Baolixin plans to raise 250 million of the main investment lithium battery upgrade project Gao Baoqing to participate in the subscription.

On the evening of July 7th, Baolixin (300116) disclosed that it planned to issue shares to no more than 35 specific targets, including Gao Baoqing, the actual controller of the company, and raise no more than 250 million yuan. Invest in the special upgrading and renovation project of Baolixin (Inner Mongolia) Battery Co., Ltd., the construction project of Baolixin R & D center and supplementary liquidity.

According to the announcement, Ms. Gao Baoqing, the actual controller of Baolixin, intends to participate in this subscription to a specific target in the form of cash, with a proposed subscription amount of not less than 70 million yuan (including capital). In addition, in order to substantially fulfill the above commitments, Ms. Gao Baoqing further promised that the price of the shares issued to specific targets would eventually be lower than 90% of the average trading price of the company's shares in the 20 trading days before the pricing benchmark, and that the number of shares subscribed for this time, multiplied by the amount corresponding to each share price difference, would be given to listed companies free of charge in cash.

Specifically, Baolixin plans to raise no more than 250 million yuan this time, of which the total investment of the special upgrading project of Baolixin (Inner Mongolia) Battery Co., Ltd. is 150 million yuan. the main construction contents include energy consumption transformation, equipment transformation, production environment transformation and intelligent manufacturing, through special upgrading and transformation, improve the production environment, achieve the upgrading of production equipment, and improve the degree of intelligent production.

In addition, Baolixin plans to spend 30 million yuan of the funds raised on the R & D center construction project, through the renovation and renovation of the R & D center site, the purchase of instruments and equipment, and so on, to build an R & D base with two major functional centers, namely, the technology R & D center and the testing and analysis center. Baolixin said that at present, the market for battery products such as lithium-ion power batteries and energy storage batteries is no longer limited to the pursuit of single performance in some aspects, such as cost, energy density, cycle life, etc., but the pursuit of all comprehensive performance improvement, including cost, energy density, life, safety and environmental adaptability, which puts forward high requirements for the technology of enterprises. In the future, only through continuous research and development of core technology, improving the added value of product technology, and constantly optimizing the process, reducing the manufacturing loss and cost of products, so as to improve the market competitiveness of enterprises and their products, it is the only way for enterprises to survive, grow and develop. The competition pattern of the industry will eventually return from market competition to technological competition.

In addition, Baolixin plans to use 75 million yuan of the funds raised this time to supplement working capital to further optimize the company's capital structure and meet the fast-growing working capital needs of its future business. After the bankruptcy reorganization of the company was completed in 2020, the new actual controller, Ms. Gao Baoqing, led the new management team to actively resume production and reopen up the market, and obtained a number of leading customer orders for electric two-wheelers, and the company's operation gradually recovered. However, due to the rising price of raw materials in the upstream of lithium battery, and the time difference between the purchase payment period and the sales payback period, the company has just experienced bankruptcy and reorganization and is in the process of recovery, and the bank financing channel space is limited. Therefore, there is an urgent need to obtain certain liquidity through equity financing.

It is reported that Baolixin's main product is small cylindrical lithium iron phosphate battery, which is mainly used in electric two-wheeler, energy storage and low-speed intelligent travel. Benefiting from the strong support of the national industrial policy and the rapid growth of downstream industries, the product market has a broad space. In this context, the company plans to issue shares to specific objects to further increase the company's core competitiveness and enhance the company's capital strength.

According to the "White Paper on the Development of China Electric two-wheeled vehicle Industry (2021)" jointly released by EVTank, Ivy Economic Research Institute and China Battery Industry Research Institute, in 2020, the production of lithium electric two-wheeled vehicles in China reached 11.36 million, with an overall penetration rate of 23.5%, an increase of 84.7% over the same period last year. Shipments of lithium-ion batteries for electric two-wheeled vehicles in China reached 10.7 GWH, an increase of 91.1% over the same period last year. It is estimated that by 2025, the market penetration of the entire lithium electric version of electric two-wheeled vehicles will be close to 60%; the demand for lithium-ion batteries for electric two-wheeled vehicles will reach 45.9Gwh.

In addition, in the field of power exchange for two-wheeled vehicles, data from the "White Paper on the Development of China's Electric two-wheeled vehicle Exchange Industry (2021)" jointly released by the three parties show that with the growth of the user population and the increase in exchange penetration, the demand for the laying of change cabinets in the two-wheeler exchange market has increased. In 2020, a total of 57000 change cabinets will be needed in the national two-wheeler exchange market. It is estimated that the total demand for two-wheeled changing cabinets will reach 670000 by 2025. In 2025, the demand for lithium-ion batteries for two-wheeled vehicles is expected to reach 10.9 GWH, of which the demand for lithium batteries at the C terminal of To will reach 7.1 GWH, accounting for more than 65%.

The white paper points out that at present, the two-wheeler power exchange market is still in the early stage of development, and the market scale is relatively small. In 2020, the scale of China's two-wheeler power exchange market is about 16.18 billion yuan. It is expected that with the improvement of power exchange service penetration and the growth of power exchange users, the scale of China's two-wheeler exchange market is expected to exceed 100 billion in 2025, becoming a new "blue ocean market".

In addition, according to the White Paper on the Development of China's Electric balanced vehicle Industry (2021), global shipments of electric balanced vehicles reached 10.32 million units in 2020, an increase of 23.7% over the same period last year. The development of electric balanced vehicles has also led to the growth of the demand for lithium-ion batteries. in 2020, the global shipment of electric balanced vehicle lithium-ion batteries reached 245 million, and the market scale reached 1.9 billion yuan. Wu Hui, general manager of the Research Department of Yiwei Economic Research Institute and director of China Battery Industry Research Institute, predicts that with the substantial expansion of cylindrical battery production capacity by domestic enterprises in 2020, in the future, domestic enterprises will gradually become the main suppliers of electric balanced vehicle batteries by replacing the market share of some foreign battery enterprises with high performance-to-price ratio.

What is worth paying attention is that with the improvement of the application market, Baolixin has stepped up efforts to expand production capacity this year, while the client also continues to harvest orders. On April 19th, Baolixin planned to invest 7 billion yuan with the management committee of Zaozhuang High-tech Zone to build 10GWhPACK and 10GWh lithium battery production capacity projects to meet the product layout of the company's lithium battery products in electric bicycles, four-wheel low-speed vehicles, small energy storage and low-speed intelligent travel, and enrich the company's business structure.

On June 11, Baolixin also signed a "guarantee and supply agreement" with customers on lithium battery products, which stipulates that the company will normally supply a total of about 194000 sets of various types of lithium battery products to the customer from July to October 2021 (as predicted). The unit price of the product is based on the unit price that has been reconciled in the customer's system.