Rongbai Technology cut into the field of lithium cathode materials and equipment to acquire a 70% stake in Fenggu Energy Saving.

On the evening of December 9th, Rong Bai Science and Technology (688005) announced that based on the strategic layout of "new integration", the company plans to invest 41.7 million yuan to acquire 70% of Jiangsu Fenggu Energy Saving Technology Co., Ltd. (hereinafter referred to as "Fenggu Energy Saving"). Of this, 34.8 million yuan subscribed for 22.6287 million yuan of new registered capital of Fenggu Energy Saving, and 6.9 million yuan was transferred to the 12% equity held by the original shareholders Seibole and Hangzhou Xiaoyue.

It is reported that Fenggu Energy Saving, founded in June 2013, is a professional high-tech enterprise specializing in the development and application of efficient heating control systems. Fenggu Energy Saving has the core technology of ceramic rotary kiln, successfully developed the first domestic and international leading large-scale ceramic rotary kiln and took the lead in mass production. Ceramic rotary kiln technology innovates the core production process of cathode material by reducing metal foreign body rate, saving energy consumption and optimizing production process, which is beneficial to the overall design innovation of high nickel production line and the development of super-large-scale positive production line. The commercial application of the new technology and equipment will play a practical role in energy saving and emission reduction and enhance the environmental friendliness of the industry.

According to the agreement, Fenggu Energy Saving will complete the development of high-performance ceramic rotary kiln in accordance with the company's technical standards within a certain period of time. At the same time, Rongbai Technology will also give full play to the company's leading advantages in the engineering technology and equipment of high-nickel cathode materials, work with Fenggu energy conservation to promote the project development of new processes and technologies, and jointly promote the large-scale application of products.

Rongbai Technology said that this acquisition is the first step for the company to carry out mergers and acquisitions and integration in the field of lithium cathode materials and equipment, which will further strengthen the company's advantages in engineering and technology such as production line design and equipment development, and improve technical barriers to process and equipment; in the medium to long term, it will reduce the cost of procurement and manufacturing links, and enhance the company's profitability.

In addition to strengthening the layout of the equipment field, Rongbai Technology is also making efforts in terms of raw material security.

On November 19th, Rongbai Technology announced that the company signed a "Strategic Cooperation Agreement" with Huayou Cobalt (603799). According to the agreement, Rongbai purchased no less than 180000 tons of precursors in Huayou Cobalt from January 1, 2022 to December 31, 2025. Under the condition that Huayou Cobalt Industry provides Rongbai Technology with competitive pricing of metal raw materials and processing fees for precursors, the two sides expect that the procurement of precursors will reach 415000 tons. The quantity of purchasing precursors in a specific year shall be subject to the monthly purchase and sales orders depending on the development progress of both parties' products and customers. The terms of cooperation for the period from 2026 to 2030 shall be agreed upon by the two parties through separate consultation and confirmation after signing a supplementary agreement.

According to Battery Network, Rongbai Technology is the first cathode material manufacturer in China to achieve mass production of high nickel products (NCM811): the development and pilot test of the first generation NCM811 was completed in 2016, mass production was achieved in 2017, and NCM811 shipments exceeded 20, 000 tons in 2020, ranking first in the world.

This year, Rongbai Technology went overseas, established a positive production base in Zhongzhou, South Korea, and expanded Synchronize in Wuhan, Hubei, and Zunyi, Guizhou, to achieve a production capacity of more than 120000 tons of high-nickel ternary cathode materials by the end of the year, more than three times that of the same period last year.

In terms of customers, Rongbai Technology is one of the main suppliers of High Nickel Ternary in Ningde era; benefiting from the volume of models of Daimler and other customers, Funeng Technology has sufficient orders on hand. 0.6 and 30,000 tons of high-nickel ternary positive electrodes will be purchased from the company in the second half of 2021 and the whole year of 2022 respectively. In terms of overseas customers, the company has deepened cooperation with SKI and other companies, and is expected to enjoy the acceleration of high nickel production in overseas markets in the future.

Huaxin Securities believes that Rongbai Technology relies on its rapidly expanding production capacity, high-quality customer base, precursor integration and technological research and development advantages, high nickel leading position is stable. In the future, the company will benefit from positive track growth, high nickel permeability and improved profit per ton.