On April 24, Hunan Yuneng New Energy announced that it plans to invest around RMB 8 billion in the development of the phase 2 of its Yunnan manufacturing base. This capacity expansion will be implemented through its wholly-owned subsidiary Yunnan Yuneng New Energy Battery Material. Furthermore, the funding will primarily come from Yuneng itself.
The phase 2 of the Yunnan base will comprise production lines for LiMnxFe1-xPO4, iron(III) phosphate, and hydrogen peroxide. There will also be a line for the additional processing of lithium carbonate as well as other supporting facilities.
Previously, Yuneng disclosed that the phase 1 of the Yunnan base entailed an investment of RMB 6 billion. The phase 1 was completed in June 2022 and is now in operation. It comprises 240,000 tons per year of production capacity for iron(III) phosphate and 160,000 tons per year of production capacity for LFP.
In comparison with the phase 1, the phase 2 has the addition of a production line for LiMnxFe1-xPO4. Yuneng explained that cathodes that combine lithium, manganese, iron, and phosphorous have come under its focus with respect to R&D. By studying and applying different materials and process technologies, the company will be able to offer phosphate-based cathodes that delivers a higher level of performance.
Yuneng stated that the phase 2 of the Yunnan base will help expand its product portfolio and create a complementary system of products that will be able to meet the diverse demands of its customers in the downstream of the industry chain. These developments, in turn, will reinforce the company’s competitive advantages. Moreover, the government of Anning has pledged that it will support Yuneng in obtaining mineral resources in accordance with the relevant laws and regulations. Yuneng will thus have a higher level of supply security for the key raw materials, and its material costs will also drop as well. Anning is a county-level city under the administration of Kunming, the capital of China’s Yunnan Province.
Yuneng’s main offerings are LFP and ternary cathode materials that used in Li-ion batteries, though much of the recent focus has been on the former. The company’s own annual report for 2022 stated that its market share for LFP rose from around 25% in 2021 to around 29% in 2022. The company has been the top supplier for LFP in China for three years in a row.
As of the end of 2022, Hunan Yuneng’s annual production capacity and annual production volume for LFP had come to around 348,000 tons and 337,200 tons respectively. The utilization rate of its production capacity for LFP had also reached 96.82%. The planned annual production capacity for LFP at that amounted to around 140,000 tons. From 2022 to 2025, Yuneng will be adding and activing new production capacity. By the end of this period, its annual production capacity for LFP is projected to total around 893,000 tons.
In terms of financial performance, Hunan Yuneng’s first-ever annual report stated that the company’s realized revenue for 2022 totaled RMB 42.79 billion, showing a massive YoY growth of 505.44%. The company’s net profit for 2022 also surged by 153.96% YoY to RMB 3.007 billion.
The annual report also revealed that Hunan Yuneng’s top five clients provided a sales revenue of RMB 40.01 billion for 2022, accounting of 93.48% of the company’s annual total revenue. CATL and BYD were the top two clients in 2022. Sales revenue related to them came to RMB 34.4 billion, or 80.45% of the annual total. Other noteworthy clients of Yuneng during 2022 included EVE, SVOLT, REPT, Envision AESC, Hithium, Ganfeng Lithium Battery, Ningde Amperex Technology, Narada, Pylontech, and Great Power.
This article is a translation of a Chinese article posted by Martin at 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.