On April 27th, Gotion High-tech released its 2022 annual report and Q1 report. The financial reports show that the company's revenue reaching RMB 23.052 billion, a year-on-year increase of 122.59%; of which overseas revenue was RMB 2.98 billion, a year-on-year increase of 464.76%. The company's operating profit reached RMB199 million in 2022, a year-on-year increase of 408.87%; and the net profit attributable to the parent company was RMB 312 million, a year-on-year increase of 206.15%. In addition, Gotion High-tech's Q1 report for 2023 shows that the company's Q1 revenue reached RMB 7.177 billion, a year-on-year increase of 83.26%.

During the Reporting Period, the Company maintained a stable market share relying on strong research and development capability, excellent product performance, effective production guarantee and global delivery capability. According to China Automotive Power Battery Industry Alliance, the installed capacity of the Company was 13.33GWh in 2022, a year-on-year increase of 66.2%, ranking fourth in the domestic market.

Technology leads the way, contributing to green energy

As a technology-driven enterprise, Gotion High-tech regards its technological innovation capability as its core competitiveness. In 2022, the company's R&D investment reached RMB 2.416 billion, a year-on-year increase of 107.09%, and for four consecutive years, it accounted for more than 10% of its revenue, which is a leading figure in the industry. The company's R&D team size has also continued to expand. As of the end of 2022, there were 6,267 R&D technical personnel, accounting for more than 32%; among them, there were 2,578 R&D personnel, a year-on-year increase of 34.41%, with 76.76% holding a master's or a doctoral degree.

The high nickel ternary 7 series cell was successfully applied in the market, and the low temperature iron lithium material was fully mass-produced. New breakthroughs were made in the research and development of key technologies of iron lithium cell and semi-solid ternary cell; 104Ah iron lithium cell and 300Ah energy storage battery with cycle life of 10,000 times were mass-produced, and zero thermal runaway battery pack was successfully developed.

To address the transformation challenges faced by the manufacturing industry, Gotion High-tech has developed a digital platform for battery manufacturing. By improving digital, intelligent, and informational levels, the platform aims to enhance manufacturing capabilities, research and development capabilities, and quality control capabilities, including the development of an independently researched and developed intelligent diagnostic system to ensure product reliability throughout its entire lifecycle.

In recent years, the competition in the lithium battery industry has intensified, and the industry concentration has further increased. By breaking through with cutting-edge technologies and their applications, Gotion High-tech has maintained its leading position in the industry. According to statistics, by the end of 2022, Gotion High-tech had applied for 6,344 patents and granted a total of 4,274 patents, ranking among the top in the industry in terms of technological research and development.

International outlook, steady market development

Against the backdrop of the lithium industry going overseas,Gotion High-tech, which had previously laid out its strategy, has seized the initiative and achieved remarkable results. In 2022, the company's overseas sales revenue was RMB 2.98 billion, an increase of 464.76% year-on-year. More than 15 new overseas targeted customers were added throughout the year, including strategic customers for overseas passenger cars, commercial vehicles and energy storage. Behind the achievement is the all-round development of Gotion High-tech from market development, R&D and manufacturing layout, as well as capital globalisation over the years.

The pace of globalisation accelerated in 2022 with the acquisition of the Bosch Gottingen factory in Germany, which began renovation in June last year and started localised operations in Europe. In South Asia and Southeast Asia, the construction of overseas manufacturing bases in partnership with local enterprises such as TATA, Vinfast, and Nuovo Plus has been steadily progressing. It is worth mentioning that Gotion has also made a layout in Argentina to acquire upstream resource lithium carbonate locally. Local production reduces some production costs while also accelerating the expansion of cooperation partners in local markets based on local market advantages. It can be foreseen that the company's business will soon see an increase in many global markets.

The global layout of production bases and R&D centers has also further promoted the introduction of overseas senior R&D personnel. In addition, the overseas operation and marketing team has reached more than 800 people, providing strong support for the company's globalization strategy. In July of last year, the company successfully issued GDRs on the Swiss Stock Exchange, raising approximately USD 685 million. With the introduction of international capital, the company's internationalization strategy has entered a stage of leapfrog development.

Global presence and accelerated production capacity

In the past year, the global penetration rate of new energy vehicles has further increased, and the energy storage market has rapidly exploded. Gotion High-tech has accelerated its production capacity layout. Multiple projects, including the 20GWh intelligent manufacturing power battery project in Nanjing, the 10GWh power battery project in Yichun, the annual output of 200,000 tons of high-end positive electrode materials project in Lujiang, the first phase of the 40GWh power battery project in Tongcheng, and the 10GWh battery project in Liuzhou, have been put into production one after another, further improving the company's industrialization level and meeting downstream customers' demand for high-performance battery products.

In response to the questioning of industry overcapacity, on the one hand, the company relies solely on the market and layouts new production capacity according to downstream customer demand, while on the other hand, it leverages advanced research and development and manufacturing capabilities to meet the ever-increasing market requirements with more advanced technology and processes.

While increasing production capacity, Gotion actively implemented 114 energy-saving and carbon-reducing projects under the "Dual Carbon" policy, achieving 100% carbon verification for suppliers and reducing greenhouse gas emissions by 59,637.4 tons of CO2e, with a year-on-year decrease of 24.6% in unit energy consumption. In February 2022, Gotion started construction of the world's first zero-carbon negative electrode material base in Wuhai, Inner Mongolia, which is expected to consume 4 billion kilowatt-hours of new energy. On the one hand, this demonstrates the company's grand layout of the entire industry chain, providing supply chain guarantees for increasing production capacity; on the other hand, the low-carbon strategy starting from the upstream of the industry chain also demonstrates the far-sightedness of the industry leader. According to the plan, Gotion High-tech's production capacity will exceed 300GWh by 2025, assisting in achieving global carbon neutrality.