电动汽车电池材料供应商：有选择性

1、February 20, 2019 08:00 PM GMTEV Battery MaterialsInitiating on EV Battery Material Suppliers: Be SelectiveAmid market optimism around EV batteries in 2019, we think a potential excess supply of cathode materials in Korea is being overlooked. We advise a selective approach and initiate coverage of P

2、OSCO Chemtech and Iljin Materials at OW, Ecopro at EW, and L&F at UW.Morgan Stanley doesand seeksto do businesswith companiescovered in Morgan Stanley Research. Asaresult, investorsshould be aware that the firm may have aconflict of interest that could affect the objectivity of Morgan Stanley Resear

3、ch. Investorsshould consider Morgan Stanley Research asonly asingle factor in makingtheir investment decision.For analyst certification and other important disclosures, refer to the Disclosure Section, located at the end of this report.+= Analystsemployed by non-U.S. affiliates are not registered wi

4、th FINRA, may not be associated personsofthe member and may not be subject to NASD/NYSE restrictionson communicationswith asubject company, public appearancesand tradingsecuritiesheld by aresearch analyst account.ContributorsMORGAN STANLEY & CO. INTERNATIONAL PLC, SEOUL BRANCH+Ryan KimEquity Analyst

5、+822 399-4939 HYPERLINK mailto:Ryan.G.Kim Ryan.G.KimMORGAN STANLEY ASIA LIMITED+Shawn KimEquity Analyst+8523963-1005 HYPERLINK mailto:Shawn.Kim Shawn.KimMORGAN STANLEY ASIA LIMITED+Andrew ChungResearch Associate+8522848-6575 HYPERLINK mailto:Andrew.Chung Andrew.ChungMORGAN STANLEY ASIA LIMITED+Daisy

6、 DaiResearch Associate+8522848-7310 HYPERLINK mailto:Daisy.Dai Daisy.DaiMORGAN STANLEY & CO. INTERNATIONAL PLC+Charles L WebbEquity Analyst+4420 7425-0234 HYPERLINK mailto:Charlie.Webb Charlie.WebbMORGAN STANLEY ASIA LIMITED+Jack LuEquity Analyst+8522848-5044 HYPERLINK mailto:Jack.Lu Jack.LuMORGAN S

7、TANLEY & CO. INTERNATIONAL PLC, SEOUL BRANCH+Young Suk ShinEquity Analyst+822 399-4994 HYPERLINK mailto:Young.Shin Young.ShinEV Battery MaterialsInitiating on EV Battery Material Suppliers: Be SelectiveAmid market optimism around EV batteries in 2019, we think a potential excess supply of cathode ma

8、terials in Korea is being Industry ViewAttractiveoverlooked. We advise a selective approach and initiate coverage of POSCO Chemtech and Iljin Materials at OW, Ecopro at EW, and L&F at UW.Market underestimates EV battery challenges. Although we see strong growth potential in the electric vehicle (EV)

9、 industry, the market seems to be ignoring a potential oversupply of cathode materials (nickel cobalt manganese/nickel cobalt aluminium, or NCM/NCA), which are key components of EV battery cells. The main reason for our view is a slew of new entrants, particularly in Korea, which we estimate will in

10、crease supplies at a 43% CAGR, from 54kt in 2017 to 320kt in 2022. In our view, consensus EV penetration esti- mates of 12-15% by 2025 are too optimistic (our own forecast is 9.7%), as we do not expect falling EV battery costs to match those set by auto OEMs, as materials account for about 60% of an

11、 EVs costs and there are high R&D costs and capex requirements.Mismatch in cathode supply and demand set to worsen. While demand growth is well understood by the market, we dont think the supply growth of EV battery materials is being accounted for. According to our checks, global supply of NCM/NCA

12、will exceed 800kt by 2020 and 1,000kt by 2021, compared with our estimate of market demand at 804kt in 2025 and BASFs estimate of 700-1,000kt by 2025. In our view, a lack of long-term agreements (LTAs), limited differentiation, and declining entry barriers will leave cathode suppliers positioned in

13、the wrong part of the EV material value chain.Losing out in China at least for now. We note that Korean EV battery cell and material suppliers have almost zero orders in China, where the companies are not eligible for EV subsidies. Chinas mate- rial suppliers, including Easpring and Shanshan (covere

14、d by Jack Lu), are virtually free from competition with cathode suppliers in Korea.We think Korean suppliers will face a similar situation to what China has gone through (lots of inefficient capacity at 30-40% utilization and accelerated industry consolidation), but eventually a handful of winners i

15、ncluding POSCO Chemtech and Iljin Materials will gain market share. The cancellation of EV subsidies in China (from as early as January 1, 2020) could significantly alter EV battery market dynamics and allow Korean players to re-enter the market, providing incremental revenue/volume growth opportuni

