Tramway news: on March 31, the municipal Party committee of the Shanghai Stock Exchange on the science and technology innovation board reviewed the listing applications of Funeng technology and Shenzhou cell, and both companies were approved. The financing amount of Funeng technology is 3.437 billion yuan, and the sponsor is Huatai United Securities. It is mainly engaged in the research, development, production and sales of lithium-ion power batteries for new energy vehicles and vehicle battery systems. If it is successfully listed, it will become the “first power battery stock” of the science and technology innovation board.

Funeng technology will become the "first power battery stock" of Kechuang board after its IPO application is approved

Raise 3.4 billion to expand Zhenjiang battery capacity

According to the prospectus submitted by Funeng technology, the company plans to raise 3.437 billion yuan, which is mainly used for the annual output of 8gwh lithium-ion power battery project (Funeng Zhenjiang phase III project) and supplementary operating capital projects. Among them, the annual output of 8gwh lithium-ion power battery project is the third phase of Zhenjiang project implemented by Funeng Zhenjiang in order to further expand the production scale.

In August 2018, Funeng technology set up Zhenjiang, and plans to build a new 24gwh power battery production line in Zhenjiang in three phases, taking full advantage of local location, supporting industry chain, talents and customers. After the raised funds are in place, Funeng technology will start the third phase project of Zhenjiang. With the completion and commissioning of the third phase project, Funeng Zhenjiang will become an important production base in China in the future.

At present, Funeng technology has three production bases: Ganzhou in Jiangxi, Zhenjiang in Jiangsu and Germany. Zhenjiang phase I and phase II projects of Funeng technology have been started in the second half of 2018. It is estimated that the soft pack battery will have an annual equipment capacity of 20gwh in 2019, and the total domestic capacity will reach 40gwh by 2020. By 2020, the total global capacity of Funeng technology may reach 60gwh.

According to the prospectus of Funeng technology, it is still in a state of loss. The net profits of parent company after deduction of non-profit in the first nine months of 2018 and 2019 are negative, respectively RMB – 199 million and – 17.9251 million. The company said in the prospectus that there is still a risk of negative net profit after deduction of non-profit in 2020 and in the future.

The impact of the epidemic on its production and operation this year was also mentioned in the review opinion of the municipal Party Committee on the science and technology innovation board. In fact, the epidemic situation will have a negative impact on the company’s operation, mainly including the delay in the start-up of each link of the industrial chain, the delay in the purchase and transportation of raw materials and the delivery of finished products due to traffic constraints, and the failure of employees in the production base to return to their posts in time.

As the main customers of Funeng technology are downstream vehicle enterprises, the company’s customers or downstream industries will also be adversely affected by the epidemic. Therefore, Funeng technology will be greatly affected by the epidemic situation in the first quarter of 2020, which is expected to lead to a sharp drop in revenue, a decrease in output and a significant increase in expenses in the first quarter of 2020, which will have a certain negative impact on the annual operating performance.

The cooperation with BAIC group is expected to be further deepened

It is worth noting that the main customer of Funeng technology is BAIC group. According to the prospectus, the sales revenue of Funeng technology to BAIC group from 2016 to 2018 and from January to September of 2019 accounted for 65.63%, 87.57%, 83.58% and 53.68% respectively.

From the perspective of the purpose of the fund-raising of Funeng technology, the cooperation with BAIC group is expected to be further deepened, and it may even become an important partner of BAIC Group Zhenjiang new energy plant in the future. In June 2018, Zhenjiang municipal government, BAIC group and Magna International held a tripartite cooperation signing ceremony for the high-end intelligent pure electric vehicle project. In December of that year, Magna Welland new energy automotive technology (Zhenjiang) Co., Ltd., a joint venture established by BAIC new energy and the overseas company autolaunch, was registered and established, with 50% shares of each party and 10 million investment from each party.

After the establishment of the technology R & D joint venture, in March 2019, Jiangsu Provincial Development and Reform Commission issued an announcement to approve the project approval announcement for the merger and acquisition of 150000 passenger cars of BAIC (Zhenjiang) Automobile Co., Ltd., and confirmed that the investors are Weilan New Energy Industry Investment Co., Ltd. and Magna International olang Ireland Co., Ltd.

In order to promote the development of BAIC Zhenjiang Company, in November 2019, BAIC group sold 49% equity of BAIC (Zhenjiang) Automobile Co., Ltd. at the bottom price of about 300 million yuan. Now, BAIC Zhenjiang Automobile Co., Ltd. has also been renamed as BAIC Blue Valley Magna Automobile Co., Ltd., which can be seen from the close cooperation between the two sides. BAIC Zhenjiang factory has confirmed that it will produce arcfox, a strategic product of BAIC new energy. If there is no accident, Funeng technology is likely to be a battery supplier.

Editor in charge: WV

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