Lithium battery recycling - Keyking Recycling finished two rounds of financing amounting to hundreds of millions of yuan

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Release time:

2022-05-10


Keyking Recycling (lithium battery recycling) finished two rounds of financing amounting to hundreds of millions of yuan, with Sinochem International and many other famous institutions involved 

Recently, Hunan Keyking Recycling has finished consecutively the Series A and Series A+ financing amounting to hundreds of millions of yuan. The consecutive successful financing indicated that the next super investment opportunity in the new energy industry was coming officially -- integrated utilization of lithium battery recycling!

In its Series A financing, it introduced the strategic investment party SS Capital -- PE investment fund subordinate to Sinochem International, Yujun Investment -- PE investment fund subordinate to Linyang Energy, Zeta Investment -- Shanghai Zeta Group. In its Series A+ financing, it introduced CITIC New Future Investment -- private equity investment institution subordinate to CITIC Holdings, Infinity -- private equity investment platform subordinate to Huafa Group, and GIG Asset Management Group. In this time of financing, the Company introduced many industry parties and famous investment institutions. Such capital will be used for construction of new production lines. The Company will make more efforts to promote cooperation between the upstream and the downstream of the industry chain, take advantage of the policy of “carbon neutrality and peak carbon dioxide emissions” and accelerate the formation of a closed lithium battery circulation industry chain loop.

Hunan Keyking Recycling mainly engages in recycling of wasted lithium batteries and other lithium contained scrap materials. As the sole domestic company that can produce battery-level lithium carbonate by using the one-step method, the Company leads the development of the cutting-edge technologies in the lithium recycling industry. In 2021, the Company outputs nearly 3,000t battery-level lithium carbonate in total by recycling various lithium contained scrap materials and ternary waste materials and realized a net profit of more than RMB 80 million, and its electrical carbon recycling and preparation scale ranked the first in the industry. The Company possesses many exclusive process technologies, including breaking of charged batteries, lithium extraction before nickel and cobalt in ternary batteries, selective lithium extraction from lithium iron phosphate and battery-level iron phosphate recycling and preparation of battery-level lithium carbonate by using the one-step method. Currently, 66 patents of the Company have been authorized or in the substantive examination phase. The lithium recovery rate of all the lithium batteries and lithium contained scrap materials can realize 95%-99%, which is higher than the industry average level (80%-85%). The core founder of the Company graduated from Central South University where he majored in the Physical Chemistry of Metallurgy. He has many years of practical experience in mineral dressing and hydrometallurgy process and applies previous experience to the recycling of wasted lithium materials, so the company's technology level is higher than the peers in this industry.

As a domestic benchmark enterprise in the lithium resource recycling industry, Keyking Recycling is technological R&D oriented and continuously improves the extraction rate of lithium element and the product purity, so that its product quality has won the praise of many customers in the industry. In November 2021, the Energy Conservation and Integrated Utilization Department of the Ministry of Industry and Information Technology of People's Republic of China issued the List of Enterprises (3rd batch) that conform to Standardized Conditions in the New Energy Vehicle Waste Power Battery Integrated Utilization Industry, and Keyking Recycling was on the list.

  

 

Source: List of Enterprises (3rd batch) that conform to Standardized Conditions in the New Energy Vehicle Waste Power Battery Integrated Utilization Industry issued by the Ministry of Industry and Information Technology of People's Republic of China

Industry view:

Driven by the strategy of “carbon neutrality and peak carbon dioxide emissions”, the development of the new energy industry in China is accelerating. In 2021, the national sales amount of new energy vehicles was 3.545 million, up 159.3% YoY, and the permeability of domestic new energy vehicles reached 13.4%. The European new energy vehicle market has risen in recent years. The overall permeability of eight European countries (Germany, France, Britain, Norway, Italy, Sweden, Spain and the Netherlands) in 2021 was about 21%, and that of the USA was only 4%. The global new energy vehicle industry is developing rapidly. Since the global new energy industry is developing rapidly, the quality demand for lithium that is essential in the new energy industry is increasing exponentially. In 2021, the output of domestic power batteries in China reached 219.26 GWh, and the demand for battery-level lithium carbonate was 0.1202 million tons. It is expected that the demand for domestic battery-level lithium carbonate will be more than 1.115 million tons by 2030.

  

 

Source: data compilation based on the study of ZK Capital

The demand gap is expanding. Due to the upstream lithium resource exploitation restriction and the heavy demand in the downstream battery market, the demand for lithium resources will be more than supply in the next future years. It is expected that the domestic demand gap of lithium carbonate resources will be about 0.0615 million tons by 2022. Since 2023, due to the rapid increase of the demand of new energy vehicles for power batteries, the market demand of battery-level lithium carbonate has increased sharply. The demand gap will keep expanding. It is expected that this gap will reach 0.4844 million tons by 2026. The supply of resources is insufficient, so the demand gap needs to be filled up through recycling. On this background, the battery recycling market stepped into “a growth surge phase”.

Currently, recyclable anode materials in the domestic lithium battery industry are mainly from power batteries of wasted vehicles, scrapped lithium batteries in production and worn anode materials in production. In 2021, nearly 0.113 million tons of anode materials were recycled through the above-mentioned three channels. It is expected that the annual recycling amount of anode materials on the whole market will reach 0.6529 million by 2026.

In addition, the State Council, the Ministry of Industry and Information Technology of People's Republic of China, the Ministry of Ecology and Environment of the People's Republic of China and other authorities have frequently issued guidelines on recycling of power batteries to normalize the power battery recycling system and promote maximum utilization of resources.

Summary

In the next five years, the huge demand for power batteries on the new energy vehicle market will continuously drive the domestic demand for battery-level lithium carbonate. The expanding demand gap of lithium resources will promote recycling of power batteries to be the next important investment opportunity in the new energy field. Keyking Recycling will take quick actions to finish Series B and subsequent financing and plan to finish the IPO on the capital market in 2023-2024 to further lead the technological breakthrough and development in the lithium battery recycling industry, actively participate in carbon emission reduction in the international community, proactively follow the global green and low-carbon development trend and actively arrange carbon neutrality.