The electrolyte industry reappears heavy integration, Xinzhoubang plans to enter 2.227 billion yuan in Jiujiu Technology

After failing to prepare for the division and delisting, Yan'an Bikang found a new buyer for Jiujiujiu Technology-the electrolyte leader Xinzhoubang. On the evening of November 3, Xinzhoubang announced that the company intends to purchase a 74.24% stake in Jiangsu Jiujiu Technology Co., Ltd. (hereinafter referred to as Jiujiu Technology) held by Yan'an Bikang in cash. According to preliminary research and calculations, the transaction price was initially determined to be 2.227 billion yuan. A brokerage researcher said that after nearly two years of in-depth reshuffle, the market concentration in the field of lithium battery electrolytes has further increased, and the leading companies are still increasing the output of upstream raw materials to achieve cost optimization. Xinzhoubang plans to acquire 2.227 billion yuan in Jiujiujiu Jiujiujiu Technology is a leading processing company in the domestic lithium battery materials and pharmaceutical intermediate industries, and a specialized processing plant for ultra-high molecular weight polyethylene fibers. Lithium hexafluorophosphate processed by the company is one of the core raw materials of lithium battery electrolyte, with an output of 5,000 tons/year, which ranks among the forefront of the industry. In 2019, it achieved a net profit of 109 million yuan. As a subdivision leader in the field of capacitor chemicals, Xinzhoubang has built a complete industrial chain of 'additives-new lithium salts-solvents-electrolytesAccording to the company's research information, the company's lithium battery electrolyte shipments and market share in 2019 are the second largest in China, and it has opened up overseas customers such as LG Chem, Samsung SDI, Panasonic, and Murata. Xinzhoubang previously stated that companies that master core additives and formulation technologies, lay out upstream core raw material resources, and have high-quality customers will have the opportunity to achieve rapid development. Xinzhoubang has relevant experience in successful integration. In 2017, Xinzhoubang spent about 300 million yuan to acquire BASF's electrolyte business in the Asia-Pacific region, its Suzhou plant and related intellectual property rights. In 2018, Xinzhoubang further acquired BASF's electrolyte business and related intellectual property rights in Europe and North America. When Xinzhoubang built a plant in Europe this year, it acquired a chemical plant of BASF in Poland. Financial data show that in 2019, Xinzhoubang electrolyte achieved revenue of 1.16 billion yuan and shipments of about 28,000 tons; in the first half of 2020, Xinzhoubang electrolyte achieved revenue of 590 million yuan and shipments of about 14,000. Tons, the gross profit margin remains at around 29%. According to industry insiders, the acquisition of Jiujiujiu Technology, a lithium hexafluorophosphate processor, will enable Xinzhoubang to further increase its electrolyte sector's gross profit margin while ensuring the supply of raw materials. Yan’an Bikang will focus on its main pharmaceutical business. On the evening of November 3, Yan’an Bikang announced that in addition to signing an equity transfer agreement with Xinzhoubang, the company also signed an agreement with Jiujiu Technology and its legal representative Zhou Xinji. Transfer of 13% equity of Jiujiu Technology, the transaction consideration is about 390 million yuan. The notice shows that Yan'an Bikang currently holds 87.24% of Jiujiu Technology and Oriental Risheng New Energy Co., Ltd. holds 12.76% of its shares. After the completion of the above transaction, Yanan Bikang will no longer hold the equity of Jiujiu Technology. On March 25 this year, Yan'an Bikang announced a notice that it plans to spin off Jiujiujiu Technology for listing on the Shenzhen Stock Exchange’s Growth Enterprise Market. Yan'an Bikang said that Jiujiu Technology is in a capital-intensive industry. The spin-off and listing will provide Jiujiu Technology with an independent fund-raising platform, accelerate development and improve its operating and financial performance. However, on the night when Yan'an Bikang disclosed its spin-off and listing plan, the Shenzhen Stock Exchange issued a letter of concern, requesting the company to analyze whether the spin-off and listing decision was prudent, whether there was a situation that actively catered to market hotspots, and whether it involved a “flicker-style” spin-off and listing. In the morning of March 26th, Yan'an Bikang announced a notice that the CSRC decided to open a case to investigate the company due to the company’s suspected violation of information disclosure laws and regulations. Under regulatory and market pressures, Yanan Bikang has suspended its spin-off and listing application. The latest financial report data shows that in the first three quarters of this year, Yanan Bikang realized revenue of 5.139 billion yuan, a year-on-year decrease of 21.5%; net profit was 12.7684 million yuan, a year-on-year decrease of 97.08%. Yan'an Bikang said that after the completion of this transaction, it will help the company go lightly, focus on the development of the company's main pharmaceutical business, and enhance the company's ability to continue operations and healthy development. At the same time, it will help supplement the company's liquidity, ease the company's tight liquidity, and speed up the settlement of debt problems. 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