On August 21, Caixin reported (Reporter Zeng Chu Chu) in the semi-annual earnings conference of Putailai (603659.SH) held today, the layout of the company's core business anode materials and solid-state battery materials became the most concerned issue for investors. According to Caixin reporters' statistics, about 50% of the 50 questions submitted by investors are related to the above aspects.

Regarding the price of anode materials, Chairman Liang Feng of the company said at the earnings conference that due to reduced profitability and tightening of financing, the speed of investment in new capacity in the industry has slowed down significantly, and it is expected that there is limited room for further price reduction in the future.

There is limited room for future price reduction of anode materials.

Anode materials are the core business of Putailai. The financial report shows that in the first half of 2024, the company's shipment of anode materials was 66,992 tons, a decrease compared to the same period last year when the shipment of anode materials was 68,197 tons.

Putailai explained in the semi-annual report that due to the short-term supply and demand mismatch in the industry, the price of anode materials has been at a low level. The market price of some segmented areas of anode materials is lower than the reasonable production cost. In addition, the demand from Europe is still below expectations. The company has appropriately reduced and controlled the shipment of some low-priced products, arranged the supply and sales of products reasonably, and ensured the long-term healthy development of the enterprise, resulting in a decrease in the revenue and sales volume of the anode materials business compared to the same period last year.

This means that in order to cope with the oversold market price, leading anode material companies have started to reduce shipments. In March of this year, when BYD raised the ultra-low-priced orders for leading anode material vendors, some industry insiders told reporters that the bottom of the anode material market has been confirmed.

The situation in the anode material industry is also a concern for most investors. "In recent years, due to the rapid release of new anode capacity, the anode material market has shown a phased supply-demand imbalance, and the intensifying market competition has led to a significant price reduction of anode materials." Liang Feng said that overall, new entrants to the industry and their new capacity are difficult to form effective industry competitiveness, and the price of anode materials has approached the cost line of production companies. Most companies have suffered losses; due to reduced profitability and tightening of financing, the speed of investment in new capacity in the industry has slowed down significantly, and it is expected that there is limited room for further price reduction in the future.

Liang Feng further stated that in the future, disadvantaged production capacity without differentiated product advantages, research and development advantages, and production cost advantages will face elimination, while leading enterprises with differentiated product advantages, research and development technology advantages, capital advantages, and overseas production capacity layout capabilities are expected to usher in a new round of industry consolidation opportunities.

Putailai also disclosed the progress of the anode material construction project, among which, the first phase of 0.1 million tons of Sichuan Zichen anode material is expected to be put into production by the end of 2024, and the second phase of 0.1 million tons will complete the construction of the plant by the end of 2024.

In terms of overseas layout of anode materials, Putailai executives stated that the preliminary design and planning of the annual production of 0.1 million tons lithium-ion anode material integrated production base project in Sweden Zichen has been initiated, and they are currently preparing for the local approval work for the registration and establishment of the project implementation body.

"Next-generation" battery materials have high attention in layout.

In addition to anode materials, investors have a high interest in Putailai's layout of "next-generation" battery materials, including silicon-carbon anode and solid-state electrolyte.

In the semi-annual report, Putailai has disclosed that the company started the research and development of solid-state electrolyte materials in 2022 and has completed the pilot production of LATP (lithium aluminum titanium phosphate) and LLZO (lithium lanthanum zirconate oxide) solid-state electrolyte materials. The ionic conductivity of the products is 10^(-3) S/cm, and the particle size is controllable. A pilot production line for solid-state electrolyte with an annual production capacity of 200 tons has been built in Sichuan base.

At the earnings conference, some investors asked whether the development of solid-state batteries still requires anode materials and separators. Will it have an impact on the company's business?

Regarding this, Liang Feng stated that as a service provider that provides comprehensive solutions for various materials and process equipment to downstream customers, the company has increased its research and development and industrialization cooperation in various aspects of solid-state batteries. Currently, there are still many technical, electrochemical performance, and cost issues to be solved in the commercialization process of pure solid-state batteries. Existing lithium batteries and semi-solid-state batteries are still the mainstream solutions for quite a long time. Solid-state batteries still require anode materials such as silicon-carbon and lithium metal, which are the areas where the company specializes. Some solid-state batteries do not require separators, but they require the coordination of electrolyte membranes and coating processes, which is also the company's expertise.

Regarding the anode material, Liang Feng stated that the company has actively deployed silicon-carbon anode and lithium metal anode. The new type of silicon-carbon anode can be used as the anode material for semi-solid/state batteries. Currently, it is progressing smoothly in customer introduction, and the shipment volume continues to grow. The capacity construction work of Anhui Zichen silicon-carbon anode is also underway.