16、ties.POSCO Chemtech and Iljin Materials are our top picks. Korean EV battery stocks fell 17% in 2H18 (vs. 4% for KOSPI and 5% for KOSDAQ), after significant outperformance during 2H17 to 1H18, due to concerns over hefty valuations and lack of earnings visibility. Among Korean EV battery material sup

17、pliers, we would look forcom- panies with bargaining power, an integrated manufacturing process, and LTAs, which will help them gain market share as the industry con- solidates. We initiate at OW on both POSCO Chemtech, a one-stop EV battery materials shop, and Iljin Materials, a copper foil produce

18、r. We are more cautious on cathode material suppliers Ecopro (EW) and L&F (UW) due to oversupply concerns as well as potential ASP and margin pressures.Exhibit 1:Key stock callsCompanyTicker MSratingPrice target (KRW)Share price (KRW)Upside/downsidePOSCO Chemtech003670.KQOW95,00070,70034%Iljin Mater

19、ials020150.KSOW56,00043,75028%Ecopro086520.KQEW34,00033,9000%L&F066970.KQUW28,00035,350-21%Source: Morgan Stanley Research. Closing share prices as of February 18, 2019.Contents5Investment summary11Re-examining supply and demand15EV battery materials are key to cost reductions18Debate 1: Rise of cat

20、hode material supplies = potential oversupply beyond 201922 Debate 2: What are the advantages Korean EV material suppliers have over competitors?27Debate 3: Winners and losers Tide wont continue to lift all boats34 POSCO Chemtech (OW): Turning into a one-stop shop in Korea; our top pickRisk Reward:

21、POSCO ChemtechFinancial SummaryIljin Materials (Overweight): Elecfoil offers 34% 5- year CAGR TAM growth by 2022Risk Reward: Iljin MaterialsFinancial Summary: Iljin MaterialsEcopro (Equal-weight): Near-term earnings solid but oversupply concerns keep us on the sidelinesRisk Reward: EcoproFinancial S

22、ummary: EcoproL&F (Underweight): Demanding valuation and potential cathode oversupply being overlookedRisk Reward: L&FFinancial Summary: L&FInvestment summaryBe selectiveKoreas battery material suppliers are potential beneficiaries of the EV boom. Morgan Stanleys global auto team believes EV penetra

23、tion will reach 9.7% by 2025, up from 1.5% in 2018. However, although the market has a clear understanding of the EV industrys demand growth potential, we think it is failing to see a possible oversupply in cathode materials, particularly in Korea, that will lead to margin contraction and industry c

24、onsolidation. In this report, we introduce three debates and recommend that investors be selective and look for companies with bargaining power, an integrated manufacturing process, and long-term agreements. We prefer EV battery value chain winners such as POSCO Chemtech (cathode/anode/needle coke)

25、and Iljin Materials (high-end copper foil for EV batteries).(1) Oversupply in cathode materials driven by Korean suppliers: Over the past 12-18 months, Korean EV battery cell makers LG Chem, Samsung SDI, and SK Innovation have announced meaningful increases in GWh capacity. In response, Korean EV ba

26、ttery material suppliers like POSCO ESM, L&F, Ecopro, Cosmo AMC, and Iljin Materials have announced significant capacity expansion plans. In addition, LG Chem announced it will produce up to 50% of cathodes in-house by 2021. We estimate cathode capacity from Korea in 2022will be at least three times

27、 greater than in 2019, which supports our view that the cathode industry will face increasing competition in the coming years. Our channel checks indicate supply of NCM/NCA will exceed 800kt by 2020 and 1,000kt by 2021, which compares with our estimate of market demand at 804kt by 2025 and BASFs est

28、i- mate of 700-1,000kt by 2025.Exhibit 2:EV battery capacity by the Big 3 Korean EV battery cell makers7284203.912705003.8516 10 30 14 (GWh) 12010080Exhibit 3:Cathode (NCM) supply additions by Korean EV battery material sup- pliers(000 ton/year)35030060401.97.52002015201620172018E 2019E 2020ESKISams

29、ung SDI LG Chem250200150100500201620172018 2019E 2020E 2021E 2022ELG Chem Cosmo AMC L&FEcopro POSCO ESMSource: Company data, Morgan Stanley Research estimatesSource: Company data, Morgan Stanley Research estimatesNote: Cosmo AMC estimates based on the companys official guidanceExhibit 4:Nameplate 20

