Keyking Recycling (lithium battery recycling) completed two rounds of financing totaling hundreds of millions of yuan, with Sinochem International and several well-known institutional investors participating in the investment.
Recently, Hunan Keyking Recycling completed hundreds of millions of yuan in Series A and A+ rounds of financing. Its continuous successful financing heralded the official arrival of the next super investment windfall in the new energy industry – the comprehensive utilization of lithium battery recycling!
The Series A funding introduced strategic investors SS Capital (PE fund of Sinochem International), Yujun Investment (PE fund of Linyang Energy), and Zeta Investment (Shanghai Zeta Group), while the Series A+ funding introduced CITIC New Future (PE investment institution of CITIC Holdings), Infinity Capital (equity investment platform of Huafa Group), and GF Group. ZK Capital co-invested in both rounds and acted as the sole FA. The financing attracted many industry parties and well-known investment institutions, and their funds would be used for the construction of new production lines, strengthening upstream and downstream cooperation, and taking advantage of double carbon trends to accelerate the closed-loop of the lithium battery recycling industry chain.
Hunan Keyking Recycling is mainly engaged in the recycling of used lithium batteries and other lithium-containing waste. As the only company in China that prepares battery-grade lithium carbonate through one-step process, it leads the development of cutting-edge technologies in the lithium recycling industry. In 2021, the company produced a near total of 3,000 tons of battery-grade lithium carbonate by recycling all kinds of lithium-containing waste and ternary waste, and realized a net profit of over 80 million yuan, ranking the first within the industry of electric carbon recycle and preparation. The company owns a number of exclusive technologies, including charged battery crushing, ternary extraction of lithium before nickel and cobalt, selective leaching of lithium iron phosphate to extract lithium, recycling of battery-grade iron phosphate, and one-step preparation of battery-grade lithium carbonate, etc. So far, 66 patents have been either authorized or under substantial examination. All lithium batteries and lithium-containing waste can achieve more than 95%-99% lithium recovery rate, exceeding the industry average of 80% to 85%. The core founder of the company graduated from the Department of Metallurgy of Central South University, and he has many years of practical experience in beneficiation and hydrometallurgy, and has applied his past expertise to lithium waste recycling, making the company lead on technical level.
Hunan Keyking Recycling is mainly engaged in the recycling of used lithium batteries and other lithium-containing wastes, and as the only company in China that prepares battery-grade lithium carbonate through a one-step process, it leads the development of cutting-edge technologies in the lithium recycling industry. In 2021, the company will produce a total of nearly 3,000 tons of battery-grade lithium carbonate by recycling various types of lithium-containing waste and ternary waste and realize a net profit of over 80 million RMB, ranking first in the industry in the recycling and preparation of electric carbon. The company has a number of exclusive technologies, including charged battery crushing, ternary extraction of lithium first and then nickels and cobalt, selective leaching of lithium iron phosphate to extract lithium, recycling of battery-grade iron phosphate, and one-step preparation of battery-grade lithium carbonate. There are 66 patents in the authorized and substantive examination stage. All lithium batteries and lithium-containing waste can achieve a lithium recovery rate of more than 95%-99%, exceeding the industry average (80%-85%). The core founder of the company graduated from the Metallurgical Department of Central South University. He has many years of practical experience in beneficiation and hydrometallurgical processes and has applied his previous experience to the recycling process of lithium waste, making his technical level ahead of his peers.
As a benchmark enterprise in lithium recycling in China, Keyking Recycling is oriented by technology research and development, and continuously improves the extraction rate of lithium and the purity of lithium-related products, making its product quality highly praised by customers in the industry. In November 2021, the Department of Energy Conservation and Comprehensive Utilization of the Ministry of Industry and Information Technology released the list of enterprises (the third batch) that meet the "Industry Standards for Comprehensive Utilization of Waste Power Batteries of New Energy Vehicles", and Keyking Recycling was among them.
ZK Insight:
Driven by the "double carbon" strategy, China's new energy industry is accelerating its development. In 2021, the national sales of new energy vehicles reached 3.545 million, up 159.3% year-on-year, and the domestic penetration rate of new energy vehicles reached 13.4%. Over the past two years, the new energy vehicle market in Europe has expanded, and the overall penetration rate in Germany, France, the United Kingdom, Norway, Italy, Sweden, Spain and the Netherlands in 2021 was about 21%, while it was only 4% in the United States. Global new energy vehicles are in a period of rapid growth. As the global new energy industry has entered a stage of rapid development, the demand of lithium, an essential element within the industry, has increased exponentially. In 2021, the total domestic power battery production reached 219.26 GWh, corresponding to a demand for 120,200 tons of battery-grade lithium carbonate. It is estimated that the domestic demand for battery-grade lithium carbonate will exceed 1.115 million tons by 2030.
Data source: Research and compiled by ZK Capital
The demand gap continues to increase. Due to upstream lithium mining restrictions and high demand from downstream battery market, the supply of lithium resources will continue to fall short in the next few years. It was estimated that in 2022, the gap between domestic lithium carbonate resources and downstream demand would be around 61,500 tons. After 2023, due to the rapid growth of demand for new energy vehicle power batteries, the market demand for battery-grade lithium carbonate will increase rapidly, and the demand gap will continue to expand. The gap is expected to reach 484,400 tons by 2026. Due to the shortage of resource supply, the resulting gap needs to be filled by recycling. In this context, the battery recycling market has also ushered in a golden period.
Currently, the main sources of recyclable cathode materials in domestic lithium battery industry are retired vehicle power batteries recycling, lithium batteries production scraps and cathode material production losses. In 2021, a near total of 113,000 tons of cathode materials were recycled via above three channels. By 2026, the annual recycling volume of cathode materials across the entire market is expected to reach 652,900 tons.
In addition, the State Council, the Ministry of Industry and Information Technology, and the Ministry of Environmental Protection and other authorities have frequently issued guidelines on power battery recycling in recent years to regulate the power battery recycling system and promote the maximum and efficient use of resources.
Conclusion
In the next five years, the huge demand for power batteries in the new energy vehicle market will continue to drive the demand for battery-grade lithium carbonate in China. The continuously expanding demand gap for lithium resources has made power battery recycling the next important investment windfall in the field of new energy. Keyking Recycling will quickly complete the Series B round and follow-up financing, and plan to issue IPO in 2023-2024, and continue to lead technological breakthroughs and industry development in lithium battery recycling
As a professional investment and financing service provider, ZK Capital focuses on market trend research, competitive landscape analysis, and investment opportunity judgment in the fields of new energy, new materials and automobile industry chain, and strives to provide quality financing services for start-ups based on accurate investment research & analysis, and to empower VC and PE in primary market, dispelling the mist for investment and identifying the trends and truths in the market.
