BTR's view on the future market of negative electrode materials

Main contents of investor relations activities

1. Industry situation of the company

Reply: The company is mainly engaged in the research and development, production and sales of negative electrode materials, positive electrode materials and advanced new materials for lithium-ion batteries, which are the core materials for manufacturing new energy vehicle power batteries, consumer electronics batteries and energy storage batteries.

From the perspective of the domestic power market, with the continuous recovery of the economy, the national and local intensive introduction of automobile policies to ensure the steady development of the car market and the continuous improvement of charging pile infrastructure, domestic new energy vehicle sales still maintain rapid growth. According to the statistical analysis of the China Association of Automobile Manufacturers, from January to July 2023, the production and sales of new energy vehicles completed 4.591 million and 4.526 million, respectively, an increase of 40% and 41.7% year-on-year, and the penetration rate of domestic new energy vehicles in July has exceeded 32%.

In 2022, the European/American market sold a total of 2.592 million / 897,000 electric vehicles, with a penetration rate of only 23%/6.5%, compared with the domestic market, overseas penetration still has great room for improvement, and the market space is broad. Based on the low penetration rate of overseas markets and broad room for growth, the domestic new energy industry chain is accelerating its expansion to overseas markets. According to the latest data from the General Administration of Customs, in the first seven months of this year, China's total lithium battery exports increased by 58.9% year-on-year.

The company will actively seize the opportunities of globalization, actively promote the globalization development strategy, accelerate the construction of overseas production bases, improve overseas layout, and gradually realize global operations.

2. Core advantages of the company

Reply: (1) The company has a high-quality customer structure. SK on, Panasonic, LGES, Samsung SDI, BYD and other global ranking power battery manufacturers are the core customers of Betri, do not rely on a single customer. (2) Strong R & D strength, with full category advantages. The company's products include artificial graphite, natural graphite, silicon-based negative electrode materials and other new negative electrode materials, etc., a complete variety, and in sodium-ion batteries, solid-state batteries, hydrogen fuel cells and other new battery material systems also have a forward-looking layout, strong research and development capabilities. (3) Excellent and stable core team. The company's core team generally has a good educational background, professional background, many of them have accumulated 10 to 20 years of industry experience, the operation and management, industrial pattern, industry development and future trends have a deep understanding of the company's stable development to build a talent foundation. (4) The layout of the whole industrial chain and technological innovation to reduce costs and increase efficiency. In terms of natural graphite, the company has been centering on the whole industrial chain from mine to finished product. In the field of artificial graphite, attention is paid to the stable supply mechanism of core key materials such as needle coke, as well as the capacity assurance and technological innovation of key processes such as graphitization. The layout of the whole industrial chain will provide low-cost advantages for the company's negative electrode materials.

3, sodium cathode material technical route

Reply: The company has laid out sodium positive and negative electrode materials, of which sodium positive electrode materials are mainly in the direction of layered oxide technology. At present, the specific capacity of Benoa-O3B positive electrode materials launched by the company can reach 145 mAh/g, and the compaction density is greater than 3.4g/cc.

In the future, the company will work hand in hand with customers to jointly open the broad market of oxide layer structure cathode materials and accelerate the large-scale application of sodium-ion batteries.

4, natural graphite, artificial graphite future market views

Reply: Natural graphite has the advantages of low energy consumption and low cost, and has been widely used by overseas customers, while artificial graphite has good cycle performance and has advantages in application. Some battery manufacturers will also mix natural graphite with artificial graphite in a certain proportion to improve product performance. With the continuous innovation of technology, artificial graphite and natural graphite will still maintain a large market space.

5, whether downstream customers are more concerned about carbon emissions, and what measures the company has

Answer: Betri attaches great importance to green development, and will look for areas with green electricity indicators when determining investment projects. At the same time, we continue to increase the use of clean energy and reduce carbon emissions through hydropower, solar energy and other ways.

Betrie has installed solar panels in its factories in Jiangsu and Huizhou, used hydropower in its bases in Sichuan and Yunnan, and achieved a significant reduction in carbon emissions in the production process by adjusting the use of equipment and upgrading equipment.

6. Judgment on future trends of the industry and the company in the third and fourth quarters

Reply: In terms of negative materials, overall, the current negative materials market is still in a state of structural excess capacity. However, in the third quarter of this year, the overall production of negative electrode materials picked up. The company has been deeply engaged in the field of negative electrode materials for more than 20 years, and is one of the earliest enterprises in the mass production of silicon-based negative electrode materials in China. Its shipment volume is leading in the industry, with obvious technology and first-mover advantages. The company focuses on strategic customer needs, improves product competitiveness and input-output ratio, and will achieve continuous growth in the shipment scale of negative electrode materials in the future. In the first half of 2023, the company comprehensively implemented the concept of cost reduction and efficiency improvement, improved the overall quality of operation, and achieved sales of negative electrode materials of more than 170,000 tons, corresponding revenue of 6.327 billion yuan.

In terms of cathode materials, according to Baichuan Yingfu data show that since the third quarter, terpolymer materials need to continue to improve, the production expectations of domestic power battery companies in the second half of the year continue to be optimistic, while some battery companies have production capacity climbing demand, the order increase of mainstream material companies is obvious, and the domestic supply and demand situation is tight in the short term or will promote the price of terpolymer materials. In the context of the increasing market demand for long-life trams, the material system with higher nickel content in the future meets the energy density requirements of the downstream market for power batteries in the future. The company continues to focus on high-nickel terpolymer cathode materials. In the first half of 2023, the company promotes high-quality development through lean cost reduction and other ways to achieve sales of more than 19,000 tons of cathode materials. The corresponding revenue is 6.99 billion yuan.

7. Gross profit margin of the company

Reply: The company continues to strengthen the supply chain management ability, lean cost reduction, improve the quality of operation. In the first half of 2023, the company's gross profit margin was 14.97%. Among them, profitability improved significantly in the second quarter. In the second half of the year, the company will continue to comprehensively implement the concept of cost reduction and efficiency improvement in raw material procurement, core processes, technological innovation and other aspects, and gradually improve the gross margin level of products.

8, the company's existing silicon based anode material silicon content

Reply: The silicon content of silicon carbon is basically at the level of 5%-10%, and with the improvement of the future technical level, the silicon content is expected to be further improved.

9, how to view the ternary material technical route selection

Terpolymer materials have the advantage of high energy density, with the technological iteration of new energy vehicles and power batteries, long driving range, fast charging rate and high safety will be the mainstream demand and direction, terpolymer materials are conducive to electric vehicles to achieve a longer driving range breakthrough, will still be favored by the market.

10. How to deal with the increase in overseas markets

Reply: The company is currently fully promoting the construction of Indonesia's annual output of 80,000 tons of new energy lithium battery negative electrode material integration project, the future will be combined with industry development, overseas customer demand, the company's strategic development planning and other factors, gradually demonstrate and plan the capacity layout of other overseas markets, in order to cope with the increase of overseas markets.