Xingyuan material plans to increase the investment of 100 million US dollars to European Star Source to expand the production of lithium diaphragm.

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On the evening of November 12th, Xingyuan material (300568) announced that according to the actual business development needs of the company's wholly-owned subsidiary European Xingyuan, the company held the 17th meeting of the fifth board of directors on the same day. The motion on additional investment in European Xingyuan, a wholly-owned subsidiary, was examined and passed, agreeing that the company intends to use its own funds or self-raised funds to invest no more than 100 million US dollars in the wholly-owned subsidiary European Xingyuan. It is used to expand 2 wet production lines, 2 coating production lines and supporting equipment in the second phase of European Xingyuan project.

The Battery Network noted that European Star Source was established in January 2021 with a registered capital of 25000 Swedish kronor and was responsible for the construction of the first phase of the European factory. According to the previous announcement, the first phase of the European plant project investment of about 130 million yuan, four new coated diaphragm production lines, the annual output of coated diaphragm about 90 million square meters.

Xingyuan material said that this additional investment will help to further expand the production scale of European Star Source, at the same time, it will play a positive role in the further promotion of the company's diaphragm products in foreign markets, and will further accelerate the company's development in the European market. for the company to cooperate with well-known European car companies to lay a good foundation.

In terms of European customers, in March this year, the company received a large order of 3.34 billion yuan for the diaphragm of Northvolt lithium battery. It is reported that Northvolt is a lithium-ion battery company based in Stockholm, Sweden, and its main financiers include Goldman Sachs, European investment bank (EIB), Volkswagen Group and BMW. Northvolt is building the production of lithium-ion battery cells, systems and solutions, including a research, development and testing production facility in Vasteras, Sweden, as well as a super factory in Skelleftea, Sweden.

Keep pace with the landing of Dadan, on March 31st, Xingyuan material issued another announcement, planning to invest 2 billion yuan to build a factory in Sweden. When the new factory is completed in 2025, it will become the European headquarters of Xingyuan material, involving a base membrane production capacity of more than 700 million square meters and a coating capacity of more than 420 million square meters. The plant will be one of the largest of its kind in Europe, and the plant in Eskilstuna will provide a diaphragm for Northvolt's superfactory in Skellefte and later for other European battery manufacturers.

According to a recent research report by Southwest Securities, Xingyuan material began to provide lithium-ion battery separators to Northvolt in 2023 to open up the European market. By 2024, the company's European factory will provide Northvolt with more than 50% battery separators, including base membrane, coating diaphragm and slitting.

In addition to overseas markets, since the beginning of this year, Xingyuan material is also seizing the opportunity of large-scale expansion of the domestic lithium industry, constantly increasing its own production capacity.

Soochow Securities recently reported that in October 2021, the production capacity of Xingyuan wet base membrane totaled 900 million square meters, including 30 million square meters in Shenzhen base, 80 million square meters in Hefei base and 800 million square meters in Changzhou base (master volume). In terms of dry process, the Shenzhen base has a stable production capacity of nearly 200 million square meters, mainly supplying LG Chemical, while the Jiangsu base has all been put into production, with a total production capacity of 1.5 billion square meters. In terms of coating, the company's Jiangsu base is divided into two phases, with 30 lines in the first phase, corresponding to 600 million flat, and 20 lines in the second phase, corresponding to 400 million square meters, all of which have been put into production. The company's shipments are expected to exceed 1.1 billion square meters in 2021, an increase of nearly 60 percent over the same period last year; in the second half of 2022, the company will increase its dry and wet production capacity, and diaphragm shipments are expected to reach more than 1.7 billion square meters; and production capacity will be released in 2023, and growth will accelerate. In order to meet the needs of downstream customers, the company plans to increase production capacity by raising no more than 6 billion, and the follow-up share is expected to be further increased.

According to EVTank, Xingyuan ranked second in the global diaphragm market with a 12.77% market share in 2020. The company plans to have a production capacity of 6 billion tons of diaphragm basement membrane in 2025.