Baling Technology's acquisition of a part of the equity of Yuliang Battery Strengthening Competitive Advantages in the New Energy Automobile Industry

On May 18, Baling Technology issued an announcement stating that based on the judgment of the good market prospects of Suzhou Yuliang Battery Co., Ltd. and the needs of the company's strategic development, Nanning Baling Technology Co., Ltd.(hereinafter referred to as "the company") signed the "Letter of Intent for Equity Transfer"(hereinafter referred to as "The Letter of Intent") on May 16, 2018 with Shanghai Kailong Investment Management Co., Ltd., the controlling shareholder of Suzhou Ultimate Battery Co., Ltd.(hereinafter referred to as "Ultimate Battery"). After friendly consultations between the two sides, a preliminary cooperation intention was formed. The company intends to transfer the 20 to 30 shares of the UQ battery held by Kailong Investment, and the overall valuation of UQ batteries is 2.8-3 .5 billion yuan. The two sides will discuss the specific terms of the transaction after completing due diligence. And sign a formal equity transfer agreement.

It is reported that UQ Battery is a legally registered renewal company in China. It is a provider of ternary power battery system solutions and focuses on the development, production and sales of ternary power lithium battery cores, modules, and battery systems. Provide global customers with safe, reliable, efficient, durable and competitive three-way power battery system solutions.

Yuliang Battery has a core R&D team with strong R&D and design capabilities led by Dr. Mao Huanyu. It has a high-safety battery structure design, a chemical design that reduces the thermal runaway strength, and a design to cut off the uncontrolled battery cells to maintain battery operation. Innovative technologies such as detachable battery link design, battery and ultra-thin thermal diaphragm design on the side of the pole group, and split-capacitor technology, and successfully use high-nickel NCM811 materials, silicon carbon/graphite hybrid materials and other new materials as positive and negative electrodes to produce high energy. The battery makes the mass battery have significant technical competitive advantages and manufacturing advantages in the same industry.

The UQ battery was established in 2014 and plans to have an annual power battery capacity of 12 GWh. At present, the first phase of 2GWh production capacity has been put into production, mainly supporting WELTMEISTER, Jianghuai Automobile, Kowloon Automobile, Jinlong Bus, Guanzhi Automobile, Ludifangzhou, Hezhong Automobile, Southeast Automobile, Zhongtai Automobile and other auto manufacturers.

The company, which has significant technological competitive and manufacturing advantages in its industry, has an industry expert and technical team headed by Dr Maohuanyu, said the company. Equivalent batteries mainly provide three-yuan material power batteries for new energy vehicles. New energy vehicles are the strategic emerging industries that the country has focused on developing. They are the development trend of the automotive industry and will surely be the mainstream of the automotive industry in the future.

The main business of UQ battery is in line with the development trend of automobile industry, and has broad development space in domestic and foreign markets. At the same time, the UQ battery has established a good cooperative relationship with a well-known domestic host factory, accumulated a wealth of customer resources, and UQ battery business has a good synergy and complementarity effect with the company's business.

The company acquires part of the equity of the UQ battery, on the one hand, it can share the future development of UQ battery; On the other hand, it will help strengthen the deep integration of the company and the UQ battery in the new energy automotive industry, further strengthen the company's competitive advantage in the new energy automotive industry, achieve the company's layout and breakthrough in the automotive industry, and promote the company's existing products in the automotive field. Infiltration and application, we will increase the scale of the company's business and the level of competition in the industry, enhance the company's continuous profitability, and promote the healthy and stable development of its main business.

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