The Four Major Lithium Battery Concepts of New Energy May Become the Big Dark Horses in the Future (附股)

Chengfei Integration

Advantages: After the completion of the AVIC Lithium Battery project in Jiangsu, it will form a large-scale lithium-ion power battery production capacity of 680 million AH; after three years, the annual production capacity will be about three times higher than now, reaching 2 billion ampere-hours.

Risks: The company's announcement mentioned market capacity risks and project progress risks.

In July and August, with the rapid surge in stock prices, Chengfei Integration, located in a remote corner of western China, became famous overnight. Not only did it rise to become the top bull stock in the two markets, but it also drove a batch of similar concept stocks to soar significantly. This "turning stone into gold" thing is the lithium battery. It was precisely the rapid advancement of "Chengfei Integrations" that made the lithium battery concept deeply rooted in people's hearts. For a time, anything related to "lithium" would surely rise, becoming the most popular winning strategy in the current A-share market.

A 400% surge in just two months! Although A-shares have never been short of bull stocks, such a sharp rise in such a short period has greatly surprised investors, including industry insiders. Many analysts who did not delve deep into the matter sounded the alarm on risks soon after the stock started moving, only to watch helplessly as Chengfei Integration soared skyward.

Authoritative information comes from Chengfei Integration's non-public additional issuance plan disclosed on July 6. It was this plan that revealed the news of Chengfei Integration entering the lithium battery field, which led to the stock taking off. On that day, Chengfei Integration announced a huge investment plan, intending to issue an additional 106 million shares to raise 1.02 billion yuan, all of which would be used for capital increase and control over AVIC Lithium Battery Co., Ltd. under the China Aviation Industry Group, to build a lithium-ion power battery project. After the additional issuance plan was released, Chengfei Integration resumed trading after a one-week suspension and continued to hit the upper limit.

The country had recently begun pilot subsidies for the new energy vehicle industry, especially for private car purchases, and the timing of Chengfei Integration's announcement of its entry into the lithium battery sector was quite opportune.

After the capital increase is completed, Chengfei Integration will absolutely control AVIC Lithium Battery, expected to hold 60% equity. After the completion of the AVIC Lithium Battery project, it will form a large-scale lithium-ion power battery production capacity of 680 million AH. The construction cycle of the project is 38 months. After the project is completed and put into operation, the average annual net profit is expected to be 374 million yuan, and the project investment payback period is 7.8 years. An average annual net profit of 374 million yuan means an earnings per share of 1.1 yuan for Chengfei Integration, which has only 206 million shares. Although the project's completion still needs time, the imagination space has already been opened.

Careful investors found that the company that Chengfei Integration is about to control has already put its manufactured lithium batteries into use at the World Expo. "The World Expo has put into use 25 electric flower cars, 24 of which are equipped with batteries produced by AVIC Lithium Battery," some media reported.

According to reports, in 2010, the AVIC Lithium Battery Industrial Park plans to start construction of 11 buildings. By the end of 2013 when the construction is completed and production begins, 44 production lines will be added, and the annual production capacity will be approximately three times higher than now, reaching 2 billion ampere-hours. This production capacity is almost enough to drive 50,000 electric vehicles from Luoyang to Beijing.