A 200 Million Bet! Lithium Industry Giant Seeks to Secure Major Domestic and International ESS Lithium Battery Deals Through Equity Investment?

Recently, Ganfeng Lithium (002460) announced that its board of directors has approved its controlling subsidiary, Jiangxi Ganfeng LiEnergy Technology Co., Ltd. (hereinafter referred to as "Ganfeng LiEnergy"), to jointly invest RMB 200 million with professional investment institutions to subscribe to the property shares of Luoteng (Hangzhou) Equity Investment Partnership (Limited Partnership) (hereinafter referred to as the "Partnership").

According to the announcement, the fund size of the Partnership is RMB 1.001 billion, and its business scope includes general projects such as private equity fund activities involving equity investment, investment management, and asset management (subject to registration and filing with the Asset Management Association of China before conducting business activities).

According to the Partnership Agreement, the target total capital commitment of the Partnership is RMB 2 billion, with an investment strategy focused on direct or indirect equity investments or related activities in new energy asset projects, including commercial and industrial distributed PV, distributed wind power, centralized wind power, and ground-mounted distributed PV.

According to the Supplementary Agreement to the Partnership Agreement, the procurement commitment party (referring to Hangzhou Baobi, its subsidiaries at all levels, affiliates, or designated third parties) will collaborate with Ganfeng LiEnergy or its affiliates on the procurement of lithium battery ESS products. Regarding overseas cooperation, Hangzhou Baobi will make its best commercial efforts to facilitate Ganfeng LiEnergy's ESS procurement project cooperation in Saudi Arabia. Hangzhou Baobi will also coordinate with its Singaporean shareholders to establish communication channels with Ganfeng LiEnergy for overseas cooperation.

Ganfeng Lithium stated that this investment will help Ganfeng LiEnergy expand its lithium battery ESS business, leverage professional investment platforms to develop its new energy business and overseas ESS market, deepen cooperation with professional investment platforms, enhance the company's capital operation efficiency, improve its new energy industry chain layout, and strengthen its overall competitiveness and profitability.

Additionally, according to Ganfeng Lithium's 2024 annual performance forecast, the company expects a net profit attributable to shareholders of the publicly listed firm to record a loss of RMB 2.1 billion–1.4 billion, down 142.45%–128.30% YoY. Regarding the reasons for the performance change, the company stated that in 2024, the main factor was the volatility in the lithium product market, leading to a decline in the selling prices of lithium chemicals and lithium batteries. Although product shipments were up YoY, the company's operating performance declined significantly YoY.