30、20 NCM/NCA market shareCosmo AMC 1%Exhibit 5:NCM/NCA cathode material supply & demand (pulling forward demand by six months and lagging supply by six months)POSCO ESM 4%Ecopro8%Others1%Umicore 12%(kt)1,000900800700Supply delayed 6m (approval lag)100%80%L&F 5%BASF(Toda) 7%600 Demand pulled forward 6m

31、50060%LG Chem 5%PuLeadSumitomo MM 9%4003002001000Implied Utilisation2016201720182019e2020e2021e40%20%0%1%Reshine 3%Jinhe 10%GEM 4%Nichia 1%ShanShan 16%Source: Company announcements, Morgan Stanley Research estimates(3) Selective value chain winners in Korea: Despite the markets high hopes for EV pen

32、etration, at 12-15% by 2025, we expect the seg- ment to evolve into a winner takes all market, with only a few select suppliers gaining additional market share and benefits. According to our checks, EV battery cell producers are willing to sign LTAs withZhenhua E-chem4% Tianli Energy1%XTC 5%Easpring

33、 4%anode and elecfoil suppliers, but such LTAs are very rare amongcathode material suppliers. In our view, all else equal, only a fewSource: Company announcements, Morgan Stanley Research estimates(2) Advantages of Korean EV battery material suppliers vs. com- petitors: Korean EV battery material su

34、ppliers are well positioned for the upcoming global EV boom, thanks to: (i) technological leader- ship in cathode materials (NCM622 or 811), (ii) being a first/major vendor of Korean EV battery cell producers, (iii) the potential busi- ness opportunity in China once the EV subsidy is cut, (iv) ties

35、with EV battery cell makers, (v) 5-7 years of the EV model change cycle, and(vi) rising concerns about technology leaks.cathode suppliers those withscale and capital resources are likely to thrive. Competition is fierce and execution is key. LG Chems and Samsung SDIs internalization of cathode produ

36、ction 30-50% internal cathode supply is likely to put further pressure on ASPs and margins at independent manufacturers. We believe component suppliers with LTAs and bargaining power will succeed, and we prefer Korean anode (POSCO Chemtech) and elecfoil (Iljin Materials) sup- pliers over cathode mat

37、erial producers such as Ecopro (NCA/NCM) and L&F (NCM).Exhibit 6:Supply chain of global EV component suppliersSource: Company data, Morgan Stanley ResearchWe initiate on four Korean EV battery material suppliers:POSCO Chemtech (Overweight): The company is turning into a one-stop supplier of cathode

38、and anode materials. As a core part of POSCO groups commitment to the EV battery business, we esti- mate POSCO Chemtechs revenue will expand at an 84% CAGR in 2017-20. The company believes a supply shortage in needle coke will continue, which we estimate would add about W20bn or (60% of net profit)

39、every quarter.Iljin Materials (Overweight): We think the elecfoil market will increase at a 34% CAGR in 2017-22, on the back of rising demand for ultra-thin copper foil in EV batteries and higher content per vehicle, supporting higher energy density. Further, its LTAs, in which costs are partially p

40、assed through to customers, reduce the downside risk from volatility in raw material prices.Ecopro (Equal-weight): Despite Ecopros leading position in NCA cathodes, its commitment to expand NCM capacity to 55kt in 2020 (vs. 8.5k in 2016) poses risks, in our view, given the 57% CAGR (2016-20) of cath

41、ode supplies in Korea, LG Chems and SDIs in-house cathode production plans, and the companys lack of LTAs. Share price and earnings catalysts over the near term include a potential IPO for Ecopro BM, business opportunities in NCM811, and customer qualification of EV batteries.L&F (Underweight): Alth

42、ough L&Fs product portfolio is streamlined and concentrated on NCM (80%) and lithium cobalt oxide (LCO, 20%), we have concerns on whether the company can outperform its peers due to its lack of scale (we estimate its total capacity to be only 50% of Ecopros announced capacity by 2025) and LTAs.Korea

43、 at the heart of the global EV marketThe EV battery component industry has emerged as one of the fastest growing in terms of revenue in Morgan Stanleys global tech universe over the past two to three years. This has been fueled by the EV battery capacity expansion plans of global manufacturers, incl

44、uding LG Chem, Samsung SDI, SK Innovation, and CATL. In our view, Korean EV battery material suppliers over the next decade will be major beneficiaries of structural growth in the move towards widespread use of electric vehicles and energy storage systems. In 2020, we estimate Korean EV battery cell

45、 makers will have 43% global market share, equivalent to 150GWh (vs. 24GWh in 2017). We believe accelerated cost deflation supported by technology break- throughs, particularly in cathode materials, will lead to greater EV penetration in the next decade. According to Morgan Stanleys globalExhibit 7:

