A Potential 500,000 Ton Graphite Deficit by 2026(2) Could Put the Brakes on a Possible $3 Trillion Electric Vehicle Market(1)
Graphex (OTCQX:ETIHY) Could Replenish This Supply and Immensely Benefit
Most likely, you already know electric vehicles could be one of the hottest sectors of the decade, thanks to what seems to be an accelerating push globally for more EVs on the road.(2)
Recently on the West Coast, California Gov. Gavin Newsom appears to have signed an executive order banning the sale of gas-powered passenger cars in his state starting in 2035.(3)
Porsche, the other day also claimed that by 2030, more than roughly 80% of its cars would be electric.(9)
However, there seems to be a severe, urgent issue that could put the brakes on it all.
One that should have been solved yesterday.
A critical shortage in graphite supply.
The World Could See a Deficit of Approximately 500,000 Tons of Graphite by 2026(2)
Analysts at Citi, as noted by Forbes, claim that the “global glut of the energy-storing metal will dissipate by the middle of next year as demand for electric vehicles (EVs) accelerates.”(4)
Secondly, the world could soon run into another severe lithium supply crunch. Creamer Media Mining Weekly reported that demand for lithium could more than double by 2024, as the production of electric vehicle batteries gears up for potential growth.(5)
But that could only be the start.
The other essential metal – graphite – appears to be running into similar supply issues. But this could be even more critical than the lithium crunch. Without sufficient graphite, the brakes could be put on the entire industry.
Graphite appears to be an essential material used for producing the anode of lithium-ion batteries used in electric vehicles and energy storage.
In fact, every EV on the road seems to use around 70kg of spherical graphite.(2)
Need more evidence why graphite supply is crucial?
In 2019, approximately 200,000 tons were required for EVs. By 2026, EVs could consume roughly 700,000 tons of spherical graphite.(2)
That could lead to an approximate deficit of 500,000 tons.(2)
Demand appears to be scorching.
According to CNBC, by 2030, the world could see approximately 125 million EVs on the road and cause a good deal of demand for graphite.(6)
Furthermore, the USGS now seems to have included graphite on its list of 35 minerals and metals critical for the United States.
Consider this as well.
By 2025, about 62 GWh of energy storage could be added per year. This could add nearly 248,000 tons/pa spherical graphite by 2025.(2)
The Graphex (OTCQX:ETIHY) Stock Appears to Have Seen Enticing Returns Backed by Fundamentals
Ever since the stock seems to have started trading on January 8th, the stock appears to have moved at an exciting pace, reaching a return of approximately 113%.
When you take into consideration the current need for graphite, and what could potentially be a growing need for graphite, a return like this is not surprising and could only be the start.
Additionally, Graphex appears to have some strong fundamentals to like. The company appears to have a current ratio of around 1.2x(10), which indicates that it could likely meet its short term liabilities with current assets.
The company also seems to have a gross profit margin of about 41.8%(11)
With demand for graphite only expected to explode from here, it could be benefit ETIHY
After acquiring a graphene business, Graphex appears to be positioned as a leading supplier of graphene products in the People’s Republic of China.
Strategically located near the largest supply source of high-quality natural graphite in the world, Graphex appears to have extremely strong and long-standing relationships with multiple major graphite suppliers and claims to hold around 25 patents in areas including products, production methods, machinery design, and environmental protection.(8)
Graphex seems to have significant competitive advantages
- Stable Supply: The company appears to be strategically located near the most extensive supply source of high-quality natural graphite anywhere in the world.
- Tech Advantage: The company claims to own two patents in China, including products, production methods, machinery design, and environmental protection.
- Ready to Upgrade: Its ultra-fine spherical graphite of roughly 6.9 microns seems to be ready for use in more advanced lithium-ion batteries.
- Operates in the world’s largest market: Because the company operates in China, the largest consumer market for EVs, it believes that it will see significant demand for its graphite products.
