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Tianneng Power's Attributable Net Profit increased 14.96% to approximately RMB760 million in 1H 2022
High-end eco-friendly battery business maintains the momentum of high-quality and sustainable development
Operating Income of Energy storage increased approximately 32 times
HONG KONG, Aug 27, 2022 - (ACN Newswire) - Tianneng Power International Limited ("Tianneng Power" or the "Company"), a leading company in the sector of batteries for new-energy vehicles in China, (the "Group"; stock code: 819.HK), today announced its interim results for the 6 months ended 30 June 2022 ("the reporting period").
In the first half of 2022, the global pandemic was in a state of flux. The Central Economic Work Conference stated that "economic development is facing pressure of decrease in demand, supply shock and weakening expectations". Tianneng, through the implementation of the "Industry Technology Capital" development strategy with determination, quickly and scientifically adjusted the operation strategies of various business segments, stepping on an "upward trend" during the off-season of the industry. During the reporting period, turnover from the manufacturing industry was RMB17,410 million, representing a YoY ("year-on-year") increase of approximately 8.10%, turnover from trading was RMB13,617 million, representing a YoY decrease of approximately 32.49%. The gross profit increased by 23.01% to approximately RMB2.379 billion, while the gross profit margin was approximately 7.67%, representing a YoY increase of approximately 2.34 percentage points.
Attributable net profit amounted to approximately RMB760 million, representing a YoY increase of 14.96%. Basic earnings per share increased by approximately 14.98% to RMB67.47 cents.
Leveraging on the core competitiveness built with rich industry experience of more than 30 years, comprehensive product research and development, production and sales systems, as well as profound brand power, Tianneng was listed on a number of honours during the reporting period, among which it was ranked the 160th on Fortune China 500, the 208th on Top 500 National Science and Technology Innovation Enterprise, the 10th on Top 500 Zhejiang Business Enterprises in China, and the 46th on Top 100 Creative Enterprises in Zhejiang Province.
In recent years, the thriving new economy has driven the demand for two-wheeled and three-wheeled electric vehicles in the short-distance delivery and express delivery. Meanwhile, the COVID-19 pandemic has propelled the transformation to the commuting alone mode for end consumers. According to the White Paper for the Development of the Chinese Two-wheeled Electric Vehicles Industry (2022) published by EVTank, a research institute, China produced a total of 54.43 million two-wheeled electric vehicles in 2020, recording a year-on-year rise of approximately 12.6%. Given the aggregate ownership of approximately 350 million two-wheeled electric vehicles in 2022, approximately every four Chinese people own one two-wheeled electric vehicle. Based on the personal daily commute by consumers, lead-acid batteries need replacement every 0.5 to 3 years, generating an even greater market for replacement battery.
High-quality and sustainable development of High-end Eco-friendly Batteries
High-end eco-friendly batteries are a series of sealed maintenance-free lead-acid battery products created by Tianneng relying on its R&D and technology innovations, which are advantageous for its cost-effectiveness, safety and stability and recyclability. During the reporting period, the operating income of high-end eco-friendly batteries amounted to approximately RMB14,213 million, representing a YoY increase of 8.34%.
As the power source of vehicles, Lead-acid motive battery's market share has increased year by year in the past three years that the market share of the lead-acid batteries for light electric vehicles currently exceeded 45%. Start-stop batteries are designed for instant starting, ignition, and lighting power needs of vehicles, ships, diesel locomotives, etc.. In the first half of the year, Tianneng launched a variety of AGM start-stop batteries and low lead consumption EFB start-stop batteries. The product parameters all meet the requirements of industry standards.
During the reporting period, the Group's energy storage recorded operating income of approximately RMB280 million, representing a YoY increase of approximately 32 times. Among which, lead-carbon energy storage recorded operating income of approximately RMB73.31 million, representing a YoY increase of 763%. During the reporting period, Tianneng's lead-carbon energy storage has expanded its markets in various fields. Currently, Tianneng's products and system solutions in the field of new energy storage have covered the power generation side, grid side and user side, which are widely used in photovoltaic power stations, wind farms, urban power stations, large data centres, 5G base stations, industrial parks, and ordinary residences and other scenarios.
New Energy Batteries
New energy batteries mainly comprise lithium-ion batteries, and also include the production and R&D of next-generation battery products such as hydrogen fuel cells. During the reporting period, the Group's new energy battery business recorded an operating revenue of approximately RMB763 million, representing a YoY increase of 80.04%.
