Dangsheng Science and Technology plans to buy Changzhou Dangsheng 31.25% of the planned cathode material with an annual output of 100000 tons.

Published: Dec 07, 2020 14:19 (GMT+8)

SMM: on December 6th, Dangsheng Technology announced that the company intends to issue shares to the controlling shareholder Mining and Metallurgical Group to buy its 32.5% minority stake in Changzhou Dangsheng. After the completion of this transaction, Changzhou Dangsheng will become a wholly-owned subsidiary of Dangsheng Technology. The number of shares to be issued by the company at 24.30 yuan per share is 16.8978 million shares, accounting for 3.87% of the total share capital of the listed company before this transaction.

Before and after the completion of the share purchase of this issue, the changes in the ownership structure of listed companies are as follows:

当升科技

The announcement shows that when Sheng Technology has not changed its control since its listing, the controlling shareholder of the company has been the Mining and Metallurgical Group, and the actual controller is the State-owned assets Supervision and Administration Commission of the State Council. As of the date of signing of the report, the Mining and Metallurgical Group held a total of 22.50% of the shares of listed companies. After the completion of this transaction, the Mining and Metallurgical Group is still the controlling shareholder of the Company, and the SASAC of the State Council is still the actual controller of the Company.

It is understood that Changzhou Dangsheng's main products are high-performance lithium battery cathode materials, which is responsible for the production and operation of Changzhou lithium battery new material industry base. The base plans to build an annual production capacity of 100000 tons of lithium cathode materials in the long term. The first phase of the project plans to build an annual production capacity of 50, 000 tons of cathode materials, of which the production capacity of 20, 000 tons of cathode materials in the first phase of the project has already completed the construction of the production plant and the installation of the production line. Is carrying on the production line debugging and the product trial production work, the market space is big, has the strong profitability.

Progress and commissioning of the production capacity of 20,000 tons of cathode materials in the first phase of the Changzhou Dangsheng Phase I project: the 10,000-ton production line has completed production line construction, power commissioning, commissioning with materials, and preparation of important international customer test samples. 50% of the production lines have reached the scheduled state of use and have been officially put into production and transferred to fixed assets in November 2020, and the remaining 50% of the production lines are in the process of customer confirmation and other finishing work. It is expected to be put into production in December 2020. Another 10,000-ton production line has completed equipment installation, water and electrical wiring and power commissioning, and is carrying out material debugging and customer test sample preparation.

When Sheng Science and Technology said that after the completion of this transaction, the proportion of shares held by Dangsheng in Changzhou will reach 100%, which will further increase the proportion of rights and interests enjoyed in Changzhou, the net profit of listed companies belonging to the parent company will be increased, the profit level of listed companies will be improved, and the comprehensive competitiveness of listed companies will be further enhanced, which will help to protect the interests of all shareholders, especially minority shareholders. Enhance the core competitiveness of listed companies.

Soochow Securities Research report shows that when the production capacity of science and technology has rapidly expanded from 24000 tons to 44000 tons by the end of the year in 2020, the follow-up Changzhou base is still planned, with a production capacity of 80,000 to 90,000 tons in 2023. The company predicts that the order is sufficient and is expected to achieve full production and full sales. It is estimated that the company's positive shipments from 2020 to 2022 are 2.4 Dynamx 4.5 / 64000 tons, corresponding to a growth rate of 57%, 88% and 43%.

According to Soochow Securities, Dangsheng Technology shipments are mainly overseas, accounting for 70% in 2020, and are the main global supplier of SK, which is expected to supply about 20, 000 tons in 2021. In addition, it will steadily supply LG Energy Storage, Murata, BYD, Yiwei and so on. In terms of profitability, overseas has high requirements for quality, reasonable pricing, and continue to strengthen the company's quality control. 2020Q3's profit per ton is expected to be 13000 yuan / ton, while the industry average is between 0.7 and 10, 000 yuan / ton. Capacity utilization and overseas share will remain high in 2021, and the company's profit per ton is expected to remain about 12000 yuan / ton.

Soochow Securities estimates that the domestic / overseas demand for ternary positive electrodes in 2025 is 49 / 1.17 million tons respectively. It is estimated that the domestic / overseas share of Dangsheng Technology will be 9-10%, corresponding to about 150000 tons shipped in 2025, which is still more than five times higher than in 2020, and the compound growth rate from 2020 to 2025 is 44%.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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