Dow Technology 1.5 billion Yuan layout lithium battery material

On April 24, Dow Technology announced that it intends to acquire the remaining shares of the holding subsidiaries Jiana Energy and Qingdao Haoxin, with a total transaction price of 1.503 billion Yuan.

According to the announcement, Jiana Energy, as an important supplier of cobalt products in China, has been focusing on the production of cobalt salt products through wet smelting process for more than ten years, and has expanded its product line downstream to ternary precursors through technology accumulation and product development. Qingdao Haoxin is an important conductive agent manufacturer in China and is in the leading position in the conductive agent industry. Its main products are graphene conductive agent and carbon nanotube conductive agent, which is a lithium battery conductive enhancer.

Dow Technology has been actively deploying new energy materials industry since 2016, and has invested and controlled Qingdao Haoxin and Jiana Energy. In 2017, Dow Technology publicly issued convertible bonds to raise funds for the construction of “Lithium Mica Integrated Development and Utilization Industrialization Project”, which uses lithium mica as raw material to produce lithium carbonate. At this point, Dow technology has formed a more comprehensive industrial chain in the field of lithium battery materials.

In May 2015, the “Made in China” issued by the State Council listed “new energy vehicles” and “graphene” as key development areas; in October 2016, the Ministry of Industry and Information Technology issued the “Non-ferrous Metal Industry Development Plan (2016-2020)” Clearly put forward "focusing on the needs of energy storage and new energy vehicles, focusing on the development of high-capacity long-life energy storage battery cathode materials, anode materials, high-performance copper foil and aluminum foil, as well as low-cost high-quality battery-grade lithium carbonate, ternary Precursor, etc.” In November 2017, the National Development and Reform Commission issued the “Three-Year Action Plan for Enhancing the Core Competitiveness of Manufacturing Industry (2018-2020)”, which included “graphene” as a key task in the industrialization of key technologies for new materials.

It can be seen that the state attaches great importance to the supporting industries such as new energy vehicles and batteries, graphene materials, etc. The subsidy policy has greatly promoted the development of the new energy automobile industry, and thus created a good development for the development of Jiana Energy and Qingdao Haoxin.

In 2016 and 2017, the operating income of Jiana Energy was 688 million Yuan and 1.35 billion Yuan respectively, and the net profit was 31.79 million Yuan and 238 million Yuan respectively. The operating income of Qingdao Haoxin was 62.368 million Yuan and 113 million Yuan respectively. The net profit was 16.12 million Yuan and 23.98 million Yuan respectively, and the performance showed a rapid growth trend.

The vigorous development of new energy vehicles and lithium battery industry drives the growth of upstream cobalt products and conductive agent products. As an important supplier in their respective fields, Jiana Energy and Qingdao Haoxin rely on their strong technical reserves and stable large customers. Channels and efficient management team to seize market development opportunities and share industry development dividends.

In order to further strengthen the control of the two subsidiaries, further optimize the internal resource allocation, and give full play to the synergy of various businesses, and through the consensus of the parties to the transaction, Dow Technology intends to purchase the shares from Yuanwei Investment and Xinhualian Holdings. A total of 49% of the shares held by Jiana Energy, the transaction price is RMB 1.323 billion; it is proposed to issue shares to Wang Lianchen and Dong Angang, and pay cash to Wei Chen to purchase 45% of the shares of Qingdao Haoxin held by the company. The transaction price is RMB 180 million Yuan. Upon completion of this transaction, Jiana Energy and Qingdao Haoxin will become wholly-owned subsidiaries of Dow Technology.

Dow Technology said that this transaction is a strategic move for the company to further deepen its layout in the new energy materials industry.

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