In terms of production capacity development, in March 2022, the Company invested in the construction of Annual Output of 10GWh Lithium-ion Battery Second Phase Project for the Base in South Taihu New District, Huzhou, Zhejiang Province, with a planned production capacity of approximately 7GWh. The first phase of 3GWh has entered the mass production stage, which has facilitated the Company's production capacity layout for lithium-ion iron phosphate (LFP) batteries. At the same month, Tianneng Battery Group Co., Ltd. (Stock Code: 688819.SH), a holding company of the Company, announced that it plans to invest in the construction of Annual Output of 15GWh Energy Storage and Motive Lithium-ion Battery Project with contribution of approximately RMB5.17 billion in three phases. This project investment will accelerate the implementation of the Company's development strategic plan, seize the development opportunities of the energy storage industry, continue to optimise the Company's industrial structure, and further enhance the Company's market competitiveness.
In the first half of 2022, the Group's lithium-ion motive batteries for light electric vehicles recorded operating income of approximately RMB410 million, representing a year-on-year increase of 17.77%. Lithium-ion storage energy business achieved a breakthrough, recording operating income of approximately RMB206 million.
Lithium-ion energy storage products can provide effective power for a variety of application scenarios as same as the Group's lead-carbon energy batteries do. Lithium-ion energy storage has the advantages of high energy density, high conversion efficiency, and long cycle life, mainly used on the power generation, grid and user perspectives .
Renewable New Materials Business Expansion
In terms of the renewable new materials segment, the Company, based on the Extended Producer Responsibility Scheme, has developed the recycling business of used lead-acid battery and lithium-ion battery apart from the main business, constructing a value chain of batteries. Meanwhile, the Company is also actively exploring other green recycling businesses including solid waste and hazardous waste disposal. It extended the upstream and downstream industrial chains and increased its influence in the subdivision fields.
Tianneng adheres to the concept of green, low-carbon and circular development. From product design to manufacturing and application to regeneration, it keeps optimizing the industrial structure and production methods while contributing to the construction of circular economy to solve the problem of global resource circulation. During the reporting period, the Group's renewable new materials business recorded operating income of approximately RMB1,918 million, representing a year-on-year increase of 54.22%.
Tianneng continued to accelerate the global layout of the large-scale recycling business. In addition to obtaining the recycling pilot qualifications in 15 provinces, Tianneng also empowers and creates values for customers in cooperative relationship through online platforms. In the future, the Company's lead-acid battery recycling industry will continue to expand overseas markets.
Help to achieve the national goal of "Dual Carbon"
In recent years, the Chinese government has successively drafted or issued such laws and regulations, with a view to setting out detailed provisions on the recycling and disposal processes of used batteries, establishing an Extended Producer Responsibility scheme for products such as lead-acid batteries and vehicle motive batteries. The objective is for China to recover over 70% of its lead-acid batteries by the end of 2025.
In the future, relying on its profound and accumulated experience in lead-carbon energy storage technology and lithium-ion battery energy storage technology, Tianneng will further integrate various advantageous technical routes and integrated systems to create a full set of smart energy storage solutions with "smart operation and maintenance, safety, reliability, clean and friendliness", while taking into account the optimal allocation of innovative resources to promote the integrated development of the industry, academia, and research.
Tianneng will continue to delve into new energy storage business models, explore the application of business models such as shared energy storage, cloud energy storage, energy storage aggregation, and separate energy storage, focus on and dig into the commercial value of the energy storage industry, and develop a reasonable pilot demonstration of "new energy + energy storage". Meanwhile, for the international market, Tianneng will also actively promote international cooperation in the process of new energy storage industrialisation and achieve high-quality introduction and high-level export of new energy storage technologies and industries, so as to support the world to achieve the goal of "carbon neutrality".
Looking to the future, Mr. Zhang Tianren, the Chairman of the Board, said, "In line with the improvement of battery technology and product competitiveness for batteries such as lead-acid batteries and lithium-ion batteries, the Group will strive to research and develop new-generation batteries, stimulate the innovation of the R&D team, facilitate the output arising from the Group's major R&D projects, and accelerate innovationdriven technologies. Recycling and new energy storage segment will be its focus while strengthening the fundamentals of lead-acid batteries. Tianneng will strengthen the lead-acid battery recycling segment with its solid effort and continuously improve the operation management and equipment technology standards to accelerate the development plan of lithium-ion battery recycling. Building a strong recycling network and improving recycling technology are conducive to forming Tianneng's core competitiveness. The new energy storage business will have an extensive breakthrough to the new market and enhance the edge of various market segments, further increasing the competitiveness of the industry."
Source: Tianneng Power International Limited
Sectors: Alternative Energy
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