On March 14th, Dangsheng Technology's annual report showed a surge in performance, with revenue reaching 1.33 billion yuan and net profit reaching 99.2878 million yuan, representing a profit increase of 647.56%. The report also revealed a two-year collaboration with a subsidiary of South Korea's GS Group on NCA (nickel-cobalt-aluminum ternary cathode materials).
Regarding the company's future development, Li Jianzhong, general manager of Dangsheng Technology, said that the NCA project, a collaboration between the two parties, will be "put on hold" for now. The company will focus on developing NCM811 based on its existing NCM (nickel-cobalt-manganese) products.
The two-year collaboration project was quietly terminated.
On March 14th, Dangsheng Technology released its 2016 annual report, which attracted considerable attention. The company achieved revenue of 1.334 billion yuan, a year-on-year increase of 55.10%, and net profit of 99.2878 million yuan, a year-on-year surge of 647.56%. Among them, the revenue from lithium battery materials business reached 1.184 billion yuan, accounting for nearly 90% of the total revenue.
Reporters noted that in its annual report, Easpring Technology announced the termination of its two-year cooperation with South Korea's GS Group on NCA (Neural Cell Acrylic Atomizer) technology. "Given that GS Group has transferred all of its cathode business, the company has terminated its cooperation with GS Group on the NCA project and will independently develop next-generation high-nickel ternary materials for automobiles." This comes at a crucial time for Easpring Technology to deploy next-generation high-nickel ternary materials and seize a share of the new energy vehicle battery market.
In 2015, after achieving mass sales of high-nickel ternary cathode materials for automotive applications, Easpring Technology set its sights on another high-end lithium-ion battery cathode material, NCA. The report shows that in July 2015, Easpring Technology signed a letter of intent and market development cooperation agreement with GSEnergy, a subsidiary of South Korea's GS Group, to jointly develop the NCA cathode material business.
According to the announcement from DangSheng Technology, its partner, GSEnergy, is a subsidiary of South Korea's GS Group, primarily engaged in energy development. In recent years, GSEnergy has gradually shifted its business focus from traditional areas to emerging fields such as new energy, renewable energy, and lithium battery material development.
According to the agreement between the parties, they planned to establish a joint market development team to conduct research on the domestic NCA market, set up a laboratory for research and development, and ultimately establish a Sino-foreign joint venture with equal equity. Prior to the termination of this cooperation, Dangsheng Technology had already established a joint market development team and laboratory with South Korea's GS Group.
In its annual report, DangSheng Technology stated that the reason for the termination of the cooperation was the complete transfer of the cathode material business by South Korea's GS Group. DangSheng Technology's board secretary, Qu Xiaoli, stated that this termination would not affect the listed company's development. The company's difficulties in cooperating with GS Group were a major reason for the termination, as the two sides had many differences in product and market judgment. It is worth noting that Qu Xiaoli stated that the two sides had not yet reached a formal communication regarding the termination of the project.
NCA battery development suspended
In its announcement, Dangsheng Technology stated its intention to independently develop next-generation high-nickel ternary materials for automotive applications. However, technological routes and industrialization timelines are crucial for success in the booming lithium battery industry. The termination of this collaboration adds uncertainty to Dangsheng Technology's pursuit of the new energy battery boom.
In the domestic automotive lithium battery market, ternary lithium batteries are challenging the dominance of lithium iron phosphate batteries, attracting increasing capital investment. The lifting of restrictions on ternary lithium batteries for electric commercial vehicles has created opportunities for them to enter the commercial vehicle sector, making power lithium batteries using ternary lithium batteries as cathode materials popular with automakers.
Industry insiders say that high-nickel ternary materials are currently a key direction for the development of automotive lithium batteries. High-nickel ternary materials NCA and NCM811 have similar nickel content and battery capacity, belonging to the same product category. Both have excellent future prospects. They also noted that NCA is currently the most widely used in overseas markets, with TSLA being a representative example.
Li Jianzhong, General Manager of DangSheng Technology, stated that the company's previous cooperation with South Korea's GS Group was based on the South Korean NCA R&D team. Following the termination of this cooperation, DangSheng Technology will "slow down" its NCA R&D and production, and will continue to develop NCM811, a material similar to NCA, based on its existing NCM series products. He explained that NCM already accounts for about 70% of the company's main lithium battery materials business, and the company currently has the R&D capabilities for both NCA and NCM811 ternary cathode materials. This year, DangSheng Technology can achieve small-batch production of the new products.
