According to the disclosure announcement of Shanshan Shares, the company plans to invest in the company's holding subsidiary Shanghai Shanshan Lithium Battery Materials Technology through its wholly-owned subsidiary Ningbo Shanshan New Energy Technology Development Co., Ltd. (hereinafter referred to as Ningbo Shanshan New Energy) and four strategic investors. Co., Ltd. (hereinafter referred to as Shanghai Shanshan Lithium Battery) for capital increase. After the completion of the capital increase, Shanghai Shanshan Lithium Battery is still the holding subsidiary of the company.
Who are the strategic investors introduced by Shanshan? According to the announcement, the four strategic investors are Ningbo Meishan Bonded Port Area Aspiration Investment Co., Ltd. (hereinafter referred to as Wending Investment), BYD Co., Ltd. (hereinafter referred to as BYD), CATL New Energy Technology Co., Ltd. (hereinafter referred to as CATL), China National Petroleum Corporation Kunlun Capital Co., Ltd. (hereinafter referred to as Kunlun Capital).
It is understood that the total amount of capital increase this time is 3.05 billion yuan, and the registered capital of Shanghai Shanshan Lithium Power is 305 million yuan. The capital increase of each strategic investor varies. Among them, Ningbo Shanshan New Energy increased its capital by 2.4 billion yuan; Xingding Investment increased its capital by 300 million yuan; BYD increased its capital by 150 million yuan; CATL increased its capital by 100 million yuan; Kunlun Capital increased its capital by 100 million yuan . Each strategic investor subscribes for the newly added registered capital of Shanghai Shanshan Lithium Battery according to 10% of the capital increase.
Shanshan Co., Ltd. stated that the capital increase will be fully used for the daily operating activities of Shanghai Shanshan Lithium Power and its subsidiaries, including but not limited to business expansion, research and development, capital expenditures and other daily operations related to the main business of Shanghai Shanshan Lithium Power. Among them, the capital increase of Ningbo Shanshan New Energy can be used to repay the loan of Shanghai Shanshan Lithium Power and its subsidiaries.
In addition, after the completion of this capital increase, the registered capital of Shanghai Shanshan Lithium Power will be changed from 877 million yuan to 1.182 billion yuan, and the company's shareholding in Shanghai Shanshan Lithium Power will be changed from 89.99% to 87.08%, which is still listed Company's holding subsidiary.
Why increase capital in Shanghai Shanshan Lithium Battery
The announcement shows that Shanghai Shanshan Lithium Battery is mainly engaged in the research and development, production and sales of lithium-ion battery anode materials and their carbon materials. Shanshan Co., Ltd. said that through this capital increase and share expansion, it will help optimize the asset-liability structure of Shanghai Shanshan Lithium Battery, reduce financial costs, enhance capital strength, and provide financial guarantee for the expansion of anode materials business.
According to the announcement, by the end of 2021, Shanghai Shanshan Lithium Battery has total assets of 10.203 billion yuan, and owner’s equity attributable to the parent company of 3.577 billion yuan; in 2021, it will achieve operating income of 4.181 billion yuan and net profit attributable to shareholders of the parent company of 601 million yuan.
The purpose of this capital increase is mainly to stabilize core customers and suppliers, and to obtain the funds required for the project. In 2021, Shanshan Co., Ltd. announced that it plans to use Shanghai Shanshan Lithium Battery as the main investment to carry out the integrated base project of lithium-ion battery anode materials with an annual output of 200,000 tons in Meishan, Sichuan. The project investment is expected to reach 8 billion yuan.
In addition, Shanshan said that the strategic investors introduced this time are all core strategic customers and suppliers of the upstream and downstream of the anode material business. The company and all parties will further deepen the strategic relationship, develop collaboratively, achieve mutual benefit and win-win results, assist the development of Shanshan anode materials, and consolidate the core competitiveness of the company.
The annual report shows that in 2021, Shanshan will achieve operating income of about 20.7 billion yuan, and realize net profit attributable to shareholders of listed companies of about 3.34 billion yuan, an increase of 151.94% and 2320% respectively over the same period of the previous year. Among them, the company's operating income mainly comes from lithium battery materials and polarizers, accounting for about 44.08% and 48.04% of the operating income respectively.
