Hunan Yuneng New Energy, a Chinese supplier for cathode materials, posted an impressive financial results for 2022 mainly due to the strengthening of its business ties with domestic battery giants CATL and BYD. On April 12, Yuneng released its first annual report since its listing and stated that the company’s realized revenue for 2022 came to RMB 42.79 billion, reflecting a massive YoY increase of 505.44%. Yuneng’s net profit for 2022 came to RMB 3.007 billion, reflecting a YoY increase of 153.96%.
In China, Yuneng is a major supplier for cathode materials used in Li-ion batteries. The company is involved in the R&D, manufacturing, and sales of cathode materials. Its main offerings include LFP cathode materials and ternary cathode materials. Currently, Yuneng’s main focus is on LFP cathode materials.
Yuneng’s production of LFP cathode materials totaled around 323,900 tons in 2022. Furthermore, the company was ranked first in China for the annual shipment volume of LFP cathode materials for 2020, 2021, and 2022. The realized revenue from LFP cathode materials totaled RMB 42.667 billion for 2022, showing a YoY increase of 514.94%.
In terms of production capacity, Yuneng currently operates with a production capacity of 348,200 tons per year for LFP cathode materials and is building another 140,000 tons per year. The utilization rate of its production capacity for LFP cathode materials is now at 96.82%. Therefore, the company urgently needs to activate new production capacity in order to meet the growing demand. Last year, Yuneng committed a substantial amount of resources and efforts in setting up manufacturing projects in Yunnan, Guizhou, and Huanan. These new manufacturing projects have adopted the company’s latest technological innovations and design solutions for process optimization. They are expected to be completed as scheduled.
Regarding its clients, Yuneng has established long-term supply partnerships with the major domestic battery manufacturers such as CATL and BYD. At the same time, Yuneng has become a strategic investor in CATL’s and BYD’s business operations, thereby further cementing their relations.
Yuneng’s sales to its top five clients in 2022 were valued at RMB 40.001 billion or 93.48% of its entire annual revenue. Sales to CATL and BYD as its two largest clients reached around RMB 34.4 billon or 80.45% of its annual total.
Yuneng has acknowledged the issue of relying too much on a few clients. In its annual report, Yuneng said the company is trying to diversify its client base. While the company continues to work closely with CATL and BYD due to them being the major strategic partners, it is also going to open up new market opportunities. Presently, Yuneng is serving nine out of the top 10 suppliers for LFP batteries. The other clients besides CATL and BYD now account for 19.55% of its sales, and this share has grown.
This article is a translation of a Chinese article posted by TrendForce. It contains information that is either sourced from other news outlets or accessible in the public domain. Some Chinese names are transcribed into English using Hanyu Pinyin.
