's fourth quarter earnings are expected to improve due to strong market demand for electric vehicle batteries. In November, it announced that it signed a battery supply contract worth 2.9 billion euros (22.605 billion yuan) with Samsung SDI, with a supply period from 2021 to 2031. In addition, Samsung SDI has also signed long-term supply agreements with the group and akasol, a German power battery system manufacturer, to guarantee the growth of its power battery business. In order to meet the increasing market demand of customers, Samsung SDI launched the capacity expansion plan in 2019. In addition to investing 5.8 billion yuan to expand the battery capacity of Xi'an joint venture plant, Samsung SDI also invested 9.2 billion yuan to expand its Hungarian power battery plant. After the expansion, the annual capacity will meet the battery demand of 50000 electric vehicles. In order to meet the demand of capacity expansion and further reduce costs, Samsung SDI has also signed a long-term supply agreement with its raw material suppliers to ensure the stable supply of raw materials. In October, Samsung SDI and graceco signed a multi-year supply agreement. Graceco will supply 80000 metric tons of NCM materials to Samsung SDI, starting from 2020. At present, Samsung SDI is strengthening its lithium battery industry chain layout and further strengthening its competitiveness in the power battery market. However, Samsung SDI still faces multiple pressures and challenges. On the one hand, competitors such as LG Chemical, ski, Panasonic, etc. are also strengthening the layout of power battery business. The international power battery market competition is increasingly fierce, and Samsung SDI's international market share is facing challenges. On the other hand, at present, the price and gross margin of power battery products continue to decline, the profitability of battery enterprises weakens, and there are still big uncertainties whether Samsung SDI's lithium battery business can continue to make profits.