CATL issued an announcement to clarify market rumors that the floating profit and loss on the futures side has little impact on the company's performance

CATL issued an announcement in response to recent market rumors.

On June 9, Ningde TimesNew EnergyTechnology Co., Ltd. issued a clarification announcement, in response to "the semi-annual report of Ningde Times may confirm the loss of futures investment of more than one billion yuan in the first quarter", "the number two person of Ningde Times, Huang Shilin, has recently reduced wildly. Market rumors such as "holding cash" have been clarified.

Rumors are not true

In response to the rumors of the company's futures investment losses, Ningde Times responded: "Based on ensuring the stable supply of the company's raw materials and the need to reduce costs, the company has made a partial layout of the nickel resource industry chain. In order to prevent the risk of sharp fluctuations in raw material prices, the company combines its own operations. According to the situation and business needs, according to regulatory requirements and relevant regulations of the company's system, the corresponding commodity (nickel) hedging is carried out to avoid the risk of large fluctuations in the commodity market, not for the purpose of speculation. The company's hedging business is based on spot Based on this, the floating profit and loss on the futures side is hedged by the corresponding spot, which has little impact on the company's performance, and the above rumors are not true."

Source: official announcement

Ningde Times stated in May this year that in order to prevent the risk of sharp fluctuations in raw material prices, the company carried out hedging business for nickel and other related products based on its own operating conditions and business needs.In addition, according to the 2022 hedging business announcement of CATL, the company plans to carry out the commodity hedging business with a maximum occupancy of no more than RMB 11 billion in margin.

In response to the rumor that the No. 2 person was madly reducing his holdings and cashing out, Ningde Times confirmed that Huang Shilin, a shareholder holding more than 5% of the company's shares, said the rumor was not true.Due to the needs of family asset planning, Huang Shilin signed the "According Party Agreement" with the 6 private securities investment fund products that hold 100% of the shares in January 2022, stipulating that Huang Shilin will transfer no more than 2 million shares (including the number of shares) in a block transaction. The company shares are given to the aforementioned 6 private securities investment fund products.The only investor after the penetration of the above-mentioned private securities investment fund products is Huang Shilin himself, and the above-mentioned six private securities investment fund products and Huang Shilin are acting in concert.At present, the implementation of these share transfer plans has been completed.

The announcement shows that the above-mentioned transfer has not resulted in any change in the proportion and number of shares of the company actually controlled by Mr. Huang Shilin (through direct or indirect shareholding), and there is no disguised reduction of holdings in market rumors.At the same time, because the above-mentioned 6 private securities investment fund products form a concerted action relationship with Mr. Huang Shilin, according to the relevant regulations of the Shenzhen Stock Exchange, the shareholdings of major shareholders and their concerted actors should be calculated on a consolidated basis. Therefore, the subsequent reduction of the above-mentioned 6 private securities investment fund products will be reduced. It is also necessary to strictly abide by the relevant regulations on the reduction of major shareholders.For the follow-up changes in shares of Mr. Huang Shilin and persons acting in concert, the company will also fulfill its information disclosure obligations in a timely manner in accordance with relevant regulations and regulatory requirements.

According to "First Finance and Economics", starting from June 7, there was a bad news in the investment circle of the Ningde era, that is, the semi-annual report of the Ningde era this year may confirm the loss of more than one billion yuan in futures investment in the first quarter.Later, an insider from the Ningde era said: "It must be a rumor, and now the second quarter is not over."

Affected by the above news, on June 8, the Ningde era opened lower and moved lower. It dropped sharply during the session. It once fell by more than 7%, and then the decline narrowed and then closed up red.As of the close, the stock rose 0.22%, with a trading volume of 17.87 billion yuan and a turnover rate of 1.99%.

Changjiang Securities analyzed that the rumors of the Ningde era this time mainly involve nickel futures, but the Ningde era has made it clear that futures are hedging and will not affect the income statement.From the perspective of the layout of CATL, CATL operates 4 PKEF production lines in Indonesia through Blue Sky Metal, corresponding to 36,000 nickel metal equivalents. Changjiang Securities believes that this is a hedge against hedging losses.

Performance is under pressure

Even though the above rumors have been clarified, the profits of CATL are still under pressure due to the continuous rise in the price of raw materials for power batteries.

According to the first quarterly report of 2022 disclosed by CATL in April this year, the company achieved operating income of 48.678 billion yuan during the reporting period, a year-on-year increase of 153.97%; net profit of 1.493 billion yuan, a year-on-year decrease of 23.62% and a month-on-month decrease of 81.75%; Net profit was 977 million yuan, a year-on-year decrease of 41.57%.The gross profit margin in the first quarter of this year was only 14.48%, the lowest level since 2014.

In March of this year, there were rumors that CATL was involved in the “London Nickel Short Squeeze” war. CATL did not clearly respond to the rumors whether it held a large number of short positions in London nickel, but did not deny its participation in nickel futures hedging transactions.

Source: Ningde Times official website

In the investor conference call on May 4, CATL responded to investors' concerns about the exposure of futures hedging risks and stated that it has deployed part of the nickel resource industry chain based on ensuring the stable supply of raw materials and the need to reduce costs; in order to prevent raw materials Risk of substantial price fluctuations, based on its own business conditions and business needs, carry out hedging business for nickel and other related products; conduct accounting treatment and relevant financial information disclosure for hedging business in strict accordance with the "Accounting Standards for Business Enterprises" and related regulations. Performance impact is small.

However, CATL's first quarterly report this year showed that its derivative financial liabilities increased by 1.787 billion yuan, and other comprehensive income was -1.563 billion yuan; however, other comprehensive income in the first quarter was not reflected in the current profit and loss.However, Ningde Times explained in its quarterly report that a derivative financial instrument with a positive fair value is recognized as an asset, while a negative fair value is recognized as a liability. Any non-compliance due to changes in fair value The profit or loss stipulated by accounting for the current period is directly included in the current profit and loss.

In the first quarter of this year, institutions’ shareholding in CATL also declined.Wind data shows that general legal persons, funds, securities companies and Lu-Share Connect held a total of about 1.38 billion shares of CATL at the end of the first quarter of this year, accounting for 67.76% of the company's total share capital.At the end of last year, the number of shares held was about 1.42 billion shares, accounting for about 69.5%.

In addition, according to statistics from the China Automotive Power Battery Industry Innovation Alliance, last year, CATL ranked first in the domestic power battery market, accounting for half of the domestic market.According to the monthly data of power batteries in April 2022, in the ranking of the installed capacity of lithium iron phosphate power batteries, BYD surpassed the Ningde era and became the first place with the installed capacity of 4.19GWh, accounting for 47.14%.

According to a research report published by CITIC Securities on May 23, considering the rise in raw material prices, the profitability of CATL will be under pressure in stages, and the net profit attributable to the parent in 2022 isforecastto be 23.7 billion yuan (the original forecast was 28 billion yuan).CITIC Securities said that in the short term, affected by the sharp rise in the price of upstream raw materials and a certain lag in price increases for downstream customers, the profitability of the CATL era will be under pressure in stages. The resource side accelerates the layout, and it is expected that the company's profitability is expected to gradually recover in the follow-up.