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on august 29, shanshan co., ltd. released its 2024 semi-annual report. taking this opportunity, let's take a look at what new measures it has taken to break the productivity problem?

the dawn of the second quarter has begun, and the company is firmly in the global leading position

in the first half of this year, suning holdings group achieved operating income of 8.82 billion yuan and net profit attributable to shareholders of the parent company of 17.5745 million yuan, both showing negative growth year-on-year.

(source: shanshan holdings' interim report)

however, looking at a single quarter, the second quarter of 2024 has seen a clear recovery, with revenue of 5.068 billion yuan, a month-on-month increase of more than 35%, and net profit also increasing month-on-month.

after months of silence, shanshan shares seems to have ushered in the dawn of recovery? to trace the source, we still have to go back to the two major business lines of negative electrode materials and polarizers to find the answer. in the first half of 2024, with the implementation of favorable policies such as the replacement of old new energy vehicles with new ones and energy structure reform, and the acceleration of vehicle model iteration to participate in the competition, orders in all links of the new energy vehicle industry chain continued to pick up, energy storage battery shipments increased significantly, and the operating rate of the materials industry rebounded. although the current price of negative electrode materials is still at a low level, the booming momentum of the entire new energy industry is unquestionable, and backward production capacity is also continuing to be cleared.

the display panel industry is also facing the same situation. the growth momentum of terminal demand has increased slightly, but the competition in the industry has intensified, and the price of polarizer products has still declined year-on-year. the two major terminal industries are in a period of adjustment of prosperity. it is inevitable that the supporting links of the industrial chain will adjust with the cycle. basically, all companies in the chain are affected by this, and shanshan shares are naturally not immune. but as the saying goes, "the industry trough is the touchstone", prices driven by the supply and demand of the entire market may be difficult to intervene, but shanshan shares' continuous breakthroughs in quantity still show its full resilience. in the first half of 2024, through deepening cooperation with global leaders, its sales of negative electrode materials and polarized products have achieved positive year-on-year growth. in particular, the sales of negative electrode materials increased by more than 50% year-on-year, with a growth rate higher than the industry average, and sales to head customers also achieved significant growth. looking at the world, shanshan shares' two major businesses still maintain their leading position. according to xinluo information data, shanshan shares' negative electrode material artificial graphite production accounted for the first place in the industry, and its market share increased year-on-year. according to cinno research data, in the first half of 2024, shanshan's shipment area share of large-size (including tft-lcd tvs/monitors/laptops) polarizers was 34%, continuing to rank first in the world, and its global market share also increased further. to put it bluntly, you have to be able to withstand the trend, and shanshan has obviously withstood the trend!

cost reduction and innovation are both indispensable

however, if we want to smooth out the industrial cycle, we still need the two magic weapons of cost reduction and efficiency improvement, and r&d and innovation.

1. three parallel efforts to increase efficiency, reduce costs and control expenses

faced with falling product prices and narrowing profit margins, shanshan shares' solution is to tap potential, increase efficiency, and focus on cost reduction. take artificial graphite as an example. through the "negative electrode material + graphitization" integrated project, the proportion of self-supply of graphitization is increased; the new box furnace technology is adopted, and the cost of self-supply graphitization is further reduced by increasing the furnace load and rapidly cooling. at present, the company has three integrated bases in inner mongolia, sichuan, and yunnan. among them, the first phase of inner mongolia and sichuan has been put into production, and the first phase of yunnan is in the process of capacity climbing. in the field of polarizers, shanshan shares focuses on improving production efficiency. by precisely modulating production parameters, the product pass rate is improved, and the product yield is ensured by combining automatic detection technology. as of now, shanshan shares has built 10 world-leading polarizer production lines in many places, especially rtp production lines, which are usually set up in customer factories to control transportation and packaging costs. on the expense side, in the first half of 2024, its sales expense rate and management expense rate are still controlled at a low level.

2.increase r&d and build high barriers

they tightened their belts but never skimped on r&d. in the first half of 2024, shanshan co., ltd. invested a total of 530 million yuan in r&d, all of which were expensed, setting a record high for the same period, and the r&d expense rate also increased to 6%.

research and development has yielded fruitful results. as of june 30, 2024, there are 302 domestic and foreign authorized patents for negative electrode materials, an increase of 23 from the end of the previous year. among them, there are 8 international patents and 213 domestic invention patents. polarizers have applied for more than 1,000 patents in many countries around the world, including south korea, china, japan, and the united states, of which 1,172 patents have been authorized (including 912 overseas patents) and 1,081 invention patents. specifically, as the first domestic company engaged in artificial graphite negative electrode materials for lithium batteries, after more than 20 years of research and development and iteration, shanshan co., ltd. has now made considerable breakthroughs in high-precision and cutting-edge products. in the first half of 2024, we will continue to break through the bottleneck of high-energy density fast charging technology, and the fast charging product system will lead the generation.

consumer fast-charging products continue to maintain their leading market share, and have achieved batch shipments of 5c products and ton-level supply of 6c products.

