On January 26th, far East Co., Ltd. announced its intention to sign a strategic procurement agreement. Jiangxi far East Battery, a wholly owned grandson company, and NIU.US, a smart lithium electric vehicle, carry out strategic cooperation on the production and supply of ternary lithium cells. From 2021 to 2023, Maverick Electric purchased not less than 150 million ternary lithium batteries from Jiangxi far East battery, which is expected to generate operating income of no less than 900 million yuan.
Sales of Mavericks electric two-wheeled electric vehicles reached 149705 in the fourth quarter of 2020, up 40.9 per cent from a year earlier, according to sales figures for the fourth quarter of 2020 released by Mavericks Electric earlier this month. In 2020, Mavericks Electric sold a total of 600892 two-wheeled electric vehicles, an increase of 42.6 percent over the same period last year, of which domestic and foreign sales were 572154 and 28739 respectively.
Far East Co., Ltd. has more than 10 years of industry experience in the field of smart batteries, focusing on providing customers with first-class lithium battery application solutions. It has formed an industrial layout that integrates lithium-ion single battery, BMS system, power battery system and key components. At present, it includes two major industrial bases in Jiangxi and Jiangsu, among which Jiangxi far East battery is mainly cylindrical battery with 7GWh production capacity. It is one of the few enterprises with 21700 production capacity in the country, and is currently an important strategic partner such as Mavericks Electric and No. 9 Robot (Nambo). Far East battery Jiangsu is mainly a soft pack battery with 1GWh production capacity, which is mainly used in brilliance Xinri A00 cars and is currently being delivered.
In terms of performance, on the afternoon of January 22nd, far East Co., Ltd. issued an annual performance pre-loss announcement for 2020, mainly due to the impact of previous mergers and acquisitions. The company further impaired the relevant assets of far East Battery Co., Ltd., Shuimuanyuanhua Electric Co., Ltd., and Shanghai Aineng Electric Power Engineering Co., Ltd., realizing a net profit of-1.413 billion yuan to-1.696 billion yuan belonging to shareholders of listed companies. It is proposed to make an impairment of about 839 million yuan in goodwill, of which the impairment of accounts receivable, inventory and assets of far East Battery Co., Ltd. from January to October 2020 amounts to 715 million yuan, and the consolidated statement provides for 705 million yuan of goodwill, totaling nearly 1.4 billion yuan (see announcement on November 25, 2020). The risk of impairment of related assets has been fully released.
In terms of customer introduction cycle, far East shares said that Mavericks Power, as a domestic light travel leader, focuses on electric two-wheelers, and the introduction cycle of new suppliers is more than one year. As a high-rate product, power tools should have the functions of anti-falling, anti-shock and so on. The introduction cycle of new suppliers is about 2-3 years.
It is reported that as early as April 2020, Jiangxi far East Battery signed a strategic cooperation agreement with Mavericks Electric.
According to the White Paper on the Development of China Electric two-wheeled vehicle Industry (2020) released by EVTank and China Battery Industry Research Institute, the production of electric two-wheeled vehicles in China is expected to reach 65.58 million in 2025, with an average annual growth rate of nearly 10%. With the implementation of the new national standard and the rapid decline in the cost of lithium-ion batteries, the permeability of lithium batteries in electric two-wheelers will increase rapidly.
According to the white paper, China produced 6.15 million lithium-electric two-wheelers in 2019, with an overall permeability of 16.2 per cent, an increase of 4.2 percentage points over 2018 and is expected to rise to 56.4 per cent by 2025. As a result, the demand for lithium-ion batteries will reach 40.5GWh.
In addition, in addition to the layout of the two-wheeled vehicle field, far East said in a survey conducted by the reception agency on January 25 that the far East battery focused on the head of the market segment for deep development, and in 2020 it has become a leading supplier of ternary lithium batteries in the domestic light travel market segment. At the same time, after the previous layout, the far East battery has signed a strategic cooperation agreement with the world's leading power tool brand Shang Bao to achieve batch introduction of products in 2021.
In the future, the company will strengthen the development of energy storage market and international cylindrical battery customers, especially in the energy storage industry. Far East Battery will make full use of the parent company's customer relationship and industry advantages to become a leading solution provider in the energy storage market. Will also continue to expand cooperation with international automotive companies.
In the field of lithium power, far East shares are also involved in copper foil business. The holding subsidiary Shengda Electric Co., Ltd. launched the lithium copper foil project in 2017, which was put into production that year. The existing production capacity of 6 μ m high-end ultra-thin lithium copper foil is 7500 tons. In the future, the company will continue to strengthen the reserve of copper foil professionals and speed up the capacity construction of lithium copper foil. The second phase of 7500 tons 4.5 μ m very thin lithium copper foil project has entered the equipment installation stage and is expected to be put into production in the first quarter of 2021. With a total production capacity of 15000 tons in the second quarter, the company will focus on expanding the sales of high-margin, extremely thin, high-end lithium copper foil and continue to invest in research and development of high-resistance and high-elongation copper foil.