However, it’s not just electric vehicles that seem to be dependant on graphite supply
Major multi-billion-dollar industries seem to be extremely dependent, including:(2)
- Biomedical: For tissue engineering
- Rust-Free Composites: For sports equipment and racing cars
- Electronics: For flexible displays and semiconductors
- Energy: Graphene supercapacitors, and ultra-thin solar panels
- Membranes: For filtration
- Sensors: For gas molecule detection and smart food packaging
Strong Management, Strong Results
Graphex seems to possess common traits of many other successful companies- a strong management team.
Chan Yick Yan Andross
Chief Executive Officer and Director
Mr. Andross has over 34 years of experience in operation and management in the landscape architecture industry. He first joined the company in 1991 as managing director, and is responsible for formulating corporate and business strategies, and decisions.
Chief Strategy Officer
Mr. Nye has 20 years of experience investing in and building technology businesses. He holds a MBA from Harvard Business School, BSc Engineering from Boston University, and an MSc equivalent in Nuclear Engineering U.S. Navy Nuclear Power School.
Mr. Bin has been an executive director of the company since 2017, and is in charge of supervision of the graphene business. He has also been a part of the management team at the Bank of China and Shanghai Pudong Development Bank. He was also the director of the finance department of Beijing Dong Fang Chengrui Investment Consultants in charge of foreign investment and financing.
Prof. Luo Liqun
Head of Research, Graphene
Mr. Liqun is the Head of Research for graphene technology. He obtained his doctoral degree in Engineering, Mineral Processing, from Wuhan University of Technology in 2003, and is currently the Professor and Senior Engineer at Wuhan University of Technology. He is also an expert in mineral processing, and a visiting scholar to the University of Queensland, Australia. In addition, he has participated in numerous scientific and research projects and has over 90 academic papers published on the topic.
Source 1: https://www.globenewswire.com/news-release/2018/07/25/1541707/0/en/Global-Market-for-Battery-Electric-Vehicles-2018-2032-A-3-Trillion-Market-Opportunity.html
Source 2: Investor Deck
Source 3: https://www.gov.ca.gov/2020/09/23/governor-newsom-announces-california-will-phase-out-gasoline-powered-cars-drastically-reduce-demand-for-fossil-fuel-in-californias-fight-against-climate-change/
Source 4: https://www.forbes.com/sites/timtreadgold/2020/11/10/lithium-leads-a-new-battery-metals-rush/?sh=3d8871428e86
Source 5: https://www.marketwatch.com/press-release/accelerating-demand-for-electric-vehicles-is-fueling-the-need-for-more-graphite-2021-02-04-81974555?siteid=bigcharts&dist=bigcharts&tesla=y
Source 6: https://www.cnbc.com/2018/05/30/electric-vehicles-will-grow-from-3-million-to-125-million-by-2030-iea.html
Source 7: https://www.marketwatch.com/press-release/accelerating-demand-for-electric-vehicles-is-fueling-the-need-for-more-graphite-2021-02-04-81974555?siteid=bigcharts&dist=bigcharts&tesla=y
Source 8: https://www.barrons.com/press-release/earthasia-international-holdings-ltd-announces-corporate-rebranding-and-proposed-name-change-to-graphex-group-limited-to-reflect-focus-on-graphene-and-renewable-energy-01612356056?tesla=y&tesla=y
Source 9: https://www.bloomberg.com/news/articles/2021-02-07/most-porsche-sales-will-be-electric-vehicles-by-2030-bild-says
Source 10: https://finbox.com/OTCPK:ETIH.Y/explorer/current_ratio
Source 11: https://finbox.com/OTCPK:ETIH.Y/explorer/gp_margin
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Phone: +852 25599438
Earthasia International Holdings Ltd is principally engaged in the provision of landscape architectural services. The segments of the group are Landscape design; the Catering business which focuses on the operation of restaurants; and Manufacture and sale of graphene products. It derives key revenue from the Landscape design segment which comprises activities of residential development projects, infrastructure and public open space projects, commercial and mixed-use development projects, and tourism and hotel projects. Specific group derives revenue from Hong Kong, Mainland China and other countries, of which a majority of the revenue is generated from Mainland China.