the shipment volume of power fast-charging products has grown rapidly, and large-scale supply of 4c and 5c products has been achieved. 6c products have completed customer finalization and are undergoing batch stability verification. the technological leading advantage of fast-charging products has been further expanded.

silicon-based negative electrodes continue to gain recognition from customers at home and abroad and are now available in large quantities.

silica products have been supplied in batches to leading overseas customers and have been installed on vehicles. at the same time, the problem of second-generation silica low-temperature circulation has been solved, and related products have been introduced to leading overseas power tool companies.

silicon-carbon products are constantly iterating, and the new generation of silicon-carbon products maintains its leading position in tests by leading customers. related core technologies have obtained patent authorizations in the united states and japan.

the thousand-ton production line for hard carbon negative electrodes was completed and put into production.

the product's capacity, high temperature and processing performance are leading in the industry, and has been mass-applied in the fields of sodium batteries, lithium batteries (including semi-solid batteries) and supercapacitors.

based on this, shanshan has established long-term and stable cooperation with mainstream domestic and foreign battery companies such as catl, ultiumcells, byd, lges, atl, farasis energy, guanyu, and xinwanda. in the field of polarizers, as a leading company with more than 20 years of deep cultivation, shanshan has led the market through differentiated polarizer technologies such as ultra-large size, ultra-thinness, high contrast, and wide viewing angle, and has become a supplier to global panel giants such as boe, huaxing optoelectronics, and lg display.

in terms of new display technologies and applications, its independently developed polarizers for oled tvs, oled mobile phones and oled displays have been mass-produced and shipped; automotive polarizers are actively promoting internal testing and will be sent for samples as soon as possible.

in addition, the company also disclosed its plan to acquire lg chem's oled polarizer, automotive polarizer and other businesses in december last year to accelerate the increase in the market share of high-end polarizers, which is currently progressing steadily.

when the industry is in a downturn, continuous innovation is the key to maintaining core barriers, and will also help it to set sail again when the next cycle comes.

embracing new opportunities in the industry with new quality productivity

isn't this the opportunity?

in the first half of 2024, the lithium battery industry and the panel display industry both rebounded after a brief period of dormancy. according to data released by the china association of automobile manufacturers, domestic sales of new energy vehicles in the first half of 2024 reached 4.944 million, a year-on-year increase of 32%. the shipment of energy storage batteries also increased significantly. according to data from xinlang information, it reached 130gwh in the first half of this year, a year-on-year increase of 35%.

thanks to this, global lithium battery production in the first half of this year was 608gwh, an increase of about 20% year-on-year; global lithium battery negative electrode material production was 967,000 tons, an increase of 29% year-on-year.

evtank predicts that by 2030, global lithium-ion battery shipments will reach 5,004gwh, of which power battery shipments will reach 3,369gwh, nearly three times the growth space compared to 2023. by then, global negative electrode material shipments are expected to exceed 8 million tons, and the cagr from 2023 to 2030 will exceed 20%.

the "china high voltage fast charging industry development report" edited by huawei technologies co., ltd., china electricity council and others also made a future outlook. by 2026, the sales volume of high-voltage platform models above 800v in my country will reach 5.8 million units, an increase of nearly 400% from 2023, and is expected to account for 50% of china's pure electric vehicle sales.

the high growth in demand for fast-charging models will inevitably drive the demand for fast-charging negative electrode materials. as the old saying goes, it takes a thousand days to train an army and only one day to deploy it. shanshan co., ltd. has already made its layout here early. isn't it waiting for this day?

at the same time, there are new opportunities in the field of polarizers. with the holding of major international events such as the 2024 olympic games and the european cup, the panel industry will usher in a new round of replacement cycle, especially the demand for large-size panels will increase significantly.

according to witsview data, in the first half of 2024, the global large-size lcd panel shipment area increased by 7% year-on-year. omdia also predicts that by 2030, the shipment area of ​​display panels above 80 inches will account for 11%.

another strong proof of the recovery of the panel industry is that boe's net profit attributable to shareholders of the parent company in the second quarter of 2024 increased by 166.17% year-on-year.

these signs of recovery have already initially emerged in the performance recovery of shanshan co., ltd. in the second quarter of 2024. in the future, with the development of oled, smart cars, vr/ar and other fields, the demand for optoelectronic material products will be further released, and shanshan co., ltd. will also have a broader room for growth.

as the global leader in negative electrode materials, shanshan co., ltd. has long been not limited to the domestic market, but has turned its attention to the world. after reaching a strategic cooperation with basf in 2021, shanshan co., ltd. announced in 2023 that it would build a 100,000-ton negative electrode production capacity in finland, and is currently in the stage of handling preliminary procedures. with overseas customer resources in hand, it only needs to wait for the capacity to be built.

it can be said that suning holdings group, which is in the midst of cyclical adjustment, has become not only the mainstay of my country's manufacturing industry, but also a benchmark in the new era and new quality productivity. it has withstood the severe winter with cost reduction and waited for spring with innovation.