Greater Southeast is deep in the mud of lithium power business and faces the risk of withdrawal from the market

With the speed of lithium industry integration, a group of underperforming companies are facing the risk of going out.

On April 28, the Greater Southeast(002263) announcement showed that the company will terminate the implementation of the "annual production of 300 million Ah high-energy power lithium-ion battery construction project."

It is understood that the implementing body of the project is Zhejiang Green Sea, a wholly-owned subsidiary of the company. The estimated total investment of the project is 795.6 million yuan. As of December 31, 2017, the company invested a total of 83.768 million yuan, and the project progress was 10.53 %.

Greater Southeast announcement said that due to the current state related departments to automotive battery subsidy policy is not clear, weak downstream demand, the company's power products in the context of sluggish market demand, the cautious expansion of production. At the same time, the price increase of raw materials on lithium batteries is relatively large, causing the market price trend of finished products to be unclear. In order to avoid the above risks, the company plans to terminate the implementation of the project.

As a veteran plastic film, plastic packaging enterprises, greater Southeast originally wanted to transform lithium-electric power to seek new profit growth point, now, due to lack of core competitiveness, lithium-electric business seems to be the development of the company's "oil flask."

It is understood that at present, there are two main aspects of the lithium electricity business involved in Greater Southeast, mainly lithium diaphragm and lithium ion battery, and its involvement in lithium electricity is not new. Greater Southeast has been involved in lithium diaphragm for more than 7 years. Lithium-ion batteries are also at least 5 years.

According to financial data, in 2016, the revenue of the lithium battery isolation film business in Greater Southeast was 1.565 million yuan, and the total revenue accounted for 0.16 %; Lithium battery business revenue of 7.4874 million yuan, the total revenue ratio of 0.79 %. In 2017, the company's diaphragm sales volume was only 1.7148 million square meters, a year-on-year decrease of 30.94 %; The sales volume of lithium batteries was 1.3337 million, a year-on-year decrease of 24.35 %.

On the one hand, the development of the lithium power business is unsatisfactory. On the other hand, the company's heavily invested online game field has also progressed slowly. In 2016 and 2017, the net profit of Greater Southeast was 186 million yuan and 568 million yuan respectively.

According to the Greater Southeast 2017 Daily News, because the company's net profit audited for two consecutive fiscal years was negative, the company's stock was warned of the risk of delisting since May 2, and the stock abbreviation was changed from "Greater Southeast" to "* ST Southeast".

To make matters worse, the first quarter report showed that Greater Southeast achieved revenue of 291 million yuan, a year-on-year increase of 31.28 %; The net profit loss was 6,457,700 yuan, a year-on-year decrease of 169.2 %. This means that the predicament in Greater Southeast has still not improved.

It is worth mentioning that Greater Southeast, which is in deep trouble, may welcome a change of owner of the controlling shareholder. On January 2, 2018, Greater Southeast issued an announcement that the company's controlling shareholder, Da Southeast Group, is negotiating with Jiangsu BaiNeng New Energy Automobile Co., Ltd. on equity transfer matters. If the agreement is signed and the transfer is finally completed, the company's control rights will change.

Comments: Greater Southeast is deeply involved in the lithium power business is a microcosm of the power battery industry began to shuffle. As a listed company that has cultivated nearly seven years in the lithium power industry, whether it is lithium battery diaphragm or power battery, it has not formed its own characteristics., Lithium accounts for less than 1 % of the business, and its expansion plan is nothing but a castle in the air. The lithium-electric industry is not without a threshold, if it does not have the core advantages, the company that wants to rely on the concept of new energy to take off, the final fall must be quite ugly.

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