Zhongwei Co., Ltd. plans to increase capital by more than 1 billion to three subsidiaries to expand the market scale of lithium materials.

On June 19th, Zhongwei (300919) issued an announcement that the company examined and passed the "motion on increasing capital for the company's wholly-owned subsidiaries". It is agreed that the company will increase the capital of the three wholly-owned subsidiaries of Hunan Zhongwei New Energy, Zhongwei Trading and Hong Kong New Energy by more than 1 billion yuan, and authorize the management of the company to be responsible for the capital increase of the above three companies.

It is reported that Zhongwei shares to high-nickel low-cobalt ternary precursor, high-voltage cobalt tetroxide as the research and development and production and marketing direction. The main customers include LGC, Xiamen Tungsten Industry, Tesla, Dangsheng Technology, Bertre, Samsung SDI, SKI, Zhenhua and other enterprises. By the end of 2020, the company has completed a production capacity of about 110000 tons for ternary precursors and 25000 tons for cobalt tetroxide, all of which are in full-load production.

This capital increase is for Zhongwei to expand the market scale of lithium materials and improve the comprehensive competitiveness of subsidiaries. According to the announcement, the capital increase is an increase of 280 million yuan (about 321 million yuan) to Hunan Zhongwei New Energy, a wholly-owned subsidiary, 400 million yuan of trade to Zhongwei, a wholly-owned subsidiary, and 386 million Hong Kong dollars (about 321 million yuan) to Zhongli, a wholly-owned subsidiary.

Zhongwei said that the three wholly-owned subsidiaries increased this time are all important subsidiaries of the company. In order to actively respond to the future development trend of the new energy industry, increasing the capital of the three wholly-owned subsidiaries will help to improve the comprehensive competitiveness of the subsidiaries, improve their capital structure and financial situation, enhance their sustainable operation ability, and help the company to optimize the allocation of resources, improve the strategic layout, enhance the company's production capacity, and expand the market scale. In line with the company's overall development strategy and the long-term interests of shareholders.

What is worth paying attention to is that, on May 18, Zhongwei shares announced that the company examined and approved the contract for the signing of Zhongwei New Energy Global R & D Base and Annual output of 35000 tons of Lithium precursor Materials and supporting Nickel-Cobalt Resources and batteries Recycling Project in Ningxiang Economic and technological Development Zone with Ningxiang Economic and technological Development Zone.

According to the contract, the total investment of this project is about 1.3 billion yuan, the construction of Zhongwei New Energy global R & D base and the annual production capacity of 35000 tons of lithium precursor materials and supporting nickel-cobalt resources, battery recycling project, the products are suitable for new energy lithium batteries, power batteries and other fields, after the project is completed and reached production, the overall project of Ningxiang Zhongwei Industrial Park can achieve 135000 tons of lithium precursor materials production capacity.