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KEDA Posted Net Profit of RMB 4.251 Billion for 2022

published: 2023-04-26 9:30

KEDA Industrial Group, a Chinese machinery company, released its annual report for 2022 on April 14. According to the report, the company posted a realized annual revenue of RMB 11.157 billion, showing a YoY growth of 13.89%. The annual net profit attributable to the shareholders of KEDA’s listed companies came to RMB 4.251 billion, showing a massive YoY growth of 322.66%. KEDA’s main businesses are equipment for manufacturing ceramic products, equipment for manufacturing building materials, Li-ion battery materials, and other types of machinery. Its subsidiary Lake Lithium supplies lithium salts.

Regarding KEDA’s businesses related to Li-ion battery materials, their realized annual revenues totaled RMB 1.21 billion for 2022, reflecting a YoY growth of 179.89%. KEDA’s subsidiaries released a significant amount of new production capacity for anode materials. Furthermore, the sectors related to new energy technologies grew rapidly and provided a huge amount of demand for Li-ion battery materials. Due to these developments, KEDA saw an increase in both the sales and the average prices of its battery-related products.

In 2015 KEDA entered the field of anode materials used in Li-ion batteries. The company mainly offers graphitization service, artificial graphite, and silicon-carbon composite anode materials. It is capable of developing, manufacturing, and selling these products. Currently, KEDA’s anodes are being adopted for various types of Li-ion batteries sold in the market.

Fujian KEDA New Energy Technology and Anhui New Materials are the two subsidiaries that are in charge of KEDA’s battery material businesses. In terms of vertical integration, KEDA’s capability extends from coke processing to graphitization and graphite manufacturing. The company is also developing new kinds of anode materials to further enhance its coverage of the industry chain.

Since 2021, KEDA has been focusing on building a vertically-integrated manufacturing hub in Fujian. The phase 1 of Fujian KEDA’s manufacturing hub comprises 40,000 tons per year of graphitization capacity and is now ramping up. The setup of another production line with 10,000 tons per year for artificial graphite was completed in the first quarter of 2023. As for the phase 2 of the hub, it is designed to have 50,000 tons per year of vertically-integrated production capacity for anode materials. The construction of the phase 2 has been initiated. At the same time, KEDA is expanding its base in Chongqing (Sichuan). The phase 3 of the Chongqing base is now in the funding and preparation stage. With a production capacity of 50,000 tons per year for anode materials, the phase 3 is scheduled for completion within 2023.

KEDA also offers different types of equipment related to the manufacturing of battery materials. In 2022, the company formally established a R&D center for battery manufacturing equipment and began to formulate a strategy to expand into this area. As of now, KEDA has developed roasting kiln, rotary kiln for pre-carbonization, roller-hearth kiln for secondary carbonization, tunnel kiln for heat treatment of graphite, and automated crucible installation system. The company has received around RMB 300 million worth of orders for these kinds of equipment.

Besides developing its own production capacity for battery materials, KEDA is also making strategic investments across the industry chain for Li-ion batteries. The company is exploring all the potential opportunities for the related businesses.

In 2017, KEDA with its expertise on anode materials, decided to invest in Lake Lithium so as to venture into the areas of the additional processing of lithium carbonate, the trading of lithium resources, etc. In 2022, Lake Lithium’s latest lithium carbonate project came online, adding another 20,000 tons per year of production capacity to its existing 10,000 tons per year.

Due to the activation of new production capacity and the sharp rise in prices of lithium carbonate, Lake Lithium’s output and sales of lithium carbonate in 2022 totaled around 31,000 tons and 30,300 tons respectively. Its inventory for the material reached 4,200 tons. In terms of financial performance, Lake Lithium’s revenue, net profit, and net profit attributable to the parent company came to RMB 11.495 billion, RMB 7.916 billion, and RMB 3.45 billion respectively.

Moreover, in 2022, KEDA invested RMB 150 million to establish Guangdong KEDA Nanyue New Energy Startup Investment (LP). Through this entity, KEDA has signed equity investment deals with carmaker GAC Aion. In the future, KEDA could supply anodes for batteries used in electric vehicles manufactured by GAC Aion.

KEDA has also invested RMB 1.3 billion to establish Jiaxing KEDA Jinhong Salt Lake Industry Equity Investment (LP), through which it acquired a 0.93% stake in Qinghai Salt Lake Potash (Co. Ltd.). This deal is expected to benefit Lake Lithium’s long-term growth as it also has a stake in Qinghai Salt Lake Potash.

Regarding overseas expansions, KEDA is currently eyeing Africa. In 2022, the company began prospecting for lithium and graphite ores in several locations in Africa. This initial exploration process plays an important part in determining the potential and viability of KEDA’s businesses related to Li-ion battery materials.

Looking ahead, KEDA said in its annual report that the development of the company’s long-established businesses and new energy businesses will go hand in hand. The company’s main strategy will be to differentiate its core competitive advantages and make sure that its businesses related to ceramics, building materials, and Li-ion batteries will grow together.

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.

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