46、Global EV penetration roadmap (EVs as a percentage of total auto sales)100%90%80%70%60%50%40%30%20%10%201620172018e2019e2020e2021e2022e2023e2024e2025e2026e2027e2028e2029e2030e2031e2032e2033e2034e2035e2036e2037e2038e2039e2040e2041e2042e2043e2044e2045e2046e2047e2048e2049e2050e0%auto team, EV penetrati

47、on will reach 9.7% (10mn units) by 2025, 23.1% (25mn) by 2030, and 82.4% (114mn) by 2050, from 1.5% (1.3mn) in 2018 (see HYPERLINK /eqr/article/webapp/81291a54-788e-11e8-bca7-8b13396f2648?ch=rpext&sch=sr&sr=1 Autos & Shared Mobility: Raising long-term BEV HYPERLINK /eqr/article/webapp/81291a54-788e-

48、11e8-bca7-8b13396f2648?ch=rpext&sch=sr&sr=1 penetration (27 Jun 2018).We believe energy storage systems offer an additional growth opportunity in the lithium-ion (Li-ion) battery market, and we esti- mate global ESS supply to reach about 25GWh in 2023, or 8% oftotal Li-ion battery supply, vs. 5GWh i

49、n 2018. We believe the growth rate of the ESS market will be largely driven by regulations on CO2 emis- sions and government subsidies. Renewable energy demand and advanced battery recycling technology should also accelerate ESS penetration rates. We estimate that recycled batteries are rated at 70%

50、 of their original capacity and have at least 10 more years of ser- vice in ESS.ChinaUSAEuropeJapanIndiaS. KoreaOthersSource: IHS, Inside EVs, Morgan Stanley Research. e = Morgan Stanley Research estimatesMarket understands demand growth wellElectric vehicles are set to become mainstream, in our vie

51、w, given: (i) increasing political and environmental concerns over CO2 emissions,(ii) the introduction of stricter regulations, such as Euro 6, and (iii) global auto OEMs ambitions in the EV segment. A number of market research firms (including SNE Research) and industry participants appear to alrea

52、dy reflect the substantial growth outlook and fore- cast 12-15% EV penetration by 2025, which compares with our more conservative 9.7% estimate. According to our checks, it seems themarket emphasizes demand growth more than supply growth, and we believe EV batteries could be in oversupply beyond 202

53、0.As governments move to reduce emissions, we believe EV adoption rates will continue to depend on battery technologies, infrastruc- ture, and regulatory regimes. With Volkswagen claiming to be unable to meet 2025 and 2030 CO2 emissions targets in Europe with internal combustion engines (ICE) alone,

54、 BEV adoption will become a competitive advantage for auto OEMs, even if it is initially an expen- sive option to pursue in terms of costs ( HYPERLINK /vokswagen-future-ev-plan-is-not-enough/ link).Exhibit 8:Battery demand from various applicationse-BusBEVPHEVHEV500.2379.0318.0225.6163.8174.2120.485

55、.21.64.210.222.238.460.06005004003002001000FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 FY 25Source: SNE ResearchExhibit 9:Morgan Stanley auto teams base case BEV penetration forecastsExhibit 10:Global powertrain sales mix forecasts100%80%60%40%20%0%BEVICE (ex PHEV)(

56、mn units)160140120100806040202016201820202022202420262028203020322034203620382040204220442046204820500ICEPHEVBEV201620182020202220242026202820302032203420362038204020422044204620482050Source: Wards, ACEA, CAAM, Morgan Stanley Research estimatesSource: Wards, ACEA, CAAM, Morgan Stanley Research estim

57、atesAs demand for EVs across developed markets accelerates, this is likely to drive outsized growth in GWh battery capacity demand. In our view, a 12x increase in battery production capacity will be required by 2025. Using HYPERLINK /eqr/article/webapp/81291a54-788e-11e8-bca7-8b13396f2648?ch=rpint&s

58、ch=sr&sr=1 our auto teams BEV forecasts, we believe that automotive battery capacity will increase materially from around 70GWh today to close to 490GWh (BEV 454GWh + HEV 12GWh + PHEV 26GWh) by 2025. This would be a material pickup indemand throughout the entire EV supply chain. We expect the EV bat

59、tery industry to see simultaneous growth thanks to regulatory support ( HYPERLINK l _bookmark3 Exhibit HYPERLINK l _bookmark3 11 ) and technological improvement in compo- nents. Higher energy density per battery cell should also cause lower prices, which would in turn drive faster growth in global E

60、V penetra- tion.Exhibit 11:Key headlines supporting EV battery demand Key catalystDieselgate:Volkswagen recalls 8.5mn diesel vehicles in Europe (New York Times, October 15, 2015)After diesel scandal, VW turns to new leadership & electric cars (National Public Radio, April 24, 2018)NGOs increase pres