As countries successively banned the sale of fuel vehicles, major automakers have announced plans for the next 5-10 years, and started to develop and sell electric vehicles, which has also caused the demand for electric vehicle batteries to surge since last year. (4721-TW), CommScope (4739-TW) has also expanded production at the same time, and signed long-term contracts with customers.
Megima and CommScope are both ternary material cathode material manufacturers, providing cobalt sulfate and nickel sulfate for precursors and car manufacturers, etc. Last year, they benefited from strong demand from customers, and the revenue of the two companies increased by 85% and 39% respectively. The first three quarters Profits have increased exponentially, and they have won the whole year of 2020.
In response to customer demand, the two companies started large-scale expansion last year. In addition to selling materials, Maqima is also actively developing a battery material recycling business. By cooperating with car manufacturers, the recycled batteries are refined into raw materials and sent to the factory. Back to the supply chain to achieve a green economic cycle, in line with the current global trend.
Maegima said that the recycling rate of waste battery materials is currently 90%, and the expansion of battery material recycling capacity has been completed in the fourth quarter of last year, and the benefits will gradually emerge. Master the source of metals and improve gross profit margins, and currently also sign long-term contracts with customers.
In addition to signing long-term contracts with customers this year, CommScope also signed contracts with upstream miners to ensure sufficient raw material scheduling. Currently, the production capacity of nickel sulfate and cobalt sulfate is 22,000-25,000 tons and 11-13,000 tons respectively. Due to the clear customer orders, The long-term contract coverage rate is as high as 75%, and the rest of the production capacity is due to emergency orders.
In addition, CommScope negotiates prices with customers every year. It is estimated that the processing cost will increase by more than 10% this year. The legal person is optimistic. With the new production capacity of power battery materials, CommScope will increase annual revenue by 3-4% this year. The profit growth is expected to be better due to the increase in the proportion of revenue from high-margin products.
